Equifax Inc. (EFX) Earnings Call Transcript & Summary

Hey, good morning, everyone. Welcome to Day 4 of the 17th Annual Needham Technology and Media Conference. My name is Kyle Peterson. I'm with the fintech research team at Needham. Next, we're going to hear in fireside chat with Equifax we have CFO, John Gamble; and IR, Trevor Burns here with us today. So thanks for joining us, guys. Welcome to the conference.

I want to start off on mortgage. Frankly, it's been kind of a [ topic ] conversation across our coverage. And I know you guys have a decent amount of the business in mortgage. I know you guys just recently kind of revised your guidance specifically for the mortgage outlook. Can you guys talk about what you guys are seeing here just given how quickly kind of rates climbed up on everyone in the last few months?

Sure. And Kyle, thanks for having us. We certainly appreciate being here. So yes, as we talked about on our earnings call, during -- we revised down to try to derisk to the greatest extent we could, the mortgage market as we went through the rest of this year, right? And what we did is if you take a look at the second half of 2022, we took the mortgage market down about 40% relative to where it was in 2021. And as a reminder, 2021 was down over 20% from where we were in 2020. So a very substantial decline from the peaks that we saw during 2020 after the -- as COVID hit. So -- and when we looked at that, we looked at a couple of things. First, what we tried to take a look at was what we've seen as mortgage trends over the past 10-plus years. And at the levels we've selected for the back half of this year, we are at levels below anything we've seen in the last 10 years and more than about 25% below or about 25% below, but the average level of mortgage inquiries that we've seen over what we call a more normal period. So I think the period just before the pandemic, so say, 2014 to 2019. So we think we picked a level that is substantially below anything we've seen over historic periods. At the time that we set these levels, right? And as you'll remember back in late April, we were seeing the mortgage rates were over -- up to 30-year mortgage rates were over 5% kind of consistent with where we are now. The third -- the 10-year was around 3%, actually a little lower today, but somewhat consistent with where we are now. So we think probably still relatively reasonable expectations. Again, we forecast USIS mortgage credit inquiries, right, which is a little different than either applications or originations. A lot of people take a look at MBA application index, right? And what you normally see is that during a period of declining applications that inquiries outperforms applications because people shop more, right? As the rate environments become more and more difficult, people do a lot more shopping before they select their mortgage vendor. So we tend to do much -- have a much stronger performance than the overall application index. You saw that in the first quarter. We'd expect that to continue to a degree in the second quarter and then kind of we'd start to move toward the level of applications in the third and fourth quarter, but down [ 40 ] in inquiries is probably more like down mid-40s, in applications. So we feel like we've taken a relatively conservative, relatively derisked view. If you think about kind of the mix between purchase and refi, we obviously participate heavily in both, both in USIS as well as in Workforce Solutions. We've assumed that we're going to see the purchase market stay relatively good, but decline from the levels we saw last year, so think down 5-plus percent, right, and which I think is somewhat consistent with what the trends people are currently looking at. As a reminder, back half of last year, obviously, was already weaker than the front half of last year. So it's a decline off of that somewhat lower level. And refi, we're expecting very substantial declines. Think on the order of 2/3 or more decline from the levels we saw last year, right? And as a percentage of revenue down -- as a percentage of transactions, sorry, down substantially from where we were running during 2021 and 2020. So -- and we think that's very consistent with what we're seeing overall in the mortgage market. Right now, the number of homes, as we talked about back in April, that could benefit on a rate basis where our refinancing has declined substantially, down to in the order of 3 million homes. But there's always -- there tends to always be refi volume, especially now given the fact that so many people have such tremendous home equity outstanding in their homes, you tend to see people increasingly doing refis to do a cash out refi to take more cash out of the equity they have in their home or to just refinance other debts nonmortgage, right? Although 5% or 5.5% feels like a high mortgage rate, given what we've seen over the past 2 years, it's not that high relative to a credit card, right? So that type of activity tends to continue. And what we've seen in the last several months for the data we look at from Black Knight is on cash out refis have become the substantial majority of the transactions we're seeing in the refi market, which again, it's consistent with what we've seen historically. If you go back to the last time we were in a rising rate environment like back in 2018, it's similar to what you saw there. So we think we've picked a reasonable spot. And obviously, we'll follow it closely. And as we do always, we'll provide you with details on what we're seeing for originations every quarter. So you can see that -- you can actually see what's occurred and then so people can make their own judgments as well.

Great. That's really helpful. And you kind of briefly touched on the Workforce Solutions component of mortgage, seems like that's been a really good story and even when mortgage was -- and refi was really booming in the last couple of years. You guys were significantly outperforming the overall mortgage market. It seems like it was -- a lot of that was due to Workforce Solutions. Could you maybe talk about the story there within mortgage? And what's helped you outperform the overall even mortgage inquiry market, partially just due to share gains and new product adoption there?

Absolutely. So it's -- the story in mortgage for Workforce Solutions is really the same story across all of the segments of Workforce Solutions. So Workforce Solutions is unique in the fact that we have the ability to grow the database, where in our credit business, the database is fairly complete. So verification services which is the portion of the business, which is the bulk of the business, obviously, in Workforce Solutions, where we verify employment income not only for mortgage, but also for card, for personal loans, for talent solutions and government, which I'm sure we'll talk about more in a minute. There's multiple drivers that allow us to try to drive that revenue to substantially outperform the overall market. And in the first quarter, we outperformed the overall mortgage market Workforce Solutions by more than 25 points, right? And the biggest driver is really growth in records. And what you've seen is we've been able to grow records year-on-year. We grew records year-on-year by, I think, about 19% in the first quarter, a similar number in the fourth quarter. And that's from us continuing to board more and more contributors to the work number directly, and we do that through our employer services business, where we're the largest provider of unemployment insurance claims, work opportunity, tax credits, ACA validation work, digital I-9 validations. We provide all of those services to HR departments. All of those services really require the HR departments to provide us with their employment records and their payroll records. And when they do that, we provide to those companies, those customers a free service where we'll do employment and income verifications for their employees for -- to -- back to the company for free. We obviously charge the verifier, charge the mortgage company or the lender but to the company that's contributing the records they're free. So we continue to add records directly and about 55% of the records we get, we get through direct contributions from companies or universities or other organizations. And then also, we've continued to be very successful at adding new partners, generally payroll processors, but in many cases, software companies as well. We announced that we added 4 more payroll processors as exclusive contributors to the work number over the past 3 to 4 months. One of them is starting to go live as we talk today. And what's occurring, obviously, as we continue to build those exclusive partnerships, that helps us build records. And as we indicated at the end of the first quarter, we were at 136 million payroll records contributed real-time. Currently, that's about 105 million individuals, and some people have 2 jobs, that's approaching 70% of U.S. nonfarm payroll. And we have over 550 million total records, which includes historical information, which increasingly is critical to any response that we give to a lender or obviously to anyone in talent or government because they're not interested in only your current job, but also your historical job. And it's that 136 million current records and very importantly, 550 million total records that makes the work number so unique and so much tremendously more valuable than any other potential solution in the market that has only a very, very small fraction of the current records that we have, and in many cases, virtually no historical records. And to give you a perspective, we're approaching 45% of the transactions we execute in Workforce Solutions. It involves current and historic records. So it involves our historic records as well. So those historic records that trended information is critically important. So it's that growing the database really allows us to outperform the mortgage market, but really a lot of the markets we're in. Also, product helps us drive new -- increasingly grow. We continue to launch new products at higher price points because we're providing more and more information. We can increasingly provide more historical information that's complete to our customers, for example, in mortgage refinancing that allows us to drive higher value products, and we're continuing to drive that through high-value products. Also, every year, if you take a look at same product transactions, if you bought a standard verification of income or employment from us last year, that might include some historical information. In 2022, that information is more deep because we have 19% more records. So although you might have brought the same SKU, right, that same SKU delivers more value than it did a year ago. And because of that, right, we're able to actually get price every year because it's not just a straight price increase, we're actually increasing price on a product that may be the same SKU, but actually delivers more value. So that continues to be the case. And we continue to drive relative inquiry growth because we continue to build out system-to-system integrations. So in mortgage, for example, I think we're up to about 75% of the transactions we execute our system to system. The reason that's important to us is, obviously, if we're in your workflow as a mortgage company, then every time you execute a mortgage transaction, you'll go hit the work number database. So we get a larger number of inquiries, a higher percentage of the market when we go system to system. We still have a long ways to go there, right? If you take a look at historical data back at 2021, we saw just over 6 in 10 mortgages that closed used a work number as part of that closing process. And it -- that's up well over 500 basis points over 2 years. So we continue to grow that share. And again, we think what's driving that share growth is the fact that we continue to build out the database. So our response rate is going up and up. And as our response rate is higher, it is really beneficial to our customers to build those system-to-system integrations. So those are 3 big drivers that allow us to substantially outperform our underlying markets. Just 2 seconds on talent and government, right? Talent solutions and government outside of mortgage are our 2 largest nonmortgage segments by far, right? And what's happened with talent, obviously, is we've built out not only a broader set of records where those historical records are incredibly important, right? We can now, because of the depth of the database with over 550 million total records, we can, in many cases, deliver a digital resume. We can [indiscernible] tile and understand where you not only work currently, but your last several jobs. So to a background screener, that's very valuable. That allows them to respond to their customer immediately. And what that's doing is as we can continue to build out that digital resume more fully, then we're able to increase our penetration in the $5 billion industry for data that's in the background screening industry. And that we've seen our share grow very nicely with background screeners over the past several years. We're still at just between 10% and 20% of the transactions are executed of the hiring transactions executed in the U.S., of which there are 75 million a year where they're using the work number, but that's been growing substantially over time. We're also building out the data hub. You know we acquired Insights, the Appriss Insights business which has incarceration and criminal information available through it, also it has medical credentials as well as medical sanction data available. And we also have signed an exclusive partnership with the National Student Clearinghouse where we're the only party in the U.S. that can pull your full educational history, secondary educational history using your identity information. So what we're increasingly doing with that data hub is we're now able to provide a much more complete and rich set of information to background screeners and companies when they're trying to -- after they've made an offer to someone where they're trying to validate the information on which they made that offer because we can provide targeted products that provide the level of employment history, that companies are looking for. We can provide the educational history that may be required for specific jobs and then we can provide the criminal and incarceration information required for them to validate criminal backgrounds in one package. And the package that's required for someone working in financial services or banking looks different than the package that's required for someone that would be involved in health care, looks different than the package that might be required for someone who's going to be involved in truck driver or working in retail. And we can build targeted packages that allow us to deliver those specific data sets to our customers, and you've seen tremendous growth in talent solutions right up on the order of 100% because of the tremendous growth we've seen in those data assets which allows us to build share and new products. And government is very similar, right? We provide information to governments to help them board customers onto social programs. Think rental assistance, think food assistance and those types of programs. And what we can do, since our database is now so substantial and complete, is when a person is coming in to apply for those benefits to the extent that the state government or the local government, in some cases, federal government, is using the work number, they can enroll people in those benefits much more rapidly. And we're finding tremendous growth in government. We've seen more than double-digit growth in government as well as we move through the year. And so really strong performance there. And again, similarly, extremely strong performance around our nonmortgage financial services area, where, again, we're seeing increasingly card issuers pulling the work number, not just for subprime, but also for all card evaluations and also doing CLIs and similar around personal loans. So it's the growth of the work number and the growth of the new product sets we can build as we continue to build out the data hub that's allowing us to dramatically outgrow the markets we serve. So a long answer, but a big question. Yes.

No, that's really helpful. Maybe another question we've gotten quite a bit from investors lately is if we are heading into a recession, there's a lot of kind of ramifications with that. Potentially higher unemployment is one thing, I know within Workforce Solutions, you guys do have some employment -- unemployment verification claims business and that seems like it was a real tailwind for you guys kind of at the onset of the pandemic. Can you maybe remind us kind of how -- what exactly that business does and how it could potentially serve as come a nice like countercyclical offer for you guys if the economy does experience kind of a slowdown or a recession in the coming quarters or year?

Absolutely. And looking to the question more broadly about how would our business react in a recessionary environment or given the levels of high employment or potentially maybe just an economic slowdown. We provided some information at the last earnings about the percentage of our revenue that we think is either countercyclical, and you've obviously covered one of those with unemployment insurance claims, but also the fortunes that is recession resistant. And we think we're at the -- we think we have over 55% of our revenue that is either recession-resistant or countercyclical, and I'll hit UC here in a minute. But -- and that's up substantially from the levels we would have seen 10 years ago up on the order of 20 points from the levels we would have seen back during the last significant recession over 10 years ago. And if you think about the parts of our business where that's the case, so even like if you think about our U.S. consumer credit business, although, yes, obviously, to the extent the economy weakens, you may see fewer transactions executed by consumers as they pull back on spending, but what happens in the banking industry is they then significantly increase the level of data they're pulling from us, but also our peers, obviously, to try to do credit line reviews and try to make sure they're understanding what's happening in their existing book and those back book processes to make sure they manage their existing outstandings effectively. So there tends to be somewhat of a natural offset there. Also, obviously, we have -- we just talked about our government business, that government business, to the extent that the economy weakens, obviously, there's more people trying to access benefits and that increases the usefulness of the work number in driving that revenue base, which we think is far more stable during the weakening market. And there's also other parts of our business, which we've walked through, which we think are recession-resistant, maybe not countercyclical, but would perform relatively well in a recession. In terms of parts that are countercyclical, the biggest part is what you mentioned, unemployment insurance claims. That tends to run -- currently, we're kind of back at our normal base rate right now. We're running at, say, $30 million to $35 million a quarter for our unemployment insurance revenue. During the peak of the period over the last couple of years, that business was up well over 50%, right? What that business is, as all employers are required to do filings with their state and, in some cases, with local governments related to their employees as employees leave the company, right? And those unemployment insurance filings go to the state government and their use as they process claims and in some cases, dispute claims when people make claims for unemployment insurance. And so we help companies do those filings. In order for us to do those filings, they need to provide us with their payroll records. So one of the ways that we build that strong relationship with our payroll data contributors is by doing the unemployment insurance claims filings for employers. And currently, about 1 in 3 unemployment insurance claims filing done in the U.S. is done by Equifax, right? So it's a very large business. We have an extremely good business doing that, highly automated. So we feel very good about our strength there. And it makes us very sticky with our record contributors because of the fact that we're so large in that business. But it's absolutely countercyclical to the extent you start seeing unemployment increase, we would expect to see that business grow during a downturn. Similarly, we have an employee retention credit business, we saw that grow substantially. That was a program that was specific to COVID. I don't know if it'll be extended, but that was where we saw countercyclical activity over the past 2 years related to our ERC business. And then also, we have a debt management business where we help on people manage collections, and that's also something where that business tends to be countercyclical. The largest portion of that business is in the U.K. where we provide those services to the U.K. government.

Great. That's really helpful. And maybe switching gears a little bit. We've talked about some kind of downbeat things with mortgage environment getting tougher and potential recessionary environment. But I guess, peeling back some of your updated guidance, stripping out the mortgage impact, it seems like the ex mortgage outlook was raised. So maybe if you could talk about some of the trends, either through share gains or just potentially stronger performance in some of these other credit products like cards or personal loans? What are you guys seeing that is allowing the momentum in kind of the nonmortgage piece of the business to accelerate?

Yes. So when we talked -- at the April earnings call when we went through the -- our guidance for the rest of the year, right, we certainly did revise mortgage down. But as you said, we substantially increased the revenue contributed by nonmortgage. And if you go back to November, right, our -- what we've done is we provide growth rates for our nonmortgage business, and we adjusted for the impacts of the mortgage market and then adjusted for the kind of onetime benefits we were getting for unemployment insurance claims, as we just talked about, right? And that core revenue growth we have increased 250 basis points since we originally started talking about 2022 back in November. And what we talked about -- what we indicated in our April call is that we expect to see 17% core revenue growth in 2022 and that's up from 16% that we had indicated back in February and again up 250 basis points from back in November. And really, what's driving that is we've seen really outstanding performance across Workforce Solutions and Talent Solutions as we just talked about, as we continue to drive new products, new product growth and then growth obviously in the database. Outstanding performance in government, as government continues to grow aggressively across Workforce Solutions. Very, very strong performance in some of our Employer Services business. We're one of the largest providers in the U.S. of I-9 validation services, of citizenship validation services on hiring, and we've launched the product over a year ago that allows companies to do that for remote workers without having to have them come into the office. That business is growing extremely fast, and we've seen growth rates there that are well over 50%. So extremely strong growth in those businesses. And so outstanding performance really across the nonmortgage segment of Workforce Solutions. And again, nonmortgage is now 60% of our revenue in Workforce Solutions. So really great performance there. Very good performance also in international, right? We've seen north of 10% growth in international in the first quarter. We're talking about north of 10% growth in the second quarter, continuing, we said for the full year to see 7% to 9%. So very good growth in our international business as we go through all of this year. We've seen good growth across most of the regions that we serve and very good growth in our debt management business as economies continue to start to recover. So really nice, outsized nonmortgage growth or growth in general and international. And in USIS, we've seen very good growth in our online nonmortgage business, right? That was up 10% in the first quarter. Organic was up 6%, right? So again, consistent with our long-term model with USIS of 6% to 8%. And what we've indicated is we expect to see that strengthen as we move through the year. So our nonmortgage growth has been really outstanding. And then we also covered a piece of what's driving our ability to outperform the mortgage market, in general, with U.S. -- sorry, with Workforce Solutions as they continue to dramatically substantially outperform the mortgage market overall and as we said in the first quarter by over 25 points. So it's the continued substantial growth in records at Workforce Solutions and which is driving not only the outperformance in mortgage but also tremendous growth across talent, across government, across nonmortgage financial institution revenue and across I-9 and other employer services as well as very good growth in international and continued strengthening in our USIS nonmortgage business that gives us a lot of confidence that we're going to deliver really nice nonmortgage core revenue growth in 2022 and that really makes us feel good about it as we go forward. And as a reminder, right, when we talk about 17% core revenue growth, that's on a component of growth basis, right? So that's driving 17 points of growth in our total revenue. So that is really, really strong performance that we feel great about. And if you think about the fact that we're looking at an overall mortgage market that's down really substantially in 2020 -- very substantially in 2022, even with that negative impact of the mortgage market, which is negatively impacting our revenue by well over 10 points, we're still going to deliver 6 points of revenue -- of overall revenue growth in 2022. So we think very, very good performance during a market that's normalizing. We feel that the movement in the mortgage market substantially normalizes in 2022. Obviously, no one can forecast what's going to happen in 2023. But we're at a level for mortgage inquiries as we said, as we exit 2022 that is well below what we've seen as normal below anything we've seen in the past 10 years. So we believe a lot of the normalization that we would have been talking about back in November has likely already occurred in this year. Could there be more next year? Sure. It's hard to forecast what the mortgage market does, but we're at a level now in the mortgage market, which will, as we exit the year be substantially below anything we've seen historically.

Great. That's really helpful. And then maybe just following up, you've kind of mentioned international revenue growth. I think that's a really interesting part of the story. I've noticed you expanded Workforce Solutions into some of these international markets recently. Can you walk through what are the key moving pieces, key markets for you guys driving growth? And then I guess second part of that question is, I mean you guys did have a Russian JV that impacted the numbers a little bit in the recent quarter and just kind of given the ongoing kind of situation there, how big of a piece was that for you guys? And how does that influence international revenue and earnings moving forward?

So I'll hit the second one first, okay? So the Russia JV, it's a nonconsolidated entity. It's an entity we don't control or directly manage. What we did is as we made the -- we believe we won't be receiving any benefit from that JV going forward, and we've actually written down the asset, right? And then obviously, what -- how we deal with the JV as we go forward is something we're still working on. But embedded in our numbers for 2022 and going forward assumes no equity. And there would have been no revenue anyway since it was -- we didn't have a majority or control of the entity. So there's no revenue impact, but it was benefiting our equity income by about $0.02 to $0.03 a quarter, I think $0.03 a quarter. So we eliminated that in the first quarter, wrote down the asset and have assumed that it will be 0 going forward. So we've effectively eliminated the financial effect of the venture in our financial results from this point forward for 2022 forward. And with regard to growth, what's really driving our growth in all regions, I'll cover it generally and then try to apply it to international, is really NPI, right? Our NPI or new product process has really been accelerating substantially as we've moved through 2020-'21 and now into 2022, right? And in the first quarter, we saw NPI of over 12%, and we're expecting to deliver NPI in the full year of over 11%. And that's a vitality index. And what that means is in 2022, we expect over 11% of our revenue to be delivered by products that are new in the past 3 years, which we think is really outstanding performance, right? That truly is, I think, a measure of a company that's very vital that's delivering new product and new innovation consistently. And we think what's allowing us to drive that very high vitality index is the tech transformation. So we haven't really covered that yet, right? But obviously, we've been making tremendous progress as we continue to move towards a cloud-native environment for Equifax worldwide. And we think that, that is a -- movement to cloud native we think it's very unique. But when I say cloud native, we're actually using -- and we're moving principally to GCP. We have a reasonable footprint in AWS as well so that we're in both cloud providers so we can provide competition. But a substantial impact footprint -- in the bulk of our data input footprints already in GCP. And by moving to a common data fabric with common ingestion and common journaling transactions. So we're inputting data in a consistent way. We're moving to a common data fabric across our data assets. And what that means is that puts us in a position to be able to far more easily understand the consistency of our data for an individual or a company across all of our assets much more rapidly than we think any of our peers can. And by using the native applications of our providers, so in this case, Google, because we're running on their native data management applications, we can also use their native artificial intelligence applications and all of the advancements Google is making to manage data more effectively, and we think they're the best provider of that in the world as well as use artificial intelligence to drive those types of processes, we can take advantage of across our whole footprint. And we think that gives us a substantial advantage over our traditional competitors as well as over emerging competitors that may not have made the investment which we have, which is way over $1.5 billion of incremental spend on top of our normal spend to try to move us to the situation. So tech transformation is going well. EWS, the verifier database has migrated on to GCP cloud native. We have our U.S. consumer credit and our Canadian consumer credit databases that have migrated and not all customers have migrated, but they're migrated and now delivering workloads off of those. We've migrated a substantial percentage of our customers on to Google standard APIs. So we think with the tremendous work we've done on transformation and that's now starting to move overseas. It's happened in Canada, as I just mentioned, and we're starting to see accelerating progress overseas. As that's happening with the very diverse data assets Equifax has, which you know, are far more diverse than most of our peers, that we not only have credit information, we have income information, we have employment information, we have telco payment information. We have, obviously, the very interesting and diverse information in identity and fraud the account brings not only on the financial services side, but also on e-commerce, where the volume of transactions is substantially higher, we can now combine that data to create new products faster, that are more valuable to our customers that deliver greater insights to our customers and let us grow faster. And it's -- that's what's accelerating our vitality index. And we think that's what's allowing us to outgrow the markets we're participating in internationally and we're seeing really nice growth across most of our international regions. And a lot of it's driven by the continuing improvement in global deployment of the standard transformed systems worldwide. So as an example, we've now deployed our decisioning system Interconnect in all regions worldwide, running on both GCP and AWS and that's allowing us to migrate -- move more and more customers on to our decisioning since they can use it easily on cloud and also deliver new products faster that combine our data into a decision and deliver it to our customers far faster than we ever could before. So we really think that the progress we've made in tech transformation and the progress we've made and been able to combine multidata assets much more rapidly than we ever could before is what's allowing us to deliver higher growth in those nonmortgage segments and obviously in international generally.

Great. That's really helpful. I want to switch gears over to kind of capital allocation. I mean you guys, obviously, had a very busy year last year. You made a couple of pretty exciting acquisitions. You guys sort of buying back stock again for the first time in several years. I know you've kind of paused that just given the kind of priority. It seems like to reduce leverage after a couple of the larger deals last year, namely Kount and Appriss. How should we think about your priorities for free cash flow, both in the near term and long-term for Equifax?

Absolutely. So what you're seeing, obviously, and you mentioned it already, is our free cash flow is really accelerating, right? As we're continuing to deliver growth this year even in the declining mortgage market, obviously delivering substantial earnings growth year-on-year, even in the substantial -- even with the substantial decline in the mortgage market, it's also driving much higher free cash flow. And our free cash flow, excluding the final payment that we made on the class action settlements from 2017, we'll approach $1 billion, I think, this year. And because of that, what's happening is we're having a lot more cash flow available not only for investment internally in new products, which obviously is always our priority, right, but also will be available for us to use for acquisitions, share repurchases and then dividend increases. And the priority continues to be on acquisitions. But we think as time passes and as we move through this year, our balance sheet will strengthen further and you've seen it strengthen substantially as we've moved through the first quarter and you'll see it again in the second quarter. As that continues to happen, what you'll find is that our pace of acquisitions should be able to increase, and we'll get back on our normal cadence of acquisitions. And then also, we'll start being able to consider increases in dividend and then also share repurchases. And I think that's something we'll be talking to you a lot more about as we move through the second half of this year.

Great. But that's -- yes, that's really helpful. And I guess with M&A, I mean, what would you guys be looking for in future deals? I know -- is it more unique data assets, is it something potentially internationally? What are some of the priorities and things that you would view as like a natural fit for you guys?

Yes. So our priorities, the good news have been very consistent, right? So I think we try to be very diligent in M&A. We try to be a diligent buyer. We're generally looking for bolt-ons, right? So when we say bolt-on, they can be large, Appriss was large, but it was a bolt-on, right? It was immediately adjacent in data and transaction capability that was consistent with our existing business and Workforce Solutions. So as an example, Kount the same thing. We had an identity and fraud business, relatively substantial acquisition. But by adding Kount, we added the capability to access markets we never could before, which includes, obviously, e-commerce markets, both with retailers as well as card providers. But also, it was adjacent to an identity and fraud market we already own. So we're already in. So again, we're looking at bolt-ons, and you covered them already very nicely, right? So we're looking to add new data assets that allow us to strengthen our ability to provide differentiated decisioning across our core businesses, but also to access new channels and new markets, right? And obviously, Kount did that as well as Appriss. We're also looking very specifically to strengthen workforce solutions to strengthen our employer services as well as to try to build our record base. And we did 3 or 4 acquisitions over the past 1.5 years in Workforce Solutions, specifically around those areas, where we added capabilities around work opportunity tax credits, around ACA validations for customers and then also some companies that had access and had built franchises around adding records in some segments where we were strong, but where we wanted to add more strength. So for example, i2verify was very strong in higher education and health care and they had good sales teams on how to acquire records in those segments. So we acquired them and help them drive that for us. So obviously, Workforce Solutions is very important. And then in terms of alternative data assets, alternative decisioning assets is something we're very focused on. So as you've looked over the past several years, we've done multiple transactions, mostly around USIS, but also that touched international that allowed us to strengthen our commercial business. So our acquisitions of PayNet and Ansonia strengthened that business. We already had commercial trade lines, right? And that's a substantial business. We have this growing very nicely, actually, our commercial business growing near double digits. And the -- but what we added with PayNet is leasing data. And we also added receivable securitization data from Ansonia. So strengthening that database. And then we acquired DataX and Teletrack, which is alternative financial data, which again, for consumers, again, think leasing data and that type of data also through Teletrack and DataX, so that we can build out those alternative data assets that we're now ingesting into fabric that let us build differentiated products for our customers. So we're going to continue to look at differentiated data acquisitions that get us into different channels. Many of the acquisitions we acquired -- we executed in the past 2 years, specifically in Workforce Solutions, for example, we're providing work opportunity tax credits or ACA validations not directly to customers, that's where most of our business was, but through channels, think payroll processors, so that allowed us to build those relationships with payroll processors even more deeply. And again, as I mentioned with Kount, where they had different channels where they were going through card providers to get to retailers and then to retailers directly, which again, are channels we didn't have in the past. So that's the type of bolt-on we continue to look for. We did just complete a small acquisition of the largest bureau in the Dominican Republic. When those country bureaus come up, credit bureaus come up, we'll look at them. And if it's the largest bureau in a country, we'll focus there. The number of large ones left is very small. So those tend to be sporadic, really the last -- when we did Veda in 2016, that was the largest one available at the time. There's a couple of other big ones out that are owned by kind of consortiums of banks, think Germany, but they're harder to get.

Great. That makes a ton of sense. I really appreciate you guys taking the time today. I think we've covered a lot of ground. So I think we'll leave it there and enjoy the rest of the conference, and appreciate you guys attending.

Thanks very much. Thanks for having us. We appreciate it.