EFX
IndustrialsEquifax
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XBRL · SEC EDGAR2016–2025(10yr)| Metric | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $3.1B | $3.4B | $3.4B | $3.5B | $4.1B | $4.9B | $5.1B | $5.3B | $5.7B | $6.1B | +6.9% |
| Gross Profit | $2.0B | $2.2B | $2.0B | $2.0B | $2.4B | $2.9B | $2.9B | $2.9B | $3.2B | $3.4B | +8.4% |
| Gross Margin | 64.6% | 64.0% | 57.8% | 56.6% | 57.9% | 59.8% | 57.5% | 55.7% | 55.7% | 56.4% | +0.8pp |
| Operating Income | $817.9M | $824.6M | $448.0M | -$335.4M | $676.6M | $1.1B | $1.1B | $933.6M | $1.0B | $1.1B | +5.1% |
| Operating Margin | 26.0% | 24.5% | 13.1% | -9.6% | 16.4% | 23.1% | 20.6% | 17.7% | 18.3% | 18.0% | -0.3pp |
| Net Income | $488.8M | $587.3M | $299.8M | -$398.8M | $520.1M | $744.2M | $696.2M | $545.3M | $604.1M | $660.3M | +9.3% |
| Net Margin | 15.5% | 17.5% | 8.8% | -11.4% | 12.6% | 15.1% | 13.6% | 10.4% | 10.6% | 10.9% | +0.2pp |
| Free Cash Flow | $622.3M | $597.8M | $350.3M | -$85.8M | $524.9M | $865.8M | $132.6M | $515.5M | $813.0M | $1.1B | +39.5% |
| FCF Margin | 19.8% | 17.8% | 10.3% | -2.4% | 12.7% | 17.6% | 2.6% | 9.8% | 14.3% | 18.7% | +4.4pp |
| EPS (Diluted) | $4.04 | $4.83 | $2.47 | $-3.27 | $4.24 | $6.02 | $5.65 | $4.40 | $4.84 | $5.32 | +9.9% |
1. THE BIG PICTURE
Equifax is in the final, critical stages of a "New Equifax" transformation, moving its entire operation to a cloud-native infrastructure to better sell its proprietary data. Equifax is effectively racing to prove that its unique datasets, particularly in employment and income verification, can generate enough growth and free cash flow to justify its $3.9 billion debt load while its core mortgage-related business remains under pressure (8-K, XBRL).
2. WHERE THE RISKS HIT HARDEST
The "unique and differentiated data assets" that Equifax cites as its primary competitive moat are directly threatened by Data Source Dependency. If the lenders and employers who furnish this data restrict access or if government procurement priorities shift, Equifax’s ability to sell its core products would be compromised (10-K Item 1, 10-K Item 1A). Furthermore, the Technology Transformation risk creates a paradox: while the cloud move is intended to bolster "Security Leadership," the complexity of migrating legacy systems actually increases the short-term risk of operational disruptions or cybersecurity incidents that could trigger massive regulatory fines (10-K Item 1A). Finally, the "low barriers to entry" in verification services leave Equifax vulnerable to Disintermediation, where third parties might bypass Equifax to get data directly from payroll processors (Competitive Position).
3. WHAT THE NUMBERS SAY TOGETHER
While revenue grew 9% in the most recent quarter, net income rose only 1%, suggesting that the benefits of growth are being consumed by the costs of the cloud transition and "headwinds from the U.S. Hiring and Mortgage markets" (8-K). Equifax’s operating margin of 17.7% and net margin of 10.5% both rank 5th out of 6 peers, trailing significantly behind specialized data rivals like Verisk (VRSK), which maintains a 30.8% net margin (XBRL). This gap indicates that Equifax is still a much less efficient converter of revenue to profit than its peers. Sentiment is also somewhat cautious; short interest stands at 5.0% of the float, suggesting a segment of the market is skeptical of Equifax's near-term execution (Supplemental Signals).
4. IS IT WORTH IT AT THIS PRICE?
At 19.1x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Equifax is trading exactly in line with the peer median (XBRL). At this multiple, the market is pricing in approximately 7.7% long-term growth (CAPM analysis). This expectation is supported by management’s 2026 guidance of 10.5% revenue growth and a record "Vitality Index" of 17%, which shows that new products are contributing to the top line at nearly double Equifax's long-term 10% goal (8-K). However, the valuation is sensitive to any slowdown; if growth were to fall to a 5.0% "base" scenario, the justified multiple would drop to 12.6x, representing significant downside from current levels (CAPM analysis). The current price is only "fair" if Equifax can maintain its growth trajectory despite a U.S. mortgage market it expects to be "down low single digits" in 2026 (8-K).
5. WHAT WOULD CHANGE THIS VIEW?
- Cautious if the U.S. mortgage market declines more sharply than the projected "low single digits," as this remains a primary drag on the USIS and Workforce segments (8-K).
- Constructive if FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin (currently 19.3%) begins to close the gap with peer leader Verisk (38.3%), which would signal that the cloud transformation is finally delivering structural efficiency (XBRL).
- Cautious if net debt continues to rise relative to free cash flow, as the current 3.4x net leverage leaves little room for error during an economic downturn (XBRL).
6. BOTTOM LINE
Structural Advantage: Proprietary data assets like The Work Number® integrated into a cloud-native platform that enables rapid AI-driven decisioning.
Bottom Line: Equifax is a high-stakes technology turnaround play that is currently priced for a smooth landing it has yet to fully deliver.
1. Top 5 Material Risks
- Cybersecurity and Data Security: Equifax faces constant threats from sophisticated actors, including state-sponsored entities, targeting its sensitive consumer and proprietary data. A material breach could lead to business interruption, litigation, and regulatory penalties that adversely affect cash flows and financial condition.
- Technology Transformation: The final stages of migrating legacy systems to cloud-based infrastructure are complex and expensive. Failure to realize anticipated efficiency gains or the occurrence of unanticipated problems could result in significant additional costs and reputational harm.
- Data Source Dependency: Equifax relies on external data from lenders, employers, and government sources. If these furnishers withdraw access, increase costs, or are restricted by regulation, Equifax’s ability to provide products is compromised, directly threatening revenue and earnings per share.
- Economic Sensitivity: Demand for Equifax services correlates with general economic activity and consumer credit. High unemployment, inflation, or interest rate volatility—particularly in the U.S. mortgage market—can reduce consumer spending and lender demand, negatively impacting revenue and operating profit.
- Competitive Pressures: The market is highly competitive, with rivals potentially offering superior products or lower prices. If Equifax fails to innovate or respond to new business models, it risks losing market share and suffering from margin compression.
2. Company-Specific Risks
- The Work Number® and Proprietary Databases: Equifax’s business model is uniquely tied to proprietary databases like The Work Number® and the National Cable, Telecommunications and Utility Exchange, Inc. (NCTUE). The loss of these specific data contributions would uniquely impair its ability to provide differentiated services.
- Countercyclical Workforce Solutions: While most segments suffer in weak economies, the unemployment claims management business within the Workforce Solutions segment is countercyclical, creating a unique internal hedge that may experience profit declines during periods of economic improvement.
- Tri-Bureau Mortgage Market Exposure: Equifax licenses information to and from competitors to sell "tri-bureau" products in the U.S. mortgage market; regulatory changes or pricing shifts in this specific niche could disproportionately affect its profitability.
- Artificial Intelligence in Credit Decisioning: Equifax’s use of AI in credit decisioning subjects it to enhanced regulatory scrutiny and potential liability regarding bias or lack of transparency that is distinct from its general IT risks.
3. Regulatory/Legal Risks
- Consumer Settlement Obligations: Equifax is bound by extensive business practice commitments and third-party security assessments resulting from the 2017 cybersecurity incident. Failure to comply with these orders could trigger enforcement actions, fines, or new, costly mandates.
- CFPB Supervisory Authority: The Consumer Financial Protection Bureau (CFPB) has broad authority to initiate enforcement actions, including the power to seek restitution, disgorgement of profits, and civil money penalties of up to $1.0 million per day for known violations of federal consumer financial laws.
- GDPR and Global Privacy Laws: In Europe, the General Data Protection Regulation (GDPR) allows for fines of up to 4% of annual worldwide "turnover," posing a significant financial risk for international operations.
- FCRA Litigation: The Fair Credit Reporting Act (FCRA) includes an attorney fee-shifting provision that incentivizes consumer lawsuits, which have increased Equifax’s costs associated with legal defense and resolution.
4. Financial Impact Map
Cybersecurity Incidents → Cash Flows / Results of Operations → Significant remediation costs, regulatory fines, and potential revenue loss from damaged customer relationships. Technology Transformation → Operating Margins / Expenses → Unanticipated expenses and potential additional costs if cloud-based systems do not perform as expected. Data Source Dependency → Revenue / Net Income / Earnings Per Share → Decreased ability to provide products if key data furnishers withdraw or increase costs. Economic Conditions (Mortgage Market) → Revenue / Operating Profit → Expected reduction in U.S. mortgage credit activity in 2026 could negatively impact the Workforce Solutions and USIS segments. International Operations → Operating Revenues / Operating Income → Fluctuations in the value of the U.S. dollar against foreign currencies (e.g., British pound, Euro, Indian rupee) affect consolidated financial results.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-K | Feb 2026 | Dec 2025 |
| 8-K | Feb 2026 | — |
| 10-Q | Oct 2025 | Sep 2025 |
| 14A | Mar 2025 | — |