Q2 2021 Equifax Inc Earnings Call

Hello, and welcome to the Equifax second quarter 2021 earnings conference call and webcast at this time all participants when he listed only mode. If anyone should require operator assistance. Please press star zero on your telephone keypad.

Question and answer session will follow the formal presentation.

As a reminder, this conference is being recorded its now my pleasure to turn the call over to Dorian Hare Senior Vice President head of corporate Investor Relations. Please go ahead.

Thanks, and good morning, welcome to today's conference call I'm joined here with me today are Mark <unk>, Chief Executive Officer, and John Gamble, Chief Financial Officer. Today's call is being recorded an archive of the recording will be available later today on the IR calendar section of the news and events.

At our IR website, www dot investor debt Equifax Dot com.

During the call today, we will be making reference to certain materials that can also be found in the presentations section of the news and events tab at our IR website. These materials are labeled Q2.2021 earnings conference call.

During this call, we will be making certain forward looking statements, including third quarter and full year 2021 guidance to help you understand equifax and its business environment. These statements involve a number of risks uncertainties and other factors that could cause actual results to differ materially from expectations certain risk factors that may.

Impact our business are set forth in our filings with the SEC, including our 2020 form 10-K and subsequent filings.

Also we will be referring to certain non-GAAP financial measures, including adjusted EPS attributable to Equifax, and adjusted EBITDA, which will be adjusted for certain items that affect the comparability of our underlying operational performance. These non-GAAP measures are detailed in reconciliation tables, which are included with our earnings.

Lease and are also posted on our website now I'd like to turn it over to Mark.

Thanks, Dwayne and good morning, before I address Equifax is strong second quarter results I want to recognize our 11000 associates around the globe for their continued hard work and dedication in these challenging times.

Our team members are our most important asset and they play a vital role in helping millions of consumers around the world get access to credit.

On July 1 we opened all of our U S office is fully and rolled out our new Equifax Flex program, a hybrid working environment that gives our team the opportunity to work from home 1 day per week.

For 1 program recognizes our learnings from the past year around remote work during COVID-19, but maintained the core of our Equifax culture of collaboration and teamwork that is optimized by an in person work environment.

We've also resumed in person meetings with our customers and I've been energized with the conversations that have taken place. So far it's great to be moving back to a new normal.

We had a very strong second quarter and first half was built off our strong outperformance in 2020, our team has executed extremely well against our critical priorities of our new Equifax 2023 strategy, which is shown on slide 4.

We are accelerating new product introductions, beginning to leverage our expanding equifax cloud capabilities and our highly differentiated data assets.

We continue to expand our differentiated data assets, both organically and through acquisitions and partnerships while still in the early days, our new Equifax cloud data and technology capabilities are providing competitive advantages and capabilities that only equifax can provide.

Our customer first initiatives are deepening our relationships with customers and delivering new products and solutions, along with above market Equifax growth.

And as always remain we remain focused on extending our leadership in security.

Our EPS ex 2023 growth strategies, our company for the future and drives all of our growth initiatives as we move through the second half and into 'twenty, 2 and beyond we expect this focus to drive our topline and bottom line in the future.

Turning now to slide 5 Equifax is financial performance in the second quarter was very strong and outperformed our underlying markets.

Revenue at 1 point to 3.5 billion was the highest quarterly revenue in our history breaking the record from last quarter book.

Currency revenue growth growth of 23 per cent and organic local currency growth of 20% were both very strong in some of the highest growth rates in our history.

Our U S <unk> businesses of workforce solutions, and <unk>, which together represent over 70% of our revenue again drove our overall growth delivering very strong, 25% total and 22% organic revenue growth. Despite the headwinds from the mortgage market that declined about 5%.

The 5% decline in the mortgage market was about 500 basis points more than our flat expectation, we shared with you in April.

U S b to B organic non mortgage non mortgage growth of 20% accelerated sequentially from the 16% we delivered in first quarter.

20% organic growth is also a record and reflects the underlying strength of workforce solutions and U S. I S has returned to our competitive position.

I'll cover the performance level performance detail in detail in a moment, but at a high level of workforce solutions again led equifax growth with revenue up a strong 40%.

And as a reminder, this is off growth of 53% in second quarter last year and day mortgage market that declined 5% in the quarter.

<unk> delivered another strong quarter with revenue up 11% driven by non mortgage total revenue growth of over 20% and strong organic revenue growth.

14%.

International delivered a very strong quarter with Covid recovery with revenue growth of 25 per cent in local currency and importantly, all regions internationally delivered growth about 20%.

Slightly better than expected Gcs revenue was down 3% in local currency. However, our consumer direct revenue delivered 11% growth in the quarter its second consecutive quarter in double digits.

Second quarter Equifax, adjusted EBITDA totaled $431 million up 20% with margins of 34, 9%.

Margins were down 160 basis points versus last year due to the inclusion of the cloud technology transformation costs in our adjusted results in 2021, which were excluded last year.

This negatively impacted second quarter, adjusted EBITDA margins by 310 basis points adjusting for cloud transformation cost of $38 million in the quarter. Our margins would have been up a strong 150 basis points, we're getting strong leverage out of our out of our above market revenue growth.

Adjusted EPS of $1.98 per share was up a strong 21% from last year.

Again adjusting for the cloud transformation costs adjusted EPS would have been up a very strong 36%, reflecting a strong performance and operating leverage of equifax.

During the quarter, we continue to make significant progress with the Equifax cloud data and technology transformation, Inc.

Clothing, and additional 7700 customer migrations to the cloud in the United States and more than 900 migrations internationally.

We remain on track with our cloud transformation and are confident in our plan.

We continue to expect the North American transformation to be principally complete in early 2022 with the remaining customer migrations completed by the end of next year.

International transformation will follow North America, being principally completed by the end of 2023.

And as you know last year, we started to ramp up our focus and resources on new product leveraging the new equifax cloud data and capabilities.

In the second quarter, we released 46, new products, which is up almost 2 ex from the 24 products, we released a year ago in the quarter.

These new products are increasingly leveraging the new equifax cloud to deliver better data and decisioning for our customers.

Driving N P is leveraging the new Equifax cloud is central to our E. FX 2023 growth strategy.

And we continue to expect our vitality index defined as revenue from new products introduced in the last 3 years to exceed 8% a big step up from the 5% last year and a reflection of the strong product focus across the FX.

Our first half performance exceeded our expectations and we are clearly seeing continued strong momentum as we move into the second half.

Just on our strong first half results and confidence in the future. We increased our full year revenue guidance by $155 million to a midpoint of $4.7 8 billion, which is up 400 basis points to 16% growth.

We also increased our full year adjusted EPS guidance by 45 per share to a midpoint of $7.35 per share, which adjusting for the technology transformation cost is up 700 basis points to 19% growth.

This includes our expectation that the U S mortgage market as measured by credit inquiries will decline approximately 8% in the year, which is consistent with the guidance we provided in April.

In the second quarter Equifax core revenue growth the green section of the bars on slide 6 accelerated to 29%. This is up significantly from the 20% core revenue contribution we delivered in the first quarter and 11% in the fourth quarter and well above our historical core growth rates.

While our outperformance in the mortgage market continues to drive significant core growth the contribution from U S. Non mortgage and international increased significantly in the quarter.

Reflecting approximately 50, 50% of core revenue growth in the quarter, excluding acquisitions and FX favorability.

Turning now to slide 7 our strong second quarter results were broad based and reflects better than expected performance for all for Equifax business units.

Workforce solutions, our largest business had another exceptional quarter, delivering 40% revenue growth and 58% adjusted EBITDA margins.

Again as a reminder, the 40 per cent revenue growth is on top of 53% growth last year in the second quarter.

<unk> is cementing itself is our largest and most valuable business and is powering our results representing 40% of total equifax revenue in the quarter.

UWS verification services revenue of $395 million was up a strong 57 per cent.

Verification services mortgage revenue grew 52% in the quarter. Despite the 5% decline in the mortgage market from increased records penetration and new products in.

Importantly, verification services non mortgage revenue was up over 60% in the quarter and up over 15% sequentially from the first quarter.

Our government vertical which provides solutions to federal and state governments and supportive assistance programs, including food and rental support grew over 10% in the quarter.

Government remains 1 of our largest non mortgage segments, representing about a third of non mortgage verification revenue.

We continue to expand our products and solutions in the government vertical and expect our new social security administration contract to go live this quarter with revenue ramping to a $40 million to $50 million run rate in 2022.

Talent solutions, which rides income and employment verification as well as other income information for the hiring and Onboarding process through our AWS data hub had another outstanding quarter from customer expansion and N. P is growing over 200 per cent.

Talent solutions now represents almost 30% of non mortgage verification revenue.

Building out the AWS data hub that Leverages the work history in our twin database with other unique data elements using the height used in the hiring process is a priority for us.

Over 75 million people change jobs in the U S annually with the vast majority having some level of screening as a part of that hiring process.

Our non mortgage consumer business, principally in banking and auto showed strong growth of about 50% in the quarter as well both from deepening penetration with lenders and some recovery in these markets get management also returned to growth in the quarter.

Employer services revenue of $101 million was about flat in the quarter as expected.

Bind our unemployment claims and employee retention credit businesses had revenue of about $64 million down over 15% from last year.

Substantial declines in UC revenue in the second quarter were partially offset by new ERC revenue that began in the quarter as we support businesses in obtaining federal employee retention credit payments.

Yeah.

Employer services non U C. In ERC businesses had revenue up over 50% in the quarter.

Our online business driven by our new <unk> anywhere product continued to show very strong growth up over 50%.

Our <unk> business is now almost half of employer services 9 you see an ERC revenue.

Reflecting on the growth of 99 and the return to work it returned to growth of workforce, a workforce analytics, we expect employer services non U C in ERC businesses to deliver organic growth of over 20% for the year.

Reflecting the power and uniqueness of the twin dataset strong verifier revenue growth and operating leverage resulted in adjusted EWC EBITDA margins of 58% 160 basis point expansion from last year <unk>.

Excluding technology transformation expenses AWS margins would have been up over 240 basis points.

Really Florida in AWS team delivered another outstanding quarter and are positioned to deliver a very strong 2021.

Workforce solutions is our most powerful and unique business and is powering equifax results with growth substantially above the rest of the company.

Turning now to U S. I S. They had another strong quarter with revenue up 11% driven by strong performance across the business.

Total U S. <unk> mortgage revenue of 160 million was down about 2% in the quarter, while mortgage inquiries were down 5.

Below the flat expectation we shared in April.

John will cover our updated view of the mortgage market shortly.

<unk> mortgage revenue outgrew the market by over 300 basis points, driven by growth in marketing and debt monitoring products.

Importantly, non mortgage revenue performance was up 21% with strong organic growth of 14%.

This performance reflects the commercial focus of Sid Singh and his team and their competitive position in the marketplace <unk>.

Importantly, organic non mortgage revenue also delivered strong sequential growth acceleration of 250 basis points from the first quarter's 11% an important indicators indicator of the continued strengthening of the U S <unk> business.

Banking and insurance both grew over 20% in the quarter.

Aldo and direct to consumer were both up over 10, and telco and commercial were just above flat in the quarter.

Financial marketing services revenue, which is broadly speaking our offline or batch business was $59 million in the quarter and up about 14%.

This strong performance was driven by marketing related revenue, which is up over 20% in I'd and fraud revenue growth of over 15% as consumer marketing and originations ramped up coming out of Covid.

In 2021 marketing related revenue is expected to represent about 40% of Fms revenue identity in Florida about 'twenty and risk Decisioning about 35 per cent.

This strong growth across our non mortgage business is encouraging as we move into the third quarter and the rest of 2021.

The U S. I S. New deal pipeline remains very strong and comparable to the strong levels. We've seen so far in 2021 wells.

We are seeing the highest growth in auto financial services financial services and mortgage.

U S. I S. Adjusted EBITDA margins were 43% in the quarter. The decline of 380 basis points from second quarter last year was principally due to the costs related to the cloud transformation.

The cost of redundant systems and inclusion in our adjusted results of the technology transformation costs, which were being excluded in 2020.

Sales and marketing expenses also increased in the quarter and sequentially to leverage both the stronger U S markets and increased NPI rollouts to drive growth.

Shifting now to international revenue up was the revenue was up a strong 25% on a local currency basis, which is a third consecutive quarter of growth in our global markets.

Revenue growth was up over 20% in all of our markets in Canada Asia Pacific Latin America and Europe.

Asia Pacific, which is principally Australia, Australia day business had a very strong quarter with revenue up $91 million.

We're up about 21% in local currency.

Australia consumer revenue turned positive and was up 23% versus last year and up about 2% sequentially.

Our commercial business combined online and offline line revenue was up a very strong 26% in the quarter and almost 18% up almost 18% sequentially.

Fraud, and identity was up 30% in the quarter following 15% growth in the first quarter.

European revenues of $68 million were up 27% in local currency in the quarter, our European credit reporting business was up about 20% with strong growth in both the UK and Spain.

In UK, which is our largest European market, we saw growth of over 25% and consumer data analytics and scores in over 40% growth in commercial.

Our European debt management business revenue increased about 30% in local currency off the lows we saw in the second quarter last year during the Covid recession.

Canada delivered record setting revenue of $47 million in the quarter up about 26% in local currency.

Consumer online was up about 26% in the quarter, an improvement of 12 percentage points from the first quarter.

Double digit growth in commercial analytical and decision solutions in I'd and fraud also drove growth in the Canadian revenue in the quarter.

Latin American revenues of 44 million grew 30% in the quarter in local currency, which was the second consecutive quarter of growth coming out of Covid.

We continue to see the benefits in Latin America, the strong new product introductions. The team has rolled out over the past 3 years.

International adjusted EBITDA margins at 27, 3% were up 500 basis 540 basis points from last year, driven by leverage on revenue growth and continued very good cost control by the international team.

Excluding the impact of the inclusion of the technology transformation costs in adjusted EBITDA margins were up over 750 basis points.

Global consumer solutions revenue was down 2% on a reported basis and 3% on a local currency basis in the quarter and slightly above our expectations. We again saw strong double digit growth in our global consumer direct business, which sells directly to consumers through equifax dot com and which represents a little over half of gcs revenue.

Direct to consumer.

Direct to consumer revenue was up a strong 11% in the quarter the fourth consecutive quarter of growth.

The decline in overall gcs revenue in the second quarter was again driven by our U S lead generation partner business, we expect the gcs partner business and Gcs business overall to return to growth in the fourth quarter.

Gcs adjusted EBITDA margins of 22, 5%, we're up just above 70, 170 basis points, which was better than our expectations.

Turning now to slide 8 workforce solutions continues to power Equifax and is clearly a strongest fastest growing and most valuable business.

Workforce solutions revenue grew a very strong 40% in the quarter with core revenue growth of 46% and.

And again, the 40% growth in the quarter was on top of 53% growth in the second quarter last year.

This above market performance is driven by the uniqueness of the twin income and employment data the scale of the twin database and the consistent execution by Rudy and his team.

At the end of the second quarter twin reached at twin reached 119 million active records, an increase of 13% or 14 million records from a year ago and included 91 million unique records at.

At 91 million Uniques, we now have over 60% of non farm payrolls, which makes our twin dataset were valuable to our customers by delivering higher hit rates.

Beyond focusing on adding the over 50 million non farm payroll records not in the twin database. Yet. We're also focused on adding data records from the $40.50 $40 million to $50 million gig workers and around $30 million pension recipients in the United States marketplace to further broaden the twin database, we have plenty of room to grow.

We are now receiving contributions from $1.2 million companies across the U S up from 27000.

Employers are short 2 plus years ago.

And as a reminder, over 60% of our records are contributed directly by employers that AWS provides comprehensive employer services to like unemployment claims W..2 management.

9 what's the employee retention credit HSA and other HR and compliance related solutions.

These relationships have been built up over the past decade by the workforce solutions team.

The remaining 35% are contributed through partnerships with payroll providers and HRS HR software companies.

Most of which are exclusive.

The exclusive arrangement with a major payroll processor Lee we announced on our February call is still on track to become active later this year.

We have a dedicated team with an active pipeline of record additions to continue to expand our twin database in the future and as you know as we add records to the dataset there monetize almost instantly with our customer system to system integrations interacting with our twin database.

Workforce solutions continues to grow penetration in key existing markets, while expanding into new markets. We continue to increase our penetration in the mortgage market.

As of the most recent data available at the end of 2020 workforce solutions received an inquiry.

In almost 60% of completed U S mortgages.

Which is up from 55% in 2019.

This 500 basis point increase shows a continuation of growth in twin mortgage penetration as well as the substantial opportunity for continued continued growth that exists in mortgage with only 60% of mortgaging mortgages using twin data today.

We're also seeing substantial growth in twin in the non credit markets of government and talent solutions as well as increased twin usage within the card and auto verticals.

As we discussed in the past growing system to system integrations as a key lever in driving both increased penetration and the increased number of polls per transaction for workforce solutions.

During the quarter about 75% of twin mortgage transactions were fulfilled system the system, which is up 2 ex from the 32% in 2019.

The workforce solutions, new product pipeline is also rapidly expanding as our teams leveraged the power of our new Equifax cloud infrastructure we.

We plan to roll out new products and mortgage talent solutions government and <unk> 9 in the second half of the year.

New product revenue will increase in 'twenty, 1 and 'twenty 2 as we begin to reap the benefits of our new products introduced to the market by workforce solutions in the past 18 months.

Rudy in the workforce solutions team have multiple levers for growth in 'twenty, 1 'twenty 2 and beyond.

Workforce is clearly our largest and most valuable business and will continue to power our results in the future workforce solutions growth rates and margins are highly accretive to equifax now and in the future.

Slide 9 provides perspective on the tremendous growth workforce has delivered since 2017 and the increasing impact of the business as on Equifax with its highly accretive revenue growth rates and margins in.

In 2017 workforce solutions revenue and EBITDA made up 23% of Equifax revenue and 27% of business unique business unit EBITDA per.

For the first half of 'twenty, 1 workforce solutions revenue and EBITDA have increased to 40% of equifax revenue and over half of Equifax business unit EBITDA EBITDA.

In a short 4 years workforce solutions has more than doubled in size and is now almost 50% in the first half versus the same period last year and is up almost 50% in the first half versus the same period last year.

Our unique twin employment and income assets and the continued expansion of employment related assets within the Equifax data hub provides opportunities for bolt ongoing outsize growth in equifax traditional financial markets of mortgage banking auto as well as a substantial growth in new verticals in government talent solution others to come.

We expect workforce solutions will continue to be an increasingly large part of equifax and power of our top and bottom line with the above market growth and margins.

Turning to slide 10. This provides a perspective on the return to growth <unk> delivered since 2018.

<unk> has delivered strong double digit revenue growth over the past 6 quarters.

Although the strong mortgage market has advantage <unk> as shown in the bottom left of the slide <unk> has driven consistent sequential improvement in non mortgage growth in second quarter last year with the overall growth in U S is being driven by 18% non mortgage growth in the first half of 2021.

<unk> team is also increasingly leveraging the equifax cloud to design and implement new ntis for customers.

The Equifax cloud new products and our unique data assets are making usia's teams more competitive in the marketplace.

In the U S. S team is focused on integrating count into new Equifax cloud and we're seeing increased use cases and opportunities with our I'd and fraud vertical from the count acquisition.

We expect the IBM fraud to play a large role in <unk> growth in 2021 and beyond I encourage you to review the IGN fraud slides in our broader investor presentation, which can be found on our Investor Relations website. Following this call.

Turning to slide <unk>.

Slide 11, this highlights the core growth performance in our mortgage for our U S U S <unk> businesses.

Workforce solutions in U S I S.

Our U S. <unk> businesses delivered a combined 25% revenue growth in mortgage in the second quarter, which was 30 points stronger than the 5 percentage, 5% mortgage decline we saw overall mortgage market.

The strong performance was again, primarily driven by workforce solutions with core mortgage mortgage growth of 57%.

Consistent with past quarters, Uws's outperformance was driven by new records increased market penetration.

Larger fulfillment rates and new products proof that lenders are increasingly becoming reliant on unique twin income and employment data when making credit decisions in the mortgage space.

U S. I S delivered 4% core mortgage revenue growth in the second quarter, driven primarily by new debt monitoring solutions and further support for marketing.

Our ability to substantially outgrow underlying markets as core to our business model and core to our future growth.

I'll now turn the presentation over to John to discuss current trends in the mortgage market and to walk through our third quarter and revised full year 2021 guidance.

Thanks, Mark as Mark discussed our Q2 results were very much stronger than we discussed with you in April with revenue about $85 million higher than the midpoint of the expectation we shared.

For perspective, all be used performed well relative to the expectations we share.

Performance in non mortgage in our U S businesses workforce in the U S. I S was very strong in absolute terms and relative to the expectations, we share our unemployment claims and employee retention credit businesses and workforce solutions declined in the quarter, but much less than expected.

International revenue performance was also very strong again, both in absolute terms and relative to our expectations.

And although the mortgage market was down 5% versus our expectation of flat our mortgage revenue principle, our mortgage revenue principally in workforce was not impacted to the same degree.

This strong revenue drove the upside in adjusted EPS relative to the expectations we share.

Now turning to mortgage as shown on slide 12 U S mortgage market credit inquiries declined 5% in 2021 weaker than the about flat. We had included in our guidance our financial guidance for 2021 assumes that the trend in mortgage credit inquiries. We saw in late June and July continues in <unk> 'twenty, 1, resulting in a decline of more.

<unk> market credit inquiries of about 23% and <unk> 21 versus <unk> 20.

Although our second half 2021 market credit inquiry assumptions are down significantly from the second half of 'twenty. They remain above the average as we saw prior to 2020.

As shown on the left side of slide 13 mortgage market indicators remain above the peak seen in previous mortgage cycles. Despite the substantial refinance activity that has occurred over the past year. The number of U S mortgages that could benefit from our refinancing remains at a relatively strong level of about $12 million.

Refinance activity continues to benefit from low and recently declining mortgage rates and the substantial appreciation in home prices over the past year.

Based upon our most recent data from January mortgage refinancings continue to run just under $1 million per months.

As shown on the right side of slide 13, the pace of existing home purchases continues at historically very high levels. The strong new purchase market is expected to continue throughout 2021 and into 2022.

Slide 14 provides our guidance for <unk> 'twenty, 1 we expect revenue in the range of $1.160 billion to $1.180 billion.

Reflecting revenue growth of about 9% to 11%, including a 1% benefit from FX acquisitions are positively impacting revenue by 1.8%, we're expecting adjusted EPS of <unk> 21 to be $1.62 to $1.72 per share compared to <unk> 20, adjusted EPS of $1.91 per share.

And <unk> 21 technology transformation cost are expected to be around $40 million or 25 cents per share.

Excluding these costs, which were excluded from 3 to $2.20, adjusted EPS of <unk> 21, adjusted EPS would be $1.87 to $1.97 per share. This performance is being delivered in the context of a U S mortgage market, which is expected to be down 23% versus <unk> <unk> 'twenty.

Comparing the midpoint of our <unk> 'twenty, 1 guidance sequentially to a very strong <unk> 'twenty..1 performance revenue is down about $65 million. The drivers of this decline are 2 main factors. The largest factor is a decline in mortgage revenue driven by the impact of the expectation we share regarding the decline in the U S mortgage market.

The other significant factor is our expectation that we will see a significant sequential decline in unemployment claims revenue.

Our guidance for adjusted EPS declined about 30 per share sequentially. The bulk of this decline was driven by lower gross profit on the revenue expectation I. Just discussed. In addition, we are increasing investments sequentially in sales and marketing, particularly in the U S as well as increasing investments in product and technology.

Slide 15 provides the specifics on our 2021 full year guidance, we are increasing guidance substantially reflecting our very strong 2021 performance in the second half of 2021, we expect strong growth in our U S. Non mortgage business in international and a return to growth in gcs.

We also expect our U S mortgage business to grow about 15% in 2021 over 20 points faster than the expected approximately 8% decline in the U S mortgage market.

2021 revenue of between $4.76 billion and $4.8 million reflects revenue growth of about 15% to 16% versus 2020, including a $1.5 benefit $1.5 per cent benefit from FX acquisitions are positively impacting revenue by 1.9%.

Dws is expected to deliver about 30% revenue growth with continued very strong growth in verification services <unk> revenue is expected to be up mid to high single digits driven by growth in non mortgage international revenue is expected to deliver constant currency growth of about 10% in.

In Gcs revenue is expected to be down mid single digits. In 2021, <unk> 21 revenue is also expected to be down mid single digits with $40.21 revenue of returning to growth.

As a reminder, in 2021 Equifax is including all technology transformation costs and adjusted operating income adjusted EBITDA and adjusted EPS. These onetime costs were excluded from adjusted operating income adjusted EBITDA and adjusted EPS in 2017 through 2020.

In 2021, Equifax expects to incur onetime cloud technology transformation costs of approximately $155 million.

A reduction of over 55% from the 358 million incurred in 2020 the.

The inclusion in 2021 of this about $155 million in 1 time costs would reduce adjusted EPS by about 97 per share. This estimate of onetime technology transformation cost is up $10 million from the 145 million we guided in April given our very strong performance in 2021, we are investing to accelerate.

Our tech transformation globally.

2021, adjusted EPS of $7.25 to $7.45 per share which includes these tech transformation cost is up 4% to 7% from 2020.

Excluding the impact of the tech transformation cost of <unk> 97 per share adjusted EPS in 2021 would show growth of about 18% to 21% versus 2020.

2021 is also negatively impacted by the redundant system costs of $79 million related to 2020. These redundant system costs are expected to negatively impact adjusted EPS by about 49 per share and negatively impact adjusted EPS growth by about 7 percentage points.

Additional assumptions included in 2021 guidance will be posted to the July investor Relations presentation to be posted later later today.

Slide 16 provides a view of Equifax total and core revenue growth that is included in our current guidance.

Core revenue growth excludes the impact of movements in the mortgage market and equifax revenue as well as the impact of changes in our UC claims and employee retention credit businesses within our employer services business employee retention credits are specific U S government incentives for companies to retain their employees in response to COVID-19, and the associated.

<unk> revenue is not expected to continue into 2022.

The data shown for 321 and full year 2021 reflects the midpoint of the guidance ranges we provided in.

And <unk> 21 in 2021, we delivered very strong core revenue growth of 20% and 29% respectively. We continue to deliver strong core revenue growth in <unk> 'twenty, 1 of 17% and 19% for all of 2021 and our expectations as Mark mentioned earlier the composition of our core revenue growth is becoming more.

Balanced, reflecting substantially increasing contributions from U S. Non mortgage international and as we enter for Q2, 'twenty, 1 gcs and we continue to expect our mortgage business to grow at rates.

Faster than the overall mortgage market does.

This very strong performance, we believe positions us well entering 2022 and beyond and now I would like to hand, it back to mark. Thanks.

Thanks, John turning now to slide 17, as I referenced earlier Bison Keller and our technology teams continue to make very strong progress on our new Equifax cloud data and technology transformation with the North American technology transformation expected to be principally complete in early 2022, and the remainder of North America transformation in customer migrations completing by the end of.

Next year in our international transformation, following North America being principally complete by the end of 2023.

<unk> transformation to a cloud native environment delivers a host of capabilities that only equifax can provide is the only cloud native data and technology company.

The Equifax cloud will deliver always on stability accelerated response time and built an industry, leading security that will provide our customers with real time access to data and insights that they can rely on to make decisions.

The equifax cloud through our ignite analytics platform will allow customers and equifax data scientists to work together utilizing <unk> unique data assets and customer proprietary assets to define attributes and models to improve customer outcomes.

And we will continue to accelerate the time from analytics to production to bring new products and solutions to market faster and more efficiently enhancing customer benefits and equifax revenue.

Already the Equifax cloud has enabled us to produce new products designed and delivered on our cloud infrastructure 4 times faster than the past.

We began to leverage these cloud benefits in 2020, as we more effectively develop new products and deliver them to market leveraging the new es ex cloud growing new product introductions by 44% last year in 2020.

These new improvements have been further accelerated in 2021 as we are delivering the highest number of new products in our history and we are realizing higher revenue from new product introductions.

Slide Slide 18 provides an update on NPI is a key driver of our current and future revenue growth as.

As we just discussed the new cloud transformation has significantly strengthened our NPI capabilities, allowing us to increase both the number of NPI and the revenue generated from new products.

We continue to expand our product resources and focus on transforming equifax into a product led organization leveraging our best in class Equifax cloud native data and technology to fuel top line growth.

As I discussed earlier in the second quarter, we delivered 46, new products, which is up about almost 2 ex from the 24, we delivered last year year to date, we've rolled out 85, new products, which is up 44% from the 59 that we delivered in the first half last year.

We're energized as we continue to grow off and NPI record setting 2020.

We wanted to highlight some of these products rolled out during the quarter, which we expect to drive revenue growth over the second half in the next year next few years.

Our new payment insights products launched by <unk> in April was delivered in partnership with <unk> net and uses consumer permission utility and telco data to improve use of customers consumers financial picture and help credit invisibles.

The cloud based solution promotes greater financial inclusion regardless of the consumers' traditional credit score by empowering consumers to share utility and telco payment history with banks or lenders when applying for loans or other services. The product also allows lenders to seamlessly seamlessly integrate data into review.

Sse's, while meeting industry, leading standards for protection of consumer data security confidentiality and integrity.

Workforce solutions launched a new mortgage 36 product in May this solution addresses income verification needs by enabling mortgage lenders to pull an extended set of both active and income and inactive income and employment data for more complex income mortgage applicants were additional history may be needed in the underwriting process.

UWS also launched a new talent report employment staffing product in April this.

This solution provides flexibility on the number of past employers polled to meet the employment verification needs of the employer.

Staffing agencies leverage as a reference check off often looking to verify only to employers, which this product helps deliver.

In the United Kingdom, we launched the credit line.

Vitality view App. This ignite based App Visualizes key credit data trends across the U K versus a company's own performance at.

It uses a range of macroeconomic measures and includes filtering capabilities. So our customers can focus on the performance of their own portfolio and product lines, such as mortgages or credit cards. The App also can illustrate these company and market trends over multiple years.

Lastly, we introduced the Equifax affordability solutions in Australia, and New Zealand.

These solutions deliver automated categorized income and employee income and expense verifications in a way that delivers meaningful and actionable insights for our customers.

Our customers can easily digest, an accident and act on these insights through the delivery of comprehensive consumer report ability Port reports, which are now required from a regulatory standpoint in these markets.

This new solutions will reduce loan application processing time, and cost improve conversion rates and maximize efficiency, while wall fulfilling responsible lending regulatory requirements.

Delivering overall improvements to the consumer experience.

These are just some examples of the new solutions, we launched during the quarter.

We're focused on leveraging our new cloud capabilities to increase NPI rollouts in new product revenue in 2021 and beyond.

Growing NPI is central to our FX 2023 growth strategy.

And as a reminder, our vitality index is defined as a percentage of revenue delivered by NPI is launched during the past 3 years.

In April we increased our vitality index outlook for 2021 from 7% to 8% and we remain confident in this framework for 2021.

As you can see from the left of the slide our 8% vitality outlook for 2021 is a big step forward from the 5% vitality, we delivered last year.

NPI is a big priority for me and the team as we leverage the equifax cloud for innovation, new products and growth.

Slide 19 showcases the capabilities, we've been building over the past 3 years that only equifax can bring to the marketplace.

We have unique market, leading differentiated data at scale that includes our $228 million macro credit records $119 million twin income and employment records and additional data at scale that comes from alternative datasets, including count and Cte we pay net ISI and others.

Our advanced analytics allow us to build and test attributes faster leverage artificial intelligence and machine learning and development models in days and weeks, where it used to take months.

Our team of 320 data scientist located around the world are leveraging our advanced analytics and Equifax cloud native infrastructure to define and deploy cloud native products and solutions.

Our cloud native data fabric is allowing us to key and link our unique data asset in ways that we could never do before.

Our data fabric scratchers across the globe and we are in the early innings of leveraging its global capabilities only equifax can provide these capabilities and we are on offense as we deploy these into the marketplace.

Wrapping up on slide 20, Equifax delivered a record setting second quarter with strong momentum as we move into the second half.

Our 26% overall and 29% core revenue growth in the quarter reflects the strength and breadth of our business model and early benefits from our Equifax cloud investments.

And of course, it's enhanced focus on new products.

We've delivered 6 consecutive quarters of strong above market double digit growth.

Our strong performance reflects the execution against our <unk> 2023 strategic priorities.

Faxes on offense.

As we discussed earlier, we're confident in our outlook for 2021, and we raised our full year mid point.

Revenue guidance to $4.78 billion increasing our.

2021 growth rate by over 370 basis points to almost 16%. We also raised our midpoint EPS guidance to $7.35 to $7.35.

Increasing the growth rate by over 640 basis points.

As we discussed earlier workforce solutions had another outstanding quarter, delivering 40% revenue growth and 50, 58% EBIT EBITDA margins.

Dws is our largest fastest growing and most valuable business.

During the quarter workforce solutions delivered 40% of Equifax revenue, we expect the AWS to continue to drive Equifax as operating performance throughout 2021 and beyond as consumers recognize the value of our growing twin database.

Rudy and his team remain focused on driving outsized growth by focusing on their key growth drivers of adding new records rolling out new products driving penetration driving their new talent solutions data hub expansion in new verticals and leveraging their new es ex cloud capabilities.

<unk> also delivered another strong quarter of 11% growth driven by there are 14% non mortgage organic growth.

We expect <unk> non mortgage growth to continue to be strong due to the economic recovery. The commercial focus of the team new products and our unique alternative data assets Sydney Usia's team are competitive and winning in the marketplace and will continue to deliver in 'twenty, 1 and beyond.

International grew for the third consecutive quarter accelerating to 25% in local currency in the second quarter as economies reopen and business activity resumes.

Our new International leader, Lisa Nelson has high expectations for our team and we expect continued strong growth through the rest of 2021.

We're beginning to realize the benefits of our <unk> cloud data and technology transformation as we accelerate new product innovation with products designed and built.

Off of our new <unk> cloud infrastructure.

We spent the last 3 years building the Equifax cloud and we're now starting to leverage our new cloud capabilities as.

As we move through the rest of the year and into 2022 will be increasingly realize the top line.

Cost and cash benefits from these new cloud capabilities.

Accelerating new products, leveraging our differentiated data and the new <unk> cloud capabilities is central to our FX 2023 growth strategy.

We're beginning to see the benefits of our new product focus and resources leveraging es ex cloud with the 85 NPI is completed in the first half pace.

Pacing well ahead of the record $1.34, we delivered last year.

As we discussed in the past bolt on acquisitions that expand our differentiated data assets strengthening workforce solutions and broadening our IGN fraud capabilities are integral to our future growth framework.

We reinvested a strong cash flow and 5 bolt on acquisitions. So far this year that will add 170 basis points to our revenue in the second half.

We will continue to focus on accretive bolt on acquisitions that strengthen workforce solutions.

I'm more energized now than when I joined Equifax 3 years ago about the future what the future holds as we move from building the cloud through our next chapter of growth leveraging the new Equifax cloud for innovation growth in new products with strong momentum across our business as we move into the second half and we're beginning to deliver on the benefits of the significant.

Data and technology investments, we made over the past 3 years ex.

Taxes on offense and positioned to bring new and unique solutions for our customers that only equifax can deliver leveraging our new es ex cloud capabilities with.

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

Thank you will now be conducting a question and answer session if you'd like to be placed in the question queue. Please press star 1 on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star queue, if you'd like Triple Great question from the queue for participants on the speaker phone may be necessary to take your phone off mute or pickup.

Speaker before pressing star 1.1 moment, please while we poll for questions.

Our first question today is coming from David <unk> from.

Evercore Your line is now live.

Thank you good day running it.

Mark Good morning, John.

Good to see the strong growth in NPI, continuing in the 13% new record growth clearly the first half outperformance versus your guidance continue to come from the strength in workforce solutions.

As we look at the second half.

Guidance, what's embedded in terms of.

The outperformance of AWS core mortgage growth versus the mortgage market 62 percentage points in Q2, how are you thinking about the back half.

<unk> AWS core mortgage outperformance.

Yes, so David we don't give specifics by Bu in terms of how we break down quarter, but but as you can see from the from the detail. We gave we're expecting to have very good core growth in the third quarter at 17%, we're expecting AWS to continue to perform extremely well and we're expecting them to continue to substantially outgrow book, the mortgage market and as we indicated for the full year.

We expect our mortgage revenue to grow over to grow 15% that's up from what we've talked about in April and that's up more than 20 points higher than the 8% decline that we're talking about for the overall mortgage market itself. So so we expect dws to continue to substantially outperform and continue to deliver very high core revenue grew.

<unk>.

As you know David debt, there's multiple levers, but by the workforce solutions team to drive that outperformance.

Specifically, a mortgage and of course across all their other verticals, but the record additions.

Fuel that the new product Rollouts that the team did last year and they're continuing this year in the mortgage space will drive that.

We gave some visibility around.

Our growth in the mortgage market itself as you know we don't see every mortgage so the team's focused on.

Adding income and employment from Equifax.

Large portion of mortgages, we still don't see and of course, we're continuing to drive the system. The system integration. So all of those levers are what Rudy and his team are deploying to continue to drive that outperformance of not only the mortgage market, but all of their markets.

I appreciate that just as a quick follow up.

At the 14% USAF organic non mortgage growth in Q2 in which verticals are you gaining significant market share and if you could maybe kind of compare where you are today and kind of non mortgage USAF versus where you were a year ago.

Yes.

I would say.

First we're certainly benefiting from the economic recovery, we see net and card issuers in really all of the financial institutions or <unk>.

Doing more marketing you've seen strong performance there.

And the consumers back in accessing credit products, so you'd see net.

On the mortgage side, but I think youre focus more on the non mortgage of course on the new.

Product Rollouts are benefiting sit and his team is there.

On bringing new products to market.

It really broadly we've got a strong focus as we've been very clear over the last really.

Almost 24 months about.

The focus that the team has on building out their deal pipeline they're focused on.

Their customers.

Rebuilt and enhanced.

Our commercial team with more coverage, we've added more resources, we've re levered. The commercial team. So all of those are benefiting from us and we've got a lot of confidence in our ability to be competitive in the in the non mortgage market.

In <unk> going forward.

Thanks, very much I appreciate all the insight.

Thank you. Our next question today is coming from Kevin Mcveigh.

From credit Suisse.

As a reminder, we'd like you to ask 1 question and 1 follow up that return to the queue.

Kevin Your line is now live.

Great. Thanks, I'm going to ask 1 question because you've got a couple of parts to it but.

Hey, Mark you've got AWS, just 40% of revenue today, 53% and EBITDA versus about 23%.

And 7% in 2017 somewhere around there.

It feels to me like what's happening with the TPI as you're accelerating the shift to AWS. So can you help us understand kind of the dynamics of how the cloud transition impacts AWS versus the core business and then within the context to that if my maths right. The average client size was about.

4000 contributors in terms of employees and 18 versus about 100 today. So.

So how do those dynamics kind of impact dws sort of trying to get at is it feels like there's going to be structurally higher level of growth looking beyond the volatility just mortgage overall and again it feels like there's something structural so just maybe trying to frame that to the extent you can help us.

Sure.

Just broadly.

As you know we're focused on growing all of our businesses all 4 business units.

Workforce solutions is very unique in that it really driven by the uniqueness of the income and employment data that it has at scale and the value of that and we've talked I think Kevin in the past that there was an element of catalyst from our perspective, when the dataset got over 50% of nonfarm payroll call it a year ago.

And it just made the data set more valuable and when you think about someone's credit history did they pay their bills is very valuable but are they working and how much do they make is equally valuable and really only equifax has debt dataset the war.

Our solutions business as levers as we talked a couple of times on the call already that are really quite unique and I think it starts with records most data businesses have all the records.

Workforce solutions has shown a history of building out their data set and as I talked in my comments, we added $14 million.

14 million records year over year basis, or continuing to add records as you know we've got visibility for.

A significant addition of meaningful addition from a large payroll processor.

In the second half of the year and we're out there talking to <unk>.

Individual companies to grow the dataset, which we do through our employer services business by providing those services and then of course the.

Other payroll processors or that we don't have now with Equifax, we're working to add so records is a very important lever for that business and there's a long runway.

Not only with non farm payroll.

We're at $90.91 million uniques versus the 150.

$1 million or so total nonfarm payroll, but we're focused on the gig economy, which is another 40 to 50 million individuals that have either first or second jobs or self employed out.

Outside of the non farm payroll and then of course pensioners. So records are a big opportunity for workforce to grow and then you've seen a lot of growth over the last couple of years beyond mortgage mortgage was always a place that this business.

Focused on and we've been able to grow very very strongly in the government vertical and of course, you know we've got the large SSA contract that's going live in the second half and will ramp to.

<unk> $40 million to $50 million of incremental revenue in 2022. So that's an example of the dataset being used in.

And another use case and the other area that we've been focused on outside of just kind of the core growth of products penetration more usage and.

And records is around strengthening the business through M&A.

As you know we've done 2 acquisitions, so far this year higher tech and IQ verify to strengthen our employer services business, which delivers records and of course, that's just a good core business, we talked about some of the solutions. We have in the market like Einstein anywhere that are growing outside of some of our traditional financial markets. So that focus on the <unk>.

Hiring process were 75 million people are hired every year or change jobs and most of them have to have some kind of.

Background screen done that relies on work history, along with other data elements and today, we are building out the equifax data hub of workforce solutions data hub that includes our twin data, but also other unique data elements and we'd like to do more M&A in that space to strengthen workforce solutions as I mentioned in my comments that.

We're focused on building that out and just maybe closing on workforce.

Business has a long history of outperforming its underlying markets and I think as we look at.

A couple of years, you've seen a step up in net outperformance in the last couple of years that we linked to the scale of the dataset. The cloud has allowed us to ingest more data more quickly.

Think about it 2 years ago, maybe 3 years ago. We had 27000 contributors are companies contributing now we have $1.2.

And there's different numbers about there around how many companies there are in the United States $345 million, but we're really scaling net dataset quite substantially so it's a very unique business. It's 1 that we're investing inorganically to cloud is allowing them.

To ingest more data and <unk> seen a ramp up in new products coming out from workforce solutions as they start to leverage the new cloud capabilities and of course thats happening across equifax.

Thank you. Our next question today is coming from <unk>.

From Barclays. Your line is that line.

Thank you.

Apologize just just what you said on the workforce M&A did you did you say that background screening was an area you are interested in the comment.

Comment.

No I didn't say to add debt, what I said was that.

What's real interest estimate App and we've talked about it before is number 1 strengthening the core of workforce solutions, it's our strongest business. It's our largest business. It's our fastest growing business in doing acquisitions like higher Tech and IQ verify is clearly a priority for equifax. The other area that we've talked before with you and others about it.

Is the talent solutions data hub, we want to be in the data business around the hiring process. We are now as you know with our work history. Yes, we have an average of 4.5 jobs on the average American in our database and net work history is very valuable in the hiring process in <unk>.

Beyond work history as you know other data elements like where do you go to school what licenses to do you have have you ever been incarcerated before you've been arrested before all those data elements are very very valuable and we're building now a data hub partnerships. If we could find a way to do M&A in that space wed like to do it.

Okay that makes sense.

And just John I don't know if I missed it but I was hoping you could help us just how to think about what you've baked into your.

Guidance for just the growth in verification in employee services for the back half of the year.

Yes, So I think what we talked about is we gave we gave a good view I think of.

What we expect the growth to be for the full year and as we indicated we expect workforce solutions to grow over 30% in the year. So obviously that's up substantially from what we talked about in April. So it reflects the much stronger performance in the second quarter, but also continuing very strong performance in the third and fourth quarters and we're expecting to see continued strong performance.

Cross really all the businesses as we've talked about I think effectively we held or increased our expectation for growth in all of our businesses in the second and the full year and therefore, the second half. So so we're feeling very good about the trend.

Alright, thank you.

Thank you next question today is coming from Hamzah <unk> from Jefferies. Your line is now live.

Hi, This is Mario <unk> filling in for Hamzah.

Just a quick question on your international business, and then I guess, specifically Australia.

Could you just walk us through how margins in net business differ from other international markets and then maybe you could also just talk about your view on the recovery there.

They just went into lockdown again, so I just wanted to get your outlook.

Yes International still is broadly kind of lagging the United States, maybe Canada is quite similar as far as the the vaccine rollouts, but other markets. Yes, UK is similar but its been choppy or internationally than it has in the United States for sure and as you point out Australia has got.

Another lockdown because the vaccines are really lagging there.

<unk> as adjusted.

A lot of international markets like it did in the United States.

Quicker, meaning customers and consumers figure out how to live their lives in and operate their businesses in more of a virtual.

Environment, and I think Thats what were seeing in.

In Australia with.

In our international markets that are still lagging in some regards particularly in Latin America around the Covid.

Lockdowns being relaxed.

The margins John.

Not really dramatically different on a global basis, I wouldn't characterize them differently by market and we really don't talk about them on a market basis, we don't talk about them on a market basis right with what we've indicated historically is markets that look very much like the U S. So we can talk about Canada tends to run at higher margins than some other businesses, Australia looks probably more like international averages then.

Think about them in Canada that would be stronger.

Understood and then just my follow up.

Can you just comment on the fraud segment of the business and how much further scale can you gained share through more M&A post the account deal obviously, it's a highly fragmented market. There and then any initial views on synergies that youre seeing as you're integrating count.

Yeah I commented earlier that we're quite encouraged by that we're really very energized and pleased with the acquisition and the team.

We brought on board from from Count I'd and fraud as a very strategic growth area. It's also an area as you point out if we could find more M&A, we'd like to do it to broaden its a very big space and as you also pointed out very fragmented we think we've got.

Very unique data assets to play in identity and fraud.

Augment that and Thats really the power of the count combination and synergies with Equifax is really leveraging their data at scale from the E Commerce World. They have something like 32 billion interactions every year with consumers.

They have really scaled data assets around E mail address is IP addresses cell phone numbers over $400 million.

Aurify elements and with ecommerce you're interacting very quickly because a lot of people are doing E. Commerce. So the data is very current and the combination of that data from count with Equifax is really the power and argued Bob We believe starts with data and that's why we think we have a license to play and if we could.

And more and we're looking.

For more M&A in the I'd and fraud space to further strengthen our position it's a huge tam.

The market is.

Close to $18 billion globally for I'd and fraud, and it's growing at 20% with the large digital macro meaning more consumers interacting in really every aspect of their lives, whether it's financial services insurance telco or of course ecommerce and retail digitally and.

With that digital interaction the requirement to verify that Mark is really mark is critically important and that's where the data assets come in and also to do it seamlessly meeting where the consumer doesn't feel it and the way to do that is to power with more data. So we're quite energized about the integration with count debt of progress so far and.

It's an area, we'd like to be bigger in going forward, both organically through new products and the synergies that account acquisition, but also inorganically. If we could find some M&A that would strengthen us.

Great. Thank you.

Thank you. Your next question today is coming from George Mahalo from Cowen Your line is that line.

Hey, George.

Hey, good morning, guys. Congrats congrats on another strong quarter.

Wanted to ask a broad question to kind of start things off obviously theres a lot of debate going on looking at the bond markets and the like but.

To the extent we enter <unk>.

More inflationary period going forward is that something that could be could be a catalyst.

For you guys. Both in terms of people relying more on credit and obviously potentially the health of some of your Fi customers in <unk>.

Environment, where rates go up.

I'm just curious how you guys are thinking about that if you are thinking about that at all.

Yeah, No we think about it it's obviously something that is hard to forecast, but when you think about.

Net interest rates going up inflation going up I think you've got to step back and look at the consumer itself the consumer coming out of Covid is very strong.

But at the same time, they are coming out of Covid with some pent up demand and we think that holds well for the credit environment, meaning that debt consumers.

Our healthier.

Meaning they can access more credit and there is an underlying desire to.

Go on vacations expand your home Baidu call you to all of those elements I think or a catalyst for the economy, which we're already seeing obviously.

Quite strong and for the.

Credit bureaus Equifax.

That means our customers are going to be spending more in marketing.

Spending more on originations and looking for new solutions.

To identify the consumers if you think about our customers they are very healthy.

They really manage the pandemic much more strongly because their consumer with stronger they are the losses were not any anywhere near what were anticipated.

Our customers are strong and they're looking to grow and if you've got a consumer that's been paying down balances in lots of areas like cards and others during the pandemic because of stimulus.

They are broad financial strength.

Our customers need to build up their best their balance sheets by getting more.

Loans on their books, whether it's credit card or personal loan and auto loan or a mortgage and of course the other the other area that we watch is what impact higher interest rates may have in the future on the mortgage market.

The 1 counter to that is there's still at least at current rates, our loan pipeline and John talked about it.

Of consumers that will still benefit from a refi and then the other element that we're watching is home price appreciation is up dramatically.

And net home price appreciation is an asset for consumers that.

Historically, they will access.

Through either home equity loans or a refi of their mortgage a cash out refi. So that's another catalyst that we keep an eye on so there is a lot of variables, there, which but when we think about.

Our guidance for the second half, we've got a lot of confidence.

The underlying equifax business, our ability to perform which is why we raise guidance.

Okay. Great appreciate that color, obviously, there are a lot of <unk>.

Puts and takes there.

John just a just a housekeeping question and forgive me if you've answered. This I may have missed it but the margins in U S. I asked I think you called out several factors some related to the inclusion of some of the tech expenses and then some additional sales and marketing as you as you invest more.

In the segment.

Is there a way to think about.

What the margins would have been in a year over year basis apples to apples, so basically excluding what the contribution to expenses were from.

From from increased tech costs.

Yes, I think what we said is that the.

The biggest drivers were the tech related costs in the in the decline of about I think it was 380 basis points year on year.

We also definitely invested more in marketing and sales given new NPI rollouts in the improving economy and.

That certainly impacted year on year and that would have been more impactful. If you think about sequential but we didn't give specifics, but we did indicate that the biggest driver of year on year decline as the tech related cost.

Thank you. Our next question today is coming from Andrew Steinman from JP Morgan. Your line is now live.

Hi, Andrew Andrew Hi, It's Andrew So 2 questions 1 John could you tell us the percentage of revenues in mortgage for just the second quarter just reported and the second question is I wanted to get back to a comment in Mark's prepared remarks about growth in employer services I'm pretty sure Mark that you said.

20% growth this year outside of <unk> and <unk> can correct me if I heard it right and is that organic number and how much would we think that you see in ERC.

Change that number when thinking about EPS growth for the whole year.

Sure. So Andrew mortgage was about 32% of revenue in the quarter.

Thank you.

And on the employer services, we did say the debt we expect it to be up 20% for the year and that's really driven by a lot of the new product rollouts that we have.

<unk> anywhere solutions.

We're just seeing real traction in the hiring process. So that is really driving that.

Thank you. Our next question today is coming from Simon Clinic from Atlantic Equities. Your line is now line.

Alright.

Thanks for taking my question.

Want to follow up again.

Verification services in particular lapping quite started probably the step up in growth rates for the non mortgage portion in the second quarter and this is before <unk> got the social security contract before you've got the New records coming in so I was wondering if you give me a.

Help me understand what can give some color around how to think about that pace of growth as we move through the next year or 2 because I.

I'm struggling to Hawaii.

Why there was such a big step up.

Got it.

Yes, there is an element of COVID-19 recovery in there and some of the markets like cards.

In auto and P loans. So there is an element of that records or a piece of it for sure as you add records.

Our hit rates go up so that's clearly an element.

A real focus on new products in that space and as you point out.

The SSA contract that will go live in the second half.

It will really ramp in.

Somewhat in the second half of the year, but it's really a 2022.

Benefit as it gets to full.

The full run rate there is just a lot of opportunities for us.

The non mortgage space.

Talent solutions, we talked about.

Very strong growth there.

And then some of the other non mortgage financial verticals.

Performing well.

As Mark mentioned huge growth and talent solutions and government, which the 2 biggest segments by far in verification services.

Okay understood. Thank you and just a follow up.

Wondering just more broadly.

With with some of the Fintech.

Ups.

Growing in the market today.

Effectively using.

Using multiple.

Alternative datasets, just like yourselves, but is also using the credit reporting data as well too.

To sort of improve models for risk assessment and decision, making and the credit process.

As I said that Youll partners today.

On a market opportunity grows you become assume you become more competitive.

Was wondering if you could talk about that that sort of longer term competitive dynamic.

And how you're planning to navigate that.

Yes, I wouldn't think about them as competitors their customers and partners.

The bulk of the day to day use in there and their processes comes from us or our competitors.

They have some of their own data from historical interactions with consumers, but.

Whether its identity and fraud data to verify that the consumers who they say they are in the NPL transaction or.

A lot of the fin techs are in P loans in subprime auto and mortgage and of course in cards. They are using.

Our credit file they are using our NC plus data.

We sell quite a bit of.

In Fintech our.

Our twin income and employment data is used in some of the larger ticket transactions there. So.

They are a very data savvy very data sophisticated and as you point out they look for more data to enhance the crediting decision, which plays well for us because as we continue to build out our differentiated data sets, we can bring real value in enhancing the credit decision or the decision they're making.

With the addition of more of more data.

We view it as a positive I think is as you know we werent as focused on Fintech 3.

3.4 years ago, we changed that.

And really and expanded our resources and capabilities, there and we think our cloud investment plays well for Fintech, our differentiated data plays well for Fintech.

New product focus that plays well for Fintech. So it's a place we want to be larger it.

Thank you. Our next question is coming from Andrew Nichols.

William Blair. Your line is now live Nicholas Please go ahead Sir.

Thank you for taking my question My first 1 I wanted to ask another 1 on international you mentioned in your prepared remarks, and it's noted on a few of the slides that you're outgrowing underlying market. So I was wondering if theres any region in particular countries in particular, where your share gains are outsized internationally and then.

To the extent that's the case what is specifically driving your gains in those markets.

Yes.

R R.

All the markets really were quite strong in the second quarter with every region really up over 20%. So it was broad base, there's definitely an element that's meaningful in the quarter from the Covid recovery.

Thank all of the international markets. After a year of Covid really figured out how to operate because they all have a different flavor of COVID-19 challenges that they are still operating with like the Australia locked down or UK opened up on Monday, but theres still some hesitancy I think for.

Some consumers to go out but they are also they learn how to operate so I think that's that's that's.

A big driver I, Wouldnt really highlight any market differently than the other we have a very strong market position in Australia.

In Canada, where we have a very strong market position.

And we do in Latin America, and a lot of the markets that we operate in I think broadly our international markets are very NPI focus they always have been.

But really leveraging new products created in the United States or unique to their markets and getting those out those are a big.

Fuel for growth going forward and in a lot of our markets, we're continuing to grow our data asset you heard.

I think either 1 or 2 of the new products I highlighted.

Our new solutions in our international markets.

Got it. Thank you and then for my follow up.

I know, it's been touched on a few times already but.

Out of town.

<unk> solutions, a little bit further I think you said, 200% plus growth there.

Is there any additional color you can give on specific products that are contributing and maybe more importantly from my perspective, how should I think about how much of that strength.

Is tied to better hiring volumes.

Extent that it is particularly relative to second quarter of last year. Thank you.

Yes, so there's been a really substantial focus on new products and talent solutions and they are generally built around <unk>.

Allowing the party that's purchasing the product rate, whether it would be a background screeners or somebody else. So by specifically the information they need for the duration may require it and and we've launched a series of products that allow them to do that in ways and they tend to be at very attractive price points for equifax. So.

So.

So we're seeing very good improvement.

And NPI and talent solutions really it's a real strength for AWS, but obviously, we've also seen very substantial increase in hiring as we get into the second quarter relative to last year. So I can't give you a breakdown, but what I can say is and I think we've been talking about this consistently since at least the third quarter that net new products have drove have driven a substantial amount of <unk>.

<unk> and talent solutions really starting about mid way through last year.

Thank you. Our next question today is coming from Kyle Peterson from Needham. Your line is now live.

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

Just wanted to start on.

Dws, particularly on the employer services.

It looks like the momentum has been really strong there on the talent that'd be 2 side.

How should we think about some of the puts and takes in that business.

As things open up between growth on that side of the business.

Like some of the excess you see claims kind of declining as long as things keep improving.

Yes.

<unk> been very clear that we expect.

You see claims.

Decline from the extraordinary levels of a year ago, and that's a part of our guidance and when you think about some of the other solutions. We have the hiring process is generally good news for a lot of those whether it's <unk> onboarding and employee.

The employer resource credit is 1 that's really it's still a COVID-19 benefit that we expect to benefit through the rest of the year, but.

That's an area that we're focused on expanding and as you know we did it.

2 acquisitions, particularly higher tech that we acquired in the in the <unk>.

First quarter is helping us get stronger and work opportunity tax credits.

Which is.

And we've been growing and going forward if youre looking at employer services, excluding you see NERC right, which is what we exclude from core growth.

The 2 biggest businesses there are 9% and our business that supports HCA and our <unk> business as we talked about is growing very fast and Thats, new solutions and new using our new commerce platform to get to much smaller customers. So they can access us more quickly and directly and then also obviously with the changes in that and what's occurring in the ACI we're seeing.

That return to growth. So I think those 2 factors are have been very beneficial in the growth of the business is excluding obviously, you see an ERC, which mark already talked about.

Super Helpful. And then maybe just a follow up you guys have mentioned the large payroll partnership.

Planning on going live.

Later in the year, maybe if you could give us.

Any color on potential size and the rate of monetization.

That goes live.

And how that could influence the back half of the year.

Yes, I don't think we want to get into the exact size on it but we've tried to be clear I was 1 of the top <unk>.

Payroll processors, and we're pleased to be adding them to the twin database.

We have factored this into our framework our guidance for the second half and obviously as it's added day it'll benefit us in 2022 benefit workforce solutions is that those records are added.

Those turned into revenue in our system to system integrations.

Alright, thanks, guys.

Thank you. Our next question is coming from Toni Kaplan from Morgan Stanley. Your line is now live.

Thanks, very much and good morning.

The buy now pay later and a recent question and that's seeing a lot of growth right now.

Can you just talk about your position in that market any sort of current revenue contribution and growth rates, you're seeing there and how you view the opportunity well that more generally like in terms of future potential for that market.

Yes.

We are participating in the NPL space in the states and other markets around the globe.

Australia and UK and.

In Canada, I think of our markets also have BNP.

The NPL relationships.

We provide identity data to them they have to verify who the who the <unk>.

<unk> and <unk>.

Some of the NPL players are starting to move to larger ticket transactions in <unk>.

Looking to do more of an underwriting of the consumer.

Doing a b NPL on a $100 per bluejeans theres, a risk profile that you can do less underwriting if you will maybe just verify the identity of the consumer to make sure. It's not a fraudster when you start doing a refrigerator or a couch or larger ticket transactions. So in all of our NPL discussions we're talking to them about their desire to move into.

Bigger ticket transactions.

Leveraging equifax data to do that including the credit file some of our alternative data like NC plus.

<unk> income and employment data from workforce solutions.

Great and then for my follow up.

Consumer indirect got slightly better in the quarter, but it's still down I know you said you expect it to return to growth in <unk>.

We did see that 1 of your clients are 1 of the larger players in the space reported a very strong quarter just wondering.

Is there just sort of a lag to get to.

Sure.

Basically to get P. L. R. You know I guess why isn't that better yes.

Yes, I don't know which competitor.

You're referring to but as you might imagine we all don't have the same customer relationships and there is a different level of COVID-19 recovery I think with debt space. When you think about lead gen.

Layers.

If you're if you're a bank you are going to restart your own lead Gen. First before you start buying third party leads from a lead Gen. Players. So I think there is some lag in that that we expect to.

Improve as we go through the second half.

Thank you. Our next question is coming from Andrew Jeffrey from Truest. Your line is now live.

Hi, good morning lots of terrific information here I appreciate it.

Mark I'm wondering if you could talk a little bit about.

Within UWS verifier in particular.

Volume, which I assume is.

Being driven nicely by by NPI as well as the twin database, but also price and I'm thinking about price to value around some of your newer solutions, but also the impact of.

More digital Verifications in mortgage for example is there a dynamic you can call out share between price and.

In units. So we can think about yields in that business.

Yes, we don't we don't talk about specific price, but.

We try to try to exercise price in all of our businesses as you might imagine through our uniqueness of the solution or the data set and of course workforce solutions is.

For sure our most differentiated data assets. So we do use price, but product is also a very strong way to enhance revenue as we've talked in the past about.

Historically, we would have.

Single pole solution that we might sell for 15 and $2025.30 of workforce solutions in some of the newer products. We've rolled out in the last 12 to 18 months deliver more value to our customers, whether it's more historical data.

At $150 price point.

Or it's allowing a co borrower solution called we call mortgage duo where you.

You can pull or a husband and wife that are both applying for a mortgage and a single poll.

Price to more of the $150 solution.

Multiple poll alternatives in order to Incent usage all of those you can decide.

Define it whether you want to call it price or product, but it all results in higher revenue and higher margins.

Definitely interval of the strategy is to leverage the new cloud capabilities around the use of our data in workforce solutions to bring new solutions to market.

And then as you referenced earlier records.

Obviously resulted in higher hit rates remember, we're getting and system to system integrations.

We get a hit on our database for every customer every consumer that our customer has.

Now we're in that kind of 60% hit rate range on non farm payroll as we add records and go to $61.62.63 that drives revenue of course.

The system system integrations that we have which are growing we're now 75% and mortgage continuing to grow that we only see 60% of mortgages, meaning there is a lot of customers out there that we still have to add to our relationships. So that's another growth lever. So theres just a lot of players here in in growing that.

Business, which is why it has had the outsized growth that.

<unk> seen for really a decade, but the.

Stronger growth in the last cut.

A couple of years from the scale of the dataset, where it just becomes more valuable to integrate into.

Our customers.

Workflows because of the higher hit rates that it delivers.

Thank you I appreciate that.

Thank you. Our next question today is coming from Craig Huber from Huber Research partners. Your line is that line.

Yes. Good morning, My first question on fraud, and I'd could you potentially size that for us.

In the U S. I'm, just curious I know it's across multiple products you have there.

With the growth rate is if you could break that out for us. Please.

Yes, I think we've talked about this in the past right that as we look at 2021, we're expecting to see our total fraud and I'd business, but didn't necessarily break out the U S separately to be over $200 million. So that includes the addition of count but in total we're expecting our fraud and I'd business to exceed $200 million in 2021, and that's a space as you know we want to grow Thats why we did account.

<unk>, we're still in the early days of that integration and really driving the synergies in combining the data assets and rolling out the new solutions that.

The combination of Equifax data in count data is going to deliver principally in the U S. But counts also got global capabilities. So it will benefit to some of our global markets.

What sort of revenue growth would that imply for the full year and then my follow up question if I could ask please.

In U S. I guess can you just hit on a little bit.

<unk> credit card personal loans from your core.

Credit Bureau business, how well that did in this last quarter and what's your sort of outlook more importantly for the second half of the year there. Thank you.

Yeah, I don't think we'd given in identity and fraud a growth rate I think we have shared broadly and you know that the market. The market itself is growing 20%. So that's underlying why we.

<unk>.

In count and why we are still very.

Very open and looking.

Priority <unk> for us to do more M&A, because the size of the Tam is $18 billion growing at 20%.

Digital macro of more consumers doing things online on their phone on their tablets on their computers.

It was really driving that space, which is why we want to be bigger in it as.

As far as <unk>.

<unk> has been impacted.

By some of the inventory issues.

So.

That's clearly dampened some of their growth we've seen strong growth in card is.

Marketing and broadly originations come back and.

Same with the <unk>.

And as Mark mentioned in his comments right.

<unk> grew over 20%.

And auto grew double digits. So.

In the quarter.

Thank you. Our next question is coming from George Tong from Goldman Sachs. Your line is now live.

Hi, Thanks, Good morning, 2 questions within your non mortgage use science business, how does revenue in <unk> 2021, approximately compared with <unk> 2019 levels and then secondly, how has your non mortgage science business performing relative to the broader industry from a growth perspective.

So Georgia was the first question I am sorry, how did we compare to 2019 that is our second quarter and USA as compared to 2019.

Yes, so we haven't given specific detail, but what we've indicated is where we're seeing growth relative to 2019 really across most of the businesses right.

And the second 1 is versus I think your second question Georges versus the industry.

I assume needs versus our competitors 1 of our competitors hasn't reported yet and I think.

Versus the other that did.

I think we are in line and quite pleased with our performance and competitiveness.

No.

In the marketplace and we're seeing that with the kind of core growth that we're delivering.

In non mortgage.

Got it thank you.

Thank you. Our next question today is coming from Jeff Mueller from Baird. Your line is now live.

Thank you for employment and income verification do you have a sense of how often the cost are born out of the profit pool of the originator of pass through to the consumer and their closing costs and on the 60% metric that you gave us.

Any sense, if you over or under index to the purchase versus refi market relative to broader inquiries specific on verification services.

Yes, I think youre talking about mortgage Jeff in mortgage debt.

You know the credit file is used in virtually 100% of mortgages and Thats a pass through cost to the consumer.

We're starting to have some originators.

Move the income and employment data is the closing statement.

Days on that and we think Thats an opportunity going forward is going to take it's going to take some time.

In terms of whether our penetration is different than refi versus purchase.

We don't we don't think so we think it's relatively consistent it's basically driven more by by the by the underwriter are the provider of the mortgage then it is by by refi versus versus new purchase.

Got it I think Jeff you know there is a difference in number of pulls on the credit side versus the income and employment and we have been closing that gap on income and employment.

It.

There is an average of 4% to 5 credit polls for a mortgage and.

Now we're in kind of the 2 plus range on income and employment data, which is up from.

A number of years ago was closer to 1%. That's 1 we want to continue to grow and we think theres opportunity there, yes, I hear you.

And then on slide 11, the mortgage outgrowth within verifier relative to end market inquiries.

Where do you expect that.

Level off in coming years, and maybe at least if you did say do you expect it to be higher than this kind of 11% 21% range. It was in pre 2020 because of all book to us structural growth drivers Youre talking about.

Well I don't think we want to get into guidance.

Good day.

That level given its outside of 2021.

If you think about the opportunities we've laid out and what the cloud benefits are we believe theres a lot of opportunity for workforce solutions broadly ended mortgage when you adding.

Adding records, obviously allows you to outgrow the market, whether it's up down or sideways, so and that's a big focus of ours and we still have a lot of runway on records.

The scale of the dataset.

More system to system integrations, we get a 25% lift in polls when we're system to system integration versus coming to our website. The number of polls closing that gap with the 4 to 5 on the credit file new products is another way to continue to outgrow the market, which we're focused on pure price obviously.

<unk> allows you to outperform the market.

So we're confident in net in the scale of the levers there, but I don't think we want to give any.

<unk> on what it's going to look like over the long term.

But those levers are increasing relative to prior periods correct. That's the right interpretation.

1%, Okay. Thank you.

Thank you. Our next question today is coming from Ashish <unk> from RBC capital markets. Your line is that line.

Thanks for taking my question just a quick.

I'm wondering if you could provide a quick update on your FICO partnership and data decisions cloud have you seen better traction there, particularly as consumer marketing and consumer lending picks up.

Yes. It is.

Important relationship for us.

I do a quarterly review with will Lansing, FICO and myself and the team.

Actually it's a quarterly monthly.

So we're excited about that and decide the data decisions cloud, which is the integration of <unk>.

They are a solution with ignite we're also in market with a joint solution on <unk>.

Very pleased with and we're looking for other solutions going forward. So we are we're pleased with the progress we're in the market commercially in looking to benefit.

Benefit both of Us where it makes sense and of course, we go to market independently, where it makes sense too.

That's really helpful. That's great and then maybe just a quick question on any update on the regulatory front again I know you've spoken about this in the past, but just there was a financial services company day hearing in June and then.

Certain things around maybe it because theyre talking about changing the CRE I was just wondering if you can talk about how that can potentially any impact to the business, but also how we think about increased demand for alternative data as there is more focused on unbanked and underbanked customers. Thanks.

Yes, I think there's a couple a couple of levels net questioning I think maybe maybe the first 1 you were focused on is the some discussions.

Round of public Credit Bureau, we don't think Theres a lot of traction on that there never was.

We don't think that there's a real path for that.

Doesn't make sense.

3 large credit bureaus is another 30 cra's underneath the 3 large credit bureaus, So I think theres plenty of competition in investment to support consumers.

Second half of your question around real desire in Washington and with.

We've heard the CFPB talk about it.

Access to credit for those that.

Our challenge in getting to credit and.

It really drive around alternative data, that's clearly a big focus of ours.

Just talk about it on this call and others around expanding our alternative data using the equifax cloud to combine our differentiated data assets.

Really open up credit using things like utility bills payment records.

Cell phone payment records income and employment data to expand access to credit. It's clearly a focus of ours and it is of our customers the financial institutions and banks and that is aligned with the.

The push that Washington has.

That's very helpful. Congrats again on the solid results.

Thank you. Our next question today is coming from Trumeau Rosenbaum from Stifel. Your line is now live.

Hi, Good morning, Thank you for taking my questions.

Maybe John maybe you could help me out with this just a little bit.

Sequentially on the online information services.

It was.

Down about 4 billion.

Despite the fact that we're getting more opening up a little bit of counting.

Counting there is the whole difference really.

Impact of mortgage.

The decline sequentially in mortgage applications, and how that hit it or is there anything else I should be thinking about there.

Now I mean, as we talked about the fact that we saw very good.

<unk> and total growth, obviously, which includes the acquisitions.

In our non mortgage business actually non mortgage growth was a little bit stronger in total obviously because of the acquisitions and online.

And so what you are seeing obviously is that as the negative impact on mortgage from the decline in mortgage and that would be the negative impact that youre seeing in OIS. So I don't think there's anything more complicated than that.

Okay, Great and then just as a follow up I'm not sure if there isn't a per qualitative way to answer this with media quantitatively.

Particularly internationally and maybe some of the other locations.

Strong growth, but it's been generally.

<unk>.

The difference in terms of the re openings and is there any way for you or how do you view. This internally in terms of how much are you getting from equifax really returning to being on offense.

With all the efforts you've made versus just hey, the markets are opening up is there is there some way to for us to think about that.

Yes, it's challenging I.

I would say that we're still cautious in the second half around some of those recoveries and that even in the United States The Delta.

Our concerns is that going to impact things is something obviously, we watch.

I think the thing that John and I keep an eye on is kind of deal pipelines, where we're winning in the marketplace, where are we adding new customers, where we're rolling out new products. Those are kind of the above market kind of kind of growth that.

We're pleased with the momentum we've talked a bunch about U S <unk> and workforce, but.

Also what the teams are doing internationally on that front.

And we're accelerating A&P.

As Mark talked about it in his comments some of the new product Rollouts really as you know we're doing this to bring new solutions to our customers, but we're also doing it to grow our top line in those new product rollouts to generate revenue.

Coming to market.

In a very positive way.

Okay. Thank you.

Thank you. Our next question today is coming from Carolina Conway from a line of Bernstein. Your line is now line.

Great. Thanks for taking my questions. So I wanted to ask about the split of new product introductions between U S and AWS at this stage and that's typically when we might expect to see USA.

Net revenue contribution from NPI are on par with AWS.

And then my second separate question is on capital allocation I just noted that there's a few.

Net of being made based on the business ex requirements to accelerate the tech transition.

To be a hint that share repurchases could exceed 100 million. So I just wanted to get an update on the prioritization of different capital allocation choices.

SEC ex.

Sure on.

On your first question about NPI.

All our teams all 4 business units are intently focused on NPI is it's a priority that is really central to our FX 2023 strategy. So.

I don't think there's a real difference of activity the pipelines that John and I have a monthly review with the with the teams on with the product teams around how they are working to leverage our new cloud capabilities to bring new solutions to market and they all have very robust pipelines.

We're seeing revenue I don't think we don't disclose the vitality index by business unit.

It's broad based as far as.

Everyone's focus as far as capital allocation.

We're clearly committed to completing the cloud, we're obviously spending the dollars there and we've been quite consistent those dollars are coming down as we go through 'twenty 1 into 'twenty 2 but we are quite significant the last 3 years and we're starting to really pivot leveraging the cloud and getting the benefits from the cloud which are.

Quite meaningful there was no hint intended hint around changing our stock buyback so I don't know.

How you picked that up from the comments, but that wasn't an intent we are quite clear.

Launching our buyback earlier this year to offset dilution from employee plans that debt was a step forward, but nothing more than that the third leg on capital allocation that you Didnt mentioned is M&A and we've tried to be very clear that we see meaningful opportunities to enhance the equifax through M&A whether it's.

And differentiated data solutions, which count check that box identity and fraud, a fast growing space that we want to be bigger in and we think we've got a ticket to play there because of our data.

<unk> debt check that 1.

Second is our third really is strengthening our workforce solutions, it's our fastest and strong fastest growing and strongest business and strengthening of the core workforce through higher check in IQ verify is.

Key to our strategy.

As we mentioned earlier, we're really focused on widening workforce solutions.

Really in the talent solutions space.

Through data assets data that would be additive to our.

Income and employment work history that we have in the database and then I mentioned earlier differentiated data assets. We're always looking for unique data assets that we can combine to existing equifax data assets. So M&A is a priority of ours and as we mentioned earlier.

Done 5 transactions this year count being quite significant but we're on the lookout for acquisitions.

What I would characterize as bolt ons.

That will really check those 3 areas of differentiated data <unk>.

Identity and fraud.

Strengthening and broadening workforce solutions.

That makes sense and thank you for the clarification on share repurchases Kim.

Sure.

Thank you. Our next question today is coming from Gary Bisbee from Bank of America Securities. Your line is now live.

Yes, thanks, and thanks for the patience and saying this long just 1 quick clarification question. If I could Mark you commented when talking about employer about employee retention credits, which I see in your slide 23, I think it was you lumped in with the unemployment.

So did I hear right that effectively those are credits that youre getting that you think will end at the end of this year and is it right to think that that sort of pushes off a little bit when youll face the real severe declines from unemployment.

Normalizing or was there something else this quarter that allowed the combination of that and the unemployment claims too.

Do exceptionally well relative to the brutally tough comp yet thank you.

Yes, actually this quarter ERC was a little stronger than we thought obviously with the new credit so difficult to forecast and you see it was a little stronger than we thought right. So the unemployment claims line claims filings were little higher than we expected when we gave guidance initially.

And yes as you move through the rest of this year ERC does tend to offset a little bit the decline in UC, but as we said the ERC credits will be.

Or something that will only see this year and will be gone as we get into next year.

Alright, thank you.

Thank you we reached end of our question and answer session I would like to turn the floor back over to thorium for any further or closing comments.

Thank you for joining today, Mark John and I look forward to engaging with you in individual meetings and conferences and other farms throughout the summer. This does conclude today's call.

Thank you we've reached in Nevada.

You may disconnect and have a wonderful day, we thank you for your participation today.