Equifax reported blockbuster revenue growth for its Workforce Solutions segment with an expansion in U.S. Information Solutions (USIS) revenues in the second quarter. By contrast, the credit data company’s international revenues fell during that time, according to a statement.
Equifax Chief Executive Officer Mark W. Begor said in the statement, “Equifax delivered its second consecutive quarter of strong, double digit revenue growth and margin expansion, driven by our Workforce Solutions income and employment business which had its strongest results in over 10 years, even with the challenging economic impacts of the coronavirus pandemic in the quarter. The results reflect the strength and resiliency of our business model, our differentiated data assets, including our unique TWN employment and income data, and the importance of data and insights to help customers manage in these unprecedented times.”
Drilling down into the numbers, and into various segments, total revenues for the Workforce Solution business rocketed 53 percent to $352.9 million. That was driven by a 75 percent spike in Employer Services, which contributed $101 million to the top line, and a 46 percent boost in Verification Services, which contributed $251.9 million to the top line.
The U.S. Information Solutions (USIS) segment showed total revenues of $365.6 million, which was up 10 percent, and within that unit, Online Information Solutions was up 7 percent for the quarter to $262.9 million.
Mortgage solutions business revenues in the segment were up by 44 percent to $51.2 million while Financial Marketing Services revenues were nearly flat, up 1 percent to $51.5 million.
The quarterly change in consumer credit inquires was a positive 41 percent for the second quarter, according to the company’s supplementary materials.
By contrast, total revenue fell 21 percent in its international segment with total revenue of $180.5 million.
As of the second quarter, Equifax was adding new global and USIS product leaders as well as new products amid the recession environment. Those offerings include “7 new recession specific products to assist customers,” according to the supplementary materials.
The company also said it would spend in excess of $1.25 billion from 2018 to 2020 “to transform our Data Security and Technology.”
Begor said in a Thursday (July 23) call with analysts that “unprecedented consumer impacts” from the coronavirus recession “significantly cloud the ability for our customers to manage their business, including marketing, underwriting, and portfolio management.”
The executive said roughly half of those who had their pay fall by over 25 percent in April 2020 were people who had a credit score of at least 680, “which further complicates the environment for our customers.”
“Forbearances are also driving material loss of predictiveness of traditional credit scores in the sub-prime market,” Begor said. “The CARES Act [has made] loan accommodation … delinquency rates artificially low and … not representative of the actual portfolio health.”
As for its overall results, Equifax reported 78 cents diluted earnings per share (EPS) on revenues of $982.8 million for the second quarter. Those results handily exceeded analyst estimates of $1.21 and $897.21 million.