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EQUIFAX INC (EFX)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue of $1.537B grew 7% reported and 8% in local currency; revenue was $27M above guidance midpoint and above Street consensus, driven by strong U.S. mortgage and continued new product innovation (Vitality Index 14%) .
  • Adjusted EPS of $2.00 was above consensus; GAAP diluted EPS was $1.53, up 17% YoY on net income of $191.3M; adjusted EBITDA margin rose to 32.5% .
  • Guidance: maintaining full-year constant currency growth midpoint (6%), but raising reported revenue by $35M and adjusted EPS by $0.03 on FX; Q3 revenue guided to $1.505–$1.535B and adj. EPS to $1.87–$1.97 .
  • Stock reaction catalysts: stronger-than-expected mortgage revenue (+14% U.S. mortgage), USIS vitality and pre-approval share gains, while management flagged higher corporate litigation costs and macro uncertainty (tariffs/interest rates) as near-term headwinds .

What Went Well and What Went Wrong

  • What Went Well

    • “Equifax delivered strong second quarter revenue of $1.537 billion…$27 million above the mid-point of our April guidance,” led by USIS mortgage (+20%) and verification services (+10%); Vitality Index of 14% vs 10% LT goal .
    • USIS non-mortgage revenue grew >4% with USIS Vitality at 10%—“their strongest vitality ever,” reflecting post-cloud product momentum and pre-approval share gains with Twin Indicator .
    • International grew 6% in local currency with margin improvement; Latin America and Europe led regional performance .

  • What Went Wrong

    • Corporate expense was ~$152M, ~$7M above prior guidance due to higher consumer litigation costs; full-year corporate costs now expected at ~$590M .
    • Talent (hiring) remained relatively weak; Employer Services revenue declined 2% YoY (Q2) amid softer U.S. hiring; background screening share shifts pressured insights revenue .
    • Canada remained subdued given macro/tariff uncertainty; International operating margin declined YoY to 10.9% despite local currency growth .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$1,419.4 $1,442.0 $1,537.0
Diluted EPS (GAAP) ($)$1.39 $1.06 $1.53
Adjusted EPS ($)$2.12 $1.53 $2.00
Net Income ($USD Millions)$174.0 $133.1 $191.3
Adjusted EBITDA Margin (%)35.4% 29.3% 32.5%

Vs Prior Year and Estimates:

ComparisonRevenue ($B)EPS ($)Adjusted EPS ($)Adjusted EBITDA ($M)
Q2 2025 Actual$1.537 $1.53 $2.00 $499.3
Q2 2024 Actual$1.431 $1.31 $1.82 $457.7
Street Consensus (Q2 2025)$1.516*$1.921*—$493.6*
Result vs ConsensusBeat (+$21M)*Beat (+$0.08)*—Slight miss (−$3.5M)*

Values retrieved from S&P Global.*

Segment breakdown (Q2 2025 vs Q2 2024):

SegmentQ2 2024 ($M)Q2 2025 ($M)YoY %
Workforce Solutions (EWS)$612.9 $662.1 8%
- Verification Services$515.9 $567.1 10%
- Employer Services$97.0 $95.0 (2%)
U.S. Information Solutions (USIS)$478.3 $521.5 9%
- Online Information Solutions$418.2 $457.8 9%
- Financial Marketing Services$60.1 $63.7 6%
International$339.3 $353.4 4%
- Latin America$97.3 $99.6 2% (11% LC)
- Europe$88.2 $99.2 12% (6% LC)
- Asia Pacific$84.6 $85.3 1% (4% LC)
- Canada$69.2 $69.3 ~0% (1% LC)

KPIs:

KPIQ1 2025Q2 2025Note
Vitality Index (New Product)11% 14%
USIS Vitality—10% (highest ever)
TWIN Active Records191M 198M (+18M YoY)
TWIN Total Records751M 767M
TWIN Current Records—113M (+9%)

Guidance Changes

MetricPeriodPrevious Guidance (Apr 22)Current Guidance (Jul 22)Change
Reported RevenueQ3 2025—$1.505–$1.535B New Q3 range
Adjusted EPSQ3 2025—$1.87–$1.97 New Q3 range
Reported RevenueFY 2025$5.910–$6.030B $5.970–$6.040B Raised (FX)
Adjusted EPSFY 2025$7.25–$7.65 $7.33–$7.63 Raised (FX)
Constant Currency Revenue Growth MidpointFY 20256% 6% (maintained)
Corporate ExpenseFY 2025—~$590M; tax rate ~26.5% Higher corp. costs
EWS Revenue GrowthFY 2025~7% (Apr) ~5% Lower
USIS Revenue GrowthFY 2025lower prior (Apr) ~7% Higher
International Revenue Growth (CC)FY 2025~7% ~7% Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 / Q1’25)Current Period (Q2’25)Trend
AI/Technology (EFX.AI, Cloud)Nearing cloud completion; Vitality 12% EFX.AI powering >100 new products in H1; Vitality 14%; USIS Vitality 10% Upward momentum in NPI
Mortgage Market & PricingUSIS mortgage +47% (Q4); pricing pass-through highlighted USIS mortgage +20%; pre-approval share gains; Twin Indicator introduced; industry support for TriMerge Continued strength despite volumes down
Tariffs/MacroQ1: held FY guide on uncertainty (tariffs/interest rates) Maintaining constant currency guide; macro uncertainty persists Persistent headwind
Government (EWS)SSA amendment ~$50M; growing TAM focus Near-term state-level funding volatility; OBBBA/work requirements positive medium-term Near-term volatile; medium-term positive
Regional TrendsLatAm strong; Canada/Europe slightly weaker (Q1) LatAm +11% LC; Europe +6% LC; Canada weak (1% LC) Mixed; Canada lagging
Litigation/LegalCFPB settlement Q4’24 Higher consumer litigation driving corporate cost increase Elevated costs near term

Management Commentary

  • “With the uncertainties in the economy and interest rates, we are maintaining our full-year 2025 local currency revenue Guidance midpoint… We are increasing our full-year Guidance for reported revenue by $35 million and Adjusted EPS by $0.03 per share for the impact of foreign exchange.” .
  • “USIS is gaining momentum post-cloud transformation… strong interest in their new mortgage pre-approval and pre-qual solutions that include the Twin income and employment information.” .
  • “We expect to generate over $900 million of free cash flow in 2025 with a cash conversion of over 95%… returning cash to shareholders.” .

Q&A Highlights

  • Government revenue visibility: state-level budget/funding changes from prior administration causing near-term headwinds; engagement ramping for OBBBA and stronger verification requirements medium term .
  • Mortgage products: Twin Indicator gaining interest; differentiates pre-approval credit file; expected broader adoption into 2H25/2026 .
  • VantageScore vs FICO: too early to assess mortgage price competition; complexity of implementation suggests gradual timeline; Equifax has access via JV .
  • Corporate costs: consumer litigation and small-claims volume elevated in 2025, impacting corporate expense; some costs could persist .
  • Hiring/Talent: weaker U.S. hiring environment persists; Employer Services down slightly; some share shifts in criminal background screening .

Estimates Context

  • Q2 2025 Results vs Street: Revenue $1.537B vs $1.516B consensus (beat); Adjusted EPS $2.00 vs ~$1.92 consensus (beat); EBITDA came in slightly below consensus [GetEstimates]*.
  • Q3 2025: Company guides revenue to $1.505–$1.535B and adjusted EPS to $1.87–$1.97; consensus sits near $1.523B revenue and ~$1.94 EPS—guidance broadly bracketing consensus [GetEstimates]*.
  • FY 2025: Reported revenue guidance raised on FX to $5.970–$6.040B and adjusted EPS to $7.33–$7.63; consensus ~$6.05B and $7.61—management midpoint ($6.00B, $7.48) is slightly below consensus revenue and EPS mids, reflecting prudence around macro [GetEstimates]*.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Beat-and-raise (FX) quarter: solid top-line outperformance and adjusted EPS beat; stronger U.S. mortgage and NPI underpin resilience despite macro uncertainty .
  • USIS momentum is real: post-cloud vitality at 10% and pre-approval share gains are tangible drivers into 2H25/2026; Twin Indicator should aid competitive positioning without incremental cost to lenders .
  • EWS steady but choppy near term: verification strength offset by hiring softness and state-level volatility; medium-term government tailwinds from OBBBA/work requirements and SSA amendment provide upside .
  • Watch litigation costs: higher consumer litigation elevates corporate expense and tempers margin expansion; risk to near-term EPS trajectory if costs persist .
  • Canada macro is a drag: tariff rhetoric weighs on consumer activity; expect improvement with product rollouts and cloud benefits but trajectory remains cautious .
  • Guidance philosophy remains conservative: constant currency held, reported raised only for FX; if mortgage volumes stabilize or rates decline, upside risk to revenue/EPS vs maintained framework .
  • Capital returns accelerating: $127M buybacks and $62M dividends in Q2; >$900M FCF and >95% conversion targeted for 2025—supportive for total shareholder return .

Additional Data and Notes

  • Equifax returned ~$190M to shareholders in Q2, including ~$127M in share repurchases under the new $3B authorization .
  • U.S. mortgage hard inquiries were down ~8% YoY in Q2; guidance assumes down >12% in Q3 and >11% for FY 2025 .
  • Segment margins in Q2: EWS operating margin 46.4%, adj. EBITDA margin 53.3%; USIS operating margin 22.6%, adj. EBITDA margin 35.0%; International operating margin 10.9%, adj. EBITDA margin 26.4% .

Press release references: Q2 2025 press release and 8-K (financials, guidance, segments) –. Earnings call transcript commentary and Q&A (themes, risks, operational detail) –. Prior quarters for trend: Q1 2025 8-K and transcript –; Q4 2024 8-K –.