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Credit reporting giant Equifax (NYSE:EFX) announced better-than-expected revenue in Q1 CY2025, with sales up 3.8% year on year to $1.44 billion. The company expects next quarter’s revenue to be around $1.51 billion, close to analysts’ estimates. Its non-GAAP profit of $1.53 per share was 9% above analysts’ consensus estimates.

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Equifax (EFX) Q1 CY2025 Highlights:

• Revenue: $1.44 billion vs analyst estimates of $1.42 billion (3.8% year-on-year growth, 1.7% beat)

• Adjusted EPS: $1.53 vs analyst estimates of $1.40 (9% beat)

• Adjusted EBITDA: $423.1 million vs analyst estimates of $404.4 million (29.3% margin, 4.6% beat)

• The company slightly lifted its revenue guidance for the full year to $5.97 billion at the midpoint from $5.95 billion

• Management reiterated its full-year Adjusted EPS guidance of $7.45 at the midpoint

• Operating Margin: 16.4%, in line with the same quarter last year

• Free Cash Flow Margin: 8.1%, similar to the same quarter last year

• Market Capitalization: $33.52 billion

StockStory’s Take

Equifax’s Q1 results were shaped by strong execution in non-mortgage verticals, continued momentum in new product launches, and early returns from its cloud transformation. CEO Mark Begor highlighted the company’s focus on leveraging cloud capabilities to boost innovation, citing new credit and employment verification solutions as a key differentiator. Begor stated, “Our strong first quarter is a proof point to the power of the Equifax cloud as our team can now fully focus on growth, innovation and customers.”

Looking ahead, management’s guidance reflects caution in light of continued economic and policy uncertainty, particularly surrounding tariffs and interest rates. Despite a solid start to the year, Equifax opted to maintain its full-year outlook. Begor explained, “Given the significant uncertainty in the economy and with consumer and corporate confidence, we are maintaining our 2025 guidance at the levels we provided to you in February.”

Key Insights from Management’s Remarks

Management’s remarks on the earnings call provided valuable perspective on what drove Equifax’s Q1 performance and how the company is positioning itself for the remainder of the year.

• Cloud transformation complete: Equifax finished most of its cloud migration, enabling teams to shift from infrastructure building to customer-facing innovation and product launches, which management credits for stronger commercial execution in USIS and elsewhere.

• New verification products launched: The company introduced its first-ever combined credit and employment verification solution for mortgage lenders, allowing simultaneous access to applicant creditworthiness and employment data. Early customer feedback has been positive, and similar solutions are planned for auto and personal loan markets this year.

• Government and social services focus: The Workforce Solutions segment benefited from an amended contract with the Social Security Administration, enabling expanded use of Equifax’s income verification for disability applicants. Management sees a favorable policy environment in Washington focused on program integrity and reducing improper payments, which could expand government adoption of verification solutions.

• Subscription and countercyclical revenue mix: Equifax’s shift toward more subscription and countercyclical revenue streams, such as government and subscription-based services, has improved its resilience to economic downturns. The company estimates over two-thirds of revenue now comes from segments less sensitive to recessions.

• Capital allocation shift: With cloud investments winding down, Equifax announced a new capital framework, including a 28% dividend increase and a $3 billion share repurchase program. Management indicated these moves were made possible by improved free cash flow and a stronger balance sheet.