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    EFX
    Earnings call· Mar 2026(Q1 FY26)

    EQUIFAX Q1 FY26 earnings call EFX

    Apr 21, 2026 Source

    Executive summary

    Equifax Q1 FY26 — Strong Revenue and Margin Expansion Despite Macro Headwinds

    Equifax delivered robust Q1 FY26 results, driven by strong revenue growth and significant margin expansion, particularly in U.S. mortgage and Workforce Solutions. Despite outperforming expectations, the company maintained its full-year guidance, citing macroeconomic uncertainties related to the Iran conflict and interest rates. Management emphasized the strategic importance of its cloud-native platform and EFX.AI capabilities in driving innovation, new product launches, and operational efficiencies, positioning the company for continued growth and shareholder returns.

    Highlights

    5

    • Reported revenue of $1.649 billion, up 14% YoY, exceeding guidance midpoint by $37 million.

    • Adjusted EPS of $1.86 per share, up 22% YoY, $0.18 above guidance midpoint.

    • EBITDA margin (ex-FICO) expanded by 80 basis points to 31.2%, surpassing long-term framework.

    • Workforce Solutions revenue grew over 10%, with Verifier up 14% and Talent Solutions up almost 10%.

    • Returned $327 million to shareholders, including repurchasing 1.3 million shares for $260 million.

    Concerns

    4

    • Maintained full-year guidance due to significant uncertainty from the Iran conflict and interest rate volatility, despite strong Q1 performance.

    • USIS diversified markets revenue grew 3%, slightly below expectations due to a tough comp in off-line batch jobs.

    • EWS government revenue expected to be flat sequentially in Q2 due to a tough comp from the SSA contract win last year.

    • Employer Services revenue now expected to decline slightly in FY26 due to Work Opportunity Tax Credit legislation not being extended.

    Guidance & targets

    18
    CategoryTargetConfidence
    Full-year 2026 Reported Revenue
    $6.745 billion
    high materiality
    Medium
    Full-year 2026 Adjusted EPS
    $8.54 per share
    high materiality
    Medium
    Full-year 2026 US Mortgage Revenue Growth
    over 20%
    high materiality
    Medium
    Full-year 2026 Diversified Markets Revenue Growth
    high single digits
    high materiality
    Medium
    Full-year 2026 EBITDA Margin Expansion (ex-FICO)
    75 basis points
    high materiality
    Medium
    Full-year 2026 Free Cash Flow
    over $1 billion
    high materiality
    High
    Full-year 2026 Cash Flow Conversion
    at least 100%
    medium materiality
    High
    Q2 FY26 Total Equifax Revenue
    $1.680 billion to $1.710 billion
    high materiality
    High
    Q2 FY26 Adjusted EPS
    $2.15 to $2.25 per share
    high materiality
    High
    Q2 FY26 EBITDA
    $537 million to $554 million
    medium materiality
    High
    Q2 FY26 EBITDA Margin (ex-FICO)
    34.3% to 34.7%
    medium materiality
    High
    Full-year 2026 EWS Revenue Growth
    high single digits
    medium materiality
    Medium
    Full-year 2026 EWS EBITDA Margins
    51.2% to 51.7%
    medium materiality
    Medium
    Full-year 2026 Verification Services Revenue Growth
    high single digits to low double digits
    medium materiality
    Medium
    Full-year 2026 Employer Services Revenue Growth
    decline slightly
    medium materiality
    Medium
    Full-year 2026 USIS EBITDA Margins (ex-FICO)
    almost 40%
    medium materiality
    Medium
    Q2 FY26 USIS Diversified Markets Revenue Growth
    mid-single digits
    low materiality
    Medium
    Q2 FY26 EWS Government Revenue Growth
    about flat sequentially
    low materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Workforce Solutions
    Strong performance driven by Verifier and Talent Solutions, with significant growth in government and consumer lending. EBITDA margins expanded by 200 bps YoY due to operating leverage and AI-driven productivity, despite continued investment in new products and record additions.
    Verifier revenue growth: 14%Diversified markets revenue growth (within Verifier): 14%Government revenue growth (within Diversified markets): mid-double digitsTalent Solutions revenue growth: almost 10%EWS mortgage revenue growth: 14%Consumer lending revenue growth: strong mid-double digits
    		$700Mover 10%—52.3%
    USIS
    Very strong revenue growth, primarily driven by mortgage outperformance and share gains from the TWN Indicator. Diversified markets were slightly below expectations due to tough comps in off-line batch. EBITDA margins were 30.3% (37.9% ex-FICO), down slightly due to one-time costs.
    Revenue growth (ex-FICO): 8%Mortgage revenue growth: 60%Mortgage revenue growth (ex-FICO): 24%Diversified markets revenue growth: 3%B2B revenue growth (within Diversified markets): 2%B2C revenue growth (within Diversified markets): 9%
    		$500M21%—30.3%
    International
    Consistent with expectations, showing strong growth in Canada, ANZ, and LatAm, with mid-single-digit growth in UK and Spain CRE businesses. EBITDA margins expanded by 80 bps YoY.
    Canada revenue growth: high single-digitANZ revenue growth: high single-digitLatAm revenue growth: high single-digitUK CRE revenue growth: mid-single-digitSpain CRE revenue growth: mid-single-digit
    		$449M4% (constant currency)—25%

    Operational metrics

    24
    Reported Revenue
    $1.649 billionup 14%
    Q1 FY26

    Exceeded midpoint of February guidance by $37 million.

    Organic Constant Currency Revenue Growth
    13%over 200 basis points above midpoint of February framework
    Q1 FY26

    Ex-FICO revenue growth was up about 10%, at the top end of the 7% to 10% long-term growth framework.

    Adjusted EBITDA
    $477 millionup 13%
    Q1 FY26

    Reported EBITDA margins were 29% in the quarter.

    Adjusted EBITDA Margin (ex-FICO)
    31.2%up 80 basis points
    Q1 FY26

    80 basis point expansion versus last year, above 75 basis point target for the year and 30 basis points above long-term 50 basis point framework.

    Adjusted EPS
    $1.86up 22%
    Q1 FY26

    $0.18 above the midpoint of February guide.

    Capital Returned to Shareholders
    $327 million
    Q1 FY26

    Includes share repurchases and dividends.

    Shares Repurchased
    1.3 millionabout 1% of shares outstanding
    Q1 FY26

    For $260 million, taking advantage of weaker stock price.

    Quarterly Dividend Increase
    12%
    Q1 FY26

    Increased to $0.56 per share.

    Dividends Paid
    $67 million
    Q1 FY26

    Paid in the quarter.

    Capital Capacity for M&A and Shareholder Returns
    $1.5 billion
    FY26

    Derived from over $1 billion free cash flow and $400 million additional debt capacity.

    Vitality Index
    17%record levels
    Q1 FY26

    Reflects focused execution in driving customer-focused growth through accelerated innovation.

    AI-based Patents
    10added
    Q1 FY26

    Continuing to invest in differentiated explainable AI capabilities.

    TWN Active Records
    211 millionup 11%
    Q1 FY26

    Record growth drives higher hit rates and revenue growth.

    TWN Total Current Records
    120 millionup 9%
    Q1 FY26

    Long runway for record growth against 250 million income-producing Americans.

    Government Services Pipeline Growth
    over 2x
    Q1 FY26

    Strong interest for new and expanded government services.

    Mortgage Originators Ingesting Free VantageScore
    over 240
    Q1 FY26

    With a paid FICO Score offering.

    Non-GSE Mortgage Lenders Using Vantage for Originations
    over 50
    Q1 FY26

    Principally non-GSE lenders.

    VantageScore Mortgage Pricing
    $1lowered from $4.50
    April 2026

    To further incent conversion, with a substantial $1 billion annual savings opportunity for originators and consumers.

    Annual Margin Upside from Full VantageScore Conversion
    $35 million
    Annual

    Assumes full conversion at current mortgage run rates; presented in appendix of earnings deck.

    Mortgages Issued with Interest Rate over 5%
    over 15 million
    since early 2022

    Provides perspective on the pool of mortgages potentially available to refinance as rates change.

    New Products Launched in 2025
    record levelup 2x over historic levels
    FY25

    Driven by cloud-native technology and EFX.AI capabilities.

    New Models and Scores Built Using EFX.AI
    100%
    FY25

    Indicates higher performance and complexity.

    New Products Powered by Multiple EFX Data Assets
    about 50%
    FY25

    Reflects increased sophistication and integration.

    Year 3 NPI Revenue
    up about 70%over historical levels
    FY25

    Indicates higher performing products.

    Product announcements

    3
    ProductTypeDetails
    Ignite AI Advisor for Autolaunch
    The Work Number Record Indicator (TWN indicator) for Auto Lenders and Personal Loan Originatorslaunch
    Continuous Evaluation for SNAP (EFX.AI-based)launch

    Risks & headwinds

    4
    Macroeconomic Uncertainty and Geopolitical ConflictFY26

    Maintained full-year guidance despite strong Q1, due to significant uncertainty related to the Iran conflict.

    Mitigation: Conservative guidance framework; monitoring economic conditions, inflation, and interest rates.

    Higher Interest Rates and Impact on Transactional ActivityQ1 FY26 and ongoing

    Mortgage activity declined in the last 6 weeks of Q1 from elevated levels in February; lesser impact on auto and banking.

    Mitigation: Offering TWN Indicator and other attributes at no cost to drive share gains; leveraging new products to outperform underlying markets.

    Work Opportunity Tax Credit (WOTC) Legislation Not ExtendedFY26

    Employer Services revenue now expected to decline slightly in 2026.

    Mitigation: Continuing to process WOTC applications to build a pipeline for retroactive recovery when legislation is renewed; lobbying for extension.

    Timing Issues in Government Deal Closures and ActivationsQ2 FY26 and beyond

    EWS government revenue expected to be about flat sequentially in Q2 against a tough comp from SSA contract win last year.

    Mitigation: Strong pipelines (up 2x YoY) for new and expanded government services; expecting benefits from OB3 opportunities later in 2026 and 2027.

    What to watch in Q2 FY26

    4

    FHFA Activation of VantageScore

    Next quarter
    CurrentGetting closer, but no formal activation
    TargetFormal activation decision

    Why it matters

    Formal activation would enable significant cost savings for the mortgage industry and margin upside for Equifax, impacting revenue mix and profitability.

    All indications are we're getting closer. We had the same indications last time we talked in February, but we're certainly closer now that we're in April. And the industry is clearly ready for it.

    Q&A highlights

    6

    Clarification on the timing of revenue from expanded government opportunities, especially given Q2's tough comp, and the drivers behind USIS diversified markets' Q1 slowdown and expected Q2 acceleration.

    Management reiterated bullishness on government, with substantial OB3 benefits expected in late 2026 and primarily 2027 due to deal cycles and budget challenges. Q2 faces a tough comp from the SSA contract. USIS diversified markets' Q1 was impacted by choppy batch volumes and a general economic slowdown in March, with new TWN indicator products expected to drive Q2 acceleration.

    “We remain very bullish about our government vertical, given the big TAM and also OB3, we've talked about that a bunch. We've been clear since really last July when OB3 was passed that we expect the substantial portion of that to be later in the year, but really principally in 2027, when that takes effect.”

    asked by Jeffrey Meuler · answered by Mark Begor

    2 min read6 chapters

    Detailed Narrative

    01

    Impact of Macroeconomic Uncertainty on Guidance

    Despite a strong Q1 FY26 performance, Equifax maintained its full-year guidance due to heightened economic uncertainty, particularly concerning the Iran conflict and its potential impact on interest rates and mortgage volumes. Management noted that current mortgage run rates are slightly below the levels reflected in the February framework, and absent the conflict, guidance would have been raised. The company's framework conservatively assumes no VantageScore conversion in 2026.

    02

    Strategic Focus on EFX.AI and Cloud-Native Innovation

    Equifax is leveraging its cloud-native infrastructure and EFX.AI capabilities to accelerate innovation, with over 90% of products built on new global cloud-based platforms. This has quadrupled the innovation funnel and halved product development cycles, leading to a record number of new product launches in 2025. The company holds over 400 pending or granted AI-based patents, emphasizing differentiated explainable AI capabilities.

    03

    Workforce Solutions Momentum and Government Opportunities

    Workforce Solutions delivered strong revenue growth, with Verifier up 14% and Talent Solutions up almost 10% despite a challenging white-collar hiring market. The government vertical shows significant long-term potential, with pipelines up over 2x YoY, driven by OB3 opportunities and new federal requirements for income validation in Medicaid and SNAP. New products like continuous evaluation for SNAP, built using EFX.AI, are already delivering results for states.

    04

    USIS Mortgage Outperformance and VantageScore Strategy

    USIS mortgage revenue was up 60% (24% ex-FICO), driven by significant share gains in pre-approval products, particularly with the new TWN Indicator. Equifax lowered its VantageScore mortgage pricing from $4.50 to $1 to incentivize conversion, anticipating FHFA activation. The company believes this could unlock $1 billion in annual savings for originators and consumers, and positions Equifax for margin upside upon conversion.

    05

    Proprietary Data and AI Moat

    90% of Equifax's revenue is generated from proprietary data sources, including income and employment exchanges, consumer and commercial credit exchanges, and alternative data sets. This data is not publicly available and is subject to strict regulatory and privacy controls. Management asserts that this proprietary data, combined with EFX.AI, creates a significant 'AI moat' that differentiates Equifax from competitors and protects against AI-driven data access threats.

    06

    Capital Allocation and Shareholder Returns

    Equifax returned $327 million to shareholders in Q1, including $260 million in share repurchases (1.3 million shares) and $67 million in dividends. The quarterly dividend was increased by 12% to $0.56 per share. With expected free cash flow over $1 billion and cash conversion over 100% in 2026, the company anticipates approximately $1.5 billion in capital capacity for bolt-on M&A and further shareholder returns.

    AI-generated summary of the company’s earnings call. Not investment advice.