10-QPeriod: Q2 FY2017

EQUIFAX INC Quarterly Report for Q2 Ended Jun 30, 2017

Filed July 27, 2017For Securities:EFX

Summary

Equifax Inc. reported strong financial results for the three and six months ended June 30, 2017, demonstrating significant year-over-year growth. Operating revenue increased by 6% for the quarter and 10% for the year-to-date period, driven by broad-based growth across its segments, particularly in U.S. Information Solutions and International. Net income attributable to Equifax also saw substantial increases of 26% and 37% for the respective periods, reflecting improved operating income and a beneficial change in accounting for stock-based compensation. The company's operating margins expanded across segments, highlighting operational efficiency. Liquidity remains strong, supported by robust cash flow from operations and available credit facilities.

Financial Highlights

52 data points
Beta

Revenue

$856.70M

Net Income

$165.40M

19.3% Net Margin

EPS (Diluted)

$1.36

Total Assets

$7.06B

Cash & Equivalents

$403.90M

Free Cash Flow

$225.40M

Financial Statements
Beta
Revenue$856.70M
SG&A Expenses$226.60M
Operating Expenses$590.80M
Operating Income$265.90M
Interest Expense$24.60M
Net Income$165.40M
EPS (Basic)$1.37
EPS (Diluted)$1.36
Shares Outstanding (Basic)120.30M
Shares Outstanding (Diluted)121.90M

Key Highlights

  • 1Total operating revenue increased by 6% to $856.7 million for the three months ended June 30, 2017, and by 10% to $1,689.0 million for the six months ended June 30, 2017, compared to the prior year periods.
  • 2Net income attributable to Equifax grew significantly, up 26% to $165.4 million for the quarter and up 37% to $318.7 million for the six-month period.
  • 3Diluted earnings per share (EPS) rose by 26% to $1.36 for the quarter and by 35% to $2.61 for the six-month period.
  • 4Operating margins improved across all segments, with consolidated operating margin increasing to 30.8% for the quarter and 28.5% for the year-to-date.
  • 5The International segment showed robust growth, with revenue up 6% for the quarter and 19% for the six months, partly driven by the Veda acquisition and strong local currency performance.
  • 6Cash provided by operating activities increased by $30.6 million to $329.1 million for the six months ended June 30, 2017, indicating strong operational cash generation.
  • 7The company paid $0.78 per share in dividends during the first six months of 2017, an increase from $0.66 per share in the prior year period.

Frequently Asked Questions

Revenue growth was primarily driven by broad-based increases across Equifax's segments, including strong performance in U.S. Information Solutions, International markets (partially due to the Veda acquisition), and Workforce Solutions. Growth was also fueled by increased demand in mortgage, government, and financial verticals.

The acquisition of Veda contributed significantly to the revenue growth, particularly in the International segment and for the six-month period. It also led to an increase in depreciation and amortization expenses and influenced cost of services and operating income.

Equifax expects long-term average organic revenue growth between 6% and 8%, with an additional 1% to 2% from strategic acquisitions. They anticipate modest economic growth in key markets for the remainder of 2017, though mortgage market volumes are expected to be down for the full year.

Equifax maintains a strong financial position with substantial cash generation from operations. They utilize a commercial paper program and revolving credit facilities for liquidity. At June 30, 2017, approximately $383.3 million was available under their revolving credit facility, and they were in compliance with all debt covenants.