Equifax Delivers Fourth Quarter 2023 Revenue growth of 11% to $1.327 Billion Amid Challenging Mortgage Market
- Fourth quarter 2023 revenue of
$1.327 billion grew strong 11%, with 14% non-mortgage local currency revenue growth - Workforce Solutions 4Q revenue growth of 10%, with strong 17% non-mortgage revenue growth and Verification Services non-mortgage revenue growth of very strong 27% with strong growth in Government and Talent
- USIS 4Q revenue growth of 5% with 16% mortgage revenue growth and 3% non-mortgage revenue growth
- International 4Q revenue growth of 20% on a reported basis and 22% on a local currency basis, with organic local currency revenue growth of 6%
- Strong new product innovation leveraging new EFX Cloud with 14% 4Q new product Vitality Index
- Full year 2023 revenue growth of 3%, to
$5.265 billion , despite the significant 17% decline in mortgage revenue from higher rates - Strong execution of 2023
$210 million Cloud spending reduction plan - Issuing full-year 2024 guidance midpoint expectation for revenue of
$5.720 billion , up 8.6%, with strong non-mortgage local currency revenue growth of over 10.5% and Adjusted EPS of$7.35 . This reflects an expected 16%+ decline in our outlook for 2024 U.S. mortgage credit inquiries
"Equifax performed extremely well in the fourth quarter against our EFX2025 strategic priorities in a very challenging mortgage market delivering revenue of
"We are issuing our full-year 2024 guidance midpoint expectation for revenue of
We have strong momentum as we enter 2024 and are confident in the future of the New Equifax as we deliver strong double-digit non-mortgage revenue growth, finalize our Cloud transformation, leverage our new Cloud capabilities to accelerate new product roll-outs that 'Only Equifax' can provide, and invest in new products, data, analytics, and AI capabilities which are expected to drive growth in 2024 and beyond. We are energized about the New Equifax and remain confident in our long-term 8-12% revenue growth framework that is expected to deliver higher margins and free cash flow."
Financial Results Summary
The Company reported revenue of
Fourth quarter 2023 diluted EPS attributable to Equifax was
Net income attributable to Equifax of
For the full year 2023, revenue was
Workforce Solutions fourth quarter results
- Total revenue was
$559.5 million in the fourth quarter of 2023, up 10% compared to the fourth quarter of 2022. Operating margin for Workforce Solutions was 41.9% in the fourth quarter of 2023 compared to 36.5% in the fourth quarter of 2022. Adjusted EBITDA margin for Workforce Solutions was 51.2% in the fourth quarter of 2023, compared to 46.8% in the fourth quarter of 2022. - Verification Services revenue was
$457.1 million , up 15% when compared to the fourth quarter of 2022. - Employer Services revenue was
$102.4 million , down 7% when compared to the fourth quarter of 2022.
USIS fourth quarter results
- Total revenue was
$427.7 million in the fourth quarter of 2023, up 5% compared to the fourth quarter of 2022. Operating margin for USIS was 22.0% in the fourth quarter of 2023, compared to 21.4% in the fourth quarter of 2022. Adjusted EBITDA margin for USIS was 35.1% in the fourth quarter of 2023, compared to 35.3% in the fourth quarter of 2022. - Online Information Solutions revenue was
$327.5 million , up 6% compared to the fourth quarter of 2022. - Mortgage Solutions revenue was
$22.9 million , down 12% when compared to the fourth quarter of 2022. - Financial Marketing Services revenue was
$77.3 million , up 7% when compared to the fourth quarter of 2022.
International fourth quarter results
- Total revenue was
$339.3 million in the fourth quarter of 2023, up 20% and up 22% from the fourth quarter of 2022 on a reported and local currency basis, respectively. Operating margin for International was 17.9% in the fourth quarter of 2023, compared to 12.4% in the fourth quarter of 2022. Adjusted EBITDA margin for International was 31.2% in the fourth quarter of 2023, compared to 25.8% in the fourth quarter of 2022. -
Asia Pacific revenue was$82.2 million , down 3% from the fourth quarter of 2022 on a reported basis and down 2% on a local currency basis. -
Europe revenue was$93.6 million , up 15% from the fourth quarter of 2022 on a reported basis and up 9% on a local currency basis. -
Latin America revenue was$98.6 million , up 85% from the fourth quarter of 2022 on a reported basis and up 103% on a local currency basis. -
Canada revenue was$64.9 million , up 1% from the fourth quarter of 2022 on both a reported basis and a local currency basis.
Adjusted EPS and Adjusted EBITDA Margin
- Adjusted EPS attributable to Equifax was
$1.81 for the fourth quarter of 2023, up 19% compared to the fourth quarter of 2022. Adjusted EBITDA margin was 33.7% for the fourth quarter of 2023, compared to 31.0% in the fourth quarter of 2022. - Full year adjusted EPS attributable to Equifax was
$6.71 , down 11% from the prior year period. Full year adjusted EBITDA margin was 32.2% compared to 33.6% in 2022. - These financial measures exclude certain items as described further in the Non-GAAP Financial Measures section below.
2024 First Quarter and Full Year Guidance |
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|||||
|
Q1 2024 |
|
FY 2024 |
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|
Low-End |
|
High-End |
|
Low-End |
|
High-End |
Reported Revenue |
|
|
|
|
|
|
|
Reported Revenue Growth |
5.6 % |
|
7.1 % |
|
7.7 % |
|
9.6 % |
Local Currency Growth (1) |
7.1 % |
|
8.6 % |
|
9.6 % |
|
11.5 % |
Organic Local Currency Growth (1) |
4.0 % |
|
5.5 % |
|
7.6 % |
|
9.5 % |
Adjusted Earnings Per Share |
|
|
|
|
|
|
|
|
|
(1) |
Refer to page 9 for definitions. |
About Equifax
At Equifax (NYSE: EFX), we believe knowledge drives progress. As a global data, analytics, and technology company, we play an essential role in the global economy by helping financial institutions, companies, employers, and government agencies make critical decisions with greater confidence. Our unique blend of differentiated data, analytics, and cloud technology drives insights to power decisions to move people forward. Headquartered in
Earnings Conference Call and Audio Webcast
In conjunction with this release, Equifax will host a conference call on
Non-GAAP Financial Measures
This earnings release presents adjusted EPS attributable to Equifax which is diluted EPS attributable to Equifax adjusted (to the extent noted above for different periods) for acquisition-related amortization expense, accrual for legal and regulatory matters related to the 2017 cybersecurity incident, fair market value adjustment and gain on sale of equity investments, pension mark-to-market fair value adjustment, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, realignment of resources and other costs, income tax effect of stock awards recognized upon vesting or settlement,
These non-GAAP financial measures should be reviewed in conjunction with the relevant GAAP financial measures and are not presented as an alternative measure of net income or EPS as determined in accordance with GAAP.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures and related notes are presented in the Q&A. This information can also be found under "Investor Relations/Financial Information/Non-GAAP Financial Measures" on our website at www.equifax.com.
Forward-Looking Statements
This release contains forward-looking statements and forward-looking information. These statements can be identified by expressions of belief, expectation or intention, as well as statements that are not historical fact. These statements are based on certain factors and assumptions including with respect to foreign exchange rates, revenue growth, results of operations and financial performance, strategic initiatives, business plans, prospects and opportunities, the
While the Company believes these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Several factors could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These factors relate to (i) actions taken by us, including, but not limited to, restructuring actions, strategic initiatives (such as our cloud technology transformation), capital investments and asset acquisitions or dispositions, as well as (ii) developments beyond our control, including, but not limited to, changes in the
Other risk factors relevant to our business include: (i) any compromise of Company, customer or consumer information due to security breaches and other disruptions to our information technology infrastructure; (ii) the failure to achieve and maintain key industry or technical certifications; (iii) the failure to realize the anticipated benefits of our cloud technology transformation strategy; (iv) operational disruptions and strain on our resources caused by our transition to cloud-based technologies; (v) our ability to meet customer requirements for high system availability and response time performance; (vi) effects on our business if we provide inaccurate or unreliable data to customers; (vii) our ability to maintain access to credit, employment, financial and other data from external sources; (viii) the impact of competition; (ix) our ability to maintain relationships with key customers; (x) our ability to successfully introduce new products, services and analytical capabilities; (xi) the impact on the demand for some of our products and services due to the availability of free or less expensive consumer information; (xii) our ability to comply with our obligations under settlement agreements arising out of the 2017 cybersecurity incident; (xiii) potential adverse developments in new and pending legal proceedings, government investigations and regulatory enforcement actions; (xiv) changes in, and the effects of, laws, regulations and government policies governing our business, including oversight by the
A summary of additional risks and uncertainties can be found in our Annual Report on Form 10-K for the year ended
EQUIFAX |
CONSOLIDATED STATEMENTS OF INCOME |
|
|
Three Months Ended
|
||
|
|
2023 |
|
2022 |
(In millions, except per share amounts) |
|
(Unaudited) |
||
Operating revenue |
|
$ 1,326.5 |
|
$ 1,198.0 |
Operating expenses: |
|
|
|
|
Cost of services (exclusive of depreciation and amortization below) |
|
581.6 |
|
539.2 |
Selling, general and administrative expenses |
|
343.4 |
|
340.4 |
Depreciation and amortization |
|
156.4 |
|
142.3 |
Total operating expenses |
|
1,081.4 |
|
1,021.9 |
Operating income |
|
245.1 |
|
176.1 |
Interest expense |
|
(60.3) |
|
(54.6) |
Other (expense) income, net |
|
(2.0) |
|
19.8 |
Consolidated income before income taxes |
|
182.8 |
|
141.3 |
Provision for income taxes |
|
(48.3) |
|
(32.2) |
Consolidated net income |
|
134.5 |
|
109.1 |
Less: Net income attributable to noncontrolling interests including redeemable |
|
(2.1) |
|
(0.9) |
Net income attributable to Equifax |
|
$ 132.4 |
|
$ 108.2 |
Basic earnings per common share: |
|
|
|
|
Net income attributable to Equifax |
|
$ 1.07 |
|
$ 0.88 |
Weighted-average shares used in computing basic earnings per share |
|
123.3 |
|
122.5 |
Diluted earnings per common share: |
|
|
|
|
Net income attributable to Equifax |
|
$ 1.06 |
|
$ 0.88 |
Weighted-average shares used in computing diluted earnings per share |
|
124.4 |
|
123.3 |
Dividends per common share |
|
$ 0.39 |
|
$ 0.39 |
EQUIFAX |
CONSOLIDATED STATEMENTS OF INCOME |
|
|
Twelve Months Ended
|
||
|
|
2023 |
|
2022 |
(In millions, except per share amounts) |
|
(Unaudited) |
||
Operating revenue |
|
$ 5,265.2 |
|
$ 5,122.2 |
Operating expenses: |
|
|
|
|
Cost of services (exclusive of depreciation and amortization below) |
|
2,335.1 |
|
2,177.2 |
Selling, general and administrative expenses |
|
1,385.7 |
|
1,328.9 |
Depreciation and amortization |
|
610.8 |
|
560.1 |
Total operating expenses |
|
4,331.6 |
|
4,066.2 |
Operating income |
|
933.6 |
|
1,056.0 |
Interest expense |
|
(241.4) |
|
(183.0) |
Other income, net |
|
25.7 |
|
56.7 |
Consolidated income before income taxes |
|
717.9 |
|
929.7 |
Provision for income taxes |
|
(166.2) |
|
(229.5) |
Consolidated income from continuing operations |
|
551.7 |
|
700.2 |
Less: Net income attributable to noncontrolling interests including redeemable |
|
(6.4) |
|
(4.0) |
Net income attributable to Equifax |
|
$ 545.3 |
|
$ 696.2 |
Basic earnings per common share: |
|
|
|
|
Net income attributable to Equifax |
|
$ 4.44 |
|
$ 5.69 |
Weighted-average shares used in computing basic earnings per share |
|
122.9 |
|
122.4 |
Diluted earnings per common share: |
|
|
|
|
Net income attributable to Equifax |
|
$ 4.40 |
|
$ 5.65 |
Weighted-average shares used in computing diluted earnings per share |
|
123.9 |
|
123.3 |
Dividends per common share |
|
$ 1.56 |
|
$ 1.56 |
EQUIFAX |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
||
|
|
2023 |
|
2022 |
(In millions, except par values) |
|
(Unaudited) |
||
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ 216.8 |
|
$ 285.2 |
Trade accounts receivable, net of allowance for doubtful accounts of $16.7 and $19.1 at December 31, 2023 and 2022, respectively |
|
917.2 |
|
857.7 |
Prepaid expenses |
|
142.5 |
|
134.3 |
Other current assets |
|
88.8 |
|
93.3 |
Total current assets |
|
1,365.3 |
|
1,370.5 |
Property and equipment: |
|
|
|
|
Capitalized internal-use software and system costs |
|
2,541.0 |
|
2,139.1 |
Data processing equipment and furniture |
|
247.9 |
|
281.4 |
Land, buildings and improvements |
|
272.9 |
|
261.6 |
Total property and equipment |
|
3,061.8 |
|
2,682.1 |
Less accumulated depreciation and amortization |
|
(1,227.8) |
|
(1,095.1) |
Total property and equipment, net |
|
1,834.0 |
|
1,587.0 |
|
|
6,829.9 |
|
6,383.9 |
Indefinite-lived intangible assets |
|
94.8 |
|
94.8 |
Purchased intangible assets, net |
|
1,858.8 |
|
1,818.5 |
Other assets, net |
|
306.2 |
|
293.2 |
Total assets |
|
$ 12,289.0 |
|
$ 11,547.9 |
LIABILITIES AND EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Short-term debt and current maturities of long-term debt |
|
$ 963.4 |
|
$ 967.2 |
Accounts payable |
|
197.6 |
|
250.8 |
Accrued expenses |
|
245.1 |
|
229.0 |
Accrued salaries and bonuses |
|
168.7 |
|
138.7 |
Deferred revenue |
|
118.5 |
|
132.9 |
Other current liabilities |
|
334.7 |
|
296.6 |
Total current liabilities |
|
2,028.0 |
|
2,015.2 |
Long-term debt |
|
4,747.8 |
|
4,820.1 |
Deferred income tax liabilities, net |
|
474.9 |
|
460.3 |
Long-term pension and other postretirement benefit liabilities |
|
100.1 |
|
100.4 |
Other long-term liabilities |
|
250.7 |
|
178.6 |
Total liabilities |
|
7,601.5 |
|
7,574.6 |
Redeemable noncontrolling interests |
|
135.1 |
|
— |
Equifax shareholders' equity: |
|
|
|
|
Preferred stock, $0.01 par value: Authorized shares - 10.0; Issued shares - none |
|
— |
|
— |
Common stock, $1.25 par value: Authorized shares - 300.0; Issued shares - 189.3 at December 31, 2023 and 2022; Outstanding shares - 123.3 and 122.5 at December 31, 2023 and 2022, respectively |
|
236.6 |
|
236.6 |
Paid-in capital |
|
1,761.3 |
|
1,594.2 |
Retained earnings |
|
5,608.6 |
|
5,256.0 |
Accumulated other comprehensive loss |
|
(431.2) |
|
(473.7) |
respectively |
|
(2,635.3) |
|
(2,650.7) |
Stock held by employee benefits trusts, at cost, 0.6 shares at December 31, 2023 and 2022 |
|
(5.9) |
|
(5.9) |
Total Equifax shareholders' equity |
|
4,534.1 |
|
3,956.5 |
Noncontrolling interests |
|
18.3 |
|
16.8 |
Total shareholders' equity |
|
4,552.4 |
|
3,973.3 |
Total liabilities, redeemable noncontrolling interests, and shareholders' equity |
|
$ 12,289.0 |
|
$ 11,547.9 |
EQUIFAX |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|
Twelve Months Ended
|
||
|
|
2023 |
|
2022 |
(In millions) |
|
(Unaudited) |
||
Operating activities: |
|
|
|
|
Consolidated net income |
|
$ 551.7 |
|
$ 700.2 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: |
|
|
|
|
Depreciation and amortization |
|
619.8 |
|
568.6 |
Stock-based compensation expense |
|
71.8 |
|
62.6 |
Deferred income taxes |
|
(70.2) |
|
88.1 |
Gain on fair market value adjustment and gain on sale of equity investment |
|
(13.8) |
|
(36.8) |
Changes in assets and liabilities, excluding effects of acquisitions: |
|
|
|
|
Accounts receivable, net |
|
(32.3) |
|
(138.6) |
Other assets, current and long-term |
|
(13.0) |
|
(22.4) |
Current and long-term liabilities, excluding debt |
|
2.8 |
|
(464.6) |
Cash provided by operating activities |
|
1,116.8 |
|
757.1 |
Investing activities: |
|
|
|
|
Capital expenditures |
|
(601.3) |
|
(624.5) |
Acquisitions, net of cash acquired |
|
(283.8) |
|
(433.8) |
Cash received from divestitures |
|
6.9 |
|
98.8 |
Cash used in investing activities |
|
(878.2) |
|
(959.5) |
Financing activities: |
|
|
|
|
Net short-term (payments) borrowings |
|
(371.2) |
|
242.2 |
Payments on long-term debt |
|
(579.3) |
|
(500.0) |
Proceeds from issuance of long-term debt |
|
872.9 |
|
749.3 |
Dividends paid to Equifax shareholders |
|
(191.8) |
|
(191.1) |
Distributions paid to noncontrolling interests |
|
(45.6) |
|
(3.1) |
Proceeds from exercise of stock options and employee stock purchase plan |
|
32.3 |
|
16.9 |
Payment of taxes related to settlement of equity awards |
|
(17.3) |
|
(33.9) |
Purchase of redeemable noncontrolling interests |
|
— |
|
(0.4) |
Debt issuance costs |
|
(6.2) |
|
(6.2) |
Cash (used in) provided by financing activities |
|
(306.2) |
|
273.7 |
Effect of foreign currency exchange rates on cash and cash equivalents |
|
(0.8) |
|
(10.8) |
(Decrease) increase in cash and cash equivalents |
|
(68.4) |
|
60.5 |
Cash and cash equivalents, beginning of period |
|
285.2 |
|
224.7 |
Cash and cash equivalents, end of period |
|
$ 216.8 |
|
$ 285.2 |
Common Questions & Answers (Unaudited)
(Dollars in millions)
1. Can you provide a further analysis of operating revenue for the fourth quarter and the full year by operating segment?
Operating revenue consists of the following components:
(In millions) |
|
Three Months Ended |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
Local Currency |
|
Organic Local |
Operating revenue: |
|
2023 |
|
2022 |
|
$ Change |
|
% Change |
|
% Change (1) |
|
% Change (2) |
Verification Services |
|
$ 457.1 |
|
$ 398.6 |
|
$ 58.5 |
|
15 % |
|
|
|
15 % |
Employer Services |
|
102.4 |
|
109.8 |
|
(7.4) |
|
(7) % |
|
|
|
(7) % |
Total Workforce Solutions |
|
559.5 |
|
508.4 |
|
51.1 |
|
10 % |
|
|
|
10 % |
Online Information Solutions |
|
327.5 |
|
308.0 |
|
19.5 |
|
6 % |
|
|
|
6 % |
Mortgage Solutions |
|
22.9 |
|
26.0 |
|
(3.1) |
|
(12) % |
|
|
|
(12) % |
Financial Marketing Services |
|
77.3 |
|
71.9 |
|
5.4 |
|
7 % |
|
|
|
7 % |
Total |
|
427.7 |
|
405.9 |
|
21.8 |
|
5 % |
|
|
|
5 % |
|
|
82.2 |
|
84.6 |
|
(2.4) |
|
(3) % |
|
(2) % |
|
(2) % |
|
|
93.6 |
|
81.5 |
|
12.1 |
|
15 % |
|
9 % |
|
9 % |
|
|
98.6 |
|
53.3 |
|
45.3 |
|
85 % |
|
103 % |
|
15 % |
|
|
64.9 |
|
64.3 |
|
0.6 |
|
1 % |
|
1 % |
|
1 % |
|
|
339.3 |
|
283.7 |
|
55.6 |
|
20 % |
|
22 % |
|
6 % |
Total operating revenue |
|
$ 1,326.5 |
|
$ 1,198.0 |
|
$ 128.5 |
|
11 % |
|
11 % |
|
8 % |
(In millions) |
|
Twelve Months Ended |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
Local Currency |
|
Organic Local |
Operating revenue: |
|
2023 |
|
2022 |
|
$ Change |
|
% Change |
|
% Change (1) |
|
% Change (2) |
Verification Services |
|
$ 1,846.2 |
|
$ 1,871.0 |
|
$ (24.8) |
|
(1) % |
|
|
|
(1) % |
Employer Services |
|
469.6 |
|
454.4 |
|
15.2 |
|
3 % |
|
|
|
— % |
Total Workforce Solutions |
|
2,315.8 |
|
2,325.4 |
|
(9.6) |
|
— % |
|
|
|
(1) % |
Online Information Solutions |
|
1,375.2 |
|
1,295.4 |
|
79.8 |
|
6 % |
|
|
|
4 % |
Mortgage Solutions |
|
113.7 |
|
138.3 |
|
(24.6) |
|
(18) % |
|
|
|
(18) % |
Financial Marketing Services |
|
231.5 |
|
224.0 |
|
7.5 |
|
3 % |
|
|
|
3 % |
Total |
|
1,720.4 |
|
1,657.7 |
|
62.7 |
|
4 % |
|
|
|
2 % |
|
|
345.3 |
|
348.4 |
|
(3.1) |
|
(1) % |
|
4 % |
|
4 % |
|
|
333.2 |
|
327.8 |
|
5.4 |
|
2 % |
|
— % |
|
— % |
|
|
290.9 |
|
206.8 |
|
84.1 |
|
41 % |
|
56 % |
|
17 % |
|
|
259.6 |
|
256.1 |
|
3.5 |
|
1 % |
|
4 % |
|
4 % |
|
|
1,229.0 |
|
1,139.1 |
|
89.9 |
|
8 % |
|
12 % |
|
6 % |
Total operating revenue |
|
$ 5,265.2 |
|
$ 5,122.2 |
|
$ 143.0 |
|
3 % |
|
4 % |
|
2 % |
|
|
(1) |
Local currency revenue change is calculated by conforming 2023 results using 2022 exchange rates. |
|
|
(2) |
Organic local currency revenue growth is defined as local currency revenue growth, adjusted to reflect an increase in prior year Equifax revenue from the revenue of acquired companies in the prior year period. This adjustment is made for 12 months following the acquisition. |
2. What is the estimate of the change in overall
The change year over year in total
Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Financial Measures (Unaudited)
(Dollars in millions, except per share amounts)
A. Reconciliation of net income attributable to Equifax to diluted EPS attributable to Equifax, defined as net income adjusted for acquisition-related amortization expense, accrual for legal and regulatory matters related to the 2017 cybersecurity incident, fair market value adjustment and gain on sale of equity investments, pension mark-to-market fair value adjustment, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, realignment of resources and other costs, income tax effect of stock awards recognized upon vesting or settlement,
|
|
Three Months Ended
|
|
|
|
|
||
(In millions, except per share amounts) |
|
2023 |
|
2022 |
|
$ Change |
|
% Change |
Net income attributable to Equifax |
|
$ 132.4 |
|
$ 108.2 |
|
$ 24.2 |
|
22 % |
Acquisition-related amortization expense of certain acquired intangibles (1) |
|
65.4 |
|
62.3 |
|
3.1 |
|
5 % |
Accrual for legal and regulatory matters related to the 2017 cybersecurity incident (2) |
|
1.9 |
|
0.2 |
|
1.7 |
|
nm |
Fair market value adjustment of equity investment (3) |
|
— |
|
(14.2) |
|
14.2 |
|
nm |
Pension mark-to-market fair value adjustment (4) |
|
0.1 |
|
(1.4) |
|
1.5 |
|
nm |
Foreign currency impact of certain intercompany loans (5) |
|
1.3 |
|
1.4 |
|
(0.1) |
|
(7) % |
Acquisition-related costs other than acquisition amortization (6) |
|
27.2 |
|
25.3 |
|
1.9 |
|
8 % |
Realignment of resources and other costs (7) |
|
19.4 |
|
24.0 |
|
(4.6) |
|
(19) % |
Income tax effects of stock awards that are recognized upon vesting or settlement (8) |
|
(0.6) |
|
(0.5) |
|
(0.1) |
|
20 % |
|
|
3.2 |
|
0.1 |
|
3.1 |
|
nm |
Adjustments to deferred tax balances (11) |
|
1.0 |
|
— |
|
1.0 |
|
nm |
Tax impact of adjustments (12) |
|
(25.9) |
|
(18.3) |
|
(7.6) |
|
42 % |
Net income attributable to Equifax, adjusted for items listed above |
|
$ 225.4 |
|
$ 187.1 |
|
$ 38.3 |
|
20 % |
Diluted EPS attributable to Equifax, adjusted for items listed above |
|
$ 1.81 |
|
$ 1.52 |
|
$ 0.29 |
|
19 % |
Weighted-average shares used in computing diluted EPS |
|
124.4 |
|
123.3 |
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
||
(In millions, except per share amounts) |
|
2023 |
|
2022 |
|
$ Change |
|
% Change |
Net income attributable to Equifax |
|
$ 545.3 |
|
$ 696.2 |
|
$ (150.9) |
|
(22) % |
Acquisition-related amortization expense of certain acquired intangibles (1) |
|
250.7 |
|
236.7 |
|
14.0 |
|
6 % |
Accrual for legal and regulatory matters related to the 2017 cybersecurity incident (2) |
|
16.8 |
|
1.5 |
|
15.3 |
|
nm |
Fair market value adjustment and gain on sale of equity investments (3) |
|
(13.4) |
|
(33.2) |
|
19.8 |
|
(60) % |
Pension mark-to-market fair value adjustment (4) |
|
0.1 |
|
(1.4) |
|
1.5 |
|
nm |
Foreign currency impact of certain intercompany loans (5) |
|
(1.0) |
|
(1.3) |
|
0.3 |
|
(23) % |
Acquisition-related costs other than acquisition amortization (6) |
|
103.2 |
|
68.2 |
|
35.0 |
|
51 % |
Realignment of resources and other costs (7) |
|
34.6 |
|
24.0 |
|
10.6 |
|
44 % |
Income tax effects of stock awards that are recognized upon vesting or settlement (8) |
|
(3.4) |
|
(6.8) |
|
3.4 |
|
(50) % |
|
|
3.8 |
|
(0.2) |
|
4.0 |
|
nm |
Gain on settlement of |
|
— |
|
(2.2) |
|
2.2 |
|
nm |
Adjustments to deferred tax balances (11) |
|
(27.2) |
|
3.9 |
|
(31.1) |
|
nm |
Tax impact of adjustments (12) |
|
(78.0) |
|
(52.8) |
|
(25.2) |
|
48 % |
Net income attributable to Equifax, adjusted for items listed above |
|
$ 831.5 |
|
$ 932.6 |
|
$ (101.1) |
|
(11) % |
Diluted EPS attributable to Equifax, adjusted for items listed above |
|
$ 6.71 |
|
$ 7.56 |
|
$ (0.85) |
|
(11) % |
Weighted-average shares used in computing diluted EPS |
|
123.9 |
|
123.3 |
|
|
|
|
|
|
(1) |
During the fourth quarter of 2023, we recorded acquisition-related amortization expense of certain acquired intangibles of |
|
|
|
For the year ended |
|
|
(2) |
During the fourth quarter of 2023, we recorded an accrual for legal and regulatory matters related to the 2017 cybersecurity incident of |
|
|
(3) |
For the year ended |
|
|
(4) |
During the fourth quarter of 2023, we recorded a |
|
|
(5) |
During the fourth quarter of 2023 and for the year ended |
|
|
(6) |
During the fourth quarter of 2023 and for the year ended |
|
|
(7) |
During the fourth quarter of 2023 and for the year ended |
|
|
(8) |
During the fourth quarter and for the year ended |
|
|
(9) |
|
|
|
(10) |
During the third quarter of 2022 and the year ended |
|
|
(11) |
During the fourth quarter of 2023 and the year ended |
|
|
(12) |
During the fourth quarter of 2023, we recorded the tax impact of adjustments of |
|
|
|
For the year ended |
Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Financial Measures (Unaudited)
(Dollars in millions, except per share amounts)
B. Reconciliation of net income attributable to Equifax to adjusted EBITDA, defined as net income excluding income taxes, interest expense, net, depreciation and amortization expense, accrual for legal and regulatory matters related to the 2017 cybersecurity incident, fair market value adjustment and gain on sale of equity investments, pension mark-to-market fair value adjustment, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, realignment of resources and other costs,
|
|
Three Months Ended
|
|
|
|
|
||
(In millions) |
|
2023 |
|
2022 |
|
$ Change |
|
% Change |
Revenue |
|
$ 1,326.5 |
|
$ 1,198.0 |
|
$ 128.5 |
|
11 % |
Net income attributable to Equifax |
|
$ 132.4 |
|
$ 108.2 |
|
$ 24.2 |
|
22 % |
Income taxes |
|
48.3 |
|
32.2 |
|
16.1 |
|
50 % |
Interest expense, net* |
|
56.4 |
|
53.0 |
|
3.4 |
|
6 % |
Depreciation and amortization |
|
156.4 |
|
142.3 |
|
14.1 |
|
10 % |
Accrual for legal and regulatory matters related to 2017 cybersecurity incident (1) |
|
1.9 |
|
0.2 |
|
1.7 |
|
nm |
Fair market value adjustment of equity investment (2) |
|
— |
|
(14.2) |
|
14.2 |
|
nm |
Pension mark-to-market fair value adjustment (3) |
|
0.1 |
|
(1.4) |
|
1.5 |
|
nm |
Foreign currency impact of certain intercompany loans (4) |
|
1.3 |
|
1.4 |
|
(0.1) |
|
(7) % |
Acquisition-related costs other than acquisition amortization (5) |
|
27.2 |
|
25.3 |
|
1.9 |
|
8 % |
Realignment of resources and other costs (6) |
|
19.4 |
|
24.0 |
|
(4.6) |
|
(19) % |
|
|
3.2 |
|
0.1 |
|
3.1 |
|
nm |
Adjusted EBITDA, excluding the items listed above |
|
$ 446.6 |
|
$ 371.1 |
|
$ 75.5 |
|
20 % |
Adjusted EBITDA margin |
|
33.7 % |
|
31.0 % |
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
||
(In millions) |
|
2023 |
|
2022 |
|
$ Change |
|
% Change |
Revenue |
|
$ 5,265.2 |
|
$ 5,122.2 |
|
$ 143.0 |
|
3 % |
Net income attributable to Equifax |
|
$ 545.3 |
|
$ 696.2 |
|
$ (150.9) |
|
(22) % |
Income taxes |
|
166.2 |
|
229.5 |
|
(63.3) |
|
(28) % |
Interest expense, net* |
|
227.2 |
|
180.4 |
|
46.8 |
|
26 % |
Depreciation and amortization |
|
610.8 |
|
560.1 |
|
50.7 |
|
9 % |
Accrual for legal and regulatory matters related to 2017 cybersecurity incident (1) |
|
16.8 |
|
1.5 |
|
15.3 |
|
nm |
Fair market value adjustment and gain on sale of equity investments (2) |
|
(13.4) |
|
(33.2) |
|
19.8 |
|
(60) % |
Pension mark-to-market fair value adjustment (3) |
|
0.1 |
|
(1.4) |
|
1.5 |
|
nm |
Foreign currency impact of certain intercompany loans (4) |
|
(1.0) |
|
(1.3) |
|
0.3 |
|
(23) % |
Acquisition-related costs other than acquisition amortization (5) |
|
103.2 |
|
68.2 |
|
35.0 |
|
51 % |
Realignment of resources and other costs (6) |
|
34.6 |
|
24.0 |
|
10.6 |
|
44 % |
|
|
3.8 |
|
(0.2) |
|
4.0 |
|
nm |
Gain on settlement of |
|
— |
|
(2.2) |
|
2.2 |
|
nm |
Adjusted EBITDA, excluding the items listed above |
|
$ 1,693.6 |
|
$ 1,721.6 |
|
$ (28.0) |
|
(2) % |
Adjusted EBITDA margin |
|
32.2 % |
|
33.6 % |
|
|
|
|
|
|
*Excludes interest income of |
|
|
|
(1) |
During the fourth quarter of 2023, we recorded an accrual for legal and regulatory matters related to the 2017 cybersecurity incident of |
|
|
(2) |
For the year ended |
|
|
(3) |
During the fourth quarter of 2023, we recorded a |
|
|
(4) |
During the fourth quarter of 2023 and for the year ended |
|
|
(5) |
During the fourth quarter of 2023 and for the year ended |
|
|
(6) |
During the fourth quarter of 2023 and for the year ended |
|
|
(7) |
|
|
|
(8) |
During the third quarter of 2022 and the year ended |
C. Reconciliation of operating income by segment to Adjusted EBITDA, excluding depreciation and amortization expense, other income, net, noncontrolling interest, accrual for legal and regulatory matters related to the 2017 cybersecurity incident, fair market value adjustment and gain on sale of equity investments, pension mark-to-market fair value adjustment, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, realignment of resources and other costs,
(In millions) |
|
Three Months Ended |
||||||||
|
|
Workforce |
|
|
|
International |
|
General Corporate |
|
Total |
|
|
|
|
|
||||||
Revenue |
|
$ 559.5 |
|
$ 427.7 |
|
$ 339.3 |
|
— |
|
$ 1,326.5 |
Operating Income |
|
234.7 |
|
93.9 |
|
60.6 |
|
(144.1) |
|
245.1 |
Depreciation and Amortization |
|
44.4 |
|
52.6 |
|
41.7 |
|
17.7 |
|
156.4 |
Other expense, net* |
|
(0.1) |
|
(0.1) |
|
(3.1) |
|
(2.6) |
|
(5.9) |
Noncontrolling interest |
|
— |
|
— |
|
(2.1) |
|
— |
|
(2.1) |
Adjustments (1) |
|
7.5 |
|
3.7 |
|
8.7 |
|
33.2 |
|
53.1 |
Adjusted EBITDA |
|
$ 286.5 |
|
$ 150.1 |
|
$ 105.8 |
|
$ (95.8) |
|
$ 446.6 |
Operating Margin |
|
41.9 % |
|
22.0 % |
|
17.9 % |
|
nm |
|
18.5 % |
Adjusted EBITDA Margin |
|
51.2 % |
|
35.1 % |
|
31.2 % |
|
nm |
|
33.7 % |
(In millions) |
|
Twelve Months Ended |
||||||||
|
|
Workforce |
|
|
|
International |
|
General Corporate |
|
Total |
|
|
|
|
|
||||||
Revenue |
|
$ 2,315.8 |
|
$ 1,720.4 |
|
$ 1,229.0 |
|
— |
|
$ 5,265.2 |
Operating Income |
|
969.3 |
|
365.0 |
|
167.8 |
|
(568.5) |
|
933.6 |
Depreciation and Amortization |
|
176.4 |
|
205.8 |
|
147.6 |
|
81.0 |
|
610.8 |
Other (expense) income, net* |
|
(0.2) |
|
0.3 |
|
15.7 |
|
(4.3) |
|
11.5 |
Noncontrolling interest |
|
— |
|
— |
|
(6.4) |
|
— |
|
(6.4) |
Adjustments (1) |
|
35.5 |
|
22.1 |
|
1.1 |
|
85.4 |
|
144.1 |
Adjusted EBITDA |
|
$ 1,181.0 |
|
$ 593.2 |
|
$ 325.8 |
|
$ (406.4) |
|
$ 1,693.6 |
Operating Margin |
|
41.9 % |
|
21.2 % |
|
13.7 % |
|
nm |
|
17.7 % |
Adjusted EBITDA Margin |
|
51.0 % |
|
34.5 % |
|
26.5 % |
|
nm |
|
32.2 % |
|
*Excludes interest income of |
(In millions) |
|
Three Months Ended |
||||||||
|
|
Workforce |
|
|
|
International |
|
General Corporate |
|
Total |
|
|
|
|
|
||||||
Revenue |
|
$ 508.4 |
|
$ 405.9 |
|
$ 283.7 |
|
— |
|
$ 1,198.0 |
Operating Income |
|
185.4 |
|
86.7 |
|
35.1 |
|
(131.1) |
|
176.1 |
Depreciation and Amortization |
|
41.4 |
|
50.5 |
|
32.4 |
|
18.0 |
|
142.3 |
Other income (expense), net* |
|
— |
|
0.1 |
|
18.8 |
|
(0.7) |
|
18.2 |
Noncontrolling interest |
|
— |
|
— |
|
(0.9) |
|
— |
|
(0.9) |
Adjustments (2) |
|
10.8 |
|
5.8 |
|
(12.1) |
|
30.9 |
|
35.4 |
Adjusted EBITDA |
|
$ 237.6 |
|
$ 143.1 |
|
$ 73.3 |
|
$ (82.9) |
|
$ 371.1 |
Operating Margin |
|
36.5 % |
|
21.4 % |
|
12.4 % |
|
nm |
|
14.7 % |
Adjusted EBITDA Margin |
|
46.8 % |
|
35.3 % |
|
25.8 % |
|
nm |
|
31.0 % |
(In millions) |
|
Twelve Months Ended |
||||||||
|
|
Workforce |
|
|
|
International |
|
General Corporate |
|
Total |
|
|
|
|
|
||||||
Revenue |
|
$ 2,325.4 |
|
$ 1,657.7 |
|
$ 1,139.1 |
|
— |
|
$ 5,122.2 |
Operating Income |
|
1,006.0 |
|
402.1 |
|
147.0 |
|
(499.1) |
|
1,056.0 |
Depreciation and Amortization |
|
162.2 |
|
191.4 |
|
132.0 |
|
74.5 |
|
560.1 |
Other income (expense), net* |
|
— |
|
29.3 |
|
(20.5) |
|
45.3 |
|
54.1 |
Noncontrolling interest |
|
— |
|
— |
|
(4.0) |
|
— |
|
(4.0) |
Adjustments (2) |
|
25.3 |
|
(13.1) |
|
38.1 |
|
5.1 |
|
55.4 |
Adjusted EBITDA |
|
$ 1,193.5 |
|
$ 609.7 |
|
$ 292.6 |
|
$ (374.2) |
|
$ 1,721.6 |
Operating Margin |
|
43.3 % |
|
24.3 % |
|
12.9 % |
|
nm |
|
20.6 % |
Adjusted EBITDA Margin |
|
51.3 % |
|
36.8 % |
|
25.7 % |
|
nm |
|
33.6 % |
|
|
*Excludes interest income |
|
|
|
(1) |
During the fourth quarter of 2023, we recorded pre-tax expenses of |
|
|
|
For the year ended |
|
|
(2) |
During the fourth quarter of 2022, we recorded pre-tax expenses of |
|
|
|
For year ended |
Notes to Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Financial Measures
Diluted EPS attributable to Equifax is adjusted for the following items:
Acquisition-related amortization expense - During the fourth quarter of 2023 and 2022, we recorded acquisition-related amortization expense of certain acquired intangibles of
We calculate this financial measure by excluding the impact of acquisition-related amortization expense and including a benefit to reflect the material cash income tax savings resulting from the income tax deductibility of amortization for certain acquired intangibles. These financial measures are not prepared in conformity with GAAP. Management believes excluding the impact of amortization expense is useful because excluding acquisition-related amortization, and other items that are not comparable allows investors to evaluate our performance for different periods on a more comparable basis. Certain acquired intangibles result in material cash income tax savings which are not reflected in earnings. Management believes that including a benefit to reflect the cash income tax savings is useful as it allows investors to better value Equifax. Management makes these adjustments to earnings when measuring profitability, evaluating performance trends, setting performance objectives and calculating our return on invested capital.
Accrual for legal and regulatory matters related to the 2017 cybersecurity incident - Accrual for legal and regulatory matters related to the 2017 cybersecurity incident includes legal fees to respond to subsequent litigation and government investigations for the periods presented. During the fourth quarter of 2023 and for the year ended
Fair market value adjustment and gain on sale of equity investments - During the year ended
Pension mark-to-market fair value adjustment - We utilize a mark-to-market method of accounting for recognizing actuarial gains and losses and expected return on plan assets for our defined benefit pension and other postretirement benefit plans. Under our accounting methodology for recognizing actuarial gains and losses and expected return on plan assets for our defined benefit pension and other postretirement benefit plans, remeasurement of projected benefit obligation and plan assets are immediately recognized in earnings through net periodic benefit cost within Other Income (Expense) on the Consolidated Statements of Income, with pension and postretirement plans to be remeasured annually in the fourth quarter, or on an interim basis as triggering events require remeasurement. During the fourth quarter of 2023 and for the year ended
Foreign currency impact of certain intercompany loans - During the fourth quarter of 2023 and for the year ended
Acquisition-related costs other than acquisition amortization - During the fourth quarter and for the year ended
Charge related to the realignment of resources and other costs - During the fourth quarter of 2023 and for the year ended
Income tax effects of stock awards that are recognized upon vesting or settlement - During the fourth quarter and for the year ended
Gain on settlement of
Adjustments to deferred tax balances - During the fourth quarter of 2023, we recorded a tax expense of
Adjusted EBITDA and EBITDA margin - Management defines adjusted EBITDA as consolidated net income attributable to Equifax plus net interest expense, income taxes, depreciation and amortization, and also excludes certain one-time items. Management believes the use of adjusted EBITDA and adjusted EBITDA margin allows investors to evaluate our performance for different periods on a more comparable basis.
Contact: |
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|
|
|
|
Investor Relations |
Media Relations |
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|
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