Equifax posted its first-quarter results on Wednesday (April 21) that showed continued outperformance measured against its key markets, such as mortgages and workforce solutions geared toward managing payroll, tax and verification activities.
On a headline basis, the adjusted earnings per share of $1.97 were 42 cents better than expected, and revenues, which were up 26 percent year over year to $1.2 billion, were better than the Street by $90 million.
Drilling down into segment-level performance, Workforce Solutions posted 59 percent revenue growth to just under $481 million. Verification Services revenues soared by 75 percent year over year in the first quarter to $385.2 million, while Employer Services revenues gained 17 percent to $95.7 million. USIS was up 19 percent year over year, where the total top line stood at $409.4 million. The Mortgage Solutions segment’s revenues were up 27 percent year on year to $54.1 million.
Management said on the call that mortgage markets and related activity have been at record levels, though are slowing a bit. Mortgage credit inquiries are expected to be flat this year, and are expected to decline by double digits in the second half of the year.
Non-Mortgage Top Lines Up 20 Percent
Supplemental materials from the company show that core, non-mortgage-related businesses were up by 20 percent in the quarter.
CEO Mark Begor commented on the call that the firm is continuing to execute on its EFX2023 strategy, where data and applications are moving to a cloud-native environment. A particular source of strength in this segment has come from Workforce Solutions. The company said that online information solutions revenues gained 19 percent to $302 million. The CEO noted that as the U.S. is in recovery mode, momentum is continuing in its non-mortgage-related segments. B2B-related revenues, not related to mortgages, were up 38 percent, with online revenues up 44 percent.
According to management, Workforce Solutions revenue growth is accelerating beyond activity such as unemployment claims-related revenues, which were up 5 percent in the latest period. As mentioned on the conference call, EWS processed about one in three unemployment claims in the most recent quarter, up from about one in five as measured in the fourth quarter. Workforce Solutions reached 115 active records, up 9 percent year on year.
Begor noted on the call that, looking out beyond the U.S., Asia Pacific was up 25 percent on an as-reported revenue basis, followed by Europe’s revenues, which were up 3 percent on a reported basis, year over year. Equifax continues to make strides in leveraging cloud data assets (in USIS) to tap alternative data sources, as well as expand access to credit and analyze risk for borrowers who may not have built up traditional credit files.
Amid the U.S. recovery from the pandemic, and signs that international markets are reopening, management guided to total 2021 revenue growth of between 10.8 percent and 13.3 percent (excluding EFX Cloud technology transformation costs).
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