Equifax Inc (EFX) September 2026 Conference Transcript

All right. Good afternoon, everybody. Thank you for being here at day one of our 24th Annual Financials Conference. My name is Manifet Naik. I cover business and information services with Barclays. We're happy to kick off the afternoon session here with Equifax. We have Mark Bigore, CEO, and John Gamble, CFO. So, Mark and John, thank you for being here. Thanks for having me.

Thank you. Two weeks in a row we're with you.

Yeah, that's right. It's always a good time, a lot of information to digest. Maybe just high level, let's just start off with the state of the consumer, you know, from the data that you're seeing. I think resiliency was a word you had used last week as well. But there are also concerns, you know, with oil, you know, the gas is not cheap, you know, rates. Gas, diesel, fuel. So, like, how do you balance this for the rest of the year?

Yeah, so we should probably separate what's happening in the mortgage market related to higher rates, Obviously, where the 10-year went, it touched five today. That's going to push mortgage rates up at seven or north, and that's clearly having an impact on mortgage activity, particularly in refis, but also on the purchase side. Your question is more around the consumer, which I always think about, and I think it's a great indicator. If consumers are working, which they are, unemployment is low, which is very good. Employment is very high. That's always a good environment, you know, for the consumer. They have the capacity to repay, and that means our customers, you know, are still out there originating. And I don't see a change in that. Clearly, at the lower end, and you can go into kind of mid-market, as you point out, inflation, particularly with fuel, is having pressure. That lower-end subprime consumer has been challenged for quite some time. You know, really post-COVID, there's been an inflation that's been higher than anyone would like, which has clearly pressured that demographic. That is one where the subprime lenders two years ago kind of reset some of their originations, but it's fairly normal now. Clearly, you know, with where inflation is, it's not good. You know, it's not helpful for the economy. It's not helpful for interest rates. But, you know, broadly with the consumer working, I think we're in good shape. The other side is that our customers are still strong. Whether it's a bank or a financial institution or a fintech, they have strong balance sheets. They're managing themselves well. I think they're operating at a fairly strong level. They're obviously still originating, as they would. That's what their business is. And we haven't seen any change of our customers changing cutoff scores, pulling back around thinking there's a change coming in the economy. Now, mortgage, clearly, you know, with where rates are now, that's more challenging. You know, that's one where, you know, we started the year expecting, you know, a slightly down mortgage market. When we got to July, it was getting a little bit weaker through this first quarter and second quarter, and clearly that adds some pressure with where rates are now.

Got it. And, John, maybe if you could remind us in the context of the guide that's there for the rest of the year, like, you know, mortgage rates have gone higher from the last time you spoke, gas prices, is it still within the context of your guidance ranges that you had assumed?

Well, guidance we gave in July is kind of as Mark indicated, right, that we were expecting to see overall we're going to see a decline in the mortgage market in terms of originations, right? But obviously we haven't updated our guidance since then, but obviously you've seen rates move up meaningfully since when we gave guidance in July, right? So that'll be, and we've seen that impact on transaction volumes in the market over the last, certainly over the last month. Got it.

But maybe a little bit of a longer-term picture on mortgage. You know, I mean, we've been waiting for this recovery. It hasn't come. It sounds like it's at least delayed for the foreseeable future. Can you meet your long-term guidance targets on the top line without a mortgage recovery?

Yeah, I think we're all, you know, mortgages down in the zip code of 50% from historic levels, mortgage activity. The good news is that even at these lower levels, there's still mortgage transactions happening. You know, so we're building, you know, what I would call a population or a backlog of higher interest rate mortgages when there is, when inflation does come under control, when rates do come down some, you know, there's going to be a tailwind, you know, from mortgage activity. And, you know, we saw that, you may remember, pre the war in the Middle East, we saw that in the kind of the March timeframe, rates came down slightly, we saw an uptick in refis. It only takes about a quarter point. And John, there's what, 15 million mortgages now above 6 percent. And there's almost 10. Right. Over six and a half. Right. So there's a there's a large population out there. And, you know, obviously, we'll see what the Fed's going to do, you know, on Wednesday. You know, but I think the expectation is, you know, clearly the 10 years moved up, expecting the Fed is going to do a rate increase. But at some point, the war's got to get resolved. At some point, inflation from really fuel and oil should come under control. You know, there should be an opportunity for rates to come down. We've been very clear that when there is a mortgage market recovery, it's all going to flow through to shareholders. And we've sized that, that it kind of today's levels a normal mortgage market when it comes. And as you point out, it's harder to see today with where the tenure is. But at some point, whether it's 27 or 28, there's a billion-plus of incremental revenue available at Equifax and very high incremental margins, so I think 700 million-plus of incremental margins. And that will flow through to our bottom line. That'll flow through really to EPS, to dividend increase, and to buyback, that excess free cash flow. So to your question about do we deliver our long-term framework, you know, in a flat mortgage market, and the answer is yeah. You know, we've been very clear about that. You know, we have a long-term framework to grow 7% to 10%. That includes a couple of points of GDP, you know, so think about normal increases in economic activity across all of our verticals. We have a lot of confidence in our ability to deliver that 7 to 10 in a, you know, call it a flattish mortgage market, which we haven't seen in a long time. You know, it's been on the other side. It's been declining really since COVID as rates continue to continue to move up now with the impact, you know, from the war. So we have a lot of confidence in that. With that comes 50 basis points of operating leverage in our margin expansion, which we think is quite powerful, very high cash conversion. And then our capital allocation plan that we put in place a year ago is our intention is to grow our dividend in line with the earnings. Think mid-teens, excluding a mortgage market recovery. And then our excess-free cash flow we'll use for both on M&A, but predominantly to buy back stock. And that's really our capital allocation model going forward. Got it.

Somewhat sticking to the mortgage market, you know, not a lot of activity on the mortgage industry side, but a lot of Twitter activity going on, so I want to touch on that a bit.

I think there's 39 tweets from Director Pulte in the last 10 days. You can add one for today as well. Make it 40. But just curious. I did one on Friday. So I put a tweet out.

Well, maybe just to address that and just overall, like what do you think he's getting at and, you know, like what is, you know, I don't know if you've directly met him recently, but I know you said you were meeting the team broadly. So what is your kind of impression of what's going on here?

Yeah, you know, our view in the dialogues that we've had with him and his staff is that he's been very frustrated around the FICO price increases. I think everyone knows it was a little over a year ago in July of last year when Director Pulte of the FHFA said they were going to allow lender choice around scores and adopt Vantage later, really early this year, he and Secretary Turner said they were going to start accepting Vantage, which is owned by the three credit bureaus. And, you know, today's FICO price is roughly $10. We have a $1 Vantage price out there. So he's very positive around the Vantage adoption. I think you saw really a week ago Friday he came out, I think it was Thursday night, and said he was going to accelerate to full Vantage adoption. They had been phasing it in over time, you know, with lenders, and I think there were up to like 30 lenders were able to use FICO or Vantage for agency mortgages. As Effective Friday, it's now all lenders. So that's positive. That, from our perspective, is around, you know, driving that lender choice around using Vantage or FICO. So I think as everyone in the room knows, the score is really used just in the pre-qual process to really give an early indication to the consumer in the marketing flow what their pricing would be off of the Fannie and Freddie pricing tables, and the score really helps deliver that. Once the application goes in, the score is not really used. The credit date is used from the three credit bureaus. So there's been a big focus, I think, by the FHFA around driving to activate Vantage, and now that's fully activated. And our dialogues with customers, the mortgage customers, that $10 versus $1, it's a huge difference. And we've gone to the industry and said we're going to maintain the dollar through 2027, so to give some visibility to drive adoption. But that delta, when you look at the cost of a credit file with the Vantage score versus a credit file with the FICO score, it's 45% lower with the Vantage score. That's a ton of savings for the mortgage industry where somewhere in the neighborhood of 6, 7, 8 loans out of 10 don't close. They start in the process and don't close, so that's breakage. And for the consumer, and the total is over a billion dollars. So our dialogues with the FHFA have been focused around how do we support the implementation advantage that's continuing. I'll be in D.C. in a couple weeks for more meetings with the regulators in Washington. I go there quite regularly, and we'll continue our dialogues with them.

And just on the pricing front, maybe a two-parter, you're keeping $1 through $27, but longer term, how should we think about that? And then the second part is your data file costs. How do you think about the pricing on that?

Yeah, so, you know, we don't give long-term guidance to our customers or to the street. We have a long-term framework. But when I think about pricing of the credit score, the Vantage credit score, we're never going to have larger increases like FICO has been doing, just not our model. You know, we're in this for the long haul. We're in this to support our customers. You know, we don't think about pricing in that fashion. And when we think about pricing of the credit score, we're certainly going to keep it flat in 2027. We'll decide what we do post-2027, but we want to give real visibility to our customers so they can really drive adoption of the Vantage score in mortgage. With regards to the credit file, we do modest price increases there. We'll continue those modest price increases, really reflecting our long-term framework, which is kind of a little above mid-single-digit growth, 68% growth in USIS. We're not in this to really drive price, and price is not our only lever. We have lots of levers at Equifax around new products, around new solutions, going into new verticals. Price is only one, and it's not one that we use as a strong one.

And it seems like, given though, as you said, it appears he's obviously not happy with FICO, it seems like you guys have been caught in the storm.

We're in the blast radius, for sure.

Yeah, and I guess, you know, he's now revisiting the idea of TriMerge to BuyMerge. I'm just curious, you know, I know we talked about this extensively last year as well.

Yeah, I'm not sure if he's revisiting or if it's just still on the table for them to analyze. But, you know, we're collaborating. We have been and we're continuing to collaborate more so, you know, around why is TriMerge so important. And it's really quite basic because there's meaningful differences between the three credit bureaus' credit files. And, you know, you look at the data, you know, which is out there, there's 10 million U.S. consumers only on one of the three credit bureaus. So if you were to go buy merge, they'd never get approved if you don't pull that file. And then if you look at most of us in this room that are kind of near prime prime, I'm going to say prime, I'm going to say most of this room is prime as opposed to near prime. Most of us in this room, if you look at your credit score at Equifax, TU, Experian, it's likely 40, 50, 60 points difference for the average consumer. Like, think about 60 million U.S. consumers that are in the core of financial services. Why? Because not every financial institution contributes data to all three credit bureaus. So you could have a bank or a fintech where it's only going to one of the three but not to the other two. Meaningful differences. Now, what does that mean in an application process? So if you were to go to a buy merge, those consumers might not get approved. There's cutoffs. So if you only pull the two low credit scores for that consumer and not the higher credit score that has more data in it, they may not get approved. It will certainly result in price differences. You know, if you're only pulling the two, it's not going to cover the top two are typically used versus the bottom two if they were selected. that consumer could pay a higher price. And when you think about federally guaranteed mortgages, the purpose of those is to promote homeownership in the United States and to provide access to government-guaranteed mortgages. If you're going to exclude people, that doesn't resonate well politically, and it's not a positive. The flip side is safety and soundness. If you're excluding some data from the underwriting, it results in having a more risky loan if some of those trade lines or data that's included is the bad trade lines. So you have a loan that's more risky than is realized because you don't have the full picture on the consumer. Those are the reasons why we think tri-merge is so important and why we think it's here to stay. And when we meet on the Hill, we meet with Treasury, we meet with all the constituents involved, they all understand that very clearly. So we'll keep collaborating with FHFA around why tri-merge is important. The other point I'd make, Manav, is if you look at the most sophisticated lenders in the United States outside of mortgage or even in mortgage, if they're balance sheeting a mortgage loan, they're pulling tri-merge. Safety and soundness, they spend a lot of money marketing. And then if you go in non-mortgage where there's no requirements around whether it's 1B, 2B, or 3B, the most sophisticated lenders pull a tri-merge because they get a more complete picture on the consumer. They're able to approve more at lower losses because they have more data. So I think tri-merge is kind of fundamental because of the differences in the three credit bureaus' data. And it's one we're just going to be a little more deliberate around sharing the facts around that. why it's so important.

And, John, maybe if I could bring you in here, just, you know, even last week you talked about, you know, kind of the breaking down the mortgage revenues by the FICO path-throughs and other items. What's the real exposure here on TriMerge to BuyMerge?

So if you take a look at the portion of the Equifax credit file that has sold into TriMerge, so our trended credit file, it's about 30% of total USIS mortgage revenue, which is, think, plus or minus $900 million, right? So substantial amount, but on an Equifax that's, you know, $6.7 billion, you know, it gives you some perspective on the size that you're talking about here.

I would also add, and maybe we'll get to this in your questioning, but I just want to make the point, we're also investing heavily to make sure we differentiate our credit file when it is used in a 1 or a 2B environment. And I think we know that the mortgage credit file process has changed because of FICO pricing. If you go back three years ago, the pre-application or pre-qualification credit file polls and score polls were predominantly tri-merge. As FICO pricing went up, that's moved to more of a 1B poll, and then there's a 3B poll at application as required by the Fannie and Freddie and the FHFA. Same thing in non-mortgage. Most of that is a 1B poll in AutoCard and P-Loan. I talked about the more sophisticated lenders. So we've been investing over the last 6, 9, 12 months to try to differentiate our credit file versus our competitors when it is used in a 1B poll. And we're adding, I think everyone in the room probably knows, we're adding income and employment attributes that we have from the twin data set to our credit file in mortgage. So we're adding that Mark's working, that Mark, in my case, works for Equifax, and we're adding an average of Mark's income last year. Because remember today, for 30 years, 40 years, in an application process in mortgage, all you're looking at is the credit score. You have no idea of the applicant's income during that marketing phase before application. All you know is Mark's credit score is 750, 680, or whatever. You don't know if he's working. You don't know if his income meets the debt-to-income DTI ratios that are requirement. There's no visibility in the historical process. So we're adding that information, which we think is super valuable for the mortgage lenders to better manage their marketing funnel. Like which consumers should I lean into where I'm spending money on to get to an application and then get to closing because I have confidence that they can close and open up that visibility around income and employment. So we're adding that information for free in order to drive share gains. We also have a very unique data set on cell phone utility trade lines. So think about if you pay your streaming bill, your cell phone bill, your electric gas, water bills on time, those are very valuable attributes to add to the credit file because that data is not in the credit file. So we're adding that to our mortgage credit file, 54 different attributes, again for free, to differentiate our credit file in that pre-qual process. And then what I described around income and employment data, we're also doing on our auto, card, and P-loan credit files in order to differentiate those going forward. And these are examples of things that we can do kind of post-cloud that was super complex for us to do before we had really leading technology. And second, it's a great example of the differentiated data sets that Equifax has that really give us a lot of levers versus our competitors and how we go to market. Got it. Just one more on this topic.

I mean, the MBA has been, I guess, pushing the idea of a single file and seems to be caught directable to his attention as well. Is there anything to that? I mean, I guess it is quite common in the non-mortgage side of the equation, right, to do 1B, but just curious your thoughts there.

Yeah, it's one where I would remind you that the MBA represents mortgage originators, not consumers, and, you know, consumers are the ones that are really impacted. There's no consumer advocates that are suggesting 1B, you know, versus the current 3B, I think you've got to put it on its face of the MBA's view. And as a reminder, something like six, seven, or eight loans that are started in the pre-application process don't close. That's breakage costs for the lenders. And that's predominantly been fixed in the pre-qual by going to a 1B. And then by the adoption of Vantage, with the huge cost savings that come from Vantage, there's another lever where the industry is going to be able to pick up upwards of a billion worth of cost savings through that 45% cost savings of the credit file and score from Vantage versus FICO going forward, we think that answers the question for the mortgage industry.

Let's stick with government but to better aspects of it. Within your EWS business, your government business, last quarter you gave us some new disclosures around the ACV and renewals. Can you just remind us of those numbers and just put it into perspective of how we're should interpret that?

Yeah, just for everyone in the room knows, I think this is our workforce solutions business where we use our income and employment data for government social service delivery. As you know, there's almost 90 million Americans that get some form of social services. That's all needs-based and income verified. So if you make less, you get more social services or you qualify. That's delivered by the states, but funded predominantly by the federal government. Almost a trillion dollars a year is used in the delivery of social services. Think about Medicaid, Medicare, food stamps, SNAP, TANF, rent support, child care support, all kinds of social services. The average recipient gets over five different services, so all income verified. This is about an $800 million business for us. It's about a $5 billion TAM. Most of the states, and I think as I mentioned earlier, the federal government pays for most of the social service dollars. The states distribute it and are responsible for doing the verifications under the requirements of each social service of each of the applicants around their income and employment. So very attractive business for us, one that we've been growing quite rapidly. As Manat points out, we had a very attractive kind of three, four months in the second quarter of commercial activity. And what's really changed in the last year or so is the big focus on the current administration around the integrity of government social services. I mentioned that there's about a trillion dollars of payments that go out. The government has quantified just under $200 billion of improper payments, improper payments being someone's receiving the social services that no longer qualify, and they shouldn't be getting those. That's the $200 billion. And I think everyone knows last July, OB-3 was passed. Inside of OB-3, there was all kinds of tax stuff and everything else. There was also some additional requirements principally around food stamps and Medicaid on the states to increase the income requirements of what you use to verify the eligibility. So we've seen a very large increase in our deal pipeline. And in February and again in July, we shared that our new business pipeline, so this is our commercial pipeline and our government vertical, doubled year over year. And then as you asked at the front end of your question, in July, we shared that we landed in really in the second quarter principally, 100 million of new ACV, meaning new contracts with new customers. And think about that's that $5 billion TAM versus the $800 million we're penetrating into states or at the federal level, in this case principally states. So $100 million of new ACV that benefits principally 2027. That's when the contracts kind of start. There's some of that in the fourth quarter, but the vast majority is in 2027. We also shared that we had $200 million of the existing business renewals. It was just a lot. And government can be lumpy. You know, you can have, I remind, Manab knows this, but a year ago, April, in April of 2025, we had a large new contract with Social Security Administration that we landed. So that was a large contract. So those can happen, you know, kind of episodically, you know, throughout the year. I think the most important point is that our engagement at the federal and state level has never been higher. and having a pipeline that's up 2x year over year, those are commercial opportunities that we're working on, you know, is a great indicator. And obviously the $100 million of new ACV is a very positive setup for 2027. So I guess two follow-ups.

Is this something you would give us regularly, I guess? And then the $200 million of renewals, how should we think about just retention rates overall just to get some perspective on that?

Yeah, so the $100 million, are we going to give it to regularly? You want everything. You're like most of our investors. So we thought it was large enough that we shared it. Whether we shared every quarter or not, we'll make the right decision on that. But $100 million is quite a bit, you know, given the size of the vertical, and we thought it was appropriate to share. And the retention is very, very high. Retention levels are very high. You get very sticky once you get into workflows. It's unusual for us to have a state that either pauses for funding reasons or, you know, any other change like that.

And maybe, John, if you can just keep us grounded here on the numbers, I think you said second-half government will be better than the second quarter, but second quarter was, I think, negative. You also said back to growth. Back to growth. So just some perspective on maybe some help on what that means. And then I think last week on the deck you also said expect accelerating growth in 27. So just some framework before we get too carried away there as well.

I think you covered it in your question, right? So back to growth means exactly what it sounds like. We expect to see growth in the second half, And then we expect to see improvements in 2027 relative to what we've been delivering here in 2026, based on a lot of what Mark already described. The $100 million. The $100 million and the renewals, right? So we expect to see a government business that's improving as we go through the rest of this year and then continues to improve in 2027.

Given the size of the TAM, we've said this quite consistently. I think everyone knows, I mentioned it earlier, we expect Equifax to grow 7 to 10. We expect our USIS business to grow 6 to 8. This is over the long term. So long-term, this isn't, you know, this quarter, next quarter, isn't next year. So long-term, Equifax 7 to 10, USIS 6 to 8, International 7 to 9, EWS low double-digit. And we expect government to really be at the top end of that. You know, given the size of the TAM and the market opportunities, we expect government to be one of the larger and fastest-growing verticals inside of EWS and obviously, you know, helping power their growth. I don't know if you want to touch on, like, talent is performing exceptionally well.

Yeah, I mean, I guess mortgage and government are your top two, right, and then talent next. So you've been posting some pretty good results there. So what's driving that? Because employment-based doesn't seem to be that great.

Yeah, as Benat points out, the hiring market is still, you know, strong but down. I think it's a remarkable number. I think on a normal level, 70 million people a year change jobs. I think we're in kind of the mid-60s, probably something like that, million changing jobs every year. And then for us in the background screening industry, each of those job changes result in some form of a background check. And we have a business, I think everyone knows, it's our, I guess our third largest vertical now, is our talent vertical. We call it talent where we sell data to background screeners to help them do their background checks. And one of the core data elements we have is everyone's job title. So when we get payroll data from a payroll company or directly from an employer, We have almost 6 million companies delivering data to us every pay period. We get over 50 attributes. One of those attributes is an individual's job title. So we have a digital resume on the average American. So we sell that. One of the things that's checked in a background check is your prior employment. So if a background check was being done on this room, you'd check five years or seven years of employment to make sure your resume wasn't fabricated. Did you really work for Chase City, whatever the company is? So five years' worth of, seven years' worth of job history. We can do that instantly because we have that digital record every pay period of the job titles. We also sell incarceration data. You'll remember, I think, four years ago, maybe it's five now, we brought Appris Insights, the only data set on incarceration. And one of the checks that's done in a background check is were you incarcerated previously, not to deny employment, but to allow the hiring manager and the HR manager to talk about that. So that's another valuable data set. That's been growing for us. We have education data. We have a partnership with National Student Clearinghouse. Another thing that's checked in a background check is to make sure your education is accurate, that you're not rounding up or changing where you went to school. So we do that check in there. And then we're also rolling out a bunch of new products. So we're adding a new hourly solution. If you think about this room, highly professional financial services jobs, a lot of data is used in your background check. If someone's an hourly worker at a warehouse, restaurant, you know, retail, they might check last job work, they might check last 12 months. We've now got a product just for that, so we've seen some growth there. We've rolled out a product with our incarceration data set that will do monitoring of employee bases, you know, for incarceration after employment, right, to make sure that that's understood if there was some kind of incarceration dependent upon what the job is. So that's been another positive. Record growth, as you know, we've been growing our records. We're up 10% in the second quarter, 10% for the half, and more records result in higher hit rates. So that's benefiting the business. We had some element of price. What did I miss, John? I think you covered them all. And penetration, just adding new clients. That's about a $5 billion TAM also, and we've got a business that's got a lot of room to grow.

And, John, maybe just we got a lot of questions on the margins, so I'll work for Sleeve. and it's kind of been, you know, plus or minus, or 50-plus, but roughly there. I mean, it sounds like. Where was it minus? Not minus. That sort of changed from there. But I guess the point is, I think Mark pointed out, a lot of partnerships, including the period, provide a lot of investments. Is that why there's a limit to those margins intentionally, perhaps?

So we like the margins at just over 50%, and we've delivered them very consistently for a long time. And we're very specifically investing in workforce solutions to expand product sets. Some of them are through partnerships. Some of them are through expanding data. Much of the investment also is around expanding the work number database so we continue to grow it effectively. So we think holding the margins at that level while investing in new product, investing in new sales channels, investing to broaden the number of white-label employer services products that we bring to our partners so we can expand those relationships and build increasing record contributions to workforce solutions we think is the right way to manage the business so that we can deliver the growth rates Mark's talking about. So we like those margins. I think we're being very specific to make sure we invest to be able to continue to deliver the growth at that margin level.

And I think just one more on talent marketing, you talked about reinvesting back to manual verification. I know a couple of years ago you guys got out of that business. So just to help us appreciate the difference.

Yeah, what I'm referring to is that when you think about every one of our verticals, whether it's a mortgage, auto card, P-loan, You know, we deliver, dependent upon the demographic set, you know, 50-plus percent hit rates. And just remember the data set we have. There's about 250 million income-producing Americans in the United States. We've got roughly 110 million of them in our data set. We're growing that every quarter. So when a customer sends an inquiry to us for a mortgage application, an auto loan, a background screen, a government social service verification, we'll deliver back the twin data set. but then they still have 30%, 40%, 50% of their transactions they have to do something else with to verify the income because we don't have the records. And we've had customers come to us and say, hey, can you do the whole thing? And we did it before. Now we've invested more in tech. It's a place we're investing more to make it more efficient. And in mortgage, in background screening, in government, you know, we're rolling out solutions where we can do the complete verification. And we would, in essence, do the manual or use some of our AI technology to do it, you know, for those records we don't have. And we think that's a real, you know, positive value add, you know, so we're in the marketplace talking to our customers about that. One last one in the workforce.

You know, every now and then the question around competition keeps popping up. I think since the government introduced that ME program and you have steady IQ making noise, experience, you talked about the priority, true, checker, to you as a minority investment. They're the same soon. So I guess just the question on, you know, are you seeing any changes?

Yeah, we watch the competitors. Obviously, it's a competitive marketplace. Yeah, I think it really starts with records. You know, if you can maintain the records and keep growing your records, that's really a very valuable part of the equation. And, you know, any way you cut it, our $110 million, we have $170 million active. The delta is people with two jobs. Really remarkable when you think about our data set. You know, you've got 60 million people that have either, you know, two jobs, you know, in our data set. It's really remarkable. So records is really a very important area for us that we want to keep adding. We've added, you know, in the last five years, something like 50 partners. And remember, we get our records two ways. We get them through partnerships. Think about payroll partnerships, payroll processors, HR software companies. New area for us is benefit administrators. A newer area for us is pension administrators. Because remember, when you break down the 250 million income-producing Americans, non-farm payroll, which is W-2, you know, is around 100. I'm rounding up a little bit, 170 million people. There's 50 to 60 million, 1099 are self-employed individuals, and that's obviously a lot of gig workers, but it's doctors, dentists, lawyers, private equity executives, you know, lots of really high-paid people, dentists, et cetera, they're self-employed. And then there's another 30 million defined benefit pensioners. So think about legacy companies like IBM, General Motors, GE, that have legacy pension payments to their prior employees. But also think, you know, state of New York, city of New York, firemen, teachers, police officers, federal government, federal employees still get defined benefit pensions. That's income. So we have a multifaceted strategy to go after the records, and I think our record additions speak for themselves, you know, that we just have very scaled data set. We continue to add records. We have a dedicated team, you know, focused on it, and, you know, we're continuing to drive top-line growth.

In the firemen that we have left, I guess that's such a capital allocation. I mean, there's definitely been a noticeable shift in the balance you've had. So maybe just remind yourself your priorities today and how you should think of it in the context of leverage as well, please.

Yeah, and just to be clear, the capital allocation plan is not new, but it's fairly new. We put it in place last April. Through last April, I think everyone knows we were putting most of our capital towards completing the cloud. We felt that to be a great data analytics company, we had to have the very best technology. We spent a $3 billion incremental on our tech. That's behind us. CapEx is coming down. And last April, a year ago, April, we announced our capital allocation plan going forward as we substantially completed the cloud and really laid out that our intention is to grow our dividend in line with earnings. So think about kind of mid-teens dividend growth going forward. That's going to be a use of our cash. and then our free cash flow and leverage from growing EBITDA we're going to use for both on M&A and to return cash to shareholders through buyback. And we've been doing a substantial amount of both. As you know, about two months ago we announced the Mexico acquisition, Circulo de Credito. We're super excited about that, a $740 million acquisition, fast-growing Mexican market, very strategic in its connection to the United States, growing middle class, lots of fintechs. And this business has been growing that we're acquiring, you know, kind of 20-plus percent revenue growth rates at mid-40s EBITDA margin. So very attractive acquisition. And so we intend going forward to do what I use very clearly I call bolt-on. You know, bolt-on acquisitions is how John and I and the board and the team talk about it to strengthen the core of Equifax. And then our excess-free cash flow and leverage that comes from growing EBITDA, our intention is to maintain a strong investment-grade balance sheet. that excess-free cash flow is going to go back to shareholders. And in the last kind of trailing 12 months, we bought back $1.4 billion of stock. We did $500 million in the fourth quarter last year, where we've been told our investors if we're not doing bolt-on M&A, which we're going to be measured about, we're going to buy back stock. And then to make our last point on it from the capital allocation plan, we've also been clear, and I said it earlier in our comments, when that mortgage market recovery comes, that's all going to shareholders. Said differently, we're not under-investing in Equifax because the mortgage market is constrained. We're investing the right amounts today, so when that mortgage market comes back, we're not going to add more people. You know, we're not going to invest more in CapEx. You know, we're going to really deliver that through dividend and buyback. And I would add one more point. You know, we think we're one of the few info services companies that now has an AI productivity goal out there. And maybe it was going to be one of your questions that relates to capital allocation because it's going to expand our margins. As we said earlier, our intention is to grow over the long term. Seven to ten on the top line delivers 50 basis points of operating leverage. We laid out in February, you know, as our first step, some of the AI productivity we expect to deliver inside of Equifax. So think about agents taking calls instead of people. Think about agents doing paper processing, you know, from consumers, which we get a ton of. We have a couple thousand people in our operations center. A lot of productivity there. Technology is our largest workforce. You know, we have a lot of technology coders and operators. We're seeing a lot of productivity there. And then in July, we increased our productivity goal from $75 million to $150 million. And this year, against the 50 basis points operating leverage long-term framework, we set out a guide of 75 basis points, so 25 basis points higher, much of that from that AI productivity that we're delivering across Equifax, inside of Equifax, and at the half, we're 110 basis points. So we're really seeing a lot of momentum around the use of AI, not only for products, models, and scores with our customers, but also inside of Equifax. And we believe the fact that we did the big cloud investment and that we have, we think, the most advanced tech in the marketplace, it's enabling us to deploy AI more quickly for growth, but also for margins and productivity.

Got it. Well, we're almost out of time, so it's a great place to end. Thank you, Mark and John, for being here, and thank you, everybody, for having us.