Equifax Inc. (EFX) Earnings Call Transcript & Summary

I think we're ready to begin with our next presentation of the day. My name is George Mihalos. I am the fintech analyst here at Cowen. I'm not really sure exactly what fintech entails, but everything is there.

We like that we're included in that, George.

Absolutely. New Equifax.

Yes.

Very pleased to welcome to the conference, Mark Begor, CEO of Equifax. Mark, thank you for being here. Appreciate your time.

Great to be here, George. Thanks for having us.

I would be remiss not to say Trevor Burns, the Head of IR, is here as well. So guys, thank you again for being here.

So why don't we just kind of jump right into it? I mean, obviously, I think you guys have a very sort of privileged position in being able to see trends in the U.S. consumer, maybe how those are developing through your partners. But just curious, at a high level, what are you seeing in the market today, Mark? And if we kind of go back to late April, let's just put mortgage to the side because it is what it is. But it sounded like a fairly healthy demand environment, meaning your bank partners are out there, they're ready, willing and able to lend. So just...

Yes. So I think that's a great point, George. From our perspective, the consumer is very strong. And it's going to stay strong and pick your time frame, but certainly through 2022, through the rest of this year. If you think about the consumer, they're working. If they lose a job, they get a new one. They've had wage growth. Their credit scores are up 20 to 30 points from where they were pre-COVID. There's still a bunch of stimulus around that's supporting the low-end consumer, but even in the middle with a lot of the stimulus support that's still there, meaning they've added social services into the network. And then if you're a homeowner, which a lot of consumers are, your home price is up 30%. And they've got equity they haven't tapped into. So that's a very healthy balance sheet for the consumer with low unemployment, a lot of open jobs. That's a positive. We are seeing at the low end, the subprime consumer who is -- had that wage growth is working but is being pressured by inflation whether it's oil prices, gas prices, energy prices, food prices, there's some pressure there. And we've seen an uptick in delinquencies. But as you know, that's a small portion of the consumer base. So broadly, the consumer is very, very strong. And I don't see that changing as we go through 2022 for sure, meaning there's a lot of jobs out there. And then the other piece that's strong is our customers. When you think about banks, telcos, insurance, very, very strong balance sheets. Their balance sheets got delevered. They are also, I think, this group knows much stronger financially than they were in the last economic event, go back to the global financial crisis in '08, '09. There's so many more capital controls, meaning they have to carry more capital, but they're just broadly very strong. And so our customers are really originating. They're doing prescreens, they're doing marketing. They want to grow their business. And leave mortgage aside of the macro there, which we'll probably touch on what's happening with refis, but when you think about a global economy and certainly the U.S. consumer, they're going to be strong for a while. And they're out there spending. I think we also -- in the first quarter, credit card spend rates are up, meaning they're out there traveling, they're spending, they're buying. So there's still a lot of momentum, which is good for our customers and good for our business.

And I would think having anniversaried stimulus that there's more demand, again, for lending that is building into some of these FI partners.

No question because consumers really paid down their balances in '20 and '21. And now that they're starting to spend more, do continued home improvements, travel, et cetera, they are going out, they're looking for new cars. Of course, there's still a shortage of automobiles, but people are out there buying cars, they're adding to their home, they're traveling. That's all good for credit card originations, for personal loans, for auto loans. Even in the mortgage space, people are still moving in the purchase side, and there's still a refi business. Remember, with -- there's -- I forget the number, I think it's either $3 trillion or $4 trillion of untapped home equity is out there today because of that 30% price appreciation. We saw in the first quarter, consumers taking up their cash out refi activity. The way you access that equity to pay down a credit card, to buy a new car, to do an addition on your home, you do a refinance of your mortgage and consumers are willing even at higher interest rates, if you want to use that term. They were 2.5 a year ago, now mortgages at a fixed rate of 5 and change. But even at 5, that's an attractive way to access that equity versus a 25% credit card, a 10% personal loan, 8% auto loan, so that home equity piece is still there. So we're bullish around certainly the non-mortgage portion of our business. As you know, we've guided up twice this year on our non-mortgage business, which is 75% of Equifax. We started the year with a goal of 15% growth for non-mortgage. We took it up to 16% in February, and we took it up to 17% in April because we're just seeing really strong growth across our non-mortgage businesses. And as you know, 17% is very, very strong for Equifax and the industry from a non-mortgage perspective, and that 17% is well above our 8% to 12% long-term framework. So you're seeing the vast majority of Equifax operate exceptionally well.

So that dovetails well into the next question, which is, again, let's put mortgage to the side. I think you guys sort of derisked the guide on mortgage. But to your point, you put that to the side, the actual outlook for the rest of the business is actually up, I think something like $75 million.

Yes.

What exactly is outperforming to allow you to do that?

It starts with workforce solutions. And as you know, that's our strongest, fastest growing, most profitable business. Workforce is just hitting on all cylinders. And if I could take a minute to talk about it, I think, as you know, workforce is approaching half of Equifax. It will be north of $2.4 billion of revenue inside our $5.2 billion at the midpoint this year. In the first quarter, it was up 3%, in the light of a mortgage market that was down 25%. They've got a big mortgage business, which they outgrew. But what's really powering Workforce Solutions is, number one, records. Quite uniquely, as you know, we can add new payroll records to that business and it translates into revenue the day we add them. Our records were up 19% in the first quarter. And just as a reminder, we ended the first quarter at 104 million unique individuals every pay period, which was up 19% over a year ago. But the runway for us is roughly 200 million working Americans. So we have the ability to take our records overtime and call it 10 years to go from 104 million to 200 million. That's revenue. And if you think about our business because we have interactions, connections with mortgage lenders, auto lenders, credit card issuers, P loan, background screeners, government where we monetize those records, we're receiving inquiries for every one of their applications. We can only fulfill 55% today, and that's the $2.4 billion. So just on records in that business in Workforce Solution, we can double the business, take it to $5 billion roughly just through getting full records. Now that's going to take us a long time. So then you add to that some of the growth in some of the verticals. Mortgage, even with mortgage down 25%, Workforce Solutions grew its mortgage business about 8 points. So meaning it offset the 9 as 25 and it grew through price, through new products, through records, through penetration and system to system integrations. If you come outside of mortgage, we had in non-mortgage financial services, so think credit cards, personal loans, auto was up strong double digit in the first quarter in Workforce Solutions, like north of 40%. So that very strong growth there. And then move into our Employer Solutions business, where we provide regulatory and compliance services to HR managers, very unique for credit bureau to be doing this, but it's a part of the model and workforce solutions where we do I9 verification work for companies. We do unemployment claims management, W-2 management, work opportunity tax credit. That business is performing very, very well, strong double-digit growth. And then go over to talent and government, 2 of the newer verticals for Workforce Solutions, which you wouldn't typically hear our competitors talk about. Talent is the hiring space. 75 million people a year get new jobs. Every one of those new jobs requires a background screen. We're not in the background screening business. That's for First Advantage, for Sterling, Precise and HireRight, the other companies that do that, we want to be their data provider. And inside of our Workforce Solutions twin database, not only do we have the income history on people, we have their company and job title. So we have 0.5 billion total records. We accumulate and keep every record, every pay period. So we have a digital resume on 550 million jobs in our data set, which equates to about 5.5 jobs on the average American. So we're selling that digital resume into the background screener space. That business is about $300 million for us and is growing. It's strong double digits, up about 40% in the first quarter. And then the other vertical, which is another one that's newer for Workforce Solutions, it's fast growing, is government social services. We sell into the federal, state, local and city level our data to be used in income verification for the delivery of social services. So in social services, you should think about food stamps, rent support, unemployment claims, child care support, student loan, abatement or support. All of those social services require a verification of income, and the individual gets more services depending upon their income levels. And that's a $2 billion TAM. We have about a $300 million business there, again, growing about 40%. So workforce is really powering that non-mortgage. And the uptick from '15, '16, '17 across all of Equifax is really driven by their outperformance. I'll just quickly go across USIS and International. So USIS is performing well also. Their online business was up 10% in the first quarter. That's above their long-term frame. So that's helping in that guide up. And then international was up about 10%. As you know, we have a $1 billion plus business outside the U.S. We're #1 in Australia, #1 in Canada, #1 in Spain, #1 in most Latin American countries. And that business is performing well, kind of double-digit -- kind of approaching double digits. So the combo of those, really led by Workforce, is really what gave us the confidence to guide up the non-mortgage outlook.

No, that's great. Appreciate you're taking us sort of around the entire business there. Just there are a number of questions I have on Workforce. Well, why don't we delve right into it based on some of the comments you made. The record growth, obviously, you talked about the long-term trajectory. There's still a lot with the job there...

104 million towards 200 million.

But even more near term, you're still ramping payroll process for relationships, even from a near-term perspective.

But remember, we get records 2 ways. 45% of our records come through partnerships. I think payroll processors, 55% come from individual companies. And I think it's really important to understand the depth of interactions we have with individual companies. And that comes through our Employer Solutions business, where we're delivering those regulatory and compliance services to an HR manager. So that's about a $3 billion TAM. We have about a $400 million business in that space. And remember, it's I-9 verification or citizens verification. Every employee -- every new employee has to have an I-9 verification done as a part of their onboarding. We do that for companies. Most companies do it themselves. Unemployment claims. If you lay off an employee, you have to process the paperwork so they can collect unemployment insurance. We do that for companies. W-2 management, et cetera. So those regulatory services that we deliver get us access to records. So we're adding new companies every week as we grow that business. As you know, we've done 4 acquisitions in that space in the last 15 months to strengthen our capabilities around delivering those regulatory services. And when you think about the $3 billion TAM, 70% of that activity is done in-house by companies. So they've only outsourced 30% so far. Our play is to drive the outsourcing. We can deliver accuracy. We can deliver auditable results. We can deliver productivity to the HR manager. And then in addition to those services, we'll do their income and employment verification for free. And if we're not doing their income and employment verification, they have a small call center and they're receiving calls from a mortgage broker, an auto lender, a background screener, checking on George's -- you apply for a mortgage, they're going to call into Cowen and say, hey, does George work there? How much does he make? And get that information. The HR manager has to verify that's not a fraudster. They have people that are doing that for them. We take that and now do it securely, privately. We credential the mortgage broker, so it takes it off the company. So really strong value prop. So that's 55% of our records. And as we grow our employer solutions business, we grow records there. And that's really the base load of records for us. The other 45%, as you point out, comes from partnerships that we've developed over the last, really, 7, 8 years, and it's ramped as you know, in the last number of years where we go to a payroll processor or a software provider that provides payroll services. And just as a reminder, like the I-9 unemployment claims verification outsourcing, where 70% of that is done in-house. In the payroll processing side, 60% to 70% of payroll processing is done in-house by companies. So they have outsourced 30 to 40 to the likes of an ADP, a Paychex, a Paycor, a PayNet and all the others. So we go to those payroll processors and let them take a free value-added service to their clients in addition to the payroll processing of income and employment verification. So they're more valuable to their clients by having Equifax do their income and employment verification. And then as you know, we pay a rev share. And what's really powerful is our rev share -- because remember, we're getting inquiries from so many connections around the applicants that every one of our customers have that as we add a new set of records either directly or through a partner, we monetize them this afternoon because we're already getting the inquiries. So we can deliver a revenue share to that payroll processor tomorrow afternoon. So very, very powerful because our hit rates go up. And the revenue translates. And think about our 19% record growth in the first quarter. We were up 15% record growth in 2020, close to '19 and 2021, that's revenue. So it translates not 1 for 1, but directionally into double-digit revenue growth. And as you know, we've been signing these agreements exclusively. We want to have an exclusive arrangement, so does our partner. They want to be connected to our security, our privacy, the scale of our technology, and we've been laying those out as a exclusive arrangements. And we announced in Feb and then again in April that we now have 4 new relationships that are exclusive to Workforce Solutions that we'll be adding in the second half of the year as we continue to drive towards that 200 million record. So it's a powerful network effect that we have of really driving the records. And I think as you know, we believe we have a pretty strong moat around the business from our scale and the capabilities we deliver to our contributors, which are really companies. And today, we have 2.5 million, 2.5 million companies are contributing their payroll records to Equifax either directly or through payroll partners or software companies in those partnerships we have every pay period. And that's how you get to the 104 million, and we see a lot of growth potential there.

So Mark, a lot to unpack there with what's going on in Workforce. But just curious, we tend to think, obviously, it's a big mortgage business there as well. But what are the verticals that you're most excited about sort of increasing the penetration?

Can I say yes?

You can say because I don't -- absolutely.

Well, it's one -- you and I have to remember, and I forget it too often that this business is only a decade old. But at scale, it's only 2 years old. And let me just speak on mortgage for 1 minute, if I could. People think about this as mortgage, and maybe I'll just unpack the revenue. So more than half of the revenue is outside financial services. 60% is outside mortgage. So mortgage is still very important to this business because we're so important to the industry. But even in mortgage, we're only 60% penetrated. 40% of mortgages today are still done with paper pay stubs. That's our competitor. And it -- you asked the question why. You've been at this for 10 years, why isn't it 70%? Well, 2 years ago, it was 50%, and we've grown it from 50% to 60%. We'll take it to 100. And just remember, the analogy, the credit file has been around for 100 years -- not quite100, 70 years. It's 100% penetrated in the mortgage market. So every mortgage pulls a credit file. We're now at 60% with the work number, our income and employment data. We'll get to 65%, 70%. We'll get to 100 just a matter of time. So penetration is a huge opportunity. So even that excites me. And as you know, with the ability to outgrow a mortgage market that's down 25% and then deliver positive revenue growth is really around the ability to drive penetration records, et cetera. So other verticals. Auto is a big vertical for us. Auto lending for Workforce Solutions is used pretty strongly around subprime. It's starting to move into near prime. We expect that to continue to grow. Cards is really a new frontier for Workforce Solutions. As you know, credit cards all pull a credit file. They do a credit score and a credit file pull. We have 1 large originator that's pulling not the full income and employment data, but a flag that says Mark is working. And it's driving their ability to do more originations at lower losses because they're verifying not only is Mark's credit score where they want it to be, but Mark is working so he has the capacity to pay or the ability to pay. So credit cards are a place where we see growth in the future. And as I said, in financial services outside of mortgage, auto lending, personal loans, that was up 40% in the first quarter. Personal loans is the other one, pretty well penetrated there. And then just jumping out of financial services, I already talked about talent, $5 billion TAM, supplying data to the background screeners. We do today roughly 1 in 10 background screens use our data. We want to get to 2 in 10,3 in 10, 4 in 10, just a matter of time. We deliver real productivity to the background screeners because they don't have to call around to the companies to verify that resume for someone. We do it instantly. And then we also deliver speed, which is really valuable for them. And then the other vertical we already talked about is government. Social services are only going in one direction. And our value prop there is instant. When you think about a social services office, and remember, a lot of that's done at the state levels, and each state is going to have an agency for rent support, a separate group for food support, a separate group for childcare support. So we have to connect to each of those agencies. And what they want to do is deliver those services as quickly as possible to the individual who needs them. And the way you deliver those services quickly? With this instant verification from our data versus having the person come back next week with more paperwork to verify their income or verify that they're not working, we do that instantly. So we see big potential there. And as I said, we're about 15% penetrated in government, but that's growing at strong double digits. And as you know, last year, we won a large contract in the government space with Social Security Administration. That went live in August last year, that's ramping. But that contract alone is $30 million to $40 million in run rate. So it shows the scale of that $2 billion TAM. So I like all my children. So when you think about verticals, we're quite energized about the breadth. And what's really unique as you think about Equifax historically, we would be more in that financial services world. Here, you've got a $3 billion TAM in employer solutions, where we've got huge penetration opportunity, $5 billion TAM in talent; big penetration opportunity in government, $2 billion TAM. Those are where we're just getting started in our penetration there. So we're really excited about those verticals.

Yes. I mean that sounds like a lot of growth to continue in the future. Just curious, when we think about that growth algorithm for EWS at a high level, right, you've got the record growth. That's been fairly consistently double digit if we look at it on an annualized basis.

And just I would add that, probably elevated in the near term. Like you shouldn't and we don't think about 19% or 15% as being the long-term kind of record growth rate of the business. But if you think about the potential, we see a long runway of growing records. And as I said, that translates into revenue. Like a 19% record growth translates into double-digit revenue and margin growth just from records. And going from 104 million to 200 million, we got a long -- a lot of opportunities to keep bringing new records into the data set.

That makes sense. So you've got that. You've got sort of newer end markets that you're looking to penetrate...

With big penetration potential.

And then maybe -- I don't know if I'd call it necessarily pricing, there's pricing components, but then there's also bundling, it sounds like. You're just adding more data there.

And add product. Yes, which is really -- bundling product is probably the same thing. So we have the ability to do pure price. Every year, we take price up in all Equifax businesses. We do it in December, so we have real visibility from that. We have more leverage on pricing in Workforce Solutions than the rest of Equifax because of the uniqueness of the data set. But I think as you point out, a really powerful lever for us is product. And as you know, that's a big initiative of Equifax as a part of our cloud transformation is to really start leveraging the cloud in our single data fabric to bring new solutions to market. And when we introduce a new solution that helps solve a customer problem, we really have very high incremental margins. Like Workforce Solutions, as you know, is 55% EBITDA margins. Their incremental margins on new growth, on new products is 70%, 80%, 90%. So very, very high because we've already paid for the infrastructure, and it's really a new solution. And when you think about new products, you should think about kind of 2 directions. One is combining the many data assets we have together into a new solution that drives predictability. And that's something we sell at a higher price because it's delivering more value to the customer. The other is leveraging our historical data around trended solutions. And if I could, I'll give you a couple of examples maybe from Workforce. So in Workforce, our base product is what I would call a snapshot of how much does Mark make today. We sell that to the background screener on where he works. And we sell that to the government space on what the income level is. We sell that into mortgage in a very detailed report around gross net deductions, et cetera. And like in mortgage, we'll sell that at $40. So a very powerful product for us. It's used quite broadly, but it's just a snapshot of how much do I make today. That works for a lot of decisioning. It doesn't work for every consumer. Now think about a consumer that gets a bonus payment in February, but the snapshot's taken the first week in June, doesn't pick up that bonus payment. So we've rolled out products in the last 12, 18 months at Workforce Solutions where we have a mortgage 24 -- 24 months' worth of history because, remember, we have history going back 10 years. So 24 months' worth of history, 36 months of history is another product, 48, 60 months. So instead of selling those for $40 because we're delivering more value to that more complex consumer, we sell it for $150, $175, $200. A lot of revenue, a lot of margin, but it also solves a problem for our customer. They're able to complete that loan. So it's very valuable to them. So they're willing to pay for that additional cost in the data. So product is a big play for us. One last one with Workforce you didn't mention is system-to-system integrations. We have 2 ways our customers buy our product. They either come to our website, credential in and do a single transaction typically. They'll log in, we have to make sure they're authorized to access our data and then they'll go in and put my name, social data, birth and pull the report down. That's 25% of what we do. 75% of system-to-system integrations were in the workflows, and they automatically hit our database every time they have an applicant coming through their process. We get a 25% lift in hit rates or revenue in system-to-system versus web because in a web process, we don't pick up every application. So getting the system to system is another big revenue opportunity. So each of the verticals we're working to convert manual or web access into system to system, and it drives our revenue. So another powerful lever for us.

And that creates a moat, obviously, around it once you're...

Because we're more connected, correct. As I said, roughly 75% in mortgage, it's lower in the other verticals as system-to system. But just as an analogy, the credit file in virtually every financial services process is fully integrated into the workflows, meaning it's system to system. So it's a matter of time before we bring all of our verticals to system-to-system because of the business is fairly new in the industry.

That's helpful. Mark, I did want to let you talk about one of these -- some current events here just around the mortgage business and of a coding issue that occurred at Equifax. So why do you just sort of respond to that? I know it's...

Yes. There was a press report, I think, from one of the mortgage magazines over the weekend about a coding issue that we had back in April. It's not new news for us. We had a coding issue that was a mistake made by our technology team in one of our legacy applications that resulted in some scores going out that had incorrect data in it. And we fixed the issue. We've been working with our customers over the last 5, 6 weeks to really collaborate with them about what impacts there may be. We think the impact is going to be quite small, not something that's meaningful to Equifax. And we're in very close collaborations with them around making sure that we stand behind it. And obviously, any data quality issue is a big issue for us. We take it very seriously, and it's one that we're going to make sure we're going to fix. And we've frozen this environment, and it's going to be moved to the cloud, in our new cloud transformation in the next couple of months.

I just wanted to have you address that. Why don't we pause here for a moment, see if there are any questions from the audience. Yes, please.

So you at Equifax have 4 years now. And I'm just curious in you talking about where the company is in its sort of life cycle. You've got some great business right now [indiscernible]. But where you need to take the business in 3 to 5 years?

Yes. We're excited about the future, I am. Thanks for noticing I've been here for 4 years. It's 4 and change.

It was chaotic when you got there.

Yes, it was pretty tricky in 2018 and '19 to really turn the business around. I think as you know, if you follow the company, we made a bold bet in 2018 that we're going to move to cloud. And that has been a big project. It's one we're well down the road. At the end of last year, we were 50% of the way there, meaning 50% of our revenue is cloud-native. This year, we'll approach 70% to 80% by the end of 2022, and then we'll finish it up in '23 and '24. So getting cloud done is a big deal. And we'll be the only company that's cloud-native. And if you want to be a great data analytics company, we believe, I believe you have to be a great technology company. It was a big bet, $1.5 billion incremental spend, doubling our tech spend over this time frame. And we believe it's going to transform Equifax really in our ability from our competitiveness in a digital world where all of our customers are interacting with their consumers online. You have to be always on. And the only way to have that stability or uptime of 99 is through cloud capabilities, we believe. So we think we're going to be stronger competitively from a market share standpoint. And then as you point out, the next chapter of Equifax is really leveraging our data. And we believe we have data our competitors don't have, at the heart of Equifax, whether it's our income and employment data we talked about or other data elements. We also not only took our technology to the cloud, we took our data from siloed data assets, which is the old Equifax and how our customers -- our competitors operate, to a single data fabric. So the next chapter of Equifax is really driving that through new products. And really leveraging our cloud capabilities and our new products to really drive innovation and new products going forward. Three years ago, we did something like 70 to 80 new products per year. Last year, we did 150. And as you point out, we're talking to you and internally about our vitality index. What portion of our revenue is from new products? And that's gone from 5%, 6% to 11% this year. So you think about 11%, that's $500-plus million of new revenue that's coming from products introduced in the last 3 years. And then on top of that, we've changed our long-term framework. In November, we had an Investor Day. Historically, Equifax had a goal of growing 7 to 10 with 25 basis points of margin expansion per year. Our new long-term framework is 8 to 12, so up 100 to 200, 200 in the high end, 100 in the low end, and we took margin growth for the long term from 25 to 50. So that's a different company going forward. And you've heard us talk about Workforce Solutions is driving that because they're outgrowing that long-term framework. And then the other thing we laid out in November was a goal in 2025 versus today of growing from -- this year will be about $5.2 billion, but growing our revenue to $7 billion by 2025. That's inside that 8 to 12 framework. But our margin expansion accelerates in the next 3 years because of the cost savings from the cloud as we complete it. So we're going to grow our margins from roughly 34 today to 39 by 2025. So 500 basis points of margin expansion, which is well in excess of that 50 basis points per year. Half of that comes from the cloud savings. The other half comes from new products and the leverage on the top line. And then the other big change is with our EBITDA growing, our margin rate growing, our free cash flow is going to grow dramatically in the next 3 years. So it's a very different company. We'll still use a sizable amount of our free cash flow to invest in bolt-on M&A to strengthen the company. But as we get into '23, '24, '25, we're going to have sizable excess free cash flow. And at the right time, we're going to return that to shareholders through a buyback. And we've been very clear about that's the new Equifax. So I'm really energized about what we've done. I'm focused on completing the cloud, so we can really unleash our differentiated data for kind of that next chapter of the new Equifax.

Just one follow-up on increase in the vitality index. Can you talk about the internal process change made to bring out more product...

Yes, it was quite dramatic. Two years ago, we started overinvesting in product, resources and capabilities in advance of the cloud transformation. We added, for example, 2 years, a Chief Product Officer that works for me. We have a monthly deep dive I do with the whole product team around their pipeline. We're very focused on collaborating with each new product with our customers. So meaning it's got someone who wants to use it to solve a problem. So really important to have that customer collaboration. We do a financial analysis on each new product to make sure it's going to have the return on capital. We're going to invest in building that product. And we're very focused on delivering -- leveraging our differentiated data assets and bringing them together. So it's an exciting next chapter of Equifax that we're building, as I call it, the new Equifax. Yes?

[indiscernible]

Yes. Yes, it's great. So I think we're running out of time, but we can do a couple more minutes, George. Is that right?

Yes. Can we do 2 minutes? Is that cool?

All right. So M&A is important. So a part of our 8 to 12 long-term framework includes 1% to 2% from bolt-on M&A annually in our revenue. So that's our goal. And we've had a pretty good history, the industry does and Equifax has. And last year, we were over-indexed on that. We did about $3 billion of M&A that's going to add $300 million of revenue. So that's in our run rate. We saw some unique opportunities. So really 3 priorities for us. And again, I'm very deliberate about using the term bolt-on. You won't hear Equifax talk about buying a fourth, fifth or sixth business. I think that's brought with beta. Buying a bolt-on acquisition that strengthens something you already have is what we want to do. So 3 areas, differentiated data. We're a data analytics company. If we can find data at scale that no one else has, that's what we want to buy. We bought a company last year called Kount that had very unique identity fraud data from the e-commerce world that no one else has. So great acquisition. We also bought a company called Appriss Insights, very unique incarceration data in the United States. They're the only ones that have that data set. So differentiated data. Second is we're focused on strengthening the core of Workforce Solutions. Workforce Solutions is our largest, fastest-growing, most profitable business. So we're looking for acquisitions that strengthen workforce. We've done 4 acquisitions around the Employer Services business where we deliver those regulatory services and it delivers records. So really strengthening that. Number three is identity and fraud. Fast-growing $20 billion TAM. We have a license to play in identity and fraud around data. And of course, we bought Kount, we'd like to do more there. And we're really quite disciplined around our financial criteria. We look for M&A that's going to be accretive to our top line growth rate. We bought Kount, it was growing at 20%, so well above our 8 to 12. We brought Appriss Insights. It was growing at 20%, well above 8 to 12. And we want acquisitions that are going to accretive to our margins and obviously be accretive from a return on capital standpoint. Yes.

I think we'll have to leave it there. Mark, thank you so much.

Thanks a lot. Thanks, George.