Equifax, Inc.

Good day and welcome to the Equifax Third Quarter 2020 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Dorian Hare. Please go ahead.

Thanks and good morning. Welcome to today's conference call. I am Dorian Hare. 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 investor relations section in the About Equifax tab of our website at www.equifax.com. During the call today, we will be making reference to certain materials that can also be found in the investor relations section of our website under Events and Presentations. These materials are labeled Q3 2020 Fairings Release Presentations. During this call, we will be making certain forward-looking statements 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 inherent in our business are set forth in filings with the SEC, including our 2019 Form 10-K and subsequent filings. Also, we'll be referring to certain non-GAAP financial measures, including adjusted EPS attributable to ECOFAC and adjusted EBITDA, which will be adjusted for certain items that affect the comparability of our underlying operational performance. Certain revenue variances referred to on this call are based on adjusted revenue from the third quarter of 2019. These non-GAAP measures are detailed in reconciliation tables, which are included with our earnings relief and are also posted on our website. Now I'd like to turn it over to Mark. Thanks, Doreen, and good morning, everyone, and thanks for joining our third quarter earnings call. Businesses and consumers around the world continue to face challenges brought on by the COVID-19 pandemic. I hope you and your families are continuing to be safe in managing this unprecedented environment. At Equifax, we continue to make the health and safety of our 11,000 employees a top priority, Turning first to the slide deck on page number four, before I cover our very strong third quarter performance, I wanted to recap our focus over the past three years to transform Equifax to drive revenue growth, margins, and cash in the future. Today we solve unique industry and vertical customer and consumer challenges through our differentiated data assets and best-in-class analytics. Most of our differentiated and most valuable data assets are twin income and employment data. We are building an industry-leading global cloud-native technology footprint enabled by best-in-class cloud-native tools that will leverage our new cloud-based single data fabric. We've taken an industry leadership position in data security by changing our culture, our technology solutions, and governance to ensure customer and consumer data is safer than it has ever been before. We're relentlessly focused on a customer-first mentality, and we have a market-leading position in 25 countries. In building a new Equifax, we are executing on our $1.5 billion cloud data and technology transformation that will move our data to a single cloud-native data fabric and move our legacy applications to the Google Cloud. We're ramping up our investments in innovation and product resources to drive new product acceleration by leveraging our cloud investments. We're strengthening our differentiated data portfolio with new unique data assets that complement our view of consumers. We're leveraging advanced analytics, our patented AI technology, and cloud data technology to deliver multi-data solutions. And we're differentiating our business portfolio by acquiring new capabilities and entering new areas of growth. Turning now to slide number five, the COVID pandemic has accelerated key market macros that are positive for Equifax and for the industry. First, in our... data-driven economy, it's clear that both deeper insights from comprehensive data sources like the U.S. Consumer Credit Database at Equifax and the use of multiple and alternative data types are critical for risk management, customer prospecting, employment verification, and an array of other activities engaged by our customers. More differentiated data was a positive macro prior to COVID-19. These economic impacts of the pandemic have only accelerated this trend around differentiated data. Differentiated data and analytics are more valuable than ever to our customers. Second, providers of credit are increasingly delivering real-time and advanced analytics that utilize artificial intelligence and machine learning to deliver incremental insights beyond core data. This trend has been accelerated during COVID, including instances where fraudsters have expanded efforts around fraud, account takeover, or activities such as loan stacking, such as loan stacking. Identity and fraud solutions are increasingly valuable. Third, consumers, especially those from the digital age, have expectations that their financial and workplace interactions function digitally. We've seen this trend towards digital accelerate in the current COVID environment as face-to-face interactions have become increasingly rare. And last, fintechs and alternative lenders are nimbly taking share of wallets from traditional financial institutions. We've seen this trend challenge somewhat in the near term due to economic pressures, including disruptions in capital flows, but we expect it will reaccelerate as we move into 2021. The Equifax team is laser-focused on delivering solutions to help our customers meet the challenging economic demands caused by the COVID-19 pandemic. Our new cloud-native data and applications are delivering integrated data solutions that we were unable to execute on in our legacy environment with unprecedented data currency and speed. We're applying advanced analytics and alternative data assets toward the creation of trended insights that can better help our customers manage in this COVID environment where the consumer credit profiles are complicated by unemployment, salary reduction, furloughs, and load accommodations. Our new cloud-based Illuminate identity and fraud platform that uses these advanced analytics, along with machine learning and data orchestration, is providing risk managers with greater insights to better manage fraud. And our solutions enable organizations across industries to adopt new realities using digital solutions to interact with their customers. Whether it's an automotive dealership looking to convert online browsers to online purchasers without stepping foot in a dealership or a credit union looking for ways to support members while operating with a reduced branch footprint, Equifax solutions help organization of all types to drive new digital interactions. The COVID recession has accelerated key market macros around the value of broader data assets and real-time decisioning that will benefit Equifax in the future. Turning to slide six, it highlights how Equifax goes beyond the standard credit report to give lenders, employers, marketers, and other service providers a fuller, more complete, 360-degree picture of a consumer's financial life to enhance decisioning. We are working with our customers to leverage the traditional credit file that lenders already rely on to understand the financial profile of candidates for loans and services. Instead of focusing only on financial activity or delinquency over the past three to six months, our trended data and analytics allow lenders to look at delinquencies over an extended period while closely monitoring indicators of financial distress, such as utilization increases and loan accommodations. We estimate that this deeper view of traditional credit records may allow nearly 4 million consumers who were recently moved down from prime and super prime credit categories due to credit policy tightening to move back up. Consumers that may be good candidates for cards or personal loans who may otherwise be overlooked as lenders execute their traditional recession playbook. Even more importantly, alternative data in the form of Equifax's unique twin income and employment information has become increasingly critical as uncertain job markets impacts underwriting, and the ability of a consumer to repay their loan. Unique data we provide helps lenders and consumers together to verify that a borrower is employed when a credit decision is made. The do-it-yourself alternative requesting hard copy employment and income verifications can lengthen process workflows and cannot be verified. We estimate that the addition of twin income and employment data into credit decisioning can move more than 7 million consumers up into prime and super prime categories so they can receive larger loans and other services with renewed lender confidence. Telco, utility, bank transaction, and commercial data are further examples of Equifax's unique and differentiated data sets. Our cloud technology transformation is delivering a single data fabric that combines our multiple databases into one environment to enable more nimble innovation, insights, and analytics, while at the same time enhancing regulatory compliance. We have an incredible appetite for new and differentiated data and we believe that more data delivers better decisions for our customers. I hope this gives you a strong sense of our broad range of strategic initiatives as we are transforming Equifax for the future. Turning now to slide seven in our third quarter financial results, Equifax continued with very strong performance again in the third quarter. I'm very encouraged by the resiliency and strength of Equifax and how our teams around the world are meeting the challenges of COVID to help our customers, partners, and consumers. We are operating more effectively and efficiently with more energy and momentum than I've seen since I joined Equifax, and I believe we'll be a stronger, more resilient organization when this global pandemic is over. During the third quarter, we saw very strong revenue performance, particularly at Workforce Solutions and USIS, with broad-based improving revenue trends resulting in strong cash generation and EBITDA margins, while we continue to make incremental investments in technology, new product innovation, and security. Revenue growth of 19% is the highest quarterly growth in our history, and we eclipsed $1 billion of quarterly revenue for the first time in Equifax's history, both huge milestones. I'll talk more in a minute about our financial results. We continue to make proactive customer collaboration a key priority in order to drive engagement, deal pipelines, and new product innovations. During the quarter and past several weeks, I've been engaged with our key customers. This is the most challenging environment they've ever faced. Broadly, data is more valuable today than ever, and our unique data assets like Twin and Advanced Analytics are critical to helping our customers navigate through this pandemic. We continue to take advantage of our strong cash generation to accelerate our cloud data technology transformation investments. Under Bryson Keller's leadership, and with the support of thousands of technology team members, we are making continued strong progress on our $1.5 billion technology transformation, and we are seeing new customers accessing our cloud-native solutions each week as our migrations accelerate. We're also continuing to expand our investments and resources around innovation and new products that are helping our customers manage today's challenging environment, but also with an eye on beyond the pandemic. Our transformation into a product-led organization focused on innovation and enabled by best-in-class cloud-native data assets and world-class technology is becoming more real every day and will power our business in 2021 and beyond. Our team's strong execution and outperformance in the third quarter is another very positive step forward for Equifax. Turning to slide eight, our financial results for the third quarter were strong and broad-based. Revenue of $1.07 billion was up 19% on a reported and local currency basis, which is well above our expectations in the framework of 10% to 12% that we shared with you in early September. M&A contributed less than 1% in the quarter. Our growth was again powered by our U.S. B2B businesses, USIS and Workforce Solutions, which had a combined revenue of up a very strong 32.5%. combined adjusted EBITDA margins of over 50%. Workforce Solutions continued their exceptional performance driven by the value of the twin database with revenues up 57% in the quarter while generating EBITDA margins of 58%. This marked Workforce Solutions' second consecutive quarter of 50% plus revenue growth, and USIS also exhibited strong revenue growth of 15%. Our strong U.S. B2B business performance continues to be powered by our focus on growth and our differentiated data assets. U.S. mortgage revenue was up almost 90% compared to the third quarter of 2019. U.S. mortgage market inquiries, our proxy for the overall mortgage market growth, were up 51% in the third quarter, driven by strength in both the new purchase and refinancing mortgage volumes. The driver of our U.S. B2B business's substantial outperformance versus the market continues to be Workforce Solutions. for the second consecutive quarter in a row. This is driven by the value that our customers place on our unique twin income and employment data, the rollout of new products, the addition of new customers, improved customer penetration, and expansion of our twin data records. U.S. mortgage revenue growth of 57% also outpaced the market by 600 basis points. Our unemployment insurance claims business grew over 70% in the quarter with revenue of $50 million. In the third quarter, Workforce Solutions processed about 3.4 million initial unemployment claims, which is down from 7.5 million initial claims in the second quarter. Workforce Solutions continues to process roughly one in five U.S. initial unemployment claims. We expect unemployment claims to continue above 2019 levels in the fourth quarter, but at a reduced level compared to the third quarter. Including the growth from unemployment claims, which we would not expect to record in 2021, Equifax revenue growth was up a very strong 17% in the third quarter and is up over 12% year-to-date. Revenue growth drove adjusted EBITDA to $391 million, up 29%, with a 270 basis point expansion in our margins to 36.6%. We prudently balanced cost controls while making targeted investments in our cloud transformation, new products, and data and analytics. Adjusted EPS at $1.87 a share was up a strong 26% despite incurring increased depreciation and amortization and incremental flag costs of $0.15 a share and increased interest expense of $0.06 per share from our second quarter bond offering. This exceeded our expectations in the framework of $1.50 to $1.60 we shared with you in September. USIS revenue of $386 million was up a very strong 15% in the third quarter, with the M&A contribution less than half a percent. Total USIS mortgage revenue of $179 million was up 57% in the quarter, as both purchase and refi transactions remained strong throughout the quarter, and better than our expectations of up about 45% from our call last month. Non-mortgage revenue also strengthened USIS sequentially in the quarter, Importantly, we saw substantial improvement in non-mortgage online revenue, which was down only 5% as compared to almost 10% decline we saw in the second quarter. We saw very good sequential improvement in banking, insurance, rental, and direct-to-consumer, with insurance turning from down double digits to up double digits in the quarter. We are starting to see signs of customers restarting origination efforts with several major FIs revenue, up versus 2019 for the first time in a pandemic, which is a positive sign for the future. In September, we saw positive growth in both insurance and direct-to-consumer, which, although still negative, we saw improvements in banking and auto, both of which had only single-digit declines. Financial marketing services revenue, which is, broadly speaking, our offline or batch business of $46 million, was down 9%, consistent with our expectations. Marketing-related revenue, which represents just under 40% of FMS, continued to be down significantly but did show some improvement as we moved through the third quarter. Risk decisioning, which includes portfolio review activities and represents about 40% of MFS revenue, was down slightly due to a large one-time project last year. And identity and fraud-related revenue, which represents about 20% of FMS, was flat. I'm very encouraged by the progress that Sid Singh and the USIS teams continue to make, especially during these challenging economic times. They are competitive commercially and on offense. We continue to see very strong new deal pipeline growth at USIS, with total pipeline value up over 30% versus last year, driven by growth in the volume and average size of our USIS pipeline opportunities. Larger deal opportunities are a very positive sign as we look to accelerate USIS revenue growth. USIS adjusted EBIT job margins of 46% were up 160 basis points from last year and up 180 basis points sequentially. The improvements both year-to-year and sequentially were driven principally by the significant growth in high-margin online revenue. Turning now to Workforce Solutions, they had another exceptional quarter with revenue of $377 million, up a very strong 57%. Year-to-date revenue is already over $1 billion. and workforce solutions. Rudy Porter and the EWS team continue to leverage broad structural growth drivers, including new products, penetration, pricing, new verticals, and record additions to fuel their above-market growth. EWS remains our most differentiated business, particularly in this unprecedented consumer environment where our twin income and employment data is immensely valuable. Verification service revenues at $301 million was up 63% versus 2019. Verification services mortgage revenue more than doubled for the second quarter in a row, growing more than 80 percentage points faster than the 51% growth we saw in the mortgage market credit inquiries in the third quarter. Verification services non-mortgage revenue was up about 4% in the quarter and slightly outperformed our expectations. Similar to the second quarter, we continue to see growth in government and health care as well as in the auto vertical as we increase penetration of twins. During the third quarter, we saw significant recovery in talent solutions, reflecting both increased U.S. hiring and the rollout of new products. Consistent with second quarter, debt management continues to be very soft. Employer services revenue of $76 million increased 37% in the quarter, driven by our unemployment claims business, which had revenue of $50 million and was up 70% compared to last year. Adjusting for the $20 million of incremental UC claims revenue in the quarter, Employer services was flat with revenue growth in I-9 and onboarding services that was driven by the acceleration of I-9 Anywhere solutions, offset by declines in our tax credit business. Transaction activity in our I-9 and onboarding products improved through the third quarter and sequentially versus the second quarter, driven by new hiring activity with our customers. Many of the large retail, shipping, and e-commerce companies utilize our I-9 onboarding products, In addition, we're seeing a positive shift to our new remote I-9 product suite with new customer wins. Strong EWS verifier revenue growth resulted in adjusted EBITDA margins in workforce solutions of 57.8%, a 900 basis point expansion from the prior year. Turning now to international, their revenue of $218 million was down 5% on a constant currency basis, a substantial improvement from the down 15% in second quarter, and better than our expectations as shelter-in-place orders were lifted in many markets and economic activity resumed. Asia Pacific, which is principally our Australia business, had a very good performance in the quarter with revenue of $80 million, about flat in local currency versus last year, and better than the down 5% we expected earlier in September. Australia consumer online revenue was down 5% versus last year, a significant improvement from the down double digits we saw in second quarter. Our Australian commercial business combined online and offline revenue was up 1% in the quarter, again, a nice improvement from the prior period. Fraud identity was also up over 15% in the third quarter versus the down 12% in second quarter. These areas of improvement offset declines in consumer marketing services, our consumer offline business, and HR solutions. Consistent with second quarter, they continue to be down versus last year. New Zealand revenue was down just over 10% in the quarter, a significant improvement from the down 25% in the second quarter. European revenues of $59 million were down 13% in local currency in the third quarter. Our European credit business was down about 7%, with Spain performing slightly better than the U.K. In the U.K., consumer online revenue was down just over 10%, a significant improvement from the down 20% we saw in the second quarter. Analytical and decision solutions revenue was almost flat in the quarter, a significant improvement from down about 20% in second quarter. Combined consumer online and analytical decision solutions represent about 75% of our UK CRA business. Similar to the U.S., our consumer offline business continues to show significant declines due to reductions in economic activity and credit originations. Banking revenue driven by new wins with top five U.K. banks was up over 25% in the quarter. Our U.K. banking team is seeing real momentum. Our European debt management business declined 20% in local currency in line with our expectations, principally driven by government-enacted policies that continued to temporarily halt debt collections due to COVID-19. U.K. government debt placement activities restarted in August. We expect fourth quarter debt management revenue to improve meaningfully as September debt placements were up 5x versus pre-COVID levels. Turning to Latin America, their revenue of $40 million decreased 6% in local currency in the third quarter, better than the down 9% we expected earlier in the quarter. Importantly, our Latin American revenues were much better than the down 14% we saw in the second quarter. In the quarter, Chile, our largest country in Latin America, delivered positive revenue growth. And our Argentina, Uruguay, Paraguay businesses showed significant improvements from second quarter, down about 4% in the quarter versus 2019. These markets continue to benefit from the resumption of economic activity, expansion of Ignite, the migration of customers to our global cloud-based interconnect SaaS decisioning platforms. We're also seeing the benefit of the strong new product introductions over the past three years in the region. Canada revenue of $39 million was flat to mobile currency in the third quarter, a significant improvement from the down 13% in second quarter, and in line with our expectations from our September call. Consumer online and commercial were both down about 5% in the third quarter, and both were a substantial improvement from almost 20% declines in the second quarter. Analytical and decision solutions were about flat in the quarter, again, substantial improvement from the second quarter. We delivered nice growth in Canada in our ID and fraud business and property service businesses. It combined with the improved performance of the other segments allowed us to improve to flat in the third quarter. International adjusted EBITDA margins at 32.3% were up 130 basis points from last year despite the decline in revenue. principally reflecting benefits from cost actions taken in 2019 and strong expense management this year. Turning now to global solutions revenue, which was down 2% on a reported and local currency basis in the quarter. Our global consumer direct business was up 6%, their highest growth since 2017. Our North American consumer direct business revenue was up a solid 6% versus 2019, while the UK consumer direct revenue was about flat. Importantly, we continue to see sequential subscriber growth in the U.S. and Canada, our two largest markets. Based on a continuation of these trends, we expect our consumer direct business to show positive revenue growth in the fourth quarter. Bev Anderson and the GCS team have done a good job returning our global direct business to a growth mode. Our remaining GCS business channel and event-based businesses decreased about 10% in the quarter in line with our expectations. We delivered 11% growth in our benefits channel and event-based businesses, but this growth was more than offset by declines in our U.S. lead gen partner business as originations continue to be soft in the third quarter. DCS adjusted even job margins of 24.8% decreased 10 basis points compared to the prior year period due to increased marketing spend to drive future direct revenue and lower lead generation revenue offset by one-time setup costs incurred during the third quarter of 2019 related to a new multi-year contract. Slide 9 highlights the acceleration of revenue growth over the last several years and quarters, broken down between the growth drivers from the extraordinary UC claims revenue in 2020 from high unemployment and the strong U.S. mortgage revenue market, to help you look through the impact of these strong market factors to the underlying Equifax core growth. As we discussed earlier in the third quarter, Equifax grew 19% overall with 200 basis points of that growth from UC claim revenue and 11 points of Equifax revenue growth from the strong U.S. mortgage market. We were very pleased with the 6% core growth with strong sequential growth versus the minus 2% in second quarter. particularly with the headwinds from the COVID recession. Equifax is clearly outperforming our and your expectations in the COVID recession. The impact of the strong U.S. mortgage market is highlighted in purple and reflects growth driven directly by the strong underlying U.S. mortgage market. To be clear, this is not the growth of Equifax U.S. mortgage revenue, but it's instead only growth directly attributable to the U.S. mortgage market itself, that we estimate based on mortgage market credit inquiries. During the third quarter, 11 points of Equifax's 19% growth was from the strong U.S. mortgage market. The impact of the extraordinary UC claims growth in 2020 is highlighted in blue. We are providing this given the dramatic, unusual growth in the year we are seeing in 2020 that we expect to normalize over time. Equifax core growth is in green and reflects the resiliency and breadth of our business performance in the COVID recession. Essentially, this is the sum of the growth in our U.S. non-mortgage businesses, our international businesses and GCS, and growth in our U.S. mortgage businesses above underlying mortgage market growth. Excluding the impact of the U.S. mortgage market and UC claims, Equifax core growth has expanded from 2% to 3% in 2018 and 2019 during the global financial crisis to 5% in the first quarter and now 6% in the third quarter while we're still in the middle of the COVID pandemic. This performance reflects the resiliency and breadth of the Equifax portfolio. As I will cover on the next slide, it's important to recognize that in the third quarter, mortgage vertical powered by Workforce Solutions core growth, which was a strong 30%, and USIS, which was only down 1% on a core growth basis. This ability to substantially outgrow the underlying market is core to our business model and a substantial strength that should continue to provide significant benefits through the balance of 2020 and into 2021. Equifax is dramatically stronger in 2020 versus the 2008-2009 during the global financial crisis, again reflecting the strength of today's Equifax portfolio. A continued strategic focus and strength of Equifax is our deep and broad array of products and solutions for the U.S. mortgage market and ability to consistently outgrow the underlying market. Slide 10 highlights this for our U.S. B2B businesses, Workforce Solutions and USIS. Both Workforce Solutions and USIS have consistently outgrown outgrown the underlying U.S. mortgage market. The driver of the acceleration of this outperformance over the past several years has been the tremendous growth in Workforce Solutions mortgage revenue, which exceeded mortgage market growth rates by over 20 points in 2019, accelerating to about 80 points of outperformance this year. The key drivers of this strong Workforce Solutions performance includes increased market penetration, which by this we mean both an increase in the percentage of mortgage applications for which the underwriter requests an income and employment verification from Equifax, and an increase in the number of times a mortgage underwriter requests an income or employment verification during the application process. Both of these drive increased twin inquiries. As we view U.S. mortgage inquiries as a proxy for the overall market, an important metric we track is twin inquiries as a percent of USIS credit inquiries. In third quarter, this metric for the first time exceeded 50%, where we had one twin mortgage market inquiry for every two U.S. I.S. credit mortgage market inquiries. This metric has been growing substantially over the past three years and has more than doubled since early 2018. However, at only 50%, it shows that we have a lot of runway ahead of us to reach the same utilization for twin as the credit file. We are actively working with our customers to continue to drive penetration through both expanded selling efforts across our customer ecosystem and increasing customer system-to-system integrations. Second is increased fulfillment rate. This is the percentage of times we receive a mortgage inquiry that we can't fulfill and is driven by growth in the twin database. While we have real scale at over 50% of the non-farm payroll in our database, we only fulfill roughly 50% of our inquiries. As we add records, we are immediately monetized, which provides real leverage for Workforce Solutions. Adding new twin contributors and records is a priority for the EWS team. And third is new products. We continue to introduce new Workforce Solutions products that provide greater value to our customers in terms of depth of data, and frequency of polls with higher price points and margins. We expect NPIs to accelerate in workforce solutions from the addition of new product resources and leverage from the cloud transformation. Workforce solutions is clearly our most powerful business. Slide 11 shows their above-market strong performance, which is highly accretive to Equifax revenue growth, margins, and cash flow. Through third quarter, overall workforce performance revenue growth of $332 million, or 48%, drove 13 points of Equifax revenue growth, and workforce core revenue growth of $163 million contributed six points of Equifax core revenue growth versus last year. The impact on Equifax EBITDA was even more powerful, with workforce dilutions delivering $572 million of Equifax EBITDA business and an important driver of Equifax results in 2020 and in the future. As shown inside slide 12, you can see the continuing growth in our twin database, which has been a significant driver of its value to our customers and the growth of Workforce Solutions. In the third quarter, we continued to add twin records and delivered new twin record growth of 6 million active records in the quarter, even in the high unemployment environment, which drove the twin database to over 111 million records, up from the 105 million we had at the end of both first quarter and second quarter. Twin records are up a strong 20% versus 2019. We also hit a significant milestone in the third quarter with contributors surpassing the 1 million level. This is a million companies in the United States that are contributing their payroll records to Equifax, up from 64,000 a year ago, which has moved the twin database deeply into small and mid-market companies. With the twin database now providing information on over 88 million unique individuals, firmly over half of the U.S. non-farm payroll, we view this as a catalyst for workforce solutions given the increasing hit rates and the uniqueness of the data. As we discussed previously, the workforce solutions team is expanding their focus on records beyond just W-2 payroll into areas like 1099 employees, the gig economy, and pension income. The increasing depth of the twin database, with now over 450 million total records, has the additional benefit of increasing the completeness of an individual's job history that we have in the database. This also significantly increases the value of the unique twin data for both credit decisioning as well as in talent solutions and other applications. As a reminder, we generate almost 20% of our verification services revenue from inactive records that we have built up over the past decade, which helps provide a full picture of an individual's employment history. This also expands the uniqueness and value of TWIN versus other sources of income or employment data. In what has been the most challenging economic and health environment we've faced in our lifetimes, Equifax delivered exceptionally strong performance again in the third quarter, while investing in our cloud transformation and new products. We are focused on finishing 2020 strong while investing for 2021 and beyond. I'll now turn the discussion over to John to discuss recent trends in revenue in our underlying markets, as well as review some other financial items. After John's discussion, I'll come back and review our progress on the tech transformation and new products.

Thanks, Mark. I'll generally be referring to the financial results from continuing operations represented on a GAAP basis, but will refer to non-GAAP results as well. In the third quarter, general corporate expense was $155 million. Excluding non-recurring costs, adjusted general corporate expense for the quarter was $109 million, up $38 million from 3Q19. Corporate function expenses such as finance, HR, and legal were down year to year, reflecting the cost containment activities we outlined in April. The increase in total general corporate expense is primarily due to higher incentive compensation costs in 2020 due to our strong and improving financial performance. We continue to exercise disciplined cost management across the business while also continuing to invest in our technology transformation, data and analytics, new products, and security. We will accelerate investments in these areas in 2020 if we believe this will deliver accelerated benefits. Outside of these areas, headcount additions remain at levels below attrition, and discretionary spending has been reduced. Across the company, business travel remains at very low levels. For 3Q20, the effective tax rate used in calculating adjusted EPS was 21.2% and in line with our expectations. We expect a 4Q20 tax rate and a full-year effective tax rate used in calculating adjusted EPS be around 24%. In 3Q20 and year-to-date, operating cash flow of $367 million and $645 million were up $532 million and $566 million respectively from 2019. The increases reflect the substantial improvements in operating performance in 2020 as well as lower payments for litigation settlements in 3Q20 and year-to-date of $341 million and $246 million respectively. The timing of payment of the remaining $347 million to the U.S. Consumer Restitution Fund is principally dependent on the resolution of the appeals filed related to this case. At this time, we do not expect to fund the remainder of the settlement until early 2021. Our liquidity and balance sheet remain very strong. At September 30th, we had $1.5 billion in cash and available borrowing capacity on our bank credit facility of $1.1 billion. As Mark mentioned, our 3Q results were substantially stronger than the implication of the trends through August that we discussed in our September 8th investor call. The improved results were predominantly in our U.S. B2B business. Importantly, the improvement was in our U.S. online revenue, with significant improvement in non-mortgage revenue as well as in mortgage. We also had stronger results in international in Australia and Canada. The strength in adjusted EPS reflects the margin impact from the stronger revenue in September. Slides 13 through 15 show details of revenue trends on a local currency basis that we saw in 2Q and 3Q, as well as monthly data for July, August, and September. We are also providing a view of the trends so far during the month of October and their implications on 4Q20 if they were to continue throughout the quarter. For line items for which daily trends are not available or not relevant, we did not provide monthly actuals, but did provide 2Q20 and 3Q20 data for as well as an estimate for 4Q20. The monthly actuals data provided should be viewed as directional. Looking at slide 13, starting at the bottom of the slide, U.S. B2B revenue growth trended very positively in September relative to August and in 3Q20 relative to 2Q20, with U.S. B2B revenue up 32% in 3Q20 year-to-year as compared to the 28% year-to-year growth we saw in 2Q20. This was driven by improved year-to-year growth in U.S. B2B online revenue. Mortgage year-to-year revenue growth strengthened significantly in September versus August and in 3Q20 year-to-year in both USIS and EWS. This stronger growth was in the context of the stronger mortgage market we saw in 3Q19, which grew 20% from 3Q18. Importantly, online non-mortgage revenue growth trends also improved meaningfully in both September and 3Q20. USIS non-mortgage revenue was down only 3% in September and 5% in 3Q20 year-to-year, and EWS saw year-to-year growth in online non-mortgage revenue in both September and third quarter 20. Workforce Solutions unemployment insurance claims business grew substantially year-to-year again in the third quarter of 20. We expect strong growth in UC again in 4Q20, up about 30% year-to-year. The column on the far right of slide 13 provides a view on year-to-year revenue growth trends through mid-October and the implications on 4Q20 revenue if those trends should continue. A few reminders as we look at those trends. Fourth quarter is seasonally the lowest quarter for mortgage revenue, reducing the relative mix of mortgage revenue and overall Equifax revenue. 4Q19 saw very strong growth in U.S. B2B online at about 18%, driven by very strong 4Q19 online mortgage revenue growth of 34%. Again, starting at the bottom of the slide 13, should the implication of the revenue trends through mid-October continue throughout 4Q20, U.S. B2B online year-to-year revenue should continue to be extremely strong with growth rates just under 30%. Both USIS online and EWS online verification services growth rates will be very strong, but at levels slightly below what we saw in 3Q20. Mortgage revenue growth rates would be slightly weaker than in 3Q20, reflecting the strength in 4Q19 mortgage revenue, particularly in EWS. USIS non-mortgage year-to-year growth rates would be about flat with 3Q20, and workforce non-mortgage is expected to decline slightly versus the slight growth we saw in 3Q20. Workforce Solutions employer services year-to-year revenue would be up under 15% as the unemployment insurance claims business continues with good growth, but at levels lower than 3-2-20. Financial marketing services revenue would be down consistent with the levels we saw in the third quarter. Turning to slide 14, as Mark discussed earlier, international saw significant improvements in all regions in 3-2-20, but constant currency year-to-year revenue down only 5%. Trends through mid-October and international continue to improve. And should the implication of the revenue trends through mid-October continue throughout 4Q20, we expect international revenue to be down only slightly in the fourth quarter. GCS October trends reflect the continuation of those that Mark discussed earlier. In consumer direct, growing total subscribers are expected to lead to a second consecutive quarter of global direct revenue growth in 4Q20. As we referenced last quarter, the decline in partner revenue we saw in 3Q20 is expected to increase significantly in 4Q due to declines in the lead gen-related partner business. We expect the weakness in partner revenue to continue into the first half of 2021. As with our prior two earnings calls and due to the continuing uncertainties in forecasting the direction, depth, and duration of the recession related to the actions to combat COVID-19, we are not going to provide four-quarter guidance. However, for perspective on total Equifax 4Q20 performance, we will again provide an illustrative fourth quarter framework to help you think about our performance. Please turn to slide 15. To the extent total Equifax revenue continues at the pace I described earlier, 4Q20 revenue would be up about 9.5% to 11.5% or $84 to $104 million year-to-year, resulting in 4Q20 revenue of $990 million to $1.01 billion. Adjusted EPS and 4Q20 at these revenue levels could be in the range of $1.40 to $1.50 a share, down slightly from 4Q19. Slide 15 also provides a walkthrough explaining the translation versus 4Q19 of the revenue increase to the increase in pre-tax income and adjusted EPS. Importantly, at these adjusted EPS levels, Equifax should deliver over $350 million in adjusted EBITDA on the quarter. This is not guidance, as there is still much uncertainty as to what impact the pandemic will have on the economy, our customers' business activities, and therefore our revenue and earnings. This range provided reflects current variability and trends, not a view of potential quarter outcomes. As I referenced earlier, trends in Equifax mortgage inquiry volume remain at record levels in the third quarter, consistent with a very strong market data on originations. In addition to very strong refinancing activity, new purchase volume has been at record levels in the June through August period, up 20% from last year. And as we referenced last quarter, for Black Knight estimates, approximately 18 million households still benefit from refinancing at current average 30-year mortgage rates of under 2.9%. For perspective, current estimates of refinance originations in 2Q20 are at under $1 million per month. As Mark referenced earlier, we continue to look to accelerate the completion of our tech transformation, including increasing investment levels in 2020. At present, we expect 2021 time costs related to the Equifax 2020 technology and data security transformation to be above $340 million. We expect capital spending to be about $410 million for the full year. As a reminder, in 2021, we will no longer be adjusting our financial results for one-time costs related to the cloud technology transformation. These one-time technology transformation costs are expected to decline substantially in 2021 and will likely be largest in 1 through 21, decreasing throughout the remainder of 2021. Those one-time technology transformation costs will impact development expense, G&A, and COGS. We will continue to disclose these one-time tech transformation costs to allow you to have comparability with our financial results from 2017 to 2020. And with that, I'll turn it back over to Mark.