10-KPeriod: FY2016

EQUIFAX INC Annual Report, Year Ended Dec 31, 2016

Filed February 22, 2017For Securities:EFX

Summary

Equifax Inc.'s 2016 10-K filing reveals a year of significant growth, largely driven by the acquisition of Veda Group Limited for approximately $1.9 billion. This strategic move expanded Equifax's global footprint, particularly in the Asia Pacific region. The company demonstrated robust top-line growth, with operating revenue increasing by 18% year-over-year, bolstered by strong organic performance across its U.S. Information Solutions and Workforce Solutions segments. The Workforce Solutions segment, in particular, showed impressive growth in both Verification Services and Employer Services. Despite increased operating expenses, partly due to integration costs related to the Veda acquisition, Equifax maintained a strong operating margin of 26.0%. The company's financial position remained solid, supported by strong cash flow from operations. Equifax continues to invest in technology and new product development to drive future growth and maintain its competitive edge in the evolving data and information solutions market. The company also navigated a complex regulatory environment, with ongoing attention to data privacy and consumer protection laws.

Financial Highlights

53 data points
Beta

Revenue

$3.14B

Net Income

$488.80M

15.5% Net Margin

EPS (Diluted)

$4.04

Total Assets

$6.66B

Cash & Equivalents

$129.30M

Free Cash Flow

$823.00M

Financial Statements
Beta
Revenue$3.14B
SG&A Expenses$941.00M
Operating Expenses$2.32B
Operating Income$825.10M
Interest Expense$92.10M
Net Income$488.80M
EPS (Basic)$4.10
EPS (Diluted)$4.04
Shares Outstanding (Basic)119.30M
Shares Outstanding (Diluted)121.10M

Key Highlights

  • 1Acquisition of Veda Group Limited for approximately $1.9 billion, significantly expanding international presence, especially in Asia Pacific.
  • 218% year-over-year increase in operating revenue, reaching $3.14 billion, driven by broad-based organic growth and the Veda acquisition.
  • 3Workforce Solutions segment experienced strong growth (22% revenue increase), particularly in Verification Services and Employer Services.
  • 4Maintained a stable operating margin of 26.0% despite increased expenses related to acquisitions and integration.
  • 5Generated robust cash flow from operations of $795.8 million, supporting business investments and financial flexibility.
  • 6Invested heavily in capital expenditures ($173.5 million) for technology infrastructure and new product development.
  • 7Navigated a complex regulatory landscape, with ongoing compliance efforts and adherence to evolving data privacy and consumer protection laws.

Frequently Asked Questions

The primary driver of Equifax's growth in 2016 was the acquisition of Veda Group Limited for approximately $1.9 billion. This acquisition significantly expanded the company's international operations, particularly in Australia and New Zealand.

The Veda acquisition led to an 18% increase in operating revenue to $3.14 billion. While it also increased operating expenses due to integration costs and amortization of intangibles, Equifax maintained a strong operating margin of 26.0%. The acquisition also contributed to a significant increase in goodwill and purchased intangible assets on the balance sheet.

For 2017, Equifax expected modest economic growth in the U.S. and strengthening economies in several international markets like the UK, Australia, Canada, Argentina, and Chile. The company anticipates long-term organic revenue growth of 6-8% with additional growth from strategic acquisitions, along with faster earnings per share growth.

Equifax faces risks including negative economic conditions, reliance on external data sources, intense competition, the need for timely new product introductions, increased availability of free consumer information, system constraints or failures, security breaches, and evolving government regulations. International operations also carry risks related to economic and political conditions, currency fluctuations, and differing regulatory environments.