Equifax Q3 2026 Earnings: Revenue Rises 10% as Mortgage Outlook Weakens

Equifax (NYSE: EFX) reported Q3 2026 revenue of $1.6925 billion for the quarter ended September 30, up 10% from $1.5449 billion, while diluted EPS rose 39% to $1.79 from $1.29. GAAP earnings growth benefited from the absence of a prior-year restructuring charge, but adjusted EPS still increased 11% and adjusted EBITDA margin expanded. Broad Diversified Markets growth and gains in U.S. mortgage revenue supported the quarter, although a weaker mortgage market prompted a lower full-year revenue outlook.

Core Earnings Results

Revenue increased by $147.6 million year over year, with all three operating segments reporting growth. Operating income rose faster than revenue, lifting GAAP operating margin to 21.0%, while the smaller improvement in adjusted EBITDA margin provides a more normalized view of profitability.

Net income attributable to Equifax increased 32%. Adjusted net income rose 6%, with a lower diluted share count helping adjusted EPS grow at a faster 11% rate.

Business and Segment Performance

U.S. Information Solutions, or USIS, was the fastest-growing major segment, while Workforce Solutions remained the largest contributor to segment operating income. International revenue also advanced, although its adjusted EBITDA margin declined modestly.

Within Workforce Solutions, Verification Services revenue grew 9% to $603.2 million, offset partly by a 5% decline in Employer Services to $90.7 million. Workforce Solutions’ Diversified Markets revenue increased 9%, led by growth of more than 20% in Talent Solutions, high-double-digit growth in Consumer Lending, and mid-single-digit growth in Government. Its mortgage revenue was approximately flat.

USIS benefited from 13% growth in Online Information Solutions and 11% growth in Financial Marketing Services. USIS mortgage revenue rose 28%, while its Diversified Markets revenue increased 6%, led by financial institutions and automotive customers. Across Equifax, U.S. mortgage revenue grew 15%, despite the market weakening during the latter half of the quarter.

International growth varied by region. Asia Pacific revenue rose 20% as reported and 12% in local currency, while Latin America increased 12% as reported and 8% in local currency. Europe grew 3% as reported and Canada increased 2%. International adjusted EBITDA margin decreased to 30.9% from 31.3%.

GAAP Profit Growth Outpaced Adjusted Improvement

The 39% increase in diluted GAAP EPS was substantially faster than the 11% increase in adjusted EPS. One major reason was the $43.9 million restructuring charge recorded in Q3 2025, predominantly related to headcount reductions, which did not recur in Q3 2026.

Selling, general and administrative expenses also declined to $390.4 million from $434.1 million, even as revenue grew. However, adjusted EBITDA margin improved by only 40 basis points, compared with the 390-basis-point increase in GAAP operating margin, showing that prior-year special charges accounted for a meaningful portion of the reported margin expansion.

Adjusted net income increased 6%, while adjusted EPS rose 11%. Weighted-average diluted shares declined to 118.1 million from 124.1 million, supporting the faster per-share growth.

Cash Flow, Capital Allocation, and the Balance Sheet

Nine-month operating cash flow was $1.1421 billion, nearly unchanged from $1.1449 billion in the prior-year period. Capital expenditures increased to $378.9 million from $351.4 million, resulting in calculated free cash flow of approximately $763.2 million, down about 4% from approximately $793.5 million. These figures are for the first nine months of 2026 rather than Q3 alone.

Equifax returned $158 million to shareholders during the quarter, consisting of $92 million used to repurchase 0.5 million shares and $66 million in dividends. Cash and cash equivalents stood at $192.9 million on September 30, compared with $180.8 million at the end of 2025. Interest expense increased to $62.3 million from $52.2 million, partially offsetting the improvement in operating profit.

Earnings Guidance

Equifax maintained its high-single-digit growth outlook for Diversified Markets but lowered the midpoint of its full-year revenue guidance to $6.661 billion. Management attributed the reduction to a much weaker U.S. mortgage market in the second half of Q3, which it expects to continue through the remainder of 2026.

The full-year adjusted EPS midpoint was reduced by only $0.04 to $8.50. Management said cost controls and AI-related operating efficiencies should principally offset the gross-margin effect of lower mortgage revenue.

The contrast between Q3 revenue growth of 10% and Q4 guidance of 3.5% to 5.4% reflects the expected near-term effect of weaker mortgage activity.

Management’s View

Management linked the broad Diversified Markets performance to a new-product Vitality Index of more than 17%, above Equifax’s 10% long-term target. The company is also deploying EFX.AI in products and internal operations as it works toward a stated $150 million AI productivity goal.

Equifax expects its Círculo de Crédito acquisition to close in the fourth quarter. Management said free cash flow will continue to support shareholder returns and bolt-on acquisitions, without characterizing the repurchases as an indication of valuation.

Recent Insider Transactions

The supplied insider data showed 86,859 shares acquired across 11 transactions and 86,037 shares sold across five transactions during the latest six-month period. That resulted in a net increase of 822 shares, equal to 0.10% of the reported 757,780 shares held by insiders.

Recent reported activity included executive sales, a derivative-security conversion, and director stock awards. Awards and derivative conversions are economically different from ordinary open-market purchases.

The six director grants were reported for Mark L. Feidler, Scott A. McGregor, John A. McKinley Jr., Barbara A. Larson, Karen Linn Fichuk, and G. Thomas Hough. The reported transactions were all classified as direct holdings.

Risks Investors Need to Watch

• Further mortgage-market weakness: The late-quarter slowdown already caused Equifax to reduce its full-year revenue midpoint. Continued pressure could limit Q4 growth and weigh on mortgage-related margins.
• Uneven performance within Workforce Solutions: Verification Services and diversified offerings grew, but Employer Services revenue fell 5% and Workforce Solutions mortgage revenue was flat.
• International margin pressure: International revenue increased, but adjusted EBITDA margin declined by 40 basis points, indicating that revenue growth did not translate into comparable adjusted margin expansion.
• Higher financing costs: Quarterly interest expense rose 19% to $62.3 million, creating a larger offset to operating-income growth.
• Free-cash-flow conversion: Nine-month operating cash flow was approximately flat while capital expenditures increased, reducing calculated free cash flow by about 4%.

Summary

Equifax delivered double-digit Q3 revenue growth, led by USIS, Verification Services, and broad Diversified Markets demand. Profitability improved, although the unusually fast GAAP earnings growth partly reflected a prior-year restructuring charge and a lower share count. The main issue for the remainder of 2026 is the weaker U.S. mortgage market: Equifax lowered its revenue outlook but largely preserved adjusted EPS guidance through cost controls and expected AI-related efficiencies.