Hello and welcome to the Equifax Q2 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It’s now my pleasure to turn the call over to Trevor Burns, Senior Vice President, Head of Corporate Investor Relations. Please go ahead, sir.

Thanks, and good morning. Welcome to today's conference call. I'm Trevor Burns. With me today are Mark Begor, Chief Executive Officer, and John Gamble, Chief Financial Officer. Today’s call is being recorded. An archive of the recording will be available later today in the IR Calendar section of the News & Events tab at our IR website, www.investor.equifax.com. During the call, we will be making reference to certain materials that can also be found in the Presentations section of the News & Events tab at our IR website. These materials are labeled Q2 2022 Earnings Conference Call. Also, we will be making reference to certain forward-looking statements, including third-quarter and full-year 2022 guidance to help you understand Equifax and its business environment. These statements involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from our expectations. Certain risk factors that may impact our business are set forth in filings with the SEC, including our 2021 Form 10-K and subsequent filings. We will also be referring to certain non-GAAP financial measures, including adjusted EPS attributable to Equifax and adjusted EBITDA, which will be adjusted for certain items that affect the comparability of our underlying operational performance. These non-GAAP measures are detailed in reconciliation tables, which are included with our earnings release and can be found in the Financial Results section of the Financial Info tab at our IR website. Now I'd like to turn it over to Mark, beginning on slide four.

Thanks, Trevor, and good morning. Equifax delivered another solid quarter with record second-quarter revenue of $1.32 billion, which was up 7% and at the middle of our April guidance, including the negative impact of 190 basis points or $23 million of FX. Constant currency revenue growth was almost 9% at 8.5%. Adjusted EPS of $2.09 was above the top end of our April guidance range with the U.S. mortgage market overall about at the level of our April guidance with U.S. mortgage credit inquiries down 33% versus last year. As expected, the mortgage market decline increased as we moved through the quarter. In the first half of July, mortgage credit inquiries were down about 40% versus last year. Core revenue growth in the quarter of 19% and core organic revenue growth of 16% in the quarter were very strong. Consistent with our expectations, which allowed us to deliver the 8.5% constant currency growth against a 33% U.S. mortgage market decline. Importantly, non-mortgage constant currency growth of 22% was very strong in the quarter and well above our 8% to 12% long-term framework and of course, this represents about 75% of Equifax revenue. Workforce Solutions core revenue growth of 41% was outstanding and above our expectations. International delivered 11.5% constant currency growth, which was also above our expectations. And USIS B2B non-mortgage growth of 6% was up from first quarter, but lower than we expected. B2B non-mortgage online was strong at 9%. However, our B2B offline business was much weaker than expected, declining 5% in the quarter, and I'll cover this more fully shortly. Second-quarter adjusted EBITDA totaled $461 million, up 7% and adjusted EBITDA margins of 35% were above in line with our expectations for the quarter. We continue to make strong progress during the quarter on our EFX Cloud data and technology transformation. Year-to-date, we've migrated approximately 14,500 customers to the cloud in the U.S. And since the start of the transformation, we now have migrated about 70% of our U.S. customers. So far in 2022, we also migrated approximately 13,000 international customers and decommissioned four U.S. data centers. Leveraging our new EFX Cloud infrastructure, we continue to invest in new product resources and accelerate new product innovations. So far in 2022, we released over 50 new products continuing momentum from 2021 where we launched a record 151 new products. In the quarter, our Vitality index, defined as revenue from new products introduced in the last three years, was extremely strong and exceeded 13%. This is over a 400 basis point improvement from our 9% Vitality last year and the highest level in over 10 years at Equifax. For 2022, we expect Vitality of over 11% and which is 100 basis points above our 10% long-term Vitality goal and 100 basis points above the framework when we started the year. This strong NPI performance will benefit our growth in the second half and in 2023 and beyond. We continue to invest our strong free cash flow and strategic bolt-on acquisitions with the acquisition of LawLogix that we announced earlier this morning, which will further strengthen our EWS Employer Solutions I-9 integration regulatory service capabilities. This is our sixth acquisition in Workforce Solutions since January 2021 and aligned with our M&A strategy to strengthen workforce, our largest and fastest-growing business. Bolt-on acquisitions that broaden and strengthen Equifax are a strong lever for future growth and are central to our long-term growth framework to add 100 to 200 basis points to our revenue growth annually from strategic bolt-on M&A. We are very pleased with our strong second-quarter results, particularly our strong 22% non-mortgage constant currency growth. This is clearly an unprecedented economic environment with record inflation, strong headwinds, and the impact from higher interest rates on the mortgage market. Despite our strong first-half performance, we felt it was prudent to adjust our 2022 guidance to reflect expectations for further weakening of the U.S. mortgage market in the second half beyond the framework we provided in April, as well as the significant negative impact of FX from the stronger dollar. Importantly, our expectations for 2022 core revenue growth remains a very strong 17%. Our expectation for constant currency non-mortgage revenue growth remains a very strong 19%, both unchanged from our April guidance. While our second-quarter mortgage results were aligned with our April guidance, we thought there was enough uncertainty between future Fed actions, the impact on interest rates, and mortgage activity to further adjust our second half mortgage outlook. Our updated expectations for mortgage are that credit inquiries will decline by over 46% in the second half, which is down about 600 basis points from our April framework with mortgage originations declining 200 to 300 basis points beyond these levels. This compares to the Mortgage Bankers Association forecast for the second half of 2022 mortgage origination units of down 43.5%, which was released last night. As you know, USIS mortgage revenue is tied more closely to credit inquiries, while Workforce Solutions revenue is tied more closely to mortgage originations. And for the second half of 2022, FX is a headwind of over $40 million up from an impact of about $7 million in our April guidance from the stronger dollar. The change in the second half mortgage inquiries and FX impact results in our revised 2022 guidance for revenue at the midpoint of $5.1 billion, down $100 million from our April framework, but still up almost 4% versus last year or 5% on a constant currency basis. This reduction in revenue is about two-thirds related to mortgage with the balance from FX. Our updated adjusted EPS guidance is to a midpoint of $7.68, down $0.47 from our April guidance and up about 1% from 2021. As I said earlier, there is no change in our core organic revenue growth framework, which remains a very strong 15% for 2022 and 13% in the second half of 2022, and our non-mortgage growth framework remains up a strong 16% for the year and 12% in the second half as we comp off some strong double-digit results in the second half of 2021.

Thanks, Mark. As Mark mentioned and as shown on slide 16, our guidance now reflects an expectation that the U.S. mortgage market credit inquiries will decline over 46% in the second half of 2022, a continued decline from the down 40% level we're seeing in early July. Our assumptions reflect mortgage originations, 200 basis points to 300 basis points weaker than those levels with the Work Number inquiries more closely linked to mortgage originations. The reduction in U.S. mortgage credit inquiries of over 46% in the second half is off the second half 2021 reduction over 20%. This level of U.S. mortgage credit inquiries in the second half is over 30% lower than the second half average levels we saw over the 2015 to 2019 period. 1Q mortgage revenue was 29.5% of total Equifax revenues and 2Q mortgage revenue was 24.7% of total Equifax revenues. In 3Q, we expect mortgage to make up just over 21% of total Equifax revenues and about 23.5% in the full year of 2022. As we have shared in prior quarters, slide 17 provides a view of both the number of home mortgages that would have a rate benefit from refinancing on the left and a view of the levels of home purchases on the right. The left side of the slide provides a perspective on the number of home mortgages for which a refinancing would provide a rate benefit, the in-the-money population of mortgages. The in-the-money population is about 1.9 million homes and below the $3.3 million we saw in April. At the current level, mortgage refinance activity is heavily driven by cash-out refinances that are often executed with no rate benefit or rate increase. For perspective, for the most recent available Black Knight data for May 2022, about 95% of refinancings were cash out. As shown on the right side of slide 17, the pace of existing home purchases continues at high levels, but were down about 7% in May and 14% in June from the levels we saw in 2021. We believe our assumptions for U.S. mortgage market credit inquiries over the last six months of 2022 reflect the trends just discussed. The 46.5% year-to-year decline in mortgage credit inquiries reflects a continued sequential weakening of the mortgage market with third-quarter increases down over 25% in the second quarter and fourth quarter down a further over 15% from these much-reduced third-quarter levels. The rapidly changing and unprecedented macro environment makes forecasting the impact on the U.S. mortgage market incredibly challenging.

We believe that Equifax’s business mix is much better positioned for a potential economic event in the future than we were in 2009. Strong Workforce Solutions growth has increased their relative size in Equifax from 16% of revenue in 2009 to almost 50% today with margins above 50%, about 20 percentage points higher than the Equifax average. EWS is benefiting from strong growth levers that are not directly tied to economic activity, including record growth, penetration into new fast-growing verticals like talent and government, system-to-system integrations, deploying new and higher-value products as well as the measured price actions, taking advantage of the scale of the TWN database. The completion of the Equifax Cloud will deliver cost savings in 2023 and beyond, we expect will drive about half of our targeted 500 basis point margin expansion from 2022 to 2025. The cloud migration cost savings are independent of any economic event and driven by our execution. And third, we're leveraging the cloud to accelerate new product development with a goal of 11% Vitality index in 2022, which is over $500 million of annual incremental revenue — new product revenue for Equifax. As we look to 2023, the completion of the Equifax new cloud data fabric will enable enhanced product offerings in B2B offline combining U.S. credit file, DataX, Teletrack, TWN, IDN fraud, and NCTUE data. We believe this will drive growth across all three of our B2B offline lines of business as we get to 2023. For B2B non-mortgage in total, we expect to see continued strong online growth consistent with the first half. However, declines in Financial Marketing Services are expected to result in second-half total B2B non-mortgage growth at or slightly below the bottom end of our long-term framework of 6% to 8% revenue growth.

USIS Consumer Solutions business, the U.S. D2C business from GCS that we combined with USIS in the fourth quarter last year, had revenue of $49 million, up 3% in the quarter and about flat versus last year. We expect second-half growth rates to improve as the team leverages the cloud to roll out NPIs. USIS sales team had a strong quarter with a number of key wins resulting in a healthy win rate and their new deal pipeline remains very strong with the overall pipe slightly higher than the first quarter. And USIS adjusted EBITDA margins were 38.2% in the quarter, 110 basis points lower than the first quarter but better than our expectations. The decline relative to the first quarter is principally driven by lower revenue from the decline in mortgage.

Given the strong price performance in the market and your expectation next year for a much stronger free cash flow and returning cash to investors, what are your thoughts regarding using your balance sheet today to potentially return cash versus waiting for next year?

Yes, it's a great question. We certainly think about it, but we think the timing is not right for us to do that. Obviously, we have a strong pipeline of investments in place.

We reach the end of our question-and-answer session. I'd like to turn the floor back over to Trevor for any further or closing remarks.

No, I just want to say thanks for everybody for joining the call. If you have any follow-up questions, please feel free to reach out and have a great day. Thank you.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.