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DATE

Tue, Oct. 20, 2026

CALL PARTICIPANTS

• Senior Vice President, Investor Relations - Trevor Burns
• Chief Executive Officer - Mark Begor
• Executive Vice President and Chief Financial Officer - John Gamble

TAKEAWAYS

• Operating Revenue -- $1.69 billion, increasing 10% year over year driven by diversified markets growth across all three business segments.
• Adjusted EPS -- $2.26, growing 11% compared to the prior year despite $20 million in mortgage market headwinds during September.
• Adjusted EBITDA Margin -- 33.1%, representing an increase from 32.7% last year, supported by AI productivity and cost management.
• New Product Vitality Index -- 17%, reaching a record high that exceeds the company's 10% long-term framework goal.
• Workforce Solutions Revenue -- $693.9 million, rising 7% year over year as diversified markets growth was partially offset by mortgage market weakness.
• Talent Solutions Revenue -- growing over 20% in the quarter, outperforming a soft white-collar hiring market through increased product penetration and pricing.
• Government ACV -- over $550 million year-to-date, including $150 million in new business and $400 million in renewals.
• Active TWN Records -- 23 million, up 12% year over year, while total current active records reached 125 million across 110 million unique individuals.
• U.S. Information Solutions Revenue -- $599.1 million, increasing 13% year over year led by strong mortgage and financial institution performance.
• Ex-FICO USIS EBITDA Margin -- 42.4%, expanding over 23 basis points versus last year due to AI-driven productivity and cost management.
• International Revenue -- $399.5 million, up 7% in constant currency with 12% growth in Asia Pacific and 8% in Latin America.
• VantageScore Adoption -- approximately 2,000 mortgage lenders, representing a sevenfold increase in the underwriting process since April.
• Share Repurchases -- $92 million in the quarter, bringing year-to-date repurchases to $650 million on 3.6 million shares.
• Full Year Revenue Guidance -- $6.66 billion at the midpoint, reflecting an $80 million reduction in U.S. mortgage revenue expectations compared to July guidance.
• Full Year Adjusted EPS Guidance -- $8.50, slightly lower than previous midpoints as the company offsets mortgage revenue declines through efficiency programs.
• Free Cash Flow -- projected to exceed $1 billion for 2026 with a cash conversion rate of at least 100%.
• M&A Investment -- $750 million enterprise value for the pending Círculo Crédito acquisition in Mexico, expected to close in the fourth quarter.
• AI Productivity Goal -- $150 million, driving margin improvements across internal operations, technology, and general functions.
• U.S. Mortgage Transaction Volumes -- expected to decline by a high single digit percentage in 2027 versus 2026 based on current run rates.
• Bimerge Revenue Impact -- $80 million potential annual risk if the industry moves to a two-bureau credit report requirement for conforming mortgages.

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RISKS

• Gamble stated, "Mortgage market transaction volume began to decline later in August as interest rates started rising, with the decline accelerating as we move through September 30 year mortgage rates reaching about 7.5% compared to 6.6% when we provided guidance in July," noting that total mortgage revenue expectations for the year are now $80 million lower than previous forecasts.
• Begor warned that employer services revenue fell 5% in the quarter, reflecting the suspension of the Work Opportunity Tax Credit program.
• Gamble noted that the company is seeing some slowing in hiring activity and overall volumes in financial institutions and automotive segments late in the third quarter.

SUMMARY

Equifax Inc. (EFX +11.33%) reported third quarter results that surpassed the high end of its earnings guidance despite significant late-quarter headwinds in the U.S. mortgage market. Management emphasized the company's ongoing shift toward non-mortgage revenue streams, which now represent a larger portion of the total business. The company is aggressively deploying artificial intelligence through its EFX.AI platform to drive both new product innovation and internal cost productivity. Financial results were supported by record record-high vitality indices and strong growth in government and talent verticals, even as 30-year fixed mortgage rates rose to approximately 7.5% in September. Management updated its full-year guidance to reflect the current weak mortgage run rates while maintaining its adjusted EPS targets through rigorous cost management and AI-driven efficiencies.

• Management is focusing on a $5 billion total addressable market in government social services, where the company recently signed agreements totaling over $550 million in annual contract value.
• The company intends to maintain a $1 price point for VantageScore through 2028 to incentivize lenders to switch from more expensive legacy scoring models. CEO Begor stated, "Equifax plans to maintain the $1 VantageScore price through the end of 28, to continue driving the adoption of the lower priced and higher performing VantageScore."
• The technology transformation is nearly complete, with the USIS segment now fully operating in the cloud and Australia expected to follow as the final major geography.
• The pending acquisition of Círculo Crédito in Mexico is expected to be accretive to adjusted EPS within the first full year of ownership.
• The company identifies a significant potential upside in a future mortgage market recovery, estimating $1 billion in incremental revenue and $700 million in margin expansion when interest rates eventually moderate.
• AI for EFX productivity programs were expanded from a $75 million target to $150 million, reflecting faster-than-anticipated deployment across internal coding and support functions.

INDUSTRY GLOSSARY

• ACV: Annual Contract Value, representing the total annualized value of a signed customer contract.
• Bimerge: A mortgage credit report containing data from only two of the three major credit bureaus.
• FHFA: Federal Housing Finance Agency, the regulator overseeing Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System.
• SSNs: Social Security Numbers, used here to represent unique individuals within Equifax data sets.
• TAM: Total Addressable Market, the total revenue opportunity available for a product or service.
• Trimerge: A comprehensive mortgage credit report that includes data and scores from all three national credit bureaus.
• TWN: The Work Number, Equifax's proprietary database of income and employment records.
• VantageScore: A credit scoring model developed jointly by the three major credit bureaus as a competitor to FICO scores.
• Vitality Index: A metric measuring the percentage of total revenue derived from new products launched within the last three years.
• WOTC: Work Opportunity Tax Credit, a federal tax credit available to employers for hiring individuals from certain target groups.

Full Conference Call Transcript

Operator: Greetings and welcome to the Equifax Q3 26 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press 0 on your telephone keypad. Now my pleasure to turn the call over to Trevor Burns, Senior Vice President, Investor Relations. Trevor, please go ahead.

Trevor Burns: Thanks, and good morning. Welcome to today's conference call. I am Trevor Burns. With me today are Mark Begor, 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. In the IR Calendar section of the News and Events tab at our Investor Relations website. During the call, we will be making reference to certain materials that can be found in the Presentations section of the News and Events tab at our IR website. These materials are labeled 3Q 26 Earnings Conference Call.

So we will be making certain forward looking statements including fourth quarter and full year 2026 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 our expectations. Certain risk factors that may impact our business are set forth in our filings with the SEC, including our 2025 Form 10-Ks and subsequent filings. During this call, we will be referring to certain non GAAP financial measures including adjusted EPS, adjusted EBITDA, adjusted EBITDA margins and cash conversion, which are adjusted for certain items that affect the comparability of our underlying operational performance.

All references to EPS, EBITDA, EBITDA margins and cash conversion are references to non GAAP measures. These non GAAP measures are detailed in reconciliation tables. Which are included with our earnings release and can be found in the financial results section of the Financial Info tab at our Investor Relations website. Now, I would like to turn it over to Mark.

Mark W. Begor: Thanks, Trevor. Turning to Slide 4, Equifax delivered solid results in the third quarter in a challenging mortgage market driven by strong diversified markets revenue growth of over 8% that exceeded our mid single digit guidance with strong broad based performance across all 3 business units. Included improved performance in AWS Government, which grew mid single digits in the quarter. EBITDA margins were up a very strong 130 basis points excluding FICO versus last year, from operating leverage, AI productivity and good cost management even with the $20 million of mortgage market headwinds in September. EPS grew 11%, and it $2.26 per share was above the high end of our guidance even with the negative mortgage market impact.

A very strong broad based quarter for Equifax against a challenging mortgage market. This strong performance was delivered despite the significant weakening in The US mortgage market as 30 year fixed mortgage rates increased about 75-basis-points since July, which negatively impacted overall mortgage market transaction volumes. And Equifax revenue versus our expectation by about $20 million in the quarter. Or over 100 basis points versus our Julia framework. Exit Equifax revenue of $1.693 billion was up 10% on a reported basis and 9% in constant currency, and was slightly below the midpoint of our July guidance due to the negative $20 million of mortgage market impact.

Ex fake mortgage, revenue growth of 7% was at the midpoint of our July guidance. Excluding the negative impact of the $20 million of U.S. Mortgage market decline in September, relative to our July guidance, total Equifax revenue would have been above the top end of our guidance range for the quarter. U. Mortgage revenue was up 15% in the quarter and up 1% ex FICO, both below our expectations from the higher rate environment in September. John will provide context on the impact of the significant weakening in The U. S. Mortgage market on the fourth quarter and in 2027. Equifax returned $158 million of cash to shareholders in the quarter, about $850 million year-to-date.

Share repurchases moderated in the quarter at $92 million with the Círculo deal expected to close in the fourth quarter. Bringing year to date repurchases to about $650 million on 3.6 million shares or 3% of shares outstanding. Since launching our $3 billion share repurchase program in April 2025, We have used our excess free cash flow to repurchase $1.6 billion of Equifax stock. We continue to expect strong free cash flow of over $1 billion in 2026 and cash conversion over 100%. With our financial capacity of over $1.5 billion, we can execute the Círculo Accredo acquisition in the fourth quarter and continue to repurchase shares while maintaining a strong balance sheet. Turning to Slide 5.

Workforce Solutions delivered solid results in the third quarter with total diversified market revenue up 9% and total verified diversified markets revenue up a strong 13%. Mortgage revenue was about flat in the quarter versus last year, reflecting the significant weakening in The U. S. Mortgage market. AWS mortgage revenue outperformance was high single digits and consistent with the first half from record growth, new products like Mortgage Qualify and pricing. Internal workforce solutions revenue was up 7% in the quarter as the strong diversified markets revenue performance was partially offset by the weakness in the overall U. S. Mortgage market.

Third quarter government revenue was up mid single digits, I will discuss government in more detail shortly, but we are very pleased with the trajectory of our government revenue growth given new state wins and our strong deal pipelines in their big $5 billion TAM. Talent Solutions revenue grew a very strong over 20% in the quarter and continues to outperform a soft white-collar hiring market with growth in new products increased product penetration, across our incarceration and education data assets, and pricing. The talent team continues to execute very well in their big $5 billion TAM.

Consumer lending also had another very strong quarter with high double digit revenue growth led by card and consumer finance, principally due to penetration and record growth. This is increasingly an important growth vertical for workforce as they roll out new solutions in the Auto, Card, and P-Loan verticals. Employer services revenue was down 5% in the quarter, and as expected due to the suspension of the Work Opportunity Tax Credit or WOTC program. Workforce Solutions EBITDA margins of 51.4% were in line with our expectations despite the revenue impact from the weaker mortgage market.

Twin record additions continued to perform well again in the third quarter with 23 million total active records, up 12% and 125 million total current active records up 11%, representing 110 million unique individuals, or SSNs. We expect strong record growth as we exit through 2026 and in 2027 from W-2 based records as well as alternative record sources like pension, gig, and 1.1 thousand with significant potential for record additions with 250 million income producing Americans against our 110 million unique SSNs in the twin dataset at the end of the quarter. Turning to Slide 6.

In 2026, we have made excellent progress with government customers converting our large commercial pipeline with renewals, extending existing relationships, and adding new principally state government customers. As a reminder, we operate in a $5 billion TAM at the federal, state, and local level of principally manual income verifications delivery of social services. Year to date, the EWS government team has signed agreements with state agencies for the provisioning of income and employment data supporting principally SNAP CMS, SNAP and CMS, totaling over $550 million in annual contract value, including about a $150 million in new business and $400 million in renewals, an extremely strong result that will principally benefit our workforce solutions government vertical in 2027.

Our discussions with state agencies continue to be robust and productive, given the strong value proposition from Twin on speed of social service delivery, caseworker productivity, and accuracy of income verifications, which drives a reduction in improper payments, and helps states get benefits to those who need them quickly. Further, we have seen strong engagement from states converting to subscription based contracts that provide more certainty of spending levels as well as adding new solutions from workforce solutions. For example, Continuous Evaluation for Snap is a new AWS solution that identifies changes in recipient income. Incomes above program levels to reduce SNAP error rates. CE-- Our new CE solution has been added to several recent state contracts.

We are having active discussions with states to support verification of hours worked for new OB 3 Medicaid work requirement obligations beginning in January 2027. And our EWS Complete Income solution supports states' ability to validate through a single integrated solution includes the work member, and other sources of income such as gig work, self employed wages, and non earned income through applicant permission services. We also have several large new federal opportunities in our deal pipeline. Our strong wins and renewals this year, along with continued strong deal pipelines, reinforces our confidence in the medium and long term growth opportunities for EWS government.

Supporting states in meeting requirements regarding accuracy and frequency of income validation in Medicaid SNAP and other social services. The AWS government team is clearly on offense supporting federal, state, and local customers with their social service program requirements and has significant opportunities for long term revenue growth supporting government programs their big $5 billion TAM. Turning to Slide 7, USIS also delivered a solid quarter with diversified markets revenue growth of 6% consistent with the solid performance in the second quarter within their long term framework. B2B revenue was up 5% with high single digit online growth in FI from stronger volumes, new business, and pricing.

And mid single digit online growth in auto from pricing and new business wins. Also saw improved growth in commercial and insurance. Within financial marketing services, our offline batch business revenue was up over 10%, led by very strong bought broad based growth across marketing, identity and fraud, and account reviews, principally from new business. Our consumer direct business continued to deliver strong growth of 9% in the quarter from good subscriber growth in our direct channel and new business wins in our partner channel. USNS mortgage revenue was up 28% and up low single digits ex FICO against the slowing mortgage market late the quarter.

Relative to the underlying mortgage market, revenue ex FICO outperformed the underlying mortgage market by high single digit percentages percentage driven by share gains in prequalification, and preapproval products and pricing. USIS EBITDA margins were 35.4% in the quarter, Excluding FICO royalties, USIS EBITDA margin was 42.4%, up over 23 basis points versus last year, and an outstanding performance. The improvement was driven by improved diversified markets revenue growth, strong cost management, and AI driven productivity. Turning to Slide 8. In September, the FHFA accelerated the use of VantageScore for conforming mortgages to all U. S. Mortgage lenders.

With Score Choice now available to all US mortgage lenders, we are seeing a rapid adoption of Vantage 4 with about 2,000 mortgage lenders using VantageScore in their underwriting processes of 7x since April. And since April, our mortgage Vantage core volume is up over 230%. Through September, the bulk of mortgage lenders continue to purchase both the FICO mortgage score and obtain a free Vantage score from Equifax, and therefore, our mortgage Vantage score revenue continues to be small. However, we now have over 200 mortgage lenders exclusively using VantageScore, and expect more vendors.

More lenders to move to the paid VantageScore model as we move through the fourth quarter and into 2027 to take advantage of the higher approval rates and the $1 cost of VantageScore from Equifax. As VantageScore mortgage revenue increased we will share the positive financial impact on Equifax margins, and adjust our revenue and mortgage margin guidance accordingly. The strong adoption of VantageScore is a drive. Is driven by the $1 billion annual savings opportunity for mortgage originators, and consumers, as well as VantageScore's ability to score more consumers supporting homeownership. Equifax plans to maintain the $1 VantageScore price through the end of 28, to continue driving the adoption of the lower priced and higher performing VantageScore.

To further provide lenders and brokers with greater effects of flexibility and cost efficiency, 2 weeks ago, Equifax announced our new Mortgage Score Select product. This new offering enables the mortgage industry to pull an Equifax mortgage credit file without a credit score, or hold a mortgage credit file with the credit score they select for their mortgage banking needs. Whether that score is VantageScore 4, classic FICO, or FICO score 10 t when it is approved. If the lender or broker wants a second look at the mortgage credit file after the initial pull, they are now able to pull the Equifax mortgage credit file again within 24 hours for just $1.

Along with the cost of their selected mortgage credit score or without a mortgage credit score as a part of that offering. With the Mortgage Score Select, we are helping lenders and brokers achieve 2 key objectives. First, cost effectively gaining access to more data to support the lending process, and second, qualifying more borrowers based on these expanded datasets. Turning to Slide 9, there have been discussions from the FHFA about eliminating the Tri Merge credit report requirement and moving to a 2-bureau mortgage credit report.

We, and the vast majority of industry participants, strongly believe the TriMerge credit report is essential to expanding consumer access to credit lowers mortgage rates for consumers, ensures the safety and soundness of mortgage underwriting. We believe TriMerge is the right solution for consumers, the mortgage industry, and government agencies. We thought it would be helpful to provide more detail on our USIS mortgage revenue and to size the potential impact of a of a bimerge change on Equifax if it were to occur.

We expect the impact of GSE related mortgage related originations moving to bimerge would be manageable for Equifax with roughly $80 million of potential annual revenue impact based on 2026 revenue, which includes the FICO score being delivered with each credit file. We have multiple levers to help manage a potential $80 million revenue in $38 million margin impact given Equifax's unique solutions and assets, including only about 40% of current originations are GSE related, and would be subject to a potential change by the FHFA to buy merch. We expect FHA and VA, which we estimate participate in about 25% of originations, would retain the TriMerge requirement based on their consistent statement supporting the value of TriMerge.

Mortgage lenders would have the option to pull a 3- or 2-bureau file in the mortgage underwriting process, and we expect many would continue with 3 b, to contain. To gain the approval rate list from the additional data. Of course, any implementation would take a long time, and Equifax will be advantaged with our unique solutions, including the twin indicator or income qualify and our NCTUE telco utility data that we deliver today with the Equifax mortgage credit file at no charge that our competitors cannot match. And, of course, our TriMerge go to market business will advantage Equifax in this environment. And last, full conversion to VantageScores and mortgage delivers about $35 million of incremental margin to Equifax.

And once rates moderate, there is a big $1 billion revenue and $700 million margin upside in a full mortgage market recovery. Bar provides an approximate breakdown of expected 2026 USIS mortgage revenue as indicated about 45% of that revenue is FICO royalty pass through, with no margin, and about 10% is pass through revenue from the resale of TransUnion Experian trended credit files to our TriMerge business, which is also not no margin. This means about 55% of our USIS mortgage revenue is at 0 margin. About 30% of revenue is from the sale of Equifax, trended credit files sold principally to resellers that create the TriMerge report.

But also directly through the Equifax TriMerge report business, which we refer to as Hardpull. The trended credit files sold for this purpose have rich data on the consumer and are used for the mortgage approval process. The remaining about 15% of revenue is principally from the sale of EFX credit files for pre call or pre approval products, used early in the application by mortgage originators. These principally 1-bureau products assist in early evaluation of applications, are defined as soft pull products. Equifax generates very high variable margins from the sales of credit files in these hard and soft pull products.

Turning to Slide 10, international revenue was up about 7% in constant currency with a strong 12% Asia Pacific revenue growth, including Australia up 11%, and 8% Latin American revenue growth. Canada and Europe both delivered 4% revenue growth with market headwinds in both the Canadian and The UK market impacting overall growth rates. In Latin America, we saw double digit revenue growth in Peru and Central America, with high single digit growth in Brazil. And international EBITDA margin was 30.9% in the quarter. Turning to Slide 11. In July, we signed a definitive agreement to acquire Círculo Credito, the fastest growing credit bureau in Mexico for an enterprise value of $750 million.

This acquisition will expand Equifax into the fast growing market, the second largest economy in Latin America. And offer circulator credit customers access to industry leading Equifax cloud native capabilities decision and analytics capabilities, patented EFX dot I a I technology, award winning identity protection and fraud prevention offerings for the development of solutions designed to help customers grow and expand financial inclusion, in Mexico. For the last 12 months, including September, Circular's revenue is up a very strong 24% and delivering 47% EBITDA margins. We expect Círculo to be accretive to Equifax adjusted EPS in the first full year of ownership.

And since 2020, Equifax has invested our strong excess free cash flow and strategic bolt on acquisitions to drive our financial results and shareholder returns. Including Círculo Accredo, we have invested nearly $5 billion in 17 bolt on acquisitions since 2020, with a proven track record of integrating these acquired businesses like our acquisition of Boa Vista, in Brazil 3 years ago. We are energized to be entering the fast growing Mexico market with our Círculo acquisition that we expect to close in the fourth quarter of this year. Turning to Slide 12. Equifax is executing a broad AI and Agentic strategy that leverages efx.ai along with our cloud native technology our Ignite analytics prod.

Platform, and our unique proprietary data to deliver higher performing efx.ai powered scores, models and products to our customers. In the third quarter, we delivered a record over 17% new product vitality index, leveraging the Equifax cloud and efx.ai capabilities, which is above both our 15 percent 26 vitality guide and our 10% long term framework goal for vitality index. Year to date, over 80% of our new products are leveraging efxai capabilities that drove our record 17% vitality index. We are seeing double digit performance lifts performance lists from these efx.ai enabled new analytical products, which is driving strong market adoption.

This includes the rollout of Ignite AI Advisor, and EquifaxIQ on our integrated Ignite analytics and InterConnect decisioning global platforms. We are leveraging EquifaxIQ capabilities across multiple credit risk fraud and collection solutions in several countries, consistently seeing very significant improvements in customer outcomes for these use cases. Brazil, EquifaxIQ is powering collection solutions from multiple large banks driving an improvement in their collections recovery. Similarly, EquifaxIQ is powering credit risk in Latin America, driving risk reduction. We are continuing to build out the platform capabilities to scale Equifax IQ Capabilities and expect EquifaxIQ will be Commercially Available In The US early next year.

We are also seeing strong adoption of new products based on differentiated proprietary Equifax data, including our twin indicator solution for mortgage and Continuous Evaluation and public safety solutions in EWS government, are helping support the AWS sequential government revenue growth in the quarter. Turning to Slide 13, we continue to see strong execution by the operations and technology teams across toward our $150 million AI for EFX productivity goal, and is delivering margin improvements across the business. In July, we reviewed with you the expanded deployment of AI tools and agents across internal Equifax product and model development, operations, technology, and our G&A functions which is driving cost efficiencies across the entire business.

Given our strong ex FICO third quarter EBITDA margin performance of up 130 basis points from operating leverage cost management, and AI productivity, we are raising our full year EBITDA margin guidance from up 75 basis points to up 100-basis-points, or double our long-term framework of 50 basis points despite the negative about $80 million impact on revenue from The U. The weaker US mortgage market, versus our July guidance. We are energized by the rapid deployment of AI tools across Equifax that is driving productivity and we believe we are still in the early innings of the potential for AI driven productivity across Equifax.

Now I would like to turn it over to John to provide our fourth quarter and full year framework.

John W. Gamble Jr.: Thanks, Mark. Before we discuss 4Q and calendar year 2026 guidance, I would like to spend a minute discussing the current weakness in The U. S. Mortgage market and the impact this had on 3Q 26 results as well as 4Q 2026 guidance. Mortgage market transaction volume began to decline later in August as interest rates started rising, with the decline accelerating as we move through September 30 year mortgage rates reaching about 7.5% compared to 6.6% when we provided guidance in July. This mortgage market decline the bulk of which occurred in the second half of the quarter drove about a $20 million decline versus in U. S. Mortgage revenue in the quarter. Our fourth quarter expectations for U.

S. Mortgage transactions reflect current run rates and a continuation of the current weak mortgage market conditions. On this basis, 4Q 2026 mortgage revenue is down about $60 million versus our July guidance. For the full year 2026, total U. S. Mortgage revenue is now expected to be about $80 million below our previous guidance with growth rates down over 500-basis-points versus July. Excluding FICO mortgage royalty pass through revenue, Equifax mortgage revenue will be up slightly versus 2025. This reflects U. S. Mortgage market originations of down an estimated 6.5% to 7.5%.

As we look forward to 2027 using current mortgage market transaction levels across USIS and EWS, and applying normal seasonal factors 2027 mortgage market transaction which we believe would be consistent with U. S. Originations would be down on average high single digit percentage in 2027 versus 2026. Principally over the first 8 months of the year. Looking at overall U. S. Mark conditions, while The U. S. Mortgage market has weakened meaningfully since our guidance in July, overall U. S. Mark conditions impacting the remainder of our other businesses remain relatively consistent with the environment we saw in July. Low unemployment continues to support overall consumer financial health.

As we have referenced previously continued higher levels of inflation has disproportionately pressured the lower income subprime consumer demographic but the majority of consumers continue to be resilient which is good for Equifax and our customers. We have also not seen financial institutions increase their portfolio management reviews or decrease consumer credit lines which are actions they take when they anticipate an economic downturn. As we have seen some slowing in FI and auto volumes late in 3Q and as we begin 4Q as well as some slowing in overall hiring activity, we continue to watch this closely particularly in segments impacted by higher interest rates. Slide 14 provides the specifics of our 2026 full year guidance.

As Mark referenced earlier, the Equifax team is executing extremely well. For 2026, we expect to deliver our committed diversified markets revenue growth of high single digit percent year-to-year. U. S. Mortgage revenue reflecting the current market conditions we discussed is expected to be about $80 million below our July guidance with mortgage revenue ex FICO royalty pass through slightly above flat year-to-year. As a result, Equifax revenue for 2026 at the midpoint is now expected to be $6.661 billion. The Equifax team continues to execute extremely well in delivering improved efficiency through our AI and broader automation and cost management programs.

We are increasing our EBITDA margin ex FICO mortgage royalty guidance to an increase of 100 basis points in 2026 versus 2025 up from the 75 basis points we guided in July. As a result, we expect to deliver at the midpoint of our guidance EBITDA of $2.125 billion and adjusted EPS of $8.50 per share within the guidance range we provided in July, but down slightly from the midpoint as our team offset the significant majority of the gross margin impact of the over $80 million of lower mortgage revenue versus our Julia guide.

As Mark covered earlier, we believe we are in the early innings of opportunities from our AI and Agentic implementation both in driving NPI and in AI driven cost productivity. The acceleration of these benefits is a key focus of our 2027 plans. Slide 14 also provides guidance for business unit revenue and EBITDA margins which reflect both the significant weakening of The U. S. Mortgage market as well as Equifax strengthening EBITDA margin performance. In EWS, we now expect revenue growth of up mid-single-digit percent. This is below our July guidance of high single digit percent growth solely related to the decline in mortgage revenue.

We continue to expect EWS' diversified markets revenue to grow high single digits and Verifier diversified to grow low double digits consistent with our July guidance. Consistent with our July guidance, we continue to expect adjusted EBITDA margins to be about flat year-to-year. In USIS, we continue to expect revenue to grow mid teens percentage but at the very bottom end of the range given lower mortgage revenue. We made no changes to our mid single digit diversified markets revenue growth expectation. And EBITDA margins ex FICO mortgage royalties are over 40% and up strongly, reflecting good cost management and continued good progress in AI and other automation and cost structure management programs. International guidance is essentially unchanged from July.

In 2026, we expect to deliver over $1 billion of free cash flow and a cash flow conversion of at least 100%. With EBITDA of about $2.1 billion at the midpoint and strong free cash flow, this creates $1.5 billion in capital available in 2026 for M&A and return of cash to shareholders. While maintaining debt leverage at about 3 times EBITDA. As referenced earlier, this provides the capability for us to complete the Círculo acquisition as planned in 4Q 26 while still executing share repurchases in 4Q 2026. Slide 15 provides the details of our 4Q 2026 guidance.

In 4Q 2026, we expect total Equifax revenue to be between $1.605 billion and $1.635 billion up about 4.5% on a reported basis year-to-year at the midpoint. Excluding the impact of FICO mortgage scores 4Q 2020 reported revenue is expected to be up about 3% at the midpoint. Diversified markets revenue is expected to be up 6% to 7% on a reported basis. U. S. Mortgage revenue per my previous comments is expected to be about $60 million weaker than our expectation when we gave guidance in July, reflecting substantial decline in The U. S. Mortgage market. U. S. Mortgage revenue is expected to be down mid single digits percent year-to-year. U. S.

Mortgage revenue excluding FICO mortgage royalty related revenue is expected to be down mid double digit percent year-to-year. EBITDA margins ex FICO mortgage royalties are expected to expand about 90 basis points year-to-year at the midpoint. Again reflecting strong execution on our AI and automation programs and broader cost management initiatives. Equifax 4Q 26 EBITDA dollars are expected to be $529 million to $546 million, up almost 6% at the midpoint. EPS in 4Q 26 is expected to be $2.07 to $2.17 per share up about 1.7% versus 4Q 2025 at the midpoint. 4Q 2026 EPS growth is lower than EBITDA dollar growth given increased depreciation expense related to transformation assets going into service and a slightly higher tax rate.

We believe that our full year and 4Q 26 guidance are centered at the midpoint of both our revenue and EPS guidance ranges. As a reminder, our guidance for 4Q 2026 and fiscal year 2020 assumes Equifax will calculate and sell FICO scores for all mortgage credit transactions and there will be limited VantageScore revenue. Now I would like to turn it back over to Mark.

Mark W. Begor: Thanks, John. Wrapping up on Slide 16, the Equifax team executed very well in the third quarter against our EFX28 strategic priorities, despite the weaker mortgage market. Equifax is leveraging the EFX Cloud, efx.ai, and proprietary data assets to accelerate innovation help our customers grow. Our broad based third quarter diversified market revenue growth of 8% and 130 basis points of EBITDA margin expansion from operating leverage and AI for EFX productivity savings are indicators of the broad based Equifax operating model. We delivered above our EBITDA dollar and EPS guidance ranges this despite the impact of the negative $20 million from the decline in The U. S. Mortgage market in the third quarter.

Our updated 100 basis point FICO margin expansion guide for the year from strong driven by strong cost management AI productivity is up 25-basis-points from our 75 basis point framework and twice our long term goal of 50 basis points from strong cost management and AI driven productivity despite the negative $80 million impact from the weaker mortgage market for the balance of 2026. Pike's Cloud, EFX is deploying AI to power higher, performing and differentiated solutions for our customers and AI for EFX is a new gear for margin expansion and free cash flow acceleration as we deploy AI inside of Equifax for cost productivity.

Our big cloud foundation is our big cloud investment is the foundation for enabling rapid deployment of AI, and we are still in the early innings of our rollout. Our diversified markets momentum driven by our strong AI enabled NPI rollout and continued execution of AI for eFX productivity, gives us strong confidence and momentum as we finish the year and look forward to 2027. In the third quarter, we expect to deliver approaching 100 basis points of margin expansion from continued strong diversified markets revenue growth and AI for EFX productivity. Our focus continues to be delivering financial results consistent with our long term framework.

With organic revenue growth of 7% to 10%, and at least 50 basis points of margin expansion from broad based AI powered BU revenue growth of low double digits in EWS, 6% to 8% in USIS, and 7% to 9% in international. The EFX Cloud and efx.ai give us continued confidence to innovate with our customers to exceed the 10% vitality index goal with new solutions like Twin Indicator, and our suite of AI enabled solutions like AI Ignite Advisor, and EquifaxIQ. Our operating leverage, strong post cloud AI cost management, and AI driven productivity are powering our margins and free cash flow.

Given our strong free cash flow generation, with cash conversion over 100% in 2026, we are also delivering on our commitment to return substantial free cash flow to shareholders. So far in 2026, we have returned $850 million to shareholders, and in the fourth quarter, we can complete the Círculo acquisition and continue healthy share repurchases while maintaining our strong balance sheet. And as a reminder, while hard to see today with the Middle East conflict driving inflation and interest rates, these macro factors will resolve in the future and bring rates down and mortgage activity back up.

Even at lower levels of mortgage activity, the pipeline of higher rate mortgages grows every week for future refis, when rates contract with over 17 million mortgages now over 6%. With AI powering Equifax on the top and bottom line, we are clear that in a mortgage market recovery, that the incremental revenue margin free cash flow from mortgage upside will flow to our investors. Equifax is poised to deliver upwards of billion dollars of incremental mortgage market revenue and $700 million of incremental margin expansion that will drop to our EPS and free cash flow when rates contract. We are investing at the right levels for Equifax growth today and AI driven productivity is improving our operating leverage.

The incremental $700 million of free cash flow from mortgage market recovery will be delivered to investors from accelerated dividend growth in share repurchases and drive incremental shareholder returns. I am energized about our execution and performance in the quarter and how AI is powering our top and bottom line, but I am even more energized about the future of the new Equifax. And with that operator, let me open it up for questions.

Operator: Certainly. We will now be conducting a question and answer session. If you would like to be placed into the queue, you may press star 2 if you would like to remove your question from the queue. We ask you please ask 1 question, 1 follow-up, then return to the queue. And once again, that star 1 to be placed into the question queue. Our first question today is coming from Jeff Meuler from Baird. Your line is now live.

Jeff Meuler: Yes. Thank you. Good morning. Hey, really good job here on margins. I hear you that your early innings on AI productivity. Can you just maybe help us dig through any puts and takes for 2027? Mortgage volumes are obviously 1. I do not know if there is any other, like, grow over considerations, if there is like, 1 time adjustments this year to incentive comp accruals because of what is going on in mortgage or anything like that. But it seems like there is good momentum on the AI productivity side that should continue to build. So just trying to think through margins holistically.

Mark W. Begor: Yes. Thanks, Jeff. We are very pleased with momentum that we have on our cost management and AI productivity. As you know, back in February, we set out a $75 million goal over the next couple of years for cost out, net cost out from AI productivity. We doubled that in Julia to a 150 million to give us. You know, because of the momentum we have. And we are just really pleased with the momentum in a post-cloud world. As you know, we invested heavily in our tech. So our team and our infrastructure is highly tech enabled. With that huge investment we made over the last 5 years.

And we are just seeing our ability to deploy AI in operation and technology and our support functions, you know, really scaling very rapidly. And, I think you are pleased, and so are we, that it is showing up in our margins this year even with the headwinds, you know, of the mortgage market. In September and in the fourth quarter that are quite substantial, we are still increasing our mortgage guide for the year. And we believe that gives us real momentum and confidence as we move into 2027. You know, we are not ready to give guidance in 2027. For 2027, we will do that in February.

But clearly, if mortgage rates stay where they are, you know, mortgage activity will be down in 2027, as John laid out. Outside of that, we do not think about anything else as being, you know, kinda meaningful on a year over year basis. You know, our momentum in our diversified markets is very strong. We see real momentum in EWS as we move through the through the year and into the fourth quarter. You on their path back to their long term framework growth, which I think is really positive. USIS is inside of their LTF, and performing well, and the same, you know, with international. You know? So we are pleased with that.

You know, in mortgage specifically, while activity at current levels, you know, if that continues in 2027, that would clearly be a meaningful negative that, you know, we will all be able to size. We have the positive of Vantage conversion. You know, when we look to 2027. And I am sure you are thinking about that just as we are. That momentum is super strong and, you know, when the FHFA opened up, you know, the LLPA tables a few weeks ago. What we are hearing from our mortgage customers is they are going to move to the $1 Vantage to take advantage of that significant price delta versus the FICO score.

So that is something that should be a positive for us in 2027, and we will size that when we get to February. And you specifically asked about AIP, how our bonuses work, and just so you are aware, the bulk of our bonuses are paid based on earning. On EPS. Operating profit and individual performance objectives. And as you know, our operating profit and EPS performance for the year looks very similar to where we started back in February.

Jeff Meuler: Very helpful. And then just with the personal AI agent rollouts and the adoption that has been happening recently. Could you just comment on how you are thinking through potential impacts on your business or your customers, things like inquiry volumes in any verticals, or anything on identity solutions or potentially something on like twin data or alternatives if it is agentics remove friction?

Mark W. Begor: Yes, it is still super early days on that, Jeff, from a customer perspective. Obviously, everyone's talking about it, everyone's focused on it, We are investing heavily to be enabled to interact in that way. I would tell you there is very little activity right now, although lots of discussions with our customers. So we wanna be prepared and really built for it. And because of our big tech investment, and the AI enablement that we have really broadly across Equifax, we think we will be ready when it moves forward. We think about it as a net positive. In the future.

Think about 2027, 2028, 2029 as that enables that the ability for our customers to more rapidly utilize our unique solutions you know, that becomes advantageous to us. Because as you know, there is a lot of friction around change with our customers when they wanna use 1 of our new higher performing scores, 1 of our new higher performing models, or some of our products that deliver more value. So, you know, we view AI as a something that is gonna be accretive not only to our top line, but also our bottom line.

We already talked about in your first question about kind of AI cost efficiencies and productivity inside of Equifax and how we operate in tech and operations, you know, that clearly is a big deal, part of the 150 million we have laid out as a multiyear cost out goal. And as I said, and I think John said also, it is still early innings for that, meaning we are continuing to see positive momentum as far as deployment in our ability to achieve the $150 million and look for going north of that.

And on the product side, really great work by our team to AI enable a lot of our solutions You now have our new products being rolled out that have AI capabilities in them, as you described, but also AI performance lifts because we are adding more data into solutions, which is also a big positive for us. You know, as you know, we talked about our vitality index, which continues to scale. 17% in the quarter was actually a record for Equifax.

We have never been that high, and in a post cloud Equifax environment, in all our focus on innovation new products, leveraging our differentiated data, and AI enabling those solutions you know, that 17%, you know, is a great momentum for us as we move through the quarter and into 2027. Thank you.

Operator: Our next question today is coming Toni Kaplan from Morgan Stanley. Your line is now live.

Toni Kaplan: Thanks so much. On Slide 7, you noted that the twin indicators driving share gains in mortgage. I was hoping you could just give some additional color on that, how much of the market and pre-qual you think you have or however you want to quantify share in sort of that TriMerge area? Thanks.

Mark W. Begor: Yeah. it is a great question, Toni. it is 1 that we view as a real asset for Equifax. As you know, we, you know, rolled it out, you know, a little less than a year ago. it is still. I would characterize it as early days in that deployment, but the response from customers is super positive. As you know, the NBA meeting was last week.

Our team was there, you know, in full force, and, you know, that is just 1 of the items that we had a lot of discussions about as well as some of our other new products that we are rolling out for the mortgage space, like Mortgage Qualify from the EWS business and the new score solution that we have from USIS. On Twin Indicator, it provides very unique visibility for our customers, and, you know, there is a there is a deployment implementation time frame that, you know, really lags some of the revenue benefit that we get that is just a reality of process change in our industry, but momentum that we have with our customers is positive.

We have not quantified the actual share gains, but we know they are positive. I think you can see it in our revenue numbers for USIS in mortgage, as well as how we characterize the performance versus the market as being positive. And then I would just add a couple reminders. Number 1, you know, we are also rolling out the NC plus attributes. The cell phone utility attributes, so 54 attributes we are adding to our mortgage credit file also for free.

To differentiate it in the pre-qual and pre-application process We are getting great feedback from customers there. that is another example that takes time for our customers to really adopt to the ability to ingest those additional attributes and that underwriting they are doing in the pre-qual marketing phase is also in the underwriting stage, but you know, we all know that more data, you know, is valuable in an underwriting process, and our customers are focused on how do they optimize their marketing funnel, particularly in a super challenging market that we are in. So our ability to offer those unique solutions that are accretive to the core credit file at no cost, we think, is an advantage.

So second reminder is that we are doing the same thing with the TWN indicator in AutoCard and P loan. So that is going to benefit our diversified markets business in USIS. As we really do the same thing, work with the auto card and consumer finance or personal loan space to really optimize their marketing funnel and originations by providing that incremental data on, you know, someone's employment status, you know, their income last year, their employer, etcetera, you know, which really aids them in positioning the right product.

And also, optimizing, you know, who they focus on as they are trying to bring people through the marketing funnel to make sure that they can, you know, get someone, you know, to a closed loan, which is where they make the money.

Toni Kaplan: Great. And then in government, really nice momentum in the new wins and renewals. You have been calling that out the last 2 quarters. I guess now that we have passed the ninethirty fiscal year end how does that impact the sales process in government? Do you tend to get more new sales at the end of their fiscal year or the beginning of the next year when new budget cycles start? Like, just wanted to understand the dynamic on the sales cycle in government. Thanks.

Mark W. Begor: Yes, it is a great question. Not every state is on that 09:30, so others are on different time frames. But you really have to separate what I would call revenue showing up in our P&L, meaning the sales become, you know, online and active and become revenue versus the sales cycle. The sales cycle is can be very long. In government as it is in all of our businesses, but in government in particular. And when we talk about you know, signing a contract, know, which we did, you know, this quarter, we talked about it in Julia again from our strong second quarter on contract signings.

We are clear about some visibility to you, but we know kind of exactly you know, with some real confidence of when that is gonna turn into revenue. You know? So there is a there is a differentiation there. So when it comes to contract signings, happen through the year. They can be lumpy, as we have said, and, you know, second quarter was particularly strong because of 1 large 1 and a couple of other meaningful ones, but it does not change the commercial cycle that we have. And as we have talked about on this call, we talked about it back in Julia and in February, the commercial momentum is extremely strong.

Across both the federal, state, and local level. there is a lot of interest. Some of it o b 3 related, which puts you know, more requirements on the states. But also more broadly, the unique solutions that we deliver. Remember, we deliver speed of social service delivery. We deliver the productivity of the caseworker, and we also deliver that integrity. So there is a very strong value prop. So I would think about you should think about and it is how we operate, that commercial activity is happening every day, and I think I highlighted in my comments that you know, for example, we have and we. I think we talked about it in Julia also. We have several.

Actually, more than several large federal commercial discussions going on that are quite meaningful. And those take time before they crystallize into a contract signing, and then there is an element of when they become revenue. But, you know, what is encouraging to us is the pipeline is robust, the conversations are robust, and our team is out there. And then I highlighted in my comments all also that we are rolling out new solutions. So we are bringing more solutions to our customers in the federal state and local government to really help them better manage the delivery of social services and then the integrity around that social service delivery.

So we are we are very energized around the progress by the team and the momentum as we you know, we the third quarter, we move into fourth, and then, obviously, we have got a lot of momentum about the setup we have for 2027. Thank you.

Operator: Our next question today is coming from Andrew Steinerman from JPMorgan. Your line is now live.

Andrew Steinerman: Hi. I have a similar question about the setup for Verifier, particularly government for 2027. I assume the kind of the strongest thing that you guys feel like you have locked in for Verifier is the record growth that is already kind of underway and exiting for 2027. You just remind us the puts and takes? What should we be thinking about of what is going to be the driver of Verifier? I assume it is going to be government contracts.

Mark W. Begor: Yes, it is multifaceted. As you know, Andrew, records is certainly a positive. We had a very strong records quarter and I think we highlighted in our comments that we have a strong pipeline for continued record addition. that is been a strength of Chad and the EWS team for multiple years, and it continues. And, again, a reminder which sometimes our investors forget, you know, while we have you know, growing records, you know, up kinda low double digits, you know, over the last number of years, there is still a super long runway. We finished the quarter you know, with a 110 million current people or SSNs in our dataset.

Obviously, we have more records than that because people have multiple jobs, you know, but the 110 million compares to 250 million income producing Americans. So, you know, we have a runway to more than double the dataset going forward. And, obviously, that is gonna take time. So records is a big deal. As you know, when you think about 2027, we typically do price increases on January 1, so those will flow into you know, EWS and the verifier, you know, businesses in 2027, and, we have visibility from an Equifax perspective about what that is. You have also got new product rollouts and new customer penetration.

Penetration's a big deal because of the $15 billion TAM they participate in, so the ability to add new customers we have got visibility. And I think you pointed out we highlighted in July, the large new state contracts that we have shared with you that are gonna be substantially benefiting 2027. there is some fourth quarter impact but the vast majority of that is in 2027. So you see that, and obviously, we do too, which is know, positive. And then I would add just the commercial momentum. I think you have seen our talent business, very strong performance in a tougher market for white collar hiring.

You know, but strong double digit, you know, 20% kind of growth that is from new products, that is from penetration into that into that big $5 billion TAM, so, we are pleased with that. Our consumer finance or auto card personal loan business performing very well. As we look forward to 2027, we expect that kind of performance to continue. So we have got a lot of confidence in that business getting back to their inside of their LTFF framework as we get into 2027.

Andrew Steinerman: Thanks, Mark.

Operator: Appreciate it. Next question is coming from Shlomo Rosenbaum from Stifel. Your line is now live.

Shlomo Rosenbaum: Hi, thank you very much for taking my questions. Mark, I want to ask a little bit about this discussion about tri-merge to bi-merge. And can you just talk a little bit when you just described to us what the sentiment is amongst your largest lenders? And terms of moving there because obviously there is a potential to save costs if you are only if you are using bi-merge instead of tri-merge, but what are their other considerations and how do they think about it when you talk to them about it?

Mark W. Begor: Well, the large lenders, the ones that make the most difference. Yeah, would say broadly and you could add lenders, you could add many regulators, you could add legislatures, think about Congress. You could think about Treasury, who has a role in know, the fact that the federal government owns, you know, liability on a lot of loans if they do not, deliver. You know, there is this kind of broad consensus that TriMerge delivers a lot of value around access to credit, having the right price for the applicant or the homeowner or future homeowner or consumer and then also safety and soundness. You know?

So when you think about from a mortgage originator standpoint, what are they focused on? They are focused on, you know, managing their marketing funnel. You know, they spend a lot of money, and then typically, they are doing digital originations. And so they wanna make sure that, when they have someone who is coming to their website, typically, in order to, you know, apply for a refi or apply for a new home loan mortgage, that they can approve that consumer and that applicant.

And a big part of that is having the complete information and I think we all know that there is enough significant differences between the 3 bureaus on the credit file that is pulling 3 delivers a more accurate a more complete and also includes more people and gives them, you know, a better pricing. there is 11 million US consumers that are only on 1 credit bureau. You know, if you are gonna pull 2 or 1, you know, that consumer may not get approved. And I think we know that there is 40 to 50 million U. S.

Consumers, most of us on the phone, that have a, you know, 20 to 40 difference the 3 credit bureaus because not every financial institution contributes data to all 3 bureaus. that is a meaningful difference. If you are pulling 2, you do not pull that higher score for that consumer. They end up paying a higher price, or maybe they do not get approved. You know? So it is a big element of the approval process.

And then the flip side, you know, is if you are the government, or if you are a balance sheet lender, which is still a meaningful part, you know, of the mortgage market, you wanna make sure you get all of those trade lines from a safety and soundness If you are only pulling 1 or 2 files and you do not pull that third that has maybe some of those more negative trade lines, you have got a riskier loan. You know? So we think there is kind of broad based support for it. I think as you know, FHA and VA have come out very clearly, you know, back in April.

They put out a press release supporting Vantage. And also in that press release supported TriMerge. You know? So I think, you know, they clearly understand the value of TriMerge for the consumer of approving more, and then the value around making sure they get the best price, meaning the lowest price that meets their risk profile because getting all the data, and then the safety and soundness that comes from it. So we thought it was important because there is a, you know, been a lot of confusion, I think, in our investor base about you know, how large could an impact be if HFA decided to go to bimerge.

You know, that is why we decided to size it. You know, we view it as very manageable, and likely for those on the call today, you know, a framework that is a lot less than perhaps you were thinking over the last month or 2 is that dialogue has been in the press and so on. So that was our intention was to frame it, but, you know, look, we think TriMerge is right for the consumer. We also think it is right for the mortgage industry, and also we think it is right for federally guaranteed mortgages.

Shlomo Rosenbaum: Okay, thanks. And just for my follow-up, John, maybe you could help us out a little bit, just as everyone is trying to incorporate into their model the impact of higher mortgage rates on the numbers in 2027. Where do you expect mortgage to end up as a percentage of revenue for the company? Like in total company, USIS, EWS, do we have some kind of, like, a range or at least a rough estimate that you could give us so that we can kind of sensitize our numbers starting from that when we think about 2027?

Mark W. Begor: Yeah. Go ahead, John, please.

John W. Gamble Jr.: You are not going to give 2027 guidance and certainly not going to give specifics around revenue or percentage of revenue. But the reason why in the script, we tried to give some perspective on originations and transaction levels is to allow you to try to do that math on your own. And as we said, we expect that you are gonna see mortgage originations activity to kinda decline high single digit percentage year on year to the extent that current mortgage run rates stay the way they are as we go through all of 2027. With the bulk of that impact happening in the first 8 months. So if.

As you will remember, fourth quarter of 25 was a strong mortgage period. First quarter of 26 was a strong period as well. So you will see significant impacts. Obviously, you are seeing it in the fourth quarter. You would see it in the first quarter. It starts to mitigate a little bit in the second. And then obviously substantially in the third given what happened this quarter. What you are seeing in the fourth quarter of this year.

Mark W. Begor: And again, just to be clear, you know, what we always do and what we have done in this in this scenario modeling for the fourth quarter and to give you some visibility for 2027 is we have taken current run rates. Obviously, they are depressed over the last 8 weeks and we can only assume that they are going to continue at that level until you know, inflation comes under control and perhaps the Middle East conflict is resolved and then, you know, rates moderate some. I had in my comments the fact that even if this lower level, there is still mortgage activity happening.

You know, it is it is down meaningful. it is down over 50% from what we would call normal levels but there is still mortgage activity happening every day, every week that you know, is building that pipeline going forward. We are now up to 17 million mortgages, over 6%. And I think, as you know, it takes a quarter point, 50 basis point you know, change in rates, and you open up a refi opportunity for that population. it is hard to see when that is going to happen with what is happening today. But it is gonna happen.

You know, it is just a matter of when that time frame is, and you know, as we move forward, that $17 million. 17 million you know, household number or mortgage number is only gonna get larger. Thank you.

Operator: Next question today is coming from Jason Haas from Wells Fargo. Your line is now live.

Jason Haas: Hey, good morning and thanks for taking my question. Can I just confirm and a follow-up and a response to prior question? Did you see that you would expect the EWS business to get back to the, long term framework next year. Did I. Did I hear that correctly? Was that to the overall EWS Yeah.

Mark W. Begor: We did not give we did not give long. We did not give, 2027 guidance, and I our intention to give 2027 guidance. I think the question was around the performance of the business and its momentum as we finish the year, which we are super pleased with, and, you know, the business is performing well, and you have seen, you know, kind of improvements on a quarter over quarter basis from second to third quarter that we are pleased with. And we have provided some information on 2027 that you can do your own math on.

You know, on some of the setup, like, you know, the government contracts that we have signed that, you know, were substantially incremental in 2027 versus 2020 that, you know, give you some visibility.

Jason Haas: Oh, okay. Great. Thanks for clarifying that. And then, yes, maybe just a follow-up on government. So the 15 million of new government bookings in 3Q was very strong. Are you able give us any expectation for I know in there if there was any sort of big wins or not. If that is, like, the right framework to think about what we could see as well in 4 q. Then for government, do you expect that revenue to continue to accelerate in 4q again in 2027?

John W. Gamble Jr.: I think you had said that previously. But 2 q and 3 q were very strong quarters for the government team in terms of signings and renewals. And part of that is just based on the timing of when state budgets move. Right? So fourth quarter tends to be much smaller. In terms of that type of activity. As Mark said, we are doing a lot with the federal government and other opportunities. Does not mean the selling activity changes in any way. But in terms of likely signings, you know, the strongest periods you tend to see are really 2 q and 3 q.

A little bit in 1 q, but really 2 q and 3 q tend to be the strongest just based on the way state budget cycles run.

Operator: Thank you. Next question today is from Faiza Alwy from Deutsche Bank. Your line is now live.

Faiza Alwy: Yes. Hi, thank you. So just to follow-up on that government question. How much of the $150 million of the new business are you expecting to realize in revenues this year?

Mark W. Begor: Yeah. I think we have said a couple times that the new contract signings are principally 27% kind of impact with some of that benefit in the fourth quarter. Some of it was in the third quarter, quite small. But you know, substantially all of that is in 2027.

John W. Gamble Jr.: We saw some of the contracts that we talked about in the second quarter start to monetize in the third quarter and many of them are monetizing in the fourth.

Faiza Alwy: Okay. Got it. Okay. And then 1 to ask about, you know, Vantage adoption. Adoption and you talked about moving to a paid model. So just wanna understand, you know, the strategy there. Are you going to continue to offer, Vantage for free when someone is buying the FICO score from you? Or is, is that strategy changing? And then I think you talked about $35 million annualized margin upside. Just curious, what does that represent? At this point?

Mark W. Begor: Yeah. So your last question, and we have been clear about that, is we wanted to calculate for you if there was full Vantage conversion of all the FICO scores. Obviously, we do not make any money today when we sell a FICO score. that is 0 margin. Which is to pass through to FICO. And if we sell the Vantage, we make a dollar on each score. So, you know, that at current you know, kind of run rate levels, if we move everyone, our piece of that would be margin upside of in the 30 million to $40 million range. Obviously, that is going to take time, but we see some real momentum there.

We did we did announce at NBA last week, and I shared on that call this morning that we are planning to keep our $1 Vantage score at $1 through 2028. To give our customers more confidence in visibility, you know, around, you know, Vantage pricing versus FICO pricing, you know, as they make that decision to, you know, use the VantageScore. And, yes, we are still offering the free VantageScore with every paid FICO score, in order to drive adoption. But you remember, you know, for customers, you are not getting any savings because you are still paying you know, the $10 plus for the FICO score, you versus the dollar that is available if you move to Vantage.

And that is why we said on the call, I think we have 200 customers, smaller, that have moved to the dollar VantageScore exclusively because they are getting better score performance. And in the marketing side of the origination, in prequal, and they are getting the big cost savings. And you know, you have seen press releases from, you know, some of the larger mortgage lenders, and you know, we are talking to them also. You know, they are well aware of the, you know, huge cost savings that they have because, as you know, 7. 6 out of 8.

6 out of 10, 7 out of 10, 8 out of 10 mortgages do not close, and that is a COGS for them. So the ability to do that pre qual or pre application with a advantage score for a dollar is a huge savings. it is you know, in the neighborhood between a credit file and the VantageScore versus a credit file versus the FICO score, it is like a 45% savings, you know, for the originator, and that is just a lot of savings. That also passes through the consumer. Because the consumer pays for the TriMerge. It closing, and at a $1 score, you know, there is a meaningful savings for the consumer also.

So there is a lot of momentum around that conversion, and we expect that to pick up in the fourth quarter. And then move forward in 2027. You know, when we expect FHA and VA to move to adopting Vantage, you know, inside of their process We both, know, we understand around January 1. Thank you.

Operator: Next question today is coming from Manav Patnaik from Barclays. Your line is now live.

Manav Patnaik: Hi, this is David Amin on for Manav. Just wanted to talk about the event that FHFA decides to go from TriMerge, I know you talked about my merge, but, ultimately, if it goes to a single file, would the economics hold true in your view that lenders will still want to pull all 3 And would it still be manageable And outside of that, I understand the twin indicator and the NC Plus, but is there any other way you can differentiate the credit file outside of that?

Mark W. Begor: First, to be clear, you know, our knowledge, and maybe you have different knowledge, but everything we know is the FHFA is not made a decision to go to bimerge. Obviously, they have talked about it. There was a press article, I believe, in Bloomberg that said they were expecting an announcement from FHFA, and that knowledge, has not happened yet. But that is why we decided to, you know, put some, you know, framework in our discussion this morning about what a potential impact would be to Equifax, and we view it as manageable We have already talked on the call this morning about why we think TriMerge is important.

And, you know, to your question, you know, our expectation is it would not be a requirement to go to a buy or single merge. It would be an option you know, for the lender, and the lender would make the decision about you know, what they wanna do in their marketing process and underwriting process you know, to make sure that they are managing their marketing funnel, they are approving more consumers, they are providing the right price to the consumer around what price the interest rate is on the loan. And then as you point out, you know, we have a lot of, you advantages at Equifax, you know, in a bimerge, you know, world for FHFA loans.

Because of the unique solutions we deliver with Twin. The Twin attributes, the Twin data that we have in the credit file, the NCP attributes that we are offering at no charge, also the fact that we own a TriMerge business, you know, where we go to market. So, you know, we would obviously take advantage of that in how we deliver our credit file, you know, in the marketplace So I think it is 1 that our intention this morning was really just to size the impact and then we will be ready to respond, you know, if in fact FHFA goes down the path.

But as you point out, our expectation is the lender would make that decision of about, you know, what they wanna do as far as credit files that they are pulling. Thank you.

Manav Patnaik: And then on government, I know you mentioned some of the contract wins have been towards subscription based As you are having more conversations with these state counterparts, Are they leaning more towards subscription based contracts? And if not, is that something you think the government is headed towards?

Mark W. Begor: Yeah. it is 1 that we started, you know, deploying commercially a couple of years ago. it is clearly something that many of our customers like the idea of the certainty of a subscription. And as you know, all budgets are complex, whether you are in government side or if you are in the commercial side. In the case of government, they are more complex because they generally have to get at the state or local level funding for expenditures for projects, you know, from their legislature. So know, having the ability to have some more certainty around, you know, during that you know, fiscal year, what the spend is gonna be on our solution, you know, is positive.

So we have seen a growing trend there, but we still offer you know, both, and we wanna be flexible with our customers, you know, around helping them, you know, utilize our solution. We wanna drive, you know, penetration into that big TAM. You know, as a reminder, it is a $5 billion TAM. Know, we have got less than, you know, 20% of it. You know? So there is, you know, a lot of manual verifications that are still being done that are opportunities for us. So we wanna you know, be responsive and flexible commercially to help our customers adopt our solution. Thank you.

Operator: Next question today is coming from Andrew Nicholas from William Blair. Your line is now live.

Andrew Nicholas: Hi, thank you and good morning. Want to dig in a little bit further into talent momentum think you mentioned mid single digit growth for underlying growth, but outperformance relative to that market is holding very strong, if not accelerating. So I was hoping you could spend a bit more time on kind of what is driving increased penetration, what how much of that outperformance is new products, And any other color on kind of market makeup there and your evolution as key provider to the space?

Mark W. Begor: Yeah, we are pleased with the performance. Strong performance last year. Also it is big TAM it is 1 where we deliver a lot of value in kind of our core solution about verifying past I think, as you know, the APRIS incarceration data acquisition that we did several years ago has been a very positive 1 for us. that is used very broadly in background screens, doing that incarceration check, and we have rolled out new products there and are driving penetration You know, the TAM is quite large here also You know, that is a multibillion dollar, $5 billion TAM. You know?

And, again, here we have, again, less than 15% of the of the market is using our solution a penetration standpoint. So, you know, our team at EWS has a lot of penetration opportunities. And then as you point out, you know, we have been rolling out new products in the education space, in the employee verification space. We now have an hourly solution where there is less data required to verify pass employment. Education solutions that we are rolling out, you know, every year we take price up, we will do that again.

On January 1 in the talent vertical, so when we look forward we are still benefiting from the price we did early this year in for 2026. So a lot of really strong performance. And then, of course, record growth When we grow records, we have higher hit rates. You know, we can deliver, you know, more complete information on that know, employment background. So multifaceted and, you know, strong in a big TAM by the workforce solutions team. We have also expanded into health care. We have launched more and broader health care into the talent vertical as well, which we think is also gonna help drive long term growth. Great.

Andrew Nicholas: Very helpful. And then for my follow-up, I wanted to ask on income and employment verification. Think last month a competitor of yours announced an integration with a large partner of yours. Why to see if you had any thoughts on what that means for your business, but maybe more broadly, you could touch on kind of your conviction in having exclusive relationships on that front or maybe, again, like, the resilience of your model to competition? Thank you.

Mark W. Begor: Yes, we view that more as a 1 off that was really driven by some decisions that they wanted to make about you know, how they go to market. You know, we saw a very strong relationship with that customer. We expect that continued going forward. And when we look broadly, we are very pleased with our record growth. We deliver a lot of value to those partners that you know, we work with in the in the payroll, HR software, you know, pension, benefits administrator space, there is just a lot of continued momentum there. You know, our benefits are the scale of, you know, our distribution. Is very, very large. Know, we are.

We have connections, you know, in the mortgage, auto, card, p loan, background screening. Government social service space that, you know, are really second to none. So you know, when it comes to you know, our ability to you know, grow our business and then share in a rev share with them, you know, we just have very substantial advantage there, which is a positive in those partnerships that we have. We also invest heavily in our technology and in our product capabilities So, when you think about us rolling out new solutions in all of our verticals, those benefit those partnerships. Which are really valuable to us.

So we have a lot of confidence in our ability to continue to grow our records. We have a lot of confidence in our ability to deliver value to our partners in those partner relationships, and we do not expect that to change going forward. Thank you.

Operator: Our next question today is coming from Ashish Sabadra from RBC Capital Markets. Your line is now live.

Ashish Sabadra: Thanks for taking my question. I just had a question on the EWS margins. The guidance implies a step down for 4Q, which I believe John you attributed to mortgage weakness. We think about some of the puts and takes, obviously, you talked a lot about the AI benefit, but how should we think about AWS margins going forward even with some mortgage pressure there? Thanks.

Mark W. Begor: Yeah. We are very pleased with the EWS margins. They are very, very high and attractive and our intention is to continue to invest in the business because of the high growth it delivers as well as the high margins that it generates. But at the same time make sure that we are deploying everything we have around productivity and AI productivity and operating leverage not only at AWS, but at our other businesses, and you know, we are seeing very positive, you know, benefits the EWS team as they deploy AI productivity in their operation centers. They have very large operation centers in our employer business.

You know, we have the same kind of call centers, although not as large. Both for consumers, for employees, you know, of our contributors, and also for our b to b customers that we are deploying AI in. You know, and we. And then our technology operation in EWS, same thing. So our goal is to continue to maintain those very attractive 50 plus percent EBITDA margins going forward by the strong operating leverage that comes from their top line growth and also the deployment of AI productivity.

Ashish Sabadra: that is very helpful color. And then maybe just on mortgage and I know this question was asked before, but as we think about like that, high single digit, mostly on the first 8 months of 2027, Are there certain nuances by quarter that we need to be cognizant of? Any particular color that you can provide there will be helpful. Thank you.

John W. Gamble Jr.: Yes. So the way as Mark described it, what we do is we just apply normal seasonality to our expectations for the next year because we do not have any basis to think of anything else. However, you obviously know what happened in 2026. So in 2026, the first quarter, was a pretty good mortgage quarter. Right? And until rates started increasing in Mark. Right? And then second quarter, weakened, but was certainly better than what we saw in the third and the fourth quarter this year. So on a year over year basis, it would indicate that the largest impact year over year is likely gonna be in the first half.

But, again, that is just based on us using normal seasonality in 2027 because that is what we know today. Thank you.

Operator: Next question is coming Curtis Nagle from Bank of America. Your line is now live.

Curtis Nagle: Great. Thanks so much for taking the question. Apologies if I missed this, just any color you could provide on the verifier government mortgage expectations for 4Q? We expect something similar to 3Q in terms of year over year growth? Does it accelerate? Given Mark your point some more new development. But the business coming in, just a little more color if you could in terms of what is contemplated in the guide.

John W. Gamble Jr.: Yeah. So we do not give specific guidance going forward by segment or line of business, right? So, think all we have said is that we are happy with the pace at which we have added new clients and new customers in government that we have seen a fair number of the contracts we signed in the second quarter start to monetize and others would start to monetize in the fourth quarter. So we are very happy with that. And then more broadly, when we talked about what we are seeing in the economy, indicated that we are seeing some weakening in talent.

And we are seeing some weakening, just in industry run rates around auto and FI, right, and more heavily around things that are more interest rate sensitive. So what we said is we are looking at those. But as you are thinking about fourth quarter, those are some of the trends that we are thinking about as we look through the next quarter and into next year.

Curtis Nagle: Okay. Let me go to shift it to somewhat of a 2 part advantage. Just guess outside of the 3 large lenders that are currently originating, I think you are mostly originating. what is your sense in terms of preparedness for the rest of the industry in terms of them turning on, advantage to originate? And I guess, much do you think Mark alluded to this, the move to the unified grid potentially shifts more volume to Vantage?

Mark W. Begor: Yeah. I think the industry has been preparing for quite some time. I think as you know it is a year ago Julia when the FHFA first announced that they were going to adopt Vantage. Then in April, they actually turned it on. In that time frame, a lot of the technical work, process work has been completed. Know, in some cases, there is still testing happening, which is why you know, last year, we started offering the free VantageScore you know, so they could, you know, adopt it and really process through their workflows, you know, both scores.

So you know, I think substantially, the industry is pretty well prepared, and the fact that they made the decision a few weeks ago to you know, normalize the LLPA tables You know, I think that opens up, and we have heard a lot of feedback from our customers that they plan to really start ramping their Vantage adoption because of the big cost savings that come with it. And, you know, that is the numbers are just quite substantial. For the industry and consumers, it is $1 billion that is hard to not focus on, particularly in this mortgage environment where the whole industry is extremely pressured, you know, by the lower activity.

So, you know, we see all of our customers you know, really moving to implementation mode, so we would expect to see that adoption to grow in the fourth quarter and then continue to accelerate in 2027. And really, really good progress in the third quarter also with Connector and Technology Partners. Enabling Vantage. So there was there was a substantial change in the third quarter, which we think has a lot of momentum and is continuing. You.

Operator: Our next question today is coming from Surinder Thind from Jefferies. Your line is now live.

Surinder Thind: Thank you. Mark, just 1 question here. Can you talk about just the way that lenders are behaving or they are thinking about the consumer and their willingness to market, to spend, to originate Obviously, some sensitivity around rates and consumer behavior, but is there a delay effect that we should be thinking about? Or are there certain metrics that really need to degrade before we see any material change in lender behavior?

Mark W. Begor: Yeah. I think you have seen our USI's business, which is probably the right place to look, and even EWS in our consumer finance or auto card P loan business, performed very well. Our DDM business, you know, which where some of this activity would be, was strong, but principally around, you know, marketing activities. So we have not seen real uptick in what you would typically see when investors are more nervous about the economic conditions, you know, where they are doing more portfolio management reviews. That has not happened. And the real indicator I have been around consumer finance for decades. And, you know, the real indicator is, you know, unemployment.

And it is still quite strong, meaning employment is still quite strong. Employment is quite low. When people are working, you know, while they can be pressured, and they are, in many income demographics because of what is happening with inflation in oil, they still manage to pay their bills. And I think we have seen, you know, a lot of the bank earnings last week were very strong in their consumer businesses, meaning they are originating you know, and operating in a quite normal way. So we do not we do not see it a change happening in that, and we do not expect.

You know, it is hard to see 1 happening in kind of the medium term as we move through the quarter and into the early parts of 2027, that you just do not see that on the horizon as long as unemployment stays low. Thank you.

Operator: Next question is coming from Kyle Peterson from Needham and Company. Your line is now live.

Kyle Peterson: Great. Good morning. Thank you guys for taking the questions. I want to dig a little more into talent. So I guess, I am looking at the numbers there, it actually looks like you guys had a really strong quarter in talent, and you guys, I think, are being a little conservative there in the outlook. So I guess, like, is there kind of how the quarter trended or recent weeks based on some of the data you guys are seeing, or are you guys getting shared? Just any additional color there to kind of explain the divergence and maybe a little more cautious outlook than I would expect will be super helpful.

John W. Gamble Jr.: Start with third quarter was extremely good, strongest we have seen in a long time. Right? So And I think what we have talked about is we expect the talent business to continue to perform very well. But performing consistently at the level we saw in the third quarter given maybe some weakening in hiring in general. Is probably something that would be difficult to deliver consistently. So we think talent is gonna perform very well. They had a great third quarter. Expect them to continue to perform well. But we are seeing. We did see some weakening in the overall hiring market.

And specifically as it related to white collar hiring as we move through the quarter, and we are just reflecting that. In our in our in our guidance in general and in our commentary.

Kyle Peterson: Okay. Okay. That is really helpful, and appreciate the additional color. And then I wanted to switch over to the international business, particularly Latin America. You know, looks like you guys had a really nice quarter there. You know, especially on a constant currency basis. So wanted to see, you know, where is most of that growth coming from? Are you guys seeing more of this from some of the larger banks? Or know, are you guys seeing better adoption with the fintechs? I know fintechs in that region have been gaining a lot of share. So where are you guys seeing the most success there? I think that will be really good for everyone to hear.

Mark W. Begor: Yeah. it is fairly broad based. You know? Brazil which is Boa Vista, as you know, where we acquired that business, a little over 3 years ago, performing very well. And we think gaining some share. They are they are doing very well with fintechs and also know, picking up some business with the larger banks. So performing well there. Broadly, I think, you point out, in Latin America, you know, fintech is quite large. And is performing well, and we are well positioned with them. So we. We have seen kind of broad performance in Chile and Peru and Argentina, Ecuador, some of the other markets in Central America. Where we are performing well.

And then as I commented on the you know, the call earlier, we are super energized to get the Círculo deal closed That business is also performing well. We do not own it yet. But we will soon. And that business has been up strong double digit actually growing faster than the rest of Latin America and the fastest growing know, kinda credit bureau business in Mexico because they were really focused on fintechs.

You know, they have got a very strong market position and actually do not do as much as, you know, we see an opportunity to do more business with the banks, where the competitor plays, but the FinTech growth has been super positive And running all the plays you would expect us to run, we are now cloud native in Latin America. I think that is a big deal. We just completed that, you know, in the quarter. So having that you know, complete. Most of the countries have been complete for, you know, months and years. But that allows the team to fully focus on growth. We are know, rolling out the.

A lot of the new AI you know, powered new products. I think that is benefiting us. Some of the new scores that bring more data in is really powering, you know, their business down there. And you know, we are we are pleased with, you know, how it is performing. Thank you.

Operator: Our next question today coming from Simon Klintch from Rothschild and Company Redburn. Your line is now live.

Simon Clinch: Thanks. Thanks for taking my question. I just wanted to start with the U. B2B online business. I just wanted to give some color as to the trajectory of growth there. We have seen some kind of pickup here to I think mid single digit last quarter, 4% this quarter. Versus low single digits before. But I was wondering if we could square sort of how to think about this going forward, given your comments around some of the slowing we have seen in those key markets. And if there is any sort of onetime or unusual impacts that we need to think about as well for this Thanks.

Mark W. Begor: Yes. Nothing 1 time, but you are seeing some of the benefits. As you remember, the USIS was kind of our last large U. S. Business, a very large U. S. Business complete the cloud. So they are, you know, kind of 24 months into that post cloud mode, and they have really accelerated their new product rollouts. You know, their vitality index is, you know, up above north of 10% now, which is really great news. It was not for years. It was kind of in mid single digits. You know, kinda when they were doing the cloud transformation. So that is benefiting them. Know, commercially.

Some of the new solutions, you know, we talked about, you know, twin indicator, you know, that we are clearly. it is been a lot of focus on in the mortgage space. But we are rolling it out in auto card and P loan. Offering that as a. As an addition to the credit file you know, at no cost in order to drive share gains. So we are starting to see some traction there. it is been quite modest because we are early days in the rollout, but we would expect you know, that to be a positive for us going forward. So I would think about you know, commercial execution.

We have got a new leader that we are really energized about. David Smith, who is leading the business now. And he is got his feet on the ground and really focusing on commercial execution. And then the new product rollouts, you know, we expect to continue to be a positive for them in the quarter. it is to finish the year, but more importantly, in 2027 and beyond.

Simon Clinch: Okay. that is beautiful. Thank you. And just changing tack, going back to Vantage. I was wondering if you could just help us think about so we have gone to a unified LLPA grid for Vantage and FICOs. that is viewed as a real beneficiary for VantageScore. What if we move to an actual bespoke or specific LLPA grid for Vantage, which is not just a 1 to 1 map with FICO. How does that impact the likelihood of lenders using the product or any of those dynamics? Any sort of color you can give around that would be useful.

Mark W. Begor: Sure. I would expect that to happen. Know, I think it is just a matter of time, when they get to that stage that they would have, you know, really an LLPA table that is specific to FICO classic they have today, and then they would have it more specific to 10 t. But remember, the credit score in a mortgage underwriting process is really only used in the pre application prequalification process in order to give an indicator to the consumer before the credit data is used, which is really what is used in underwriting, actually calculates the actual underwriting and then the actual price that consumer is gonna be offered.

What the originator does is use the credit score early in the process before they submit the application to the agencies, and we are talking about, you know, GSE, FHA, type loans, they use that credit score really just as an indicator from those tables to tell the consumer that, hey, based on your credit score that we are looking at today, this is the kind of price that you will have. And what they wanna do is make sure that they are using the most accurate complete information. And today, you know, I think it is widely viewed that Vantage 4.0 includes more data than FICO classic, you know, so it provides a more complete picture on the consumer.

So, you know, that is a reason. 10T will close some of that gap once it gets approved by the agency. But that is only an indicator And the fact that price is you know, dramatically different of a dollar versus 10 plus You know, when you are a mortgage originator, you know, you really have to focus on both the performance of the score in that pre qual process and the cost to actually use it.

And it is just so substantially different You know, our expectation is that is gonna be a real determinant and we are seeing it, with the mortgage originators in using the VantageScore because it just delivers a lot more value you know, for the service. And just, you know, as a reminder, once the application goes in, the score is really not used in the underwriting process, The credit data is used in the TriMerge report, including a report from Equifax, to do that underwriting and to confirm the actual interest rate that is gonna be offered on that mortgage, based on the consumer's the applicants', you know, credit data, you know, not the credit score.

So, you know, we think there is gonna be a lot of momentum to utilize the VantageScore because of the value it delivers, you know, both on the performance, but also on the cost to use it. Thank you.

Operator: Our next question today is coming from Ryan Griffin from BMO Capital Your line is now live.

Ryan Griffin: Hey, thank you so much. Just 1 for me. I wanted to ask about the new mortgage score select I know that is still early innings, but what behavioral patterns have you seen from the lenders? That have worked on that workflow thus far? Thank you.

John W. Gamble Jr.: Yes. Well, we launched that solution specifically based on lender input. Right. So we are expecting we will see adoption. We think it creates a lot of flexibility for lenders as they are going through the approval process, so that they could move forward and use a VantageScore And to the extent they see some reason through the closing process, like, for instance, today with a VA loan, that they need to pull a FICO score as well. That it gives them the flexibility to do that later. At a lower cost, right, without having to repurchase the credit file.

So we think it is it is, in response to industry demand, and something that will be adopted, we think adopted significantly. And we think it should also help promote movement to VantageScore more quickly. Thank you.

Operator: Next question is coming from Andy Grubler from BNP Paribas. Your line is now live.

Andy Grobler: Hi, good morning. Thank you for taking my question. Firstly, just to go back to John's comment from earlier about seeing some slowing in FICO and auto volumes. In the latter part of the quarter. Can you quantify at all to what extent that slowed? And has that continued into the early part of Q4? Thank you.

Mark W. Begor: Yes. I think we quantified that the mortgage market clearly slowed in the third quarter and that impacted us in the neighborhood of $20 million negative in the third quarter. And then we also sized for you what the impact at current run rates, which is the only thing we can run off, the impact would be in the fourth quarter. Is that what your question is about?

Andy Grobler: Well, I think I No. No.

John W. Gamble Jr.: I said auto and FI, not that is what I think we heard FICO. But the. No. If we saw some slowing, We did not say it was substantial, but we did see some slowing since it occurred We reflected in what we are seeing in the fourth quarter, and we just wanted to share with you that was something we were starting to see as you are considering the fourth quarter as well. that is all.

Andy Grobler: Okay. Thank you. And then just a follow-up on the government vertical. So you had a very good quarter again in terms of growth. There has been some change in competition in that market with a relatively new entrant in Trove winning a couple at least a couple of state contracts. Are you seeing the dynamics in that market change at all? Is there space for all of you given the size of the TAM or anything else we should consider about kind of the changing competitive environment? Thank you.

Mark W. Begor: Yes. There have been other competitors around for quite some time. I think you should talk to them about how large their contracts are or are not, our understanding is they are, you know, quite small. But, obviously, we focus on, competitors that are trying to enter the space. As you point out, it is a very big TAM. there is a lot of space to participate.

You know, we think we have, you know, a very, very strong offering you know, with the instant solution, you know, from Equifax, through the twin dataset, you know, that is extremely competitive, and we have been investing in new solutions particularly around consumer consented data where we do not have all the records to have an integrated solution. And what we hear from our customers is they you know, really want an integrated solution, you know, because they think about the first place they wanna check, know, is the Twin database because it has such large coverage. And then integrate into, you know, solutions like our consumer consented, which we signed a couple of states on it.

So big space, we think we have a strong position know, and we are going to continue to invest to make sure we maintain that.

Andy Grobler: Excellent. Thank you very much.

Operator: Thank you. Next question is coming from Kevin McVeigh from UBS. Your line is now live.

Kevin McVeigh: Great. Thanks so much. Great to see the cost momentum. I can you help us understand what drove the upsize, the $150 million up from 75 on the AI. And then I think you talked and maybe it is in nuances, just cost management versus AI driven cost efficiencies. Maybe just dimensionalize what those 2 things are. But I guess, first, just the $150 million up from $75 million and then, the cost management versus AI efficiency.

Mark W. Begor: I think as you know, we announced the 75 back in February. We doubled that in Julia to 75 because of the momentum we have seen on AI deployment. Our early AI deployment, think about the latter half of 25 inside of Equifax, was in operations. You know, most companies start there in call centers and document processing centers are kinda purpose, you know, built for that.

You know, I talked a bunch about on the call already this morning that we think the fact we invested so heavily in our tech stack you know, over the last 5 years, you know, and that is obviously behind us now that we are cloud complete and in the cloud, but that positioned us to really effectively deploy AI, you know, we think better than others. And so the 2075 was, you know, our first step of sharing with you what we are doing internally you know, as far as some of the AI productivity you know, going forward. And then, you know, we have just seen kinda rapid adoption.

The big know, change between February and Julia and now is that, you know, the deployment of AI, you know, in Equifax in technology, that is our largest team, As you know, we are a data analytics technology company. You know, but using AI for coding, new products, and capabilities is seen, you know, really rapid adoption and deployment by our teams. which is super positive. And then we are also seeing, you know, in finance, HR, legal, you know, AI being deployed there to drive efficiencies. And I said it on the prepared comments earlier this morning, that we are still early innings on this.

I think that is what is exciting for me and John and the rest of the Equifax team is that we just see a lot of potential going forward. So when we think about that translating into operating margin dollars and margin rate, Obviously, we have a metric we use as our margin rate.

We started doing it ex FICO, so it is really more clear around the fact that FICO, you know, distorts that in some way because we pass through the FICO score with no margin on it, you know, and we set a goal you know, in our long term framework to grow our margin rate 50 basis points per year, We set a goal early in the year to do 75, and as you know, we have out outperformed it in first, second and third quarter. Is why we now raised it to 100 basis points. So inside of that 100 basis points of margin expansion, the biggest lever we have is operating leverage.

If our revenue's growing and our costs are growing slower than the than the revenue, you get operating leverage that drives margin expansion. So that is, you know, the way I think about it, we think about it, that kind of 50 basis points in our long term framework is the operating leverage that we should get from our 7% to 10% you know, long term organic growth rate. You know? So that is clearly a base part of how we think about the business going forward and that becomes free cash flow and you know, in that free cash flow, it becomes substantially ends up in buyback because that is where the incremental, you know, cash is gonna go.

And then the new gear you know, the new lever for us in operating margin expansion is really the deployment of AI across Equifax. You know, we branded it internally as AI for EFX. We have it as 1 of our strategic priorities that we set out in January. Was not only to deploy AI for our products, models, and scores to drive our top line, but also to really aggressively deploy AI across Equifax to drive speed, to drive efficiencies, to drive capacity, and also to drive productivity. So, you know, that was the 150 million that we laid out in July.

We were clear that was going to be a multiyear impact. it is going to impact both OpEx and CapEx because a lot of our technology costs get capitalized. So, as we have efficiencies there, there will be savings, but also CapEx. So we are really energized around our ability to deploy AI, and I think we are 1 of the few info services stocks out there that have put a marker out fairly early in the AI journey around, you know, the benefits that we expect to get from it, which is, again, that 150 million.

And then, obviously, it is showing up in our P&L in 2026, you know, and, you know, with our ability to increase our operating margin rate guidance for the year, you know, while having the significant mortgage top line pressure. We think shows a lot to us as well as to our investors that you know, there is, you know, some real, positive change happening in, you know, we run our business internally from an efficiency and AI productivity standpoint.

Kevin McVeigh: Very helpful. Thank you.

Operator: Thank Next question is coming from Scott Wirtzl from Wolfe Research. Your line is now live.

Scott Wurtzel: Hey, good morning guys. Thanks for taking my questions. Just 2 on the government side of things. Wonder if you can talk about maybe how much of the new ACV that you are seeing is being driven by some of these new products that you have that introduced into the ecosystem? And then just a clarification on the renewal ACV, does that include any sort of like expansion with current customers or pricing increases? Or is that just a straight renewal of existing services? Thanks.

Mark W. Begor: Yeah. So on your second question, it would be substantially renewal of existing business, but there is always some element of price in a lot of the conversations. there is also the element of we add new solutions in those renewals. And then the new ACV we think about as being kinda new customers, and there is clearly. When you think about what is driving the bulk of that revenue, I would think about it as our core products, you know, about verifying income, you know, that we have been doing for, you know, a lot of years.

But there is an element of the new solutions we have talked about over the last 6, 9, 12, 18 months that we are adding into the market, like Continuous Evaluation, for our customers and you know, the complete income you know, adding that as a solution where we are adding some of the consumer consented stuff. So know, it is you know, the bulk of that new ACV would be in what I would call our core solutions. And just really penetrating the TAM. I think a lot of us forget meaning our investor base, that we have a big business.

Know, obviously, and we have a big business that is growing but we operate in a TAM that is substantially manual. When you think about the $5 billion TAM and the 4 plus billion of that TAM that we do not participate in today, you know, that states that is agencies, that is federal government, that is local you know, local government, you know, kind of social services that are being done principally manually. So that is the opportunity for us to really deliver you know, the real value we deliver in our salute.

Core solution, which is speed of social service delivery, know, caseworker productivity, You know, think about a $5.07, $10 transaction with Equifax versus, you know, a caseworker who is paid $30 an hour with benefits, working on it, and then obviously the huge integrity side you know, and there is been increased focus around, you know, I attacking the way the federal government frames the 180 billion of improper payments that happened and the roughly trillion dollars of social service delivery. So we just have strong momentum in our pipelines and really a good runway going forward to continue to penetrate into that Big TAM.

Scott Wurtzel: Great. Thank you.

Operator: Thank you. Next question is coming from Kelsey Xu from Autonomous Research. Your line is now live.

Kelsey Zhu: Good morning. Thanks for taking my question. What is your expectation around paid VantageScore adoption in the mortgage vertical in the medium term? And any updates on FICO 10T implementation timeline for the GSE loans and how that might change the competitive landscape between FICO and VantageScore? Thanks a lot.

Mark W. Begor: Yeah. So the paid Vantage is still fairly small. I think we have been clear about that. The free vantage is very high. And we think about that as an indicator of the industry's focus on you know, preparing to move to full advantage. And then when we talk to our customers, and some of them put out press releases, you can check on that. there is clearly a lot of focus on taking advantage of the huge cost savings that come with Vantage. With regards to 10T, you know, adoption and activation, you know, you should talk to FICO. You know, we are not involved in that. You know, that is something FICO is working on.

You know, suspect there will be a point in time where it will be adopted, but we are not close enough to know, you know, what is happening or not happening in that space We do believe that, you know, 10 t will close what we view as a gap between FICO classic and Vantage 4.0 from a performance standpoint. I think it is well understood in the industry that Vantage 4.0 includes more data, has more trended data, and is provides a more complete picture on the consumer around what their credit worthiness is. So I think that is well understood.

Our view is that 10T will close some of that, then you have got the challenge of, you know, that is at least currently priced at over $10 a score versus badges at a buck. You know, that is a massive delta that, you know, we think advantages. You know, Vantage even when 10 t's in the marketplace.

Kelsey Zhu: Got it. Very helpful. Director Pulte also alluded to releasing the GSE credit scores to the marketplace. Is that something you have been working with agency on? And how are you thinking about having Fannie score and Freddie score potentially competing with VantageScore in the marketplace?

Mark W. Begor: Yeah. I think you would have to talk FHFA about their plans on that. While we collaborate very closely with them because they are a close partner, I would not want to comment on what they are or not going to do around their own credit scores. We know that they I think it is well understood that the way the underwriting process works is that after the application goes in, the score VantageScore or FICO classic score is not used and that underwriting process. The credit date is used in that process, and they have a underwriting process that is very robust and very complex and very sophisticated.

That ingests all of the trade lines from all 3 credit reports in order to do their underwriting because, remember, they own the loan at closing, and that includes, you know, some element of score calculation that they use internally but you would have to talk to them about, you know, what they think they might wanna do with that you know, in the marketplace. Thank you.

Operator: Our next question today coming from Craig Huber from Huber Research Partners. Your line is now live.

Craig Huber: Great. Thank you. My first question is if we go back to October 2022, when the Biden-Harris administration proposed going to bi-merge, And then given all the pressure etcetera, nothing happened on that front through the rest of the administration, roughly 27 months. I guess my question to you is, what is changed in the marketplace out there that even if Pulte wants to go that route here, besides the fact we have a different administration, what is changed now that it would actually get implemented? Obviously, you talked about the treasury being against it, lot of congressmen being against it, regulatory folks underneath Pulte have been against it. Much of the industry against it, etcetera.

But what is changed that actually could get implemented this time if he wants to go that way?

Mark W. Begor: Yes. Craig, as a reminder, when you go back to the Biden administration, what they were they did a study and they got industry inputs. So it was a very formal process They reached out to the industry. We provided inputs. I think our competitors did. I am sure FICO did, and, you know, and the industry participants did. And they really asked to do a study on 2 things. Number 1, moving from tri merge to bimeerge. And at the same time, they proposed going to Vantage and FICO score. You know, meaning requiring both scores be used. There was a lot of input from the industry.

I think universally, the industry input was a move from trimerge to bimeerge, you know, was not a good thing for the consumer. Was not going to provide a complete picture on the consumer, was gonna result you know, in situations where consumers are not approved or was gonna result in situations where consumers are paying a higher interest rate because you are not having the complete picture on them. And then it was also going to result in a you know, a less accurate, less complete underwriting because you are not gonna have the trade lines, you know, including some of the negative trade lines that I could consumer, so there is a safety and soundness impact.

And at the same time, you know, there was feedback from the industry that understands how the process works well that was no value in having 2 credit scores used in really the prequal process. And then know, that is really how that unfolded. But that same sentiment around, tri-merge to bi-merge has not changed today in. From my perspective, from what I know in my communications and our communications, you know, around the value. The. There the facts are the facts. You know, because of our contributory system in The United States is voluntary, to the 3 credit bureaus, not every financial and contributes every trade line to all 3 credit bureaus.

And that results in meaningful differences between the 3 credit reports And when you are talking about something as substantial as a home mortgage, that is the largest transaction any homeowner does, consumer does, it can have significant impacts you know, on whether they are approved what the price they pay if you do not have all the data on that consumer. So I think that is well understood. And then the safety and soundness is crystal clear. You know, if you are gonna exclude data, that is okay if it is positive data.

But if it is negative data, and you do not know when you are only doing a bimerge, whether you are getting all of the complete information on that consumer and whether there is negative data out there that means that loan is riskier, you know, that is something that is on the shoulders of the federal government. You know, and I remind investors, you know, when I am in 1 on 1 meetings often that some of the most sophisticated non mortgage lenders pull TriMerge for all of the reasons I described.

They own the loan, it is on their balance sheet, they want to approve every consumer They want to give the consumer the right price meaning the price that they qualify for based on all of their trade data, and that is why even in nonmortgage where there is no requirement, the most sophisticated lenders will pull a TriMerge because they wanna get that complete picture on approvals, to approve more. And they also wanna have the complete picture on the loans they put on their balance sheet.

Craig Huber: I appreciate that. I mean, I think what you say makes an awful lot of sense. You have said that many times over the years. Publicly and I am sure privately as well to the regulators. My question further is here, you have got Pulte, Director Pulte out there being very upset about what he perceives as the price to value. For credit reports, but also the price increases as he goes on and on about, now versus, say, last year. Can you just quantify for us how much apples to apples, if you are willing to apples to apples, how much your credit file price has gone up this year versus last year? This year versus Yes.

2 years ago, however you wanna talk about it. But just what. Why is he so upset about the price increase from his vantage point? Thank you.

Mark W. Begor: Well, I think you would have to talk to him. We talked to him, lots of the industry participants too. We have got a lot of respect for director Pulte, and, you know, we have applauded his decision, which was really, you know, groundbreaking along with secretary Turner at FHA, you know, to drive adoption advantage to drive some score competition. You know, from our perspective, you know, the. I think we all know, you know, what is happened with FICO pricing over the last 5 years, and I think that is been the principal focus of the regulators around the impact that is had on the mortgage industry. As well as the impact that is had on consumers.

Because remember, ultimately, consumers pay for their credit reports at closing and, you know, so they have been bearing this cost of you know, the rapid increase of the of the FICO score. You know, our pricing is, you know, year over year is actually down on the credit file. You know, we, you know, have been. You know, tried to be very supportive of the industry given the pressures that they are under and also supporting consumers. And I think the VantageScore itself, the fact that we are being super responsible and super supportive of the industry and consumers with the $1 pricing.

And as I said this morning, last week, we announced to our customers we are gonna extend that not only through 2027 but through 2028, meaning keeping it flat at a buck so we can provide that support in a probably the most challenging mortgage environment that we seen in decades, you know, and support consumers, you know, who are struggling with the cost of homeownership, this provides clearly recognized a very small benefit, but a positive for them of the dollar versus 10 And remember, we launched pre-qual and pre-approval products which are at much lower prices, which give our customers and mortgage underwriters the ability to manage their credit costs as they see fit. Right?

Operator: Thank you. Question is coming from Craig Moore from B. Riley Securities. Your line is now live.

Analyst: Yes. Hi, thanks. Just a quick, I wanted to follow-up on the international question. What are some of the trends you are seeing in APAC that drove the sharp acceleration in the third quarter? And where is the largest opportunity for international growth in 2027?

Mark W. Begor: Yes, great questions. We are really pleased with the Australia performance. I think a piece of that is that they are really moving well down the path of their cloud completion. that is the last place that we have to finish. But know, I think they have got, you know, a lot of that complete, which is allowing them to more broadly focus on innovation and new products, Our leader, Mel Cochran, is doing a great job there in the marketplace. We have had some share gains versus our competitors. In that marketplace, which has really been a positive. And you know, we expect, you know, that, be a solid grower for us as we move forward in the future.

Your question around where do we expect to see growth kind of as we look forward internationally. Latin America is clearly gonna be the fastest growing geography for us. Obviously a big place, and we have got big positions. And remember, we are, you know, we entered Brazil 3 years ago with the Boa Vista acquisition. A leader down there is doing a great job driving innovation and growth. Enrique Morales is doing a terrific job, you know, of really driving the growth in that business. In Brazil, we are super energized to get Círculo closed. That business has been growing very kind of over 20% so far in 2020. So really a strong performance there.

So that will be a positive contributor as we get it closed in the fourth quarter as we move into 2027. And then in the more I would call it traditional markets for us that are more developed markets, maybe is a better term, of like Canada and UK, We are looking for those businesses, some of the innovation new products that they have been in the marketplace. We are seeing progress around share gains and performance in those markets, so we expect them to be positive for growth as we look forward. Thank you.

Operator: Thank you. Next question is coming from Owen Lau from Clear Street. Your line is now live.

Owen Lau: Hi, good morning. Thank you for taking my question. So going back to the LLPA question, if there are essentially 2 different LLPA grids how will this impact the like, the back end securitization part How to harmonize the whole value chain? And also, ultimately, how would it impact which score to use? Thank you.

Mark W. Begor: Yes. From our perspective, the credit score is not a big determinant in capital markets. it is the underwriting that takes place by the mortgage originator. And by banks and financial institutions and agencies, you know, whether it is Fannie, Freddie or FHA. it is their underwriting process. Process, really supports the capital markets, and that underwriting process that includes robust data today, the TriMerge, and making sure that got the complete picture on the consumer. that is what drives the capital markets. The change in the LLPA tables you know, are important.

The change that was made a few weeks ago by FHFA you know, was important to, you know, really, you know, put on parity, you know, Vantage versus FICO. You know, when they go to, you know, more custom LLPA tables, I do not think that has an impact on Vantage FICO. The real impact is going to be price. And with the significant price advantage that Vantage has, You know, it is gonna be a score that the industry is gonna wanna use just because you know, the. A lot of those, you know, prequal loans do not move to application. And that becomes a COGS form.

And at a dollar versus 10 plus, you know, there is just meaningful savings. that is the billion dollars we talk about. You know, and in this environment and likely an environment in 2027 where the industry is gonna be challenged until rates come down, this kind of cost productivity for the mortgage industry is significant. So, you know, we think there is a lot of momentum, you know, around Vantage conversion as we move through the quarter and into next year.

Owen Lau: Got it. And then on the VantageScore adoption, can you please talk about the use cases of pulling both VantageScore and FICO at this point? I know many of them can get Vantage for free. But I think they cannot use 2 different scores for the same loan in origination. So how are lenders actually leveraging Vantage when they have FICO? Thank you.

Mark W. Begor: Yeah, remember that this was a massive change for the industry for 25 plus years, the only score that was used was 1, which was the FICO score and their systems, their processes. Think about the workflows that happen inside of a financial institution like a mortgage originator, those all had to be changed and rebuilt to have the ability to you know, absorb a second score and have it work through their process.

So that is why, you know, last summer, you know, when FHFA and director Pulte announced that they were going to allow Vantage to be used in the in the Fannie and Freddie underwriting process, you know, the industry had to start investing in technology changes and process flow changes in order to make that happen. that is a big project. Took a lot of time it is, you know, substantially complete now. And that is why we are. We made the decision last year to offer the free you know, VantageScore with every paid FICO score so our customers could start you know, absorbing it you know, flowing it through.

They could see, you know, the score difference on a consumer, you know, which is very insignificant between Vantage and FICO and also work. You know, update their workflows so they could actually, you know, make that decision. And, you know, that process is, you know, happening. And as I said, we have got 200 lenders that are understandably smaller lenders, but the big ones, you know, are. Have built their process built their workflows, and, you know, everything we hear from them they are gonna start moving to the paid VantageScore to get that substantial cost savings versus the $10 plus FICO score going forward.

We rolled out a new solution last week because we heard from lenders that they may want to for example, pull the VantageScore first for a dollar and then on certain consumers, they may decide, well, I am also gonna pull the FICO score.

And they wanted to have a process to be able to do that you know, so we built that technology, you know, in order to bring that through From my perspective and our perspective, what we know with the industry, that will be more an anomaly than the norm that because remember, if you pull Vantage at a buck and then FICO at 10-plus, you know, that is $11 you have got invested You know, if the $1 vantage serves your purpose from a marketing standpoint, that is better for the consumer because they end up ultimately paying for it, and then it is also better for the lender because not every loan closes.

So, you know, there is just a huge advantage with the $1 Vantage Core. Thank you.

Operator: Our final question today is coming from George Tong from Goldman Sachs. Your line is now live.

George Tong: Hi, thanks. Good morning. I wanted to go back to the government business. Beyond the 150 million of new state business already signed, you mentioned active discussions around the new Medicaid work requirements. Can you frame the potential incremental opportunity there and where those states are in the decision and contracting process?

Mark W. Begor: Yeah. it is a great question, George, and it is not only the work requirements, it is the new SNAP requirements. Where they have the error rate audit requirements from the federal government. If they are over the error rate, then they are going have to start paying for some of the SNAP benefits. Going forward. So those are all changes that would not place a week. A year ago, July, with o b 3 that, you know, are driving kinda new product rollouts by us, but also, you know, engagement, you know, by the states as the federal government intended.

They wanted to have more robust verification of income to try to bring down that 180 billion of improper payments. So that is a part of the pipeline. Going forward. And as I said earlier in 1 of the questions, our kind of our core solutions. Again, as a reminder, I know you know this, George, because you know us well, You know, when you think about a $5 billion TAM, you know, we are less than 20% of that today. You know, meaning less than half of the states use us for Medicaid. Less than half of the states use us for SNAP. Less than half of the states use us for a lot of the other benefits.

That white space, which we think about as new customers and new states and new agencies we wanna do business with, you know, are doing their verifications principally manual today. And that is our opportunity. And that is big part of our pipeline. It always has been. So that has not changed with OB 3 and it is just.

OB 3 has just increased the commercial discussions, the frequency of them, the level of them, but the core value prop we have has not changed, and it is really around delivering that value of speed of social service delivery with an instant verification the caseworker productivity that delivers from, you know, our solution, you know, versus doing it manually, and then, of course, the integrity that comes you know, in using our verified data to make sure that, you know, the applicant, you know, should be receiving the benefits or if they have the benefits, you know, to make sure they should still be getting them.

And know, as you know, the 180 billion is a, you know, is a lot of opportunity for the federal government working through the states to reduce the cost of social services for those that you know, currently do not qualify.

George Tong: Very helpful. Thank you.

Operator: Thank you. We reached the end of our question and answer session. I would like to turn floor back over to Trevor Burns for any further closing comments.

Trevor Burns: Thanks for everybody today. If you have any follow-up please talk to me and Molly and we will be available. Thank you.

Operator: Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.