Equifax, Incorporated

Digital transformation and innovation · Digital transformation and modernization

Our transition to cloud-based technologies could expose us to operational disruptions. As part of our technology transformation strategy, we are upgrading a significant portion of the information technology systems used to operate our business and replacing them with cloud-based solutions. This transition will continue to require substantial changes to our software and network infrastructure, which could lead to system interruptions, affect our data systems and further expose us to operational disruptions.

Digital transformation and innovation · Technology obsolescence and evolution

If we do not introduce successful new products, services and analytical capabilities in a timely manner, or if the market does not adopt our new services, or if new technologies are introduced by competitors that are more effective or at lower costs than ours, our competitiveness and operating results will suffer. Without the timely introduction of new technologies, products, services and enhancements, our products and services will become technologically or commercially obsolete over time.

Technology infrastructure · Cloud services and data center operations

If our systems do not meet customer requirements for response time or high availability, or we experience system constraints or failures, or our customers do not migrate to the cloud or modify and/or upgrade their systems to accept new releases of our products and services, our services to our customers could be delayed or interrupted, which could result in lost revenues or customers, lower margins, service level penalties or other harm to our business and reputation.

Digital transformation and innovation · Technology implementation and upgrades

We expect our technology transformation strategy, including our transition to cloud-based technologies, will significantly increase our efficiency, our productivity, and the stability and functionality of our products and services. This initiative is a major undertaking as we replace many of our previous operating systems with cloud-based systems. This complex, multifaceted and extensive initiative is expensive and has caused, and may cause in the future, unanticipated problems and expenses.

Information management · Data quality and integrity

Our customers' decisioning may be adversely affected if we provide inaccurate or unreliable data, which could adversely affect our financial condition, cause loss of customer trust and contribute to non-compliance with certain laws and regulations. Data accuracy is an essential component of data quality and is the foundation of our business model. We have experienced data accuracy issues, including errors in connection with our technology transformation.

Cybersecurity and data protection · Data breaches and cyber attacks

Security breaches and other disruptions to our information technology infrastructure could compromise Company, consumer and customer information, interfere with our operations, cause us to incur significant costs for remediation and enhancement of our IT systems and expose us to legal liability. In 2017, we experienced a cybersecurity incident following a criminal attack on our systems that involved the theft of personal information of U.S., Canadian and U.K. consumers.

Market and investment · Investment portfolio performance

Our retirement and post-retirement pension plans are subject to financial market risks that could adversely affect our future results of operations and cash flows. We have significant retirement and post-retirement pension plan assets and obligations. The performance of the financial markets and interest rates impact our plan expenses, expected returns, and funding obligations. Significant decreases in interest rates, decreases in the fair value of plan assets and investment losses on plan assets will increase our funding obligations.

International and currency · International operations and emerging markets

Sales outside the U.S. comprised 22% of our total revenue in 2022. Our business is subject to various risks associated with doing business internationally including changes in specific country or region political, economic or other conditions, trade protection measures, data privacy and consumer protection laws and regulations, geopolitical instability, including terrorism and war, including the Russia-Ukraine war, and foreign currency changes.

Capital structure and performance · Credit rating and cost of capital

A downgrade in our credit ratings could increase our cost of borrowing under our credit facilities and have an adverse effect on our ability to access the capital markets. A downgrade in our credit ratings would increase the cost of borrowings under our commercial paper program, $1.5 billion revolving credit facility and $700.0 million delayed draw term loan, and could limit or, in the case of a significant downgrade, preclude our ability to issue commercial paper.

International and currency · Foreign exchange and currency exposure

We earn revenue, pay expenses, own assets and incur liabilities in countries using currencies other than the U.S. dollar. Because our consolidated financial statements are presented in U.S. dollars, we must translate revenue, income and expenses, as well as assets and liabilities, into U.S. dollars at exchange rates in effect during or at the end of each reporting period. Fluctuations in foreign currency exchange rates, particularly the strengthening of the U.S. dollar against major currencies, may materially affect our consolidated financial results.

Reputation and brand · Esg environmental social governance performance

Our reputation and/or business could be negatively impacted by ESG matters and/or our reporting of such matters. In 2021, we announced our commitment to reach net-zero greenhouse gas emissions by 2040, the achievement of which relies, in large part, on the accuracy of our estimates and assumptions around the availability and cost of low- or non-carbon based energy sources and technologies. We could fail to achieve, or be perceived to fail to achieve, our net zero 2040 commitment or other ESG-related initiatives, goals or commitments.

Customer and revenue · Customer concentration and key customer dependence

We have long-standing relationships with a number of our customers, many of whom could unilaterally terminate their relationship with us or materially reduce the amount of business they conduct with us at any time. Many of our material customer agreements can be terminated by the customer for convenience on limited advance written notice. The loss of one or more of our major customers or business partners could adversely affect our business, financial condition and results of operations.

Strategic execution · Merger acquisition and divestiture risks

We rely, in part, on acquisitions, joint ventures and other alliances to grow our business and expand our geographic reach. The acquisition, integration or divestiture of businesses by us may not produce the expected financial or operating results or IT and data security profile we expect. IT and data security profiles of acquired companies may not meet our technological standards and may take longer to integrate and remediate than planned.

Market position and competition · Competitive pressure and market share loss

We operate in a number of geographic, product and service markets that are highly competitive. Competitors may develop products and services that are superior to or that achieve greater market acceptance than our products and services. Some of our competitors may have significantly greater financial, technical, marketing or other resources than we do in one or more of our market segments, or overall.

Data and privacy · Data protection and privacy laws

We are subject to a number of U.S. federal, state, local and foreign laws and regulations relating to consumer privacy, cybersecurity, data and financial protection. These regulations are complex, change frequently, have tended to become more stringent over time. Examples of such new and evolving laws and regulations include amendments to the FCRA, the CCPA which took effect on January 1, 2020, the CPRA taking effect on January 1, 2023 and privacy laws in Virginia, Colorado, Connecticut and Utah which have taken, or will take effect, in 2023.

Industry regulation · Professional standards and certifications

If we fail to achieve and maintain key industry or technical certifications, our customers and business partners may stop doing business with us and we may not be able to win new business, which would negatively affect our revenue. As a result of the 2017 cybersecurity incident, we lost certain key certifications which caused certain customers and business partners to stop or pause doing business with us.

Legal and litigation · Intellectual property disputes

Third parties may claim that we are infringing on their intellectual property and we could suffer significant litigation or licensing expenses or be prevented from selling products or services. A claim of intellectual property infringement could force us to enter into a costly or restrictive license agreement, which might not be available under acceptable terms or at all, or could subject us to significant damages or to an injunction against development and sale of certain of our products or services.

Human capital and workforce · Key personnel dependence and succession

Our business will suffer if we are not able to retain and hire key personnel. Our future success, including our ability to implement our technology transformation strategy, depends partly on the continued service of our key development, sales, marketing, executive and administrative personnel. Increased retention risk exists in certain key areas of our operations, such as IT and data security, which require specialized skills.

Economic and market conditions · Economic recession and downturns

Our customers, and therefore our business and revenues, are sensitive to negative changes in general economic conditions, including the demand and availability of affordable credit and capital, the level and volatility of interest rates, the level of inflation, employment levels, consumer confidence and housing demand. In 2023, we expect U.S. mortgage market originations to decline by approximately 30% compared to 2022.

Natural and catastrophic events · Pandemic and public health crises

Our business has been and may continue to be negatively impacted by health epidemics, pandemics and similar outbreaks, including the COVID-19 pandemic. The COVID-19 pandemic and the mitigation efforts by governments to attempt to control its spread adversely impacted the global economy, leading to reduced consumer spending and lending activities. We experienced significant revenue declines in several of our markets as a result of COVID-19.