Equifax Inc. announced financial results for the quarter March 31, 2018.

"I am excited to join the Equifax team as CEO at such a pivotal time in the company's history. Our first quarter operating results were better than expected and reflect the team's focus on delivering on financial commitments while continuing to make significant progress enhancing our data security and information technology infrastructure. During the quarter, we invested significantly in data security and IT infrastructure enhancements, and also took strong steps towards rebuilding the trust and confidence with consumers, customers and partners," said Mark W. Begor, Chief Executive Officer at Equifax. "Our first quarter results are a strong step forward but we still have work to do to improve our infrastructure and regain the trust of our customers, partners, and consumers. Over the coming months, my focus will be to accelerate investments to enhance our infrastructure and data security while focusing the broader team on our core growth initiatives. I am committed to bringing Equifax to industry leadership in data security and information technology while improving our relationship with consumers, customers, and partners. As a custodian of consumer and customer information, protecting sensitive consumer data is a central priority for Equifax and me personally."

Financial Results Summary

The company reported revenue of $865.7 million in the first quarter of 2018, a 4 percent increase compared to the first quarter of 2017 on a reported basis and 3 percent on a local currency basis.

First quarter diluted EPS attributable to Equifax was $0.75, down 40 percent compared to the first quarter of 2017.

Net income attributable to Equifax of $90.9 million was down 41 percent compared to the first quarter of 2017.

USIS first quarter results

• Total revenue was $306.9 million in the first quarter of 2018 compared to $310.1 million in the first quarter of 2017, a decrease of 1 percent. Operating margin for USIS was 36.1 percent in the first quarter of 2018 compared to 41.8 percent in the first quarter of 2017. Adjusted EBITDA margin for USIS was 44.1 percent in the first quarter of 2018 compared to 48.6 percent in the first quarter of 2017.

• Online Information Solutions revenue was $219.7 million, down 2 percent compared to the first quarter of 2017.

• Mortgage Solutions revenue was $41.7 million, up 8 percent compared to the first quarter of 2017.

• Financial Marketing Services revenue was $45.5 million, down 2 percent compared to the first quarter of 2017.

International first quarter results

• Total revenue was $244.5 million in the first quarter of 2018, up 13 percent compared to the first quarter of 2017 and a 9 percent increase on a local currency basis. Operating margin for International was 15.0 percent in the first quarter of 2018, compared to 13.8 percent in the first quarter of 2017. Adjusted EBITDA margin for International was 29.4 percent in the first quarter of 2018, compared to 31.2 percent in the first quarter of 2017.

• Asia Pacific revenue was $82.4 million, up 14 percent compared to the first quarter of 2017 and up 11 percent on a local currency basis.

• Europe revenue was $70.6 million, up 15 percent compared to the first quarter of 2017 and up 1 percent on a local currency basis.

• Latin America revenue was $56.0 million, up 10 percent compared to the first quarter of 2017 and up 15 percent on a local currency basis.

• Canada revenue was $35.5 million, up 13 percent compared to the first quarter of 2017 and up 8 percent on a local currency basis.

Workforce Solutions first quarter results

• Total revenue was $211.1 million in the first quarter of 2018, a 6 percent increase compared to the first quarter of 2017. Operating margin for Workforce Solutions was 42.7 percent in the first quarter of 2018 compared to 44.7 percent in the first quarter of 2017. Adjusted EBITDA margin for Workforce Solutions was 48.9 percent in the first quarter of 2018 compared to 50.2 percent in the first quarter of 2017.

• Verification Services revenue was $128.4 million, up 12 percent compared to the first quarter of 2017.

• Employer Services revenue was $82.7 million, down 3 percent compared to the first quarter of 2017.

Global Consumer Solutions first quarter results

• Revenue was $103.2 million in the first quarter of 2018, down 3 percent compared to the first quarter of 2017 and down 4 percent on a local currency basis. Operating margin was 29.2 percent in the first quarter of 2018 compared to 29.1 percent in the first quarter of 2017. Adjusted EBITDA margin was 33.8 percent compared to 31.7 percent in the first quarter of 2017.

Adjusted EPS and Adjusted EBITDA Margin

• Adjusted EPS attributable to Equifax was $1.43 in the first quarter of 2018, down 1 percent compared to the first quarter of 2017. This financial measure for 2018 excludes the cybersecurity incident related costs and for 2017 excludes Veda acquisition related amounts and adjustments for uncertain tax positions related to the settlement of an income tax audit. The financial measure for both 2018 and 2017 excludes acquisition-related amortization expense, net of associated tax impacts and income tax effects of stock awards recognized upon vesting or settlement. These items are described more fully in the attached Q&A.

• Adjusted EBITDA margin was 33.5 percent in the first quarter of 2018, compared to 36.0 percent in the first quarter of 2017. These financial measures for 2018 and 2017 have been adjusted for certain items, including costs related to the cybersecurity incident, which affect the comparability of the underlying operational performance and are described more fully in the attached Q&A.

Cost Related to the Cybersecurity Incident

During the first quarter ended March 31, 2018, the Company recorded expenses, net of insurance recoveries of $68.7 million related to the cybersecurity incident announced in September of 2017. Costs related to the cybersecurity incident include incremental costs to transform our Information Technology Infrastructure and Data Security; legal fees and professional services costs to investigate the cybersecurity incident and respond to legal, government and regulatory claims; as well as cost to provide the free product and related support to the consumer.