Greetings and welcome to the Equifax, Inc. Q1 2025 Earnings Conference Call. At this time, all participants are in listen-only mode. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Trevor Burns, Senior Vice President, Head of Corporate Investor Relations. Trevor, please go ahead.

Thanks, and good morning. Welcome to today's conference call, I'm Trevor Burns. With me today are Mark Begor, our 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 and Events tab at our Investor Relations website. During the call, we'll be making reference to certain materials that can be found in the presentation section of the news and events tab at our IR website. These materials are labeled 1Q 2025 earnings conference call. Also, we'll be making certain forward-looking statements, including second quarter and full year 2025 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. Several risk factors that may impact our business are set forth in filings with the SEC, including our 2024 form 10-K and subsequent filings. We will also be referring to certain non-GAAP financial measures, including adjusted EPS, adjusted EBITDA, and cash conversion, 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.

Thanks, Trevor. Turning to Slide 4, Equifax is off to a very strong start in 2025 with revenue of $1.442 billion, up 4% reported and 5% in constant dollars, and $37 million above the midpoint of our February guidance. The revenue strength was broad-based, with about two-thirds in non-mortgage verticals led by USIS. Mortgage was also stronger than our expectations in the quarter, particularly in USIS, with over half of this strength from improved penetration and performance of our mortgage pre-qual and pre-approval products, and a market that was about 400 basis points above our February framework. Adjusted EPS of $1.53 per share was $0.15 above the midpoint of our February guidance from the higher revenue growth and improved margins. And we ended March with debt leverage of 2.5 turns, which is our long-term goal. Our team also continued to execute very well against our EFX 2027 strategic priorities, as we pivot from building the Equifax cloud to leveraging our new cloud capabilities to drive innovation, new products, and growth. Our strong first quarter is a proof point to the power of the Equifax cloud as our team can now fully focus on growth, innovation, and customers. We launched our first-ever only Equifax solution in mortgage that provides key employment and income information powered by the scale of the work number along with the USIS mortgage credit file. Our first-to-market mortgage solution allows lenders to instantly obtain information about both the mortgage applicant's creditworthiness and the application's employment and income status with a single data request from Equifax. We are seeing strong customer demand for this unique solution. We plan to launch twin-powered solutions for the auto and personal loan verticals later this year, where both credit and income verifications are integral for credit underwriting. EWS first quarter revenue was better than our expectations, driven by talent and government. The EWS team also delivered EBITDA margins of over 50%, better than our expectations. There's a clear change in Washington around social service and tax integrity, waste, and abuse, which we view as positive macro for workforce solutions. In the quarter, EWS continued the expansion of its use cases in the federal government as they completed an amended agreement with the SSA for annual revenue of about $50 million. The amendment allows SSA to begin ramping the use of a twin solution that delivers monthly income and employment information for individuals applying for or currently receiving disability benefits from SSA. We are ramping up our engagement in Washington as the new administration gets in place. The EWS team also continued its strong momentum of twin records penetration, adding 3 million active records to the twin database, ending the quarter with 191 million active records, up 11%, and 751 million total records, up 12%. This is a very strong performance given the normal attrition in the first quarter from seasonal fourth quarter hiring. In the first quarter, EWS signed agreements with three new partners, which adds to the 15 signed last year and over 50 since the beginning of 2021. We expect these new partnerships to drive twin record growth and EWS revenue growth in 2025. We have a long runway of records growth against the 225 million income-producing Americans versus the 138 million unique records we have today. USIS had a very strong quarter with total revenue growth of 7%, well within their 6% to 8% long-term revenue growth framework and above our expectations. Non-mortgage growth was also strong at about 6%. The USIS team has pivoted from building the cloud in 2024 to being fully focused on customers, innovation, new products, and growth. They have strong momentum and are winning in the marketplace. In international, the team delivered almost 7% constant currency revenue growth, and completed transformation activities in Spain. We made very good progress in new product introductions in the quarter with a vitality index of 11%, which was 100 basis points above our long-term framework. We expect some acceleration in vitality during the balance of 2025. EFX.AI is powering our new solutions, leveraging our scale and unique data in our single data fabric. The first quarter was also a very strong start to 2025 across all BUs, particularly in non-mortgage and with our USIS mortgage, pre-approval and pre-qual products. The team is executing very well. We are clearly in a period of significant economic and market volatility, principally from uncertainty around tariffs and their impact on U.S. inflation and interest rates. Given the strength in the first quarter in our current run rates and key verticals, we would normally be increasing our 2025 revenue and adjusted EPS guidance. But given the significant uncertainty in the economy and with consumer and corporate confidence, we are maintaining our 2025 guidance at the levels we provided to you in February. We remain very confident in the Equifax long-term growth model to drive consistent revenue growth, margin expansion, and strong free cash flow with consistent return of cash to shareholders. We expect our business model to be resilient during periods of economic weakness, and our confidence was reinforced by our very strong performance in the quarter, both financially and in strong execution against our EFX 2027 strategic priorities. Turning to slide five, as we complete the EFX cloud, we are driving top-line expansion, expanding margins and accelerating free cash flow while lowering the capital intensity of our business. We expect to generate about $900 million of free cash flow this year with a cash conversion approaching 95%, which aligns with our long-term framework. Our new long-term capital allocation framework is aligned with our EFX 2027 long-term growth strategy to number 1, maintain a strong investment-grade balance sheet and credit ratings to weather economic events in the future. Second, to continue investing in Equifax growth, prioritizing high-return capital investments to support new product innovation and to continue to accelerate EFX cloud completion. We expect CapEx at about 6% to 7% of revenue as our new cloud infrastructure is much less capital-intensive. Third, to continue executing our bolt-on M&A strategy at one to two points of revenue growth, focused on bolt-on acquisitions, aligned with our strategic priorities around unique data assets, strengthening workforce solutions, identity and fraud, and new international platforms like Boa Vista. Lastly, our new capital allocation plan delivers consistent returns of capital to shareholders while maintaining our strong balance sheet. We plan to grow our dividend in line with earnings and return excess cash through our share purchase program to reduce shares outstanding. This week, the Equifax Board of Directors approved a 28% increase in our quarterly dividend to $0.50 per share and authorized a new $3 billion four-year share repurchase program. This new capital allocation framework is a big milestone for Equifax after our major investments in the Equifax cloud over the past five years. The 28% increase in our dividend reflects our confidence in the new Equifax business model and moves our payout ratio to about 25% of 2025 adjusted net income. Going forward, we plan to increase dividends annually in line with earnings, generally in the first quarter of each year, and about in line with the expected growth in adjusted EPS with a range of 5% to 15%. Our new $3 billion share repurchase program announced today reflects repurchases we expect to make under normal market conditions to be completed over the next four years, while continuing to maintain a strong balance sheet, continue investing in Equifax through CapEx and bolt-on acquisitions, and consistently grow our dividend in the future. We intend to be in the market consistently during EFX trading windows and will flex up share repurchases during periods of stock dislocations and flex repurchase levels up or down based on bolt-on M&A activity. And as free cash flow accelerates in the future from operating leverage and lower CapEx spending and as the mortgage market recovers, we expect to increase the level of cash we return to shareholders versus our share repurchase program. Between both the increased dividend and the $3 billion share repurchase program, we expect to return about $1 billion a year in cash to shareholders annually over the next four years, with the return to shareholders growing as we grow our business in the future. We are energized to be entering this new phase of Equifax with higher free cash generation and lower capital intensity, and with significant excess free cash flow and leverage to return cash to our shareholders. Turning to Slide 6, our first quarter results were much better than our expectations with revenue and adjusted EPS well above the top end of our February guidance range. Adjusted EBITDA margins of 29.3% were up 20 basis points from last year and about 80 basis points better than expected, with EWS margins above 50%. Relative to our February framework, non-mortgage drove about two-thirds of the revenue outperformance. Our global non-mortgage businesses grew about 5% in constant currency from stronger-than-expected growth in USIS from strength in card and auto, as well as in EWS in both talent and consumer lending. Mortgage revenue was up 7% in the quarter and drove about a third of the outperformance in total Equifax revenue versus our February framework. This outperformance versus guidance was predominantly in USIS as we saw both stronger performance in our mortgage pre-qual and pre-qualification products as well as an improvement of about 400 basis points in the mortgage market that was down 9% versus our minus 13% framework for the first quarter. Mortgage rates declined about 30 basis points in late February and March to about 6.7%, which delivered some improved mortgage hard inquiry performance during that period, which reflects the mortgage market's sensitivity to interest rates. We believe this improvement was likely led by higher mortgage refinancing activity off the lower mortgage rates. U.S. Mortgage revenue was about 20% of Equifax revenue in the quarter. In the first quarter, USIS mortgage revenue was up a strong 11% and outperformed underlying USIS hard credit inquiries by 20%, again driven by pricing pass-through as well as the stronger performance in our mortgage pre-qual and pre-approval solutions. EWS mortgage revenue was up over 3%, marginally stronger than our expectations from stronger volumes in a down market. Over the last several weeks, we've seen declines in mortgage activity from higher interest rates. We expect to see continued impacts on mortgage activity until there is some stability in Washington. Based on current trends and overall current economic and market uncertainty, we are maintaining our 2025 U.S. Mortgage market assumption of down 12% for the balance of 2025, which is the same framework we provided to you in February. Turning to slide 7, workforce solutions revenue was up 3%. Verifier revenue growth of 5% was stronger than expected due to stronger verifier non-mortgage revenue that was up 6%. We saw stronger-than-expected revenue in government, talent solutions, and consumer lending. Talent Solutions revenue is up 12% in the quarter, benefiting from better hiring volumes in February and March, as well as easier comps versus the first quarter last year. Talent Solutions continues to outperform the underlying markets from new records, new products, penetration, and pricing, as well as new solutions from their total verified data hub. Government grew 2% in the quarter given the headwinds related to changes in CMS, federal funding practices at the state level we discussed in February, as well as difficult comparisons from CMS redetermination volumes in the first quarter last year. We expect government revenue growth to continue to strengthen as we move through 2025, expecting to deliver about 10% government growth in the second half of the year. Our government business will benefit from a new $50 million SSA amendment that went online a few weeks ago, as well as continuing to benefit from growing state agency penetration and growth in twin records. Consumer lending revenue was up 11% in the quarter from strong sales execution across card, auto, personal loans, and debt management, along with continued growth in new records and new products. Employer services revenue was down 8% in the quarter as our I-9 and onboarding revenues have been negatively impacted by the weaker hiring market. Workforce solutions' adjusted EBITDA margins of 50.1% was over 100 basis points better than our February framework, driven by higher-than-expected revenue growth and good cost execution. Workforce solutions had a very strong quarter in record growth with 4.4 million companies contributing to twin and 191 million active records with 138 million unique individuals. The continued strong pace of partner and record additions further strengthens the multi-sided twin exchange with a big runway for future growth. Turning to Slide 8, the significant focus of our EWS strategy is penetrating the large $5 billion government TAM at the federal, state, and local levels. In 2025, we expect EWS government revenue of about $800 million, with growth accelerating this second half to about 10%. Clearly, there is heightened focus with the new administration in Washington on program integrity and reducing the estimated $160 billion of improper payments within social services and tax programs. EWS has made significant progress penetrating agencies such as CMS, SSA, and SNAP TANF, given the strong value proposition in increasing program integrity with big opportunities for broader utilization of our verified and instant income verification for federally sponsored social services given this new focus in Washington. We also have a big runway to expand twin utilization at the state and state agency level where social services are delivered. We are expanding our presence in Washington and adding state resources to drive state utilization and penetration. Full utilization of twin on all social service programs, new federal use cases such as Do Not Pay, and the IRS earned income tax credit and strengthened program income verification requirements and more frequent redeterminations of the $50 million SSA amendment during the quarter is a great proof point of the value Equifax can bring to the $160 billion of improper payments across government programs. We are on offense in Washington and across the states to take advantage of this new focus and have significant opportunities for future growth in supporting the government's goal of program integrity and efficient delivery of social service benefits. Turning to Slide 9, USIS had a very strong quarter with revenue up 7% and much better than our expectations. USIS non-mortgage revenue grew 6% in the quarter, well within their 6% to 8% long-term revenue growth framework, and their strongest organic non-mortgage growth in over two years. Non-mortgage B2B revenue growth of 5% was stronger than we expected in both online and offline. Within B2B online, we continue to see a stable and only slightly muted lending environment. We saw mid-single-digit revenue growth in financial institutions and high single-digit revenue growth in auto. All other online B2B verticals in aggregate were up slightly. Financial marketing services, our B2B offline business, was up a very strong 10% in the quarter, driven principally by new business growth within insights and archives at large financial institutions, as we've modernized our new data delivery services using the new Equifax cloud. We've not seen an increase in portfolio review spending that would be indicative of increased risk management activity in a weaker economic environment. Consumer Solutions revenue remained very strong at up 8%. The USIS adjusted EBITDA margins at 34.1% in the quarter were up about almost 150 basis points compared to last year. The USIS team is on offense with 100% of their post-cloud focus on customers, share gains, innovation, new products, and growth. Turning to Slide 10, international revenue was up 7% in constant currency with broad-based revenue growth across all regions. Strong Latin American revenue growth was led by very strong double-digit growth in Brazil and Argentina. The Boa Vista business is performing very well as we bring new Equifax platforms like Ignite in our global products to the business and drive their cloud completion. Asia Pacific performed very well at 7% growth. Canada and Europe growth were slightly weaker than we expected, reflecting the overall weaker economic conditions in both markets. And international adjusted EBITDA margins of 24.1% were down 20 basis points versus last year. Turning to Slide 11. The first quarter marked a huge milestone for Equifax, launching our first-ever only Equifax solution that combines twin and credit data for mortgage shopping. Equifax is entering a new phase of innovation, leveraging our unique twin income and employment and credit data to build solutions that only Equifax can deliver enabled by the Equifax cloud and EFX.AI. We expect to launch additional twin-powered credit solutions later this year in auto and personal loans. In the first quarter, we delivered a vitality index of 11% from double-digit performances in EWS and international, which was 100 basis points above our long-term framework. We are seeing post-cloud increases in innovation and new products from USIS that we expect to continue through the balance of the year and increase further in 2026. We expect Equifax to deliver a strong 11% vitality index in 2025, above our 10% long-term goal, leveraging our EFX cloud capabilities to drive new product rollouts using our differentiated data and EFX.AI capabilities. Turning to Slide 12, we are clearly in a period of significant economic and market volatility and uncertainty from the tariff actions in Washington. Economic experts are raising concerns of weaker economic growth going forward as well as concerns of higher inflation in the direction of interest rates. While we've not seen impacts on our businesses to date, this uncertainty has led us to hold our 2025 guidance at the levels we shared in February despite our very strong performance in the quarter. Equifax is better positioned for an economic event than ever in our history, given the mix of our business growing mix of subscription revenue and the upside from a mortgage market recovery. We have the majority of our cloud technology and data transformation behind us and are beginning to see the benefits of our new cloud capabilities, driving always-on stability and innovation powered by our Equifax data assets and EFX.AI that are delivering growth and share gains. We're also improving the overall cost structure of our business, which is independent of any economic event. Our EWS government business has big growth potential in their $5 billion TAM in an attractive Washington environment. During a downturn, more consumers will apply for or increase social service benefits, including in our unemployment claims management business that was up double digits during the COVID recession. Workforce solutions will continue to grow the twin database in every economic scenario, which increases our fulfillment rate and revenue. During periods of economic uncertainty, we've historically seen areas of increased twin usage in financing markets as borrower, unemployment, and income status becomes even more critical to lenders during periods of increased unemployment. And our balance sheet and cash flow are strong, with strong cash conversion as our capital spending declines with the completion of our cloud investments. As shown on the left side of slide 12, the mix of Equifax businesses that are recession resilient or countercyclical and we expect to grow in an economic event is very strong at about 67% of our revenue, which is up from 54% in 2022 and up significantly from 37% in 2008. We're a different business today and much more resilient. Our government, identity fraud, debt management, mortgage, and credit portfolio review businesses, as well as the significant portions of our employer services, commercial credit, and consumer direct businesses that are subscription-based are recession resilient and, in most cases, countercyclical, and we expect them to grow in an economic event. For perspective, we included a view of how our businesses may perform in a hypothetical recession in which U.S. GDP declines about 300 basis points and is negative and long-term interest rates decline over 150 basis points in the back half of an economic event to boost activity. In this scenario, we believe Equifax could still grow total revenue 5% to 10% on average over this recession cycle. Our non-mortgage businesses, we believe, would grow low single-digit percentage as the growth in recession-resistant and countercyclical businesses is only partially offset by declines in our recession-impacted businesses. It's shown on the right side of slide 12, we are at historic lows in U.S. mortgage market activity, with 1.2 billion in revenue opportunity for Equifax, with the market still 50% below what we characterize as normal 2015 to 2019 pre-pandemic average mortgage volume activities. Looking at Equifax data on mortgage issuance since early 2022, there have been over 13 million mortgages issued with an interest rate over 5%, including about 11 million with rates over 6% and almost 8 million mortgages with rates over 6.5%. With an interest rate decline in a recession, this creates a large pool of loans available for refinancing, which would drive substantial growth for Equifax from the current depressed mortgage refinance levels. Purchase mortgages could also see strong growth from current levels. For perspective, the last time mortgage rates were about 6%, purchase mortgage volumes were more than 25% higher than the levels we're seeing in 2025. Mortgage revenue could see growth rates of 20% or significantly more against the 50% decline from normal levels today in a reduced rate environment. Given these factors, and as shown on Slide 12, Equifax could grow revenue in the range of 5% to 10% in a typical recession with significant potential upside if mortgage rates decline even further, and mortgage volumes move back towards historical levels. We feel we're well positioned in an economic event given the unique position of our businesses like Twin, our growing subscription revenue, and the upside from the mortgage market recovery. We expect to continue to deliver strong free cash flow during a typical recession, allowing us to continue to invest in Equifax CapEx for growth and bolt-on M&A while still delivering on our new capital allocation plan that will grow our dividend and return excess free cash flow with our buyback program, while maintaining a strong balance sheet and credit ratings. And now, I'd like to turn it over to John to provide more detail on our 2025 guidance and also provide our second quarter framework.

Thanks, Mark. Turning to Slide 13. As Mark indicated, given the current economic and market uncertainty, our current full year 2025 guidance for USIS mortgage hard inquiries that are down 12% is unchanged from what we shared in February. USIS hard mortgage credit inquiries run rates declined through last week, consistent with market activity and with the significant uncertainty that exists in the market. Based on these factors, our guidance for the second quarter USIS hard mortgage credit inquiries is expected to be down about 11% and is consistent with the full year at down 12%. As Mark indicated, we are holding our full year 2025 guidance on a constant currency basis to be unchanged from our February guidance. We updated revenue by about $20 million reflecting the benefit from the weaker dollar using FX rates on April 10. The EPS benefit of the FX movement is very small. Slide 14 provides our full year 2025 guidance reflecting only the change in FX. Organic constant currency revenue growth is unchanged at 6%. BEU level details are also consistent with our February guidance. Going forward, each quarter, we will disclose the actual level of our share repurchases and the impact on shares outstanding. Slide 15 provides the details of our 2Q '25 guidance. In 2Q '25, we expect total Equifax revenue to be up just over 5.5% on a reported basis year-to-year at the midpoint, with constant dollar revenue growth up just over 6.5% at the midpoint. Adjusted EPS in 2Q '25 is expected to be $1.85 to $1.95 per share, up over 4.5% versus 2Q '24 at the midpoint. The increase in adjusted EPS is principally driven by revenue growth and lower interest expense, partially offset by higher depreciation and amortization. Equifax 2Q '25 adjusted EBITDA margins are expected to be over 32.5% at the midpoint of our guidance, up about 50 basis points year-to-year. The increase in adjusted EBITDA margins principally reflects revenue growth and higher margins at both USIS and international. Business unit performance in the second quarter is expected to be as follows: Workforce Solutions revenue growth is expected to be up over 6.5% year-to-year. Verification services revenue is expected to be over 8%. Mortgage revenue is expected to be up about 6% with the growth in records and pricing offset by the expected continued mortgage market decline. Verifier non-mortgage revenue is expected to be up about 9%. Government revenue is expected to be up low double digits and improve sequentially from higher SSA revenue, state penetration, and records, as Mark indicated. Talent revenue should be up low single digits as growth remains negatively impacted by expected declines in U.S. hiring and with more difficult comparisons than the first quarter. Employer revenue is expected to be down slightly. EWS adjusted EBITDA margins are expected to be about 52%, down about 80 basis points year-to-year but up about 200 basis points sequentially. USIS revenue is expected to be up about 6.5% year-to-year. Mortgage revenue is expected to be up about 11%, and non-mortgage revenue is expected to be up about 4%. Mortgage revenue is still being impacted by a significant decline in USIS hard inquiries, which are being more than offset principally by third-party vendor pricing actions, as well as strengthening revenue in pre-approval and pre-qualification products. Adjusted EBITDA margins are expected to be up above 200 basis points at over 35%. Again, reflecting the benefits from USIS decommissioned legacy systems and revenue growth. International revenue is expected to be up about 6.5% in constant currency, and adjusted EBITDA margins are expected to be up about 75 basis points at over 26% in 2Q '25. Our guidance assumes economic and market conditions do not deteriorate meaningfully from current levels, and U.S. interest rates at levels also about consistent with current levels. Delivering second quarter and full year guidance at the midpoint requires continued strong execution by the team against our Equifax 2027 strategic priorities. Now, I'd like to turn it back over to Mark.

Thanks, John. Turning to slide 16, in 2025, despite our very strong performance in the quarter, we're expecting challenging markets in both U.S. mortgage and hiring to continue with the uncertainty in Washington, resulting in our expectation of 6% constant currency revenue growth for the year. We continue to be confident in our long-term growth framework that delivers 8% to 12% growth, including bolt-on M&A, 7% to 10% organic growth, strong operating leverage delivering 50 basis points of margin expansion annually, and strong free cash flow for investment in Equifax and returning cash to shareholders. We have a strong and resilient business model. Wrapping up on slide 17, we're off to a great start in 2025 with first quarter revenue and adjusted EPS well above our February framework in a challenging macro environment. As I said earlier, under normal economic and market conditions, we would be increasing our full year 2025 guidance. However, due to the significant current economic and market uncertainty in Washington, we felt it was prudent to maintain our 2025 full year guidance for Equifax, as well as our view on a weaker mortgage and hiring markets for the balance of the year. Our strong free cash flow generation and the strength of our balance sheet positions us well to return cash to shareholders. Our new long-term capital allocation plan is a big step forward for Equifax. We are energized to be increasing our quarterly dividend by 28% this quarter to $0.50 per share and launching our new $3 billion share repurchase program that we expect to complete over approximately the next four years. Our capital allocation plan continues high-return investments across Equifax and CapEx and bolt-on M&A while returning cash to shareholders and maintaining a strong balance sheet. Equifax is better positioned than ever in its history to weather an economic event, while delivering growth margin expansion, free cash flow generation, and returning cash to shareholders. We are entering the next chapter of the new Equifax with our cloud transformation substantially behind us as we pivot our entire team from building the cloud to leveraging the new Equifax cloud for innovation, new products, and growth. We're using our new cloud capabilities, single data fabric, EFX.AI, and Ignite, our analytics platform, to develop new credit solutions leveraging our scale and unique data assets. And we're accelerating multi-data asset solutions, including those that combine traditional credit, alternative credit assets from DataX and Teletrac, and TWIN income and employment indicators in verticals like mortgage and auto that only Equifax can deliver that will drive share gains and growth for Equifax in the future. I'm energized about our strong start to 2025, but even more energized about the next chapter of the new Equifax with our new capital allocation plan in place. This is a big milestone for Equifax and an exciting time to be at the new Equifax. One final note. We're planning an Investor Day the morning of June 17 in New York City, where you'll hear from the Equifax leadership team on our long-term growth plans that are aligned with our EFX 2027 growth framework. The event will be held in person as well as webcast live. Please mark your calendars and look for more information to come soon from Trevor and Molly on our Investor Day. And with that, operator, let me open it up for questions.

Certainly. We'll now be conducting a question-and-answer session. Our first question is coming from Jeff Meuler from Baird. Your line is now live.

Thank you. Good morning. So great to see the amended SSA contract. Just now that Doge is further into its work, can you just try to give us any more color on, I guess, the twin federal government discussions or opportunities as well as any risk that you're hearing could arise from that?

Yes. Thanks, Jeff. We feel it's a real tailwind for us in the current administration with their focus on improper payments. As you know, it's a huge number. This is not our number; it's from the government, $160 billion a year with improper payments, either from social services or tax support that go to consumers, and TWIN is really the answer. As I said in my comments earlier, we're ramping up our presence in Washington. I was up there a couple of weeks ago. Chad Borton, who leads EWS, I think is there next week. I'm going to be there again in a couple of weeks. The discussions are very constructive around their desire to tackle this challenge for the federal government and really drive; they all want to have individuals that deserve social service and get them quickly, but those that no longer qualify, they really want to take those benefits back, and TWIN is really the answer. So, we're spending a lot of time with the new agency heads. We see opportunities in existing programs for increasing requirements around the authentication of income at the state level, perhaps doing more frequent redeterminations, which are currently every 12 months, and this demographic, their income profile changes more rapidly, so doing that more often. There's some very significant programs that we've been working on for four, five, six years. One is the Do Not Pay system, which we're not in today. We were making momentum in the last couple of years in the last administration. We think that will accelerate, and that's kind of a stopgap for all social service programs that would check that database before making social service payments. Another big one for us that we've been working on the last couple of three years is with the IRS around the earned income tax credit, which they frame as being something like $16 billion of improper payments. So, the tone in Washington is super positive, we think around this. And as you point out, the amendment that we got with the SSA contract a couple of weeks ago, I think is a great proof point that even in this administration, which there's a lot of change going on in Washington, the value of TWIN is clear. I'd also point out that as most of the TAM for that $5 billion TAM versus our roughly $800 million run rate of our business, that 4 plus billion is really at the states. There's a lot of states that don't use our data today. There are a lot of agencies that don't use our data. So that's a big part of the penetration opportunity. And as I said earlier in my comments, we're adding more state resources to really help drive that at the state level. I would also tell you that many states we're seeing are adopting, if you want to use the term, the Doge mentality, but the focus on integrity at the state level. And we play into that, too. So, we're really enthused about the momentum in the current administration around the integrity of social service and tax refund payments, like the earned income tax credit, and we're really on spending a lot of time in DC, but spending a lot of time in the states to really drive growth there.

And then I appreciate the resilience of the business and you providing a recession framework. The recession impacted businesses being down only 3% to 5%. I think that might be better than some investors would expect. So how did you come up with that estimate, and what are kind of the offsets relative to potential, I guess, end market origination volume declines?

Yes, we've been trying to be pretty consistent on that. Last time we did it was around going into COVID, as you know, we looked back to ‘08, ‘09, which was the last economic event. We looked at how our different business lines performed during that timeframe, which businesses were impacted, which businesses kind of grew through that timeframe, and then kind of rolled that forward to the current mix of the business. The other thing we factored in is, even since 2021, there's been a meaningful increase in our subscription-based revenue that is not going to be recession-impacted or economic impact. Meaning, we're locking into like 12-month contracts with volumes in government space and some of our FI space. The other thing, as you know, is that there is an element of counter-cyclicality that we really carried forward the same trends we saw back in 08, 09 and in 2021 as we went into the COVID pandemic. When there is an economic event, you may see credit activity slow from a marketing standpoint. It doesn't go to zero, obviously, but then there's a real pickup in management of existing books. So, more data is used in managing existing portfolios to drive collections and line management. The other thing that I think is also changing along with the subscription revenue is that the value of more data is really a positive for Equifax and a positive for our customers, meaning in an economic event, more data will be used in originations, because it helps identify those consumers that can really handle that next credit card or that next auto loan or mortgage. So that the power of more data is also a positive for us. Anything John, you'd add?

Just also to make sure everyone's clear. This is really directional, because what a typical recession is very hard to define, and we did everything relative to our long-term framework. So, when you see a 3% to 5% decline, that's relative to our long-term framework for non-mortgage of 7% to 10%. So, what we're talking about is just a very substantial reduction in the level of growth that we would see and an actual decline in those businesses that in our long-term framework would have been growing 7% to 10%. So, we think that's quite material, as Mark said, that is somewhat consistent with what we saw back in the last two recessions that we're able to track.

And Jeff leaving mortgage aside. And I think we all understand the mortgage impact that happens in a recession when typically, rates are cut in the back half of a recession in order to boost economic activity. You've got businesses like government today that are huge for us. And notwithstanding the macro in Washington and around the states, around those unemployed, typically, right? Unemployment goes up. We get a benefit from our unemployment claims business, which you saw during the COVID pandemic, was a significant, I think, $75 million or so uptick over a couple of quarters as there were very sharp layoffs during that timeframe. But then also, with government social services, you'll see more individuals go into government and social services, meaning take advantage of it. That drives our business also. So, there's just a massive change in our business that's happening quite rapidly, over even the 21 to 25 timeframes, around the mix of our businesses, where they are from a recession resiliency basis. Those that are recession-impacted are still there, but they're a smaller portion of Equifax revenue. And then, I would also point you to the increase really across all of our businesses around subscription revenue, versus transaction revenue. That's a change that's been happening over the last five years, three years, two years. Number one, based on the types of businesses that are growing faster, but also number two, based on how we're going to market on the kind of way we're positioning our products from a contractual basis.

Yes. And as Mark stressed in his comments, right, I think importantly in non-mortgage, what we think is we'll grow during a typical recession and we think that's really the most important outcome of the substantial change that we have in the percentage of our revenue that's recession resilient. The amount any individual segment that we showed you could grow, obviously, that could be right or wrong and move around, but the fact of the matter is we feel like we're going to grow our non-mortgage business in a typical recession, and we think that's very substantial.

Thank you. Next question is coming from Andrew Steinerman from JPMorgan. Your line is now live.

Hi, John. Just two questions. One is, could you just give us in the quarter just reported the percentage of U.S. Mortgage revenues? And then the second question has to do with free cash flow. Obviously, this is that great inflection year where free cash flow for the year is guided to be strong in terms of conversion of free cash flow. But when I look at the first quarter, it doesn't have that high conversion rate. I surely know it's been a while since we've seen seasonality. So, just help us bridge the free cash flow that we just saw in the first quarter with the strong free cash flow conversion that you're guiding for the rest of the year? And then I assume that's sort of like the conversion we can expect going forward?

Yes. So, to your first question, it's 21%, right? To your second question, free cash flow for Equifax in the first quarter is always much lower, which would mean our conversion would be lower principally because it's the period in which we pay out our variable compensation from the prior year. So, it's a very large payment that occurs in the first quarter. The reason why the growth in free cash flow doesn't look as strong in the first quarter of '25 relative to 2024, is that the payments made in the first quarter of 2025 were substantially larger than the payments made in the first quarter of 2024 because as you'll remember 2023 was a more difficult year for us. So, our variable comp payments were much lower. If you were to normalize the variable comp payments and the free cash flow, our growth rate would be over 20% in the first quarter of '25 versus the first quarter of '24. So, we feel good about the way free cash flow came in, and it's actually very consistent with the $900 million number that we talked about when we gave guidance both in February and in April.

Thank you. Next question is coming from Manav Patnaik from Barclays. Your line is live.

This is Brendan on for Manav. I just want to ask on just the level of visibility you have for the second quarter and kind of the trends you saw the first couple of weeks of April and not just mortgage, but also in kind of your non-mortgage, your consumer and card and other categories like that?

Yes. We kind of talked about that in our prepared comments around the second quarter. I think we have quite a bit of visibility in the second quarter in most of our business lines, actually the vast majority outside of what happens with rates on mortgage. Everything else, I think we have clear visibility. We talked about that auto has been a little bit stronger, perhaps some pre-tariff buying in lending happening. But all the other businesses, we've really seen no negative impact; if anything, it's been extremely muted in any kind of activity. So, we've got good visibility. Where rates are going to go with what's happening in Washington, it's hard to read. I think you saw the variability we had in the first quarter versus our minus 13% framework, ending up at minus 9% because there were some lower rates for a number of weeks that really boosted mortgage activity. The guide that we put together for the second quarter and the year, we think reflects what we're seeing over the last couple of weeks on mortgage.

Your next question is coming from Toni Kaplan from Morgan Stanley. Your line is live.

I wanted to follow up on the Government segment. Can you confirm that the low double-digit growth you're expecting is for the second quarter? Additionally, does this relate to the SSA amendment you recently signed, or will it be recognized evenly over the next period?

No, that spreads through the quarters in a normal fashion. There's some level of ramping but not disproportionate.

Yes. The low double digit does reflect in the second quarter as well.

Okay. Fantastic. And then I think that's better than expected. And then also, if I look at Talent, Talent was better than expected in 1Q. I guess maybe just shifting to Talent. What were the main sort of drivers that got you to that better spot? And how should we think about Talent as we sort of go through towards the back half of the year as well?

Yes. So really, in the first quarter, we exited the year with kind of some tight hiring markets that we heard from our customers and we saw in our numbers. So, the market ended up being a little bit better as we went into February and March than what we saw in January and kind of the framework we put together. That was a portion of the, what I would call, strong performance from Talent, but there was also a significant portion of just kind of execution with new products, expanding our penetration into the background screening TAM, and new solutions that we're bringing to customers, that's really helping us outgrow the underlying market in a positive way. And of course, record additions drive just more records across all of the Workforce Solutions business, including Talent.

Yes. And look, low single digits also just reflect that the year ago period, first quarter of '24 was just weaker than the second quarter of '24. So, we just have a grow-over difference. And also, we're assuming that we're going to see hiring weaken a bit as we go through the year, right? So, we didn't change our full-year guidance. Our full-year guidance had weaker hiring for the year when we provided the guide back in February, and we've assumed that's going to continue and start to occur as we go through the second quarter and then be in place in the third and fourth.

Our next question is coming from Kyle Peterson from Needham & Company. Your line is live.

Great. Good morning, guys, and thanks for taking my question. Just wanted to clarify on some of the moving pieces within the guide. I know it sounds like at least you have the 1Q upside, and then you're at least reflecting that mortgage kind of compressed a bit in the last few weeks. But I guess the first few weeks since tariffs and some of the stuff has driven a lot of things into a more volatile state here. Does the guide reflect what you guys have seen in the last few weeks across the board, or is some of the decision-making and everything has been a little too volatile to extrapolate based on the last two weeks that you guys held the guide?

We certainly factored into our guide of holding the full year guidance even with a first quarter beat. As we said, you would expect and we would typically be raising the year based on that, but there's just so much uncertainty in our eyes around where the economy is going likely in the second half, meaning that there's enough visibility through the second quarter given that we're approaching the tail end of April, we thought it was prudent to be balanced or conservative, whatever term you want to use, and just hold the full year guidance until we see more around what kind of economic event we're going to have. As you know, there's been a kind of a CNBC and Wall Street Journal call for a recession in the second half by the expert economists; if that's going to happen, that's tough to factor into a guide when you have a strong first quarter performance and we think decent second quarter performance. It's just hard to handicap what that means in the second half. So, we felt it was balanced to put together a guide that just holds the full-year numbers.

Yes. And mortgage that, as we said, the trends actually weakened over the past 10 days and the trends that we're seeing...

Along with the tenure in mortgage rates, yes.

Yes, they are fairly consistent with our guidance for the year. We experienced a strong first quarter, but we noticed a significant decline in the first two weeks in the mortgage sector as mortgage rates increased. Our quarter and annual results reflect these trends. We did not observe any weakening in other areas of business over the past couple of weeks. Therefore, in response to your question, yes, it aligns with the current trends we are experiencing.

Your next question is coming from Matt O'Neill from FT Partners. Your line is live.

Thank you for taking my question. Most have been asked and answered here. I guess quickly, just following up on the employer service question just now. Any indication, I guess, that in the important sort of white-collar hiring environment, there's been more of a sit on the hands approach from large employers in the last couple of weeks here? And I guess just as a follow-up around now having the share repurchase at your disposal, any thoughts on how to balance being aggressive there versus the tuck-in acquisitions or just continue to be opportunistic?

Yes. Regarding your question on Employer Services, I believe you meant Talent related to hiring. We haven't observed any significant changes in the past few weeks, but we are keeping a close eye on it. As for our capital allocation plan, it will be balanced. Capital expenditures are a top priority for us, even at lower levels, given the substantial returns they generate organically within Equifax primarily through new products. This will be a steady focus for positive shareholder returns through investment in Equifax. For bolt-on M&A, we will be disciplined about the sectors we explore and the financial returns. We are seeking businesses that enhance our growth rate and margins after integration, which is a high standard. However, we have been effective in this area over the past five years, completing around 20 acquisitions, including bolt-on acquisitions like Appriss Insights, which has added significant value to Workforce Solutions, as well as several others in workforce and USIS. We are particularly satisfied with the Boa Vista acquisition from almost 18 months ago, which is performing well. Therefore, we will continue with bolt-on M&A. Additionally, our commitment to the dividend is to grow it in line with earnings in a 5% to 15% range, which is an important commitment from the company for long-term shareholder cash return. The $3 billion buyback program we announced aligns with our expectations for growth, earnings, and free cash flow over the next four-plus years. We will actively participate in the market during open trading windows and look for opportunistic purchases during market dislocations or when we don't see suitable M&A opportunities. If we generate excess free cash flow without engaging in M&A, we will return that to shareholders while maintaining a strong investment-grade balance sheet to remain prepared for any economic event.

Your next question is coming from Arthur Truslove from Citi. Your line is live.

A couple of questions for me, if I may. First one, please. If you think about what you did in your USIS non-mortgage business, clearly, it's accelerated meaningfully in the first quarter of the year from where it was in the fourth quarter of last year, and in particular, within the B2B non-mortgage. How much of that acceleration related to better market conditions of lending in particular? And how much relates to what you've done in terms of getting back to market following your cloud transformation? And the second question on a similar vein around the cloud. Are you able to just confirm that the first quarter fully benefited from the cloud transformation in USIS? And are you able to say year-over-year how much the cloud transformation benefited the cost side in that division, please? Thank you.

We have definitely noticed a significant change in the momentum of USIS in the marketplace after our cloud transition, and we believe that most of the credit goes to our execution. There has been no change in the market from the fourth quarter to the first quarter, so it's really about how we engage with our customers. For a long time, we faced challenges, particularly with USIS, in building and migrating our cloud, which affected our ability to be present with our customers as many meetings revolved around migration talks. However, that changed last summer, leading to increased momentum across all USIS verticals as they began to engage our customers with new products and solutions. Additionally, as we mentioned earlier, there has been a noticeable acceleration in our focus on innovation, which we anticipated. We also expected to gain market share due to our cloud-native capabilities, which make us always-on and improve data transmission speed. Customers have provided positive feedback about their interactions with Equifax since our transition to cloud-native. This outperformance, which took us by surprise, can be attributed to the team operating effectively in a post-cloud environment, allowing us to concentrate on customers, innovation, new products, and growth. Although the impact was minimal in the first quarter, we are beginning to see benefits from multi-data solutions, such as the mortgage TWIN indicator integrated into the USIS credit file, which will enhance our competitiveness and contribute to market share gains in mortgage lending with our differentiated offerings.

And to your question on cost, yes, in terms of the migration of the consumer databases to the cloud, yes, that was completed and the current run costs are fully on the cloud and the prior infrastructure is decommissioned. You're seeing it in the margins. We're not going to quantify the dollar amount, but you're seeing it in the margin growth and the very nice margin performance at up almost 150 basis points in the first quarter year-to-year and then obviously, almost 200 basis points in the second quarter.

Our final question today is coming from George Tong from Goldman Sachs. Your line is live.

You talked about the performance of cards, personal loans, and auto volumes in Q1. Can you talk about how trends in each of these categories performed exiting the quarter and in the first 3 weeks of April?

I think we already commented. I don't know if you were on the call for that period, George. But we haven't seen any change in the last couple of weeks, and we don't expect them to change in the second quarter, for sure, from what we saw in the first quarter and this first number of weeks in April.

Okay. Got it. And then in your long-term growth framework that you provided, are you assuming a return of mortgage volumes to historical levels pre-COVID?

Our long-term growth framework assumes a normal economy, projecting growth of 8% to 12% long-term, with 7% to 10% organic growth. This takes into account economic cycles and current events like the recession and high interest rates affecting mortgages. With the mortgage market currently 50% below what we consider normal, we anticipate a return to those levels, driving the expected growth. Additionally, we are uncertain about future pricing actions from our partners, which have significantly impacted us in recent years and will affect our long-term growth outlook.

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

I just want to say thank you, everybody, for joining the call. If you have any follow-up questions, reach out to Molly or myself. 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.