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Equifax (EFX) Q2 Earnings Beat Estimates, Revenues Miss
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Equifax Inc. (EFX - Free Report) reported mixed second-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings (excluding 59 cents from non-recurring items) came in at $1.71 per share, beating the consensus mark by 2.4% but declining 18.2% from the year-ago figure.
Total revenues of $1.32 billion missed the consensus estimate by 0.4% while matching the year-ago figure on a reported basis. The top line gained 1% on a local-currency basis.
Revenues in the Workforce Solutions segment totaled $582.8 million, down 4% from the year-ago quarter’s figure. Within the segment, Verification Services’ revenues of $474 million were down 6% year over year. Employer Services’ revenues of $108.8 million were up 4% year over year.
Revenues in the USIS segment were $445 million, up 6% from the year-ago quarter’s level. Within the segment, Online Information Solutions’ revenues of $358.6 million were up 9% from the year-ago quarter’s figure. Mortgage Solutions’ revenues of $30.3 million declined 18% year over year. Financial Marketing Services’ revenues were $56.1 million, increasing 1% year over year.
Revenues in the International division totaled $289.8 million, gaining 1% and 7% year over year on a reported basis and a local-currency basis, respectively. Asia Pacific’s revenues of $87.7 million declined 3% from the year-ago reported figure on a reported basis and 4% on a local-currency basis.
Revenues from Europe amounted to $78.7 million, down 1% year over year on a reported basis and 2% on a local-currency basis. Latin America’s revenues of $56.9 million grew 9% year over year on a reported basis and 23% on a local-currency basis. Canada’s revenues of $66.5 million were up 4% year over year on a reported basis and 8% on a local-currency basis.
Operating Results
Adjusted EBITDA in the second quarter totaled $431.3 million, down 30% from the year-ago quarter’s level. Adjusted EBITDA margin came in at 32.7%, 230 basis points less than the year-ago reported figure.
Workforce Solutions’ adjusted EBITDA margin was 51.5% compared with 53.4% a year ago. Adjusted EBITDA margin for the USIS division was 36% compared with 38.2% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 24.2% compared with 24.7% in the prior-year quarter.
Balance Sheet & Cash Flow
EFX exited the second quarter with cash and cash equivalents of $164.1 million. Equifax generated $262.1 million in cash from operating activities in the quarter. The company has a long-term debt of $5.5 billion compared with $4.99 billion in the year-ago reported figure. Capital expenditures were $163 million.
Q3 and 2023 outlook
For the third quarter of 2023, revenues are expected to be in the $1.32-$1.34 billion band. The Zacks Consensus Estimate for revenues is pegged at $1.32 billion. Adjusted earnings per share (EPS) are expected to be in the range of $1.72-$1.82, higher than the consensus estimate of earnings of $1.67 per share.
For 2023, revenues are expected in the range of $5.27-$5.33 billion. The Zacks Consensus Estimate of $5.32 billion lies above the mid-point ($5.3 billion) of the guided range. Adjusted EPS is expected to be in the range of $6.85-$7.1. The consensus mark for earnings is pegged at $7.16 per share, which lies above the guided range.
Equifax currently carries a Zacks Rank #4 (Sell).
Investors interested in the Zacks Business Services sector can consider the following better-ranked stocks.
The Zacks Consensus Estimate for the bottom line is pegged at $1.01 per share, up more than 100% from the year-ago figure. The consensus mark for revenues is pegged at $4.7 billion, up 15.8% from the figure reported a year ago. APTV had an average negative surprise of 8.1% in the previous four quarters.
Avis Budget (CAR - Free Report) currently carries a Zacks Rank of 2. The Zacks Consensus Estimate for earnings is pegged at $9.78 per share, down 38.6% from the year-ago figure. The consensus mark for revenues is pegged at $3.19 billion, down 1.6% from the prior-year figure. CAR had an average surprise of 65.2% in the previous four quarters.
S&P Global (SPGI - Free Report) currently has a Zacks Rank of 2. The Zacks Consensus Estimate for the bottom line is pegged at $3.09 per share, up 10% from the year-ago reported figure. The consensus mark for revenues is pegged at $3.05 billion, up 1.9% from the prior-year reported figure. SPGI had an average surprise of 3.1% in the previous four quarters.
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Equifax (EFX) Q2 Earnings Beat Estimates, Revenues Miss
Equifax Inc. (EFX - Free Report) reported mixed second-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings (excluding 59 cents from non-recurring items) came in at $1.71 per share, beating the consensus mark by 2.4% but declining 18.2% from the year-ago figure.
Total revenues of $1.32 billion missed the consensus estimate by 0.4% while matching the year-ago figure on a reported basis. The top line gained 1% on a local-currency basis.
Equifax, Inc. Price, Consensus and EPS Surprise
Equifax, Inc. price-consensus-eps-surprise-chart | Equifax, Inc. Quote
Segmental Information
Revenues in the Workforce Solutions segment totaled $582.8 million, down 4% from the year-ago quarter’s figure. Within the segment, Verification Services’ revenues of $474 million were down 6% year over year. Employer Services’ revenues of $108.8 million were up 4% year over year.
Revenues in the USIS segment were $445 million, up 6% from the year-ago quarter’s level. Within the segment, Online Information Solutions’ revenues of $358.6 million were up 9% from the year-ago quarter’s figure. Mortgage Solutions’ revenues of $30.3 million declined 18% year over year. Financial Marketing Services’ revenues were $56.1 million, increasing 1% year over year.
Revenues in the International division totaled $289.8 million, gaining 1% and 7% year over year on a reported basis and a local-currency basis, respectively. Asia Pacific’s revenues of $87.7 million declined 3% from the year-ago reported figure on a reported basis and 4% on a local-currency basis.
Revenues from Europe amounted to $78.7 million, down 1% year over year on a reported basis and 2% on a local-currency basis. Latin America’s revenues of $56.9 million grew 9% year over year on a reported basis and 23% on a local-currency basis. Canada’s revenues of $66.5 million were up 4% year over year on a reported basis and 8% on a local-currency basis.
Operating Results
Adjusted EBITDA in the second quarter totaled $431.3 million, down 30% from the year-ago quarter’s level. Adjusted EBITDA margin came in at 32.7%, 230 basis points less than the year-ago reported figure.
Workforce Solutions’ adjusted EBITDA margin was 51.5% compared with 53.4% a year ago. Adjusted EBITDA margin for the USIS division was 36% compared with 38.2% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 24.2% compared with 24.7% in the prior-year quarter.
Balance Sheet & Cash Flow
EFX exited the second quarter with cash and cash equivalents of $164.1 million. Equifax generated $262.1 million in cash from operating activities in the quarter. The company has a long-term debt of $5.5 billion compared with $4.99 billion in the year-ago reported figure. Capital expenditures were $163 million.
Q3 and 2023 outlook
For the third quarter of 2023, revenues are expected to be in the $1.32-$1.34 billion band. The Zacks Consensus Estimate for revenues is pegged at $1.32 billion. Adjusted earnings per share (EPS) are expected to be in the range of $1.72-$1.82, higher than the consensus estimate of earnings of $1.67 per share.
For 2023, revenues are expected in the range of $5.27-$5.33 billion. The Zacks Consensus Estimate of $5.32 billion lies above the mid-point ($5.3 billion) of the guided range. Adjusted EPS is expected to be in the range of $6.85-$7.1. The consensus mark for earnings is pegged at $7.16 per share, which lies above the guided range.
Equifax currently carries a Zacks Rank #4 (Sell).
Investors interested in the Zacks Business Services sector can consider the following better-ranked stocks.
Aptiv (APTV - Free Report) currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for the bottom line is pegged at $1.01 per share, up more than 100% from the year-ago figure. The consensus mark for revenues is pegged at $4.7 billion, up 15.8% from the figure reported a year ago. APTV had an average negative surprise of 8.1% in the previous four quarters.
Avis Budget (CAR - Free Report) currently carries a Zacks Rank of 2. The Zacks Consensus Estimate for earnings is pegged at $9.78 per share, down 38.6% from the year-ago figure. The consensus mark for revenues is pegged at $3.19 billion, down 1.6% from the prior-year figure. CAR had an average surprise of 65.2% in the previous four quarters.
S&P Global (SPGI - Free Report) currently has a Zacks Rank of 2. The Zacks Consensus Estimate for the bottom line is pegged at $3.09 per share, up 10% from the year-ago reported figure. The consensus mark for revenues is pegged at $3.05 billion, up 1.9% from the prior-year reported figure. SPGI had an average surprise of 3.1% in the previous four quarters.