Equifax’s (NYSE:EFX) Q2: Beats On Revenue

Credit reporting giant Equifax (NYSE:EFX) beat Wall Street’s revenue expectations in Q2 CY2025, with sales up 7.4% year on year to $1.54 billion. On the other hand, next quarter’s revenue guidance of $1.52 billion was less impressive, coming in 0.9% below analysts’ estimates. Its non-GAAP profit of $2 per share was 4.2% above analysts’ consensus estimates.

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Company Overview

Holding detailed financial records on over 800 million consumers worldwide and dating back to 1899, Equifax (NYSE:EFX) is a global data analytics company that collects, analyzes, and sells consumer and business credit information to lenders, employers, and other businesses.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $5.84 billion in revenue over the past 12 months, Equifax is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions.

As you can see below, Equifax’s 9.3% annualized revenue growth over the last five years was impressive. This shows it had high demand, a useful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Equifax’s annualized revenue growth of 7.4% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

We can dig further into the company’s revenue dynamics by analyzing its most important segments, Workforce Solutions and U.S. Information Solutions, which are 43.1% and 33.9% of revenue. Over the last two years, Equifax’s Workforce Solutions revenue (HR services) averaged 5.6% year-on-year growth while its U.S. Information Solutions revenue (credit services) averaged 8.7% growth.

This quarter, Equifax reported year-on-year revenue growth of 7.4%, and its $1.54 billion of revenue exceeded Wall Street’s estimates by 1.5%. Company management is currently guiding for a 5.4% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 8.1% over the next 12 months, similar to its two-year rate. This projection is commendable and suggests the market sees success for its products and services.

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Operating Margin

Equifax has been a well-oiled machine over the last five years. It demonstrated elite profitability for a business services business, boasting an average operating margin of 19.5%.

Looking at the trend in its profitability, Equifax’s operating margin decreased by 2.8 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Equifax generated an operating margin profit margin of 20.2%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Equifax’s EPS grew at an unimpressive 4.5% compounded annual growth rate over the last five years, lower than its 9.3% annualized revenue growth. However, its operating margin actually improved during this time, telling us that non-fundamental factors such as interest expenses and taxes affected its ultimate earnings.

Diving into the nuances of Equifax’s earnings can give us a better understanding of its performance. As we mentioned earlier, Equifax’s operating margin was flat this quarter but declined by 2.8 percentage points over the last five years. Its share count also grew by 1.9%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Equifax, its two-year annual EPS growth of 8.3% was higher than its five-year trend. Accelerating earnings growth is almost always an encouraging data point.

In Q2, Equifax reported EPS at $2, up from $1.82 in the same quarter last year. This print beat analysts’ estimates by 4.2%. Over the next 12 months, Wall Street expects Equifax’s full-year EPS of $7.50 to grow 11.6%.

Key Takeaways from Equifax’s Q2 Results

It was encouraging to see Equifax beat analysts’ revenue expectations this quarter. We were also happy its EPS outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance missed and its EPS guidance for next quarter fell short of Wall Street’s estimates. Overall, this quarter was mixed, but the market seems to be forgiving the weaker guidance. The stock traded up 2.4% to $266 immediately following the results.

Is Equifax an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.