Equifax, Inc. (EFX) Earnings & Analysis

Latest quarter

Equifax reported third-quarter revenue of $1.7 billion, up from $1.5 billion a year earlier and 0.30% above the consensus. Adjusted earnings per share of $2.26 beat the consensus estimate of $2.19, while diluted earnings per share rose to $1.79 from $1.29.

The company’s filing said revenue grew across all three businesses. Workforce Solutions revenue increased 7%, as growth in verification services was partly offset by lower employer services revenue. USIS revenue rose 13%, helped by mortgage product pricing and diversified markets, while International revenue increased 9%.

Equifax’s gross margin fell to 55.5% from 57.1%, and its filing attributed higher cost of services primarily to royalty and revenue-share costs. Operating margin rose to 21.0% from 17.1%; the filing cited higher revenue, partly offset by increased operating expenses. Free cash flow was $436.9 million, compared with $437.9 million a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Mark Begor said the U.S. mortgage market weakened as interest rates rose, leaving third-quarter mortgage revenue about $20 million below the company’s expectations. He said diversified markets revenue grew over 8%, including growth in talent solutions and consumer lending. CFO John Gamble said financial-institution and auto volumes slowed late in the quarter and into the fourth quarter, alongside some slowing in hiring.

Begor said Workforce Solutions signed state agency agreements for income and employment data totaling over $550 million in annual contract value, including about $150 million in new business and $400 million in renewals. He expects the agreements to principally benefit government revenue in 2027. Asked about the sales cycle, he said government signings can be uneven and that implementation follows before contracts become revenue.

On mortgage competition and pricing, Begor said about 2,000 lenders were using VantageScore in underwriting and over 200 were using it exclusively. He said most lenders still purchased a FICO mortgage score while obtaining a free VantageScore from Equifax, keeping VantageScore revenue small. Equifax plans to maintain its $1 VantageScore price through the end of 2028, he said.

Begor also estimated roughly $80 million of potential annual revenue impact, based on 2026 revenue, if government-sponsored enterprise originations moved from three-bureau to two-bureau credit reports. Asked about the company’s Twin Indicator product, he said customer implementation takes time and that “we haven’t quantified the actual share gains.”

On costs, Begor said Equifax had doubled its multiyear AI productivity goal from $75 million to $150 million. He attributed third-quarter EBITDA margin expansion excluding FICO to operating leverage, cost management and AI productivity. Looking ahead, Gamble said, “4Q26 mortgage revenue is down about $60 million versus our July guidance,” reflecting the weaker mortgage market.

Guidance

Gamble said Equifax lowered its 2026 revenue guidance midpoint to $6.661 billion, with U.S. mortgage revenue expected to be about $80 million below the July guide. He said adjusted EPS is expected to be $8.50 at the midpoint, down slightly from the prior midpoint but within the previous range.

Equifax raised its expected 2026 EBITDA margin expansion excluding FICO mortgage royalties to 100 basis points from 75 basis points. Gamble also lowered expected Workforce Solutions revenue growth to mid-single digits from high single digits, citing lower mortgage revenue.