Greetings and welcome to the Equifax Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Trevor Burns, Senior Vice President, Head of Corporate Investor Relations. Thank you, you may begin.

Thanks and good morning. Welcome to today's conference call. I'm 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 & Events tab at our IR website, www.investor.equifax.com. During the call, we will be making reference to certain materials that can also be found in the Presentations section of the News & Events tab at our IR website. These materials are labeled Q3 2022 Earnings Conference Call. Also, we will be making certain forward-looking statements, including fourth quarter and full year 2022 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 filings with the SEC, including our 2021 Form 10-K and subsequent filings. We will also be referring to certain non-GAAP financial measures, including adjusted EPS attributable to Equifax and adjusted EBITDA, which will be adjusted for certain items that affect the comparability of our underlying operational performance. 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 IR website. Now I'd like to turn it over to Mark, beginning on Slide 4.

Thanks, Trevor. Equifax delivered another solid quarter with continued execution against our EFX 2025 strategic priorities in a challenging economic environment. Third quarter revenue of $1.244 billion was up 2% or 4% in constant currency and was above the high end of our guidance driven by strong non-mortgage revenue growth in the quarter. This strong revenue performance was well above our July framework and delivered despite a more negative FX environment than we expected, which at 200 basis points or $29 million was a $5 million or about 50 basis point greater headwind for FX than we expected when we put out July guidance. Adjusted EPS of $1.73 per share was also stronger than our July guidance. We are continuing to significantly outperform our underlying markets as we navigate the challenging economic environment and mortgage market decline. Our global non-mortgage businesses, which now represent over 78% of total Equifax revenue, were very strong with 20% total and 13% organic non-mortgage, constant currency dollar revenue growth, stronger than we expected when we provided guidance in July and stronger than our 8% to 12% long-term growth framework. We're now tracking to 20% non-mortgage constant dollar growth in 2022, which is up about a 100 basis points from our July guidance. The outperformance was again led by outstanding performance at Workforce Solutions that delivered 40% total and 20% organic non-mortgage revenue growth. USIS B2B non-mortgage grew 9% online and 5% total, which was about consistent with second quarter, but weaker than we expected. International delivered a record quarter up a very strong 17% constant dollar growth and 15% organic constant dollar growth well above our expectations. Equifax total mortgage revenue is down 30% about as expected and outperformed the underlying market decline by over 10 points from pricing, new TWN records, penetrations, system-to-system…

Thanks Mark. As Mark mentioned and as shown on Slide 14, our guidance reflects and expectations the decline in the U.S. mortgage market will steepen in the fourth quarter with mortgage originations declining over 60% and mortgage credit inquiries declining over 50%. This is a significant reduction from our expectations in July and as Mark referenced earlier, this expectation of a further weakening of the mortgage market negatively impacts 4Q revenue by almost $45 million. 3Q mortgage revenue was 21.9% of total Equifax revenues compared to 29.5% and 24.7% in 1Q 2022, and 2Q 2022 respectively. In 4Q, we expect mortgage revenue to be about 16% of total Equifax revenues. The rapidly changing and unprecedented macro environment makes forecasting the impacts on the U.S. mortgage market incredibly challenging. We will continue to be transparent with you about changes in the mortgage market and the impacts on our business. EBITDA margins at 32.5% were slightly below the level of at or below 33% we discussed in our July guidance. Mark discussed the drivers in HBU [ph]. Partially offsetting these items were lower corporate and corporate technology expenses. Slide 15 provides our guidance 4Q 2022. We expect revenue in the range of $1.165 billion to $1.185 billion reflecting revenue down about 6.3% year-to-year at the midpoint of our guidance or down about 3.7% on a constant currency basis. 4Q 2022 EBITDA margins are expected to be about 31.5%. We're expecting adjusted EPS in 4Q 2022 to be $1.45 to $1.55 per share compared to 4Q 2021 adjusted EPS of $1.84 per share. As Mark shared earlier, the decline in our 4Q 2022 guidance is as compared to implied levels we shared in July, is driven by the significant reduction in our expectations for the U.S. mortgage market in the fourth quarter. 4Q…

Thanks, John. Turning to Slide 17, we have some very unique macros in our industry and EFX growth levers driving our performance in 2023 and beyond. The acceleration of the digital macro across every industry is expanding the use of identity, data signals and solutions to drive better decisions across new and existing verticals. Equifax is well positioned to take advantage of the accelerating digital macro through our EFX Cloud investments and our recent acquisitions of Insights, Kount and Midigator. Although we've been impacted by the significant declines in U.S. mortgage market, we believe we have unique levers at Equifax to deliver strong future growth, including Workforce Solutions above market growth and margins, and our expanded focus on new data assets like Insights, USIS non-mortgage growth and Kount and Midigator identity and fraud growth, our new EFX Cloud driving competitive, NPIs top line, and of course cost savings in 2023 and beyond. NPI is leveraging the EFX Cloud and our expanded resources and focus on new products and bolt-on M&A to broaden and strengthen Equifax. These attractive market macros along with the broad EFX growth levers and our strong core and non-mortgage outperformance in the past few years, gives us confidence in our ability to deliver above market growth in the future. In the event we do see further economic weakness driven by slowing consumer demand, we believe Equifax is well positioned for continued growth. As we shared with you in July, turning to Slide 18, the new Equifax is a much different and more diverse business than we were in the last recession. We are more resilient and better positioned for stronger revenue and earnings growth in challenging economic environments. During the 2008-2009 global financial crisis, Equifax performed very well and exhibited the resiliency you would expect from data…

Thank you. [Operator Instructions] Our first question is coming from the line of Manav Patnaik with Barclays. Please proceed with your questions.

Thank you. Mark, I was hoping just on Slide 17 where you gave us some of kind of the levers for 2023, I think, I was hoping you would touch on some of the macro trends you're seeing in the card and auto verticals. You know, just some perspective on where we are today in those categories relative to pre-COVID or history and some of the trends you're seeing there, whether they're decelerating or staying the same or any color around those would be helpful.

Yes, we talked a bunch Manav, good morning, about mortgage. So we're happy to talk more questions on that. You know, maybe if you step back kind of where we are with the consumer and our customers, the consumer continues to be exceptionally strong. Their credit scores are still up from 2019. They're working. We haven't seen real changes in delinquencies except at the subprime level there's some small changes, but even there delinquencies are lower than they were in 2019. So you've got consumers that have had wage growth. Employment is low, you know, so it's a very good environment for the consumer, which really impacts the verticals you talked about. And then our customers are still very strong there's no question about that. You know, when you think about the last economic event we had in the global financial crisis, you had both traditional financial institutions, banks, and fintechs that really had balance sheet problems. So that's not the environment we have today. So, it's similar to our dialogue that we had in July and back in April. We see a strong consumer continuing, through the fourth quarter and into 2023 and the same thing with our customers. So with regards to kind of activity around originations in some of those verticals not a lot of change. There's still some challenges in auto around supply chain, availability. I think there's expectations that's going to get better in the coming quarters, but it's still hard to find a car, particularly and certain models that you want to get, which is resulting in auto being down some from a year ago. But again, kind of at our expectation, no real change in cards. I think we mentioned in our comments that we've seen a little bit of weakening in some marketing, but I wouldn't call that a trend. You know, broadly, our customers are still focused on originations, card volume is very, very strong, card originations is very, very strong. And again, you go back to, you've got consumers that are very strong. I think everyone, you know, is watching very closely, both us and our customers. When will there be a change in delinquencies.

Got it.

If you just look at non-mortgage online organic growth rates in the third quarter, right? We saw telco was up double-digit, fi, insurance and auto were up mid-to-high single digits. So which is ______.

Got it. And then just on the Workforce Solutions two thirds of non-farm payroll data now in your database, it sounds like you've, I think been closing that gap maybe faster than we had expected. Just some thoughts if that, if it is the same case versus your internal expectations, but the question is, you know, how much of that is really, you know, locked in exclusive per se? Like, you know, just so that competition is in the one year.

Yes, I think Manav a couple of points on that. You know, we're increasingly looking beyond non-farm payroll as you know. Adding in the gig economy as well as the pensioners, and when we think about our 146 million records and 111 million uniques or individuals in our data set, you know, there's about 200 plus million, 210 million, 220 million total working Americans and pensioners. So there's a long runway for us between w-2. Traditional employees, self-employed and remember self-employed we think about gig workers of being Uber drivers, DoorDash, et cetera. But think about self-employed doctors, self-employed lawyers, self-employed accountants self-employed contractors, it's a large population and then that pension base is quite large. And we mentioned in comments earlier that we've been starting to add pension records and gig records, and we signed an agreement with a company that does pension payroll, if you will, for various companies where we're going to do the income and employment verification for them. So, you know, we have the ability to double our data set, you know, over a lot of years going forward. And I think, as you know, we've talked to you before that, we've got a 13% to 15% long-term growth rate for Workforce Solutions that sits inside of Equifax's 8% to 12% growth rate. And we've got 3 to 4 points of that from record growth in the 13% to 15%. So, there's no question we've had above expectation record growth over the last, it's not new, it wasn't last quarter. You know, it's really been for three or four years. A lot of that has been from many of the payroll processors that you go back three or four years ago, we're not contributing our records and now they are. And as well as continued…

Got it, thank you.

Thank you. Our next question is coming from the line of Ashish Sabadra with RBC Capital Markets. Please proceed with your questions.

Thanks for taking my questions. One of the questions we are getting is more around if we use the fourth quarter EPS and analyze that it implies for next year a significant decline in earnings. I understand there are some puts and takes here. Obviously there was a discussion around cloud benefits coming in 2023, but I was wondering if you could help us parse what are some of the headwinds puts in the quarter, which may not exist going into 2023, and what are other tailwinds as we think about 2023? Thanks.

Yes, I'll start and then John can jump in. Obviously you want to start with revenue, you know you know, we, we expect to have you know, attractive non-mortgage growth next year. We're clearly going to have John talked about it, a grow over challenge in the first half of next year, meaning that the mortgage market will be down versus first quarter and second quarter of 2022 based on where current trends look. We don't have an outlook yet, but there was a strong mortgage market in the first quarter and it started declining in the second and more rapidly in the third. So, that's clearly going to be a part of our outlook going forward. You know, you also have our new product rollouts will be a positive for us. You know, that vitality index being above 10%, gives us momentum next year to drive the top line with those new solutions. And as I commented earlier, the new products we're rolling out this year, the 80 products we've rolled out so far, most of those aren't really in the revenue in a meaningful way in 2022. They really mature in 23 and in 2024. Last point I would make is that, we've made a number of acquisitions in the last 25 months or 20 months actually. And those acquisitions are obviously in our run rate revenue, but the synergies that we expect to get typically kick in years two and three, so meaning in 2022 and 2023. So meaning in 2023 we're going to get benefits from acquisition growth that we have going forward. John, maybe you add to that and maybe talk a little bit about some of the margin stuff?

Absolutely. And so as Mark already really covered, right? So non-mortgage revenue growth, both from NPI but also from new product and also very importantly from pricing right, will absolutely benefit us as we go into next year. Generally speaking, I think most people know a lot of new products and mortgage and other verticals that we serve actually tend to get launched at year end and pricing actions tend to happen at year end. So we tend to get a nice benefit as you move from fourth quarter to first quarter every year, and it's done very consistently. We also expect to have, as Mark mentioned, improved cost position. As we move, move into next year, as we continue to migrate more and more of our major systems to the cloud, we start to be able to decommission more systems and we're starting to see savings as we move through 2023. That's certainly a benefit. Some of the marketing and sales incremental costs we talked about this quarter that would affect the next quarter are really driven by the fact that we're performing so very strongly this year, right? That we're paying compensation appropriately at very high levels into those organizations because they're substantially outperforming. Obviously, when you get into a new plan year, those things are all reset. So we think there's certainly cost opportunities that will help margin, but also for us with the fact that we're driving very strong non-mortgage growth with new product and pricing and obviously that flows through at extremely high margins is real benefit to us as we go into next year. So again, we're not providing guidance yet as we didn't in this call, but we have a lot of levers that can help strengthen 2023.

Maybe the last one, maybe just a last one is that we commented that there's some unusuals or things that are going to work out in Workforce Solutions margins in the third and fourth quarter, from the mix of mortgage and some additional costs associated with our sales and marketing that we made the comment that we clearly expect Workforce to be back at 50% plus margins in 2023, which will be obviously a positive too.

Very helpful color. And maybe just a quick followup on EWS, the expectation for revenues to be down 3%, it's a significant moderation from 9% growth. Obviously mortgages ahead went there and maybe some of the acquisitions are anniversaring, but I was wondering if you could help parse what should -- how we should think about organic Verifier non-mortgage growth as we head into fourth quarter and next year? Thanks.

Sure. So I think we talked about it. We talked about organic revenue growth for EWS, and we said it was about 20%. Negatively impacting that is almost 15 points from reductions in UC & ERC. So if you exclude UC & ERC we're seeing organic growth across Workforce Solutions of approaching 35%, which we think is very…

It's a very good number.

Very strong in the third quarter, right? So…

Well above their 13% to 15% long-term growth rate.

And so even, and as we look into next quarter when we compare the 20% that they delivered this quarter, we expect to have very strong performance again next quarter also in non-mortgage. So again, we think EWS non-mortgage revenue growth has been really outstanding and continues to grow.

Thank you. Thanks for the color.

Thank you. Our next questions comes from the line of Andrew Steinerman with JPMorgan. Please proceed with your questions.

Hi, John. I just want to verify that we have some figures here, and just for these questions, if it's okay, let's put aside core, when I ask these mortgage questions. So I think we know mortgage as a percentage of total third quarter revenues, I think that's 22% the inverse of the 78% on the first quarter, just please verify that? And the second thing I want to make sure that we have non-mortgage organic revenue growth and I think that's 13%. I think that's what you gave on Slide 4. And if you could just make a comment about fourth quarter, what's implied in terms of non-mortgage organic revenue growth.

Yes, so I believe both of the numbers you quoted were in the presentation, so yes, I think they're correct. And in terms of non-mortgage growth right, we are expecting non-mortgage growth to continue to be strong, right? Mark talked about the fact that for the full year, we're continuing to expect 20% and we're expecting a strong fourth quarter, not quite probably as strong as the third quarter, so slightly, so somewhat below the third quarter, but still a very strong number and we're expecting to see that the strength that you've been seeing all year continue.

Okay, thank you, John.

Thank you. Our next question is come from the line is Kyle Peterson with Needham and Company. Please proceed with your questions.

Hey good morning guys. Just wanted to follow up on the margin a little bit, maybe if you guys could run us through some of the puts and takes in the 4Q step down is really most or all of that just mortgage and lower volumes kind of running through and the full quarters impact of that or there's no, like other cost inflation or anything that you guys are seeing material in your business?

No cost, really inflationary impact. It's really the mix of the loss of that mortgage revenue is just such high margin. And then I think we also talked about some costs from sales and marketing and onboarding, some TWN contributors, but the majority of it is the margin mix from a mortgage.

Absolutely. The step down in 4Q from 3Q is really driven by lower revenue in general because of, but it's driven by lower -- because mortgage is lower, and obviously mortgage has a very high variable margin. So that's the driver.

Got it. That's helpful. And then, just a quick follow up on international, obviously the constant currency trends have looked really good for you guys. I know FX is kind of a problem for you guys and a lot of companies, but a little surprising to us that, I guess with all the recessionary fears and such, are you guys seeing any slow down or caution especially in parts of Europe and such with your clients or has at least through October so far have those trends still held up and been pretty stable and healthy?

Yes, as you know Europe for us is primarily UK but also Spain is where we participate. And while inflation is a challenge, they're still working, right? And so we really haven't seen any meaningful change in what's happening with our customers. Everyone is worried about inflation, but when you've got people working, they're generally going to pay their bills, they are also going to spend money and they operate. And as you saw from our comments, our UK business, which is most of Europe, had a very good quarter. I think it was up 7%. So no, we haven't seen it yet, even with all the inflation fears.

Got it. It's helpful. Thanks guys.

Thank you. Our next question is come from the line of Kelsey Zook [ph] with Autonomous Research. Please proceed with your questions.

Hey, Mark. Hey John. For EWS for this quarter, when I look at non-mortgage Verifier revenue, it seems to be down a little bit sequentially. Can you just help us understand a little bit in terms of what's going on there? Is it the consumer lining keys? Is it talent or government or other verticals?

Yes, so EWS non-mortgage in Verifier, but broadly right, was very strong, right? So again, the growth rates we're talking about are extremely high. We think government and talent continue to perform very, very well. What we -- if you're just looking at growth rates, obviously as you move through the year, comps get tougher because we grew very strongly in 2021. But overall, as we take a look at talent solutions, I think we grade the growth rates. Yes, they're slightly, they're slightly lower, but it also driven by comps, government very strong. I think we saw very good performance in kind of commercial in the non-mortgage finance segment, which again, was very strong. So we feel very good about the trajectory and the trend and continuing very strong non-mortgage growth rates there.

Got it. And just a quick follow up on EWS margin with the current mortgage environment. I'm trying to figure out what's sort of like a new normal for EWS margins? Should we basically be thinking about that as in line with what we've seen this quarter or even Q4, so kind of in the 49% range?

No, I said, we said in our comments, and hopefully you heard it, that we clearly expect margins at EWS to return to that 50% plus level in 2023. We view this mortgage mix as being a challenge in the third and fourth quarter. That will definitely impact their margins as well as some of the additional costs in sales and marketing and TWN contributor onboarding in the third and fourth quarter. I think we talked about 9 or is it 9 or 10 additions of new contributors, that 10 additions of new payroll processors that are adding records. There's generally some incremental costs, when those get added. And our non-mortgage growth is so high; we're having some additional sales and marketing costs in EWS. But to be clear we expect EWS margins over the long-term to be at that 50% plus rate versus where they are at this quarter and next quarter.

Thanks. Very helpful.

Thank you. Our next questions come from the line of Andrew Jeffrey with Truist Securities. Please proceed with your questions.

Hi good morning. I appreciate all the detail and color as usual guys. John, just a question for you on overall consolidated EBITDA margin progress, I think you touched on some of the potential tailwinds next year, but given the challenges, especially early in the year with mortgage, and thinking about margins being flattish maybe up a little, and that's my number, not yours, and then a bit of an improvement in 2024, it just seems like a heavy lift to get to 39% by 2025. Is there a step function that we need to be thinking about? I'm just trying to understand that?

John, you should jump in. But remember, a big piece of that path to 39 is the cloud transformation completion. And we get some meaningful impact on cost takeout, and we telegraph before and every quarter we talk about it that roughly half of that lift from our margins last year to the 39 is from cloud execution. And that's in our hands, so we know how to do it. It's not economic related. We're going to, whether the economy's up, down or sideways, we're going to complete the cloud and that plugs in. You've got Workforce Solutions growing faster than the rest of Equifax, at their 50% plus EBITDA margins, that equates in margin between now and 2025. You've also got our new product rollouts, our non-mortgage growth that we expect to deliver is also going to deliver margin expansion over that timeframe.

Yes. But as we get to 2025 and the framework even we laid out last November, right? We indicated we expect the markets that we're in to be somewhat normal. So we were expecting kind of a normal non-mortgage market, and we're expecting the mortgage market itself to move back toward more normal levels, right? So a big part of in addition to the cost takeout related to tech transformation, which Mark already referenced, a big part of the mortgage increase is related to that revenue growth. And clearly we do need, in order to deliver those levels, we do need to see some recovery in the mortgage market and moving, having it move back toward more normal, and then obviously some normal non-mortgage markets. And given the fact that we're performing so well in non-mortgage growth, it gives us comfort that we have a path there to that $7 billion. But we do need to see some recovery in some of the markets we're serving, particularly mortgage.

Okay. Now I get that. That's helpful, thank you. And then Mark, your comments in USIS about mortgage shopping being a tailwind, I appreciate that. I just wonder as rates really have blown out here in the 10 years yield is up again today, remarkably how long can that persist? Does there just come a point where rates and accordingly housing affordability reaches a level where you're just not going to see that kind of behavior? And is that something you're contemplating as you think about the ultimate 2023 guidance you offer us?

It's not, it's just, our view is, and what we've seen and we continue to see it, is that at these higher rates consumers just spend more time shopping around and when they do that shopping USIS benefits from that credit poll that happens in the shopping process and we do not expect that to change. I think your question maybe is a little bit different around, at these high rates, are people going to still buy houses, and at these high rates are people still going to do some level of refis? Which there's some, it's obviously down a bunch, but it’s more cash out refis to access, the multi-trillion dollars of untapped home equity in the U.S. And as the mortgage market doesn't disappear. It certainly declined further and more rapidly than, we've expected. As you know, we've been -- revised our mortgage guidance three times this year because we didn't, we couldn't forecast where the Fed was going to take these rates, and I don't think anybody can except higher from where they are now. We're actually getting better at forecasting out a couple of months, meaning inside the quarter. But as you get out, past a quarter looking out with what's happening with the volatility of where rates are going, it's more challenging. So we'll certainly take all of these factors in place when we put out our 2023 guide in February and you'll have a clearer view hopefully there on what the mortgage market is going to look like. But there's no question, the mortgage market is going to bottom at some point. And it doesn't go obviously to zero. There's going to be an area where people still move, and even at this interest rates and it's happened before in the U.S., people still buy homes. So and meaning they buy homes and get mortgages. So there's that level of floor, I think we're all struggling with where it is. And, we'll have a better view, in a few months of what that looks like for 2023. And as John talked earlier, first and second quarter we're going to have tougher comps against a very strong mortgage market in first quarter this year. But as we get to third and fourth, we'll start, comping more towards what should be a floor until we get past whatever economic event we're in here.

I appreciate it. Thank you.

Thank you. Our next questions come from the line of Kevin McVeigh with Credit Suisse. Please proceed with your questions.

Great. Thanks so much. Hey, obviously lot of uncertainty on mortgage, but with the inquiry guidance in Q1, is there any way to think about what percentage of revenue mortgage could be in the first quarter, and then any way to think about how you think that will progress over the course of 2023, just as a percentage of revenue more broadly?

Yes, I think as Kevin, as we talked a few minutes ago with Andrew, we're in, that we're not doing any guidance on anything on 2023 right now. We're focused on the fourth quarter. And we'll certainly give that guidance as, when we get to likely our February fourth quarter earnings discussion.

Okay. And then Mark, you talked within EWS obviously kind of the relative outperformance is kind of record penetration system, the systems direct integration pricing. Is there any way to ring fence the contribution across each one of those? Like is it primarily the records growth that drives it, or just so we get a sense of across those five buckets, or is it kind of evenly distributed?

Yes, I wouldn't say even, but they're all important. There's not one that's disproportionate. Look, record additions are very attractive and very unique for the Workforce Solutions business because it drives revenue day two, after you add the records and as you, 16% record growth in the quarter, and we've driven records up double-digit for the last number of years, that's a certainly a positive. We take prices up every year, so that's something we'll do in January with all the verticals in Workforce and across Equifax. New products, we talked about Workforce Solutions is indexing kind of north of our 14% in a quarter and our 13% guide for the year of new product introductions. That's very attractive for workforce and we've talked in prior meetings about continuing to drive system-to-system integrations, and penetration is a big opportunity in Workforce. If you think about the credit file, it's very highly penetrated in all financial services verticals. Workforce is not even in mortgage. There's still 40 odd percent of mortgages that we don't see that are still done with paper pay stubs. We only do roughly one in 10, roughly background screens. In government you've got a $2 billion TAM and we've got a $300 million roughly business there. So there's a lot of government penetration opportunity. So you can see each of them are attractive and very valuable, which is why we have a lot of confidence in Workforce Solutions 13% to 15% long-term growth rate.

Great. Thank you.

Thank you. Our next questions come from the line of Shlomo Rosenbaum with Stifel. Please proceed with your questions.

Hi, good morning. Thank you for taking my questions. Hey, Mark can you talk a little bit about the NPIs and whether there's been any kind of change strategically about how you approach that we're seeing is, much higher NPI like 14%, but we're seeing the numbers of new products, obviously much lower than we saw last year. Is there some kind of strategy that you have in terms of less shots on goal, but more higher percentage shots of goal? Or just, is that just very year-per-year and we really can't look that much into the numbers of NPI like we used to?

No, numbers are important, obviously. I think just maybe spooling back to kind of two years ago when we really ramped up our new product resourcing. We brought in a cheap product to officer, we've got more of a cadence around it. We did that intentionally in advance of our single data fabric and in advance of our cloud capabilities because we were convinced that the cloud, which again, we still have to complete, we're well down the road and a single data fabric will allow us to bring things to market we couldn't do before. And use the example of the product we rolled out this week at the Mortgage Bankers Association of taking our telco utility cell phone data and embedding it in the credit file. That's a very sophisticated product. It's going to drive higher hit rates, higher approval rates, higher originations for our customers. And it's something that only Equifax can deliver. So that multi-data solution is a big part of our new product capabilities. The second area is really leaning more into our trended data, our historical data workforce solutions now gets what, 40% of revenue from historical records, almost 50 now. So you think about how they've changed that in the last couple of years through their new product capabilities. And think about a mortgage solution that shows historical income data on a consumer back a year, two years, three years, four years. That helps in the underwriting process. We sell that at a higher price point. Think about in the talent vertical, a history of job employment that's required. As, we have 500 million and I think 560 million total records now in the TWN database and that's, well over five and a half jobs on the average American, so that multi data…

And just to clarification, the almost 50% I quoted is a verifier revenue.

Yes. From a historical

Just to clarify then, I understand it's important. What I'm just trying to understand is the difference between the 14% and the amount of record of NPI that's coming in, that that's kind of the block -- I’m used to get it.

Sure. You use the term shots on goal, or do you want to have more shots that go in or more shots on goal and, we want both, right? So you have a bell curve with any new product portfolio you put in place, you're going to have, some products that are, screaming winners, that really hit the mark with our customers and some that are less successful. And then there's also maturity cycle to them, as I mentioned, we'll roll out products in the second half of this year that, won't deliver any revenue in 2022 but they'll start maturing in 2023, 2024, 2025 that's really what you have from a cycle standpoint. So to answer your specific question, we're looking to have more and obviously having more that deliver rajthat deliver larger revenue, and I think we're just getting better at that. Primarily because we're really being quite deliberate around collaborating with our customers. Instead of creating a product we think the market wants, we're creating a product that we know a customer wants because we're collaborating with them. And then once it works with one customer or two, then we productize it to take it out to the rest of our customer base.

No, so the conversion you're talking about, so part of, as part of transformation as you said removing financial systems to the cloud as well, and the major movement of financial systems, including billing systems, actually runs through October, right? Little bit in November. So some of the level of elevated DSOs we saw in the second quarter did continue into the third quarter. It's related to those transac to that system migration. And we expect to see substantial improvement as we move through the fourth quarter.

Great. Thank you.

Thank you. Our next questions come from the line of Craig Huber with Huber Research Partners. Please proceed with your question.

Yes. Hi, good morning. My first question, did your Appriss acquisition, can you maybe just tell us how the integration has been going here in the last year and I'd be curious what the pro forma organic year-over-year revenue growth was in the third quarter for the acquisition and what was it maybe for the 12-month period too? Do you have that?

Yes, so the Appriss Insights acquisition, as is our incarceration data business. We're really pleased. We bought it really just a year ago, so it's 12 months in. And the integration's progressing very positively. We talked about, some of the joint solutions that we're already bringing to market, putting their data into our total verified data hub. And we've got new products, in the pipeline, both on enhancing their solutions with their data, but also combining their data with some of the other data that's used either in the talent or in the government verticals to deliver a single pole with either employment data plus the incarceration data or employment education and incarceration. So we've seen really positive opportunities there. And as far as growth rates, it was growing, kind of mid teams when we bought it, and it still is, we're very pleased with the growth of the business.

Okay, great. My other question is, you've talked on this call in prior ones at the health of the U.S. consumer being quite strong versus pre-pandemic 2019 levels. I'm curious, are you saying that you, with all the data you look at that it's not materially getting worse versus three and six months ago, the U.S. consumer?

Absolutely not. No. There's still strong and there really hasn't been a change in 2022 about, around the consumer. As you know, employment has, unemployment has gone down and employment has gone up, you know, since the beginning of the year. So that's good for consumers. Wage growth is up, which is good for consumers, and that helps their balance sheet. Obviously, inflation's a bad guy, and it is hurting, lots of consumers. But even with inflation, consumers are still out there spending and traveling and doing all the things that they do in their lives. So the credit scores are up 15 points from 2019 that hasn't really changed. They're in good shape. You really have to watch employment and unemployment, that's where things generally change with a consumer. Obviously inflation is challenging particularly for, the kind of the lower income demographic, but the rest of the population is doing okay.

Great. Thanks a lot.

Thank you. Our next questions come from the line of Andrew Nicholas with William Blair. Please proceed with your questions.

Thanks. Good morning. In the international business, how much of the recent strength would you attribute to share gains versus end market strength at the country level? And to what extent would you say the cloud transformation is already paying dividends in terms of growth and Vitality Index there?

Yes so this, I would add a couple things to the list. I wouldn't call it, obviously end market in 2022 is stronger than 2021 as they, the international markets came out of the pandemic earlier this year. But the end markets aren't -- like in Latin America the end markets are always strong just because the underlying growth there. But I wouldn't say there's been a change in the end markets. Our team is executing well. So there is some commercial strength there. New products are a big deal, as far as bringing new solutions, new products to market. For example, we're bringing our count identity and fraud solutions to a lot of our international markets, so we're starting to get some traction there, which is helping our international platforms. Cloud isn't really a benefit to them yet. They're further behind the North America intentionally in cloud, with the exception of Canada. So their cloud benefits are really going to be more in 2023 and actually more in 2024 as they complete the cloud. What would you add to international John?

Just in debt management? I mean, they're growing very fast, right? I don't know if you would call that share or not, right? But what it is, we have certain large customers that we have very high positions with that are growing very fast, right? And principally the UK Government, so that's driving a nice piece of growth obviously in UK.

That's helpful. Thank you. And then for my followup John, maybe a question for you, just a quick clean up item. Corporate expenses tick down pretty significantly on a sequential basis. Could you speak to the driver there and how sustainable kind of that, that new level is? It's obviously ticked down quite a bit here, a couple quarters in a row. Just want to make sure I understand the dynamics driving that. Thank you.

Yes. So if you're just doing sequential third versus second, right? The big drivers were corporate technology spend and also tech transformation spend. Some of that was just good cost management. Some of that is around tech transformation. And that can move between BUs in corporate and we saw some of that in the third quarter, as projects complete in corporate or teams move between Corp and the BUs, you can see expenses come down in corporate. We had a little bit of that in the third quarter. We also saw some good cost management and some sequential declines across corporate expenses in general. And we did see some lower expenses specifically related to compensation and variable compensation broadly because we took the year down. So I'd say those were the big drivers. I think we expect to be at lower levels of expense than last year substantially, right? And which you've seen all this year probably in the fourth quarter you're going to see some of those expenses tick back up again because we'd expect to see some more investment in technology and corporate technology. So some of the benefit we got in the third quarter we'll give back because we're spending up, we’re spending more on transformation. So for example, Shlomo’s question around financial system transformation, some of that's occurring in the fourth quarter. So hope that helps.

It does. Thank you very much.

Thank you. Our next questions come from the line of Jeff Meuler with Baird. Please proceed with your questions.

Yes, thank you. Good morning. Mark, any additional perspective you can provide on what you're hearing from customers on the pre-screen and marketing activities starting to pull back, just given the health of the consumer at this point and bank balance sheet health. So we just love to kind of like square those two points.

Yes, as I said earlier, Jeff broadly the consumers unchanged from second quarter. And so our bank balance sheets are very strong. So there's no change there, so don't take, whatever you heard earlier is, some message around that. We're seeing big pullbacks. What I will tell you is every time I meet in the C-suite or with CROs we're all talking about, because we all watch CNBC, we all watch what's happening with inflation. We all see what's happening with interest rates of, when will it have an effect on consumers, and when will it have effect on ability to pay and delinquencies. And again, my view of someone who's been around financial services for, multi decades, it all starts with employment. And that's the indicator that we watch, I watch. And then after that is delinquencies. But we're seeing it still a strong job market. I think there's not quite two, but there is 1.7 jobs open for anyone who's out of a job now, something like that, so it's still very vibrant and, we don't see indications of what I would call pullback, but everyone's watching it. It's clearly a conversation in every meeting.

Got it. Appreciate the perspective. And then within TWN 16% records growth is great, as you said, way above the long term framework to drive a really good growth model. But growth accelerated year-over-year, the comp doesn't look tougher. Sequential growth seemed just okay, considering you're still onboarding partners and non-farm payrolls are growing. So any perspective on that figure and if you can confirm if there was any partner record attrition? Thanks.

Yes. There's some levels, it's very de-minimus of what I would call churn inside of the records, but they're obviously, they're generally growing when you're up 16%, so there's, it's not something that we see and there is, obviously a change, some changes in employment with some of our partners. As you go through the year, there's a seasonality as you might imagine, where there's hiring and some industries think about retail warehouse, related to the holiday season that we see in increased employment, which in results at increased records for us you know, call it in the second half of the year. And then a change in the first half of the year when some of that, comes some of that holiday hiring, comes out of the system. But broadly, we are seeing, obviously it's 16% strong record growth inside of the TWN set.

I'd say it's generally true that we're seeing it's actually been a very good year, both in terms of signing new partners, but also direct contributors, right? So I think we, we feel like in terms of the execution of the team on building new contributors, it's really been an outstanding year.

Yep, got it. Thank you.

Thanks.

Thank you. Our next questions come from the line of David Togut with Evercore ISI. Please proceed with your questions.

Thank you and good morning. Just bridging to some of the earlier questions on revenue, but focusing specifically on EWS, if we take your fourth quarter 2022 revenue growth guide of down at least 3% and kind of think through your commentary on Q1 mortgage credit inquiries being down, 50% or so year-over-year, how should we think about the starting point for EWS revenue in 2023?

Yes, again, we don't want to get into 2023 guidance. We gave you our fourth quarter guidance; it’s too early to talk about 2023. And I think we talked about, obviously mortgage in for sure in the first half will be a challenge, because of the strong mortgage market in the first quarter last year. But we, in some of the previous questions, talked a bunch about, what are the positives if you will, having the non-mortgage total growth of 20 and organic growth of 13, that's momentum coming out of 2022 into 2023. That, is obviously going to be important to us. We talked about the fact we do pricing actions typically on 11 so that's going to be a positive, for us in 2023. The new products, we talked about the acquisition synergies and growth, going into 2023. What else would you add, John?

Yes, we covered pretty good list in the earlier question. I think it's a pretty good list, right? So specific to EWS and specific to verifier, records growth was obviously outstanding so far this year.

Well, 16% records growth carries through till.

Absolutely.

Next year and I think we talked about 10 new partners being signed up three in the quarter. Those won't go online in the fourth quarter. Those will be additions. That'll happen in 2023 that'll drive records. And of course we're out there, working to add more records that will help EWS.

Understood. Just as my follow up the 38% organic non-mortgage growth at Workforce Solutions and Q4 talent up 50% organic, government up 44% organic. How should we think about the runway for growth for both talent and government in 2023? Are these types of growth rates sustainable or have they peaked?

Yes, we're not giving growth rate, outlook for 2023. That's not the intention of this meeting yet. But when you think about those two verticals, I talked about it earlier. You think about talent as a $5 billion Tam where we have a ton of penetration opportunity, right? because we're only doing one in 10 or two in 10 background screens. So that's a opportunity there. And then in the government, very similar government that's about a $2 billion TAM for that kind of verification of income and employment in some cases. And we've got $300 million business. So there's a lot of growth potential there. And add on top of it, kind of the core workforce solutions, growth levers outside of penetration, of adding more records is going to drive hit rates in both businesses. Whether it's for background screening or government social services, you add in our new products pricing changes that we're going to do early in the year system, system integrations drive revenue for us in both of those verticals. So those are the kind of growth levers the team's going to work on. And is in flight on as well as the momentum that we have coming out of the year, which is quite strong.

Over the longer term we have a 13% to 15% long term growth rate. So obviously the growth rates we're delivering today in those specific verticals are well above that. So we would expect over time, we're going to have very good performance in those verticals, but growth rates over time, we would expect in general and non-mortgage, are going to converge more down toward our long term model.

Understood. Thank you.

Thank you. Our next questions come from the line and Toni Kaplan with Morgan Stanley. Please proceed with your questions.

Thanks very much. Just looking ahead, how should we be thinking about your ability to pass on price increases in EWS versus prior years if we do have an economic slowdown, like does that impact pricing? Do you temper, what you're trying to push through? And just maybe if you could ground us on how we should be thinking about like a normal pricing baseline for EWS for price increase?

Yes, we don't see any real change in not only EWS, but across Equifax about what we're going to do in price in 2023. And like, it's already happening, so it's not going to, we're already in flight talking to customers about what our plans are around price for 2023, because most of the pricing goes into effect 11. Workforces, is a very unique solution that delivers, really unique value to our customers. So we have more pricing, power there or flexibility. But we're always balanced about, price, whether it's a, good or bad economic times. But I would say broadly, we don't think about pricing being different. If there's an economic event, and again, there's an economic event hasn't happened yet, the outside of the mortgage macro, the economy's quite good. Our non-mortgage business is very strong. Our customers are strong, the consumers are strong. So, we're kind of doing what we, I would characterize as kind of a normal process in January.

Great. And then you've talked for some time now about getting the gig and pensioner records. Have you been having success in getting those and is there a different process for, getting gig records versus W2 records? Are they harder to get? Because it's more maybe fragmented outside of ride sharing just what, how is the update on the process and how your success is and how different it is? Thanks.

Yes, there's still a bunch of runway in W2, which you heard and we're penetrating that which is, most of our records today are W2. So that 16% growth is primarily in that set, and there's still, another 40 million, 50 million records to get there. And then if you go to gig, it is more dispersed and we've got a number of strategies underway to go after those records, which are equally valuable. And we've got some traction around pensioner records. As I mentioned, we've signed a big partner to bring some records in. We're also getting records directly from large kind of legacy companies that do their own pension or payroll processing or pension or payment processing. So we're working on all those avenues and we've got dedicated teams on them and we're, our expectation is to continue to add records from all three areas, as we move through the fourth quarter and into 2023 and beyond. And what's energizing for us is the opportunity to still double the data set, it 111 million uniques and call it 210 million or thereabouts total employed or pension payment recipients in the United States. We got a long runway to add new records to the TWN data set. And again I mentioned this a couple times, I know it's not lost on you Toni, that we're already getting inquiries on those, right? So we get inquiries on the half of the records we don't have. So it's just a matter of adding them to drive our revenue growth.

Perfect. Thanks.

Thank you. Our next questions come from the line of Simon Clinch with Atlantic Equities. Please proceed with your questions.

Hi. I just wonder if I could just go back to the verification services revenue and something I've been sort of tracking has been some non-mortgage revenues on a sort of per average record basis. And since the pandemic that's just been moving up steadily pretty much every quarter since, and it's ticked down for the first time. And I was wondering, is there anything in particular about, in terms of that kind of structural opportunity or a revenue per record basis going forward, if we, you, should it be capped out at any particular time or is there anything we should read into that?

Yes, no we've been growing revenue per record quite meaningfully again the way you should think about it and the way it's, the way we think about it is, as we get into new verticals, like talent and government, or even as I would characterize, cards and as a newer vertical autos under penetrated, all of those verticals as we add those new revenue sources, the records become more valuable, right? Because we're, monetizing that same record multiple times when someone applies for a mortgage and then a credit card and then an auto loan or a P loan, and then they apply for a new job, or then they have to get government social services. You've got multiple avenues to monetize that record. So it's part of the power of the business.

The only thing I'd add, right, and the Simon right, is that the obviously the different verticals we have very different price points and very different product structures. So you can see mix changes in any give given period when you're taking a look at transactions and records and revenue. But, so just make sure you keep that in mind as you're running your analytics.

I understood. Okay. Thank you. And just as a follow up we talked a lot about how the mortgage revenues declines are really impacting margins, very high incremental margin. I just wanted to just confirm again that should mortgages ever rebound, should we just assume that it carries that kind of 80% incremental margin on the way up as well? Is there any reason not to assume that? And then longer term is there any reason why the non-mortgage revenues shouldn't carry the same kind of incremental margins as the mortgage business does today?

So are you specifically talking about verifier?

Yes. Sorry in verifier.

Okay. Yes, so variable margins with the contribution margins for mortgage obviously yes going in, coming out should be very similar. Whether or not we reinvest some of the incremental profit generated would be a different discussion, right? But they certainly should be similar in terms of the contribution margin of both. Generally speaking, the margins across Verifier are similar. They can be somewhat different depending on the relative price point and the volumes relative to the price point. So you can see some higher cost for different kind of to your earlier question. But broadly speaking yes, the margins for the products across verification services are relatively similar.

Okay. It's just a question of reinvestment at 5G. Okay. Thank you.

Thank you. And our next questions come from the line of Seth Weber with Wells Fargo. Please proceed with your questions.

Hi, good morning guys. Just I just wanted to ask about this sequential improvement in USIS EBITDA margin that you guys are forecasting for the fourth quarter. It looks like revenue is a kind of flattish sequentially. Is that just some of the sales and marketing expenses are going out or it doesn't seem like mix is really changing a lot, so just if there's any color on the 200 basis points of uptick 3Q to 4Q?

Yes, so sequentially generally we see a little bit of an uptick. Certainly, we definitely see an uptick in non-mortgage revenue generally in USIS from the fourth quarter. So we'd expect to see some of that and it tends to draw very high variable margins, so and given that we expect to see a little more leverage on some of the OpEx. That's all.

Okay. I mean, I'm just trying to understand, over the last prior to the second quarter, the business was sort of high 30% margin. So I'm just trying to think through if there was any reason why you wouldn't get back to that level, relatively quickly next year. It sounds like you're moving back in that direction?

Relatively quickly, yes obviously the mortgage market decline is weighed on that.

Very heavily. Right. So obviously as we get into 2023, we'll give you a better view as to what we expect 2023 USIS margins to do.

Right. Okay and then just quick clarification, you guys talked about a couple times, you referenced M&A synergies expected over the next couple years. Is that revenue synergies or expense synergies or both, or just how should we think about that?

Both yes when we do these bolt-on acquisitions, part of our strategy is to bring in, unique data assets that we can combine with other Equifax data assets in order to drive, new solutions to market. And that generally takes time. We got to integrate the business, integrate their data set into our single data fabric, and that usually takes call a year and change. And then we can start bringing those to market and then those drive the top line and the bottom line.

Got it. Okay, thank you guys. I appreciate it.

Thank you. Our next questions come from the line of Faiza Alwy with Deutsche Bank. Please proceed with your questions.

Yes. Hi, good morning. Thank you. I just, I wanted to talk about EWS margins again, and I'm curious, when you first gave the margins earlier this year, I think you talked about 54%. And just want to understand, is the deceleration from that to where we are today entirely mortgage related, or is there anything else in the underlying business that's – that has impacted that change?

Yes, the biggest driver and margin degradation by far is the impact on revenue and the very high variable margins we get for mortgage. So that's the biggest driver, right. We have talked about some increased expenses. We talked about some marketing investments and things we're making this year to drive NPI, which have been very successful. But generally overall the biggest driver in the movement is, has been related to the reduction in revenue related to mortgage.

Okay. Got it. And then just as we think about those margins, I appreciate, I know you're not providing 2023 guidance, but I appreciate you giving us a EWS margin outlook of about 50%. I'm curious if you can give us just not numbers, but just holistic thoughts around how we should think about the, I guess the quarterly cadence. I mean, I'm thinking we should build through the course of the year. Is there anything you can say about 1Q margin, which is given that you did provide an outlook for mortgage inquiries for the first quarter?

Yes. We're not ready to talk about 2023 guidance. We did want to make, clear that first quarter's going to have a tough comparison given the fourth quarter exit and the strength in the first quarter last year. And then at EWS you said about 50%, we actually said over 50%, just to be accurate. But yes, we'll be ready to give 2023 guidance, when we get into 2023.

Perfect. Thank you.

Thank you. Our next questions come from the line of George Tong with Goldman Sachs. Please proceed with your questions.

Hi, thanks. Good morning. You mentioned that non-mortgage growth in 4Q will be strong, but not as strong as 3Q. Can you discuss data points that you're seeing in the bank card and auto lending sectors that suggest an incremental moderation in strength in those categories?

I don't know if you were listening, George, but we got that question from, earlier that we're not seeing any change the non-mortgage growth rates that we're talking about are very, very high. And we expect them to, still be very strong in the fourth quarter.

And look, and we did give a view of international in the fourth quarter, international was outstanding in the third quarter, still going to be very strong in the fourth quarter, but its growth rate is somewhat lower and obviously international their revenue is virtually all non-mortgage.

Okay, Got it. As you look at the mortgage category certainly there was a significant amount of refinancing activity that was pulled forward into 2020 and 2021. To what extent does this pull forward structurally lower the medium term mortgage revenue growth outlook for Equifax?

Obviously we're seeing the impacts of that right now, since refinances has dried up predominantly, Right. So what's left is just cash out refis, and we're actually now starting to see substantial growth in HELOC’s, right, replacing even some of the cash out refis. So I think we're living through the, obviously the impact of that dramatic reduction in refinance right now. We gave a view of first quarter mortgage, but again in terms of giving a view as we go forward, which is kind of for us, 2023 would be midterm. It's just a little bit earlier, unfortunately you're just going to have to wait until we get into the first quarter and be for us to give our 2023 guidance.

Yes, well it really wasn't a 2023 question. More like a medium term, longer term questions since you've in the past, given longer term guidance targets before.

I don't know what you mean by medium term, longer term, do we expect the mortgage market over the long term to return to a more normal level? Absolutely. No question about it. Is that what you mean?

Well, medium term, so I guess over the next two to three years or two to four years

What's going to happen with the economy in the first year or two of that cycle? And then at the tail end that you said two to four, you get out to four years, it would, my expectation is you'd get back to a more normal level. But I don't know what's going to happen with the economy. I don't think you do either, George.

Got it, okay. Helpful, thank you.

Thank you. Our next questions come from the line of Heather Balsky with Bank of America. Please proceed with your questions.

Hi, thank you for taking my question. I wanted to just clarify well, I want two questions. One, I wanted to clarify the benefit you see next year from the cloud transformation. You said half the 500 basis points, so is that a gross or net 250 basis point benefit flowing through? And also, does that include sort of rolling off some of the, the additional costs? Is that just savings or is that also rolling off the costs from the implementation? And then the other question totally separate, but just on the talent solution side, you talked about sort of the white space there, just sort of what can get you further penetrated in the background check industry? Thanks.

So on transformation that would, the savings are related to all costs related to transformation, both the lower COGS as well as the lower investment levels. And then also they're going to be more backend loaded than front end loaded, right? Because the, you get the savings as all customers migrate, and you can actually decommission systems. So we'll start getting savings in 2023, as we said, and we feel good that's just going to happen. But the bigger savings happen is you get into 2024 and 2025. So you should think about that type of a cadence. What was your second question again, Heather? Sorry.

Just on the cloud transformation the 250 basis points, is that the flow through this year or into next year?

No, I think, as John said and we've said consistently, not only in this call and prior calls, the 250 is really between 2022 and 2025, and it's that path, the 39% EBITDA margins in 2025. That's our goal. That happens over 2023, 2024 and 2025, that's not a 2023 change.

And I think, and more of that would be backend loaded, as I just said, right? Because it happens as systems actually decommission. So we'll see some in 2023 yes, but you're just going to see more of it in 2024 and 2025.

Thank you very much.

Thank you. Our next questions come from the line of Surinder Thind with Jefferies. Please proceed with your questions.

Good morning. I'd like to start a question regarding your long term framework. Can you maybe talk about, is that intended to be like a rolling three year measurement period or like a five year period? And then maybe when we think about something like EWS non-mortgage, which continues to grow well above that framework, how often do you revisit the framework such as that and maybe some of the factors that underpin it? Like for example, at some point, whether its three years, five years out the W2 records within the TWN database will mature. So how do we think about some of those longer term drivers of the business?

Yes, I think we put this in place a year ago and I believe that was the first change in Equifax's long term framework in like five or six years at least or maybe longer. The old framework was 7 to 10. We moved to 8 to 12, 100 basis points on the low end and 200 on the high end. It was intended to be a long term framework, and we could all talk about long term, but let's say five years plus, meaning we expect the company to grow, in that range, short of economic events. Those are, something you can't put in a long-term framework. But 8% to 12% growth for workforce in particular inside of the 8 to 12, and we talked about this already this morning. We have an expectation of them growing 13 to 15. That's their long term framework inside of our eight to 12, meaning they're going to be highly accretive and grow faster than the rest of Equifax. That's something that we expect as you point out, they've been outgrowing that 13 to 15, which sits inside of our eight to 12, which is good news in our eyes. That gives us confidence in the 13 to 15 over the long term. And of course, the 13 to 15 is made up of record editions. It's made up of new product rollouts. It's made up of penetration. And they've got uniquely a lot of penetration opportunities in all of their verticals because, our income and employment data is still a fairly new data asset. In the scheme of data assets, the credit file's been around for 70 years. Income and employment data has been around in a digitized way only for 15. So we've got a lot of confidence, in the 13 to 15 for workforce because of all of their growth levers, but also because they've been outgrowing that 13 to 15 for the last three or four years. And your question, I think you also asked the question about when will we revisit this? It's just, it's actually not even 12 months old. Our Investor Day was, I think on November 7th last year, so we're very confident and comfortable with what it is today after almost 12 months. And, at the right time if things change, we would look at it again. But we see no reason to change it and we still have a lot of confidence in it.

That's helpful. And then maybe as a follow on, when we think about the contribution of new products to revenues as measured by the vitality index, so is that intended to be all growth on top of the existing revenue base, or is there some cannibalization of revenues that we need to consider or the, maybe the play between the two? How should we think about the actual measurement of that and what it means from a modeling perspective?

Yes. I think in the, in our long term framework John, we talked about new products in November last year, adding one to two points.

Yes. You said vitality 10% so that’s three year, right?

And that translated into, that was one of the drivers of us bringing up our long term growth rate from seven to 10 to eight to 12 was the increased new product rollouts, is going to be a factor of that change in our long-term growth rate and then add to it workforce solutions growing faster than the rest of Equifax at, approaching 50% of Equifax that's accretive to that growth rate if they're growing 13 to 15. And then the average for our long term is eight to 12. That's accretive. And then we believe the cloud completion and cloud competitiveness also is a factor in that change from seven to 10 to eight to 12. I don’t know if that's helpful.

And our vitality index is supposed to represent truly new products, right? I mean, certainly even new products can cannibalize an existing product, but they're not supposed to be tweaks, right? We don't tweak a product and call it a new product. It needs to be a product that's substantially different or substantially new to Equifax.

So this would be clients generally buying these on top of whatever existing products they're buying.

Yes, there's clearly that it'll replace, some products, but they're generally, as John pointed out unique additions, and use the example I shared this morning of, the mortgage credit file that we've been delivering to the marketplace for 70 years in some fashion. We rolled out a new solution that's going to be our file plus this telco utility, cell phone data that's going to differentiate our mortgage credit file. That's a new product. Some customers will only buy the new product. Some will continue to buy just the credit file. That's really, so there is there some cannibalization could be, but there's also should be, we expect share gain, meaning our credit files more valuable than our competitor's credit file because the addition of that unique data to it.

That’s very helpful. Thank you.

Thank you. There are no further questions at this time. I’d now like to turn the call back over to Trevor Burns for any closing comments.

Thanks everybody for your time today. If you have any follow-up questions feel free to reach out. Thank you.

Thank you. This does conclude today’s teleconference. We appreciate your participations. You may disconnect your lines at this time. Enjoy the rest of your day.