Kelsey Zhu

Kelsey Zhu inquired about improvements in underlying consumer credit supply-demand dynamics, specifically the volume growth outlook for card, auto, and personal loans. She also asked about tri-merge resellers' adoption of the FICO Direct program, the implied 0% penetration in guidance, and the rationale behind that assumption.

Answer

CEO Mark Begor noted that non-mortgage verticals are solid with attractive originations, driven by a positive data macro and customer demand for more data and AI-driven scores. CFO John Gamble added that online FI shows mid-single-digit performance, auto is strong, insurance is double-digit, and fintech is a growth area. Begor reiterated that guidance assumes no FICO Direct model adoption and no Vantage conversion, as no activity has been seen in Q1 2026, stressing Equifax's indifference due to zero P&L impact.

Kelsey Zhu inquired about the improvement in underlying consumer credit supply-demand dynamics and the outlook for volume growth in card, auto, and personal loans. She also asked about tri-merge resellers' adoption of the FICO Direct program and the rationale behind the 0% penetration rate assumed in Equifax's guidance.

Answer

Mark Begor, Chief Executive Officer, noted that non-mortgage verticals are solid, with activity generally below pre-COVID levels but still attractive. Customers are seeking more data and higher-performing scores/models, which Equifax provides with AI-generated solutions. Financial institutions are strong, and consumers are in good shape. John Gamble, Chief Financial Officer, added that FI online is seeing mid-single-digit performance, auto is strong, insurance is very strong (double-digit), and fintech is performing extremely well. Regarding the FICO Direct program, Mr. Begor reiterated that guidance assumes no adoption and no Vantage conversion, as no activity has been seen in Q1 and timing is uncertain. He emphasized Equifax's agnostic stance, as there's no P&L impact (EBITDA, EPS, FCF) whether Equifax or a reseller calculates the FICO score, only revenue is affected (zero-calorie revenue).

Kelsey Zhu asked about VantageScore's opportunity in non-mortgage verticals, including current penetration, pricing differences with FICO, and the outlook for adoption rates over the next three to five years. She also inquired about the evolution of SNAP contracts, revenue generated from USDA/SNAP in the last two years, and the future outlook.

Answer

CEO Mark Begor reiterated that FICO's pricing in non-mortgage has been less aggressive, leading to a different catalyst for VantageScore adoption, but a price advantage still exists. Equifax is offering free VantageScores in these verticals to drive understanding. He declined to discuss specific SNAP contracts but highlighted broader opportunities from OB3, the focus on improper payments, and states' need to reduce error rates. CFO John Gamble clarified that most SNAP revenue is directly with states.

Kelsey Zhu asked about the VantageScore opportunity in non-mortgage verticals, including current penetration rates in card and auto, pricing differences with FICO, and projected adoption rates over the next three to five years. She also inquired about the evolution of SNAP contracts within the government vertical, specifically regarding the $38 million USDA contract from Q3 2023, its impact from 2024 funding changes, and the outlook for revenue generated from USDA/SNAP contracts.

Answer

Mark Begor, Chief Executive Officer, noted that FICO has been less aggressive on pricing in non-mortgage verticals, leading to less attention compared to mortgage. However, he believes there are still savings opportunities and performance comparable to FICO, which Equifax aims to capitalize on by offering free VantageScores with every paid FICO score in these verticals. Mark Begor declined to discuss specific customer contracts but highlighted broader opportunities from the OB3 bill and the focus on $160 billion in improper payments. He emphasized new OB3 requirements (e.g., 6-month redeterminations, work requirements, SNAP error rates) as catalysts for states to adopt Equifax solutions to avoid paying larger portions of benefits. John Gamble, Chief Financial Officer, added that the vast majority of SNAP revenue is directly with states.

Kelsey Zhu asked about a specific RFP win with the state of Maine, inquiring about the drivers of its significant contract value growth, and also asked for perspective on the net impact of the OBBBA bill on the EWS business.

Answer

CEO Mark Begor acknowledged the impressive detail but deferred specifics on the Maine contract, suspecting it reflects deeper service penetration. Regarding the OBBBA bill, he stated that while it may reduce the number of benefit recipients, the tailwinds from increased verification requirements are overwhelmingly positive for EWS, given the massive $5 billion TAM that Equifax is penetrating.

Kelsey Zhu asked how Equifax's business components would perform in a stagflation scenario and inquired about the impact of CMS/USDA funding changes on the Government vertical's growth.

Answer

CEO Mark Begor stated that the company had not performed a specific stagflation analysis, having focused on a 'typical recession' scenario. Regarding government growth, he noted the impact of the CMS/USDA funding changes was already in the guide, and they are hopeful the current administration will reverse the policy. He emphasized that state-level penetration and the new administration's focus on improper payments are key long-term drivers.

Kelsey Zhu asked for details on the SSA contract extension and for an update on sizing the record additions from the Workday partnership and the overall 2025 record growth outlook.

Answer

CEO Mark Begor clarified the SSA contract is a direct federal agreement unaffected by state-level CMS changes and will benefit 2025 from a price increase. He declined to size specific partner contributions but noted that a strong backlog of new partners from 2024 provides good visibility for continued record growth in 2025.

Kelsey Zhu of Autonomous Research asked for the expected number of incremental record additions from the new Workday partnership and the timeline for onboarding. She also inquired about the drivers behind the growth re-acceleration in the EWS consumer lending vertical, given the soft end-market.

Answer

CEO Mark Begor described the Workday partnership as strategic and the expected record additions as "sizable," with the bulk coming online through 2025. He noted this was one of six new partnerships signed in the quarter. Regarding consumer lending, Begor and CFO John Gamble explained that growth is driven by the high value of combining income and employment data with credit files, which allows lenders to approve more consumers with lower loss rates. They also cited the direct benefit of strong overall record growth in The Work Number (TWN) database.

Kelsey Zhu from Autonomous inquired about the recent trends in the European ESG market, particularly regarding regulatory headwinds and uncertainty, and when a recovery in ESG growth in Europe can be expected.

Answer

Henry Fernandez, Chairman and CEO of MSCI, stated that recovery in Europe has already begun, albeit not at the desired pace, focusing on financial materiality and benefiting from supplier consolidation. He mentioned a significant sale to a European wealth tech platform. He noted continued softness in the U.S. market due to political undertones and a slower pace in APAC, but expressed hope for meaningful contributions from new management and a strategic pivot towards analyzing other emerging non-traditional risks beyond traditional ESG.

Kelsey Zhu inquired about the impact of regulatory headwinds and uncertainty on ESG growth in Europe, current market conditions, and the expected timeline for ESG recovery in the region.

Answer

Henry Fernandez, Chairman and CEO of MSCI, stated that recovery in Europe has begun, albeit slower than desired, driven by a focus on financial materiality and supplier consolidation. He cited a significant sale to a European wealth tech firm as a positive sign. He noted continued softness in the U.S. market due to political undertones but expressed optimism for APAC with new management. Strategically, MSCI is expanding its ESG franchise to cover other emerging non-traditional risks like tariffs, supply chain, AI, and physical climate risk.

Kelsey Zhu asked about the economics and competitive advantages of MSCI's active ETF products and services, and whether a shift from active mutual funds to active ETFs would be a net positive or negative for MSCI.

Answer

Baer Pettit (President and COO, MSCI) explained that active ETFs are a distributed category, with MSCI monetizing across the spectrum through index business and analytics (portfolio construction). He noted nearly $30 billion in index-linked active ETF assets, growing 10% Q-o-Q, and sees it as new, non-cannibalizing revenue. Henry Fernandez (Chairman and CEO, MSCI) emphasized helping active asset management recover by shifting to active ETFs, leading to incremental AUM fees.

Kelsey Zhu inquired about the economics and competitive advantages of MSCI's products and services in the active ETF space, and whether a continued shift from active mutual funds to active ETFs would be a net positive or negative for the company.

Answer

Baer Pettit, President and COO, MSCI, explained that active ETFs are a distributed category, and MSCI monetizes across the spectrum through index business and Analytics for portfolio construction. He noted nearly $30 billion in index-linked active ETF assets, up 10% quarter-on-quarter, calling it an 'extremely attractive category' that is not cannibalizing existing business but generating new revenue. Henry Fernandez, Chairman and CEO, MSCI, emphasized that helping the active asset management industry transition to active ETFs is a key component of MSCI's strategy to regain significant growth, adding that systematized products also generate asset-based fees on top of subscription fees.

Kelsey Zhu asked about MSCI's positioning and economic model for active ETFs, particularly given the wave of launches in the U.S. market.

Answer

Chairman & CEO Henry Fernandez described active ETFs as a significant growth opportunity with high client engagement. He explained that MSCI's economic model is flexible, ranging from selling data and benchmarks for unconstrained strategies to licensing indices and earning AUM-based fees for more structured, enhanced indexation products, similar to the passive model.

Kelsey Zhu asked why the Analytics segment didn't see stronger new sales growth in Q1 given the market volatility and what the growth expectations are for the rest of the year.

Answer

Chairman and CEO Henry Fernandez argued that significant turmoil only began in the latter part of Q1. He explained that future growth will be shaped by three forces: two positives (increased client need for data/analytics in turmoil and asset reallocation to non-U.S. markets) weighed against one negative (potential client budget constraints). The net effect on sales is yet to be determined.

Kelsey Zhu asked for color on the declines in retention and net new sales within the Private Assets segment and inquired about the timeline to achieve the 20% revenue growth target for Private Capital Solutions (PCS).

Answer

CFO Andrew Wiechmann distinguished between the two parts of the segment. For PCS, he noted a slight slowdown but steady growth at 15%, attributing softness to normal volatility. For Real Assets, he confirmed continued pressure from a large client down-sale and weakness among brokers. He did not provide a specific timeline for achieving the 20% PCS growth target but noted early positive signs in the market.

Kelsey Zhu inquired about MSCI's medium-term strategy for private assets, particularly regarding the expansion into transaction benchmarking data and the associated timeline and investment.

Answer

President and COO Baer Pettit outlined a strategy focused on collecting deeper and broader data in private markets, enhanced by AI, to serve both LP and GP clients. He mentioned that the company is actively redeveloping the acquired benchmarks to create new use cases beyond real estate. He expressed excitement about the opportunity and noted the new leadership will help accelerate this strategy.

Kelsey Zhu inquired about FactSet's competitive positioning against the 'Big Four' data incumbents, specifically regarding its strategy to maintain or gain market share amidst widespread AI infrastructure investments and new AI product launches by larger competitors.

Answer

CEO Sanoke Viswanathan expressed strong confidence in FactSet's proprietary assets, data, tools, and analytics, highlighting their non-disruptable nature. He also noted active partnerships with the AI ecosystem and strong client demand for FactSet as a consolidator of AI solutions. CRO Goran Skoko added that FactSet feels robustly positioned to take share, citing ongoing investments in content assets like time and price reference data as key drivers.

Kelsey Zhu (Autonomous Research) asked about FactSet's competitive positioning against the 'Big Four' data incumbents, seeking insight into FactSet's strategy to maintain or gain market share given widespread AI investments across the industry.

Answer

Sanoke Viswanathan, CEO of FactSet, expressed confidence in FactSet's proprietary assets, data, tools, and analytics, noting partnerships with the broader AI ecosystem. Goran Skoko, CRO, added that FactSet is robustly positioned to take share, particularly in content assets like time and price reference data, which drove Q1 results.

Kelsey Zhu asked for a broader overview of FactSet's AI strategy, covering both internal efficiency enhancements and improved client engagement. She also questioned the competitive moat of FactSet's Workstation amidst emerging AI startups and sought clarification on the actual GenAI ASV growth in fiscal 2025 compared to guidance, as well as expectations for AI product growth in fiscal 2026.

Answer

Sanoke Viswanathan, CEO & Director, FactSet, emphasized the complexity of capturing AI value in regulated environments, highlighting FactSet's open architecture and infrastructure as key advantages for client and third-party data integration. Helen Shan, CFO, FactSet, confirmed that fiscal 2025 GenAI ASV growth was exactly in the middle of the 30-50 basis points guidance range. Goran Skoko, EVP & Chief Revenue Officer, FactSet, noted that 60% of Q4's AI tooling and content sales came in the quarter, and GenAI strategy was pivotal in 35% of renewals and new deals, including three large banking renewals.

Kelsey Zhu inquired about FactSet's comprehensive AI strategy, covering both internal efficiency enhancements and client engagement, the competitive moat of FactSet's Workstation against emerging AI companies, and how actual GenAI product ASV growth in fiscal 2025 compared to the 30-50 basis points guidance, along with expectations for fiscal 2026.

Answer

Sanoke Viswanathan, CEO, stressed the complexity of capturing AI value, emphasizing the critical role of implementation, data quality, and reliable partnerships. He highlighted FactSet's open architecture as a significant advantage. Helen Shan, CFO, confirmed that fiscal 2025 GenAI product ASV growth was precisely in the middle of the 30-50 basis points guidance range. Goran Skoko, Chief Revenue Officer, added that 60% of AI tooling and content sales occurred in Q4, and FactSet's GenAI strategy was a pivotal factor in 35% of renewals and several large banking renewals.

Kelsey Zhu asked for a broader overview of FactSet's AI strategy, covering both internal efficiencies and client engagement, the competitive moat of FactSet's Workstation against emerging AI companies, and how actual GenAI ASV growth in 2025 compared to guidance, along with expectations for 2026.

Answer

Sanoke Viswanathan, CEO, emphasized the complexity of capturing AI value, highlighting FactSet's open architecture, cloud-native, and API-first design as key advantages for partnering with clients' proprietary and third-party data. Helen Shan, CFO, reported that 2025 GenAI ASV growth was exactly in the middle of the 30-50 basis points guidance. Goran Skoko, CRO, noted that 60% of AI tooling and content sales occurred in Q4, and 35% of renewals cited GenAI tooling and strategy as a contributor to their decision, including three large banking renewals.

Kelsey Zhu asked for an update on the client traction for FactSet's Generative AI products, specifically inquiring about the pricing strategy and client receptiveness to these offerings as add-on services.

Answer

CEO Phil Snow and Chief Revenue Officer Goran Skoko responded, stating they are pleased with the momentum and on track to meet their monetization goals for the year. Snow highlighted that Pitch Creator has the most traction among banking clients, while the conversational API is seeing broad interest. Skoko added that clients are reacting well to the pricing structure, recognizing the productivity gains, with nearly 2,000 active trials for Pitch Creator.

Kelsey Zhu asked about managed services as a key growth driver for buy-side ASV, inquiring about the total addressable market, key competitors, and FactSet's expansion strategy.

Answer

CEO Frederick Snow highlighted recent momentum, including a deal with an outsourced CIO and a partnership with JPMorgan. Chief Revenue Officer Goran Skoko added that the service leverages highly skilled talent to augment client teams, which is effective in a cost-sensitive environment. Chief Financial Officer Helen Shan noted they are tracking high attach rates for the service with existing clients.

Kelsey Zhu from Autonomous Research inquired about managed services as a future growth driver for buy-side ASV, asking about the total addressable market, key competitors, and FactSet's expansion strategy.

Answer

CEO Frederick Snow highlighted recent momentum, including a significant deal with an outsourced CIO and a partnership with JPMorgan. Chief Revenue Officer Goran Skoko added that FactSet's offering is unique, focusing on augmenting client capabilities in performance and risk reporting, making direct competition difficult to define. CFO Helen Shan noted they are tracking high attach rates for these services.

Kelsey Zhu requested an update on the competitive pressure in the auto market, which has been mentioned for two consecutive quarters, and Verisk's strategy to maintain or expand market share.

Answer

CFO Elizabeth Mann stated there was no new information from the last quarter, with the financial impact being in line with previous expectations. She noted that Verisk is focusing on client feedback, competitive differentiation, and leveraging deeper data sets and analytic objects.

Kelsey Zhu asked for an update on the competitive pressure in the auto market, which has been mentioned for two consecutive quarters, and Verisk's strategy to maintain or expand its market share.

Answer

Elizabeth Mann, Verisk's Chief Financial Officer, stated that the competitive pressure in auto is consistent with previous quarters, with the financial impact in line with expectations. She noted that Verisk is focusing on client feedback, competitive differentiation, and leveraging deeper data sets and analytics to build unique value propositions.

Kelsey Zhu from Autonomous Research sought more detail on the competitive pressures Verisk is facing in its auto business, asking about the nature of the competition.

Answer

CEO Lee Shavel acknowledged that Verisk faces a large competitor in the auto space where it has less scale, leading to occasional competitive pressures. He stated that Verisk continues to compete by finding ways to integrate its other data assets, such as claims data, into its auto underwriting solutions.

Kelsey Zhu asked about the expected pricing contribution to 2025 growth, considering the two-year lag on premium growth that impacts 20-25% of revenue, and requested a quantification of the 2024 pricing contribution.

Answer

CFO Elizabeth Mann acknowledged the formulaic input from strong 2023 premium growth but emphasized that the primary driver of pricing outcomes is the client's perception of the value Verisk provides. She did not quantify the specific pricing contribution for 2024, instead pointing to the success of value-based conversations.

Kelsey Zhu from Autonomous Research asked about TransUnion's strategy for gaining market share with VantageScore, particularly in light of the recent FHFA announcement validating its use in mortgage, and also inquired about the strategy for non-mortgage verticals.

Answer

President and CEO Chris Cartwright stated that TransUnion supports the FHFA's policy clarifications, as they promote modernizing scores with more predictive trended data and encourage healthy competition. He noted that while the operational rollout will take time, TransUnion and VantageScore are ready to assist the GSEs. The core strategy relies on the principle that competition drives innovation and better outcomes for consumers and lenders across all verticals, not just mortgage.

Kelsey Zhu of Autonomous Research asked about TransUnion's strategy to increase market share for VantageScore in both mortgage and non-mortgage verticals following the recent FHFA announcement.

Answer

President and CEO Chris Cartwright affirmed TransUnion's support for the FHFA's policy clarification, viewing it as beneficial for the mortgage ecosystem. He advocated for modernizing scoring by adopting trended credit data, which VantageScore uses, and welcomed the increased competition to drive innovation and better pricing. He noted that while operational details need to be resolved, TransUnion is ready to assist the GSEs in the transition.

Kelsey Zhu asked about the drivers of consumer credit demand, noting that while credit supply is expected to improve, it's unclear what will spur demand recovery in a higher-for-longer interest rate environment.

Answer

CEO Christopher Cartwright pointed to several factors supporting demand. He noted that lenders have replenished capital and are eager to lend, while consumer delinquencies are normalizing. He believes consumers are adjusting to current interest rates and highlighted a specific demand driver: the need for debt consolidation loans for consumers who increased card balances during the COVID era, which is fueling fintech lending.

Kelsey Zhu of Autonomous Research asked for more color on the drivers behind the strong, share-gaining growth in Canada and inquired about the expected medium-term growth rate for the region.

Answer

President and CEO Christopher Cartwright attributed over a decade of outsized growth in Canada to consistent innovation, including importing U.S. products and being a first-mover with trended data. While he expects the high-teens growth rate to decelerate as the company laps large gains in a mature market, he expressed confidence that the team will continue to innovate and perform well.