Credit reporting giant Equifax (NYSE: EFX) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 7.2% year on year to $1.54 billion. The company expects next quarter’s revenue to be around $1.52 billion, close to analysts’ estimates. Its non-GAAP profit of $2.04 per share was 5.4% above analysts’ consensus estimates.

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"Equifax delivered strong third quarter revenue of $1.545 billion, up 7% on both a reported and local currency basis, that was $25 million above the midpoint of our July Guidance. This was led by strong 13% U.S. Mortgage revenue growth, strong Workforce Solutions Government vertical results, and continued momentum in New Product Innovation with a Vitality Index of 16% despite headwinds from the U.S. Mortgage and Hiring markets. Workforce Solutions delivered 5% revenue growth, driven by Verification Services revenue growth of 5% led by Non-Mortgage revenue growth of 7% from strong high single digit growth in Government and double digit growth in Consumer Lending businesses. USIS delivered strong revenue growth of 11%, well above their 6 to 8% Long Term Financial Framework. USIS revenue growth was led by very strong 26% Mortgage revenue growth and Non-Mortgage revenue growth of 5%. International delivered 7% local currency revenue growth led by Latin America and Canada. We were pleased with the strong Equifax results in a challenging market environment," said Mark W. Begor, Equifax Chief Executive Officer.

Company Overview

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

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years.

With $5.94 billion in revenue over the past 12 months, Equifax is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions.

As you can see below, Equifax grew its sales at a solid 8.7% compounded annual growth rate over the last five years. This shows it had high demand, a useful starting point for our analysis.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Equifax’s annualized revenue growth of 7.6% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

We can dig further into the company’s revenue dynamics by analyzing its most important segments, Workforce Solutions and U.S. Information Solutions, which are 42% and 34.3% of revenue. Over the last two years, Equifax’s Workforce Solutions revenue (HR services) averaged 5.8% year-on-year growth while its U.S. Information Solutions revenue (credit services) averaged 9.2% growth.

This quarter, Equifax reported year-on-year revenue growth of 7.2%, and its $1.54 billion of revenue exceeded Wall Street’s estimates by 1.4%. Company management is currently guiding for a 7.2% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 7.8% over the next 12 months, similar to its two-year rate. This projection is admirable and suggests the market sees success for its products and services.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Equifax has been a well-oiled machine over the last five years. It demonstrated elite profitability for a business services business, boasting an average operating margin of 19.3%.

Looking at the trend in its profitability, Equifax’s operating margin decreased by 3.5 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Equifax generated an operating margin profit margin of 17.1%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

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

Equifax’s EPS grew at a weak 3.7% compounded annual growth rate over the last five years, lower than its 8.7% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Diving into the nuances of Equifax’s earnings can give us a better understanding of its performance. As we mentioned earlier, Equifax’s operating margin was flat this quarter but declined by 3.5 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

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

For Equifax, its two-year annual EPS growth of 9.4% was higher than its five-year trend. Accelerating earnings growth is almost always an encouraging data point.

In Q3, Equifax reported adjusted EPS of $2.04, up from $1.85 in the same quarter last year. This print beat analysts’ estimates by 5.4%. Over the next 12 months, Wall Street expects Equifax’s full-year EPS of $7.69 to grow 10.7%.

Key Takeaways from Equifax’s Q3 Results

It was good to see Equifax beat analysts’ revenue and EPS expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. Full-year EPS guidance was raised slightly, which is a good sign. On the other hand, its EPS guidance for next quarter missed. Zooming out, we still think this was a solid quarter. The stock traded up 2.8% to $237.51 immediately following the results.

Is Equifax an attractive investment opportunity right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.