Weaker Hiring Market Creates Revenue Headwinds for Equifax

For Equifax, macro headwinds from a job market slowdown and the volatile mortgage market — where uneven loan demand has been a hallmark amid relatively high interest rates — have impacted top-line momentum and forward-looking guidance.

As discussed during an earnings call with analysts Thursday (Feb. 6) and reported in a company presentation, the fourth quarter was pressured by those trends. Revenue growth slowed to 7% year on year but had been 9% as recently as mid-year.

Forward-looking guidance took note of declining mortgage inquiries thus far in 2025 — down double digits — impacting mortgage market credit pulls. Guidance for 2025 implies top-line growth slowing to a range of 3.7% to 5.8%. Current quarter top-line growth will be flat to 2.2% higher than year-ago levels.

Investors sent the shares 6% lower in intraday trading Thursday morning as the results missed guidance that had been provided in October.

During the conference call, CEO Mark Begor said in reference to technology initiatives that the company now has “close to 85% of Equifax revenue in the new Equifax Cloud, which is a big accomplishment after five years of investment. We expect to have a significant competitive advantage as we pivot from building to leveraging the Equifax Cloud in 2025 and beyond that will allow us to fully focus on growth, innovation, new products and AI.”

Through the past year, about 95% of new models and scores were built using Equifax AI, up from 70% from last year, he said.

Mortgage Impact

The revenue growth in the most recent quarter was “driven principally by weaker U.S. hiring and mortgage markets, which declined significantly in the last half of the fourth quarter,” Begor said during the call. “The weaker U.S. hiring markets impacted our talent and onboarding businesses driving the bulk of the weakness versus our guidance midpoint.”

Non-mortgage-related revenue growth was under 6% in the quarter. Total U.S. mortgage revenue was up 29% in the quarter but below company expectations, he said.

“U.S. mortgage revenue declined meaningfully in late December and January as mortgage rates have moved above 7%,” he said during the call. “Based on these trends, we expect 2025 mortgage revenue hard credit inquiries to be down 12%.”

The Workforce Solutions segment saw revenues up 7% in the quarter, below guidance, and tied to lower-than-expected activity in Form I-9 and onboarding from the weaker hiring market. Activity is still weakening in the current month, Begor said.

The firm’s B2B offline business was flat and in line with guidance, with strength in identity services, he said.

Looking ahead, “we expect our twin powered credit solutions to help our clients gain deeper insights into consumer creditworthiness from solutions using both credit and twin income and employment indicators, which is a big win for our clients, for consumers and Equifax,” Begor said during the call. “We’re rolling out a new solution that provides mortgage lenders key twin income and employment information along with the Equifax credit report.”

Chief Financial Officer John Gamble said that “as the mortgage market recovers toward its historic norms, at current mortgage pricing and mix and current twin records, that represents on the order of $1.2 billion of annual revenue opportunity for Equifax.”

Later during the call — and with mention of other credit “pull” activity for loans and credit cards — Begor said that “around auto [loans], for example, I think our expectation is auto sales, new and used, [will be] kind of flat or maybe a little better… We think the consumer is relatively healthy, but we are seeing some cracks in consumer confidence. You’ve seen that, obviously, come through in January.”