Equifax (EFX) Surpasses Q2 Earnings & Revenue Estimates

Equifax Inc. EFX reported better-than-expected second-quarter 2020 results.

Adjusted earnings of $1.60 per share beat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis. The reported figure exceeded the guided range of 78-88 cents.

Revenues of $982.8 million outpaced the consensus estimate by 6.4% and improved 12% year over year on a reported basis and 13% on a local-currency basis. The reported figure exceeded the guided range of $785-$805 million.

So far this year, shares of Equifax have gained 19.9%, compared with 1% growth of the industry it belongs to and 1.4% increase of the Zacks S&P 500 composite.

 

Let’s check out the numbers in detail.

Segmental Revenues

Revenues in the U.S. Information Solutions division came in at $365.6 million, up 10% from the year-ago quarter. Within the division, Online Information Solutions’ revenues of $262.9 million were up 7% year over year. Mortgage Solutions’ revenues of $51.2 million improved 44% year over year. Financial Marketing Services’ revenues came in at $51.5 million, up 1% year over year. The segment contributed 37% of total revenues.

Revenues in the International division totaled $180.5 million, down 21% year over year on a reported basis and 15% on a local-currency basis. Asia Pacific revenues of $65.2 million declined 14% year over year on a reported basis and 9% on a local-currency basis. Revenues from Europe came in at $48 million, which decreased 27% year over year on a reported basis and 25% on a local-currency basis. Latin America revenues of $34.2 million declined 28% year over year on a reported basis and 14% on a local-currency basis. Canada revenues of $33.1 million declined 16% year over year on a reported basis and 13% on a local-currency basis. The International segment contributed 18% of total revenues.

Revenues in the Workforce Solutions segment totaled $352.9 million, up 53% from the year-ago quarter’s figure. Within the segment, Verification Services’ revenues of $251.9 million were up 46% year over year. Employer Services revenues of $101 million were up 75% year over year. Workforce Solutions contributed 36% of total revenues.

Revenues in the Global Consumer Solutions segment amounted to $83.8 million, down 5% year over year on both reported and local-currency basis. The segment contributed 9% of total revenues.

Equifax, Inc. Revenue (TTM)

 

Equifax, Inc. Revenue (TTM)

Equifax, Inc. revenue-ttm | Equifax, Inc. Quote

Operating Results

Adjusted EBITDA in the second quarter of 2020 came in at $353.2 million compared with $296.2 million in the year-ago quarter. Adjusted EBITDA margin rose to 35.9% from 33.7% in the year-ago quarter.

Adjusted EBITDA margin for USIS was 44.7% compared with 42.9% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 27.8% compared with 25.3% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 51.5% compared with 49.4% a year ago. Adjusted EBITDA margin for Global Consumer Solutions was 23.1% compared with 23.9% in the year-ago quarter.

Equifax, Inc. Price, Consensus and EPS Surprise

 

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 2020 with cash and cash equivalents of $1.35 billion compared with $369.9 million at the end of the prior quarter. Long-term debt was $3.87 billion compared with $3.51 billion at the end of the prior quarter.

The company generated $251.2 million of cash from operating activities and capex was $104.8 million. Also, Equifax paid out dividends of $47.3 million to shareholders in the reported quarter.

Currently, Equifax carries a Zacks Rank #3 (Hold). 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 2020 earnings of key players like S&P Global SPGI, Avis Budget Group CAR and Waste Management WM. While S&P Global and Avis Budget Group are slated to release their results on Jul 28, Waste Management is scheduled to release the same on Jul 30.

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