10-QPeriod: Q2 FY2021

EQUIFAX INC Quarterly Report for Q2 Ended Jun 30, 2021

Filed July 22, 2021For Securities:EFX

Summary

Equifax Inc. reported a significant increase in financial performance for the second quarter and first six months of 2021 compared to the same periods in 2020. Total operating revenue surged by 26% in both periods, reaching $1.23 billion for the quarter and $2.45 billion for the six months. This growth was primarily driven by strong performances in the Workforce Solutions, U.S. Information Solutions (USIS), and International segments, partially offset by a decline in Global Consumer Solutions. Profitability also saw substantial improvement, with operating income more than doubling year-over-year for both periods. Net income attributable to Equifax more than doubled to $215.1 million in Q2 2021 and to $416.7 million in the first six months of 2021. This robust financial performance reflects the company's ability to leverage growth opportunities across its key segments, improve operational efficiencies, and benefit from recovering economic conditions, despite ongoing investments in technology and security initiatives.

Financial Highlights

52 data points
Beta

Revenue

$1.23B

Net Income

$215.10M

17.4% Net Margin

EPS (Diluted)

$1.74

Total Assets

$9.34B

Cash & Equivalents

$458.10M

Free Cash Flow

$407.70M

Financial Statements
Beta
Revenue$1.23B
SG&A Expenses$328.40M
Operating Expenses$928.80M
Operating Income$306.00M
Interest Expense$34.90M
Net Income$215.10M
EPS (Basic)$1.77
EPS (Diluted)$1.74
Shares Outstanding (Basic)121.80M
Shares Outstanding (Diluted)123.50M

Key Highlights

  • 1Total operating revenue increased by a significant 26% year-over-year for both the three and six months ended June 30, 2021.
  • 2Workforce Solutions segment revenue grew by 40% (Q2) and 49% (YTD), largely driven by strong performance in Verification Services.
  • 3U.S. Information Solutions (USIS) segment revenue saw a 11% (Q2) and 15% (YTD) increase, benefiting from improvements in credit decisioning services and acquisition revenue.
  • 4International segment revenue experienced substantial growth of 39% (Q2) and 24% (YTD), with positive contributions across all geographies.
  • 5Consolidated operating income more than doubled year-over-year, increasing by 83% for the quarter and 102% for the six months.
  • 6Net income attributable to Equifax grew significantly, up 115% for the quarter and 92% for the six months.
  • 7The company made strategic acquisitions in 2021, including Kount, HIREtech, and i2Verify, to expand its data assets and product offerings.

Frequently Asked Questions

Equifax's revenue growth was driven by strong performance across its key segments: Workforce Solutions (especially Verification Services), U.S. Information Solutions (driven by credit decisioning and acquisitions), and International segments. These increases were partially offset by a decline in the Global Consumer Solutions segment. Recovering economic conditions and strategic acquisitions also contributed to the revenue uplift.

Profitability improved substantially. Consolidated operating income more than doubled year-over-year, rising by 83% in the second quarter and 102% in the first six months of 2021. Consequently, net income attributable to Equifax also saw significant increases, up 115% for the quarter and 92% for the six months, indicating improved operational efficiency and revenue leverage.

Most of the lawsuits and government investigations related to the 2017 cybersecurity incident have been resolved, including a significant settlement with U.S. consumers. However, some appeals related to the settlement approval are still ongoing. The company has accrued $345.0 million for remaining settlement payments, and the ultimate outcome of any unresolved matters could still have a material adverse effect on the company's financial condition.

Equifax maintains a strong liquidity position with $0.5 billion in cash and $1.1 billion available under its revolving credit facility as of June 30, 2021. The company expects to fund remaining cybersecurity settlement payments and other requirements from operating cash flows and its borrowing capacity. If additional financing is needed, the company would explore public and private bond markets or syndicated loan markets.