10-QPeriod: Q3 FY2021

EQUIFAX INC Quarterly Report for Q3 Ended Sep 30, 2021

Filed October 21, 2021For Securities:EFX

Summary

Equifax Inc. reported solid revenue growth for the nine months ended September 30, 2021, with a 22% increase to $3.67 billion, driven by strong performance in its Workforce Solutions and U.S. Information Solutions segments. This top-line growth, coupled with improved operating margins, translated into a significant increase in net income attributable to Equifax, rising 40% to $622.1 million for the period. The company also demonstrated robust cash flow from operations, increasing by $300.5 million year-over-year. While the company continues to invest in technology transformation and strategic acquisitions, including the significant Appriss Insights acquisition, it also managed its debt effectively, refinancing its revolving credit facility and increasing its commercial paper program. Investors should note the ongoing developments regarding the 2017 cybersecurity incident settlements, which are progressing but still subject to final adjudication.

Financial Highlights

52 data points
Beta

Revenue

$1.22B

Net Income

$205.40M

16.8% Net Margin

EPS (Diluted)

$1.66

Total Assets

$11.08B

Cash & Equivalents

$2.03B

Free Cash Flow

$398.40M

Financial Statements
Beta
Revenue$1.22B
SG&A Expenses$344.20M
Operating Expenses$949.70M
Operating Income$273.20M
Interest Expense$35.00M
Net Income$205.40M
EPS (Basic)$1.68
EPS (Diluted)$1.66
Shares Outstanding (Basic)121.90M
Shares Outstanding (Diluted)123.70M

Key Highlights

  • 1Total operating revenue increased by 22% to $3.67 billion for the nine months ended September 30, 2021, compared to the same period in 2020.
  • 2Net income attributable to Equifax significantly grew by 40% to $622.1 million for the nine months ended September 30, 2021.
  • 3Operating income more than doubled, increasing by 75% to $885.8 million for the nine months ended September 30, 2021.
  • 4Cash provided by operating activities increased by $300.5 million to $949.5 million for the nine months ended September 30, 2021.
  • 5The company completed several strategic acquisitions in 2021, including Kount, HIREtech, i2Verify, Health e(fx), and Teletrack, and announced the significant acquisition of Appriss Insights for approximately $1.825 billion.
  • 6Total debt increased to $5.5 billion as of September 30, 2021, primarily due to new debt issuances to fund acquisitions and general corporate purposes, while maintaining strong availability under its credit facilities.
  • 7The company's effective income tax rate decreased to 22.9% for the nine months ended September 30, 2021, from 24.1% in the prior year period.

Frequently Asked Questions

The 22% revenue growth to $3.67 billion was primarily driven by strong performance in the Workforce Solutions segment, which saw a 44% increase in revenue, and the U.S. Information Solutions segment, which grew by 10%. This growth was fueled by increased demand in verification services, continued mortgage market strength, and contributions from recent acquisitions.

Equifax has proactively managed its debt and liquidity. In August 2021, it entered into new Senior Credit Facilities totaling $2.2 billion ($1.5 billion revolving credit facility and $700 million term loan) and increased its commercial paper program to $1.5 billion. As of September 30, 2021, the company had $2.0 billion in cash and $1.0 billion available under its revolving credit facility, indicating a strong liquidity position to fund operations, investments, and strategic acquisitions.

The company continues to progress with settlements related to the 2017 cybersecurity incident. The U.S. Consumer MDL Litigation settlement received final approval, though some appeals are still pending, including a petition to the U.S. Supreme Court. While the company has made significant payments and accruals, potential future payments related to these matters could still be material. Other government investigations and class actions in Canada and Georgia are also ongoing or stayed.

Equifax completed several strategic acquisitions in 2021, including Kount, HIREtech, i2Verify, Health e(fx), and Teletrack, which are expected to expand its data assets and product offerings. The company also announced the significant acquisition of Appriss Insights for approximately $1.825 billion, which will be reported within the Workforce Solutions segment. These acquisitions are key to the company's growth strategy.