filings.toolsItem 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the results of operations and financial condition of Equifax Inc. MD&A is provided as a supplement to and should be read in conjunction with our consolidated financial statements and the accompanying Notes to Financial Statements in Item 1 of this Form 10-Q. This section discusses the results of our operations for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. All percentages have been calculated using unrounded amounts for each of the periods presented.
As used herein, the terms Equifax, the Company, we, our and us refer to Equifax Inc., a Georgia corporation, and its consolidated subsidiaries as a combined entity, except where it is clear that the terms mean only Equifax Inc.
All references to earnings per share data in MD&A are to diluted earnings per share, or EPS, unless otherwise noted. Diluted EPS is calculated to reflect the potential dilution that would occur if stock options or other contracts to issue common stock were exercised and resulted in additional common shares outstanding.
BUSINESS OVERVIEW
Equifax Inc. is a global data, analytics and technology company. We provide information solutions for businesses, governments and consumers, and we provide human resources business process automation and outsourcing services for employers. We have a large and diversified group of clients, including financial institutions, corporations, government agencies and individuals. Our services are based on comprehensive databases of consumer and business information derived from numerous sources including credit, financial assets, telecommunications and utility payments, employment, income, educational history, criminal justice data, healthcare professional licensure and sanctions, demographic and marketing data. We use advanced statistical techniques, machine learning and proprietary software tools to analyze available data to create customized insights, decision-making and process automation solutions and processing services for our clients. We are a leading provider of information and solutions used in payroll-related and human resource management business process services in the U.S., as well as e-commerce fraud and charge back protection services in North America. For consumers, we provide products and services to help people understand, manage and protect their personal information and make more informed financial decisions. Additionally, we also provide information, technology and services to support debt collections and recovery management.
We currently operate in four global regions: North America (U.S. and Canada), Asia Pacific (Australia, New Zealand and India), Europe (the U.K., Spain and Portugal) and Latin America (Argentina, Brazil, Chile, Costa Rica, Dominican Republic, Ecuador, El Salvador, Honduras, Mexico, Paraguay, Peru and Uruguay). We maintain support operations in Chile,
Costa Rica, India and Ireland. We also have investments in consumer and/or commercial credit information companies through joint ventures in Brazil, Cambodia, Malaysia and Singapore.
Recent Events and Company Outlook
As further described in our 2024 Form 10-K, we operate in the U.S., which represented 76% of our revenue in 2024. Additionally, we operate internationally in 20 countries. Our products and services span a wide variety of vertical markets including financial services, mortgage, talent solutions, federal, state and local governments, automotive, telecommunications, e-commerce and many others.
Demand for our services tends to be correlated to general levels of economic activity and to consumer credit and small business commercial credit decisioning and portfolio review, marketing, identity validation and fraud protection activity, employee hiring and onboarding activity, and activity in provisioning support services in the U.S. by government agencies. Demand is also enhanced by our initiatives to expand our products, capabilities and markets served.
We are in a period of significant economic and market volatility and uncertainty in the U.S. and our global markets, including uncertainty regarding expectations for U.S. inflation and interest rates. The direction of global economies, inflation and interest rates will have an impact on demand for our services.
Our current planning for 2025 assumes that U.S. economic activity, as measured by GDP, will grow at a rate somewhat lower than in 2024. We expect U.S. mortgage credit activity in 2025 to be below the levels of activity seen in 2024. The U.S. mortgage market, particularly the mortgage refinance portion of the U.S. mortgage market, can be significantly impacted by U.S. interest rates which impact mortgage rates available to consumers. In the international markets in which we operate, our planning also assumes that economic activity, as measured by GDP, will generally grow in 2025 at rates at or below those experienced in 2024. As noted above, due the current significant economic and market volatility and uncertainty, these assumptions may change.
For more information, see “Item 1A. Risk FactorsーNegative changes in general economic conditions, including interest rates, the level of inflation, unemployment rates, income, home prices, investment values and consumer confidence, could adversely affect us,” in our 2024 Form 10-K.
Segment and Geographic Information
Segments. The Workforce Solutions segment consists of the Verification Services and Employer Services business lines. Verification Services revenue is transaction-based and is derived primarily from verifications of employment and income data, as well as criminal justice data and educational background data. Employer Services revenue is derived from our provision of certain human resources business process outsourcing services that include both transaction and subscription based product offerings. These services include unemployment claims management, I-9 and onboarding services, Affordable Care Act ("ACA") compliance management, tax credits and incentives and other complementary employment-based transaction services.
The USIS segment consists of two service lines: Online Information Solutions and Financial Marketing Services. Online Information Solutions revenue is principally transaction-based and is derived from our sales of products such as consumer and commercial credit reporting and scoring, identity management, fraud detection, modeling services and consumer credit monitoring services. USIS also markets certain decisioning software and services which facilitate and automate a variety of consumer and commercial credit-oriented decisions. Online Information Solutions also includes our U.S. consumer credit monitoring solutions business. Financial Marketing Services revenue is principally project and subscription based and is derived from our sales of batch credit and consumer wealth information such as those that assist clients in acquiring new customers, cross-selling to existing customers and managing portfolio risk.
The International segment consists of Latin America, Europe, Asia Pacific and Canada. Canada’s services are similar to our USIS offerings. Asia Pacific, Europe and Latin America are made up of varying mixes of service lines that are generally consistent with those in our USIS reportable segment. We also provide information and technology services to support lenders and other creditors in the collections and recovery management process.
Geographic Information. We currently have operations in the following countries: Argentina, Australia, Brazil, Canada, Chile, Costa Rica, Dominican Republic, Ecuador, El Salvador, Honduras, India, Ireland, Mexico, New Zealand, Paraguay, Peru, Portugal, Spain, the U.K., Uruguay and the U.S. We also have investments in consumer and/or commercial credit information companies through joint ventures in Brazil, Cambodia, Malaysia and Singapore. Approximately 78% and 77% of our revenue was generated in the U.S. during the three months ended March 31, 2025 and 2024, respectively.
Seasonality. We experience seasonality in certain of our revenue streams. Revenue generated by the online consumer information services component of our USIS operating segment is typically the lowest during the first quarter, when consumer lending activity is at a seasonal low. Revenue generated from the Employer Services business unit within the Workforce Solutions operating segment is generally higher in the first quarter due primarily to the provision of 1095-C services that occur in the first quarter each year. Revenue generated from our financial wealth asset products and data management services in our Financial Marketing Services business is generally higher in the fourth quarter each year due to the significant portion of our annual renewals and deliveries which occur then. Mortgage related revenue is generally higher in the second and third quarters of the year due to the increase in consumer home purchasing during the summer in the U.S. Any change in the U.S. mortgage market has a corresponding impact on revenue and operating profit for our business within the Workforce Solutions and USIS operating segments.
Key Performance Indicators. Management focuses on a variety of key indicators to monitor operating and financial performance. These performance indicators include measurements of operating revenue, change in operating revenue, operating income, operating margin, net income, diluted earnings per share, cash provided by operating activities and capital expenditures. The key performance indicators for the three months ended March 31, 2025 and 2024 were as follows:
| Key Performance Indicators | ||||||||||||||
| Three Months Ended March 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (In millions, except per share data) | ||||||||||||||
| Operating revenue | $ | 1,442.0 | $ | 1,389.4 | ||||||||||
| Operating revenue change | 4 | % | 7 | % | ||||||||||
| Operating income | $ | 235.8 | $ | 224.7 | ||||||||||
| Operating margin | 16.4 | % | 16.2 | % | ||||||||||
| Net income attributable to Equifax | $ | 133.1 | $ | 124.9 | ||||||||||
| Diluted earnings per share | $ | 1.06 | $ | 1.00 | ||||||||||
| Cash provided by operating activities | $ | 223.9 | $ | 252.7 | ||||||||||
| Capital expenditures* | $ | (101.2) | $ | (124.7) |
*Amounts include accruals for capital expenditures.
Operational and Financial Highlights
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We did not repurchase any shares from public market transactions during the first three months of 2025 and 2024. On April 21, 2025, the Board of Directors terminated the existing share repurchase authorization and approved an authorization to repurchase up to $3 billion of shares of common stock.
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We paid out $48.5 million, or $0.39 per share, in dividends to our shareholders during the first three months of 2025. On April 21, 2025, the Board of Directors approved an increase in our quarterly cash dividend to $0.50 per share beginning in the second quarter of 2025.
RESULTS OF OPERATIONS—THREE MONTHS ENDED MARCH 31, 2025 AND 2024
Consolidated Financial Results
Operating Revenue
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||
| Consolidated Operating Revenue | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Workforce Solutions | $ | 618.6 | $ | 602.8 | $ | 15.8 | 3 | % | ||||||||||||||||||
| U.S. Information Solutions | 499.9 | 465.3 | 34.6 | 7 | % | |||||||||||||||||||||
| International | 323.5 | 321.3 | 2.2 | 1 | % | |||||||||||||||||||||
| Consolidated operating revenue | $ | 1,442.0 | $ | 1,389.4 | $ | 52.6 | 4 | % |
Revenue increased by $52.6 million, or 4%, for the first quarter of 2025 compared to the same period in 2024. Total revenue was negatively impacted by foreign exchange rates, which decreased revenue by $20 million, or 1%, for the first quarter of 2025 compared to the same period in 2024.
Revenue in the first quarter of 2025 increased due to revenue growth in USIS, Workforce Solutions and International. USIS revenue growth is primarily due to growth in mortgage revenue and non-mortgage revenue, which includes growth in Financial Marketing Services. Workforce Solutions revenue growth is primarily due to growth in Verification Services, partially offset by declines in Employer Services. International revenue growth is primarily driven by local currency growth in Latin America, Asia Pacific, Canada and Europe.
Operating Expenses
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||
| Consolidated Operating Expenses | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Consolidated cost of services | $ | 656.7 | $ | 627.7 | $ | 29.0 | 5 | % | ||||||||||||||||||
| Consolidated selling, general and administrative expenses | 374.9 | 372.6 | 2.3 | 1 | % | |||||||||||||||||||||
| Consolidated depreciation and amortization expense | 174.6 | 164.4 | 10.2 | 6 | % | |||||||||||||||||||||
| Consolidated operating expenses | $ | 1,206.2 | $ | 1,164.7 | $ | 41.5 | 4 | % |
Cost of services increased $29.0 million in the first quarter of 2025 compared to the same period in 2024. The increase is primarily due to higher revenue share and royalty costs. The impact of changes in foreign exchange rates on costs of services led to a decrease of $8.7 million in the first quarter of 2025 compared to the same period in 2024.
Selling, general and administrative expenses increased $2.3 million for the first quarter of 2025 compared to the same period in 2024, primarily due to increases in people costs. The impact of changes in foreign currency exchange rates led to a decrease in selling, general and administrative expenses of $6.7 million for the first quarter of 2025 compared to the same period in 2024.
Depreciation and amortization expense increased $10.2 million for the first quarter of 2025 compared to the same period in 2024. The increase is primarily due to increased amortization of capitalized internal-use software costs resulting from technology transformation capital spending incurred previously. The impact of changes in foreign currency exchange rates led to a decrease in depreciation and amortization expense of $2.4 million for the first quarter of 2025 compared to the same period in 2024.
Operating Income and Operating Margin
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||
| Consolidated Operating Income | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Consolidated operating revenue | $ | 1,442.0 | $ | 1,389.4 | $ | 52.6 | 4 | % | ||||||||||||||||||
| Consolidated operating expenses | 1,206.2 | 1,164.7 | 41.5 | 4 | % | |||||||||||||||||||||
| Consolidated operating income | $ | 235.8 | $ | 224.7 | $ | 11.1 | 5 | % | ||||||||||||||||||
| Consolidated operating margin | 16.4 | % | 16.2 | % | 0.2 | pts |
Total company operating margin increased by 0.2 percentage points in the first quarter of 2025 compared to the same period in 2024 due to the aforementioned increase in revenue.
Interest Expense and Other Income, net
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||
| Consolidated Interest Expense and Other Income, net | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Consolidated interest expense | $ | (52.9) | $ | (59.7) | $ | 6.8 | (11) | % | ||||||||||||||||||
| Consolidated other income, net | 2.5 | 1.6 | 0.9 | 56 | % | |||||||||||||||||||||
| Average cost of debt | 4.3 | % | 4.2 | % | ||||||||||||||||||||||
| Total consolidated debt, net, at quarter end | $ | 4,964.1 | $ | 5,625.3 | $ | (661.2) | (12) | % |
Interest expense decreased by $6.8 million in the first quarter of 2025 compared to the same period in 2024. The decrease for the first quarter of 2025 is due to lower overall debt balances when compared to the first quarter of 2024.
Other income, net, increased $0.9 million in the first quarter of 2025 compared to the same period in 2024. The increase for the first quarter of 2025 is primarily due to higher equity investment income as compared to the first quarter of 2024.
Income Taxes
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||
| Consolidated Provision for Income Taxes | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Consolidated provision for income taxes | $ | (51.6) | $ | (40.5) | $ | (11.1) | 27 | % | ||||||||||||||||||
| Effective income tax rate | 27.8 | % | 24.3 | % |
Our effective income tax rate was 27.8% for the three months ended March 31, 2025 compared to 24.3% for the three months ended March 31, 2024. Our effective tax rate was higher for the first three months of 2025 as compared to the same period in 2024 due to less favorable discrete benefits, none of which were individually material.
Net Income
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||
| Consolidated Net Income | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| (In millions, except per share amounts) | ||||||||||||||||||||||||||
| Consolidated operating income | $ | 235.8 | $ | 224.7 | $ | 11.1 | 5 | % | ||||||||||||||||||
| Consolidated interest expense and other income, net | (50.4) | (58.1) | 7.7 | (13) | % | |||||||||||||||||||||
| Consolidated provision for income taxes | (51.6) | (40.5) | (11.1) | 27 | % | |||||||||||||||||||||
| Consolidated net income | 133.8 | 126.1 | 7.7 | 6 | % | |||||||||||||||||||||
| Net income attributable to noncontrolling interests including redeemable noncontrolling interests | (0.7) | (1.2) | 0.5 | (42) | % | |||||||||||||||||||||
| Net income attributable to Equifax | $ | 133.1 | $ | 124.9 | $ | 8.2 | 7 | % | ||||||||||||||||||
| Diluted earnings per common share: | ||||||||||||||||||||||||||
| Net income attributable to Equifax | $ | 1.06 | $ | 1.00 | $ | 0.06 | 6 | % | ||||||||||||||||||
| Weighted-average shares used in computing diluted earnings per share | 125.1 | 124.8 |
Consolidated net income increased by $7.7 million for the first quarter of 2025 compared to the same period in 2024. The increase for the first quarter of 2025 is due to increased operating income and lower interest expense, offset by higher income tax expense.
Segment Financial Results
Workforce Solutions
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||
| Workforce Solutions | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Operating revenue: | ||||||||||||||||||||||||||
| Verification Services | $ | 502.2 | $ | 476.5 | $ | 25.7 | 5 | % | ||||||||||||||||||
| Employer Services | 116.4 | 126.3 | (9.9) | (8) | % | |||||||||||||||||||||
| Total operating revenue | $ | 618.6 | $ | 602.8 | $ | 15.8 | 3 | % | ||||||||||||||||||
| % of consolidated revenue | 43 | % | 43 | % | ||||||||||||||||||||||
| Total operating income | $ | 264.1 | $ | 255.1 | $ | 9.0 | 4 | % | ||||||||||||||||||
| Operating margin | 42.7 | % | 42.3 | % | 0.4 | pts |
Workforce Solutions revenue increased by 3% in the first quarter of 2025 compared to the same period in 2024. The increase is due to an increase in both non-mortgage and mortgage verticals within Verification Services, partially offset by declines in Employer Services.
Verification Services. Revenue increased by 5% for the first quarter of 2025 compared to the same period in 2024. The increase in revenue is primarily due to growth in the talent solutions, mortgage and consumer lending verticals.
Employer Services. Revenue decreased by 8% in the first quarter of 2025 compared to the same period in 2024. The decrease for the first quarter of 2025 is primarily due to declines in I-9 and onboarding services, as well as lower revenue from our ACA related services.
Workforce Solutions Operating Margin. Operating margin increased to 42.7% for the first quarter of 2025 from 42.3% for the first quarter of 2024. The increased margin is due to the aforementioned increase in revenue.
USIS
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||
| U.S. Information Solutions | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Operating revenue: | ||||||||||||||||||||||||||
| Online Information Solutions | $ | 448.1 | $ | 418.2 | $ | 29.9 | 7 | % | ||||||||||||||||||
| Financial Marketing Services | 51.8 | 47.1 | 4.7 | 10 | % | |||||||||||||||||||||
| Total operating revenue | $ | 499.9 | $ | 465.3 | $ | 34.6 | 7 | % | ||||||||||||||||||
| % of consolidated revenue | 35 | % | 33 | % | ||||||||||||||||||||||
| Total operating income | $ | 105.7 | $ | 92.6 | $ | 13.1 | 14 | % | ||||||||||||||||||
| Operating margin | 21.1 | % | 19.9 | % | 1.2 | pts |
U.S. Information Solutions revenue increased by 7% for the first quarter of 2025 compared to the same period in 2024. The increase is due to growth in Online Information Solutions which is due to growth in both mortgage and non-mortgage revenue, as well as growth in Financial Marketing Services. Growth in mortgage related services is primarily due to product pricing.
Online Information Solutions. Revenue increased by 7% for the first quarter of 2025 compared to the same period in 2024. The increase is driven by growth in mortgage related services, primarily due to product pricing, as well as growth in non-mortgage online services and consumer solutions revenue.
Financial Marketing Services. Revenue increased by 10% for the first quarter of 2025 compared to the same period in 2024, primarily driven by growth in credit marketing services.
USIS Operating Margin. USIS operating margin increased to 21.1% for the first quarter of 2025 from 19.9% for the first quarter of 2024. The margin increase is due to the aforementioned increase in revenue, partially offset by increases in certain product revenue royalty costs.
International
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||
| International | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Operating revenue: | ||||||||||||||||||||||||||
| Latin America | $ | 94.2 | $ | 91.1 | $ | 3.1 | 3 | % | ||||||||||||||||||
| Europe | 86.6 | 86.2 | 0.4 | — | % | |||||||||||||||||||||
| Asia Pacific | 79.7 | 78.2 | 1.5 | 2 | % | |||||||||||||||||||||
| Canada | 63.0 | 65.8 | (2.8) | (4) | % | |||||||||||||||||||||
| Total operating revenue | $ | 323.5 | $ | 321.3 | $ | 2.2 | 1 | % | ||||||||||||||||||
| % of consolidated revenue | 22 | % | 24 | % | ||||||||||||||||||||||
| Total operating income | $ | 25.4 | $ | 31.9 | $ | (6.5) | (20) | % | ||||||||||||||||||
| Operating margin | 7.8 | % | 9.9 | % | (2.1) | pts |
International revenue increased by 1% in the first quarter of 2025 compared to the same period in 2024. On a local currency basis, revenue increased by 7% in the first quarter of 2025, driven by local currency growth in Latin America, primarily from Argentina and Brazil, as well as local currency growth in Asia Pacific, Canada and Europe. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $20.0 million, or 6%, for the first quarter of 2025.
Latin America. On a local currency basis, revenue increased by 16% for the first quarter of 2025 compared to the same period in 2024. The increase in revenue is primarily due to local currency growth in Argentina and Brazil. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $11.4 million, or 13%, for the first quarter of 2025,
primarily within Brazil and Argentina. Reported revenue increased by 3% for the first quarter of 2025 compared to the same period in 2024.
Europe. On a local currency basis, revenue increased by 1% for the first quarter of 2025 compared to the same period in 2024. The increase is primarily due to growth in the consumer credit reporting business in Spain. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $0.8 million, or 1%, for the first quarter of 2025. Reported revenue was flat for the first quarter of 2025 compared to the same period in 2024.
Asia Pacif****ic. On a local currency basis, revenue increased by 7% for the first quarter of 2025 compared to the same period in 2024. The increase is primarily driven by growth in the Australia consumer credit reporting and commercial businesses. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $3.8 million, or 5%, for the first quarter of 2025. Reported revenue increased by 2% for the first quarter of 2025 compared to the same period in 2024.
Canada. On a local currency basis, revenue increased by 2% for the first quarter of 2025 compared to the same period in 2024. The increase is driven by growth in the direct to consumer business. Local currency fluctuations against the U.S. dollar negatively impacted revenue by $4.0 million, or 6%, for the first quarter of 2025. Reported revenue decreased by 4% for the first quarter of 2025 compared to the same period in 2024.
International Operating Margin. Operating margin decreased to 7.8% for the first quarter of 2025 from 9.9% for the first quarter of 2024. The decrease in margin for the first quarter of 2025 is due to higher operating expenses, partially offset by the increase in revenue. The higher operating expenses are principally due to higher people costs, higher cloud costs and increased amortization of capitalized internal-use software costs resulting from technology transformation capital spending incurred previously.
General Corporate Expense
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||
| General Corporate Expense | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| General corporate expense | $ | 159.4 | $ | 154.9 | $ | 4.5 | 3 | % |
Our general corporate expenses are unallocated costs that are incurred at the corporate level and include those expenses impacted by the overall management and strategic choices of the company, including shared services overhead, technology, security, data and analytics, administrative, legal, restructuring, and the portion of management incentive compensation determined by total company-wide performance.
General corporate expense increased by $4.5 million for the first quarter of 2025 compared to the same period in 2024. The increase is primarily due to higher amortization of capitalized internal-use software costs.
LIQUIDITY AND FINANCIAL CONDITION
Management assesses liquidity in terms of our ability to generate cash to fund operating, investing and financing activities. We continue to generate substantial cash from operating activities, remain in a strong financial position and manage our capital structure to meet short- and long-term objectives including reinvestment in existing businesses and completing strategic acquisitions.
Funds generated by operating activities, our $1.5 billion five year unsecured revolving credit facility ("Revolver") and related commercial paper ("CP") program, more fully described below, are our most significant sources of liquidity. At March 31, 2025, we had $195.2 million in cash and cash equivalents, as well as $1.3 billion available to borrow under our Revolver.
Sources and Uses of Cash
We believe that our existing cash balance, liquidity available from our CP and Revolver, cash generated from ongoing operations and continued access to public or private debt markets will be sufficient to satisfy cash requirements over the next 12 months and beyond. While there was no significant change in our cash requirements as of March 31, 2025 compared to
December 31, 2024, we have utilized existing CP capacity, together with cash from operating activities, to meet our current obligations.
Fund Transfer Limitations. The ability of certain of our subsidiaries and associated companies to transfer funds to the U.S. may be limited, in some cases, by certain restrictions imposed by foreign governments. These restrictions do not, individually or in the aggregate, materially limit our ability to service our indebtedness, meet our current obligations or pay dividends. As of March 31, 2025, we held $174.0 million of cash in our foreign subsidiaries.
Information about our cash flows, by category, is presented in the Consolidated Statements of Cash Flows. The following table summarizes our cash flows for the three months ended March 31, 2025 and 2024:
| Three Months Ended March 31, | Change | |||||||||||||||||||
| Net cash provided by (used in): | 2025 | 2024 | 2025 vs. 2024 | |||||||||||||||||
| (In millions) | ||||||||||||||||||||
| Operating activities | $ | 223.9 | $ | 252.7 | $ | (28.8) | ||||||||||||||
| Investing activities | $ | (107.2) | $ | (131.9) | $ | 24.7 | ||||||||||||||
| Financing activities | $ | (95.8) | $ | (131.9) | $ | 36.1 |
Operating Activities
Cash provided by operating activities in the three months ended March 31, 2025 decreased by $28.8 million compared to the prior year period primarily due to changes in our working capital position.
Investing Activities
Capital Expenditures
| Three Months Ended March 31, | Change | |||||||||||||||||||
| Net cash used in: | 2025 | 2024 | 2025 vs. 2024 | |||||||||||||||||
| (In millions) | ||||||||||||||||||||
| Capital expenditures* | $ | (107.2) | $ | (131.9) | $ | 24.7 |
*Amounts above are total cash outflows for capital expenditures.
Our capital expenditures are used for developing, enhancing and deploying new and existing software in support of our expanding product set, replacing or adding equipment, updating systems for regulatory compliance, the licensing of certain software applications, investing in system reliability, security and disaster recovery enhancements, and updating or expanding our office facilities.
Capital expenditures paid in the first three months of 2025 decreased by $24.7 million from the same period in 2024 due to lower capitalized software costs and lower spending on technology infrastructure as compared to the first quarter of 2024.
Financing Activities
Borrowings and Credit Facility Availability
| Three Months Ended March 31, | Change | |||||||||||||||||||
| Net cash used in: | 2025 | 2024 | 2025 vs. 2024 | |||||||||||||||||
| (In millions) | ||||||||||||||||||||
| Net short-term payments | $ | (48.1) | $ | (83.4) | $ | 35.3 | ||||||||||||||
Credit Facility Availability
We have access to a $1.5 billion five year unsecured revolving credit facility (the Revolver), which matures in August 2027. Borrowings under the Revolver may be used for working capital, for capital expenditures, to refinance existing debt, to finance acquisitions and for other general corporate purposes. The Revolver includes an option to request a maximum of three one-year extensions of the maturity date any time after the first anniversary of the closing date of the Revolver. In May 2024, we exercised our first option to extend the maturity date by one year, from August 2026 to August 2027, and thus have two one-year extension options remaining. Availability of the Revolver is reduced by the outstanding principal balance of our CP notes and by any letters of credit issued under the Revolver.
Our $1.5 billion CP program has been established to allow for borrowing through the private placement of CP notes with maturities ranging from overnight to 397 days. We may use the proceeds of CP notes for general corporate purposes. The CP program is supported by our Revolver and the total amount of CP notes that may be issued is reduced by the amount of any outstanding borrowings under our Revolver and by any letters of credit issued under the facility.
As of March 31, 2025, there were $1.4 million of letters of credit outstanding, no outstanding borrowings under the Revolver and $229.0 million of outstanding CP notes. Availability under the Revolver was $1.3 billion at March 31, 2025.
At March 31, 2025, approximately 95% of our debt was fixed-rate debt and 5% was variable-rate debt. Our variable-rate debt consists of outstanding amounts under our CP program. The interest rates reset periodically, depending on the terms of the respective financing agreements. At March 31, 2025, the interest rate on our variable-rate debt ranged from 4.59% to 4.68%.
Borrowing and Repayment Activity
We primarily borrow under our CP program and Revolver as needed and as availability allows.
Net short-term payments primarily represent net borrowings or repayments of outstanding amounts under our CP program.
There were no borrowings or payments on long-term debt for the first three months of 2025. There were no borrowings on long-term debt for the first three months of 2024. Payments on long-term debt for the first three months of 2024 represented $4.4 million in payments on our then-outstanding term loan.
Debt Covenants. A downgrade in our credit ratings would increase the cost of borrowings under our CP program and our Revolver, and could limit or, in the case of a significant downgrade, preclude our ability to issue CP. Our outstanding indentures and comparable instruments also contain customary covenants including, for example, limits on mortgages, liens, sale/leaseback transactions, mergers and sales of assets.
The Revolver requires a maximum leverage ratio, defined as consolidated funded debt divided by consolidated EBITDA, of 3.75 to 1.0. We may also elect to increase the maximum leverage ratio by 0.5 to 1.0 (subject to a maximum leverage ratio of 4.25 to 1.0) in connection with certain material acquisitions if we satisfy certain requirements. The Revolver also permits cash in excess of $175 million to be netted against debt in the calculation of the leverage ratio, subject to certain restrictions.
As of March 31, 2025, we were in compliance with all of our debt covenants.
We do not have any credit rating triggers that would accelerate the maturity of a material amount of the outstanding debt; however, our 2.6% senior notes due 2025, 3.25% senior notes due 2026, 5.1% senior notes due 2027, 5.1% senior notes due 2028, 4.8% senior notes due 2029, 3.1% senior notes due 2030, 2.35% senior notes due 2031 and 7.0% senior notes due 2037 (collectively, the “Senior Notes”) contain change in control provisions. If the Company experiences a change of control or publicly announces an intention to effect a change of control and the rating on the Senior Notes is lowered by Standard & Poor’s (“S&P”) and Moody’s Investors Service (“Moody’s”) below an investment grade rating within 60 days of such change of control or notice thereof, then the Company will be required to offer to repurchase the Senior Notes at a price equal to 101% of the aggregate principal amount of the Senior Notes plus accrued and unpaid interest.
For additional information about our debt, including the terms of our financing arrangements, basis for variable interest rates and debt covenants, see Note 5 of the Notes to Consolidated Financial Statements in our 2024 Form 10-K.
Equity Transactions
| Three Months Ended March 31, | Change | |||||||||||||||||||
| Net cash (used in) provided by: | 2025 | 2024 | 2025 vs. 2024 | |||||||||||||||||
| (In millions) | ||||||||||||||||||||
| Dividends paid to Equifax shareholders | $ | (48.5) | $ | (48.2) | $ | (0.3) | ||||||||||||||
| Proceeds from exercise of stock options and employee stock purchase plan | $ | 12.3 | $ | 19.9 | $ | (7.6) | ||||||||||||||
| Payment of taxes related to settlement of equity awards | $ | (11.5) | $ | (15.4) | $ | 3.9 | ||||||||||||||
Sources and uses of cash related to equity during the three months ended March 31, 2025 and 2024 were as follows:
- During the first three months of 2025 and 2024, we did not repurchase any shares of our common stock on the open market.
- We maintained our quarterly dividend of $0.39 per share in the first quarter of 2025. We paid cash dividends to Equifax shareholders of $48.5 million and $48.2 million, or $0.39 per share, during the three months ended March 31, 2025 and 2024, respectively.
- We received cash of $12.3 million and $19.9 million during the first three months of 2025 and 2024, respectively, from the exercise of stock options and the employee stock purchase plan.
- We paid taxes of $11.5 million and $15.4 million related to the settlement of equity awards during the first three months of 2025 and 2024, respectively.
On April 21, 2025, the Board of Directors terminated the existing share repurchase authorization and approved an authorization to repurchase up to $3 billion of shares of common stock. On April 21, 2025, the Board of Directors approved an increase in our quarterly cash dividend to $0.50 per share beginning in the second quarter of 2025.
Contractual Obligations, Commercial Commitments and Other Contingencies
Our contractual obligations and commercial commitments have not changed materially from those reported in our 2024 Form 10-K. For additional information about certain obligations and contingencies, see Note 6 of the Notes to Consolidated Financial Statements in this Form 10-Q.
Off-Balance Sheet Arrangements
There have been no material changes with respect to our off-balance sheet arrangements from those presented in our 2024 Form 10-K.
Benefit Plans
At December 31, 2024, our U.S. Retirement Income Plan met or exceeded ERISA’s minimum funding requirements. In the future, we expect to make minimum funding contributions as required and may make discretionary contributions, depending on certain circumstances, including market conditions and our liquidity needs. We believe additional funding contributions, if any, would not prevent us from continuing to meet our liquidity needs, which are primarily funded from cash flows generated by operating activities, available cash and cash equivalents, our CP program and our Revolver.
For our non-U.S. tax-qualified retirement plans, we fund an amount sufficient to meet minimum funding requirements but no more than allowed as a tax deduction pursuant to applicable tax regulations. For our non-qualified supplementary retirement plans, we fund the benefits as they are paid to retired participants, but accrue the associated expense and liabilities in accordance with U.S. GAAP.
For additional information about our benefit plans, see Note 9 of the Notes to Consolidated Financial Statements in our 2024 Form 10-K.
Foreign Currency
Argentina experienced multiple periods of increasing inflation rates, devaluation of the peso, and increasing borrowing rates. As such, Argentina was deemed a highly inflationary economy by accounting policymakers. Beginning in the third quarter of 2018, we have accounted for Argentina as a highly inflationary economy which resulted in the recognition of foreign currency losses of $0.5 million and $0.1 million that were recorded in Other income, net in our Consolidated Statements of Income during the three months ended March 31, 2025 and March 31, 2024, respectively.
RECENT ACCOUNTING PRONOUNCEMENTS
For information about new accounting pronouncements and the potential impact on our Consolidated Financial Statements, see Note 1 of the Notes to Consolidated Financial Statements in this Form 10-Q and Note 1 of the Notes to Consolidated Financial Statements in our 2024 Form 10-K.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
The Company’s Consolidated Financial Statements are prepared in conformity with U.S. GAAP. This requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in our Consolidated Financial Statements and the Notes to Consolidated Financial Statements. We believe the most complex and sensitive judgments, because of their significance to the Consolidated Financial Statements, result primarily from the need to make estimates and assumptions about the effects of matters that are inherently uncertain. The “Application of Critical Accounting Policies and Estimates” section in the MD&A, and Note 1 of the Notes to Consolidated Financial Statements, in our 2024 Form 10-K describe the significant accounting estimates and policies used in the preparation of our Consolidated Financial Statements. Although we believe that our estimates, assumptions and judgments are reasonable, they are based upon information available at the time. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.
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