TLDR
- Q1 adjusted earnings per share reached $1.86, surpassing analyst expectations of $1.69
- Total revenue of $1.65 billion represented a 14% year-over-year increase and exceeded guidance by $37 million
- USIS mortgage revenue climbed 60%, propelled by robust early-quarter refinancing and purchase activity
- Geopolitical tensions in Iran triggered interest rate increases that cooled housing market momentum
- Full-year projections remain at 10%–12% revenue expansion with adjusted EPS between $8.34–$8.74
Equifax delivered impressive first-quarter results that exceeded analyst projections across key metrics. However, geopolitical developments in the Middle East shifted interest rate dynamics and tempered expectations for the remainder of the year.
The credit reporting giant’s Q1 adjusted earnings reached $1.86 per share, climbing from $1.53 in the prior-year period and topping the Street’s $1.69 forecast. Total revenue reached $1.65 billion, marking a 14% year-over-year gain and landing $37 million above the company’s own February guidance midpoint.
Shares of EFX traded flat in premarket activity at $198.45. The stock has declined approximately 8.5% since the start of the year through Monday’s close.
The USIS segment delivered exceptional performance, with revenue advancing 21%. Mortgage-related revenue within this division soared 60%, fueled primarily by vigorous January and February demand before interest rates began climbing.
Workforce Solutions contributed steady growth with a 10% revenue increase. Verification Services posted 14% gains, benefiting from strong double-digit expansion across government and consumer lending verticals.
International operations generated 11% reported revenue growth, though local currency figures showed a more moderate 4% gain. Canadian operations provided a highlight with 8% local currency growth.
Iran Conflict Hits Mortgage Pipeline
The Iran war altered market conditions during the quarter’s midpoint. Rising interest rates subsequently slowed housing market activity, influencing management’s outlook for the remaining months of 2026.
CEO Mark Begor emphasized that the robust Q1 performance was “principally driven by very strong U.S. Mortgage revenue growth of 38%, principally in January and February before rates increased from the Iran conflict.”
Despite the strong quarterly showing, Equifax maintained its full-year constant dollar revenue growth forecast at approximately 10%, pointing to the evolving rate landscape and broader economic uncertainties.
Management did adjust full-year reported revenue guidance upward by $25 million and increased adjusted EPS projections by $0.04 per share — changes driven entirely by favorable currency movements rather than core business improvements.
Price War With FICO Continues
Equifax remains engaged in a six-month pricing battle with Fair Isaac (FICO), alongside industry peers Experian and TransUnion. The confrontation stems from regulatory and legislative pressure to reduce housing affordability barriers, with credit scoring fees facing particular scrutiny.
Second-quarter guidance projects reported revenue between $1.68 billion and $1.71 billion, with adjusted earnings per share ranging from $2.15 to $2.25.
Net income for the first quarter totaled $171.5 million, representing a 29% increase from $133.1 million in the comparable 2025 period. Diluted earnings per share came in at $1.42, up 34% year-over-year.
The company allocated $327 million to shareholder returns during the quarter, consisting of $260 million in stock repurchases and $67 million in dividend payments.
Equifax’s new product Vitality Index reached 17% in Q1, significantly exceeding the company’s long-term 10% target threshold.
