Equifax Releases Third Quarter Results
Staff Report From Metro Atlanta CEO
Friday, November 10th, 2017
Equifax Inc. announced financial results for the quarter ended September 30, 2017.
"As we report our third quarter results, we recognize that we have an important journey in front of us to regain the trust and confidence of consumers and our business customers," said Paulino Barros, Interim Chief Executive Officer at Equifax. "Our teams have taken immediate actions to improve our data security and provide improved support for consumers who were impacted by our cybersecurity incident. As we look to the future, I have committed Equifax to four things: protecting consumers, enhancing our security, empowering consumers to control access to personal credit data, and leading our industry to confront the massive economic and national security threats represented by cyber criminals. I have high confidence in our global teams, and as we focus on these critical imperatives we will emerge from this an even stronger company."
Financial Results Summary
The company reported revenue of $834.8 million in the third quarter of 2017, a 4 percent increase compared to the third quarter of 2016 on a reported basis and 3 percent on a local currency basis.
Third quarter diluted EPS attributable to Equifax was $0.79, down 28 percent compared to the third quarter of 2016.
Net income attributable to Equifax of $96.3 million was down 27 percent compared to the third quarter of 2016.
USIS third quarter results
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Total revenue was $307.7 million in the third quarter of 2017 compared to $317.4 million in the third quarter of 2016, a decrease of 3 percent. Operating margin for USIS was 42.1 percent in the third quarter of 2017 compared to 44.0 percent in the third quarter of 2016. Adjusted EBITDA margin for USIS was 49.2 percent in the third quarter of 2017 compared to 50.6 percent in the third quarter of 2016.
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Online Information Solutions revenue was $221.0 million, down 4 percent compared to the third quarter of 2016.
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Mortgage Solutions revenue was $38.8 million, down 2 percent compared to the third quarter of 2016.
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Financial Marketing Services revenue was $47.9 million, down 1 percent compared to the third quarter of 2016.
International third quarter results
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Total revenue was $239.8 million in the third quarter of 2017, up 12 percent compared to the third quarter of 2016 and a 10 percent increase on a local currency basis. Operating margin for International was 22.0 percent in the third quarter of 2017, compared to 12.3 percent in the third quarter of 2016. Adjusted EBITDA margin for International was 33.2 percent in the third quarter of 2017, compared to 28.4 percent in the third quarter of 2016.
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Asia Pacific revenue was $81.2 million, up 10 percent compared to the third quarter of 2016 and up 6 percent on a local currency basis.
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Europe revenue was $69.0 million, up 11 percent compared to the third quarter of 2016 and up 10 percent on a local currency basis.
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Latin America revenue was $54.5 million, up 16 percent compared to the third quarter of 2016 and up 20 percent on a local currency basis.
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Canada revenue was $35.1 million, up 11 percent compared to the third quarter of 2016 and up 7 percent on a local currency basis.
Workforce Solutions third quarter results
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Total revenue was $186.4 million in the third quarter of 2017, a 9 percent increase compared to the third quarter of 2016. Operating margin for Workforce Solutions was 43.1 percent in the third quarter of 2017 compared to 40.8 percent in the third quarter of 2016. Adjusted EBITDA margin for Workforce Solutions was 48.6 percent in the third quarter of 2017 compared to 47.0 percent in the third quarter of 2016.
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Verification Services revenue was $129.9 million, up 13 percent compared to the third quarter of 2016.
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Employer Services revenue was $56.5 million, flat compared to the third quarter of 2016.
Global Consumer Solutions third quarter results
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Revenue was $100.9 million, flat compared to the third quarter of 2016 and flat on a local currency basis. Operating margin was 24.5 percent compared to 27.6 percent in the third quarter of 2016. Adjusted EBITDA margin was 27.9 percent compared to 30.0 percent in the third quarter of 2016.
Adjusted EPS and Adjusted EBITDA Margin
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Adjusted EPS attributable to Equifax was $1.53, up 6 percent compared to the third quarter of 2016. This financial measure for 2017 excludes the income tax effects of stock awards recognized upon vesting or settlement and cybersecurity incident related costs. And additionally for 2016 excludes Veda acquisition related amounts. The financial measure for both 2017 and 2016 excludes acquisition-related amortization expense, net of associated tax impacts. These items are described more fully in the attached Q&A.
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Adjusted EBITDA margin was 37.4 percent, compared to 35.9 percent in the third quarter of 2016. These financial measures for 2017 and 2016 have been adjusted for certain items, including costs related to the cybersecurity incident, which affect the comparability of the underlying operational performance.