Equifax (EFX) reported strong second-quarter 2024 results, exceeding both earnings and revenue expectations. The company’s adjusted earnings per share reached $1.82, surpassing the Zacks Consensus Estimate by 5.8% and marking a 6.4% year-over-year increase. Total revenue climbed to $1.4 billion, slightly exceeding the consensus estimate and demonstrating an 8.6% jump from the previous year’s quarter.
Equifax’s Workforce Solutions segment saw revenue increase by 5% year-over-year, reaching $612.9 million. Within this segment, Verification Services experienced a 9% growth in revenue, while Employer Services saw a decline of 11%. The USIS segment’s revenue reached $478.3 million, marking a 7% year-over-year increase. Online Information Solutions contributed to this growth with a 5% increase in revenue, while Mortgage Solutions saw a significant 33% jump. Financial Marketing Services also saw a 7% year-over-year increase in revenue.
Equifax’s International division recorded a notable 17% year-over-year increase in revenue on a reported basis, and a 28% increase on a local currency basis. However, the segment fell short of expectations, reaching $339.3 million. Latin America led the charge with a remarkable 71% year-over-year revenue surge on a reported basis and exceeding 100% on a local currency basis. Europe’s revenue increased by 12% year-over-year, while Canada saw a 4% increase on a reported basis and 6% on a local currency basis. Asia Pacific, however, experienced a 4% decline in revenue on a reported basis and 2% on a local currency basis.
Equifax’s adjusted EBITDA for the second quarter of 2024 reached $457.7 million, reflecting a 6.1% increase from the previous year’s quarter. The adjusted EBITDA margin stood at 32%, experiencing a decrease of 70 basis points from the previous year’s quarter.
Despite the impressive performance in Q2, analysts have expressed concerns about the company’s future prospects, citing recent downward revisions in estimates. These revisions suggest a potential pullback in the stock’s value. Notably, Equifax has a Zacks Rank #3 (Hold), indicating an expectation of in-line returns in the coming months.
While Equifax’s Q2 performance was strong, the downward trend in estimates suggests a cautious approach for investors. It remains to be seen whether the company can sustain its positive momentum in the face of these changing market dynamics.
