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Equifax (EFX) Beats on Q2 Earnings & Revenues, Ups '21 View

Equifax Inc. EFX reported better-than-expected second-quarter 2021 results.

Adjusted earnings of $1.98 per share beat the Zacks Consensus Estimate by 15.8% and improved on a year-over-year basis. The reported figure exceeded the guided range of $1.60-$1.70. 

Revenues of $1.23 billion outpaced the consensus estimate by 6.4% and improved 26% year over year on a reported basis and 23% on a local-currency basis. The reported figure exceeded the guided range of $1.14-$1.16 billion.

The company reported its sixth consecutive quarter of solid double-digit revenue and earnings growth. The uptick was driven by strength across the company’s Workforce Solutions, U.S. Information Solutions (“USIS”) and International segments. The company has been executing its EFX2023 strategy, leveraging the EFX Cloud to drive new products, innovation and growth. The company has delivered 46 new products leveraging EFX Cloud.

So far this year, shares of Equifax have gained 32.2%, outperforming the 6.2% decline of the industry it belongs to and 14.9% growth of the Zacks S&P 500 composite.


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Let’s check out the numbers in detail.

Segmental Revenues

Revenues in the USIS division came in at $405.8 million, up 11% from the year-ago quarter. Within the division, Online Information Solutions’ revenues of $298 million were up 13% year over year. Mortgage Solutions’ revenues of $49.3 million declined 4% year over year. Financial Marketing Services’ revenues came in at $58.5 million, up 14% year over year.

Revenues in the International division totaled $250.9 million, up 39% year over year on a reported basis and 25% on a local-currency basis. Asia Pacific revenues of $91.4 million grew 40% year over year on a reported basis and 21% on a local-currency basis. Revenues from Europe came in at $68.4 million, up 42% year over year on a reported basis and 27% on a local-currency basis. Latin America revenues of $44 million grew 29% year over year on a reported basis and 30% on a local-currency basis. Canada revenues of $47.1 million improved 42% year over year on a reported basis and 26% on a local-currency basis.

Revenues in the Workforce Solutions segment totaled $495.7 million, up 40% from the year-ago quarter’s figure. Within the segment, Verification Services’ revenues of $394.5 million were up 57% year over year. Employer Services revenues of $101.2 million remained flat year over year.

Revenues in the Global Consumer Solutions segment amounted to $82.4 million, down 2% year over year on a reported basis and 3% on a local-currency basis.

Operating Results

Adjusted EBITDA in the second quarter of 2021 came in at $431.2 million, up 20% from the year-ago quarter. Adjusted EBITDA margin fell to 34.9% from 36.5% in the year-ago quarter.

Adjusted EBITDA margin for USIS was 40.3% compared with 44.1% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 27.3% compared with 21.9% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 58% compared with 56.3% a year ago. Adjusted EBITDA margin for Global Consumer Solutions was 22.5% compared with 20.8% in the year-ago quarter.

Equifax, Inc. Price, Consensus and EPS Surprise

Equifax, Inc. price-consensus-eps-surprise-chart | Equifax, Inc. Quote

Balance Sheet and Cash Flow

Equifax exited second-quarter 2021 with cash and cash equivalents of $458.1 million compared with $765.9 million at the end of the prior quarter. Long-term debt was $3.28 billion, flat sequentially.

The company generated $407.7 million of cash from operating activities and capex was $122.5 million. Equifax paid out dividends of $47.5 million to shareholders in the reported quarter.

Third-Quarter and Full-Year 2021 Guidance

For the third quarter of 2021, Equifax expects revenues between $1.16 and $1.18 billion. The Zacks Consensus Estimate of $1.14 billion lies below the guidance.

Adjusted EPS is anticipated in the range of $1.62-$1.72. The Zacks Consensus Estimate of $1.69 lies within the guidance.

For full-year 2021, revenues are now expected between $4.76 and $4.80 billion compared with the prior guidance of $4.58-$4.68 billion. The Zacks Consensus Estimate of $4.67 billion lies below the updated guidance.

Adjusted EPS is now anticipated in the range of $7.25-$7.45 compared with the prior guidance of $6.75-$7.05. The Zacks Consensus Estimate of $7.07 lies below the updated guidance.

Currently, Equifax carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Investors interested in the broader Zacks Business Services sector are awaiting second-quarter 2021 earnings reports of key players like Fiserv FISV, Waste Management WM and IQVIA Holdings IQV, each of which is slated to report the same on Jul 27.


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