Equifax (NYSE:EFX) is a current holding within the US Long Short portfolio.
Equifax, a short position in the US Long Short portfolio, reported second quarter results before the open on Tuesday 21 July. Adjusted earnings per share rose 13 percent to $2.25, about five cents ahead of consensus and above the midpoint of the company’s own guidance. Revenue rose 11 percent to $1.70 billion, roughly in line with estimates. GAAP diluted EPS was $1.54, up 1 percent.
By segment, Workforce Solutions grew revenue 7 percent with an EBITDA margin of 52.1 percent, USIS grew 17 percent, and International rose 4 percent in constant currency. Group adjusted EBITDA rose 10.5 percent to $552 million, a 32.5 percent margin. The company returned $366 million to shareholders during the quarter, announced the $750 million acquisition of Mexican credit bureau Circulo de Credito, and doubled its 2026 to 2028 AI-driven cost reduction target to $150 million.
Guidance took the shine off. Third quarter adjusted EPS guidance of $2.15 to 2.25 sits below the $2.27 consensus, and the narrowed full-year ranges of $6.71 to 6.78 billion in revenue and $8.39 to 8.69 in adjusted EPS put the midpoint at $8.54, under the $8.60 analysts had pencilled in. CEO Mark Begor pointed to elevated rates suppressing mortgage originations and housing activity, and said inflation is disproportionately affecting lower-income and subprime consumers.
The stock fell as much as 12 percent in early trade and closed down about 7 percent. The weak third quarter outlook outweighed the second quarter beat, and the mortgage commentary gave the market a reason to mark down the second half. The Circulo de Credito deal extends the international credit bureau footprint into Mexico and closes later this year, subject to regulatory approval.
