Equifax Inc. (EFX) Earnings Call Transcript & Summary

Well, great. I'm delighted to welcome Equifax. Mark Begor, Chief Executive Officer; John Gamble, Chief Financial Officer. Thanks so much for being here today. We appreciate it.

Just kicking off, on your fourth quarter earnings call, you discussed the detailed time line for Equifax 2020, where you're spending $1.25 billion to move legacy mainframe server technology to the public cloud, build APIs, close legacy data centers and a number of other modernization initiatives. If we fast forward to early 2021, how will Equifax's technology transformation and proprietary data sets differentiate you from the competition?

Yes. As you know, that there was really 2 thrusts 2 years ago when we launched this technology transformation. One was to take security to industry leading capabilities. After the cyber incident, you want to make sure you don't have another one. And that's why we are investing so much in our security elements. We also saw an opportunity to have great security. You want a great technology, and putting security around a legacy infrastructure is challenging. And then we quickly rolled into how important technology is to our business, having siloed data assets we're going to move to a single data fabric. Being in the cloud, where we can have always-on stability. Increasingly, our customers operate online with their consumers. And if you're not -- if you're down, your customers down, and the consumer goes away. So the always-on capability that come from the cloud, we think, are very, very powerful. The ability to move products to customers more quickly, we think, is very powerful. And moving products around the globe, when you have a single infrastructure, we think, is going to be long term very attractive to us. And we're convinced that it's going to really distinguish Equifax versus our competitors being cloud native, which is why we made this bet in this big investment 2 years ago. And as you said, we're kind of 2/3 of the way through. We're going to complete a lot of the work in 2020. There'll be some tail that will go into 2021 around customer migrations in some of our international platforms. But we're really energized about the benefits that will come from our top line. We think it should increase our long-term top line growth rate from what it was pre this investment. We haven't given a framework on that yet, but we will when we put our long-term framework back in place. We also think it's going to deliver some real margin and cost benefits. We've talked about a 15% to 20% benefit from our technology cost that sit inside of our cost of goods sold, which is quite sizable. That margin benefit, some will drop through. Some we'll use to invest in growth going forward. And then last, we've talked about the 20% to 25% benefits of our capital expenditures, which is really capitalized software savings going forward, which we'll enhance both from our margin generation being higher and revenue growth being higher. And the combination of that with the cash savings from our lower CapEx spending, our cash generation is going to be higher. That will allow us to invest in M&A and then also invest in buyback and dividends going forward. So we think there'll be a real improvement as you get into '21 and '22 in both top line margins and then our cash generation.

In the sort of the better cash generation, if we kind of fast forward to capital allocation, which I know you haven't specifically addressed.

I'm going to try not to today also. But go ahead.

So is that something that you will address?

Definitely.

Sometime later this year or?

Yes.

Okay.

We've been trying to be very transparent about everything we're doing. And when I joined 2 years ago, John and I both looked at this, and we had pulled our long-term financial framework as everyone knows. We said there was really 3 things that we want to get clarity on. One was the legal settlements as a result of cyberincident. That's behind us, as you know. Second was USIS recovery. That was a business that was most impacted. Pre-breach was growing kind of 7%, 8%, went down to minus 2%. We've seen kind of sequential improvement. We'd like to see another quarter or 2 on that, but we've seen great progress in 2019. And as you know, the second half for USIS was up almost 2x the first half either with or without mortgage. Just ex mortgage, there was real improvements there. And then the last one was around the tech transformation. It's a big project. It's not for the faint of heart. It's one I've done things like this before, John has, our tech leader and our business teams. And when you think about where we are in the tech transformation, there's a lot of data around or risk around will the technology work, meaning getting it into the cloud. We're 2 years into that. So that's kind of checked off, meaning we've got exchanges in the cloud. Customers are accessing exchanges. We've got our new applications. They're cloud-based. Customers are migrating to those. And then the other element to that is, how long will it take you to migrate your customers, so you can turn off the old as you're going into the new. And we're getting more confidence around that. So back to your question, it's our expectation, call it, the second half of this year, we'll have an Investor Day. We'll do -- roll out our long-term financial framework that we know investors want to see, and we're anxious to do that, too.

Got it. You mentioned pushing products to customers a lot faster. Is there a way to quantify how much faster you could be doing this and maybe framing it in the context of your new product innovation strategy and what you're trying to achieve overall?

I think as you know, you followed the industry for a long time. The fuel for growth in our industry from GDP versus the kind of high single-digit growth rate the industry grows and that we want to grow, and we historically did in our prior financial framework is new products. The business itself grows with GDP as far as credit pulls, and how do you go from 2% or 3% or 4% to 6%, 8%, 9%, 10% is really with new products. And one of the things that I did when I joined, and John supported that, is that we are doing this big tech transformation. We want to make sure we could protect the resources around new products. And historically, we've been pretty visible with our investors about our new product introductions. And if you look at 2016, '17, '18, we were doing something like 70 to 75 products per year. Last year, we did 90 a little bit. I think we did 92 last year. So we've accelerated that. My expectation is as we go through '20 and to '21 and '22, that's going to ramp up even further. Part of it is going to be the ease of our ability to do it. Part of it is going to be quite deliberate, and I think about the next chapter of Equifax is really throwing the pedal to the metal around innovation and new products. It's really a really great capability. The second part of your question was around can you articulate some of the speed? We're starting to roll out new products to customers that are cloud-based, native cloud-based. And we're doing things that we couldn't do before and doing things we don't think our competitors can do today, things like virtual streaming of data to our customers instantly as we have new data inquiries come in. Historically, that was done in a batch basis every couple of hours. We didn't have the infrastructure to do it in streaming basis. We're delivering that to customers today. We just rolled out, and we're going -- what went live last week a new identity application with a big customer that we put in market in probably 90 days, which historically would have caught -- taken us 9 months to do, and it's going live. So we really won the award and I think it was October and did all the development work collaborating with our customers. And that contract is kind of a $10 million to $15 million run rate contract, sizeable. And this is something that speed, which was important to them and for us, it was real value. We couldn't do it that fast before in the legacy environment. And then the last one is the ability to move products globally. It's being a global business. You know we're in 24 markets, including the United States. Being able to take a product from Australia and move it to the U.K. in the old world was really hard. You have to recode it. In tomorrow's world, it's not an app like your app phone, your iPhone, but it's in that direction, meaning we've already built it, you move it through the cloud. We've got a single instance, meaning we're not having 5 versions of the same thing in other parts of the world. And that's what drives your tech savings, that 15% to 20%. That's what drives your cash savings from CapEx of that 20% to 25%, is having that consistency in a new framework and one where you don't have multiple versions either in a market or around the globe.

We've also seen with some fintech customers that they're running in GCP, and we're running in GCP.

Which makes it really easy.

Our ability to integrate with them is much, much faster. We've now seen it now starting this quarter with Cambrian and Ignite, so our analytics platforms that customers can use, are running at GCP. So they're easier for them to access. And also we can spin up new environments in no time, right? Versus having to actually build environments and spin them up in the past. So we're just seeing acceleration in how fast we can deliver and how fast people can consume.

Well, the spin up is another -- I'll do one more example if it's okay. The spin up, we have, in our old environment, situations where a customer wants us to do something unique on their whole credit file, which can be a massive project to like rescore credit file. And you have to have capacity in your mainframes to do that. So you keep a lot of idle capacity to do those unique batch projects in the cloud environment. You just do them and then pull it back down. So you've kind of paid by the drink. So #1 is economics. #2 is the ability to do it, meaning you have unlimited capacity in the cloud environment, where we've had situations, in the short 2 years I've been at Equifax, where we've had to say, "I can't do that for you now. I can do it in 2 months when I have a window of capacity in the legacy environment." And that's a reality of our environment and our competitors, too.

And internally, there's been acceleration in development because we now have development teams, large teams that have delivered multiple products in a cloud-native way. So they now know how to develop in that way. And it's substantially different than working with other people's software, right? So it is a new skill that we hired to support before, and I think we're now growing very rapidly internally, which is accelerating the progress.

We retooled our team. As you know, we brought in a new technology leader, and he is a cloud-based technology leader. He's got a dozen direct reports, 9 of them were changed out with cloud native kind of people. We've got 5,000 of our 11,000 people are in technology. In the last 2 years, we've changed out 1,500 of them from legacy coding kind of people to cloud people, which is a big transformation, but -- and that's going to continue as we go forward. You have to have the -- it's a different skill set that we think is going to be quite transformational for Equifax going forward.

You called out virtual streaming of data. What are the major new products we should be looking for in 2020? Are there products that you see as being totally game-changing for the industry? Or are they more incremental?

It's going to be both. Game-changing is a big word. I would characterize as probably not much that's game-changing. Our view is the whole environment we have is going to be game-changing for Equifax, meaning being in a cloud environment, what it does to our top line, what it does to our margins and our cash generation. That's pretty game-changing. When you get to specific products, it's hard to see one there. But like in the virtual streaming, the ability increasingly latency or how current information is, is more valuable when you're marketing to consumers or you're trying to engage with a consumer, and this is how our customers engaging with them. So having data that's an hour old or even minutes old versus a day old or 2 days old is a big deal and then getting it to them really quickly. And speed is very -- meaning latency, how fast you're delivering it, is quite unique. The other one that we think is still kind of unchartered territory for us but we're really energized about is a single data fabric. And this is one that is really important. Today, we have in the United States, some really massive databases. And our databases are larger than our competitors. Everyone has the credit file. They're basically the same. Every American that is in the credit file. There's small differences. We're the only ones that have the NCTUE cellphone utility database. That's 380 million Americans, massive scale. The TWN payroll records that we have that have 105 million actives every pay period. So our scale of data assets is massive. And what's different about how we're approaching those data assets is today, they're siloed and we have, in the United States, close to 50 of them. They're siloed. So to find Mark Begor in each database, you have to key and link across each one. There's latency with that. There's -- and it's not 100%, meaning you don't find me in everyone. I might be Mark W. Begor in one, I may be Mark Begor in another. Sometimes the keying and linking connects it, then it doesn't. We're going from those siloed data assets that we and our competitors have today, and ours are -- remember, a scale that's different than our competitors to a single data fabric, meaning Mark Begor is going to be there with every data asset already ingested and tied to me. The ability for us and our customers to access the multiple data assets we have, we believe, is going to open up new revenue opportunities. Today, we link them. We have scores. We do a lot of things to really work around the limitation of our legacy data environment. We believe it's going to be really transformational and almost unlimited in the amount of data assets that we can store around each individual. And not only static, meaning the current record, but also the history for trended data, which today is complicated in the legacy environment for us and our competitors. Tomorrow in a cloud environment, we'll have every data element trended. And we think that's going to be quite powerful.

There's also just -- what we're seeing now entering 2020 is also just a nice grouping of substantial new products, right? So we have new scores for personal loans that use multi-data assets. We have new scores for rental that use multi-data assets. We have new scores for insurance that we partnered with Verisk to deliver multi-data assets. We have new header products that use DataX, right? So it's -- which is an alternative data asset, which gives us breadth. So none of those are -- I forget the words you used, right, they're not -- none of them are game-changing, but they're all important products that allow us to sell more effectively to our customers, right? And some of them use machine learning so that we're utilizing our assets across the organization.

The machine learning one is still nascent, but it's one we're investing heavily in. And we probably don't talk enough about it. I think you know we have a technology called NDT or NeuroDecision Technology. We're the only patented, explainable AI from an FCRA standpoint. I think everyone in the room knows that, how important that is in the regulated environment we live in. You have to be able to explain when you tell someone they're not going to offer them credit. Why? And as you know, AI makes that increasingly complicated, which data asset is why you said why. In a normal kind of regression model, it's complicated, but it's organized today. And I believe that's going to be a really growing trend about the AI because when I meet with customers, they say a couple things. Number one, they want to access to more data. And more data makes it complicated to make the decision to do that regression model without AI. So having the only patent, and we've got 4 patents on it now, we've got 2 or 3 pending, we think will be quite valuable. And then the other thing they tell us is help us manage all this data, not only ours but also theirs, how do you put all that together. And AI, it's probably not a -- going to be a real catalyst in '20, but it is in '21, '22, and that's why we're investing in the AI because we think there's a real trend there. And that's -- this happened 2, 3, 4 years ago, we started investing in it, but it's a big area of ours that we think will be a catalyst in the future.

I definitely want to go deeper on data and technology, but before I do, I just want to call out 10-year treasury yield at 0.9%, which is a record low. And you have an enormous mortgage business.

Bigger than our competitors, yes.

20% of revenue.

17%.

Oh, 17% type of origination and refi. So I think at the time of the earnings call, you were guiding to flat 2020 mortgage increase, but interest rates were higher.

We said pretty strong in the first quarter on our mortgage business.

20%?

Yes.

And then comparison is tougher through the year, but you're probably not banking on 10-year treasury yield at 90 basis points.

No.

So how does this most recent step down in interest rates affect your thinking on the 2020 mortgage market?

It's obviously going to be helpful. How long it lasts, you could talk -- we haven't brought up yet the coronavirus, what's the impact of that. But we haven't seen any impact from it. Obviously, we're changing our travel patterns like everyone else is, and being careful and doing the elbows and everything else that the rest of the world is doing. But there's no question this is a tailwind for us. We haven't seen much impact from that in the last few -- in the last week. But because there's usually a lag on when that goes into the marketplace. But there's no question that's going to be helpful to us as we go into 2020.

But you're calling out maybe other effects from coronavirus?

No, no, no. We don't see any impacts. I just said, let's not forget that there could be, but we don't see any of that impact in any of our guidance. And we haven't given new guidance. We gave guidance a couple of weeks ago for the first quarter and for the year. You're pointing out that that interest rate drop should be a tailwind to that guidance, and it's hard to disagree with that.

And coronavirus, we don't know what's going to happen. So we're like everybody else, yes.

Understood. If we look at the health of consumer credit demand, we just talked about mortgage, one of the top 3. You've also got auto and credit cards.

P loans, yes.

How do you assess the overall health of the consumer, let's say, starting in the U.S. and going to your other major geographies?

Yes, for us, it starts with an employment and wage growth. And the U.S. consumer is pretty healthy when it comes from an unemployment working standpoint, and that's a good thing. And I think our customers are still very bullish about the consumer. I think there was some tone last summer about, let's do some recession planning, and we helped with customers on that. I hear less of that now. Of course, the coronavirus seems to be taking most of the bandwidth in the last couple of weeks. But the U.S. consumer feels like it's healthy. When I go to other markets, U.K. for us was challenged around the Brexit uncertainty through much of 2019. Now Brexit's solved, but is it solved? It's still unclear. Our U.K. business was up stronger in the second half than the first half. So it kind of exited the year with some momentum versus its historical growth rate still a bit lower than that. Australia as a market is one that was bumpy. They kind of started to slow down, not a recession but a slowdown in late '18 that carried through '19. Their fourth quarter was better, and second half was better. We've got a new leader there, which we're excited about, that our best leader in international was a woman from Canada. We put her down there in August, and she is doing great. So we're enthusiastic about that. And then the other 2 markets for us, which are much smaller, Argentina and Chile. Argentina was impacted by the political change down there. And then Chile was through their protests or riots, whatever you want to call it, but that had some small impact for us, but that business in Latin America still grew high singles in 2019. Anything else you'd add on economics?

No, Canada's...

Canada's doing great.

They're fine, yes.

Canada was up high singles in 2019. We've got a strong market position. They have a new leader there that came in from the industry that we're really excited about. So Canada's doing to fine, too.

Just focusing on Australia for a minute, that business I think years back, Veda used to be a high single-digit growth business before the -- certainly before Australia slowed down. Is there a path for that business to get back to high single digits over time?

High singles is a big growth rate. Canada's a business that you could look at it as a similar market that that business has been growing high singles for the last 5 years for us through innovation, and it has a similar market position to our Australia business. I don't think I'm ready to give that kind of guidance of high singles, but we expect it to come back to kind of mid- to high singles from a long-term standpoint. Whether they get there in 2020, we want to see how the economy unfolds. If you could add to that, John?

That's what we said when we bought them, right? We have said that they will probably grow kind of like USIS, right? Maybe a little faster like the Equifax model. I don't think we ever got the high singles, but we thought that they would grow 5%, 6%, 7%. And I think -- we think there's a path factor.

Yes. Veda, as you may know, had a pretty good run of M&A rolling into their numbers for a time frame. The woman that was running that was quite acquisitive. M&A is a part of our model. Historically, it's been 1% to 2% of our revenue growth. And we'll tell you what our long-term financial framework, my guess is it won't be that different going forward that we want to have 1% to 2% of growth on the top line from M&A. And if you look at 2018 and '19, we were in the ZIP code of the low end of that range. We bought DataX in 2018. That was -- added close to 100 basis points. Last year, we bought PayNet. That was kind of close to that 100 basis points. I'd like to move that more up to the 2. And I think, as you know, our strategy is very focused around bolt-on M&A. And I think DataX and PayNet are 2 great examples, buying unique data assets or analytics capabilities that we can really leverage inside of Equifax. I'm a bolt-on guy. John is, and Equifax has been. And then finding Vedas, finding a platform, if we can find other platforms like Australia that makes sense and lean in to spend a bit more on M&A to get a unique platform like that, we would do that.

Your best business, Workforce Solutions, your monopoly position growing double digits.

We don't use that term.

Okay. Okay.

Strong competitive position.

Okay, great competitive position. What to slow this business down from double digits? I mean especially if mortgage gets a little bit more of a tailwind this year from lower rates?

It's a very unique business. What's unique about the business for me is it's clearly our best business. You might argue it's one of the best businesses in our industry. It has a very unique market position. It has real scale today, and it's got multiple levers for growth. And really unique about those levers, every data business is looking for more use cases, new customers. How else can you use the data? And I'll come back to that with Workforce Solutions. Most businesses don't have the ability to add data assets. And I think you know we ended the year at around 100 million records every pay period in that business, about 75 million uniques. People have 2 jobs.

Looks closer to 80 million.

80 million uniques. So people have 2 jobs. That's how you get to 100 million. And with 160 nonfarm payroll, we've got the ability to go from 80 million uniques to 160 million uniques. And last year, we added about 10 million records. Historically, we've been adding 5-plus million records, and those monetize instantly. And that's very unique from a data business to have kind of a real runway of adding records. And as you know, we go door to door to corporations and work with the HR leader. I was on an e-mail this morning chain about a corporation that we're adding. So that's one of the ways we do. We have a dedicated team inside of that business that all they do is work on adding records. And then the other one, that's a few years old, but we still have a lot of runway left is to partner with payroll processors to add their data assets. So that's a real lever on growing that database. And if you think about that business, which will be north of $1 billion this year, growing at 50 to almost double Equifax's growth rate with margins that are close to 1,000 basis points above Equifax's average. It's a very highly accretive business inside of our long-term financial framework. It was before, but it's really accelerated, I think, as you know, in the last couple of years. And then you go to the other more traditional ways to grow the business about more verticals, more use cases. And we get the question about like with mortgage, isn't the income and employment report pulled on most mortgages? The answer is yes, where we have a credit, we have a file. But then what increasingly is happening is mortgage originators will pull it twice and 3x. So we work with the mortgage originators to try to convince them. Here's how you want to use it a second time and why it's going to enhance your process, meaning you're going to keep the customer, you're going to get a better customer. So more pulls is very attractive. And then you go into other verticals like government has been a vertical that's growing above our average at Workforce Solutions, where it's being used for social services here in the United States. Does someone qualify for Medicaid? Do they qualify for food stamps? What isn't being done yet, which we see as a real growth opportunity that could more than double our government business is around fraud. There's a huge fraud issue where a consumer is getting food stamps and then gets a better job but still collects the food stamps. It's not used today for that. We're working with the government at the federal level and the state level to work through that. So lots of opportunities in the verticals. And then the other lever for that business is it's got a very deep, but I would characterize, narrow swim lane in income and employment verification. It's a great business. So we're going to add -- keep adding records. We're going to keep having more pulls. We'll go into auto, using it for verification of income and employment and near-prime and sub-prime auto in P loans. It's increasingly being used in the credit decision, but it's pulling the report going to how we can have scores or just a flag that says, "Well, Mark is working. We won't tell you how much he's making or who he's working for." There's value in that, and we can sell it differently. Basically, we sell the $20, $30, $40 report. Having a $5 or $2 or $1 flag for a credit card company is quite valuable. You may know my background was running GE Capital's credit card business. We didn't use this data asset because the hit rates weren't good enough. Now that you're getting to 40% hit rates, it's very valuable. And if you can deliver a product -- a credit card company can't afford a $40 report on every job I've ever had. They can't afford $1 on Mark's working. It enhances the credit decision. And then the last leg for that one is really back to that data fabric being able to combine the credit report with our other data assets, along with our -- is Mark working, how much is he making, how long has he been there at that company, enhances the risk underwriting. Today, we do versions of that in scores. Tomorrow with the data fabric, we'll be much more powerful. It's a business that I talk about internally and externally of being in the second inning, which is fairly bold for a business that we've owned for over a decade. It's $1 billion growing at that pace. That's how I talk to the team about it, about the opportunities because there's a lot of things I talked about there we're not doing yet, but we will with the tech transformation.

How do you think about the operating leverage in that business? I mean do you want to grow those margins? Would you rather redeploy it to maximize revenue growth?

Both. It's hard to reinvest all those margins, right? Because we're doing it in that business and other businesses. And there's also a capacity element of how much a team can actually do. As you might imagine, our team is pretty red lined around the tech transformation. That's -- we got a full-time job running the business. There's another full-time job doing the tech transformation. And then we're also investing in innovation, going from 75 to 92 new products last year. We want to keep driving that up. So we're building capacity or bandwidth and resources to make sure we're investing in innovation. When I think long term about Equifax, the current chapter we're in is really restacking our technology. The next chapter is going to be taking advantage of that. And how do we take advantage of that? It's going to be around innovation and new products and really putting the pedal to the metal around innovation. And that's going to be -- and we're starting that -- we started that last year by adding more resources around product and around innovation and feet on the street. We're doing more of that in 2020. That will continue in '21. So there'll likely be a balance between dropping through margin dollars from our transformation to the bottom line and in reinvesting some of that in accelerating the growth even further. There will be a balance there, which every business does.

And accelerating the growth in EWS is very accretive to our overall margins because their margins are so high.

Let me just pause, see if there are any questions for management.

[ Just following on that. ] I mean conceptually, so let's say your margin [indiscernible]. What will be the reasons why you won't be through those [indiscernible]

I think that's a fairly good argument to have. We're certainly -- we're not ready to give our long-term financial framework. But the points you make are the points I was making. That's why we're doing a tech investment to grow our top line, to grow our margins. And you point out the very accretive element of EWS. We're going to have an accretive element from the tech savings, and our tech cost is going to be quite positive. We're going to reinvest some of that. But again, we're not ready today to put a long-term framework on that. We've given you good guidance for 2020 when we have an Investor Day and put the framework out later in the year. We'll certainly do that but your points are tough to argue with.

There are some areas of increased cost, right? So we've invested more in compliance. We've invested more in security, right?

Those are in our run rate now.

They're on our run rate now, but versus '16, they're higher right?

Totally.

Our insurance costs are higher. Things like that are in our run rate.

Yes.

What are the next steps you need to take to return your U.S. consumer direct business to growth?

The GCS consumer direct, is it? Yes. Well, you saw that in the second half of last year. It was negative in the first half. As you know, we started advertising in late 2018. There's a lag on when that converts into revenue. So that was negative in the first half of 2019, positive in the second half. We expect that to continue as we go into 2020.

Total GCS. Total GCS.

Yes. So we expect that to continue as we go in -- there's 2 pieces of GCS. There's direct piece as well as the partner piece. That's an important business for us. We just brought a new leader in. She started in December. We brought in a woman who used to run the credit card business for Wells Fargo. So we've got a real consumer expert in that. It's a business that we want to keep investing in, but we're never going to be as large as our biggest competitor in the direct-to-consumer. It's just not our game, but it's a business that we want to be in, and we're going to continue to invest in and continue to grow.

Any impact from Intuit buying Credit Karma?

No. We are a big partner with Karma. We're also -- Intuit's a customer. We don't see any positive or negative impact. We've got great relationships with both, and we expect those to continue.

What do you think is the most misunderstood aspect of Equifax by investors?

Most of our investors' bandwidth around questions around USIS, understandably, which means we don't spend a lot of time talking about Workforce Solutions. I'm not sure our investors fully understand the power of that business, the impact that it has, the accretive nature to our revenue and to our margins. And maybe the reason I say that is because we don't talk about it a lot in investor meetings. USIS is all-encompassing. Tech transformation takes up the next 25 minutes, and then there's 5 minutes left. And so yes, talk about Workforce Solutions, where it's such a power business for us. We want to make sure that our investors understand it, understand the runway on it. And I'm sure in our Investor Day, we'll have a segment just on Workforce Solutions, for sure.

Will you give out more metrics? I mean you mentioned a 40%-plus hit ratio, for example. Like where do you think you could take that hit ratio on the record database?

If the records go up. As you add data records, your hit rates go up. So it's really, if you think about the portion of the working population we have, really drives those hit rates. It's 70 million to 80 million versus 160 million nonfarm payroll. That drives the hit rates up. Obviously, the mix of who's applying for mortgages in the population. But you're getting to like a tipping point, my view, with the 40% hit rates with Workforce Solutions, where it's kind of a must-have to use it. And think about my example. I ran Synchrony, the GE's credit card business for 10 years. When it was 20% hit rate, it was like, well, it's interesting, but if you're only going to get 1 in 5 customers, it's not worth all the effort to put it in. Now that we're getting 1 in 2, it becomes a very valuable asset. And of course, we have to package products for those different market segments. It becomes a very different business from just income and employment verification to becoming a more valuable data asset when your database becomes more comprehensive. So it's a positive.

Great. Well, Mark, thanks so much for being with us here today.

Thanks for having us here.

John, thanks to you as well. Good seeing you.