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EQUIFAX INC (EFX)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 delivered revenue and adjusted EPS beats vs S&P Global consensus: revenue $1.545B vs $1.522B*, and adjusted EPS $2.04 vs $1.94*, aided by stronger US mortgage volumes late in the quarter, USIS mortgage growth of 26%, and EWS government strength .
  • Management raised FY25 guidance: revenue to $6.03–$6.06B (vs ~“about $6.0B” midpoint in July), adjusted EPS to $7.55–$7.65 (midpoint +$0.12), and FCF to $950–$975M (from $900M+), citing operating momentum and >100% cash conversion .
  • Segments: USIS +11% with 26% mortgage growth and 5% non‑mortgage; EWS +5% (Verifier +5%, government high‑single digit); International +6% reported/+7% LC, with margins up 360 bps YoY .
  • Strategic catalysts: new mortgage score pricing (VantageScore 4.0 at $4.50/score in 2026) to accelerate conversions and potentially add $100–$200M of annual profit at full adoption; Vitality Index hit a quarterly record 16% (FY guide to 13%) as EFX.AI and cloud scale .

What Went Well and What Went Wrong

What Went Well

  • Broad-based growth and beats: revenue $1,544.9M (+7% YoY) and adjusted EPS $2.04 (+10% YoY) exceeded the July outlook; USIS mortgage +26% and total USIS +11% drove upside .
  • Record product momentum: Vitality Index 16% in Q3 (FY raised to 13%) on EFX Cloud and EFX.AI; management: “quarterly record” vitality, “accelerating free cash flow” enabling $360M returned to shareholders .
  • International margin expansion: adjusted EBITDA margin up to 31.3% (+360 bps YoY) from cloud benefits; LATAM and Canada led growth .
    “Adjusted EPS of $2.04 per share was $0.12 above the midpoint of our July guidance, reflecting stronger revenue growth and solid operating leverage.” — CEO .

What Went Wrong

  • Mix and incentive comp pressured margins: company-level adjusted EBITDA margin held flat YoY at 32.7%, as higher variable compensation and a higher mortgage mix weighed on margins despite stronger revenue .
  • Hiring softness continued: Talent Solutions growth remained modest given weak U.S. hiring, especially white-collar, tempering EWS Employer Services (+1%) .
  • Government volatility risk: while momentum improved post‑OB3, management cautioned a prolonged U.S. federal shutdown could defer verification activity; guidance assumes no material extension .

Financial Results

Company Results (Actuals)

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$1,441.8 $1,537.0 $1,544.9
Adjusted EPS ($)$1.85 $2.00 $2.04
Adjusted EBITDA Margin %32.7% 32.5% (guide midpoint) 32.7%
  • GAAP diluted EPS: $1.29 in Q3’25 vs $1.13 in Q3’24 .

Actual vs Consensus (S&P Global)* — Q3 2025

MetricConsensus*ActualSurprise
Revenue ($USD Millions)$1,522.8*$1,544.9 +$22.1 (+1.5%)
Adjusted EPS ($)$1.94*$2.04 +$0.10 (+5.3%)
EBITDA ($USD Millions)$497.0*$493.3 -$3.7 (-0.7%)

Values retrieved from S&P Global.

Segment Breakdown (Q3 2025 vs Q3 2024)

Segment/Geo ($USD Millions)Q3 2024Q3 2025YoY %
Workforce Solutions – Total$620.0 $649.4 5%
• Verification Services$524.9 $553.6 5%
• Employer Services$95.1 $95.8 1%
USIS – Total$476.9 $530.2 11%
• Online Info Solutions$419.1 $467.5 12%
• Financial Mktg Services$57.8 $62.7 9%
International – Total$344.9 $365.3 6%
• Latin America$96.7 $102.1 6%
• Europe$94.9 $102.3 8%
• Asia Pacific$88.5 $90.1 2%
• Canada$64.8 $70.8 9%
  • Q3 operating margin by segment: EWS 43.8%; USIS 23.2%; International 15.8%. Adjusted EBITDA margins: EWS 51.2%, USIS 35.2%, International 31.3% .

KPIs and Operating Metrics

KPIQ2 2025Q3 2025
Vitality Index (%)14% 16%; FY25 guide raised to 13%
U.S. Mortgage Hard Inquiries YoY~-8.5% (quarter) -7% (quarter); Q4/FY guide “down high single digits”
U.S. Mortgage Revenue (EFX) YoY+20% (USIS) +13% total; USIS +26%; EWS +2%
Twin Active Records198M (+10% YoY) 199M (+9% YoY)
Cash Returned to Shareholders~$190M (Q2) ~$360M (Q3), incl. $300M buybacks (1.2M shares)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue (Reported)FY 2025Midpoint ~“about $6.0B” (July) $6.030–$6.060B Raised; midpoint +$40M
Adjusted EPSFY 2025$7.48 midpoint (July) $7.55–$7.65 Raised +$0.12 (midpoint)
Free Cash FlowFY 2025$900M+ $950–$975M Raised
Revenue (Reported)Q4 2025—$1.506–$1.536B New
Adjusted EPSQ4 2025—$1.98–$2.08 New
Adj. EBITDA Margin (EFX)Q4 2025—~33.0–33.3% New
EWS Adj. EBITDA MarginQ4 2025—~50.0–50.3% New
USIS Adj. EBITDA MarginQ4 2025—~35.8–36.1% New
International Adj. EBITDA MarginQ4 2025—~31.2–31.5% New

Earnings Call Themes & Trends

TopicQ1 2025 (Apr)Q2 2025 (Jul)Q3 2025 (Oct)Trend
AI/TechnologyEFX.AI highlighted; post‑cloud innovation; vitality 11% Vitality 14%; USIS vitality 10% Vitality 16% (record); Ignite AI Advisor launched to “democratize analytics” Strengthening product cadence and AI penetration
Mortgage & ScoresUSIS mortgage +11%; pricing pass‑through; Twin indicator launched USIS mortgage +20%; pre‑approval strength; reiterated tri‑merge support USIS mortgage +26%; VantageScore 4.0 at $4.50; groundswell of interest; $100–$200M profit potential Shift to competitive score economics; rising interest and potential share gains
Hiring/TalentTalent up 12% on comps; caution on hiring outlook Talent low‑single digit; continued weak hiring Talent modest; white‑collar hiring weak; employer +1% Persistent headwind
Government/OB3$50M SSA amendment; $5B TAM; improper payments focus Volatility from state funding; momentum as waivers expire High-single digit growth; stronger state/federal engagement post‑OB3; shutdown risk “deferral” if extended Growing medium‑term tailwinds amid near‑term variability
International~7% CC; cloud progress (UK, Peru) 6% CC; LATAM/Europe strong; Canada weak macro 7% LC; margins +360 bps; Canada +11% Steady growth, margin uplift from cloud

Management Commentary

  • “Equifax delivered strong third quarter revenue of $1.545 billion, up 7%... led by strong 13% U.S. Mortgage revenue growth, strong Workforce Solutions Government vertical results, and continued momentum in New Product Innovation with a Vitality Index of 16%...” — CEO Mark Begor .
  • “We are raising our full year 2025 reported revenue Guidance midpoint by $40 million... and increasing our full year Adjusted EPS Guidance by $0.12 per share... increased free cash flow Guidance from $900+ million to between $950 million and $975 million...” — CEO .
  • On VantageScore pricing: “VantageScore 4.0 for mortgage will be priced at $4.50 a score... expected to generate at full adoption an incremental annual over $100 million of profit at current mortgage levels, an additional over $100 million ... as the mortgage market recovers” — CEO .
  • Margin color: “Near-term USIS and Equifax margins [impacted by] higher variable compensation... [and] mix somewhat higher toward mortgage” — CFO John Gamble .
  • AI strategy: “We’re realizing this vision with our Ignite AI Advisor... lenders can ask questions through a generative AI chat... we plan to share more metrics on how we're delivering higher revenue and greater cost efficiency through the use of EFX.AI” — CEO .

Q&A Highlights

  • Mortgage pricing and conversion: Management cited “groundswell of interest” in VantageScore after FICO’s $10/score 2026 pricing; several customers in production/contracting; conversion to take time given complexity .
  • Margins and incentive comp: Higher mortgage mix and increased variable compensation from stronger performance explained near‑term margin dynamics; commitment to “flow through” mortgage profit over time .
  • Government vertical: Post‑OB3 engagement accelerating at federal/state levels; medium‑term revenue opportunity; a prolonged federal shutdown would likely defer (not destroy) revenue; guidance assumes no material extension .
  • Non‑mortgage demand: Stable consumer credit environment; auto and FI solid; no broad uptick in risk-driven portfolio reviews; USIS non‑mortgage +5% in Q3 .
  • International: Canada reaccelerating post‑cloud; LATAM/Brazil (Boa Vista) strong; margins expanding with decommissioning .

Estimates Context

  • Q3 2025 vs S&P Global consensus: revenue beat by ~1.5% and adjusted EPS beat by ~5.3%; EBITDA modest miss (~0.7%). Company attributed upside to stronger late‑quarter mortgage activity (lower rates), USIS mortgage outperformance, and EWS non‑mortgage/government strength; margin pressure from variable comp and mix .
  • Q4 2025 and FY 2025 positioning: Company guides Q4 revenue $1.506–$1.536B and adjusted EPS $1.98–$2.08 . FY 2025 guidance (revenue $6.03–$6.06B; adjusted EPS $7.55–$7.65) brackets S&P Global consensus (revenue ~$6.05B*, EPS ~$7.61*), implying estimates are broadly aligned with raised company outlook.
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Beat and raise: Solid revenue/EPS beats and a raise to FY revenue, EPS, and FCF guidance signal resilient execution despite mortgage and hiring headwinds .
  • Mortgage catalyst: Aggressive VantageScore 4.0 pricing ($4.50/score) versus FICO’s $10 in 2026 could drive medium‑term mix/profit uplift ($100–$200M potential) and share gains, though conversions will take time .
  • Product velocity: Record Vitality (16%) and expanding EFX.AI solutions (Ignite AI Advisor) reinforce a post‑cloud innovation cycle that supports non‑mortgage growth and margin expansion over time .
  • Government runway: OB3‑driven program integrity creates sizable mid‑term upside; near‑term variability (funding/shutdown risk) likely impacts timing more than trajectory .
  • Margin dynamics: Mix (mortgage) and higher variable comp muted margin expansion this quarter; underlying BU margins (USIS, International) are improving with cloud savings and operating leverage .
  • Capital returns: Accelerating FCF ($950–$975M FY guide) enables sustained buybacks and dividends ($360M returned in Q3) alongside continued NPI and selective M&A .
  • Near-term focus: Watch Q4 mortgage volumes (guided down HSD inquiries) and execution on VantageScore conversions; non‑mortgage trends remain stable with improving USIS vitality .

Non-GAAP Adjustments (Awareness)

  • Adjusted EPS excludes items including acquisition-related amortization ($62.7M), restructuring charges ($43.9M), antitrust litigation costs ($4.3M), and other items; adjusted EBITDA excludes similar items; full reconciliations provided .