Equifax Inc Q2 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Jeff Meuler - Robert W. Baird & Co Inc - Analyst : Yes. Thank you. Can you give some more perspective on the TWN state agency headwinds? Is this more headwinds tied to the programs that are impacted by the Federal government data expense subsidization changes? Or is it something else? And just any reason why now mid-calendar year there's incremental headwinds?

Question: Jeff Meuler - Robert W. Baird & Co Inc - Analyst : Okay. And then on what's driving the -- what are the new mortgage pre-qual products that are already driving strength for share in the quarter, I asked because it sounds like the TWN indicator product is still pretty early ramping. And then any other callouts that's leading to the step-up in USIS Vitality? Thank you.

Question: Jeff Meuler - Robert W. Baird & Co Inc - Analyst : Okay. Thank you.

Question: Andrew Steinerman - J.P. Morgan Securities LLC - Analyst : Hi. I have two questions. First one is, just what is mortgage revenues as a percentage of total revenues in the second quarter that just reported? And then looking at the beginning of this third quarter that we're in right now for USIS, what are you seeing in terms of non-mortgage lender and consumer credit activity?

Question: Andrew Steinerman - J.P. Morgan Securities LLC - Analyst : Good. Thanks, John.

Question: Manav Patnaik - Barclays Capital Inc - Analyst : Hi. Thank you. Good morning. I just wanted to revisit the government business again. Maybe it's a question just more on the visibility and assumptions there for the second half of the year. Because in the last several years, I guess, you have assumed the ramp in the second half and you've always had to lower it. But this time around, it felt like you had more visibility. So I was just wondering what exactly changed. Like, was there like a state that you had to cancel or had to step out because of budget reasons? Or is this just a little bit of all your different states?

Question: Manav Patnaik - Barclays Capital Inc - Analyst : Okay. And then just on the talent segment, on the criminal data. I think you mentioned something around share shifts between background screeners. I was hoping you could just elaborate on that, and also what the alternative is to Appriss, I guess?

Question: Manav Patnaik - Barclays Capital Inc - Analyst : Okay. Thank you.

Question: Toni Kaplan - Morgan Stanley & Co. LLC - Analyst : Thanks so much. I was hoping you could talk about VantageScore and what you're expecting in terms of price competition in the mortgage market. Are you expecting VantageScore to be priced at a level that could lead to share gains versus FICO? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 22, 2025 / 12:30PM, EFX.N - Q2 2025 Equifax Inc Earnings Call

Question: Toni Kaplan - Morgan Stanley & Co. LLC - Analyst : Perfect. And I wanted to ask also, John, about the EBITDA margin, raised your revenue but lowered EBITDA touch on the margin side. Is that from investing? Or is there a mix element there? I just wanted to hear all the drivers. Thanks.

Question: Toni Kaplan - Morgan Stanley & Co. LLC - Analyst : Very clear. Thank you.

Question: Faiza Alwy - Deutsche Bank Securities Inc - Analyst : Yes. Hi, thank you. John, just to follow up on those litigation costs. Can you give us a bit more color on what's going on there and if this is something that might continue into 2026? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 22, 2025 / 12:30PM, EFX.N - Q2 2025 Equifax Inc Earnings Call

Question: Faiza Alwy - Deutsche Bank Securities Inc - Analyst : Alright. Understood. And then I wanted to follow up on the talent business. You mentioned slightly weaker talent market. So I'm curious if you could give us a bit more color on some of the trends, like when did things start getting worse? And it sounds like you're not assuming an improvement there. So maybe just a finer point on how much of the lower guidance on talent is related to the criminal data that you talked about versus the market. And also if that is what is driving the lower guide on employer services broadly.

Question: Faiza Alwy - Deutsche Bank Securities Inc - Analyst : Great. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 22, 2025 / 12:30PM, EFX.N - Q2 2025 Equifax Inc Earnings Call

Question: Ashish Sabadra - RBC Capital Markets - Analyst : Thanks for taking my question. I have a two-part question on the USIS non-mortgage, One was on autos. We've seen some pretty strong growth there in the first half. Some of it is FICO pricing. But we were wondering if you have also seen any pull forward there, or have you seen any slowdown on the Auto front? And then the second part is just around the off-line business. Again, we've seen some good momentum there in the first half. What's driving it? And how do we think about B2B offline going forward in the second half? Thanks.

Question: Ashish Sabadra - RBC Capital Markets - Analyst : That's very helpful color. Thank you.

Question: Owen Lau - Oppenheimer & Co., Inc. - Analyst : Hi, good morning. Thank you for taking my question. So going back to VantageScore, Mark, I understand that it may be too early to talk about the pricing, but what's the goal for VantageScore longer term? I mean if you have an opportunity to make a push, would you push for higher market shares? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 22, 2025 / 12:30PM, EFX.N - Q2 2025 Equifax Inc Earnings Call

Question: Owen Lau - Oppenheimer & Co., Inc. - Analyst : Got it. That's helpful. And then maybe quickly on consumer lending. It was pretty strong, up 19% year over year in the second quarter, up from 11% last quarter, and P-Loan was very strong. Could you please give us more details on that strength and also the sustainability? Thanks a lot.

Question: Owen Lau - Oppenheimer & Co., Inc. - Analyst : Thanks a lot.

Question: Andrew Nicholas - William Blair & Company, L.L.C. - Analyst : Hi, good morning. Thanks for taking my question. First one is just on the International business broadly. In the US, you kind of characterized the consumer backdrop as stable, but subdued relative to historical trends. I'm just curious, in your major International markets, would you describe kind of the data score there as similar? Or where would it be, maybe running above or below averages compared to maybe what you would expect over a full cycle? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 22, 2025 / 12:30PM, EFX.N - Q2 2025 Equifax Inc Earnings Call

Question: Andrew Nicholas - William Blair & Company, L.L.C. - Analyst : Very helpful. Thank you. And then for my follow-up, just on the guidance broadly. Obviously, two really strong quarters start the year, above guidance on both of those. Your decision to kind of maintain the full year guide. I'm just curious, how much of that would you characterize as conservatism versus the macro deterioration, maybe you've seen a little bit in talent or delays in the government business? If there's a way to kind of frame the different factors and what ultimately led you to maintain the full year guidance.

Question: Andrew Nicholas - William Blair & Company, L.L.C. - Analyst : Thanks, Mark. Thanks, John.

Question: Surinder Thind - Jefferies LLC - Analyst : Thank you. I'd like to start with the talent business and just kind of the big picture overall here. As you think about just timing trends and generally how they've consistently been weaker for some time now, are there secular considerations here as we kind of -- the narrative of AI continues to kind of take hold in terms of hiring plans and especially within the white-collar environment. How have you taken that into consideration as you think about the big picture here?

Question: Surinder Thind - Jefferies LLC - Analyst : That's helpful. And then just as a follow-up, just regarding all of the headlines and the news around the FHFA. When we actually think about the timeline for implementation of what the FHFA would like with the introduction of VantageScore 4 followed by FICO 10T, any color that you can provide that would help us understand what a timeline might look like from a complexity perspective? Meaning that assuming the FHFA goes ahead, and we get the infrastructure in place from their perspective to be able to accept VantageScore 4, then the lenders come in and they got to update everything in their systems. So what is a realistic timeline, or how should we think about when you guys might realistically be able to start selling or the banks start incorporating Vantage scoring into the originations process?

Question: Surinder Thind - Jefferies LLC - Analyst : Thank you.

Question: Kevin McVeigh - UBS Securities LLC - Analyst : Great. Can you give us a sense, has the mortgage pricing been fully seasoned so far? And what is the pricing dynamic across the rest of the business? So what's pricing contributing to kind of the overall revenue embedded in the guidance?

Question: Kevin McVeigh - UBS Securities LLC - Analyst : Great. Thank you.

Question: Brandon Barron - Needham & Company LLC - Analyst : This is Brandon Barron on for Kyle. Thanks for taking my question. Just one for me. I'm just wondering if you can dig in on the international growth in the quarter and the rest of the year, particularly in LatAm and Europe cloud adoption and new products, and maybe how margins could shape up for that side of the business in the back half of the year? Thank you.

Question: Brandon Barron - Needham & Company LLC - Analyst : Okay. Great. Thank you, guys.

Question: Arthur Truslove - Citi Investment Research - Analyst : Thank you very much. Thanks very much for taking my question. I guess one for me, really. I was just wondering how you think about the kind of midterm outlook for FICO pricing. Obviously, mortgage revenues have significantly exceeded volumes in USIS, and a decent chunk of that is clearly as a result of FICO. Obviously, as you say, the FHFA boss has been -- talked about this. How do you think FICO will price as we look forward? And what sort of impact do you think that's going to have on your growth rates? Thank you.

Question: Arthur Truslove - Citi Investment Research - Analyst : Great. Thank you.

Question: Kelsey Zhu - Autonomous Research - Analyst : Hi, good morning. Thanks for taking my question. I have two questions on the government vertical. So the first one being, we saw that you recently won an RFP with the State of Maine as part of your contract renewal. And judging from the cost proposal, it looks like the contract value saw significant improvement from, I think, it was $1 million to $2 million a couple of years ago, and the proposal would suggest $9 million a year with the recent renewal. So just curious to hear your perspective on what's driving the significant growth there. We did see one of the main attributes that they ask for is hours worked. So maybe you can just talk about the traction you're gaining with state Medicaid programs after the One Big Beautiful Bill has been passed.

Question: Kelsey Zhu - Autonomous Research - Analyst : Got it. Super helpful. And just more broadly, Mark, I was wondering if you can help us think through the OBBBA's impact on EWS. Because on the positive side, you've highlighted some of these drivers, the working hours requirement, the double redetermination, will obviously all present tailwinds for Equifax. But then on the flip side, there are some studies that would suggest that something like [8 million] fewer people will be able to prove that they're eligible for Medicaid enrollment, as an example, which could present a headwind to EWS. So just curious to hear your perspective on all of this.

Question: Kelsey Zhu - Autonomous Research - Analyst : Thanks so much. Appreciate this.

Question: Scott Wurtzel - Wolfe Research LLC - Analyst : Hey, good morning, guys. Just one for me. Going back to the margin guidance, specifically on USIS. You raised your revenue growth guidance, but kept the margin guidance pretty flat or maintained it for the year. Just wondering what the dynamics are that are driving that. Thanks.

Question: Scott Wurtzel - Wolfe Research LLC - Analyst : Great. Thanks, guys.

Question: George Tong - Goldman Sachs & Company, Inc - Analyst : Hi, thanks. Good morning. Given the variability in state-level funding, are you considering any alternative pricing strategies to reduce revenue volatility in the EWS government segment?

Question: George Tong - Goldman Sachs & Company, Inc - Analyst : Very helpful. Thank you.

Question: Ryan Griffin - BMO Capital Markets - Analyst : Hey, thanks so much. You previously called out deepening penetration and broadening the solution set with the background screeners at your recent Investor Day. I know it's early now, but any updates worth sharing your client feedback? And how does that mesh out with the price you take there as you look ahead? Thank you.

Question: Ryan Griffin - BMO Capital Markets - Analyst : Great. Thank you.

Question: Matt O'Neill - FT Partners - Analyst : (inaudible) just squeezing me in. Most of my questions were asked and answered, but I thought I would ask one. Recently, there's been some headlines and announcement that JPMorgan would be rolling out fees for API data pulls. I was curious if this would impact Equifax directly. And to the extent to which other banks were to follow suit, is that something that you would sort of become a potentially larger dynamic to think about for you guys? Thank you.

Question: Matt O'Neill - FT Partners - Analyst : Great. Thanks.

Question: Simon Clinch - Redburn Atlantic - Analyst : Hi, thanks for taking my question. Maybe I could go back just the question previously about the challenges you're facing, I guess, at the state level, budgetary level, the headwinds that we're facing on the government side. What exactly are those states doing with their verifications? What data are they ending up using? Are they just doing -- just electing to do lower volumes? How is that actually mapping out? And then how do we think about, in the context of the OBBBA bill and the potential doubling of verifications, how do the budgetary constraints today manifest in that kind of environment as well?

Question: Simon Clinch - Redburn Atlantic - Analyst : That's really useful. Thanks, Mark. And just does this bill, do you consider the new policies as expanding that $5 billion TAM opportunity?

Question: Simon Clinch - Redburn Atlantic - Analyst : Great. Thanks so much.

Question: Craig Huber - Huber Research Partners - Analyst : Great. Thank you. You may have touched on this as I missed part of the call earlier, but can you just give us your outlook for credit cards in your auto business for the second half of the year? And maybe also just touch on the volume levels that you've seen in those two areas now, say, pre-COVID, how they stack up versus history?

Question: Craig Huber - Huber Research Partners - Analyst : Okay. Great. Thank you.