Equifax ((EFX)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Equifax Earnings Call: Strong Performance Amidst Market Challenges
During the recent earnings call, Equifax exhibited a robust financial performance, highlighting its significant advancements in cloud transformation. Despite these achievements, the company acknowledged challenges in the U.S. mortgage and hiring markets, currency headwinds, and tempered growth expectations for certain segments, affecting the 2025 outlook.
Strong Financial Performance in 2024
Equifax reported an impressive financial performance for 2024, with an almost 8% increase in revenue and an adjusted EPS boost of over 8.5%. The company also achieved a remarkable 58% rise in free cash flow, reaching $813 million, while reducing debt leverage to under three turns.
Significant Progress in Cloud Transformation
The company made noteworthy progress in its cloud transformation journey, completing consumer cloud customer migrations across several countries. This achievement resulted in nearly 85% of the company’s revenue being generated from the new Equifax cloud, subsequently reducing spending by $300 million.
New Strategic Partnerships and Product Growth
Equifax’s EWS team secured 15 new strategic partnerships in 2024, including a notable collaboration with Workday. These efforts contributed to a record year, with 188 million active records and a Vitality Index of 12%, surpassing the 10% goal and generating approximately $650 million in new product revenue.
First Quarter with Adjusted EBITDA Over $500 Million
Equifax achieved a significant milestone in Q4 2024 by recording an adjusted EBITDA of over $500 million for the first time in the company’s history.
International Revenue Growth
The company’s international revenue experienced an 11% increase in constant currency, fueled by robust growth in Latin America, Canada, and Australia.
Weakness in U.S. Mortgage and Hiring Markets
The U.S. mortgage market saw a considerable decline, impacting Equifax’s revenue expectations. The company anticipates a 12% and 8% decline in mortgage and hiring markets, respectively, in 2025.
Impact of Strengthening U.S. Dollar
A stronger U.S. dollar negatively impacted Equifax’s Q4 2024 revenue by $12 million, with an expected adverse effect of $75 million in 2025.
EWS Margin Contraction
Equifax forecasts a contraction in Workforce Solutions adjusted EBITDA margins, attributed to lower revenue growth and costs related to onboarding new TWN partners.
Decline in Non-Mortgage Revenue
In Q4 2024, USIS non-mortgage revenue grew by only 2.5%, which was slightly below guidance, with declines observed in identity and fraud sectors.
Government Revenue Challenges
Government revenue growth faced obstacles due to tough comparisons and adjustments in state funding practices, affecting performance in the first half of 2025.
Forward-Looking Guidance
Looking ahead, Equifax provided a cautious yet optimistic guidance for 2025, anticipating a revenue increase of approximately 4.7% on a reported basis, with a constant currency growth of about 6%. Adjusted EBITDA is expected to rise by 5% to over $1.9 billion, and free cash flow is projected to be around $900 million. The company plans to leverage its cloud transformation and AI capabilities to drive growth and innovation, aiming to roll out new products and enhance service offerings. Additionally, Equifax intends to increase shareholder returns through dividends and a share repurchase program.
In summary, Equifax demonstrated strong financial performance and cloud transformation progress during the earnings call. Despite challenges in certain markets and currency fluctuations, the company’s strategic partnerships, international growth, and forward-looking guidance indicate a focus on innovation and shareholder value in 2025.
