EQUIFAX INC earnings calls

AI productivity and 2027 margins

Q (Jeff Meuler · Baird): Analyst asked how AI productivity, mortgage volumes, and one-time items affect 2027 margins and bonuses.

A: Management said they have strong momentum on cost management and AI productivity and doubled their AI cost-out goal to $150 million. They noted mortgage activity is a clear negative if rates stay where they are, and they will give 2027 guidance in February. They expect AI to be net positive for top and bottom line over time.

"As you know, back in February, we set out a $75 million goal over the next couple of years for cost out, net cost out from AI productivity." — Mark W. Begor (CEO)

Twin indicator share gains in mortgage

Q (Toni Kaplan · Morgan Stanley): Analyst asked how twin indicators drive mortgage share gains and how much share they have in pre-qual/tri-merge area. Also asked timing of government fiscal year sales.

A: Management said twin indicator is early in deployment but customer response is very positive and it gives unique visibility; they have not quantified share gains yet. They added NC plus attributes and other products that take time for customer adoption. On government timing, contracts sign throughout year and revenue timing differs; 2Q and 3Q often see more signings while revenue may be recognized later.

"it is 1 that we view as a real asset for Equifax." — Mark W. Begor (CEO)

Verifier drivers for 2027

Q (Andrew Steinerman · JPMorgan): Analyst asked what will drive Verifier growth in 2027 and if government contracts are the main driver.

A: Management said records growth is a key positive and they finished the quarter with 110 million SSNs in their dataset, leaving a long runway versus 250 million income-producing Americans. They expect January price increases to flow into 2027, plus new products and penetration into large TAMs will aid growth. They also cited commercial momentum across talent and consumer finance verticals.

"We finished the quarter you know, with a 110 million current people or SSNs in our dataset." — Mark W. Begor (CEO)

Tri-merge vs bi-merge impact

Q (Shlomo Rosenbaum · Stifel): Analyst asked lenders' sentiment on moving from tri-merge to bi-merge and if lenders consider cost savings versus other trade-offs. Follow-up asked where mortgage will land as percentage of revenue in 2027.

A: Management said large lenders and regulators broadly view tri-merge as delivering more complete data, better pricing and safety; pulling fewer bureaus risks missing people and yields worse outcomes. They said they view FHFA bimerge discussion as not decided and modeled impacts as manageable. For mortgage volumes, management said they expect originations to decline high single digit year over year in 2027 if current run rates hold, with bulk impact in first 8 months.

"There is 11 million US consumers that are only on 1 credit bureau." — Mark W. Begor (CEO)

EWS long-term performance and government bookings

Q (Jason Haas · Wells Fargo): Analyst asked to confirm if EWS will return to its long-term framework next year and about the 3Q $15 million government bookings and outlook for 4Q.

A: Management clarified they did not give 2027 guidance but said EWS momentum and quarter-to-quarter improvement is strong and provided setup data for 2027 for analysts to model. They said 2Q and 3Q were strong for government signings and renewals due to state budget timing, and fourth quarter tends to be smaller for signings. Some contracts signed in 2Q monetized in 3Q and more will monetize in 4Q.

Vantage adoption and $35M margin upside

Q (Faiza Alwy · Deutsche Bank): Analyst asked how Vantage adoption and paid model will work, whether free Vantage continues with paid FICO, and what the $35M annualized margin upside represents.

A: Management said converting FICO users to paid Vantage (a $1 score) yields margin upside because FICO is currently pass-through with zero margin while Vantage nets $1 per score. They estimated at current run rates full conversion would create margin upside in the $30 million to $40 million range, and they will keep $1 Vantage through 2028 to help customer adoption. They also continue to offer free Vantage with paid FICO to drive adoption but noted many customers are moving to the $1 Vantage for cost savings.

"we are planning to keep our $1 Vantage score at $1 through 2028." — Mark W. Begor (CEO)

FHFA merge options and government contracts

Q (Manav Patnaik · Barclays): Analyst asked if FHFA moved to single-file, would lenders still pull all 3 and how Equifax can differentiate beyond twin and NC Plus; also asked about subscription contracts in government.

A: Management said FHFA has not decided to go to bimerge and if it did it would likely be optional for lenders, who would choose how to manage their marketing and underwriting. They noted Equifax has advantages in twin data, NC Plus attributes and owning a tri-merge business to respond. On government, subscription contracts are growing because customers like budget certainty, but Equifax still offers both models and remains flexible.

"our expectation is it would not be a requirement to go to a buy or single merge. It would be an option you know, for the lender," — Mark W. Begor (CEO)

Talent vertical outperformance

Q (Andrew Nicholas · William Blair): Analyst asked what drives talent's outperformance, how much is new products, and market makeup; also asked about competition in income/employment verification partnerships.

A: Management said talent growth is driven by product rollout, record growth, and expanded penetration into a large TAM where they still have low share. They cited specific data products (e.g., APRIS incarceration data) and new education and hourly employment solutions, plus price increases. On partnerships, they view a recent competitor integration as one-off and expect continued strong partner relationships due to distribution scale and ongoing product investment.

"we have been rolling out new products in the education space, in the employee verification space." — Mark W. Begor (CEO)

EWS margins with mortgage weakness

Q (Ashish Sabadra · RBC): Analyst asked how to think about EWS margins going forward given mortgage pressure and AI benefits, and about quarterly nuances for mortgage declines.

A: Management said EWS margins are very high and they will continue to invest while deploying AI productivity and operating leverage to maintain attractive 50+% EBITDA margins. They highlighted AI deployment in operations and tech across EWS to drive efficiencies. On mortgage seasonality, they apply normal seasonality and expect the largest year-over-year impact in the first half of 2027 given 2026's earlier stronger quarters.

"our goal is to continue to maintain those very attractive 50 plus percent EBITDA margins going forward by the strong operating leverage that comes from their top line growth and also the deployment of AI productivity." — Mark W. Begor (CEO)

Verifier government mortgage outlook and Vantage readiness

Q (Curtis Nagle · BofA): Analyst asked whether verifier government mortgage growth will be similar in 4Q and how prepared industry is to adopt Vantage.

A: Management said they don't give segment guidance but are happy with client additions and that many 2Q-signed contracts started monetizing in 3Q with more in 4Q. They said the industry has largely prepared systems and processes for Vantage over the past year, and the recent LLPA table normalization has increased customer intent to ramp Vantage adoption for cost savings, so adoption should grow in 4Q and accelerate in 2027.

"substantially, the industry is pretty well prepared, and the fact that they made the decision a few weeks ago to you know, normalize the LLPA tables You know, I think that opens up," — Mark W. Begor (CEO)

Lender marketing and consumer behavior

Q (Srinivasan · Jefferies): Analyst asked how lenders behave around marketing and origination amid higher rates and whether there is a delay before they change behavior.

A: Management said they have not seen broad pullback in marketing or originations and pointed to USIS and EWS consumer finance strength; DDM was strong around marketing activity. They noted unemployment remains low, which supports consumer payment behavior and lender activity, so they do not expect material change unless unemployment rises.

"the real indicator I have been around consumer finance for decades. And, you know, the real indicator is, you know, unemployment." — Mark W. Begor (CEO)

Latin America growth drivers

Q (Kyle Peterson · Needham): Analyst asked what drove Latin America growth and whether fintechs or banks are leading adoption.

A: Management said growth is broad-based with Brazil (Boa Vista) performing well, gaining share with fintechs and larger banks. They noted strong fintech adoption across Chile, Peru, Argentina, Ecuador and that Círculo (Mexico) is growing fast and will add when closed. They also highlighted being cloud-native in Latin America and rolling out AI-powered products and new scores to drive growth.

"Brazil which is Boa Vista, as you know, where we acquired that business, a little over 3 years ago, performing very well." — Mark W. Begor (CEO)

U.S. B2B online growth and Vantage LLPA impact

Q (Simon Clinch · Rothschild/Redburn): Analyst asked about trajectory of B2B online growth and if any one-time impacts; also asked how bespoke LLPA for Vantage would affect lender use.

A: Management said USIS completed cloud and is 24 months post-cloud with accelerating product rollouts and higher vitality index, which drives mid-single-digit growth improvements. They see early traction from twin indicator rollouts in auto/card/personal loan and expect continued commercial execution gains. On bespoke LLPA, management expects customized LLPA tables over time and believes price advantage plus Vantage's broader data will drive lender use despite future score performance changes.

"So that is benefiting them. Know, commercially. Some of the new solutions, you know, we talked about, you know, twin indicator, you know, that we are clearly." — Mark W. Begor (CEO)

Mortgage Score Select adoption

Q (Ryan Griffin · BMO Capital): Analyst asked what lender behaviors have been seen around the new Mortgage Score Select workflow.

A: Management said Score Select was launched based on lender input to provide flexibility—lenders can pull Vantage first and choose to pull FICO later during closing if needed, at lower cost without repurchasing the file. They expect significant adoption and that it will help promote faster Vantage movement.

"we launched that solution specifically based on lender input." — John W. Gamble Jr. (CFO)

Auto and FI slowdown and government competition

Q (BNP Paribas): Analyst asked to quantify the late-quarter slowdown in auto and FI volumes and whether competition in government (new entrant) changes dynamics.

A: Management said they quantified mortgage's third-quarter slowdown as about a $20 million negative impact and noted some slowing in auto and FI that is reflected in fourth-quarter trends but was not described as substantial. On government competition, they think TAM is large with room for competitors but view their offerings as strong and believe new entrants' contracts are relatively small.

"we quantified that the mortgage market clearly slowed in the third quarter and that impacted us in the neighborhood of $20 million negative in the third quarter." — Mark W. Begor (CEO)

AI cost-upsize and types of savings

Q (Kevin McVeigh · UBS): Analyst asked why the AI cost-out goal was doubled to $150M and to explain cost management versus AI-driven efficiencies.

A: Management said initial $75 million goal announced in February doubled because AI deployment momentum across operations, technology, finance, HR and legal accelerated after cloud completion. They explained operating leverage from revenue growth is the base for margin expansion, while AI is an additional lever that can reduce OpEx and CapEx and drive productivity. They view AI deployment as a multiyear impact and have raised margin improvement goals accordingly.

"we doubled that in Julia to 75 because of the momentum we have seen on AI deployment." — Mark W. Begor (CEO)

Government new ACV sources and renewals

Q (Scott Wurtzel · Wolfe): Analyst asked how much new ACV is from new products and whether renewal ACV includes expansions/pricing.

A: Management said renewal ACV is substantially renewal of existing business but often includes some price elements and added solutions during renewals. New ACV comes mostly from core verification products (income verification) and also from newer solutions like Continuous Evaluation and consumer-consented data. They emphasized a large $5 billion TAM with substantial manual processes today and strong penetration opportunity.

"the bulk of that new ACV would be in what I would call our core solutions." — Mark W. Begor (CEO)

Paid Vantage adoption and FICO 10T timing

Q (Kelsey Xu · Autonomous): Analyst asked medium-term paid Vantage adoption in mortgage and any update on FICO 10T timeline and competitive effects; also asked about FHFA releasing GSE scores.

A: Management said paid Vantage adoption is still fairly small while free Vantage is widely used to prepare the industry for conversion; many customers are focused on cost savings of Vantage. They said they are not involved in FICO 10T implementation and suspect it will be adopted in time but cannot comment on timing; they believe 10T may close some performance gaps but pricing remains a large delta versus Vantage. On FHFA/GSE scores, management declined to comment and said one should ask FHFA.

"the paid Vantage is still fairly small. I think we have been clear about that." — Mark W. Begor (CEO)

Why policy might move to bi-merge now

Q (Craig Huber · Huber Research Partners): Analyst asked what has changed since 2022 that would make a move to bi-merge more likely now despite prior resistance and what explains critics' complaints about price increases.

A: Management recalled the prior formal study and industry input that tri-merge provides better access and safety, and they said the underlying facts about dataset differences have not changed. They noted FICO pricing increases have been a regulator focus, said Equifax credit file pricing is down year over year, and reiterated their $1 Vantage commitment through 2028 as industry support in a tough mortgage environment.

"our pricing is, you know, year over year is actually down on the credit file." — Mark W. Begor (CEO)

APAC acceleration and international growth

Q (B. Riley): Analyst asked what drove APAC acceleration in the quarter and where international growth will be largest in 2027.

A: Management said Australia performed well as cloud completion allowed focus on innovation and they gained share there; leadership and product work drove that. They see Latin America as the fastest-growing international geography with strong Brazil performance and the pending Círculo deal in Mexico contributing, while Canada and UK will also benefit from new products and share gains.

"We are really pleased with the Australia performance." — Mark W. Begor (CEO)

LLPA grids, securitization, and score use

Q (Owen Lau · Clear Street): Analyst asked how having two LLPA grids would affect securitization/value chain harmonization and which score would be used; and how lenders pull both Vantage and FICO today.

A: Management said underwriting, not the credit score, drives capital markets and that tri-merge data in underwriting supports securitization; LLPA table changes matter but price differences will drive score choice. They explained systems and workflows had to be updated to accept a second score, they offered free Vantage with paid FICO to let customers test, and many lenders have built processes to move to paid Vantage for cost savings while some may pull both as an exception.

"From our perspective, the credit score is not a big determinant in capital markets. it is the underwriting that takes place by the mortgage originator." — Mark W. Begor (CEO)

Medicaid/SNAP verification opportunity

Q (George Tong · Goldman Sachs): Analyst asked about incremental government opportunity from new Medicaid work requirements and where states stand in decisions and contracting.

A: Management said changes around Medicaid work requirements and SNAP error-rate audits are driving new product rollouts and increased state engagement as federal rules push more robust income verification. They noted Equifax currently serves less than half the states for Medicaid and SNAP, leaving large white space in a $5 billion TAM and that their core value proposition (speed, caseworker productivity, integrity) fits the states' needs. These areas are a meaningful part of their pipeline.

"When you think about a $5 billion TAM, you know, we are less than 20% of that today." — Mark W. Begor (CEO)