2022 was a strong year for the New Equifax. We are truly a diversified data, analytics and technology company that is shifting into our Next Gear and extending well beyond a traditional credit bureau in the markets we serve worldwide. We are driving innovation to meet the evolving needs of global consumers and customers while delivering strong financial results for our shareholders.
Financial Performance
Equifax achieved record 2022 annual revenue of $5.122 billion, up 4% over 2021 despite an unprecedented estimated 56% decline in U.S. mortgage originations and a softening of the global macroeconomic environment. The power of the Equifax business model and our execution against our EFX2025 strategic priorities is reflected in our eight consecutive quarters of strong, double-digit core revenue growth – and strong 17% non-mortgage growth in 2022. Our non-mortgage businesses comprised 77% of Equifax and delivered growth in 2022 well above our 8-12% long-term growth framework.
Business Unit Performance
Workforce Solutions, our fastest-growing, highest margin, and most valuable business, delivered annual revenue of $2.3 billion – growth of 14% over 2021. Importantly, Workforce Solutions non-mortgage revenue, which represents 67% of revenue, was up a very strong 42%. This business unit has more than doubled in size over the past several years and has grown from about 25% of our total revenue four years ago to almost 50% in 2022. It will likely exceed more than half of Equifax revenue in the coming years!
U.S. Information Solutions (USIS) delivered annual revenue of $1.7 billion, a decline of 7% from 2021 due to the declining 2022 mortgage market, which was partially offset by strong 6% business-to-business (B2B) non-mortgage growth and B2B Online non-mortgage revenue growth of 11.5%. In March 2023, we announced the appointment of Todd Horvath as President of USIS effective March 31, 2023. Horvath will drive our USIS growth strategy – leveraging the company’s differentiated data assets, Equifax Cloud-based technology and deep analytics expertise to create innovative solutions that drive financial opportunity for businesses and consumers. He joins Equifax from Fiserv, where he most recently served as the Co-Head of the Fiserv Banking organization.
International, for the second year in a row, achieved more than a billion dollars in revenue and double-digit local currency growth, to $1.1 billion, up 12% in local currency. We are seeing broad-based execution from our International businesses, with strong double-digit local currency revenue growth in our Latin America (LATAM) and Europe regions.
Consumer Impact
Our company purpose is to help people live their financial best and Equifax strives to support economically healthy individuals and financially inclusive communities in each of the 24 countries where we do business. This purpose-driven focus was recognized in 2022 with a Google Customer Award for Diversity, Equity and Inclusion.
Financial inclusion is at our core and Equifax is committed to helping people and small businesses access useful and affordable financial products and services that meet their needs – including payments, savings, credit, insurance and government benefits – delivered in a responsible and sustainable way. Every financial first – whether it’s a first job, a college education, a bank account, credit card, car loan, apartment lease, small business loan, government benefit or mortgage – can spur positive economic change.
While credit reports remain a strong indicator of credit history and past financial reliability, we believe that Fair Credit Reporting Act (FCRA) compliant information that is not included in traditional credit report data has the potential to help responsibly expand consumer access to credit and support a more inclusive economy. Equifax is a leader in alternative data that supports financial inclusion and access to credit.
ESG Priorities
Data, analytics and technology is a powerful force in addressing pressing issues facing the world around us and Equifax has committed to reaching net-zero greenhouse gas emissions by 2040, an important sustainability commitment enabled by our Equifax Cloud. As we move from physical, on-premise data centers to cloud-based technology, we are working to increase system reliability and reduce operating expenses while also transitioning to more renewable energy sources, consuming energy more efficiently and reducing our carbon footprint. These strategic business actions also have the potential to help reduce greenhouse gas emissions.
EFX2025 Strategic Priorities
We move into 2023 with significant momentum in the underlying growth of our businesses and in the execution of our EFX2025 strategic priorities. Our Equifax team around the world delivered against every component of our EFX2025 growth strategy in 2022 as we worked to rapidly build the New Equifax and shift into our Next Gear of operations.
Equifax truly accelerated New Product Innovation in 2022 with over 100 new products for the third year in a row, and a record full year Vitality Index of over 13% with over 90% of new product revenue from non-mortgage products. This 13% Vitality Index is an all-time high since our Vitality Index program’s inception in 2007, and is greater than 400 basis points above our strong 2021 results and more than 300 basis points higher than our long-term growth framework.
As we complete the new Equifax Cloud, we are positioned to bring exciting new products to market that leverage our diversified assets and unique capabilities to unlock growth opportunities for our customers. A majority of our New Product Innovations, about 75% in total, leverage global capabilities from our Equifax Cloud platform, which drives both scale and efficiency. Our time to market is averaging 77 days from start to launch, which is just a third of the time needed only three years ago. Revenue driven from new products reached the highest level in our history at $650 million in 2022.
Workforce Solutions continues to lead Equifax in New Product Innovation with offerings like the TotalVerify data hub, delivering a business unit Vitality Index at more than twice our long-term 10% Vitality Index target. Workforce Solutions is the first Equifax business to be substantially complete with their Equifax Cloud transformation and the growth of the Workforce Solutions Vitality Index from the low single digits in 2019 to its record levels in 2022 is a testament to the power of the Equifax Cloud to drive innovation and new products today and in the future.
Innovation and development across all regions is increasingly powered by our investment in the Equifax Cloud. It enables us to scale and replicate our innovations across the globe – and we have grown our multi-market launches as a percentage of total New Product Innovation from 2% in 2018 to over 20% in 2022 and growing. The LATAM region leads Equifax with this approach. With a regional Vitality Index well above our 10% long term target, the International team is creating solutions that fit each of the 11 countries in the Equifax LATAM region to expand and accelerate growth.
As we move into 2023, our Equifax Cloud-based data fabric capabilities will further accelerate our New Product Innovation-based revenue growth worldwide. We are in the early days of leveraging these new capabilities but remain confident that they will differentiate us commercially, expand our New Product Innovation capabilities, and accelerate our top line growth.
Our strong financial performance was supported by the significant strides we have made to complete our Equifax Cloud transformation. This new Cloud infrastructure is delivering always-on capabilities and faster New Product Innovation, with integrated data assets, faster data delivery and industry-leading enterprise security. Approximately 70% of our North American revenue is now being delivered from the Equifax Cloud and in 2023 we are focused on completing our North American cloud transformation to become the only cloud-native data and analytics company.
The strength of the New Equifax worldwide is supported by our nearly 14,000 Equifax employees in 24 countries who have helped our customers adapt to a challenging post-COVID economic landscape, enabling them to support rapidly evolving consumer needs.
Security has become a point of strength and a competitive advantage for Equifax. In 2022, the maturity level of our cybersecurity program exceeded all major industry benchmarks for the third consecutive year, with a posture that ranks in the top 1% of Technology companies and top 3% of Financial Services companies analyzed.
In closing, I want to thank our employees for their dedication and hard work, our customers for their trust and partnership, and our shareholders for their continued support. We are excited about the opportunities ahead and remain committed to delivering value for all our stakeholders.
Sincerely,
Mark W. Begor
Chief Executive Officer
Read the original letter here.
