Greetings and welcome to the Equifax Q1 2026 Earnings Conference Call and Webcast. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing Star 1 on your telephone keypad. We ask you to please limit yourselves to one question and one follow-up and return to the queue. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star zero. It's not my pleasure to turn the call over to Trevor Burns, Senior Vice President, 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 Vigor, Chief Executive Officer, and John Gamble, Chief Financial Officer. Today's call is being recorded. AND ARCHIVED 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 PREFERENCE 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 ONE Q2026 EARNINGS CONFERENCE CALL. Also, we are making certain forward-looking statements, including second quarter and full year 2026 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 2025 Form 10-K and subsequent filings. During this call, we will be referencing certain non-GAAP financial measures including adjusted EPS, adjusted EBITDA, adjusted EBITDA margins and cash conversion, which are adjusted for certain items that affect the comparability of our underlying operational performance. All references to EPS, EBITDA, EBITDA margins and cash conversion are references to non-GAAP measures. 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 four, Equifax delivered very strong first quarter results with reported revenue of $1.649 billion of 14%, which was $37 million above the midpoint of our February guidance. On an organic constant currency basis, revenue growth of 13%, which was over 200 basis points above the midpoint of our February framework. Ex-FICO, revenue growth was up about 10% and at the top end of our 7-10% long-term growth framework. The revenue outperformance was principally in U.S. mortgage, which is up 38% and better than our February guide from stronger mortgage activity in the middle of the quarter before rates increased due to the Iran conflict. U.S. IS mortgage also benefited from stronger revenue growth related to its new wins in pre-approval products driven by our twin indicator solution. These mortgage customer wins are a good proof point that our differentiated twin indicator solutions are resonating with mortgage customers. We also expect customer share gains this year in card, auto, and P-loan as we drive twin indicator deployment more broadly. As a reminder, we are offering the twin indicator as well as our cell phone utility and pay TV attributes at no cost in mortgage to drive share gains. Organic diversified markets' constant revenue dollar growth grew almost 6% in the quarter, consistent with our guidance. This was principally driven by strong broad-based execution and workforce solutions. Importantly, first quarter EBITDA of $477 million was up 13%, with an EBITDA margin excluding FICO of 31.2%, up a strong 80 basis points and a very strong 110 basis points above the midpoint of our February framework. The 80 basis point expansion versus last year in EBITDA margin was both above our 75 basis point target for the year, and 30 basis points above our long-term 50 basis point framework. The strong EBITDA margins were driven by strong operating leverage, mortgage flow through, and AI-driven cost productivity. Equifax reported EBITDA margins with 29% in the quarter. EPS at $1.86 per share was also up a very strong 22% and 18 cents above the midpoint of our February guide. As a reminder, first quarter EBITDA margins and EPS are lower than the remainder of the year, primarily due to a large percentage of our employee equity plan expenses being recognized in the quarter. We returned $327 million to shareholders in the quarter, including repurchasing 1.3 million shares, or about 1% of shares outstanding for 260 million to take advantage of a weaker Equifax stock price. And last month, we increased our quarterly dividend by 12% to 56 cents per share. Equifax paid 67 million of dividends in the quarter. We continue to expect strong free cash flow of over $1 billion in 2026, with a cash conversion over 100%, which will deliver capacity of approximately $1.5 billion for both on M&A and return of cash to shareholders while maintaining strong leverage levels. The team also continued to execute very well against our EFX 2028 strategic priorities in the quarter by leveraging EFX.AI-based solutions built on our cloud-native infrastructure to drive innovation, new products, and growth. In the first quarter, our vitality index of 17% was at record levels and reflects the focused execution of our teams in driving customer-focused growth through accelerated innovation based on advanced EFX.AI, leveraging our proprietary data assets. As a reminder, we added over 40 EFX.AI-based patents in 2025 and 10 more AI-based patents in the first quarter for a total of 400 pending or granted AI-based patents as we continue to invest in differentiated explainable AI capabilities at Equifax. In the middle of the first quarter, we saw strengthened diversified markets, U.S. credit and mortgage activity as overall economic activity remained robust, inflation expectations moderated, and interest rates declined. In March, the Iran conflict drove market uncertainty and higher interest rates, and we saw weaker overall U.S. transactional activity from higher interest rates impacting mortgage and, to a lesser degree, auto and banking. Broadly, the U.S. consumers is resilient, even in these uncertain times. We've seen mortgage activity decline in the last six weeks from elevated levels in February from the higher interest rates, and we expect these lower levels of inquiries to continue until the Iran conflict is resolved and interest rates moderate. Current mortgage run rates are slightly below the levels reflected in the 2026 framework we shared in February. Despite our very strong first quarter results and given the significant uncertainty related to the current Iran conflict, we felt it was prudent to maintain our 2026 guidance we put in place in February until there's more clarity on the direction of the economy and importantly inflation and interest rates. Absent the uncertainty and economic conditions related to the Iran conflict, we would have raised our full year guidance based on our strong first quarter results. We are maintaining our 2026 guidance for mortgage revenue growth of over 20%, consistent with the framework we provided in February, as a stronger-than-expected first-quarter mortgage revenue growth is offset by our expectation of current trends of slightly slower growth over the remainder of the year versus our February guide. For the full year, we continue to expect our diversified markets revenue to be up high single digits, consistent with the guidance we provide in February. We expect strong execution from EFX.AID, AI-driven new products, and customer share gains to allow us to deliver at the levels consistent with our February framework. We also expect to deliver strong full-year margin expansion, excluding FICO, of 75 basis points from operating leverage off strong top-line growth, higher margin new products, and AI-driven productivity. The 75 basis points is 25 basis points above our 50 basis point long-term margin framework. Turning to slide five, workforce solutions revenue was up over 10% and better than our expectations. Verifier revenue was up a strong 14% with diversified markets revenue growth of 14%, which is a great start to the year. Within diversified markets, government had a very strong quarter building off their fourth quarter performance with revenue up mid-double digits from continued strong state-level penetration. We expect government revenue in the second quarter to be about flat sequentially against a very tough comp from the SSA contract win last year and timing of state contract activations. We continue to see strong momentum in government from OB3 and the big $5 billion TAM that they operate in. Talent Solutions' revenue was up almost 10% in the quarter. This is the second consecutive quarter of high single-digit revenue growth in a challenging white-collar hiring market. In February, we discussed weaker hiring volumes in January that they've begun to improve later in the quarter. Despite the overall weaker hiring macro in the first quarter, talent solutions continue to outperform their underlying markets driven by client penetration, higher hit rates from record additions, pricing, and product penetration, including data incarceration and education solutions. The team is doing a great job delivering new solutions to the market, enabling employers to make the right hires with speed and confidence. EWS mortgage revenue was up a strong 14% in the quarter from better than expected volumes, new products including twin income qualify for mortgage, record growth, and pricing. Consumer lending continues to perform very well with revenue up strong mid-double digits from double-digit revenue growth in P-loans and auto. This is the seventh consecutive quarter of double-digit revenue growth in these verticals. Consumer lending is increasingly becoming a larger portion of verifier revenue. Workforce Solutions EBITDA margins at 52.3% were very strong and up 200 basis points versus last year from operating leverage from higher revenue growth and AI-driven productivity, while continuing to invest in new products, government, and record additions. Twin record additions continue to be very strong again in the first quarter with 211 million active records, up 11%, and 120 million total current records, up 9%, which represents 105 million unique SSNs. The record growth drives higher hit rates and revenue growth and outperformance against underlying markets across our EWS verifier verticals. In addition to payroll provider partnerships, EWS continues to expand relationships outside of the traditional payroll processing space, including HR software companies, to obtain additional sources of income and employment data. We have a long runway for record growth against 250 million income-producing Americans. Turning to slide six, we remain energized about the mid- and long-term growth opportunities for EWS government at both the federal and the state level in meeting new federal requirements regarding accuracy of income validation in Medicaid and SNAP, as well as work, education, and community engagement requirements in Medicaid benefits. We are seeing strong interest with our pipelines for new and existing expanded government services up over 2x versus last year. As is typical in government, we are seeing some timing issues in new deal closures and activations as states manage technology implementations and challenging budget frameworks. We continue to expect to see the benefit of the new OB3 opportunities later in 26 and in 27 and beyond as state agencies implemented implement required validations of expanded work requirements and increase redeterminations for certain Medicaid populations and take actions to reduce snap error rates Equifax is serving as a key advisor leveraging our differentiated income and employment data to drive speed accuracy and productivity our new products such as continuous evaluation for snap built using efx.ai that we launched in the first quarter have already delivered strong results for a few states by identifying errors within their beneficiary population. We also see expanding opportunities with multiple federal agencies in support of their focus on reducing improper payments. Given our strong value proposition from TWIN on speed of social service delivery, caseworker productivity, and accuracy of income verifications, we are uniquely positioned with our differentiated twin data assets and new solutions to help state agencies increase efficiency and strengthen program integrity, particularly with SNAP and CMS. EWS has significant opportunities for long-term revenue growth, supporting government programs in their big $5 billion TAM. Turning to slide seven before discussing USIS results, I'd like to welcome David Smith, our new USIS president, to the team. David's broad consumer finance experience, proven executive leadership, customer focus, innovation capabilities, and regulatory depth will be a big asset for USIS as they drive innovation and revenue growth for their customers. It's great to have David on the Equifax team. In the first quarter, USIS revenue was up a very strong 21% and 8% excluding FICO driven by significant mortgage outperformance. The 8% growth is strong and at the high end of our 6% to 8% long-term framework for USIS. USIS mortgage revenue was up 60% and up a strong 24% excluding FICO and better than our expectations. USIS saw meaningful share gains in mortgage pre-approval soft pull products with our new twin indicator contributing to mortgage revenue outperformance in the quarter. And as mentioned previously, USIS saw increased mortgage activity in the middle of the quarter before rate increases from the Iran conflict reduced activity over the past six weeks. USIS diversified markets revenue grew 3% in the quarter and were slightly below our expectations, with B2B up 2% and B2C up a strong 9%. While B2B delivered low single-digit growth rates, core online auto and FI transaction revenue delivered solid mid-single-digit growth. Offline batch was about flat, principally related to a tough comp due to the strength in offline batch jobs last year. We did not see changes in customer marketing or risk management behavior in the quarter. We expect USIS diversified markets revenue growth to be up mid-single digits in the second quarter. USIS EBITDA margins were 30.3% in the quarter, excluding FICO, USIS EBITDA margins were 37.9% and down slightly compared to last year. Absent some one-time costs incurred in the quarter, margins would have grown at levels consistent with our expectations. We continue to expect USIS EBITDA margins ex-FICO to be almost 40% in the year, up over 75 basis points versus 2025. Turning to slide 8, as a reminder, we make no margin on the sale of FICO scores. FICO mortgage scores revenue is about 50% of the USIS mortgage revenue and 6% of total Equifax revenue, delivering zero margin. To be conservative, our 2026 framework continues to assume Equifax will calculate and sell only FICO scores this year and there will be no Vantage conversion in 2026. However, we are seeing strong momentum for mortgage originators on using Vantage. We expect conversions to Vantage score to accelerate once FHFA activates Vantage score, and indications are that we're getting closer to FHFA formally activating Vantage score for agency mortgage originations. A few weeks ago, we lowered our Vantage mortgage pricing from $4.50 to $1 to further incent conversion by the industry. We believe this pricing change will further accelerate mortgage originator conversions to Vantage, given a substantial $1 billion of annual savings opportunity for originators and consumers by using Vantage. The FHFA's decision last July to allow mortgage score choice between Vantage and FICO is a win for consumers and for the industry. We currently have over 240 mortgage originators ingesting our free Vantage score with a paid FICO score offering, and we have over 50 principally non-GSE mortgage lenders using Vantage for their mortgage originations. For perspective and to provide data for your analysis, we have included a chart in the appendix of our earnings deck that provides details on the annual $35 million margin upside from full conversion to Vantage score at current mortgage run rates. As we move through 2026 and there is more clarity on Vantage conversion timing or the FICO Direct License Program, we will update our guidance to reflect this shift and the opportunity for mortgage industry, consumers, and Equifax. Turning to slide nine, international revenue is up four percent in constant currency and consistent with our expectations of mid-single-digit growth. International saw strong high single-digit revenue growth in Canada and ANZ, and LATAM and the UK and Spain CRE businesses delivering mid-single-digit growth, revenue growth in the quarter. International EBITDA margins were 25% in the quarter, up a very strong 80 basis points versus last year. Turning to slide 10, as we discussed in February, there's a strong AI moat around Equifax's unique and proprietary data. 90% of Equifax revenue is generated from proprietary data sources, including our income and employment exchanges in the U.S., U.K., Canada, and Australia, our U.S. and international consumer and commercial credit exchanges, and our alternative data sets, including our NCTE telco and utility exchange in the U.S. This proprietary data is contributed to Equifax and its use is managed by Equifax and is subject to significant regulatory and privacy controls. To be clear, the data is not available on the web, and only Equifax can access this data. Equifax's scale and proprietary data, along with our cloud-native global technology platforms that include implementation of leading AI and ML capabilities, is at the center of our momentum on new product innovation that has delivered accelerating NPIs and driven our NPI Vitality Index to almost 14% over the past three years. The application of advanced EFX.AI-based and traditional IT-based analytical techniques allows us and our customers to rapidly develop new solutions that are built off our only Equifax proprietary data. Turning to slide 11, our cloud-native technology and EFX.AI capabilities have accelerated our innovation cycle over the past five years since we moved to the cloud. Last year, over 90% of our products were built on our new global cloud-based platforms. With more efficient cloud-native technology leveraging global platforms and efx.ai, we have quadrupled the number of products in our innovation funnel and reduced product development life cycles by half, resulting in a record level of new products launched in 2025, which was up 2x over historic levels. 100% of our new models and scores in 2025 were built using efx.ai. We're building more complex products generating higher performance for our customers with about 50% of our new products now powered by multiple efx data assets. And last, we're seeing higher performing products with year three NPI revenue up about 70% in 25 over historical levels. We are just getting started leveraging the power of our proprietary data, the new Equifax cloud, and efx.ai to deliver higher-performing products, models, and scores to help our customers grow and deliver higher growth and free cash flow to Equifax. Recently, we launched Ignite AI Advisor for Auto, an AI platform that provides lenders with instant, plain English analytics, benchmarking, and automated insights alongside conversational agents for deeper exploration by our customers. We expect to launch similar solutions in cards and personal loan portfolios this year while integrating advanced synthetic and credit abuse fraud detection. As EFX.ai advances, we'll leverage our new global cloud infrastructure combined with our energetic AI and Google Vertex AI capabilities and proprietary data to deliver higher-performing analytical solutions at an accelerating pace, positioning these advanced analytical solutions for more customers. Equifax is on offense with AI. Turning to slide 12, as I previously mentioned, USIS is gaining traction with their twin indicator solutions in mortgage that supported our strong mortgage revenue growth in the quarter. In April, we were energized to launch the work number record indicator or twin indicator for auto lenders and personal loan originators, which are additive to our suite of twin indicator solutions for mortgage, auto dealers, and CARD. These solutions deliver income and employment insights from the work number alongside the Equifax Consumer Credit Report at the pre-qual or marketing stage of the auto or personal loan application process. The twin indicator returns a response indicating whether a verification of income or employment is available for an applicant from the EWS work number. This immediate visibility gives lenders the ability to instantly segment their workflows, fast-tracking appropriate borrowers through an automated paperless path while proactively identifying those who may require manual documentation. By reducing guesswork from the start of the application process, lenders can offer appropriate loans while borrowers can benefit from a faster approval process. We expect continued share gains from our twin indicator suite as we move through 2026. And as a reminder, Equifax is delivering twin income and employment attributes at no cost to our customers to drive credit file share gains in twin VOI and VOE growth in the future. Now I'd like to turn it over to John to provide our second quarter and full year framework.

Thanks, Mark. Slide 13 provides the specifics of our 2026 full year guidance. As Mark indicated, we are holding our full year 2026 revenue guidance on a constant currency basis to be unchanged from our February guidance. Even with our strong first quarter performance, there continues to be a heightened level of economic uncertainty as well as uncertainty in the direction of interest rates and therefore mortgage volumes. We increased our guidance to reflect the impact of FX changes since February, increasing the midpoint of our reported revenue guidance by $25 million to $6.745 billion and adjusted EPS by four cents per share to $8.54 per share. FX is about 90 basis points favorable to revenue growth for the year. Diversified markets revenue growth at the midpoint is expected to be up high single digits and U.S. mortgage revenue to be up over 20 percent, with mortgage market originations down low single digits. For your perspective, as you determine your view of the 2026 U.S. mortgage market, based on a review of Equifax data on mortgage home purchase issuances since early 2022, We estimate that there are over 15 million mortgages that were issued with an interest rate over 5%, including about 13.5 million with rates over 6% and over 9.5 million with rates over 6.5%. This provides a perspective on the pool of mortgages potentially available to refinance as mortgage rates change. Expectations for EWS overall performance in 2026 are unchanged from the levels we discussed in February, with EWS expected to deliver revenue growth of high single digits and EBITDA margins at 51.2% to 51.7%, about flat at the midpoint with 2025. We continue to expect verification services revenue to be up high single digits to low double digits. In employer services, revenue is now expected to decline slightly in 2026, as work opportunity tax credit legislation has not been extended by the federal government. Historically, when the renewal occurs, it has been retroactive and we would expect to recover the revenue. USIS and international business unit revenue growth and EBITDA margin guidance expectations are unchanged from February. The slide also includes additional detail on revenue growth rates and EBITDA margins, excluding FICO mortgage score royalty pass-through revenue and expected BU revenue in EBITDA margins. We expect to deliver growth of 7% to 9%, excluding the impact of FICO mortgage royalties in 2026, within our long-term financial framework. And we expect to grow EBITDA margins, excluding the impact of FICO mortgage royalties by a strong 75 basis points, which is 25 basis points above our long-term framework. In 2026, we expect to deliver over $1 billion of free cash flow and a cash flow conversion of at least 100%. As we discussed in February, with EBITDA increasing to about $2.1 billion at the midpoint, we are also generating an additional $400 million in debt capacity at our current debt leverage. This creates $1.5 billion in capital available in 2026 for M&A and return of cash to shareholders. We continue to look for attractive bolt-on M&A to strengthen workforce solutions, our differentiated proprietary data assets, as well as international platforms, and we have substantial capacity for share repurchases continuing from the $260 million we repurchased in the first quarter. Slide 14 provides the details of our 2Q26 guidance. In 2Q26, we expect total Equifax revenue to be between $1.680 and $1.710 billion, up 10.3% on a reported basis year to year at the midpoint. Constant dollar revenue growth at the midpoint is up 9.4%. Excluding the impact of FICO mortgage scores, 2Q26 reported revenue is expected to be up about six and a half percent at the midpoint. Diversified markets revenue is expected to be up mid-single digits on a constant currency basis and down sequentially from first quarter given the more difficult EWS government comparison that Mark discussed. U.S. mortgage revenue is expected to be up over 20 percent and high single digits excluding FICO royalties. EPS and 2Q26 is expected to be 215 to 225 per share, up about 10% versus 2Q25 at the midpoint. Equifax 2Q26 EBITDA dollars are expected to be 537 to 554 million dollars, up just over 9% at the midpoint. EBITDA margins are expected to be about 32.2% at the midpoint of our guidance. And excluding the impact of FICO mortgage royalties, EBITDA margins in 2Q26 would be 34.3 to 34.7 percent, up over 80 basis points at the midpoint from 2Q25 on the same basis. We believe that our full year and 2Q26 guidance are centered at the midpoint of both our revenue and EPS guidance ranges. In the supplemental information to this presentation, which will be shared after this call, we have added a slide that provides a five-year view of U.S. mortgage originations by quarter. The data is determined based on submissions to Equifax's U.S. consumer credit file. Going forward, we will update this slide to provide originations data 90 days in arrears. So today we are providing data through December 2025. As full contributor mortgage origination data can take up to 150 days, we will update this slide each quarter based on any updated data we receive. As we did in February, going forward, our guidance will include our expectations for U.S. mortgage originations for the current calendar year. As a reminder, this mortgage detail and more analytical detail based on the Equifax U.S. credit files are published monthly in our Credit Trends Reports and can be found on our website under Business trends and insights. Historically, Equifax has provided USIS hard mortgage credit inquiries as a measure of U.S. mortgage market activity. Given changes that have occurred over the last several years in how mortgage originators use hard and soft mortgage inquiries during the loan origination process, hard inquiry volumes have become less correlated to changes in the U.S. mortgage market originations. As such, we will stop disclosing USIS mortgage hard credit inquiries beginning in 2027. Now I'd like to turn it back over to Mark.

Thanks, John. Wrapping up on slide 15, Equifax is off to a strong start in 2026, executing very well against our EFX 2028 strategic priorities in a challenging economic environment. The new Equifax is leveraging the Equifax Cloud, efx.ai, and proprietary data assets to accelerate innovation and help our customers grow. With the EFX cloud transformation substantially complete, we are focused on leveraging the new cloud capabilities and focusing our team on EFX.ai and NPI initiatives to deliver innovation to our customers, resulting in record-level 17% vitality index in the quarter and driving operational efficiencies inside of Equifax. We are using our single data fabric, EFX.ai, and Ignite, our analytics platform, to develop new credit solutions powered by twin indicators and verticals like mortgage, auto, card, and P-loan that only Equifax can provide, which is leading to share gains and incremental Our first quarter financial results are a strong proof point on the broad-based Equifax operating model, including the strong 80 basis points of EBITDA margin expansion in the Given our strong free cash flow generation with cash conversion over 100% in 2026, we're also delivering on our commitment to return substantial excess free cash flow to our shareholders. In the first quarter, we returned $327 million to shareholders, and in 2026, we expect to have $1.5 billion available to invest in both bolt-on M&A and return cash to shareholders through share repurchases and dividends. I'm energized about our strong start to 2026, but even more energized about the future of the new Equifax. And with that, operator, let me open it up for questions.

Thank you. We'll now be conducting a question and answer session. If you'd like to be placed in the question queue, please press star 1 on your telephone keypad. As a reminder, we ask you to please ask one question and one follow-up, then return to the queue. If you'd like to remove yourself from the queue, please press star 2. Once again, that's star one and your confirmation tone to indicate your line is in the question queue. And please limit yourselves to one question and one follow-up and return to the queue. Our first question today is coming from Jeff Mueller from Baird. Your line is now live.

Yeah, thank you. How are you thinking about the timing of the revenue from the expanded government opportunity? I get the tough Q2 comp, but Q1 was really good. So to what extent did the expended opportunity drive that strength? And then just help us understand what you're trying to signal when you're talking about timing factors related to system integration and budget challenges.

Yeah, Jeff, you know, we were made very bullish about our government vertical, given the big TAM and also OB3. We've talked about that a bunch. We've been clear since really last July when OB3 was passed that we expect the substantial portions of that to be later in the year, but really principally in 2027 when that takes effect, you know, whether it's the Medicaid or the SNAP benefits or the, you know, more frequent six-month redeterminations. We said on the prepared comments that, you know, our pipelines for government are very robust, up 2x over where they were a year ago. So, you know, we feel good about the pipelines, but, you know, government can be bumpy, you know, both on, you know, when deals not only close and sign, but also when they activate. And then there's always budget pressures at the government level. And as you point out, we had a big win with SSA a year ago in April. So that's a comp that's, you know, challenging, you know, in the second quarter. And we just wanted to highlight that.

Okay. And then for USYS diversified markets, what dragged it down in Q1? Because I think the online growth was slower overall than card and auto was. So what dragged it down in Q1? And then maybe it's because of whatever that factor is, but what drives the acceleration in Q2? Because it sounded like there was also a little bit of softening X mortgage related to rates and macro volatility later in the quarter.

Yeah, I'll jump in and John can also chime in also. You know, So first on what happened in the first quarter is we had some larger batch volumes, which can be choppy on when they land during the year and one quarter to another quarter last year versus this year. So I think that's the principal impact on the first quarter. As we look forward, we've got a lot of new products that we're rolling out. I think we talked a bunch on our prepared comments around the twin indicator that we have in market. We just launched it, you know, for auto lenders and also for CARD, and we've seen good progress there. We expect that to help, you know, as we go through the year. Anything else you'd add, John?

Not just what we had in our comments, right? We saw weakening as we went into the March period, and that affected not only online but to a degree as you indicated March batch, right? And it was in auto, it was to a degree in FI, and it crossed some other verticals as well. So I think the general economic situation that we ran into in March just resulted in a little slower volumes, not just in online, but as we all know, oftentimes batch is repetitive, right? So some of the batch jobs that occur very frequently just slowed.

Thank you. Our next question today is coming from Andrew Steinerman from JPMorgan. Your line is now live.

Yeah, I wanted to ask about EWS mortgage revenue outperformance. What did you see in the first quarter, and what are you assuming in the guide in terms of EWS mortgage revenue outperformance?

Well, mortgage had a strong first quarter at EWS. I think we talked about some new products that we've rolled out that we're getting some traction on. Anything else you'd add on that, John, for the first quarter?

No, I think we've consistently said we expect to see high single-digit type of outperformance relative to transaction volumes, and we saw very good performance in the first quarter, and that continues to be our expectation going forward.

Thank you.

Thank you. Next question today is coming from Tony Kaplan from Morgan Stanley. Your line is now live.

Thanks so much. I wanted to go back to CMS and basically when you think about competition, we saw an article a couple of months ago about one of your private company competitors who uses connectivity for verification and winning a contract on the Medicaid and SNAP eligibility side. So I was just hoping you could frame for us, you know, how you see your product versus maybe a cheaper product, like because of the state budgets always seeming to be challenged, like does that lead to a cheaper solution gaining traction? And then also the friction point you always mention, you know, does that resonate as much in this market as in the lending market? Just wanted to understand the sort of go-to-market strategy and positioning between your product, which is maybe more premium and very good accuracy versus maybe a cheaper connectivity product.

Yeah, when you say cheaper connectivity, I think you're referring to consumer consented data. And, you know, there's clearly a place for that. As you know, we rolled out last summer our own solution called Complete Income that we've seen traction on. And, you know, with this demographic, there's a lot of W-2 income in here, but there's also a lot of gig income, which we have less of in our database. So, you know, our large coverage is still a big asset for us. You know, having, you know, over 150 million current records is a big asset in our data set that we can deliver instantly. when you go down the consumer consented path, it adds friction to the process, both for the caseworker, you know, and for the recipient, they have to, you know, do things to participate in it, where we've seen, you know, why we invested in it, and we launched our solution that's integrated between, you know, hitting our twin database first, and then water falling to our own consumer consented solution, you know, that integrated solution, you know, we think is a superior one delivers that same benefit and what the what the states were after is more coverage you know it's really hard to get that income verification and that consumer consent it really covers a lot of

the records that we don't have and that's why we've invested in the solution and we've already landed a handful of states that are now using that solution in the in the marketplace yep great and wanted to ask just on vantage score I guess what's taking so long with the grid and I guess when how is the reception to your lowering the price of the score and does that sort of lead the FHFA maybe to you know sort of be less concerned about pricing in the industry?

Yeah, that's a hard question. These kind of changes take time. As you know, FICO was used for 30 years as the only score in mortgage. And last July, Director Pulte introduced score competition. It takes a lot of technical time. Our view is that the integrators, meaning the software systems, are ready for Vantage. They've built that out over the last number of months. You know, our customers are ready. We talked about 250 customers ingesting the free Vantage score. You know, we felt that there, you know, would be an advantage for Equifax and our competitors, you know, did the same thing by lowering the price to a dollar versus 450 to create, you know, a real price advantage, you know, for customers to really incent them in the industry to really move forward with Vantage. And the feedback has been very positive. And, you know, I think as you've seen in various publications, you know, if you use that dollar versus the $10 FICO score, you know, that's a billion dollars worth of run rate annual cost savings for the industry. That's a big incentive to change. So, you know, all indications are we're getting closer. You know, we had the same indications last time we talked in February, but we're certainly closer now that we're in April. And the industry is clearly ready for it. They want to take advantage of it. So we expect it to move forward. But as you know, in our guidance, you know, we laid out that, you know, we don't know when that timing is. So we really can't forecast a vantage conversion. So we assume that FICO stays there through the year. But just to be clear, and I know you know this, Tony, that, you know, we're it doesn't impact our P&L if FICO stays there long term. There's an advantage to our P&L with the margin we make on the vantage score if there is vantage conversion. So we think Equifax is well-positioned because, as you know, you can't calculate a credit score without our credit file, and that's the data that's used there. So we think we're well-positioned, whether it is FICO or Vantage, but there's definitely a lot of energy and enthusiasm about moving to Vantage once it gets activated by the agencies.

Thank you.

The next question today is coming from Anil Patnaio from Barclays. Your line is now live.

Thank you. Good morning. You know, I think we all saw the mortgage data kind of taper off in March. But, Mark, I think you mentioned there was some impact to a lesser degree in auto and banking. I was hoping you could just elaborate on that just to appreciate, you know, the sensitivities and how you think that could be impacted.

Yeah, it was really not more in auto. We saw a little bit in banking, but it's probably harder to find in the rounds. You know, auto is a big ticket transaction. When rates went up a little bit, we saw some tail off. It's typically a very, you know, a larger auto financing market around tax season. And there was some dampening of that. Part of its auto prices, for sure, you know, have increased. And then you add to it, auto rates have increased. You know, but it was still a positive market for us. But we just thought we'd highlight that. Anything you'd add, John?

No, I think you covered it. We saw it run through March, and I think it's kind of continued in April.

Okay, got it. And I think your point on reemphasizing the proprietary data, that's well understood. You also mentioned using Ignite and some of your other analytical tools. I was just wondering how connected or packaged is those Ignite and analytic tools to the data? Just trying to appreciate how you think of the potential disruption risk to the software side of things, which is the big market talk right now.

Yeah, as you know, you know, the so-called software is a small part of our business. It's one we certainly invest in, particularly for our, you know, broadly our mid-market customers that don't have, you know, larger tech platforms that they can use to ingest our data. But, you know, we sell data. We sell scores. We sell models. We sell products. You know, that's the vast, vast majority of our revenue. We're very, very small in the revenue, you know, from software sales. And we really, you know, have our investments in Ignite and Interconnect really to facilitate the sales of our data. You know, we don't really view it as a way that we deliver our data to market.

Ignite AI Advisor is to allow smaller customers to ingest more of our data by seeing the value in the scores and the lift they get by using not just credit data, but also alternative data and other data sources. So that's what it's intended to do. We are very excited about the fact that it's going to drive more data sales, that it isn't a licensing play. That isn't what we do.

Got it. Thanks, Benav. Thank you. Next question today is coming from Shlomo Rosenbaum from Steeple. Your line is now live.

Hi, good morning. Thank you for taking my questions. Mark, can you talk a little bit more about the work number indicator, and is there some way to quantify some of the market share gains? It really looks like a unique position that you guys can kind of wedge in there and gain some more share. So I'm wondering if there's some way to quantify, since you've rolled it out, where have you seen the share shift? You noted one large client last call, I think, in the mortgage space. But if you can talk about what's happened since then, and then if there have been any reaction with any of the unique data from the other bureaus that they've been putting for free aside their own credit reports, and then I have a follow-up.

You know, we think, obviously, we have a unique asset in the twin data set. by adding the twin indicator, we think it benefits both our credit file, but also benefits pull through of our twin data, you know, in the underwriting process, because the originator now knows that we have a record. So it's a benefit really on both sides. And we've seen really positive responses. You know, it's still early days, we really only only launched this in the second half of last year, and initially in mortgage. And as we talked in February, and again today, that's where we're seeing the most interest. And when you think about it, if you're a mortgage lender and then, as you know, we're rolling it out in auto cards and P loans, if you're underwriting a consumer, you typically for 20, 30 years have done that off the credit file, the credit score and credit data, but you are really invisible in that marketing process, the early stage in your funnel when you bring a consumer into your application process or pre-application process about whether they're working or not or what their income is. And, you know, number one, it's kind of binary if you're not employed, but you're applying that generally is going to be more challenging with credit. But if you're working and then dependent upon your income levels, your ability to pay, it allows the lender to give that consumer a larger loan at a lower interest rate and really drive approval rates, you know, and it really is getting the consumer into the right product. So it's a very unique solution that we have and one that we're super energized about. I think you can see in our mortgage results for the first quarter versus the underlying market, you can do the math. There's clearly some lift in there that we're seeing with share benefits in the prequal, and we attribute that to one of the factors for sure is the fact that we're offering the twin indicator there at no charge. I think I talked about on the February call that some of the early customers that are using that, we're seeing not only that they're using more of our credit file because it has that attribute with it, it's very valuable in that mortgage funnel, but we're also seeing a lift in some of the twin poles because they know we have a record and they're able to, you know, access that record later in the process when they're doing the VOE and VOI full verification versus the thinner, you know, set that we have in the twin indicators. So we're very energized about it. And then the feedback we're getting from the other financial services verticals is very positive. You know, obviously getting that kind of rich data, you know, for free, you know, is very valuable and a differentiator for us. And then beyond just the twin indicator, I think you know that we're also working to offer in the mortgage space our cell phone utility attributes in the mortgage file. You know, that's another very unique Equifax data set, one that only we have. It's got real scale. It covers most Americans. So it's got a lot of data in there. And we're adding those attributes to the mortgage file, really same basis at no charge, but to differentiate our mortgage credit file for share gains. So we're energized, but kind of, you know, I think to encapsulate it is early days, you know, meaning we're still in the – we just launched literally this week, you know, some of the solutions in card and for auto lenders. You know, so we're getting in that marketplace, but the response is very positive.

In the first quarter, a very meaningful part of that 24 points, excluding FICO, was share game, right? So it was a significant contributor.

Thank you. And then just as a follow-up, can you talk about where you are in terms of completing the cloud platform in the international markets?

Yeah, we finished the year a few months ago, 2025, at about 90% of our revenue in the new cloud. That's substantially all of the United States. As you know, that was our strategy. And what we have left to finish is Australia, a couple of Latin American countries, and a few other in India, so a few other pieces. And most of that will be complete this year. It's really a game changer for us to have the cloud behind us. You know, as I talked on my prepared comments, you know, having that cloud capabilities, our scale differentiated data, we're really purpose built now, you know, with the investments we've made to really activate our AI initiatives and our multi-data solution initiatives to really differentiate Equifax in the marketplace. And you're seeing that in our vitality index, you know, the 17% vitality in the quarter, you know, in the large pipeline we have of new products that we're planning to roll out, you know, like we just talked about Twin Indicator and really every financial services vertical, you know, that's really exciting and stuff we couldn't do before the cloud. So it's a really energizing time for us, you know, having the cloud at this stage and substantially behind us, particularly in our large, you know, and most profitable and even degenerating market in the United States. It's an exciting time. Thank you.

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

Great. Thanks, guys. I appreciate you taking the question. Just one for me. I wanted to touch on talent. You know, great to see you guys outperforming, you know, it's been a pretty tough hiring market, but I wanted to see if you guys could unpack a little bit what kind of the bigger drivers are. Obviously, it seems like records is helping a lot with, you know, hit rates and stuff, but, you know, maybe between like, whether it's records, price, you know, bigger package density, like longer background screens, just any more detail or color there would be really helpful for us?

Yeah, I think you've hit on it. Clearly, records are a real positive. And as you know, we had strong record growth again in the quarter, which is super attractive for all of our workforce solutions verticals. Chad and the team are doing a great job on continuing to expand our data set. We have price and their price is one of the elements. We took price up one one. So that's definitely benefiting all of our verticals in Equifax and AWS, including talent. We've got a bunch of new products that the team's rolling out so really a lot of innovation coming there and remember you know not only are we selling you know helping the background screeners by delivering that work history from our data set you know because we get the job title with every payroll record and we have that digital resume but increasingly we're delivering education data incarceration data you know and other data elements to the background screeners and then in different formats. You know, we're getting more sophisticated in delivering on our customers, you know, really requirements around the different job categories and what data is required. You know, in a white collar in your world financial services job, there's a lot of more history on job history and education history than there is in a blue collar job. So we're, we've rolled out, you know, some, you know, more blue collar, which think about it as a last job worked you know kind of solution versus the last five years of employment so just being uh you know more deliberate around having a suite of products to help our background screening customers great uh appreciate the color nice results thanks thank you next question today is coming from jason haas from wells fargo your line is now live hey good morning and thank you for taking my questions um i'm curious why did the uh government uh verification business decline quarter over quarter I think historically you typically see like that revenue go up from 4Q to 1Q and then I sort of question just on 2Q why is that flat year over year just because historically on that that typically increases also from 1Q to 2Q yeah so it went up in 1Q we shared that earlier so we had a very strong quarter and we're very pleased with the momentum not only in the quarter but in particular more the long-term pipeline which we shared was up kind of 2x year over year. Second quarter, as we talked about in our prepared comments in one of the earlier questions, is we got a tough comp because we had a large win last year with SSA that we're comping that activated in April of last year. So that's a tougher comp, which is really driving the performance in the second quarter.

Yeah. And seasonally, we're expecting to see revenue up in the second quarter versus the first, which is not unusual, right? Fourth versus first. I don't think there's really anything unusual in the trends that we saw this you. Okay.

I thought that SSA contract, was that like a one-time benefit? I thought that that launched in 2Q, but then that becomes an ongoing benefit.

It does, but we're comping against it because it was a new contract in 2Q. And as you point out, it does go on in the future beyond 2026, but the comp is one we have to overcome, and it was a big contract.

Okay. Okay. That's fair. And then just on the margins were really strong for EWS. The guidance now implies it looks like they're going to be down in the rest of the year. So, yeah, what drove the beat and why does that not continue going forward?

Yeah, and I hope you saw that Equifax margins were also quite strong in the quarter. And as you know, we've got a guide for 75 basis points of margin expansion for the year, which is, you know, well above our 50 basis point long-term framework. So, you know, we feel really good, you know, about the operating leverage. For EWS in particular, you know, they had a very strong first quarter. And then that operating leverage, you know, flowed through. And that's why we're still investing heavily in EWS. You know, it's our, you know, fastest growing business. over the long term and, you know, we're continuing to invest in the government vertical. We're investing, Chad's investing in a bunch of new products and we're also investing in, you know, capabilities and record additions. So it's one that we're continuing to invest in the business and, you know, you just had the strong operating leverage flow through.

Okay. All right. Great. Thank you.

Thank you. Next question is coming from Ashish Sabhadra from RBC Capital Market. Your line is now live.

Thanks for taking my question. So CMS recently launched ME and income verification tool. How is this expected to change any competitive landscape for the government verification services? Thanks.

Yeah, I think it's still early days on that solution. It's one that, you know, we think we can be complementary with. As you know, our scale data set provides an instant verification. It has large coverage. It provides a lot of productivity for the caseworkers at the state level, you know, we think that their solution looks a lot like our complete income. Obviously, it's not integrated in there to go after either records we don't have or to go after some of the gig income that we may not have in our data set. But we think it's our data set is just so much more comprehensive and instantly available. We think there's a, you know, still a large position for us to continue to grow with CMS. And then you add to some of the new requirements with OB-3 on work requirements, education requirements, or volunteering requirements. We're rolling out a solution that will really deliver those capabilities, but it's going to be integrated with our core twin data set income offering that we think will be quite beneficial for the Medicaid, Medicare verifications.

And it would just be another distribution channel for us. Obviously, we'll make sure our customers can get to our data in the way they want to. Yep.

That's very helpful, Keller. And if I can ask a question around Agent TKI, one of the concerns that we've heard is Agent TKI could potentially displace manual verification. And just given that manual verification is one of the key competition in your verification business, how does one of the questions that we get is how does the technology shift, if any, Equifax, again, positioning in the verification business? Thanks.

Yeah, we think it's pretty hard because, as you know that's all proprietary data you're talking about income and employment data is you know proprietary in our data set and it's all you know permissioned by permissible purpose because the fair credit recording act solution and then you know the contributors we have almost five million companies now contributing data to us every pay period it's proprietary in their data set or with their payroll processor hr software company so it has to be consumer permission there's a lot of friction with that. We don't see how AI can really facilitate that consumer permissioning to access that data because the data is not available anywhere in the World Wide Web. It's all in proprietary housed environments, including workforce solutions at Equifax. So we just don't see that as a threat, which is really part of that AI data moat that we highlighted in one of the charts in our deck this morning, and we did it again in February, that, you know, the work number as well as our credit data and our other data sets, you know, really are quite unique because AI can't access them. Only Equifax AI can access them. Or, you know, when we deliver it to our customers in a permission basis, they can access it, but it's just not available on the World Wide Web.

Thank you. Next question today is coming from Faisal Ali from Deutsche Bank, your line is now live.

Yes. Hi. Thank you. First, I just wanted to clarify on the government business. I think you said earlier in the call that you expect sort of second quarter revenue to be flat versus first quarter. And then I think you just said in response to a question that you expected to be up. So maybe if you could just put a final point.

No, I did not say that. No, my intention was to say it was, you know, we had a strong first quarter, which we were pleased with. We also talked about our pipelines, which when we think about pipelines, you think about later in the year in 2027. That's generally how the kind of deal cycle is in government. It's longer term. But we did say that we expect the second quarter to be flattish because of the tough comp versus last year.

Got it. And then just to put a finer point on the year, I think previously, we were expecting that you can grow sort of in line with your long-term growth rate for EWS this year, which is up 13 to 15 percent. Do you think that, you know, we sort of do that this year, or is that more, are you expecting more of that benefit in 2027?

Well, to be clear, we had only provided guidance for EWS and verification services in total, right? And EWS and the verification services guidance were not, they were below the long-term framework. We think they were very good and nice growth from 2025, right? But no, they weren't at the long-term framework yet, right? Part of it due to mortgage, part of it due to other factors like weaker hiring markets. So I think what Mark covered in his remarks and already is that our expectation is we're going to continue to see improved performance in government as we move through this year, but that the major opportunities that we have regarding the new programs that were passed by the government, et cetera, that Mark covered in detail, we expect that really to start benefiting us in 2027.

Understood. Understood. Makes sense. And then I just wanted to ask, have you seen any impact on mortgage volumes from the trigger lead legislation? I think, John, you'd previously said that, you know, it might, you might shift more towards hard inquiry. So just curious if there's been any impact on overall volumes or any kind of shifts that we should not yet.

Not yet. Now, admittedly, it's very new in the quarter, right? So not yet. And And I think our guidance doesn't assume much in the second quarter will occur either.

Our next question today is coming from Kevin McVeigh from UBS. Your mind is now live.

Thanks so much. I guess, obviously, the big focus is on mortgage. But I wonder if you had any thoughts as to how the Advantage score could impact auto, consumer, and some of the other areas from a kind of share perspective and then just from a regulatory perspective as well.

Yeah, I think it's a great question. As you know, there's already large penetration in non-mortgage or diversified markets. You've got large lenders that have been using Vantage for many years. Number one, because of the performance of the score, you know, is more predictive because it includes more data, you know, than the current Vantage Classic score. Vantage 10T will close some of that gap, but, you know, it has a performance element. And then there's just a cost element. You know, it's a it's a less expensive score. You know, we charge much less than FICO does over there. I think the other element that we think about is that if you're not a monoline and you're a financial institution that's doing mortgage, auto card, P-loan, or doing multiple products, you're likely going to be incented to move your mortgage volume over because of that significant cost savings and the fact that an agency mortgage, if it's approved, they're going to take that loan and take it into the pools that they purchased from the mortgage originators. But if you're using Vantage and mortgage, you're likely going to use Vantage with the rest of your portfolio. And, you know, we see the same opportunities, you know, over the medium and long term, you know, to drive more Vantage adoption, you know, in the diversified markets or non-mortgage spaces. And there already is a lot of adoption there. There's, as I said, large lenders that are entirely vantage outside of mortgage because, as you know, there's no regulatory requirement in non-mortgage. There only was in the mortgage space by the agencies that required the FICO score up until last July for 25-plus years. So we see it as an opportunity for sure.

That's helpful. And then just from a pricing perspective, I know you adjusted the Vantage score pricing for mortgage. Any thoughts around auto?

We're going to offer the Vantage score. We're already in the market doing that at a discount to FICO. Again, we sell the credit file plus the score. When we sell the FICO score in mortgage or auto or any other market, we don't make any margin on that score sale. When we sell Vantage, we make some margin on it. So, you know, we're obviously incented to deliver that, you know, to our customers. And we see that as an opportunity going forward. Obviously, you know, much smaller given the, you know, significant $10 price, you know, in mortgage versus it's, you know, much less the FICO score in auto cards and P-loans. But there's, you know, still a performance and a, you know, margin opportunity for our customers. So, you know, we're certainly going to take advantage of that. And I think, as you know, you know, last summer we rolled out the free Vantage score with every paid FICO score, not only in mortgage, but also in diversified markets or non-mortgage. You know, so we've got lenders that are taking, that are using FICO, that are taking Vantage, you know, to make sure they understand it and understand the performance and, you know, evaluate it. So, as I said a couple of times, we see that as an opportunity going forward.

Thank you. Our next question today is coming from Curtis Nagle from Bank of America.

Your line is now live. uh terrific thanks very much um so maybe just sticking on the subject of vantage um possible if you could provide a little more detail and i think you said 50 words lenders are currently in production with vantage um i guess just confirm you know so i think these are non-gse mortgages correct are they being underwritten are they being held on the books securitized any sense of kind of the notionals just trying to get a size of sort of where things sit you know before we get kind of full acceptance with GSEs?

Yeah, these are admittedly smaller lenders, but they're lenders that a year ago were not using Vantage in the mortgage space. They're non-GSEs, as you point out. They're some of the other federal agencies that don't fall under FHFA as well as other lenders. And it's just reassuring to us to see that they're taking these loans, In many cases, balance sheeting them, but, you know, see the power and the performance of the Vantage score and obviously the cost opportunity of, you know, buying it at a lower price than, you know, what FICO is currently charging. And, you know, we see that as another indicator that the industry is going to be ready. I think a more powerful one is the 240, you know, GSE lenders. You know, many of them also have some element of balance sheet for the non-agency loans or securitizations on their own. But the fact that they're taking the Vantage score, ingesting it in their system, and, you know, obviously we talk to them all the time. There's a lot of interest, you know, around, you know, using Vantage, you know, once it gets activated, you know, by the agencies.

And for lenders that are non-GSE and are exclusively non-GSE, we think the share of Vantage is very high, right? So where the opportunity exists, the movement has occurred. The volumes are very low, but the share is very high.

Okay, understood. And then maybe just a quick one just on, I think you at least at a high level pointed out some cost productivity from AI. Maybe just a little more detail. Is that some, I guess, output of higher throughput? Is it raw expense takeouts, some combination of the two, something else? Just any more detail there would be helpful.

Yeah, so maybe I'll be a little broader on it. You know, obviously, we were pleased with our margin expansion ex-FICO in the quarter. And we're also pleased, and I hope you are, too, with our guide for the year to be up 75 basis points. You know, you think about that as being, you know, the first big piece there is operating leverage. You know, having our strong revenue growth, you know, that, you know, is at the kind of higher end of our long-term framework, you know, delivers that incremental margin. So that's a positive. You know, we also have in the quarter, you know, which was substantially higher than our guide in the first quarter, you had that mortgage, you know, lift that we had kind of in the middle of the month before rates went up, you know, that kind of passed through and went through to the bottom line. I think that, you know, is indicative of, you know, when, you know, mortgage markets recover, you know, we've been very clear with you that margin is going to drop through and you certainly saw it drop through in the first quarter. And then last, as you point out, you know, we're really getting some traction, and I would characterize it as still early days, meaning the runway we have around deploying AI across our operations inside of Equifax. We call it AI for EFX. Operations, you know, think about call centers and our paper processing centers is kind of the first frontier there. We're making a bunch of progress of using agents to start taking, you know, calls from consumers, using agents and AI to process the, you know, hundreds of thousands of paper documents we get every month, you know, from consumers here in the United States and around the world. You know, there's a lot of productivity there. And then, you know, we see productivity opportunities going forward in technology where we have a large, you know, workforce. We're seeing, you know, real momentum around using some of the AI tools to do coding, which we're very energized about, you know, is the opportunity of that going forward. And then broadly in our, you know, kind of support teams, whether it's finance, HR, legal, you know, all of the support teams are deploying AI to increase their efficiency. So, you know, I would expect, you know, kind of AI-driven productivity to be, you know, a multi-year lever for Equifax, you know, going forward. And I think it is going to be for all companies. You know, we all read about it, but, you know, it's really real. And the acceleration of tools, you know, that we're using things today that we weren't using 6, 9, 12 months ago, you know, inside of Equifax, you know, to drive our speed, efficiencies, and accuracy. So it's really exciting. So I think those three together, you know, are really what's driving, you know, our above long-term framework margin expansion for the year. And, you know, we're very pleased with that, you know, kind of operating leverage. And then obviously it generates, you know, incremental free cash flow that we can return to shareholders or use for both on M&A.

Thank you. Next question today is coming from Syringer Thin from Jeffries. Your line is now live.

Thank you. John, can you maybe talk about just the hard inquiries versus the overall mortgage originations? Thinking about it from a lender behavior perspective, just any changes that you're seeing in hard versus soft, and what the implications this is from a revenue perspective here?

Is just more usage of soft equals less revenue, or how should we think about the pending changes here around reporting? i think what we've seen over the past several years right is a significant acceleration in the use of soft early in the mortgage process to give lenders a better view in terms of who they're who they're working with who who are who are submitting the applications or who are they marketing to right so i think it's both there has been some shift of activity from hard to soft that's certainly true but there's also been an expansion of opportunity as lenders utilize these lower cost soft pulls in order to get a better view of how they want to sell and market in the business. So overall, what we think has happened is you're just, you have seen more activity over the time period if you combine hard and soft together, right? Also, we think what has happened is that hard inquiries, therefore, have become less indicative of just the trend that's occurring in originations, as we mentioned in the prepared remarks, right? So that's why we're going to start sharing with you the origination data that we have from the credit file. Yes, it's a little bit in arrears, but we think it's very valuable information that we can share. And we'll continue to guide as we go forward based on our expectation on annual origination volume for the industry so we can get a perspective on what our expectation is for the year.

Got it. And just to clarify, is the idea here that we're going to continue to see the mix shift changes or are we kind of approaching some point of stabilization?

I think we're going to continue to see some, we're going to continue to see changes in the mortgage industry based on the new products we launch, right? So, and we're continuing to see that occur. So, for example, we're very excited about the growth that we're seeing in our soft polls based on Twin Indicator and the other data we're providing, right? So, we're continuing to offer richer products on the front end, which drive more volume. Exactly how the market shifts as we go forward, I think we're going to see together. But at this point in time, what we're seeing is we're seeing ourselves drive more growth in soft as we believe we're taking share by offering more value on the front end.

Got it. And then as a follow-up, on the whole Advantage Score FHFA debate, I mean, when we think about, like, do lenders actually care about the performance of the credit scoring model as the current, you know, the market system works, meaning that I feel like the debate has been VS4 versus classic FICO, but I also think there's 10T in the mix. And, you know, the preliminary data suggests that there may be differences in performance model and which would, you know, be perhaps another consideration in addition to price here. Like, how do we think about that?

Yeah, I think it's a great question. I think broadly, lenders will use scores that are approved by the agencies. You have to. So I think you've got to start with that. And remember that the lenders are broadly originating the loan and then selling it to the government. So they want to follow the specifications that they have. But I would make sure that we both think about, and we do too is that in that mortgage prequal and application process you know if you've got a mortgage score or data that's going to allow you to either approve more customers or put the customers the consumer the homeowner the future homeowner you know in the right loan because there's more data and in the case of you know vantage 4.0 there's just more data used in that score. So it should allow for a more accurate picture on that consumer. And then, you know, we believe allow them to originate more, which is a good thing, and put them in the right loans. Because, you know, what you don't want to do is have someone going through the application process and then they get disappointed because either they have to have a higher down payment or the interest rate's higher than they think, you know, because of, you know, not having as much data information. But, you know, so I think both are true. And, you know, from our perspective, you know, I think it's broadly recognized, although some maybe would disagree with this, but, you know, Vantage 4.0, you know, is a score that, you know, has more data in it than FICO Classic. I think 10T closes that gap once it's rolled out, you know, to Vantage 4.0. But, you know, what's approved by the agencies is what the originators are going to use, and that's what's important. And I think we're all, I don't think there's a debate. I think we're all just waiting for, you know, when will the agencies be ready to accept the Vantage score? And we just think we're getting closer to that stage. And again, from an Equifax perspective, you know, we're advantaged either way. You know, our guide for 2026, you know, assumes no Vantage conversion. We've laid out for you what the upside is if there is Vantage conversion. You know, it's only upside. And, you know, there's really not a downside to Equifax because, you know, both of these scores are calculated using our credit data and you can't calculate the score without the credit data. So it's, you know, we think we're well positioned going forward and we're trying to be responsive to our customers, you know, by offering the Vantage score that delivers performance and certainly significant, significant economic value with, you know, a dollar versus 10.

Thank you. Next question is coming from Andrew Nicholas from William Blair. Your line is now live.

Hi, good morning. Just one question for me on maybe the AI front. You talked about operating efficiency from AI, product funnels, development life cycles, patent generation, all the benefits you're seeing in the way that you use the technology. Could you speak more to how clients are interacting with you and the data differently, if at all? Are you seeing any changes in usage patterns or evolution in how often clients are interacting or wanting to interact with your data? Any insights there would be great. Thank you.

Yeah, so I think there's long been a macro, and we're still in that macro, about our customers want more data. They want more alternative data they want more differentiated data and you know that's one that's you know a macro that's still in my opinion in early innings meaning you know there are large lenders that only use the credit file today and aren't using alternative data you know and they know that they're going to get a lift with alternative data what AI is allowing us to do and again Equifax has more alternative data than our competitors which we think is an advantage for Equifax in an AI world because it allows you to really ingest that differentiated and additional data that's going to drive a more predictive or higher performing, you know, solution for either underwriting or identity or whatever the process is. So, you know, we're super energized around, you know, number one, having the cloud substantially complete. You know, we put all our data in a single data fabric. We've got large scale differentiated data that's proprietary you know we have an ai mode around it and now we're really investing in delivering that data to our customers either the individual data sets or for lots of customers scores and models that incorporate more data in it i mean you can't do that without the explainable ai that as you point out we've been investing in you know from a technology standpoint and you know with our patents you know around the ability to deliver that uh you know explainable ai that you know, our customers require for their regulators and for their own internal processes and the Fair Credit Reporting Act requires. So, you know, really both of those become another, you know, area that is an important differentiator, you know, in our space and for Equifax to make sure we're delivering solutions that, you know, have that higher performance. And AI is, we're really seeing a lot of momentum there. I think we pointed out that 100% of our scores last year We're using our AI capabilities, and that means higher performance. Our products now, we're increasingly using AI, and, you know, we talked about some of our, you know, platforms that are having, you know, conversational AI so our customers can use them more readily inside of their operations. So, you know, it's still very much early innings between the ability to deliver more differentiated data to our customers and then the ability to do that with AI.

Understood. Thank you.

Thank you. Next question today is coming from Scott Wurzel from Wolf Research. Your line is now live.

Hey, thanks, guys. Just one from me. You know, we've been getting a lot more questions around just the whole kind of try-merge-to-buy-merge dynamic and the potential of that move taking place, I guess, given some of the rhetoric we've heard from industry participants. So I'm just kind of wondering what, you know, if there's anything you guys have heard from, whether it's your conversations with regulators or other industry participants just around that whole, you know, dynamic and the potential for that.

Yeah, our conversations are quite broad that it's well understood that there's large enough differences between the three credit files that a tri-merge provides performance, you know, and meaning it includes more people, provides a more complete picture. If you think about it, you know, most consumers have, you know, multiple bank accounts. Not every bank will contribute to all three credit bureaus. And we've shared stats before. There's 10 million roughly consumers. They're only on one credit bureau. So if you're pulling one or two, you're never going to approve or even see that. And then if you ever look at your credit score between the three credit bureaus, it's going to be different by 30, 40, 50 points. And that's because, you know, not every bank contributes to all. So our view is that there's broad understanding that, you know, the TriMerge delivers both access to credit, meaning having a more complete picture on the consumers. And it also delivers the same in safety and soundness, meaning you're seeing every trade line that a consumer has, both the good and the bad trade line. So you've got a complete picture. So, you know, we think that there's, you know, broad support on the Hill with the regulators and with our customers about the power of tri-merge. And I think I've shared before on other calls, you know, if you look at the more sophisticated, in my opinion, lenders outside of mortgage, think about cards or others. You know, there's many that pull a tri-merge because they get a more complete picture about the consumer for approvals, meaning they can approve more. And they see all the trade lines, so they make sure that they're managing their losses and they're not missing a trade line that might be a negative trade line, you know, in one of the bureaus if they're only pulling a 1 or 2B. So we think there's a lot of support for it.

Thanks, guys.

Next question is coming from Ryan Griffin from BMO Capital Markets. Your line is now live.

Thank you so much. I was just wondering what percentage of your volumes are soft versus hard pull. And I was wondering where you see that mix evolving over time with some of the new products benefiting in prequel.

Yeah, so we don't specifically disclose soft versus hard. And I think what we've indicated is over the last several years, what we've seen is soft pull has obviously grown meaningfully as a percentage of total pulls.

And I would point you to our revenue is quite strong, you know, in hard and soft pulls, which we were very pleased with.

Appreciate it. And then just on the lenders onboarded thus far, testing the Vantage score, I was wondering if you could give any information on that group in terms of the customer size or type of lending institution, whether it's banks or independent mortgage brokers.

All of the above. You know, 240 is a lot and includes, you know, smaller ones, but a lot of the big ones. So it's, you know, broadly, you know, our customers understand, you know, how Vantage operates. They understand that it's a performing score. They understand that, you know, Fannie and Freddie are going to activate it. You know, it's just a matter of time. It feels like we're getting closer. And then they also understand the cost advantage, you know, which is significant to them. And remember, you know, one in eight, one in nine, one in seven loans close. The others don't, you know, and that's breakage for the mortgage lenders, you know, and at a dollar of breakage versus $10 times three, you know, it's a significant cost savings. as you know it's been quantified you know for the industry it's over a billion dollars of cost saves you know by moving to Vantage so that gets the attention of the lenders.

Thank you. Our next question is coming from Kelsey Zhu from Otomless Research. Your line is now live.

Hi, good morning. Thanks for taking that question. Could you maybe talk a little bit more about your expectation around Vantage score market share gains and future pricing policy and the mortgage vertical over the medium term? Thanks a lot.

Yeah, it's hard to put numbers. I don't know how far medium term is, but let's say over the next couple of years, you know, in my opinion, I think in our opinion, you know, once Vantage is activated by the agencies, there'll be adoption and that'll be positive for Equifax. You know, it's not in our guide. So that'll be incremental margin. Our revenue will go down because we're selling a $1 score versus a $10 score, but our margins will go up because we're going to make a buck instead of making a zero. You know, and over the medium term, you know, I think there's going to be substantial conversion. You know, why would a lender, you know, if the agencies are approving Vantage, why would they pay $10 versus a dollar? You know, it's one that's, you know, kind of common sense. You know, as far as pricing, you know, we're going to be, you know, certainly intended to be very competitive. I think the dollar reflects that. you know, versus the current FICO pricing. I don't think any of us know what FICO is intending to do, you know, in January of 2027, which is not that far away, you know, whether their price is going to go up, down or sideways. But, you know, we're going to be, you know, very competitive going forward. And, you know, we don't need a lot of price to deliver our long-term framework. That's not how we operate. You know, we're multifaceted in our ability to, you know, grow our business price is one element but uh more important for us is you know share gains uh you know new product rollouts in the case of workforce solutions record additions uh you know new verticals that we're penetrating you know we've got multiple levers uh you know for growth and you know in the case of vantage it's really going to be a margin opportunity for us um you know to grow our uh grow our margins going forward got it thanks a lot um second question was wondering I'm wondering if you can talk a little bit more about your outlook for volume growth across car, auto, personal loans for the rest of the year.

Thanks a lot.

So, again, I think we gave guide for our diversified markets for the second quarter. We gave some perspective on the full year, and I think that's kind of consistent. But really not a lot of change. But not a lot of change, right? It's pretty consistent across the rest of the year.

The consumer is still, you know, broadly resilient. You know, delinquencies are still managed well. Our customers are strong. you know, meaning the financial institutions. You know, I think one variable is how long does this, you know, conflict, you know, go on in the Middle East? And what is the impact on oil prices? What's the impact on inflation? What's the impact on consumer spending? And does that impact, you know, financial services? You know, that's hard to handicap how long this is going to go. I think we all hope it gets resolved, you know, fairly quickly. And the markets seem to reflect that kind of bias. And I think you heard last week and to a lesser degree this week from the large banks reporting that they're having good originations and managing their delinquencies broadly quite So I think that's a good outlook for us in FI when you look through the rest of the year.

Our next question is coming from Craig Cuba from Cuba Research Partners. Your line is now live.

Good morning. Thank you for taking the question. I think few people could probably blame you guys for not raising your guidance after the very strong first quarter, just given the macro issues out there. But my very specific question is, in the month of March, with this war starting, this Iran war starting at the end of February, is there any areas in your business that you saw material movement down in the revenue growth rates, given this Iran war that you can attribute it to? Anywhere else, though, can you talk about?

It was meaningfully mortgage, for sure. Meaning mortgage, we saw an uptick kind of in the middle of the quarter as rates came down before the Middle East conflict started. And then we saw, I think, a combination of rate increases and probably consumer psyche about something like that happening in the Middle East, things, mortgage slow. We talked about, we saw, you know, a little bit, you know, an auto slowdown, you know, from probably higher rates. There's also the higher prices of cars, you know, from, you know, the flow through of tariffs and other impacts. But, you know, we shared earlier that, you know, where mortgage is kind of running over the last, you know, four, five, six weeks is, you know, kind of back down in line with our February guidance for the year. You know, so that's why we, you know, slightly below that, actually, but that's why we held the year. And, you know, you know, we're hopeful that if the conflict gets resolved and, you know, inflation comes down from the oil impact that, you know, there'll be some, you know, rate reduction. And John pointed out, and, you know, I hope you saw that, you know, the significant, you know, I would call it pipeline, you know, of mortgages at these higher rates that continues to build, you know, because mortgage hasn't stopped. But you've got, you know, a large pipeline or portfolio of, you know, consumers that have mortgages at these higher rates of five, five and a half and over six, you know, that will be ready for a refi, you know, as soon as rates tick down, you know, 25 basis points, 30 basis points, 50 basis points, that creates, you know, an opportunity for a refi that's going to be good news for us when that happens. And again, we saw, you know, a small piece of that in the middle of the quarter.

My follow-up question, if I could, on the securitization market for mortgages, how important is that market there? Any feedback there, et cetera, for getting VantageScore up and rolling and moving along here with market share gains on mortgages?

We don't see it as a real event because, you know, there's a lot of securitization that's done in the non-mortgage space, you know, in auto and cards. There's large lenders that are, you know, exclusively vantaged that have been securitizing, you know, auto portfolios and card portfolios for years, you know, five years, six years, seven years. So it's well understood. We don't think it has an impact. You know, it's really more getting the agencies to get their technology and their pricing tables set up to take in that vantage score. And, you know, the indications we're getting is that they're getting, you know, close to being ready for that.

Great. Thank you. Thank you. Next question is coming from Zachary Gunn from FT Partners. Your line is now live.

This is Zach Blatchich on for Zachary Gunn. Just a couple of questions on employer. Since the macro is causing some deceleration there, can you just talk about the underlying trends we're seeing? You know, is it just the tax credit legislation? Are there other factors, you know, maybe between blue collar versus white collar, maybe geographically?

No, the employer, the big impact is the Work Opportunity Tax Credit or WOTC, you know, not being expiring and not being approved. I think, you know, we're we and lots of others are lobbying to get that, you know, through Congress. You know, there's, I think, broad support to do it because it promotes, you know, the employment of, you know, certain individuals that, you know, really benefit from that. And just as a reminder, we're continuing to process the WOTC applications, even though they're not being accepted for the tax credit, meaning that we're building a pipeline when it does get activated. And it's hard to handicap when that's going to happen, but that's a meaningful impact in that vertical employer because it's a larger business for them that we're not able to generate any revenue today. But we're building a pipeline, you know, once it does get activated to, you know, submit those WOTC applications, you know, for approval.

Our next question today is coming from Owen Lau from ClearStreet. Your line is now live.

Hey, good morning. Thank you for squeezing me in. I just have a quick clarification on that $35 million margin upside from Vendee score conversion. Could you please talk about the assumption behind how can we get to this math by $35 million and the margin profile of any score at $1 per score? Thanks.

Yeah, the margin profile on a dollar is 100% margin. Think about it that way. It's zero with our FICO score, and it's really just taking that dollar times current mortgage activity, and the $35 million assumes full adoption at today's run rate of mortgage transactions. obviously, if the mortgage market improves, that becomes a bigger number. Would you add anything, John?

No, it's just based on our, it's adoption at our 2026 guidance for the mortgage market, right? It's just consistent with our guidance. If there was no FICO and 100% vantage, that's how you get to the $35 million.

And again, just to re-clarify, our guide for the year assumes 100% FICO delivery and no vantage conversion. So this is an upside for us.

And again, if there is fico to vantage conversion our revenue would come down but our margins would go up you know by that run rate of 35 million got it so that conversion is 100 conversion from zero time correct and advantage correct thanks a lot thank you next question is coming from simon clinch from wolf traveling company red burner line is now live hi uh thanks for taking my question um just wanted to change uh subject a little bit and just going back to uh the discussion you had on consumer permissioning within the verification business I know that the current friction we have with consumer permissions I think that the consumer just has to put in their own offer their login details and passwords and obviously that creates a huge amount of friction in the whole process is there a world in which the the requirement actually input passwords and login details goes away where just actually giving permission allows access to that data uh via those um uh by those providers um just curious about your thoughts around that kind of the legal pathway to that kind of um thanks yeah it's hard to see that happening i don't know where they would i think you're assuming you're going down the path of like an ai agent somehow would have to get access to that user id and password you know from that individual consumer because they're

all individualized you know by every individual for every account they have you know and everyone's got, you know, lots of accounts. So it's hard to see that happening. What we see in consumer fishing, and we participate in it, is that there's a lot of friction with it. And our customers typically don't want to use it because in a application process, too many consumers drop out when they're asked to do more, you know, meaning they want a friction-free, very, you know, smooth process, which means instant decisioning. And you can't do instant decisioning with consumer permission. So there's a place for it. And that's why we've rolled out our complete income solution for government. And we've had some wins in the government space where that consumer is willing to invest the time. I think that's where you really get to. And as far as the AI element, it's hard to see.

Okay. That's helpful. Thanks. And just one quick follow-up, really from a sort of technical perspective here. When you talk about your ex-FICO revenue growth, how are the how are your reseller revenues treated and now are you stripping the FICO revenues out all the way through a group as well all the way all the way through that includes the FICO revenues from the the resold FICO's from the other bureaus within that we have a tri-merge business This really assumed the Equifax piece.

So what we assume is any revenue that we pay to FICO or any revenue that would be paid to FICO by Experian and TransUnion is effectively passed through to us by the price that they charge us, right? So this is to try to cover as best we can all of the FICO score revenue that we're paying. yeah either directly or indirectly okay that's that's great that really fills it up thank you very much thank you thank you our final question today is coming from Arthur Cruz love from city your line is now live sorry Arthur can you get closer to the phone we can't hear you no Ricky it's a little better There you go.

Try that.

You obviously mentioned earlier that AI is contributing to your margin development, and that's very positive. Obviously, your mid-term margin guide has always been 50 bips since I've been involved covering the stock. I guess my question would be, in what sort of set of circumstances could you see that mid-term margin guide being bumped up to 75 or 100 basis points? So I just wonder what might bring that about.

Yeah, it's a fair question. We're obviously pleased with our guide for the year and super pleased with our performance in the quarter. And as you know, the margin expansion really has two big levers. One is the core operating leverage from the business and the strong top line growth with the operating leverage you get from that generates some of that margin lift, which is directionally that 50 basis points with our long-term framework for revenue growth. And if we're able to grow revenue faster, that's going to be attractive for us as far as operating leverage. On the AI side, it's kind of early days. We're only months into this as far as deploying it. And I think as we get further into it, we see some of the further benefits in operations, which think about that as our call centers and operation centers, which are quite substantial. As I mentioned earlier, as we start getting into the technology side and our ability to use AI to really accelerate our coding capabilities, which we're seeing some early progress there. I think as that unfolds and then across the rest of the organization, we see some of the benefits. We'll certainly at the right time take a look at our long-term margin goal. Today, we feel very comfortable with the 50 BIPs. We're very pleased with our outperformance guide for 2026, and it's 75 BIPs, and then we'll certainly look at it in the future as we get further into the AI journey. Thank you.

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

Yep. Thank you for everybody's time today. If you have any follow-up questions, please reach out to Molly and I. Thank you, and have a good day.

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