Equifax Inc. (EFX) Earnings Call Transcript & Summary

Good morning, everyone. My name is Kyle Peterson with the Fintech Equity Research team at Needham. Welcome to the Tech & Media Conference. Up next, we're going to be doing a fireside chat with Mark Begor, Equifax's CEO; and John Gamble, CFO. And just I have some questions prepared. [Operator Instructions] So yes, just to start things off, guys, welcome to the conference. But I was hoping you could get -- start off by giving a high-level overview of kind of what you guys do at your core and what you feel sets Equifax apart from some of your biggest competitors, especially some of the other credit bureaus. Mark, you're on mute.

Mark, you're on mute.

Here we go. Got to get it off mute. Kyle, thanks for having us. It's great to be here. We appreciate you having us at the conference. And so Equifax, I think, as you know, is a data analytics company. We've been around for a long time. The last 3 years have been really transformational for Equifax. As you know, in 2017, we had the cyber event, and we spent 2018 and '19 really working to recover from that. I joined in April of 2018, and we really launched at that time, as you know, a really bold and, we think, transformational investment in the company to really transform from a legacy mainframe siloed data asset environment to a cloud-native data analytics company. And we think that's going to really change our competitive position. That's going to change our ability to roll out new products. It's going to change how we interact with our customers and differentiate us from our competition. So that's a big deal. I suspect we'll talk some about that. We're in the early innings of leveraging the cloud transformation. After building it over the last 3 years. We've still got work to do to migrate our customers. But we are in the early innings of taking advantage of it, which we're really excited about. And you're starting to see that in our financial results from our perspective. When you think about Equifax, we believe we have data assets at scale that our competitors don't have. That's a real differentiator for us. All 3 of us have the credit file, but Equifax has unique data assets our competitors don't have, which we think is a really big deal. At the heart, there's a number of big macros taking place in our industry. One is the explosion of data and the challenge of managing that data and delivering it to our customers. But we all know that more data results in better decisions. So we're very focused on expanding our data assets. We'll probably talk about that through M&A or through organic means. But at scale, we have data assets like TWN. I'm sure we'll talk about Workforce Solutions, our income and employment data, a really valuable data asset, arguably the most valuable data asset business in the industry, one that's growing faster than Equifax, so a really differentiated data asset. We have our NC Plus cellphone data set, where we have payment records on most Americans in the United States, payment records on their cell phone bill, very additive to the credit file. IXI, which is a wealth database. Our competitors don't have something like that, where we have down to the CUSIP level securities that Americans hold that can be used in a very valuable way as another data asset and more. And we've been making acquisitions in the commercial and consumer space around differentiating data. So I think that's the second big point about Equifax. And now we're really focused on going forward. Earlier this year, we launched our new strategy for the next 3 years called EFX2023. And our strategy really centers around leveraging our new cloud capabilities between a single data fabric and our applications and being cloud-native in how we operate to accelerate innovation and accelerate new products. And you've seen in the last 12 to 24 months an acceleration of our focus on new products. We've added resources there to really grow our business. And last year, we rolled out 134 new products, Kyle. I think, as you know, it was up from a 70 to 80 run rate. And new products really fuel our growth. So that's a really big focus for Equifax. And just lastly, I think our financial performance has been exceptionally strong, outperforming our expectations and probably even yours and the market's and our competitors. And that's really a combination of the strength of the underlying differentiated data assets that we have; the benefits of the cloud transformation is starting to take hold; our new product rollouts kicking in where our commercial teams have more products to sell. And I think you know, our first quarter was exceptionally strong, sequentially improving both overall growth over the last 5 quarters, but also, importantly, our core growth, which, as you know, we've been talking about for the last year-plus about our growth, excluding the mortgage market impact, which really gives you and our investors more of a view of the long-term growth rate, excluding the market impact from mortgage of underlying Equifax, which has also been exceptionally strong. So we're energized about the future. When we think about where we are, the last 3 years we've been building. In the last 12 months and really moving into '21, '22, '23, we look forward to leveraging what we've built to really accelerate our performance on both the top and the bottom line and use our -- accelerate free cash flow to strengthen Equifax through bolt-on M&A. As you know, we did 5 deals in the first quarter. So a strong start with Kount in identity and fraud and then HIREtech and i2Verify and Workforce Solutions. We're looking to do bolt-on acquisitions that are highly accretive and really strengthen and broaden Equifax. So we're energized about what we've done, but we're more energized about where we're going.

Great. That's really helpful overview here. I wanted to see if we could drill down a little bit more on kind of Workforce Solutions. I think the performance there has been extremely impressive. I had a lot of conversations with investors trying to distill what's been driving that? And how should we think about that business moving forward? I know there's some moving pieces between expectations from the mortgage market, unemployment claims, and then particularly, you have that social security partnership, I believe, that's launching later this year as well. So maybe if you could talk a little bit about what's driven that kind of past outperformance and how we should think about the different puts and takes as we kind of progress through the year?

Yes. And I think as you know, Kyle, you've followed the company for a while. You know that this outperformance by Workforce Solutions is not new. And if you look at our website, in the Investor Relations section, we've got plenty of material in there about Workforce. Actually, the last, I think, 4 or 5 quarterly updates, we've had a specific page on Workforce to show their historical performance and outperformance versus the market. You would expect Equifax, broadly, and that's what our industry does, to outperform our underlying markets, whether it's GDP or in the mortgage case, inquiries in the mortgage market. And Workforce is really uniquely positioned and, no question, is our strongest business. It's growing much faster than Equifax on the top line. So it's highly accretive to our growth rate going forward. And it's also highly accretive to our margins, with their margins in the high 50s, highly accretive to Equifax's margins. And what's unique about Workforce Solutions is the income and employment data that we've been collecting over the last decade and the scale of the database. And we believe in the last 12, 24 months, as we've gone north of 50% of nonfarm payroll, the database is at scale now where it's an increasingly valuable and increasingly sought-after data set because of the uniqueness of, is Mark working? How much does he make? And being added to, did Mark pay his bills, in the credit file. So it's a very powerful and very unique data asset. Our biggest competitor is PayStub, meaning those being used in a mortgage processor and some other origination process. And quite uniquely, it's got a lot of growth levers. All of our data analytics businesses do at Equifax, but Workforce probably has them at scale and more of them because of the uniqueness of their data set. It starts with the ability to add records. Most data businesses have all the records. You're always looking to improve them, enhance them, make them more accurate, add more attributes, maybe grow them a bit. But we've had a really ability to expand that data set quite consistently. And it's actually been accelerating, both the top line growth in the last couple of years, but also in the record additions. And that's quite powerful. As you know now, we have 90 million unique records. We're chasing 157 million, 158 million nonfarm payroll. So there's a lot of runway to grow the data set. And we have dedicated team that works on both the payroll partnerships, we had about 30 of them. Most of those are exclusive, the vast majority, where we provide a revenue share to a payroll processor and they deliver records to us of companies' payroll that they're processing and then we monetize those. And then most of our records are individual companies that we've developed and acquired over the last decade, and we've got a dedicated team there. And as you know, we have our income and employment verification business where we monetize those records on verifying how much is Mark making and where does he work and is he employed. And then we also have a business that's called our Employer Services Business that delivers solutions to HR managers, whether it's I-9, as you've pointed out, Unemployment Claims management, W-2, tax data management, work opportunity, tax credit, employee resource credits. So a lot of services that we provide HR managers in return, we get records, their payroll records, in order to deliver those services and then we can monetize them. So that's a really important element of the business. So beyond the ability to grow records -- and remember, we're getting inquiries from customers, whether it's mortgage or credit card or auto or P loan or in the government vertical or in talent solutions, they're hitting our database. And as we add records, we monetize them right away. So it's instant kind of monetization because we already have the inquiries coming to us. So records are a very important element. I think, as you know, we've been transparent in the last couple of earnings calls that we've added a large -- or adding a large payroll processor later this year, that's not a part of the 30-odd that are in our portfolio now. That's going to add to our data set. We're doing individual additions all the time of either payroll processors or individual companies in growing the data set. So growing the data set at Workforce Solutions is a big lever. And then you go down some of the more traditional, if you want to call it, levers in the business. One is expanding into new verticals and expanding deeper into verticals. We talk a lot about mortgage. But I think, as you know, we're increasingly growing into auto, where it's used to originate a car loan. In personal loans, it's used quite broadly because that's an unsecured loan at a very high ticket. We're just getting into credit cards. We've got 2 originators. They're going to be using our card -- our data at origination. They'll only use a single element of the attributes versus the 50 that we might deliver in talent solutions or in mortgage. But cards is another one. Government, as you pointed out, is a big vertical for us and using a delivery of social services, and we're expanding in there with our new SSA contract that goes live later this year. And it will be $40 million to $50 million of incremental revenue at run rate. And then talent solutions is also a fast-growing space for us in the hiring process because we have the work history of 450 million records, an average of 4 jobs for the average American -- I think it's actually 4.5. That work history is very valuable to a background screener or to an HR manager or a search firm when they're using that as a part of the hiring process. So verticals is a big one. New products is a big focus. And the cloud transformation did a couple of things for Workforce Solutions. One, it's really allowed it to scale its database. If you go back 2 years ago, we had 100,000 or 150,000 companies contributing to database. Now we're well over 1 million. That was scalable with the cloud transformation. And there's different numbers out there, but there's 3 million, 4 million, 5 million, 6 million companies in the United States. So we got a lot of runway to add companies to get north of that 1 million, companies that are contributing to the data state. That was benefited by the cloud transformation. It's also benefited us in the ability to deliver new products, and I'll use a mortgage example because you asked about that. But in mortgage, historically, we would traditionally deliver a $30 income and employment report. It's got 50 different attributes, gross pay, net pay, job title, hours worked, hourly versus salaried, all those different attributes, they're very rich. And we're rolling out, in the last 12 months, some new solutions that have more historical data. Remember, the 450 million records. There's certain mortgages that the consumer needs more history than the origination process, and we can deliver that now. So instead of selling a $30 report with what Mark's making now and all those attributes, we're selling one with 12 months, 24 months, 36 months, 48 months of work history that are a part of that. And we sell those at higher price points. Instead of $30, we're selling them at $100, $150, $200. Another one, there's a lot of mortgages today where there's a dual-income family, so a co-borrower situation that are both underwriting the mortgage. Historically, they would pull individually those 2 reports at the 2 co-borrowers, now we have a single solution. Some of our products are also promoting usage, meaning more hits, instead of having just one hit on the credit file in a process, having multiple hits as another solution. So new products are a big lever for growth. I talked about number of pulls. If you use the mortgage example, I think you're aware of this, the average mortgage application will pull the credit file 4 to 5x, and only pull our file 1 to 2x. So that's growing. We believe, over time, when you pull the credit file, you'll pull -- not only did Mark pay his bills historically, but how much does he make and is he working, as a part of that underwriting process. And remember, a mortgage originator is going to spend $4,000 to $5,000 in that origination process of COGs, and they want to make sure they're working on a mortgage they can close. So they're going to pull that data. And then things change over a 30-, 60-, 90-day time frame between kind of inquiry and origination application process to closing. So they want to make sure that they're working on someone that will qualify and close. So more pulls. I think you know, in the mortgage space, we have 2 ways -- actually, not just mortgage across our business that our customers access our TWN data. It's very different than the credit file, most of our credit file business is sold in a system-to-system integration where they're automatically hitting the credit file. Using mortgages as the example, only 60% of our revenue comes from system-to-system integrations. The other 40% is the mortgage originator, our customers keying into our website, putting their credentials in, putting my name and social in, pulling down the report. When we move them to system-and-system integrations, we get a 20% lift. There's less breakage, meaning they're hitting our file automatically. So those are some of the opportunities that -- we don't see every mortgage. So we're in the credit file because the credit file has been around for a long time. It's used really in every mortgage application. On the income and employment side, pay stubs are still used by a large portion. So we're working with the mortgage originator to show them the productivity, meaning they can hit us instantly. They don't have to use the labor to get on the phone and call an HR manager. You don't have the fraud. They say 1 in 10 pay stubs that are used in financial services are fraudulent. Ours are verified. So there's a lot of benefits from that. So there's just a lot of levers, and then of course, as you go across the verticals for Workforce Solutions. And just kind of cycling back at the bigger picture, it's clearly our strongest business. It's our fastest-growing business. It's now our largest business for the first time in Equifax's history, and it will stay there, because it's growing faster than USIS, international and GCS. And it's highly accretive to our top line growth and to our margins. It'll clearly factor into the long-term framework that we intend to put back in place in the second half. And just a last point, I think you know if you look at our growth rate, and we've got charts inside of our Investor Relations website, Workforce overall growth rate has been accelerating. You can take the mortgage macro out, if you want to, maybe the refi macro over the last 12 months, but it's clearly stronger on a core basis for all the levers that we talked about, the cloud transformation, the scale of the data set, the catalyst that comes with that. It's stronger in the last couple of years than it was in the last 5. So that stronger growth rate is obviously highly accretive to Equifax moving forward.

Great. That's helpful. And then you kind of mentioned you guys have pretty good, really exceptional scale in the TWN database right now. But, obviously, there's still some runway to go. So maybe you could talk about, is there a percentage of market share that you guys are kind of going for? Are there any employers or kind of a certain number of records that are too small, that it's a little too difficult to integrate? And then maybe if you could also expand on the potential to add some non-W-2 records longer term to the database, and what that could look like in terms of a ramp and monetization.

Yes. It's one we're highly focused on. We have dedicated teams, both on the partner side of adding records, think of payroll processors or employee benefit software companies, and on the direct side through our employee benefits business and actually going direct to companies even outside of our benefit solutions, our employer services business, to acquire the records. There's a lot of companies still out there to go after. And what's our goal? To get them all. And there was some limitations pre-cloud about our ability, particularly as you point out on the smaller companies. And you see we've scaled that going from, call it, a couple hundred thousand to well over 1 million in like 18 months. We know how to add the smaller companies. Those generally come from our partners versus direct. We tend to focus on the larger companies direct because we're providing those services to them and we can provide real scale. So in the kind of nonfarm payroll Workforce, we've got a lot of runway, between 90 million and, call it, 150 million. Now we're at 60%. Our goal is to add them all, so that's really what we're focused on. John and I, kind of broadly on record, we have a monthly update with the team. And the dedicated team that's working on both of these elements give us an update on their pipeline. I'm involved in some of the discussions either with big companies or with the payroll processors. And actually, every Friday, I get an e-mail, Friday afternoon, from the team that's adding individual companies and what are the companies we added this week. So we're granular. We're definitely on it. And then as you point out, we've got a real focus to go beyond the nonfarm payroll, going into the gig economy whether it's self-employed or 1099 employees. And there's a lot of people who have 2 jobs, 3 jobs. Those are really valuable data assets. So we're starting to add those. Our cloud capabilities allow us to add. We're working on different strategies to bring those in. We think that's another real opportunity. That's another 30 million to 40 million records that are out there that we're going after. A third area is defined benefit pension. There's 20 million to 30 million retirees in the United States. They get a paycheck, their pension check every month from their company or from the benefits provider. Those records are very valuable. And then kind of a fourth area that we're focused on is just getting elements around someone's working and partnering, for example, with restaurant software companies, to get someone logging into the software system, meaning they're on -- on the floor is a waiter or waitress, and then they log out. Now we're not going to know how much they paid, but we're going to know they worked 5 hours and they work for this company. That's got of an element of value. We don't know how much they make, and we can impute in, okay, if they're a restaurant employee, they're going to make something like this, so it's not a verified income, but we can verify that they're actually employed. So that breadth of broadening the data set is quite unique. And again, as I mentioned earlier, most data assets have all the data. In our case, we have these long runways and at scale, because we have such a large business, we can put resources on each of these different data sets and have dedicated people, that's all they do is work on it. And then very uniquely, remember, and we talked about this earlier, our Employer Services Business, that's something that is very unique to Equifax. Our competitors don't have Workforce Solutions on the income and employment database side, but they also don't have an Employer Services business where we're providing these services to the HR manager, whether it's unemployment claims or the other services that we provide. And we do that at scale. We're now up to something like 1 in 3 unemployment claims, Equifax is processing in the United States. So real scale there, that gets your records. You have to have the records to do that service. So that's another element of how we're focused on growing the data set.

Great. That's really helpful. And you've mentioned a couple of times so far, talking about some of the investments Equifax is making in the cloud and some of the cloud transformation efforts. Could you expand a little bit on what impact that's had, particularly on the cost side of the business this year and what that looks like, longer term, in terms of savings just on technology costs and potential efficiency that you guys would get once that transformation is complete?

Yes. I'm going to ask John to jump on the cost side because they're meaningful. And we've been very transparent about it. We know what the runway is on those, and we're executing to it. But just to be clear, we didn't do the cloud transformation for cost benefits. It's very meaningful. It's very substantial. It's clearly something we knew was going to be a benefit. We did it to transform Equifax, and that's really -- we could have, after the cyber event, spent a few hundred million dollars on our security. And taking our security to where it is today, it's actually beyond our expectations, meaning the strength of that. We took the opportunity to not only transform our security but also transform the whole company. And remember, this is a -- the cloud investment is around our technology, taking our technology to the cloud. And some of the benefits we get from a cost standpoint and efficiency standpoint is we had multiple versions of the same application that have built up over time. We had migrated all the customers to the same version. It's not as easy as an Apple app where it just automatically is updated. There's a lot of work to do in updating that. So we're moving all our customers to the same version in the cloud. Massive benefits from that from an efficiency standpoint, and John will talk about those costs. We think the more substantial benefits are what it does from a competitiveness standpoint. It really changes our ability to compete against our traditional competitor's team, Experian, in the marketplace. And remember, it's not only on our technology, but it's also the data. We move from siloed data assets to a single data fabric. Our competitors are where we were pre the cloud transformation in a legacy environment or hybrid cloud environment, still operating with siloed data assets. And we think that's going to transform and really address that macro of more data. And managing data is really complicated, particularly if you have to key and link across multiple databases to combined for those multi data assets. Commercially, we're seeing some real strength and, again, early innings of what is going to deliver for us with our customers. And you can just think about the simplistic element. You've got Equifax as a potential partner or as an existing partner that just spent $1.5 billion on top of a normal $1 billion spend over that 3-year period, so more than doubling our tech spend, to really advantage ourselves as a partner to our customers. It's a different C-suite discussion. It's a different Chief Risk Officer discussion. And then all the benefits come with it of the speed of data delivery. Really important in the digital environment where more and more of our customers' transactions are digital, the stability, meaning the uptime, and the speed of data being delivered to them is really important. And we think the cloud is going to deliver second to none. What it's going to do on new products and ability to combine multi data assets, we think, is very transformational. And you're seeing the early innings of that, combined with our focus on products. So I just want to reinforce that the cloud capability for us is going to deliver some sizable cost benefits that John will talk about. The real gain is what it's going to do for Equifax for an ability to accelerate our top line growth and expand our margins through that top line growth through either competitive market wins from a share gain standpoint just because we're a better partner, our capabilities, or our ability to ramp up the new products we already talked about, the 134 we did last year. We have a big focus on expanding those going forward. So John, why don't you touch on the cost benefits, which are also meaningful and going to be quite accretive to Equifax?

Sure. And there are really 2 main areas, right? So if you think about our cost structure, our cost of goods sold, if you look at it on a cash basis, about 45% of that is tech costs. And we expect to get savings of over 15% on those tech costs. So putting that on our 2019 cost base, that's a savings of over $90 million a year. The second big area is around the cost that it takes to develop new products and systems. And that really comes in 2 areas, right? One is development expense, the expense you run through your P&L and, obviously, also capital spending. What we expect as we complete the cloud transformation is we'll be able to run our development expense at about 3.5% of revenue. That's down substantially from the level you were seeing back in 2019. And again, based on the 2019 base, that's a savings of another $35 million of expense each year. So adding those 2 together, it's about $125 million in expense per year when this is completed, and we'll be seeing those savings on a run rate as the transformation completes internationally as well, which is really in 2023, right? On a capital basis, right, capital spending will also decline substantially. We were running at over 10% of revenue back in 2019. We expect that to get down to in the order of 7.5% as we complete the on-cloud transformation. We indicated this year, we'll be running at around 9% of revenue, next year at around -- 2022 at about 8% of revenue. But again, going from the levels we were seeing back in 2019, down to that 7.5%, that's another $115 million of cash savings. So the $125 million of expense, plus that $115 million of cash on a pretax basis, you're looking at an over $240 million that really accelerates our cash generation, which obviously is substantial. But as Mark indicated, the real benefits are the acceleration in our growth. And the good news is you're already seeing it in our Vitality Index, the percentage of our revenue generated by products over the past 3 years. That's increased substantially from last year at around 5% to this year, we're expecting it to be over 8%. So really nice growth as those new products hit the market faster.

Great. That's really helpful. And then I think another thing that's been pretty interesting in the first 5 months of the year or so has been capital deployment. Mark, as you mentioned earlier, you guys have made 5 acquisitions so far this year. You resumed a share buyback program. Obviously, as things are improving fundamentally here and cash flow is building, how should we think about some of your priorities? What would interest you in future acquisitions? How should we think about buying back stock and what that looks like moving forward?

Yes, great question. And one, I think as we mentioned earlier, our cash flow has been accelerated, and we expect it to accelerate. So there's going to be cash available to do what I would characterize as the strategic and accretive bolt-on M&A, and we'll talk about the areas of focus for us, and return cash to shareholders. We started that cash return with our first step earlier this year to initiate a buyback program to offset share dilution. And we'll lay out a long-term capital allocation plan as a part of our long-term framework later this year. So just back on M&A. John and I and the Equifax team, M&A is not new to our space. Equifax has been a bolt-on acquirer for many, many years. Rick Smith executed that strategy. Our competitors do, too. It's a very attractive way, given the nature of our business, to have really very attractive synergies and returns by buying the right kind of acquisitions. And our focus is not on transformational M&A, meaning a fifth or sixth business unit, it's really on bolt-on. And the areas that we are focused on are some that we've executed on in the last couple of years and then also in the first quarter and we expect to do going forward. First and foremost, we're focused on differentiated data assets, what are the unique data assets that can be accretive to the data assets Equifax has. And if you go back to the last couple of years, Kyle, DataX in 2018, a very unique consumer database with subprime consumer data. In 2019, we bought PayNet, a very unique commercial leasing data. Most recently, DataX is a unique data asset, it's very accretive to our identity assets. So unique data assets is a space that we'd like to keep expanding into, and we've got to focus on that. Second is identity and fraud. It's an $18 billion TAM growing at 20% per year. It's a space where we've got a strong business in. It plays to the digital macro of our customers, meaning more and more interactions in financial services, telco, insurance, e-commerce are being done online, on a tablet, on a phone. And in order to facilitate those, you've got to verify identity. And you've also got to do it in a seamless, frictionless way. So we've got new products out there with like Luminate that we've developed organically in our cloud capabilities, and Kount is really quite additive. Massive scale of interactions in a new data set in e-commerce, 32 billion interactions a year, 400 million roughly verified email addresses, cell phone numbers, IP addresses, ship-to addresses, bill-to addresses, so just more signals around Mark that's accretive to the signals we have around Mark in the credit file, around when I'm paying bills on my credit card or mortgages, et cetera. So that really makes some -- Kount makes Equifax stronger in the identity space, and Equifax assets will make Kount stronger in the e-commerce space, and it brought us into a new vertical. We weren't in the e-commerce space. So second is identity and fraud. And we'd like to do more acquisitions there, and we've got those in our pipeline and we're focused on that. Third would be Workforce Solutions. We've had a strong history of expanding our capabilities in Workforce Solutions. We did 2 acquisitions that are bolt-ins or tuck-ins in the Employer Services space, HIREtech and i2Verify in the income and employment space. These bring us new solutions in HIREtech's case, it's in work opportunity tax credit, making us bigger, in that we already have a Watsi business, this makes us stronger. And i2Verify, they're more just in the income and employment verification space, so it makes us stronger there. They both brought records. So highly accretive and very attractive acquisitions. There aren't many of those out there. We've -- there aren't really many left to acquire. But if we can find them, we will. The other place in Workforce Solutions is the differentiated data assets. Remember, our core data asset in Workforce Solutions is the TWN. Income and employment data set would be 450 million total records, so we've got a lot of work history. And in particular, we talked earlier about using that data set in the employer in the hiring process. There's 70 million new employees per year in the U.S., so massive number. And there's an average of $4,000 to $5,000, something like that, spent on each new employee in the hiring process. And our data on our work history can be accretive there. It's used in background screening and other areas. But there's also the other data elements around where did someone go to school, their university or high school degrees, technical degrees. Are they a doctor, a dentist? What are their accreditations, incarceration data. Today, we have partnerships on that data, so we can provide a complete solution. We'd like to buy some of that differentiated data assets. So I think that's kind of the fourth or fifth area of focus from an M&A standpoint. So highly accretive. It leverages our data. So high synergies, is very attractive. And the last would be international platforms, expanding our market footprint internationally, either in-market, doing a tuck-in or bolt-on in Canada, Australia, or one of our markets. One of the acquisitions in the first quarter was a tuck-in in Australia. So adding to that, last year, we bought out our partner in India, so we own 100% of our India business. So doing those kind of acquisitions, you know we did Veda, I think it was 5 or 6 years ago to buy the publicly traded credit bureau in Australia. Again, there aren't many of those, but we've got some in our pipeline that we keep an eye on, that we talk about, that we'd like to expand into. And again, just coming back to M&A, you should expect us to be disciplined. You should expect us to be focused on leveraging our accelerating cash flow. And then to the second half of your question around capital allocation, returning cash to shareholders, we look forward to doing that. That will be a part -- we look forward to dialoguing about that when we put our long-term framework back in place and then talk about our capital allocation plan that comes with that. But it's going to start with investing in Equifax. We think that's going to deliver high returns to our shareholders. So that's going to be where we'll focus first. Investing in Equifax, like the cloud transformation, over the last 3 years. And now bolt-on incremental M&A that makes Equifax broader and stronger.

And the good news is with our really strong cash flow and really strong growth in EBITDA, we're rapidly delevering. So we also have a lot of capacity, right.

Great. That's helpful. And then I have a couple of minutes left here. But I guess I wanted to close with a question that's, I think, been coming up a little bit more, particularly on competition, on the Workforce Solutions side. There's been some noise from both -- some bigger public companies as well as some private companies that have been trying to dive into the income and verification space a little more. Are you guys starting to see any more competition when you guys are going out and chasing either new records on the payroll partnership side or with like individual companies? And what would you say is kind of the value-add of going and putting your records on TWN versus a more emerging platform?

Yes. We hear mostly about competition from you, meaning investors versus customers or the marketplace or payroll processors or potential contributors. But it's not lost on us that the team at Experian are talking about it. We have a very attractive business. Conversely, like they have very attractive businesses in the health care space. I spend a lot of time looking at that. I don't think I can compete there, which is why we haven't done acquisitions. You haven't heard me talk about that. With regard to Workforce Solutions, we think the scale of our business makes it very difficult to compete. If you think about kind of different elements of that. Having the scale of the Employer Solutions business that we have, we're providing all these services to HR managers to obtain records, that takes a long time to build. We've invested $2 billion in the business over the last decade, a couple of hundred million dollars in the last 2 years. We have a lot invested in Equifax. And I don't think any of our competitors are talking about investing at that scale to obtain records. If you think about our payroll processor, Equifax has been in this for a decade. We've got highly sophisticated security and privacy protocols. Those payroll processors want to make sure that they don't damage the relationship with their customers. And when it comes to a revenue share, we have the system-to-system integrations. We have all the inquiries coming. So as we add their records, we can provide a revenue share to them day 2. If you're in a start-up mode, you can't do that. It's very, very hard to compete financially on that as well as on the value we deliver. For individual companies an HR manager's not going to give their data to cheap companies. They're not going to give it to a start-up. They're very risk-averse. And they want to make sure that their privacy is protected and Equifax can deliver. So we think we have a real moat around the business and real scale for all the reasons we described. But it's not lost on us that our traditional competitors and others are looking at it. So we're investing. We're investing organically. We're investing in M&A. And we intend to grow our franchise and grow our business. The other area I think you touched on is consumer consented data where consumers -- there's companies out there, and we're partnered with Yodlee on an exclusive basis. And our competitors have partnerships, too. We're getting bank transaction data. There's a place for that, primarily, we believe, with more the credit-needy or subprime. The bulk of consumers are not going to be willing to provide their bank credentials to JPMorgan Chase or Citibank, whatever bank you do business with, to a startup like that. They're just going to be uncomfortable doing it. And there's a lot of friction. If you think about the customer side, if you're trying to have a workflow and originate a customer and you've got to wait, have them put their credentials in, compartmentalize and categorize that, and then you get back some -- not verified, but some imputed net pay. And remember, we're delivering on the mortgage space 50 attributes, and gross pay, net pay, and these are all required in that underwriting process. In this case, it's only net pay, and then there's no history. We have 450 million records, an average of 4.5 jobs, the value of our data set. So there's a place for consumer-consented bank transaction data, that's why we're partnering with Yodlee, and we've got another partnership with a company called Urjanet that has similar data from utilities. We don't think that's ever going to compete at scale with what we have at Workforce Solutions. But we're playing in that space.

Great. This has been very helpful. I appreciate you guys taking the time today. It looks like we're kind of at the end of our time here. But yes, thanks, guys, for joining, and enjoy the rest of the conference.

Thanks for having us, Kyle. We appreciate it.

Thanks, guys.