10-KPeriod: FY2019

EQUIFAX INC Annual Report, Year Ended Dec 31, 2019

Filed February 20, 2020For Securities:EFX

Summary

Equifax Inc. operates as a global data, analytics, and technology company, providing information solutions and HR BPO services. The company's business segments include U.S. Information Solutions (USIS), Workforce Solutions, International, and Global Consumer Solutions. In 2019, Equifax reported operating revenue of $3.51 billion, a 3% increase year-over-year, primarily driven by its Workforce Solutions and USIS segments. However, the company posted a net loss of $398.8 million, a significant decrease from a net income of $299.8 million in 2018. This decline is largely attributed to an $800.9 million loss, net of insurance recoveries, related to legal proceedings and government investigations stemming from the 2017 cybersecurity incident. The company continues to invest heavily in its technology transformation and data security initiatives, incurring substantial expenses in 2019 and expecting similar levels in 2020. Despite the net loss, the company maintains a strong financial position with significant liquidity available under its credit facilities.

Financial Highlights

53 data points
Beta

Revenue

$3.51B

Net Income

-$384.10M

-11.0% Net Margin

EPS (Diluted)

$-3.15

Total Assets

$7.91B

Cash & Equivalents

$401.30M

Free Cash Flow

$313.80M

Financial Statements
Beta
Revenue$3.51B
SG&A Expenses$1.99B
Operating Expenses$3.84B
Operating Income-$335.40M
Interest Expense$111.70M
Net Income-$384.10M
EPS (Basic)$-3.18
EPS (Diluted)$-3.15
Shares Outstanding (Basic)120.90M
Shares Outstanding (Diluted)122.00M

Key Highlights

  • 1Operating revenue grew by 3% to $3.51 billion in 2019, driven by Workforce Solutions and USIS, though International and Global Consumer Solutions saw declines.
  • 2The company reported a net loss of $398.8 million in 2019, a significant reversal from a net income of $299.8 million in 2018, primarily due to $800.9 million in losses related to the 2017 cybersecurity incident.
  • 3Workforce Solutions demonstrated strong performance with revenue increasing by 15% year-over-year, led by Verification Services.
  • 4Equifax continues to invest heavily in its technology transformation and data security initiatives, with substantial expenses incurred in 2019 expected to continue in 2020.
  • 5The company settled the majority of legal proceedings and government investigations related to the 2017 cybersecurity incident, including a significant consumer settlement fund of $380.5 million.
  • 6Total debt increased to $3.38 billion in 2019, largely due to the issuance of $750 million in senior notes.
  • 7The company's financial position remains solid with $1.1 billion available under its revolving credit facility as of December 31, 2019.

Frequently Asked Questions

In 2019, Equifax reported operating revenue of $3.51 billion, a 3% increase year-over-year. However, the company incurred a net loss of $398.8 million, primarily due to significant expenses related to legal settlements and investigations stemming from the 2017 cybersecurity incident, which amounted to $800.9 million net of insurance recoveries.

Equifax has committed substantial resources to address the 2017 cybersecurity incident. This includes a global settlement that resolved most consumer class action lawsuits and government investigations, involving significant monetary payments and commitments to enhance its information security program. The company is also continuing to invest in its technology infrastructure and data security to prevent future incidents.

The Workforce Solutions segment was a key growth driver, with revenue increasing by 15% year-over-year, largely propelled by its Verification Services. The U.S. Information Solutions (USIS) segment also saw revenue growth, driven by core credit decisioning volumes and acquisitions.

Equifax is undergoing a multi-year technology transformation, which includes rebuilding its technology infrastructure and accelerating its migration to a public cloud environment. The company expects to continue incurring significant expenses related to these initiatives, including enhanced data security, at similar levels in 2020 as in 2019.

Equifax's total debt increased to $3.38 billion by the end of 2019, up from $2.63 billion in 2018. This increase was primarily due to the issuance of $750 million in senior notes in November 2019 to repay existing borrowings and for general corporate purposes. The company's credit facilities provide significant liquidity, with $1.1 billion available under its revolving credit facility as of December 31, 2019.