Summary
Equifax Inc. reported mixed financial results for the three and six months ended June 30, 2019. While total revenue remained relatively flat year-over-year for the quarter and saw a slight decrease for the year-to-date period, the company experienced a significant decline in net income and earnings per share. This was largely driven by substantial increases in operating expenses, particularly selling, general, and administrative costs, which were heavily impacted by accruals for legal proceedings and investigations related to the 2017 cybersecurity incident. Despite these challenges, the Workforce Solutions segment demonstrated strong revenue growth, indicating resilience. The company also provided an update on its significant settlement agreements related to the 2017 cybersecurity incident, which will involve substantial financial contributions. Equifax's liquidity remains adequate, supported by its revolving credit facility and receivables funding facility, as it navigates ongoing legal resolutions and strategic investments in technology and security.
Financial Highlights
52 data points| Revenue | $880.00M |
| SG&A Expenses | $306.80M |
| Operating Expenses | $766.20M |
| Operating Income | $113.80M |
| Interest Expense | $27.60M |
| Net Income | $69.50M |
| EPS (Basic) | $0.58 |
| EPS (Diluted) | $0.57 |
| Shares Outstanding (Basic) | 120.80M |
| Shares Outstanding (Diluted) | 122.00M |
Key Highlights
- 1Total operating revenue for the three months ended June 30, 2019, was $880.0 million, a slight increase of 0.3% from $876.9 million in the prior year period. For the six months ended June 30, 2019, operating revenue was $1,726.1 million, a decrease of 1.0% from $1,742.6 million in the prior year period.
- 2Net income attributable to Equifax for the three months ended June 30, 2019, was $66.8 million, a significant decrease from $144.8 million in the prior year period. Diluted EPS decreased to $0.55 from $1.19.
- 3For the six months ended June 30, 2019, Equifax reported a net loss attributable to Equifax of $(489.1) million, compared to a net income of $235.8 million in the prior year period. Diluted EPS was $(4.02) compared to $1.94.
- 4Operating expenses increased significantly, with selling, general, and administrative expenses rising by 19% for the quarter and 134% for the six-month period, largely due to accruals for legal proceedings and investigations related to the 2017 cybersecurity incident ($11.3 million for the quarter, $701.3 million year-to-date).
- 5The Workforce Solutions segment showed strong performance, with revenue increasing by 11% in the quarter and 10% year-to-date, driven by growth in Verification Services.
- 6The company entered into significant settlement agreements in July 2019 to resolve U.S. Consumer MDL Litigation and investigations by the FTC, CFPB, and state attorneys general, agreeing to contribute $380.5 million to a restitution fund and pay additional penalties totaling $180.5 million.
- 7The company has $1.1 billion available under its revolving credit facility and $25.0 million under its receivables funding facility, providing adequate liquidity to manage its financial obligations and the anticipated payments from the cybersecurity incident settlements.