Q4 2020 Equifax Inc Earnings Call

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Good day and welcome to the Equifax fourth quarter 2020 earnings Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Mr. Dorian Hare Senior Vice President of Investor Relations. Please go ahead.

Thanks, and good morning, welcome to today's conference call I'm joined here with me today are Mark Baker, Chief Executive Officer, and John Gamble, Chief Financial Officer, today's call is being recorded.

Growth of recording will be available later today in the Investor Relations section in the about Equifax tab of the website at Www Equifax Dot.

Dot com.

Joining the call today, we will be making weapons of certain materials that also for deep down in the Investor Relations section of our website under events and presentations. These materials are labeled Q for 2020 earnings release presentation.

During the call, we will be making certain forward looking statements, including first quarter and full year 2021 guidance to help you understand equifax in the 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 inherent in our business are set forth in filings with U S.

Including our 2019, former the form 10-K and subsequent violence.

Also we'll be referring to of certain non-GAAP financial measures, including adjusted EPS attributable to Equifax, the adjusted EBITDA, which will be adjusted for certain items that affect the comparability of our underlying operational performance. These non.

Non-GAAP measures are detailed in reconciliation tables, which are included with the earnings release and are also posted on our website.

In the fourth quarter of Equifax incurred of $31 9 million restructuring charge related to right sizing the organization as investments in technology transformation are reduced in 2021 as compared to 2020.

Also in the fourth quarter of Equifax changed its method for accounting for pensions to recognize the measurement of benefit obligations and planned assets for earnings annually and he's delayed recognition of gains or losses from Costco.

Caused by changes in discount rates or other extra where all of your assumptions such as mortality and planned asset actual versus the assumed returns.

All prior period, GAAP and adjusted financial information has been revised to reflect the change.

Pension expense in prior years is improved by the elimination of the amortization of the accumulated prior losses for 2020, excluding the annual Remeasurement impact I referenced at the moment. This benefit was approximately 17 million for net income for 14 cents per share in the fourth quarter of 2020.

Benefit resulted in an improvement of net income of $4 $3 million or the euro.

Zero point of three five per share.

The the annual re measurement of occurs in the fourth quarter of each year. It is recorded in other income of the income statement. The annual Remeasurement will be treated as a non-GAAP adjustment as it is non operational in nature pretax mark to market adjustments resulted in in the pre tax gain of $4 eight.

In 2019, and the pretax loss of $32 $2 million in 2020 day.

Details of this change in pension accounting are included in the for fourth quarter 2020 earnings press release on slide towards 25 of the for Q 'twenty IR Slide deck will also be included in the 2020 report 10-K, now I would like to turn it over to Mark.

Thanks, Jordan before I address Equifax is strong fourth quarter in 2020 results I wanted to take a moment to thank all of 11000 employees and the families of supported them with a tremendous dedication day showed under the challenging COVID-19 environment during 2020.

We continue to make the health and safety of our employees your top priority and I Hope you. The most close to the remains safe.

For us to slide four I wanted to start with the review of our business model growth strategy in cloud investments the physicians to win in the marketplace.

Our highly unique and diverse data assets or of the core of Equifax is differentiation in the marketplace. We have data assets of scale that our competitors do not have.

The acquisitions this week of accounts and a global identity and fraud and accounts score for the U K open banking indeed, the categorization of our examples of our accelerating focus on expanding our differentiated data assets and capabilities.

Expanding our differentiated data assets through organic actions partnerships and M&A continues to be a priority.

We entered the customers are benefiting from our investment over the last three years in our new Equifax cloud native technology footprint, which enabled the creation of a single data fabric and rapidly once the implementation of best in class cloud based tools and capabilities.

We accelerated our new product Rollouts of revenue in 2020 by leveraging our new Equifax cloud.

And the Equifax card made of footprint has enhanced our ability to integrate new partners and acquisitions and to see the recognition of synergies as we believe only the equifax can.

Our cloud infrastructure will differentiate equifax in the marketplace and drive our revenues and margins in the future.

Data security is deeply embedded in our culture and we have made tremendous progress towards the goal of being an industry leader in security.

In the we're relentlessly focused on our customer first mentality, which moves us closer to our customers, where the focus on delivering solutions to help them solve their problems from grow their businesses.

And lastly, with the acquisition of accounts and our investments in the Equifax data fabric, we've taken substantial steps forward towards building, a leading identity and fraud business, while expanding our market coverage to include retail E Commerce and transaction based markets alongside our traditional telco and insurance markets.

Moving now to slide five we've spoken before about key market macros that we believe are positively impacting the information service industry standard Equifax.

First of the dramatic acceleration of the Digitization of consumer and commercial customer facing transactions and our customers' internal infrastructure was clearly accelerated during the COVID-19, which drives the rapidly growing requirements for data and insights around identity authentication and fraud.

The second accelerating adoption of advanced analytics and machine learning is driving increasingly increasing needs for a differentiated data third syntex and alternative lenders are driving innovation growing share and accelerating the stipulation does this digitization macro which drives data usage.

First increased need for robust identity validation of fraud prevention capabilities and digital transactions is also driving data data of requirements and fifth the explosion of data drives increased requirements for data governance by our customers and control of data by consumers.

These macros clearly accelerate demand for broader differentiated data assets alternative data sources increased requirements for data recently and integrating insights echos.

The Equifax is very well positioned to address these trends as we build on the depth of our equifax cloud data assets and our capabilities to deliver advanced Equifax cloud data management and continue to leverage our equifax cloud data and technology investments.

The <unk> the depth of our assets across credit alternative credit with data ex telco and utilities with MCT and consumer asset data with ISI has long been an equifax strength.

Workforce solutions twin data is almost differentiated data asset with coverage of 90 million unique individuals in the United States.

EBITDA is expanding between dataset, while broadening the twin focus beyond W. Two income to include $10 99, and other income and employment data and.

At the same time, Uws's broadening beyond <unk> income and employment data with partnerships to deliver individuals' education licensure and other data to our customers to use in the hiring process.

With the addition of accounts brought in massive scale of digital consumer data assets, including phone number of E Mail and IP addresses equifax data assets expense substantially as do our capabilities across identity and fraud globally.

Moving now to slide six we believe the identity validation and fraud prevention markets will deliver strong long term growth for equifax and net of combined Equifax and talent are very well positioned to deliver new integrated suite of differentiated solutions for this large and fast growing marketplace.

E Commerce was up over 20% in 2020 alone while online banking was up 67% and mobile wallet usage increased 56% Inc.

And Florida is a huge and growing issue is our customers transactions of shifted from cash to digital along with increased real time payments online credit card fraud at nearly $6 billion last year with 40% of ecommerce merchants reporting an increase in charge of that fraud.

Over 40% of merchant suite of digital fraud shows that slows their innovation and growth.

The digital market macro clearly accelerated during the Covid, we see of continuing to expand the.

The combination of Equifax in accounts and protect these new distribution channels, while evaluating tireless transactions on a real time basis balanced broad with the user experience sort of as a growth platform for customer E commerce activities, while simultaneously, enabling trusting confidence both counting equifax will leverage leverage the expanded.

Predictability of our combined data.

And comprehensive equifax into the fast growing E commerce and retail markets.

And last Equifax <unk> count into the banking finance, Fintech telco and insurance markets.

The scale of accounts data assets, including $32 billion annual consumer interactions $255 million again in the $400 million addresses the 1 billion unique devices combined with Equifax has scale scale data assets is a powerful combination in the SaaS growing market.

The advanced data and analytics, AI and machine learning capabilities are more crucial than ever before and preventing for us the full suite of account products, including its next generation AI and machine learning model combined with the cloud based equifax illuminate platform, which orchestrates multiple solutions with machine learning and our patented MBT AI.

<unk> will provide risk managers with insights only equifax can give across the consumer account lifecycle.

Kind of also provides the account takeover protection and transaction dispute management, two capabilities, which equifax did not have before to address heightened cyber security and fraud payment activity.

We are energized to close the account acquisition yesterday and to have the account team joining equifax and the strong growth potential of the combined counting equifax in the fast growing identity and fraud marketplace.

As you see on slide seven what kind of is clearly our most sizable transaction in the recent years as we ramp up our bolt on M&A focus to expand the strength in Equifax has capabilities and closed two other transactions in recent days focused on Decisioning and alternative data with.

We acquired the minority position that we didn't already own of credit works in Australia credit works as the low cost flexible modular trade credit Decisioning platform. The targets. The SME segment, which is a key growth driver for our activities in the region and.

In the U K, we acquired accounts for our partner in the UK open banking solutions and a provider of bank transaction data categorization analytics and consent technology.

Accounts store for has also has the license in the UK, where open banking has accelerated importantly, its capabilities will be integrated into our interconnect and ignite platforms.

Reinvesting, our 2020 outperformance and leveraging our strong balance sheet and cash generation with bolt on M&A is central for our future growth strategy.

In our cloud data and technology platforms allow us to more quickly integrate acquisitions and drive synergies.

Continued expansion of our data assets and capabilities through acquisitions as a priority for equifax in 2021 and beyond.

Turning now to slide eight Equifax performance in 2020 was very strong the sequential improvements in both total and core revenue as we exited the year.

Our business model is resilient and delivering in the challenging Covid recessionary environment, we're energized about our momentum as we enter 2021.

Revenue in 2020 was $4 $1 billion up 17% with organic growth of 16, 3%.

This is the first time, we've delivered over $4 billion in revenue and the highest annual growth annual organic revenue growth rate in our history.

Adjusted EBITDA was just under $1 $5 billion of 25% and EBITDA margin was 36, 2% of 240 basis points adjust.

The adjusted EPS of $6 97 was up 22%.

We delivered double digit revenue growth in all four quarters of 2020, with 23% total and organic growth in the fourth quarter a record for equifax.

We executed on our investments to accelerate and leverage our equifax cloud data and technology transformation, including migrating more than 47000 customers as at the end of the year onto our new Equifax cloud services.

Leveraging our NAV, our new cloud infrastructure, we delivered a record of 130 for new products, while decreasing our NPI development time by one third of.

The 130 for NPI is were well in excess of the 100, the anticipated coming into 2020 and above the 120, we discussed with you in December.

As we continue to leverage our new cloud capabilities, we expect to accelerate revenue growth from new products in 2021, a key driver to our long term growth expectations.

We're energized about our 2020 performance and we're already seeing the momentum of our own the Equifax model leveraging our new cloud capabilities as we move into 2021.

Turning to slide nine fourth quarter revenue at $1 2 billion was up 23% on a reported and local currency basis, which is well above our expectations in the framework of 17, 5% to 20% that we shared with you in early December.

M&A contributed just under one 1% in the quarter.

Our growth was again powered by our U S <unk> businesses, <unk> and workforce solutions with combined revenue of a very strong 36, 6% and combined adjusted EBITDA margins of 50%.

As a reminder, dws and U S. Ice are now over 70% of Equifax revenue in the 80% of Equifax business unit EBITDA the.

For the combined contribution to Equifax is up 700 basis points in revenue.

And almost 750 basis points of EBITDA versus 2019, which is which is very powerful for the future of equifax.

Importantly, international also had a strong quarter, delivering 3% revenue growth and over 34% adjusted EBITDA margin outperformed the other expertise expectations in revenue, while maintaining strong control over costs.

Fourth quarter Equifax, adjusted EBITDA totaled $422 million of 31% with the 215 basis point expansion in our margin to 37, 8%.

This margin expansion was delivered while making continued investments in our cloud transformation, new products and data and analytics that will drive future growth.

Adjusted EPS of $2 per share was up a strong 28% versus 2019, despite incurring increased depreciation and amortization and incremental cloud costs of 16 of share increased interest expense of five of share from our second quarter bond offering.

The $2 per share EPS exceeded our expectations in the framework of of $1 75 to $1 85, we shared with you in early December.

<unk> revenue of $387 million was at the very strong 17% in the fourth quarter with M&A contributing less than half a percent.

Total U S mortgage revenue of $153 million was up 60% in the quarter, while mortgage credit inquiries grew in line with our expectations, increasing increasing 55%.

<unk> mortgage revenue outgrew the market by 500 basis points, driven by growth in share gains marketing and new debt monitoring products.

Non mortgage revenue performance strength substantially in the quarter. It was just below flat an improvement from down 6% in the third quarter and down 9% in the second quarter, Inc.

Accordingly, non mortgage online revenue grew slightly in the quarter versus the 5% of 11% declines we saw in the third and second quarters, respectively.

Banking I'd and fraud commercial insurance of direct to consumer all showed growth in the fourth quarter, which is a positive sign for the future.

Auto's fourth quarter decline of 5% was an improvement from the third quarter decline of 7%.

Non mortgage online revenue strengthened further by 5% growth in December and 6% growth in January.

Banking, I'd and fraud insurance and direct to consumer drove the growth in December and continued into January we.

We also saw auto returned to positive growth in January.

Yes.

Financial marketing services revenue, which is broadly speaking our offline or batch business was $70 million in the quarter down about 2%.

Which was up sharply from the third quarter, which was down 9% the.

The relative improvement in the quarter was driven by double digit growth in identity and fraud related revenue. We're also seeing improving trends in marketing related revenue, which was down under 10% in the quarter. As a reminder, marketing related revenue represented about 40% of Fms revenue identity and fraud of about 2000 and this decision in about 40%.

The <unk> team continues to drive growth in the deal pipeline with the fourth quarter up 15% driven by growth in both the volume and size of new opportunities.

The fourth quarter win rates finished the year at 2025.

<unk> and its team are on offense in the U S I S and winning in the marketplace.

<unk> adjusted EBITDA margins of 43, 5% of fourth quarter were down 160 basis points from last year, which was principally driven by the much higher mix of mortgage revenue in mortgage products in the quarter.

Margins were also impacted by redundant systems costs and investments in new products.

Turning now to work force solutions, they had another exceptional quarter with revenue of $406 million of a very strong 62%.

Dws finished the year with revenue of $1 $4 billion, an extraordinary accomplishment compared to their 2019 revenue of $950 million.

Customers found incredible value of workforce solutions unique between income and employment data assets of new products, while the team's focus on penetration pricing, new verticals and record of Jewish additions drove growth.

Dws AWS remains our most valuable and differentiated business with revenue growth rates far in excess of the rest of the equifax and highly accretive mortgage.

Verification service revenue and workforce solutions at $330 million was up 70% versus fourth quarter 2019.

Verification services mortgage revenue more than doubled versus the prior year for the third quarter in a row growing almost 100 percentage points faster than the 55% growth we saw in mortgage market credit inquiries in the third quarter.

Verification services non mortgage revenue was up about 15% in the quarter up substantially from the 4% growth in third quarter.

During the fourth quarter, we saw significant growth in talent solutions, primarily driven by new products introduced in the second half of the year.

We also saw strong growth in card and auto and cards. We've added to two major customers that now use the work number of broadly in the origination process.

In the auto we're also seeing the extension expansion and the use of the work number in subprime loan approvals.

We again saw strong growth in government verification services growth in January continued the strong levels delivered in the fourth quarter.

The Florida services revenue of $77 million increased 35% in the quarter, driven again by our unemployment claims business, which had revenue of over $50 million of 73% compared to last year.

In the fourth quarter.

Workforce solutions processed about $2 6 million initial claims which is down from the $3 4 million in the third quarter.

AWS continuing to process roughly one in five U S initial unemployment claims.

As a reminder, we expect our UC claims revenue to decline in 2021 as initial unemployment claims reduced from record 2020 levels.

Employer services non UC claims business had revenue down about 6% in the quarter.

<unk> revenue growth of nine nine and on boarding services that was driven by the acceleration of our new online anywhere solutions was more than offset by declines in workforce analytics and our tax credits business.

We're seeing a positive shift to our new online anywhere product suite with new customer wins at much higher price points.

We expect employer services non UC business revenue performance in the first in the first quarter to improve relative to fourth quarter and returned to growth in the second quarter as we move towards the more normal environment.

Strong AWS verifier revenue growth resulted in adjusted EBITDA margins of 56, 2%.

Which was an over 900 basis point expansion from the from the prior year, which reflects the power of uniqueness of between dataset.

Turning now to international the revenue of $242 million was up 3% on a constant currency basis in the quarter a significant milestone as the business returned to growth after a very challenging second and third quarters.

This was nicely above our expectations from early December.

Asia Pacific, which is principally our Australia business had very good performance in the fourth quarter with revenue of $77 million up about 4% in local currency versus last year and better than the up slightly we expected in early December.

The consumer revenue was down about 5% versus last year, a significant improvement from the down 10%, we thought saw in third quarter.

Our commercial businesses combined online and offline revenue in Australia was up 3% in the quarter again, a nice improvement from the up about 1% in third quarter and fraud and identity was up almost 20% in the fourth quarter.

European revenues of $79 million were up 4% of local currency in the quarter.

Our European credit business was down about 3% a significant improvement from the down seven we thought saw in the third quarter the.

Improvement was driven by Spain, which saw revenue growth of 7% in the quarter.

<unk> revenue was down about 8% of the quarter similar to third quarter.

Our European debt management business grew about 20% in local currency in the fourth quarter as the UK government. We started collections activity in late September.

However, following the Covid measures put in place in late in the fourth quarter by the UK government to address the pandemic debt collections were again halted late in the year.

We expect debt management revenue to decline in the order of 10% in the first quarter, reflecting these actions, but to improve once vaccines of more widely distributed in the return to a more normal mode.

Latin American revenues of $46 million declined about 2% in fourth quarter in local currency in line with what we expected which was a significant improvement from the down six we saw in the third quarter positively Chile, our largest country in Latin America delivered revenue growth in the quarter.

Latin America continues to benefit from the expenses of ignite and the.

Migration of customers to our global cloud based interconnect SaaS Decisioning platform and we're also seeing the benefit of the strong new product introductions in the region over the past three years.

Canada revenue of $41 million was up about 3% in local currency in the fourth quarter, which was also a positive.

Consumer online was down just over 5% of the quarter similar to the third quarter improving growth in analytics and decision solutions ideally broad drove the growth in Canadian revenue in the quarter.

International adjusted EBITDA margins of 33, 8% were up 150 basis points sequentially, but down 260 basis points from last year the decline versus the fourth quarter last year was principally driven by redundant systems costs from cloud investments and lower income from minority investments.

Global consumer solutions revenue at $76 9 million was down 13% on a reported and local currency basis in the quarter as we expected.

Global consumer solutions performance was very strong in our consumer direct benefits channel and event space businesses as they collectively grew over 10% on a combined basis from the fourth quarter.

The decline in overall gcs revenue in the fourth quarter was driven by our U S lead generation partner businesses.

As we've discussed previously our USB generation partner revenue was significantly impacted by the Covid recession that began in the second quarter with declines in the slot revenue increasing through the fourth quarter as banking customers cut back on lead Gen spending.

Accordingly, we expect declines in total gcs revenue in the first quarter at just over 15% similar to fourth quarter levels, we expect.

The decline in total gcs revenue due to the lead generation declines to moderate substantially as we move into the second quarter.

Our global consumer direct business the business in which we sell directly to consumers through Equifax dot com and which represents about half of total gcs revenue was up a strong 9% in fourth quarter, the highest growth rate since 2017.

Our North American consumer direct business revenue was up a solid 10% versus last year and we continue to see sequential subscriber growth in the U S and Canada, our two largest markets.

Our gcs consumer direct business will principally complete migrating the customers onto the new cloud based platform Renaissance in the first quarter. This will allow for a renewed focus on new product and service introductions of consumers in the second half of 2021.

Our benefits channel and event based businesses, which now represent about 10% of global consumer also delivered about 30% growth in the quarter.

Gcs adjusted EBITDA margins of 29, 29% were down about 610 basis points, principally reflecting the increased platform spend as they complete their cloud systems migrations increased marketing spend to drive future direct revenue and the lower lead generation partner revenue we've talked about.

Slide 10 provides an updated view of Equifax core revenue growth as a reminder, core revenue growth is defined as equifax growth. The equifax revenue growth excluding number one the extraordinary revenue growth in our unemployment claims business in 2021 and number two the impact on revenue from the U S mortgage market activity.

As measured by changes in total U S mortgage market credit inquiries.

Core revenue growth as other attempt to provide a more normalized view of equifax revenue growth for you, excluding the GC and U S mortgage market factors.

In the fourth quarter Equifax core revenue growth the Green section on the bars on slide 10 was up a very strong 11%.

This is up to significantly from the 6% core revenue growth, we delivered in the third quarter due to strong workforce solutions and <unk> outperformance, where they continue to deliver mortgage revenue growth rates well in excess of U S mortgage market credit inquiries and the significant improvement in revenue performance from our non mortgage business in the U S.

As well as the return to growth in international.

A critical lever in our ability to deliver high levels of core revenue growth is our deep and broad array of new products and solutions for the U S mortgage market and the ability to constantly outgrow consistently outgrow the underlying market.

Slide 11 highlights the strong core growth performance in mortgage for our USB to be mortgage businesses workforce solutions. The U S. I S.

AWS in the U S. I S outgrew the underlying U S mortgage market significantly in 2020 with the compliant combined core growth of 37%.

This outperformance was driven strongly by workforce solutions mortgage revenue with core growth of 80% in 2020, which exceeded mortgage market growth rates by an outstanding 80 points during the year.

The key drivers of the strong AWS outperformance include increased market penetration.

Larger fulfillment rates new products and records.

Dws has a long history of outgrowing their underlying markets.

<unk> also delivered strong core revenue growth in mortgage in 2020, the growth exceeding the market by 8% driven primarily by new debt monitoring solutions with further support from marketing.

Our ability to substantially outgrow underlying markets as core to our business model and a substantial strength that should continue to benefit equifax in 2021 and of the future.

Turning now to slide 12 workforce solutions continues to deliver outstanding results. It is clearly our strongest and most valuable business.

Workforce solutions total revenue grew sequentially during 2020% to 62% in the fourth quarter and 51% for the year.

More importantly core revenue growth also accelerated throughout 2020 with core growth of 37% in the fourth quarter up from 30% in the third quarter and 27% for the year. This.

This outperformance from sequential improvements reflects the uniqueness of between data and the power of the workforce solutions business model.

Moving forward his team that built the business with strong long term growth levers and the continued to demonstrate the value of the scale and differentiated twin income and employment data.

This depth breadth and scale of between database and over 20000 customer verification network and value of the workforce solutions for our service offerings of driving substantial growth and value.

In 2020 workforce solutions reached 114 million active twin records, an increase of 10 million active records during the difficult period of high U S unemployment.

Of these 114 million active records over 60% are contributed directly by employers to work for solutions that the team has built up over the past decade.

The remaining 40% of contributed through partnerships many of which are exclusive of.

Also in 2020 twin reached over $1 million quarter contributors of significant milestone.

As you know we of a dedicated team focused on twin record additions and expect to add records again in 2021.

Just last week, we signed the new exclusive partnership with a major payroll provider that will be integrating their payroll system with equifax with the work number later this year.

As you know we are able to monetize record additions instantly from a strong network of over 20000 verification customers and of course of the uniqueness of the twin data.

Where do you see them continue to rapidly expand the number of mortgage companies and financial institutions, with whom we have built real time system. The system integrations and as we've talked previously those drive more usage of our twin data in mortgage for example for 65% of mortgage transactions are now system the system with workforce solutions.

These integrations are now extending into card and auto verticals.

As well as across our growing government business.

We also expect our new verification solution solution for the social Security administration to go online in the first half of this year, which will deliver incremental revenue the workforce solutions.

The workforce solutions, new product pipeline is also rapidly expanding with new products across mortgage talent solutions government of 99 of new product revenue expected to increase substantially in 'twenty, one and 'twenty two.

And in 2021 workforce solutions verification services for infrastructure will be fully cloud native also providing the industry's leading cloud native data and technology platform that will further accelerate data ingestion massive additions of employee kind of contributors to the twin database and new product capabilities for this.

Unique and scale of twin data asset.

On slide 13, I'd like to turn the 2021 and discuss some of the favorable market and macro trends that I alluded to earlier.

Before COVID-19 the macro trends on the left.

Side of it.

Side of the slide had already begun to manifest themselves.

As I discussed earlier Covid driven of rapid acceleration of digital and online consumer interactions improved real time decisioning require more complete.

And more recent information from the broader set of data assets, including alternative datasets has become even more critical.

This is required to reduce friction and consumer transactions, while ensure ensuring certainty of identities and minimizing credit and fraud risk.

Effectively utilizing these expanded requirements for data decision has accelerated the need for advanced analytics, including machine learning as well as the need for effective data governance, including the ability to provide consumers with the acquired control.

And seamless delivery of these capabilities continues to advance high performance has always been table stakes in the in the space that we play in.

Given these accelerating and continuing trends of the implications for equifax or that the demand for our unique datasets and the integrated insights has never been stronger, including those embolic involving our powerful tween income and employment data.

Our IV and fraud prevention solutions in those including those acquired from count target E Commerce, and retail space, our trust enhancing thereby improving the overall digital experience for consumers.

I'll now hand, it over to John to provide our 2021 guidance and I'll come back to wrap up.

Thanks, Mark now, let's turn to slide 14, and our economic and market assumptions for 2021 in December we provided you with the framework for revenue and adjusted EPS for 2021, as well as the basic assumptions underlying that framework.

Currently the 2021 and the 2021 guidance. We are providing is consistent with that view as are the basic economic and market assumptions underlying them.

All of the progress of the COVID-19 vaccines unexpected substantial additional economic stimulus are promising for the 2021 economic recovery there remains significant uncertainties regarding the timing and pace of economic recovery in the U S as well as internationally.

Consistent with our discussion in December of 'twenty 'twenty, one guidance assumes the U S mortgage market, our proxy for which is the U S. Mortgage credit inquiries remained strong in the first half of 2021 the decline in the second half, we assume 2021 credit inquiries overall to be down about 5% versus 2020.

The first half credit inquiries up almost 15% in second half of inquiries down over 23% for perspective, the U S credit inquiries in the first half 'twenty one are assumed to grow about 6% from the strong level. We saw in the second half of 'twenty January was strong and confirm this trend.

Equifax USB to the mortgage revenue UWS and USAF will continue the significantly outpaced the overall market mortgage market with growth of over 10%.

U S economic recovery will start early in the second quarter of 2021 with over three 5% GDP growth for the full year, we expect the U S <unk> and workforce solutions non mortgage businesses to outperform their underlying markets Uws's talent solutions and government businesses should also significantly outperform.

Workforce solutions unemployment claims business should be down over 35% versus 2020 as unemployment declines with the recovering economy.

And we expect the international economies will also recover in 2021, beginning in the second quarter.

The full year GDP growth of about two 5% in Australia over 5% in the UK and over 5% in Canada. Our international business is also expected to outperform its underlying markets.

Mortgage market has continued to be very strong driven by both record refinancings and home purchases as shown in the left side of slide 15 as of December Black Knight estimates of about $16 5 million U S mortgages could still benefit from the refinancing based on the current record low interest rate environment.

While down from September's record levels, there remains significant runway in the refi market as refinance candidates continue to be markedly higher than the previous peak in refinance activity in 2016, and the global recession of 2008, given the current pace of mortgage refinancings that almost $1 million per month based on data through August we.

Elevated levels of refinancing should continue well into 2021.

As shown on the right side of slide 15, the pace of existing home purchases further strengthened in the <unk>, reaching $6 8 million on an annualized basis as of December up from $6 5 million in September the trend of families seeking more space. Those worked from home persist discontinuing further supported by the continuation of record low mortgage rates.

Slide 16 provides the specifics of our 2021 guidance, including the bridge between the midpoint of our 2021 revenue and adjusted EPS guidance and our 2020 results.

2021 revenue of between $4 35 billion and for four 5 billion reflects revenue growth of about five 4% for seven 8% versus 2020 with FX, possibly impacting revenue by about one 5% Usia's revenue is expected to be up mid single digits from 2020, which includes the <unk>.

<unk> of the account acquisition.

<unk> will continue to deliver double digit revenue growth with continued strong growth in verification services International revenue is expected to deliver constant currency growth and upper single digits. The strong strengthening the beginning in the second quarter, reflecting the assumed economic recoveries I discussed earlier and gcs revenue will be down mid single digits from 2000.

The 21, the revenue decline of 15% plus and 121 reflects the weakness in U S lead Gen partner revenue that Mark discussed earlier, we expect to see improved performance as the new through 2021, driven principally by continued growth in our consumer direct business.

As a reminder, in 2021 Equifax will include all cloud technology transformation costs, and adjusted operating income EBITDA and EPS. These onetime costs have been excluded from our adjusted operating income EBITDA and EPS in 2017 through 2020, and 2021 Equifax will incur onetime cloud technology tranche.

Formation costs of approximately $145 million a reduction of about 60% from the $358 million of occurred in 2020, Inc.

The inclusion in 2021 of this about $145 million in one time costs will reduce adjusted EPS by about <unk> 90 per share.

2021, adjusted EPS of $6 20 to $6 50 per share which includes these tech transformation costs is down approximately 7% to 11% from 2020, excluding these tech transformation costs of <unk> <unk> per share adjusted EPS in 2041 with show growth of about 2% to 6% versus 2020.

2021 is also negatively impacted by redundant system costs of almost $60 million relative to 2020. These redundant system costs negatively impact adjusted EPS by approximately 37 per share and negatively impact of adjusted EPS growth by about five percentage points in 2021.

Additional assumptions included in 2021 guidance, our capital spending in 2020 expected to be about $400 million depreciation.

Depreciation and amortization, excluding amortization of acquired intangible assets is expected to be almost $310 million. This includes about $10 million of DNA from the acquisitions completed so far in 2021 intra.

Interest and other income net is expected to be slightly negative in 2021 versus 2020.

Our 2021 tax rate is expected to be up from 2020 and slightly above 24%.

21, combined corporate from corporate technology costs are expected to be approximately $485 million.

About three quarters of the increase from 2020 is driven by the inclusion of technology transformation costs and adjusted operating income EBITDA and EPS in 2021. These tech transformation costs are principally for across the programs. The remainder of the increase was principally in security and corporate technology.

Slide 17 provides our guidance for <unk> 'twenty, one we expect revenue in the range of one 105 for one 1% to $5 billion.

Reflecting revenue growth of about 15% to 17% including of one 9% benefit from foreign exchange, we are expecting adjusted EPS in <unk> 'twenty, one to be $1 45 to $1 55 per share compared the <unk> adjusted EPS of $1 43 per share and <unk> 21.

The transformation costs are expected to be just over $45 million or 28 per share. Excluding these costs that were excluded from <unk> 20 of adjusted EPS of <unk> 21, adjusted EPS would be $1 73 for $1 83 per share of 21% for 28% from $1 21.

Slide 18 provides a view of Equifax total and core revenue growth from 2019 through 2021, the data provided for <unk> 'twenty, one and full year 2020, and full year 2021 reflects the midpoint of the guidance ranges. We have provided in 2021, we expect core revenue growth of over 10% and training the straw.

Long levels delivered in <unk> 'twenty and building momentum for 2022 Slide 18 also provides revenue growth from acquisitions for <unk> through 'twenty calendar year, 'twenty unexpected levels for <unk> through 'twenty, one and calendar 'twenty one.

For your reference in the appendix of this presentation. We have included slides that provide more detail on 2020 performance in 2021 guidance the anchor.

<unk> 2020 revenue trend details for <unk> 'twenty through 'twenty details on the pension accounting change we completed in <unk> 'twenty more detail on our 2021 guidance, including both our expected our expectation for U S mortgage market credit inquiries in <unk> 'twenty, one to 'twenty, one and second half 'twenty one.

And an update to the 2020 through 2022 of cloud transformation cost benefits framework, we shared with you in December and with that I'll turn it back to Mark.

Thanks, John turning to Slide 19, we made significant progress on our cloud data and technology transformation in the second half of last year progressing through the data product and customer migration phases of our North American technology transformation, the pace of product and customer migration continues to accelerate and as of year end 2020, USAA has completed over 12.

And the customer migrations onto the cloud based services, including our interconnect ignite API capabilities.

And workforce solutions also completed over 26000 customer migrations of verification services on the its cloud based portals and online fulfillment platforms. This represents over 95% of the workforce solutions verification services.

Customer base.

As we discussed earlier global consumer will complete migration of all consumer direct customers under which transform Renaissance platform over the next several months.

Across North America, we mean, we remain on track to have our U S customer migrations completed principally during 2021.

Our North American Exchange migration has also continued to progress well toward our 2021 goals, including our major North American exchanges of the U S and Canadian consumer risk the work number and NCT we exchanges.

In 2021, we're accelerating strange migration to the data fabric in Europe, Latam and Asia Pacific Europe, and Latin America have already made substantial progress in deploying interconnect ignite API framework and the cloud.

As of the.

As of the end of the year International had migrated over 9000 customers on the cloud based services.

In 2021 of our focuses on product and customer migration to accelerate the decommissioning of legacy systems and data centers to deliver the customer benefits in equifax cost savings.

We will continue to ramp of our focus on delivering new products and NPI revenue by leveraging our new cloud native data and technology infrastructure 2021 is of critical year as we drive toward completion of our North American transformation.

We remain committed to achieving the substantial top and bottom line benefits from the cloud we've discussed with you previously.

The Equifax cloud native data and tech infrastructure is providing meaningful benefits in the marketplace today and that will even further differentiate equifax as we complete the transformation.

Turning now to slide 20 highlights our continued focus on new product innovation, which is a key component of the next chapter of growth of Equifax as we leverage the equifax cloud for innovation and new products.

We continue to focus on transforming our company into a product led organization empowered by the best in class cloud native data and technology to fuel our topline growth.

In 2020, we further invested in NPI resources, while leveraging our new Equifax cloud capabilities to deliver 130 40 products above the 120, we discussed in December and our historical 70 to 90 Npi's annually.

Importantly in 2020 over 50% of the new products were delivered leveraging our cloud native data and technology.

In our December Investor update we shared with you several products introduced in 2020 that will have the opportunity to drive significant revenue in 2021 and beyond the <unk>.

<unk> confidence why you SaaS offers tools that empower our customers to enable consumers to share alternative data that is currently available in credit reports.

<unk> also launched one view of Configurable consumer report that will allow consumer credit data to be combined with any other equifax consumer data asset to create an easily consumable and configurable multi data as of report in the first quarter. One view will incorporate twin income and employment data along with consumer credit.

And our other differentiated equifax data assets.

Workforce solutions continues to expand its suite of new products focused on the hiring process or new talent select suite of solutions products provides easy access to all or a subset of workforce solutions data on a candidate across varying price points with the SME based pricing.

And mortgage workforce solutions has launched new products that support lenders needs to combine between employment and income data with tax return data for.

The new products simplify lenders processes by providing individual or multiple borrower information per loan.

Be it the single transaction from Equifax.

In employer services are nine anywhere of product creates a more efficient and low touch onboarding experience. The product allows the new hire to initiate their application from any device such as the phone tablet or computer computer.

The year via our <unk> app, the new higher than scheduled for completion of their application from a nationwide network of over 100 locations at a convenient time and location of their choice.

The <unk> anywhere products improves accessibility for employees at Offsite locations, streamlines paperwork and improves and speeds up the onboarding experience for the employee hiring managers and human resource professionals.

With our strong new product launches in 2020, we expect to accelerate our NPI revenue growth in 2021.

As many of you know our NPI revenue was defined as the revenue delivered by new products launched over the prior three years and our vitality index is defined as the percentage of current year revenue from new products.

In 2021, we expect NPI revenue increased by over 75% with our vitality index.

<unk>, 7%, which is up substantially for the past three years continued expansion of innovation of new products leveraging the equifax cloud are central to our strategy and future growth priorities.

Wrapping up on slide 21, Equifax finished the challenging 2021, COVID-19 environment with record revenue and earnings and strong momentum as we enter 2021.

Our 11% core growth in the fourth quarter reflects the strength of our business model.

Our estimated six 6% growth in 2021 at the midpoint of our range, while still in the midst of the Covid recession reflects the resiliency and strength and momentum of the Equifax business model.

We are delivering this growth in the context of our expectations.

That we see.

Economic recovery in the second quarter, and net U S mortgage market activity declined 5% of the second half.

Core revenue growth of over 10% in 2021 reflects the strength of our business model is new products and expansion of our data assets allow us to outperform and it's still uncertain global environment.

Workforce solutions will continue to power Equifax as operating performance in 2021.

The work number is our most differentiated data asset and workforce solutions is our most valuable business and likely we will see the workforce solutions become our largest business in the very near future.

Rudy and his team are driving outsized growth by focusing on their key levers the records, the product's penetration and expansion into new verticals.

We also expect our <unk> mortgage business to continue to outgrow the underlying mortgage market and we're energized by the outlook for U S. <unk>.

Non mortgage performance of momentum from the fourth quarter for both organic growth and the new products Inc.

And the growth we expect from count.

<unk> of competitive and winning in the marketplace and we will deliver in 2021.

International has returned to growth in the fourth quarter.

The real positive and we expect that to continue in 2021 of their underlying markets recover.

We are encouraged by improving conditions across our international portfolio of would you expect the international the outperform these underlying markets.

We're also turning the corner, we're turning the corner from building, our cloud capabilities to leveraging our new Equifax cloud data and technology to drive innovation, new products and growth.

We remain confident in the significant top line cost and cash benefits from our new cloud capabilities.

These financial benefits start to ramp in 2021 and of our enabled by our always on stability speed the market and the ability to rapidly build and move products around the globe.

Our strong operating performance strong balance sheet, and Equifax cloud data and technology platforms position us to enhance our capabilities via M&A.

We are building our acquisition pipeline as we pursue accretive bolt on transactions that will strengthen the core of the equifax and meet our stringent mutual criteria.

And given our very strong financial performance, our strong cash generation in 2020, and a strong balance sheet and our confidence in the future of Equifax, we are restarting our share repurchase program at an expected level of over $100 million in 2021 to offset dilution from employee benefit plans.

We view this as a positive step forward and returning cash to shareholders.

While the Covid recession. The recovery is still uncertain, we have a lot of confidence in our business model and our ability to perform.

We have strong momentum on all fronts as we move into 2021.

Equifax is outperforming in the challenging Covid recessionary environment, we're on offense and positioned to leverage the equifax cloud for innovation and new products to drive future growth margins and cash generation as our market, leading data analytics and technology company.

With that operator, let me open it up for questions.

Okay. Thank you.

Thanks.

From your telephone keypad.

For using a speaker phone please make sure your mute function.

Okay.

Again.

Star one for question.

And we will take our question from day.

David.

Our core ISI.

Thank you good morning and appreciate.

The detailed business of guidance update.

<unk>.

Maybe dig into the outlook for AWS, a bit more you called out the double digit revenue growth expected.

Can you be a little bit more precise there as that approximately 10% or something potentially much higher and then if you could drill down a little bit into growth expectations for.

For employer services and verification.

And maybe just close on your expectations for a record growth in 2021.

Yes.

We believe and we talked about at the workforce is clearly our most differentiated business.

You talked about the strong performance in 2020.

That follows strong performance in 2017, 18, and 19, so they've got a long history of growth and have a lot of levers for growth I don't think we want to get into specific guidance around workforces.

The growth accept it we expect it to outgrow the underlying markets again in 2021.

As we said, we expect that to be in the double digit and we also said it will be.

For sure of the highest growing business inside of Equifax.

The levers that work for.

This has in front of it and at the top of the list is the ability to add records, that's a very powerful.

Lever and as you know we added records throughout 2020.

Those are monetize the right out of the shoot the as soon as we add them to our database and of course.

Year over year basis, those record additions drive revenue growth in 2021, and I think we also stated that we expect to grow records the quite.

Quite confidently in 2021, and we added the large.

Agreement, we signed just last week with a large payroll processor for the exclusive agreement to contribute the records two of Equifax. So thats kind of helped drive our record growth of that going forward.

On the verification is clearly the large the strongest the largest part of the equifax in the highest margin part, but as you pointed out of talent solutions.

We're also excited about we expect to see some recovery in elements of that business is the.

Market improves and the economy improves kind of post vaccine.

Now, we're targeting that kind of second quarter and going into the third and fourth but underlying there. We've got some really impressive growth from our <unk> solution and we talked about on the call the <unk> anywhere.

It's really got a lot of traction because of the uniqueness of of the solution and of course, it drives a much higher.

The revenue solution for Equifax.

Anything else you'd add John.

The government, we expect government the continue to grow very very nicely right. We have obviously of the substantial new contract in the government segment and also we continue to build out.

Our suite of solutions that service not only of federal but also state and local governments and their benefit and the benefits system. So we feel very good really across the board.

And AWS and pallet solutions is obviously, the Hainan anywhere, but also substantial new products across the talent solutions marketplace in general and as a reminder, we've talked many times on the during 2020 of our calls with you about the new solution that workforce of rolling out with the social security administration and talked about that being a one day.

<unk> of $40 to $50 million a year of contract that's going to ramp.

During 2021.

The full run rate in 2022, but thats a very attractive addition to the business. So just reflects again the uniqueness of the scale of the dataset and uniqueness of the data itself.

I appreciate that just as a quick follow up do you see of feeling on EBITDA margin expansion for.

EW African business.

Get above 60% or are you going to just reinvest at a high rate.

To keep margins of approximately in the mid fifties.

Yes, I don't think we get we would invest just to keep margin that a certain level, we invest where we see accretive returns for our shareholders. When it comes to internal investments and we've been doing that quite substantially I think.

Over the last three years and even in 2020, we reinvested quite substantially in the workforce of the U S. I S. Whether it was obviously in the cloud transformation investments dependent new products of the DNA assets investing in new record additions.

So we will continue to invest with regards to is the ceiling on there I think that the tough question.

The answer is one that we see along one way of growth potential for workforce solutions I think I talked about.

Our expectation workforce will become.

Sometime in the near future of our largest business unit, which is we think quite attractive for equifax and for our shareholders because of its highly accretive nature of its revenue growth as well as the accretive nature of it.

<unk>.

The thing I'd add obviously as in terms of acquisitions as well or force as an area of where were forecast, where we're focused as well as obviously other parts of the business, but it continues to be a focus area.

I appreciate that.

Thanks.

We will take our next question from Andrew Steinman with J P. Morgan.

Hi, there for the sake of clarity.

The organic revenue growth.

From for the 'twenty, one guidance at the midpoint and has.

Estimate of of revenue growth for 'twenty, one change since the December call I'm, particularly just asking about the account revenues I assume the account revenues werent in the December call R&R and good day.

Yes so.

Slide 18, we indicate that included in the 2021 guidance.

One two points from acquisitions right. So if you think about count count revenue, we don't have kind of revenue for the entire year. It gets closed.

And because of that it's about one two points. So the inorganic revenues one 2% debt.

Covered.

And has your view of organic revenue growth for 'twenty, one change between the December call on today.

It Hasnt.

Andrew The December call was only a few weeks ago I think we still think that's the right guidance for where equifax is going to perform the 10, 5% organic growth.

From the business there is still as you know a lot of uncertainties.

The Covid recovery, we're betting on it starting in the second quarter, we've already seen some of it in the in December January So I think thats positive towards debt assumption that we have and of course, our assumption is that the mortgage market, while still very strong declines in the second half of 2021. So I think we have.

Got the right guidance.

I think the momentum we have from the fourth quarter, we can support the 10 five.

I think youre asking specifically about the numbers between the framework, we provided in December and today.

They are up about $75 million right on the top of the bottom end.

A chunk of that is accounts, which we just talked about.

And then also there was some FX benefit and it also reflects the fact that we think theres, obviously of risk and timing of recovery.

The U S economy, and other economies, so that $75 million improvement from both the top and bottom end reflects those three factors and obviously, we performed a lot better in 2020, and we have talked about in December so the actual calculated growth rates look different obviously are somewhat lower.

But the absolute delivery of revenue in 2021, we think of that as about $75 million higher reflecting the factors that I just referenced John that clarifies it. Thank you.

Okay.

We'll take our next question from Kevin Mcveigh with credit.

Great. Thanks.

For the cloud is impacted.

Both the pace and cost of new product innovation.

Two dosing the end of the year for the 34 from.

From the beginning of the year, how should we think about debt pace in 2021, and then it is here.

Any way to reconcile it for what it can mean for organic growth.

They have the potential of accelerated the core organic growth as you saw the.

The new product innovation for our book its a structurally higher level of multiple day.

Yes.

Yes, it's a great question and we talked about debt.

We really believe fundamentals of our strategy is to really leverage our cloud investments, which we think are incredibly powerful both of the technology and data side for innovation of new products.

As we talked throughout 2020, we invested more in the product resources to really start driving debt leverage of the cloud investments is the focus.

Completing the cloud the transformation, but more importantly, leveraging it and as you pointed out. The 134 is the really big increase from our historical new product Rollouts and of course, those rollouts are in the marketplace now meaning that our commercial teams are starting to take those the market. So that's embedded in our core growth assumption for.

2021, which is up substantially from where it was for growth in 2018 and 19.

Up from our historical kind of pre cyber growth rates in NPI is clearly going to be a big factor in that.

In my comments I mentioned that.

I think it was 50%.

Of our NPI during 2020.

Really leveraging the cloud as we move into 2021 that will be substantially all of our new products, which will speed up our delivery of the products of speed up the time of getting them into the marketplace and then also drive.

The number of products that we want to bring to the market and we haven't given a.

That assumption of our target for the number of new product set for 2021, but I think we were clear about our vitality index, which really drives the.

The organic growth from our new products of.

Being quite substantial of 7% the net.

'twenty, one so thats a clear lever for growth for us and we think this is as we go out in 'twenty. One 'twenty two 'twenty. Three this is really central to where we're taking the company is really leveraging the cloud transformation to drive.

Our revenue growth and thats going to happen through the innovation and new products and Kevin as you know right new products tend to deliver the most revenue for us kind of a year or two or three of their lifecycle. So we're very excited about the fact that we have very strong obviously, new product introductions in 2020, which benefit as mark referenced 2021.

The <unk> index and revenue contribution, but should also be tremendously beneficial as we look to 2022.

Just make sure to make the shift.

In the back of the market.

We started.

Okay.

The question was about the buyback, but I didn't view of the rest of it.

For your question.

Sorry about that cash.

How quickly can you get back in the market.

Oh.

Kind of start the buyback quite quickly.

We're level low debt through the year.

That's a positive step forward of reflects our confidence.

In the future of Equifax, and we think it's a positive step forward.

To start with a buyback that will offset the dilution from our employee plans and again it reflects our confidence in the future of Equifax.

Is the first step forward in returning cash to shareholders.

Thank you.

We'll take our next question.

At the Morgan Stanley.

Thank you.

Assuming once you get to the second half assuming your mortgage market outlook is correct and that the market size.

No you're confident in your ability to outperform in the market, but how do you think about the delta between your markets performance in the market. When the market is slower does that change because of the lower activity or does it stay similar just because of.

Of your capability of that.

Yes, I think it's of Great question, Tony I think you have to really separate Usia's dws workforce solutions.

Both businesses are taking advantage of new products in the mortgage space and rolling out new products in an up market.

It is positive and growing up new products in the Downmarket is positive. So I think thats one they both have the ability to grow share meaning.

The new customers.

Workforce solutions has more capability there just because.

The workforce solutions data is less used using mortgage and exert example, then the credit filers and the workforce.

More levers.

<unk> has in its ability to grow.

In all markets and you've seen net.

Not only in 2020, you've seen it in 2015, 16, 17, 18, and you've also seen it accelerate.

They're non core growth if you will over the last year.

It's driven by a more rapid increase in records.

We think it is driven by the scale of the database.

When you have hit rates that are north of 50% of the twin data that becomes increasingly valuable to customers. So that's driving usage of the data the.

The value of predictability of income and employment data is theres just a lot more levers there. So we've got a we've got a lot of confidence in both businesses ability to outgrow the market that's underlying what equifax does but.

But I think it's safe to say workforce just has a lot more levers in the AD records on top of it.

As you know.

Adding records in an up or down market is what we do and we added 10 million records last year, but as you know we had some.

Record lead the database is.

The employment was reduced by some of our contributors so that was offset from that.

Improving economic environment, we would expect to see hiring and improve with lots of our contributors, which is also going to drive records along with actions like the announcement that we shared this morning that we signed the another big payroll processor to an exclusive agreement. So the new products are going to Hell.

Both businesses in the.

We've got a lot of confidence in our ability going forward.

To outgrow underlying markets because of the uniqueness of our data on new products and the penetration of the usage and of course of the workforce with records.

Tony you are certainly right rate debt lower market activity does effect.

The growth rates and everything but again as Mark said, our performance has been so strong relative to the market overall, we feel very good about what that report and even for the second half.

That's great and then.

I've been getting a lot of questions I think given the administration's recent appointments.

On the regulators.

Could you just talk about your view on what maybe changed from a regulatory perspective. This year would you expect any meaningful changes to be implemented quickly and are there any areas. In particular that you would expect to see greater focus from regular cash. Thank you.

Yes, we would argue the regulators have been quite strong for.

A long time, including during the Trump administration Equifax of course in our competitors' operated through the Obama administration. When there was the level of very strong regulation.

Going into the by the administration.

Don't expect meaningful changes.

And whenever they are will responsible we play an important role in the marketplace.

We have been highly regulated.

For a long time, and we know what it takes to operate in the regulated environment I think that's the important characteristic.

We have to respond to them.

We believe we'll be able to respond to the interest debt.

The the regulators have theres. Another question on the legislative side of the is there going to be any changes legislatively around credit bureaus, we don't think so.

We think that we provide a valuable service and the.

We're focused on ensuring access to credit for alternative data, which is a big priority of.

The current administration and we think we have a strong response to that.

Thank you.

We will take our next question from Hamzah <unk> with Jefferies.

Good morning. Thank you my question is around the fraud business.

Could you maybe just talk about what's the differentiator there in your offering and specifically.

As it relates to accounts, our patent portfolio, which is pretty strong could you maybe talk about the opportunity to repurpose some of those pockets across your current portfolio.

Yes, yes.

First of all of the Equifax has.

<unk> identity and fraud business.

We've talked a bunch of about the market macro, which we think is very attractive.

Digitization increases identity and authentication really is the critically important that was happening pre COVID-19. It was accelerated during the Covid. We think it's only going to continue to grow so we like the macro space, which is why we've been in it for quite some time and the idea of the adding talent has been on our radar for quite some time, but we know the account for.

For five years, we've watched them and had the opportunity to acquire them and close the deal yesterday and the what count brings is really combining with our differentiated data assets in identity and fraud really just a massive increase in the data capabilities signals the <unk>.

32 billion interaction they have per year is just massive in the number of the addresses the IP addresses the email addresses phone numbers physical addresses just enhances the capabilities to provide higher predictability.

So the combination.

The comp data with Equifax data is going to enhance the count and the retail and E Commerce space and also enhanced equifax and our traditional spaces.

This week, we're already off to the races of bringing count solutions to our banking and lending customers. For example, the other thing attractive to us would count as it moves the equifax into a new industry vertical we were never in the retail and E Commerce space and count Lids, there quite strongly and then as you point out they have some really attractive.

The technology beyond their day.

If you combine for a lot of their patent and technology capabilities, along with Equifax is including or did the.

AI technology MDT, we think thats another powerful combination. So we're very energized about the acquisition of excited the hatter closed yesterday and we're off to the races.

As of yesterday afternoon of integrating and really moving to market to the market in the driving the synergies that were part of our acquisition model.

As we get the business up enrolling as an Equifax company.

Great and very helpful. Just for my follow up question and I'll turn it over is just when you look at your core growth.

Breach I guess, it was 8% than 2%, 3% sort of 2018.

And in 19, and then the sort of jumped to the 11% and you're guiding for 5%.

What's the normalized level of core growth.

Thank you are going to consist of people post the that transformation is it sort of are for certain number or is it sort of.

6% of any thoughts I know reporting for <unk>.

Different where it sort of the workforce solutions business.

Yeah, we're not ready to put our long term framework back in place.

Can't tell you, we're getting to that stage.

I would expect it will be something we certainly want to do in 2021, we'd like to see.

Little more.

A few more months under our belt of the Covid recovery to make sure. We we see debt, but I hope I hope you get a sense that our confidence of the Equifax model is quite high.

When we look at the core growth in 2020, and the core growth expectation we have for 2021.

That's a very meaningful number for us it's one that we have a lot of confidence in.

In the.

We'll be ready to share our long term framework.

Sometime in 2021, but.

Hope you get a sense of that.

Hour of workforce solutions, obviously as it moves to be a larger part of the Equifax is the is it is a positive for our core growth the new product.

We have we've been very consistent.

With you over the past.

A couple of years is that it's our expectation that the cloud investments that we've made.

Not only drive our margins and cash but will also drive our topline as we were able to deliver new solutions, we couldnt do before before and really drive our new products. So those are all positives from our perspective and.

And how we think of the long term growth rate of the company and we'll be ready to share that with you in the coming future.

Great. Thank you for Mike.

We'll take our next question from Kyle Peterson with Needham.

Hey, good morning, guys. Thanks for taking the questions.

Just wanted to start off on the <unk>.

WNS segment.

Had really strong year there.

As noticed in one of your big competitors came out with.

We are offering a few months back we had a partnership for the pretty.

Pretty big payroll provider as well have you guys noticed any change in any of the the competitive environment.

The new business wins or any momentum in the last few months non segment.

We have not.

Haven't seen any.

Kind of commercial traction on that yet.

We expect there will be but at the same time, we've got a lot of confidence in the scale of the workforce solutions business model the.

20000 verification customer network that we have it's taken a decade to build.

Of our database is multiples of what we believe our competitors will ever be able to access given the scale of our additions in the.

The reminder of the.

114 million actives, we have 60% of those we've done with individual companies over a decade and it takes a long time to build that database. We also have the database that has the 350 million total records, including inactive in.

A third of close to a third of our revenue comes from inactive records, which is another.

Characteristic is very unique to work force solutions. So we've got high confidence in our business model.

As we shared on this call we signed an exclusive arrangement with another large payroll processor just last week.

B coming between and they came to twin because of the scale of our capabilities and what we can deliver for them and what they can deliver to their customers and then of course the revenue share opportunity.

The very meaningful with Equifax and is more challenged when you were in a startup mode.

Got it from.

That's definitely very helpful color and then just a follow up on the the gcs business and of the partner revenue.

It's kind of out of a tough spot.

Just.

What would it take for I think some of your partners to start.

Up upping their marketing and helping that trend kind of improve as debt.

Is it better trends in card and auto markets or just like how should we kind of think about that business as the.

Economy, hopefully bounces back here in 2021.

You nailed it it's really the economic recovery, it's their customers.

Who are primarily card issuers pilon originators.

Having more confidence in building their originations what we believe many big card companies are doing is using their own modeling.

To generate new customers now and I would characterize more cautiously and we're seeing that in our revenue directly.

With the card companies, while its improving they're still cautious in this uncertain economic environment and what Youre cautious I ran our credit card business for 10 years.

Youre going to be careful about.

Would you use for lead generating of generally focus on your own versus buying leads from someone else. So.

It's our expectation that as the economy improves.

As we move past the book.

Covid pandemic for whatever the new normal is our view of debt, we're starting to see debt.

In the latter part of 2000.

<unk> 'twenty for sure in our non mortgage businesses and continuing to January but that will also show up in.

For our regeneration of customers and their revenue will grow.

Gcs in total we're excited about our consumer direct business frankly continues to grow in and we've seen the first growth out of it and in quite a while in the third and fourth quarter. So we think thats a very positive outcome.

Got it that's very helpful. Thanks, guys.

We'll take our next question from Manav Patnaik with Barclays.

Thank you good morning, I, just thought of a few of them. So firstly just on the organic growth I just wanted to confirm that so in December the implied organic growth of close to 6% now two in the hearts of 5% and I guess, what you're saying is basically of the tougher comp.

That was created in the Q is the reason why you just have an update of the given the uncertainties of is that correct.

So I'm going to make sure I understand the card I think you were asking the difficult about the difference between the two.

The framework, we provided in December and the guidance. We just provided is that correct.

Yes, sorry, you just coming through so I apologize.

That's all just on the guest demand and growth.

As of today in today's guidance implies $2, 5% to 5% organic which is more than what it was in December.

Yeah. So we performed much better in December than we expected right. So our revenue came in very strong.

So I understand that youre talking about a growth rate off of a much stronger 2020 of performance, but our view of 2021 right is actually slightly better than it was when we talked to you in December and and we took the step we increased the bottom and top end of our range by $75 million and that reflects count. It reflects some FX benefit but it also reflects.

The fact that we continue to believe there is substantial risk in the timing of the recovery. So that's really what it is so yes, we have a stronger December than we expected. So the 2020 was very very good but our view of 2021 is actually slightly better than it was when we talked to you in December.

Okay fine.

And then.

In terms of the exclusive partnership you have with the appeal of provider.

I understand why the large provide day would want to come to Equifax for I'm just curious why.

The day signed exclusive I was just hoping for some color of that because why not sign up with others as well and monetize the data multiple times.

Yes.

You probably know from prior discussions the bulk of our relationships are exclusive.

We think that's the right arrangement between us and our partners.

The the partners really think having one one relationship is is the way to operate.

And they believe that brings more value to their customer base and you'll remember if you are a easy examples of the payroll processor. This is not a core activity for you, but by providing the income and employment verification services to their customers. They are providing a new value added service.

From.

From a company like Equifax, they deliver that service to their customers, which are primarily the processing payroll for for free so it becomes more valuable and in our case, we just have more scale for their employees, meaning we can we can access 20000 different mortgage originators.

Origination cartage range originators, meaning we can deliver more value to them then of startup could which is why their desire around exclusive.

Is more important I think the scale of Equifax and workforce solutions also plays into it the.

History, we have of over a decade of providing income and employment verification the.

The security in the <unk>.

<unk> controls we have around privacy around how the data is used is also a big part of the discussion for our partners because.

They want to make sure they protect their customers.

Data all of those play into why the bulk of our relationships are exclusive of why this one is too.

Okay, and if I could just squeeze in one quick one.

You talked about a lot of things that I just wanted to get an update on how you see the partnership with FICO fitting into the scheme of things and kind of how that strength.

Yes, I'd say its going well.

For the couple of years ago, We've got a couple of products in the marketplace.

We're still building out some of the technology, but.

I have a monthly call with the team to talk about progress in the.

We still believe that thats going to be a positive for equifax and for FICO. So we're very committed to it and we're continuing to look for more solutions that we might we might do together.

That would leverage both of the Equifax and FICO.

Well take our next question from Shlomo Rosenbaum of Stifel.

Hi, Good morning, Thank you for squeezing me in here.

Just a few little ones to finish off.

John just as you compare compare like the frameworks of the 'twenty 'twenty one guidance of the <unk>.

We're focused a lot on kind of the <unk>.

Revenue growth rate change, which you stated is has to do more with the outperformance in 'twenty than it has to do with expectations for 'twenty one.

The redundant system costs as they have gone up a little bit of room like 45 million for almost $60 million I was wondering if you can.

Tell us what's going on over there a little bit.

So was the question what was the could you say the and I thought you were a little garbled I didn't hear exactly what the question was.

Sure the redundant system costs seems to have gone up from $48 million up from 45 million for 58 million I was just wondering what's going on over there.

Sure. So just as we continue to move through time right, we get more clarity on the pace at which we're able to bring new systems to the cloud, which that drives the incremental costs that we're incurring.

And that continues to progress really well so as we as we continue to move forward, we're able to better view of how those costs are going to be incurred and then that gives us the view as to when decommissioning will occur and just as you looked at within 2020, we are of very nice pace of new systems moving into the cloud.

Which should drive the very good 2022 performance that we're that we've talked about and we talked about bringing the framework. So for just refining the model and continuing to work forward slightly higher depreciation I think we've talked to you about before and slightly higher cloud costs in the context of our total cost base not really a very big number.

Okay. Thank you and then.

Just the inquiry.

The share repurchase program it doesn't seem like it's debt aggressive.

Given the company's kind of return to growth.

Is there potential to kind of upsize that more during the year and also what about the dividend there hasnt been any change of the dividend of the yours as well.

Yes, I think I hope you cut the characterization that we add is this is a positive step forward but.

I'd also say is that the last debt for equifax.

Thought it was a finally.

We start to return cash to shareholders and offset employee plan dilution as we talked earlier in this call and we talked for quite some time.

It's our expectation that we'll be rolling out our long term.

Financial framework that will also include our capital allocation plan.

Later in 2021, we want to see a few more months of the Covid recovery before we put that in place, but our confidence is quite strong on where we believe the company is going which is why we opted to.

Ounce of this first step.

In our buyback in the.

As you know our dividend growth was a part of our long term framework prior to the cyber event. The stock buyback was also and we've been quite consistent but it's our expectation that.

Both of those will be of part of our long term framework of the capital allocation in the future.

Okay keep in mind me squeezing of a more social security contract is that sort of one half of that slip at all of it kind of was under the impression that was going to be starting in the first quarter of this year.

The question is on the timing of the security contract.

Starting on the technical work in the first quarter and our revenue will start.

As we get into second and you'll continue to ramp through the year and I think we've talked about the run rate when fully deployed which will be in 2022 full run rate is $40 million to $50 million of year of revenue.

Great. Thank you so much.

We'll take the next question from Brett Huff with Stephens incorporated.

Good morning, Thanks for all of the direct sales guys.

I'll just just one question until the bigger picture one of you guys think about the analytics market versus the unique data market youre pile of boats.

Can you talk about how you're thinking you attack that market is it more do we need with the data.

And back end of the analytics and the cross sell or do we lead with the the analytics products and then use the data of the cross sell or am I thinking about that paradigm.

End of incorrectly.

No I think I think you are thinking about it the right way of it really depends on the customer.

You think about the larger more sophisticated customers. They have very sophisticated typically analytics teams, we still help them with analytics solutions, whether it scores or the.

The models for them, but they do a lot of that themselves. So that they would be more of a day to consumer, but where the supplement of advanced analytics from Equifax and as you go down.

And the scale of customers.

Get into customers that are really looking for more turnkey solution from us meeting, our full product and that would be new products and the scores.

Solutions, they really they can plug in there as opposed to try to create themselves.

That's why the capabilities, we have of first and foremost.

Continuing to expand our differentiated data assets is clearly at the heart of what we want to do and now that we have the data in the cloud in a single data fabric. It allows us and our customers to more easily access that data in our case to deliver analytic solutions that are just much more sophisticated and have multi data elements to it.

We think will be quite powerful like going forward and you're starting to see that ramp in NPI is the last year. The one.

34, we delivered the.

<unk> is really a good.

Example of our focus on bringing those solutions to market.

Just a quick follow up debt from a buying behavior point of view are we getting more of kind of office of the enterprise data was.

They're a data and analytics are at I don't know medium large enterprises and are they doing buying there are we still selling in the individual business units and maybe the left hand on the right hand don't know that they are both volume from you guys or in other analytics company.

It's as you said is the.

Again, it depends on the size of the company.

There's a lot of companies leverage their sourcing relationships to try to package everything they do which.

From our case, we view is advantageous in most cases because of the particularly the strength of twins.

If you're bringing in net in the commercial relationship.

It's a very valuable data asset.

There are still of lot of customers that buy byproduct line that's.

That's who we interact with a net too.

We're working in bringing solutions that we're bringing different solutions to the mortgage business unit inside of the financial institution than we are to the auto of card or P loans.

So it does vary on what we're bringing from a analytics as well as the product capabilities.

It is varied by a customer.

Great. Thanks for your help desk.

We will take our next question from Andrew Nicholas of William Blair.

Hi, good morning.

We spent 32 million on organizational right sizing in the quarter. It sounds like it was necessary to enable some of the deterioration in tech transformation spend do you expect this year I'm. Just wondering if there are additional cost of the type of this nature of you'd expect to incur in 2021 and if so are those included in the 140 <unk>.

$5 million of onetime transformation expense, you've outlined for the year.

So I think when we talked in December we indicated that we would expect to see some decline in tech transformation of expense by quarter as we go through the year and you can see that because of the 45 million of in the first quarter is obviously more than 25% of the total that we gave.

So we will you.

You'll see a decline in our tech transformation expense as you go through the year and I think as we get into the talking to you more fully about 'twenty. Two we can talk about whether there could be additional right sizing costs that could come.

But there would be nothing included in our guidance.

Got it got it and then.

Switching gears, a little bit I was hoping you could refresh us on the open banking opportunity abroad, maybe provide a bit more color on how accounts for addresses this opportunity specifically and then and then lastly is it your expectation that the accounts for acquisition could benefit.

The other capabilities or provide other capabilities that you can port over to other regions or is that primarily of European business. Thank you.

Yes, Great question open banking as you know.

What really kicked getting some traction in many markets like the UK and Australia.

All of our markets, we have partnerships like in the United States, where the partnership with Yodlee around consented data and we've got a partnership in Canada. We've got another one in Australia and our partner in the UK was accounts score and there was an opportunity to acquire them, which we thought was very strategic.

And the very strategic for our UK business.

And we also believe as you pointed out that theres going to be some capabilities around the categorization.

Assets that they have and capabilities and some of the technology that we may be able to use.

In other markets on a global basis.

Yes.

We will take our next question from Andrew Jeffrey with true security.

Hey, guys.

Lots to digest here appreciate the insights.

I have a question Mark just specifically on AWS unemployment I realize it's a relatively small business from the Grand scheme of things, but the.

The guidance this year can you unpack that a little bit.

In terms of.

Whether thats purely a return to something like full employment in the U S. Maury if there was any transitory benefit from pandemic in terms of employers that might have.

Come on come to us for assistance and automation of that.

<unk> no longer need as is the.

Economy recovers just a little more color there would be helpful.

Yes sure.

We as you might imagine we're adding customers during 2020 as we normally do and workforce solutions in employer services. We provide we have a lot of value added services that.

Our beneficial in some regards the Mac when a company is struggling they look for ways to improve their efficiencies and by outsourcing. The equifax some of those activities to work force solutions, there's a positive there for them so that was clearly.

All of our focus in 2020 will continue in the in 2021, and then of course, the big macro is less employees or reducing employees.

Generally is lower activity for our board of services business and as we have seen some pick up and we expect that to continue in the in 2021 is the cause.

All of it.

The recovery unfolds that will be of positive for that business and then on top of that we talked about some of the products that we're doing.

Like the <unk> anywhere is really a very very strong growth just because of the uniqueness of the solution, allowing a.

As prospective employees.

Fleet debt process remotely where.

The positive during Covid, but it's also positive longer term, it's just the faster they don't have to come to the HR office.

We can do that.

Some of these different locations.

That really drive speed and.

A lot of employers want to get the employees on the floor or into the warehouse quickly.

And this capability really helps drive that the speed element.

Specific to 2021 guidance the decline in the unemployment insurance claims revenue that we that we gave the specifically just related to the to an assumed economic recovery and substantial reduction in unemployment claims so theres no there isn't.

Nothing else behind it.

Okay. That's helpful. John and then just as a quick follow up.

Can you just speak to at a high level.

How much if any of the.

Tech re platforming of savings you anticipate next year.

Likely to be reinvested in the business.

I think we gave some gave some framework on 2022, you've seen and what we expect the savings to be we haven't.

Not ready to 2020 guidance I think we were clear in December would have been all year that the.

We expect the tax savings to enhance our margin, but we also expect to continue to invest.

In Equifax going forward day, whether it's the new products or other.

Priorities.

When we're when we share our long term growth framework.

The real framework on that debt.

On the long term basis.

Certainly the walk you from 'twenty one 'twenty.

<unk> 22 to one at long term growth framework.

We will be putting back in force.

Well take our next question from George Melas with Cowen.

Hey, good morning, guys. Thanks for taking my questions just wanted to ask kind of high level Mark as you see some of these.

You were sort of payment products buy now pay later and the like can you talk a little bit about the conversations that we're having with R. F.

Issuer customers how are they thinking about that from a competitive standpoint is that is that something you think can have an impact on your business.

Either negative in terms of lower car growth of were positive in terms of meeting more of your services for them to the peak.

Yes, it's the latter we're talking to all of them of providing data services to them.

They still have to do a level of underwriting as anyone would if youre going to extend credit.

For us we view it as a positive macro meeting.

Theres more lending in essence. This is a buy now pay later as other lending.

Positive for Equifax, because we can help them, it's the authentication as a part of that you have to the.

Side of the individuals who they say they are in the there is an element of underwriting that takes place and then there's another piece around that of data.

And we're working with that ecosystem too.

That data so we can add it to our existing data in order to help them and theyre in the process.

Okay. That's that's helpful and just a quick follow up on the buyback.

Should we be thinking that this is designed to offset the lease not not to absolutely reduce.

Share count is that the right way to be thinking about it from a modeling standpoint.

Correct.

That's our intention with the this first step in our buyback program was to offset share dilution from employee plans and we think it's the.

A show of confidence hopefully.

That way by Equifax.

Step forward in our.

Our confidence in the future.

We will take our next question from Jeff Mueller with Baird.

Yes. Thank you good morning, Mark you gave some debt.

Commentary.

The <unk> record.

Our contributor relationships on the incentives I want to try to simplify it for obviously, there's a risk of I'm going to Miss something important in that but.

Would love any collection of per month, so the exclusivity ask from Equifax.

The common.

Contractual relationship with the partner channel is revenue share.

We saw the network and you have the biggest network of Verifiers. So there's other revenue opportunities for your partners by partnering with.

Equifax is that.

Is that the primary.

Motivation of the two sides or is there some other benefit two contributors definement of exclusivity with Equifax.

Yes sure.

Earlier question I don't think cost of so you hit you hit.

Obviously very important points for the.

The partnership, but it's also really important debt Jeff to understand that.

This is a very important relationship because it sort of the relationship between the partner called the payroll processor and their customer, meaning the company the HR manager and there's a lot of trust around that so there is also an element of.

You're going to partner with and what's the what's the history of being in the space the fab.

We have a million companies contributing to us and the 60% of the of the data assets that we have we've gone to the company by company to collect the that history plays in that conversation.

Very very strongly meaning that we have done it we do it well we protect the privacy and.

And then there's also the scale to the employee remember this is a real benefit for.

For a company of employees to help them live their financial lives how they access credit.

If you look at the alternative debt payroll processors company today their customers, they're doing that verification individually by the HR manager.

Lack of privacy.

A lot of work involved how do you know what I'll say.

Mortgage company, calling that HR manager of that small company to identify the income and employment of one of the employees. We do that all for them. So it's a very important relationship so of the value added service.

And the idea of having two companies do it.

The one.

Our conversations with our partners is there's not a lot of interest of map.

For the economic reasons, you raised but I would argue more importantly, because of the scale of equifax the scale of workforce solutions the scale of our privacy and data capabilities, our business model of how we operate.

That is as important.

Or more important than the revenue share which of course, we believe it's very hard to compete with equifax from a revenue share standpoint.

Got it got asked of helpful. Additional color for me and then just the definitional question is core growth organic.

Organic constant currency or just core growth include the impact of acquisition from FX.

It includes the impact of acquisitions and FX, although on that slide we did give you what those impacts are right. So right. We always break those every quarter for you.

Got it thank you.

Well take our next question from Simon <unk> with Atlantic Equities.

Hi, Thanks for taking my question.

There were quite low in the laundry to the school.

I was wondering if we could just go back to Oi margin and put it on John I believe you talked about.

Mix issues or the mix impact on margins and I was wondering if you could help us think about how to think about the incremental margins excluding the tech transition costs as we can.

Go forward through 'twenty one.

And specifically if we're modeling mortgage.

Revenue declines of headwinds in the second half does that mean, you should expect higher incremental margin and vice versa.

Yes, so you're specifically referencing <unk>, yes, and yes, as we talked about in the past so the.

The margins on mortgage specifically because of mortgage solutions are lower rates of the two factors are obviously of mortgage solutions, we buy and resell the trended file from our competitors and then also the the scorecards from mortgage or just higher than they are in any other vertical so those two factors.

<unk> negatively impact our gross margin.

Mortgage so yes, as the mortgage growth substantially it's a negative for <unk>.

Arjun percentage is obviously very profitable right, but negative for the mortgage market margin percentage for us.

And as mortgage declines its somewhat of a positive obviously that isn't the only factor that moves that affects margin. So I can't tell you that that's the only thing that will move them around.

But as you're thinking about it yes, that's correct.

Okay alright. Thanks.

Just follow up.

Maybe we could jump back to the AWS.

AWS and the payroll processor.

Agreements you have in place.

In terms of the well I guess I'm, taking a step back and think bigger picture here is there any reason to think that say in 10 Years' time this market will become.

The move from the sort of exclusive relationships, maybe dual sourcing in any way.

As it has gone into other parts of the credit market for example.

And if not why.

Why wouldn't that be okay.

Yeah, we don't think so.

Given the scale of our capability to remember.

It's quite important the only 40% of our data records and of course of this 40% come through this partnership model, 60% are individual companies that we've added over a decade and that takes a lot of effort to add dose going into the company <unk>.

Convincing them you have the capabilities and of course, we do it every day, we're adding.

The company every week individually at the same time as we're working on these larger partnerships with payroll processors. So that scale really gives we believe equifax of real advantage.

We delivered to our customers and then also.

How a contributor meaning whether it's the company.

Sure.

Partnerships like a thorough process of thinks about working with someone like equifax, just because of the scale of our capabilities.

We're showing pretty clearly that we're expanding that scale $10 million record additions last year.

The conversation we had earlier about a very large the ROE processor of moving forward with us on of exclusive basis later this year.

There is a real momentum there for the business.

Forward and then the other element that I think as you know as the.

We're going beyond the WTO.

Want to expand.

The $10 99 in self employed and gig employees. So there's a lot of work going on by Equifax, there that it's just another vertical.

The data records for US. The we think is quite attractive and you talked also about even moving beyond our intention is to move beyond income and employment and look for other data records that are a part of that hiring process.

Whether it's a licensure or other data records.

So just to follow up quickly.

<unk> of the companies that provide the data is that is that invariably are heightened.

The labor intensive collection of arrangement that.

I'm just wondering if there's some way and future debt that becomes more automated and easier to collect and so easier for new entrants to <unk>.

Chipping away at the individual relationships.

No. These are tech companies that are highly automated we've talked for a cut in a couple of questions on this call about the sensitivity. They have they are in the business of processing.

And other services for the HR manager, that's the core business and they want to make sure that if we're going to partner with someone on income and employment verification that theyre doing it with someone who's going to deliver real value to their customers.

It's going to be done securely with real privacy and of course, we've been in this business for a decade.

And then also the.

Idea of the revenue share because of our scale.

Can monetize those records quite broadly across the.

20000 verification customers, we have with the becomes an advantage in that relationship.

That's great. Thanks, so much.

Thanks.

We'll take our next question from George Tong with Goldman Sachs.

Alright. Thanks. Good morning, you expect core revenue growth to be 10, 5% in 2021 can you discuss how much of the kind of near 5% do you expect from outperformance to the mortgage market and then breakout where you expect the remaining growth to come from in the.

Detail if you have it.

Yes, so I don't think were going to give a lot more detailed on the tenor of 10 five per cent that we provided but but what we would expect to happen as we move through the year right as we've talked about the fact that we expect underlying economies to improve so we expect our non mortgage revenue growth to improve meaningfully as we go through 2021, so youll see non mortgage we are substantially larger.

The contributor for core revenue growth as you move through the year. So that is we do expect that to occur and we think that's one of the contributors for the fact that we'll be able to the deliver very nice core revenue growth even in the declining mortgage market.

And just the follow up on the first question.

For on the business update call you did say that you expected outperformance of the non mortgage market to be less than half.

Some of the core growth this upcoming year is that still the case.

So you're talking about the comment on the December 7th call.

Yep.

Yeah. So I think what we expect is what I. Just said right is we are expecting to see very nice improvement in our in our non mortgage revenue not just in the U S. Not just the AWS and U S. I guess, but also internationally and I think that will that will provide substantially more contribution to core revenue growth in 2021.

Got it got it that's helpful. And then Mark you expect the U S mortgage market the increased 15% in the first half of 2021 and the declined 23% in the second half of the year, how would you handicap the upside downside potential to your forecast based on the refinancing opportunity out there and also home purchase trends.

At the tough one.

Economists, obviously and we're certainly not the.

No.

Built the forecast that we've tried to be really transparent George with you and our investors and all.

All throughout 2020 in the December call of this one too.

Tried to take all of the forecast that are out there from MBA and black Knight and others.

Bring it together and something Thats reasonable.

Still think that feels reasonable debt.

There will be of decline certainly at some point.

You can spend a long time on this call talking about the.

The positives and negatives that might drive that obviously low interest rates of positive I think the fed's position is positive.

Where the Covid recovery is going feels a little more uncertain.

Which is obviously a part of our of our.

Forecast for guidance for 2021.

And we still feel good about that framework.

Which is why we share that in December and you haven't really changed it is.

As we sit here now in February and we still think it's the right.

The right way to start the year as we think about guidance for Equifax.

Well take our next question from Gary Bisbee with Bank of America.

Hi, good morning.

I just wanted to clarify something from your prepared remarks, I believe I heard you say U S. Non mortgage revenue was flattish.

Flattish in Q4, which is improvement obviously from the prior quarter, but then up five in December of two six in January.

Of that right or was the up five and six something else and if so what what's driven that sequential improvement in trend in recent months. Thank you.

So I just the because I think the commentary was specific around online.

Not around total and all of us trying to indicators that the debt basically the trend was improving through the fourth quarter and we saw a nice performance in December and effectively it's continuing in January that's all.

And what what are the under key underlying drivers.

All of that is is it more of the sort of consumer credit activity or is it is the new products or other things that you're doing the deliver that.

Well, there's no question that there is an element of the economic improvement of consumer activity by our customers. There's no question there.

We talked about debt in third quarter, we saw kind of.

Steps forward in the fourth quarter, and that's really continuing and then on top of that we are in the marketplace, whether we're trying to gain share or rollout new products.

The development done that debt also but certainly underlying underlying that is the economic activity.

And then just a quick follow up and just the level set for US can you tell us what percent of 2020 revenue in both U S and Workforces mortgage related.

So we will close shortly and five minutes of.

David views of of revenue value of vertical for every business of getting the equifax. So if it's okay. If I could ask you to wait five minutes, you'll see it you'll see of posted on the website.

That's great. Thank you.

Thanks, a lot.

And that concludes today's question and answer session I would like to turn the conference back to Mr. <unk> for any additional and closing remarks.

Thanks, everybody for joining today's conference call. We look forward to engaging with you again in April when we release, our first quarter of 2021 results in the interim myself, Mark as well as John look forward to engaging with you in different forums throughout the quarter. This does conclude our conference call. Thank you.

And that concludes today's presentation. Thank you for your participation you may now disconnect.

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