Equifax Inc. (EFX) Earnings Call Transcript & Summary

Here, I'm George Tong. I'm really pleased to be joined by Mark Begor, CEO of Equifax. Mark, thank you for being here with us today.

Thanks for having us again.

Of course. So let's start at a high level, Mark, with macro slowdown, with inflation being high, with interest rates being high, consumers understandably are more distressed from a credit perspective than pre-COVID. Can you give us an update on the overall health of the U.S. consumer right now from a credit perspective, the puts and the takes from what you gather?

Yes, I would say some of your comments in your question are overstating what we see. I'm trying to remember the words you used, George. It's something about the credit stress on the consumer. We're not seeing that. Now at the low-end and subprime consumers, clearly, they're being impacted by inflation. But generally, what we see from a credit standpoint is where consumers have challenges is when they're not working. And with employment so high, unemployment so low, 1.7 jobs for everyone, who loses a job, the consumer is still quite strong. They came out of COVID with very strong balance sheets. Credit scores from today versus 2019 are still up 15 to 20 points on average. And the only place we see any levels of stress, which is primarily from the high inflation of fuel and food and those kinds of things, is in the subprime consumer. So the near-prime and prime consumers are very strong. And we haven't seen any impact on our volume as a result of a slowdown. We don't see an economic slowdown, right? Everyone is talking about it on CNBC and in these kinds of meetings, but it hasn't really happened yet in the world that we operate in. And it's hard for us to see, with unemployment where it is and so many open jobs, how that will impact. But we're prepared. We think we're more resilient than we've ever been, particularly because of the diversity of Equifax, with Workforce Solutions, in particular, being such a large part of our company, approaching 50%. Back in '08, '09, it was 20% of Equifax, and it grew double digit through that economic event. And now that it's approaching 50%, we think that gives us a lot of recession resiliency. We also had the cloud completion, which I'm sure you'll touch on. As the group knows in the room here, we started a cloud transformation to be cloud-native 4 years ago. We're in the final chapters of completing that. And that's going to deliver, in '23 and '24, substantial cost savings that are going to happen regardless of the economy, right? So if the economy's up, down or sideways, we're still going to complete the cloud that's going to deliver upwards of half of the 500 basis point margin expansion we're planning to deliver between now and 2025. The other half is from operating leverage. So we're watching the economy. We're ready with a plan, if something does happen, to tighten our belt, cost-wise. Until then, we're still investing. I think you know we've been really on offense over the last, certainly, couple of years, while we were doing the cloud, around new products, really ramping up our new product capabilities, which is driving our top line, and then also doing more bolt-on M&A to strengthen the core of Equifax. Maybe one last point is not only are customers strong, but -- I'm sorry, consumers are strong, but customers are. The banks, financial institutions are in a very different position today than they were in '08, '09. They have strong balance sheets. They're profitable. They don't have credit issues. So that's another piece that I would say broadly. The only place where we're seeing some customer stress is in fintech, which is really because they primarily do subprime lending. So they've had to tighten up, which impacts their business. And most of them are bank credit line or securitization funded, and that's been tightened up, the restrictions on their lending.

Right, right. Sticking with the topic of macro, Equifax recently released new long-term financial targets, including growth of 7% to 10% top line. What kind of macro environment would be most conducive to hitting that 7% to 10%? What kind of minimum GDP growth or maximum inflation or maximum interest rate environment would allow you to achieve that target growth?

Yes, I think as you're pointing out a year ago, November, we had an Investor Day, where we rolled out a new long-term framework. We took our old framework, which was 7% to 10% organic and inorganic to 8% to 12%. Inside of the 8% to 12%, the 7% to 10% and the delta being 1 to 2 points of revenue growth annually from bolt-on M&A. So the 8% to 12% was up 100 in the low end, 200 on the high end. And it's intended to be a long-term framework, meaning it's not a growth rate in a recession, and you had to define recessions. But over the long term, we think Equifax has a stronger growth rate going forward. The other thing we did, George, as you remember, is we laid out in November last year, we reconfirmed that a few weeks ago on our third quarter earnings call, a goal for 2025 to grow our revenue from this year will be a little north, about $5.1 billion, I think is the midpoint of consensus, growing that to $7 billion. And that's in line with that 8% to 12% framework. And then also expanding our margins between now and 2025 by 500 basis points from 34% to 39%. And then post '25, growing 50 basis points per year. That was the framework we laid out a year ago. And we still have confidence in that in what we see as the economy kind of going forward. It's hard to tell, is there going to be a recession or not. We're already in a mortgage recession, probably the deepest we've ever seen. We all know that there was a big refi boom in 2021. That's certainly come down in the second half of 2022. That'll comp out in 2023. It feels like we're approaching a bottom on the mortgage market, although we've called that a couple of times unsuccessfully. But mortgage is going to be down 50% in the fourth quarter in our guide versus what it was a year ago. That's a dramatic decline. Refis have really stopped. There's still -- HELOC is taking place, and there's still -- there's always a level of purchase volume, but that is below historical levels, even in an economic event. And when we look forward to 2025, which maybe I'm going to try to answer your question that way versus the 8% to 12%, we still are confident in a $7 billion and 39% EBITDA margins. Our non-mortgage businesses are performing substantially stronger than where we thought they'd performed a year ago, in November, when we laid out that $7 billion goal for 2025. And non-mortgage for Equifax is 80% of our revenue. It includes -- certainly, a big part of Workforce Solutions is non-mortgage, our Identity and Fraud business, our credit card and other businesses. In Workforce, their talent business and government business and Employer Solutions businesses, all very, very strong. And our non-mortgage businesses in 2022 will be up 20%. So that gives us confidence that we're growing above what we thought we would in '22 around non-mortgage. Second one that gives us confidence of kind of '23, '24, '25, is our new product execution. In November last year, we set a goal of 10% vitality, which is new products as a percent of our revenue from new products introduced in the last 3 years. So for Equifax at $5.1 billion this year, a 10% goal would say, $520 million of our revenue is from new products this year.

Right.

We think it's a very vibrant goal. As you know, we've guided that up in 2022. Most of the new products are in non-mortgage, and we delivered 14% vitality in the third quarter, and we increased our guide to 13% for the year. That 13% versus 10% gives us confidence going forward. The other piece of confidence is our bolt-on M&A. As you know, we've done almost a dozen bolt-on acquisitions into the core of Equifax. Every one of those is non-mortgage. They're helping drive the 80% of Equifax that's really delivering that 20% growth this year, which is above our guide when we started the year. And that bolt-on acquisitions really start kicking in the acquisitions we did this year and last year. Those synergies kick in, in '23 and '24 and '25. And then I already talked about completing the cloud. We're well down the path. Workforce Solutions is substantially in the cloud. USIS will move into the cloud in the coming quarters. And certainly by the time we're at this conference next year, but really at midyear next year, we'll have substantially all of North America in the cloud, and that's going to deliver that kind of 200 basis points of the 500 basis point margin expansion. That also gives us confidence as it's well-timed. If there's an economic event, we're going to complete the cloud regardless of the economic event. And the last point that I would make is around the resiliency of the company today, and I mentioned that earlier, in an economic event. Workforce Solutions just has very large verticals that are very diverse and have a lot of growth potential. And you can almost start just with records, and I'm sure we'll get to Workforce. But one of the growth drivers of our income and employment business, which we call Workforce Solutions, is the ability to add new data records, and we're able to monetize those instantly. And we'll add those records, whether the economy is up down or sideways. we're not going to slow down adding records. And as you know, in the third quarter, the records in that business were up 16%. Last year, they were up 21%. In '20, they were up 20%, records. And if you think about 16% record growth, that translates into low double-digit revenue growth. There's some rev share in there. So very powerful because, remember, we're getting inquiries from our customers for every applicant at -- our current records are 111 million of the working population is what we have. There are about 210 million total working Americans, including pensioners. So we're at the kind of high 50s as far as hit rate. When we add new records, we can monetize those instantly. So that's a very powerful lever for us as we think about going forward. So long winded around how do we think about the next couple of years of the 8% to 12%. Well, 8% to 12% delivers $7 billion. And the 500 basis of margin expansion, even with a mortgage market that's declined meaningfully versus what we thought in November, that will bottom out in -- if you get out to '24 and '25, there should be some modest improvements in mortgage, meaning it's so far below its historical averages on the purchase volume. And then non-mortgages are performing much more strongly.

Right, right. You touched on a lot of the great points on the cloud transformation progress there, certainly driving a lot of margin expansion. As you think about your longer-term target for margins of 39%, what are the factors that could drive upside or downside to that number...

So I would call it a medium-term goal of 39%.

Medium-term?

Yes. You said longer term, remember, longer term is 50 bps a year.

Right.

Post 39%. So we laid that on our long-term framework. Our old framework was 25 bps a year. We increased that to 50 and then the 500 basis points. So how do we think about the 500 basis points? First off, having -- approaching half of it from completing the cloud that gives us a lot of confidence in that piece. We'll execute that regardless of the economy. And then the other half is really driven by the operating leverage in the company. And it starts with Workforce Solutions. Workforce Solutions, if you think about the 8% to 12% long-term growth rate or the 7% to 10% organic long-term growth rate, let's use the 8% to 12%, we're counting on workforce growing 13% to 15%. So outgrowing the rest of Equifax. And workforce has been outgrowing that 13% to 15% for 5 years, substantially. And again, the earlier comment I made about records, if you think about the 13% to 15% and just take records, 16% record growth in third quarter inside of 13% to 15% is 2/3 of that growth is just for record. Now we don't think that's a good long-term growth rate for records. As you may remember from our November Investor Day, we laid out 4 points or 400 basis points of that 13% to 15% from record growth. So you start there, we have a lot of confidence in that. And you've got a business that has 50-plus percent EBITDA margins that's highly accretive to the rest of Equifax, when it's growing to 13% to 15%, that's a substantial piece of that margin expansion from a leverage standpoint, meaning Workforce will grow faster than the rest of Equifax and accrete in those 50% EBITDA margins into our 34%, heading to 39%. And the other piece is really, cloud. It's really the cloud completion, the ability for us to be more competitive from a market share standpoint, which should drive top line and uses international and in Workforce, and then the ability to roll out new products. That 10% vitality, which is our long-term goal, is another lever to drive that top line of the 8% to 12%, which gives us confidence in our ability to do that going forward.

Right. Yes, makes sense. Let's touch on mortgage a little bit. So as you noted, mortgage origination volumes are on track to decline about 50% full year this year. As forecast by the MBIA, it's going to decline another 10% plus next year. How do you think about mortgage volume growth structurally in a higher interest rate environment post-COVID compared to pre-COVID when rates are lower? Do you think the growth rate for mortgage volumes will change over the next couple of years compared to what you saw before COVID?

We don't. If you kind of get a normal mortgage market, people move, right? Every year, they buy homes. That purchase volume is generally there regardless of the interest rate environment. I think if we all go back in time, there have been times in the U.S. economic history where mortgage rates were very high single digits, meaning higher than where they are now. People still buy homes. People will still take out a cash-out refi. There's $25 trillion of untapped equity in people's homes. They're using HELOCs. They may use cash-out refis to get that even at a 6% mortgage rate, that's well below a teen's auto loan or well below a credit card up in the high 20s. So there's always going to be a baseload of mortgage. So we believe that part of what has taken purchase volume to record lows, one is availability of homes. Two is really the -- what's happened to how people think about where interest rates are going. There's no stability in interest rates. So a lot of consumers, we believe, are sitting on the sidelines that want to buy a home or waiting to see where our interest rates are going to stabilize. And I think that environment we've had over the past couple of quarters have driven down the purchase volume to unprecedented levels. But as I said earlier, 80% of Equifax is nonmortgage. And having that business grow 20% in an 8% to 12% framework, knowing that we're going to normalize in mortgage, and that was always in our long-term framework. When we laid out our medium-term goal last November of $7 billion in 2025, we knew mortgage was going to come down. It was elevated by the HELOC -- I'm sorry, the refi volume that was taking place. So we expected mortgage to come down. It just came down more quickly.

Right, right. The USIS non-mortgage B2B business grew a solid 5% year-over-year in 3Q. We saw strength in credit card volumes, maybe mitigated by some softness in auto loans. Can you give us an update…

Strength in Identity, with strength in commercial. Those are strong double digits in our Identity and commercial businesses. And then some weakness in our FMS.

Right. Can you touch on a little bit of the trends that you're seeing on the card side and on the auto side, specifically the volume trends that you're seeing? What kind of growth, what kind of deceleration, if any, is happening on the card side? How is...

Yes. As I said earlier, we're really not seeing any meaningful de-acceleration. I wouldn't expect that. You probably know, I spent a decade running a card business and card originators have to keep originating. And they'll slow down originations. They don't stop, but they'll slow down originations when they see delinquencies come up. And we've only seen delinquencies tick up in subprime, right? And it really hasn't ticked up in near and prime, and most of the market is near prime and prime customers. So the only place we're seeing some slowdown is really in fintech. And you've heard that, I think, from some of our peers and maybe some of the companies that are doing that, that there are some inflation-driven delinquency impacts, meaning budgetary decisions that consumers are making at the lower end, meaning subprime, about buying food or paying fuel bills versus paying back their credit cards. So there's been some tick up there. And there's also a counter-cyclicality using cards as an example is, marketing may decline in an economic event, which, again, we haven't seen yet broadly. There's an uptick that dampens that on spending in back book management, whether it's line management. They'll spend more to do credit line decreases or spend more on data to do credit line increases to those customers that they can really count on. And then more money is spent on collections to get that first dollar that's available when there's an economic event.

Right. One of your competitors, TransUnion, on their last earnings call, mentioned that they were seeing a little bit of a slowdown on card marketing activity and pre-approvals. It sounds like you're not seeing...

My understanding was that they said that around their fintech business. They're larger in fintech than we are and Experian, I think, as you know. And I believe that's what they said. That's what I would say. It's a subprime and fintech. I think that's how they described it.

And what's your fintech mix right now?

Smaller than theirs. We don't disclose what our actual fintech is, I don't think they do either, but they're probably 2 or 3x the size we are in fintech. And again, fintech, broadly, from a market standpoint, is most of the volume that all 3 of us do is in FI, right? Meaning it's in big banks. Fintech is still a fairly small piece, but it historically is growing faster until recently. Kind of pre-COVID, they tightened up during COVID. But pre-COVID, fintech was growing, call it, 20%, which is a good business for all 3 of us, particularly good for the Chicago competitor. It's a space that we're growing in, we want to get larger in and we've been adding resources and we made some acquisitions around unique data for fintech. Teletrack and DataX are 2 unique assets that we have that are really targeted at that subprime fintech space.

Right. You mentioned in the USIS business, you're seeing a little bit of headwind in Financial Marketing Services, FMS, that's your offline B2B batch business.

Yes.

Mainly related to lower demand for fraud identity...

It's really a product issue that we had. You can describe as lower demand, I call it. We had a product issue and lost some share. It's a small piece of what we call FMS and where we sell our header records that are used for Identity and Fraud Solutions and other parties. We had a product issue late last year where we didn't refresh the product. We got a little bit behind because of the cloud transformation work being done in USIS. We believe we're going to fix that, actually fixing it with -- from a product standpoint. And we'd expect FMS to grow in 2023, notwithstanding an economic event, which we don't see yet. But the product issue should be behind us.

Got it. So by next year, it should be in the rearview mirror.

Yes.

Got it. Great. So Workforce Solutions.

Finally.

A shift to their -- makes up just under 50% of revenues, grew a very solid 9% year-over-year in 3Q. And a big chunk of that growth came from non-mortgage, I think that was up 40%.

I was hoping you were going to use the 40%. If you didn't, I was going to be sure that...

Yes. No, it's great growth there. So how sustainable is that level of growth in non-mortgage, that 40%? Certainly, it should normalize over time. But what do you see as the non-mortgage sustainable growth?

Well again, our long-term growth rate for the business is 13% to 15% That's the whole business. So when you think about 13% to 15%, think about that being non-mortgage over the long term. It's substantially outgrown that over the last 5 years quite substantially. And if you think about the levers that Workforce Solutions has, either nonmortgage or mortgage, they are more unique, more powerful and with more depth than any other business we have, and really, I think any other business in the data analytics space. And we talked about it earlier, it starts with records. Very uniquely, most data businesses have all the data, and they work to increase price, roll out new products, drive new verticals, drive penetration with the existing data. And I'll come back to all that with Workforce Solutions. But with records, that translates into revenue the day you add them. And as I mentioned earlier, we were up 16% in the records in the third quarter. We ended the quarter with 111 million unique individuals in our data set. There are about 210 million working Americans. So the path from 111 million to 210 million is a lot of growth potential to add records. And we were up 16% in the quarter. We're up 21% last year. We're up 20% the year before. In our 13% to 15% long-term growth rate for Workforce Solutions, we're counting on 400 basis points. So way outgrowing that. That gives us a lot of confidence in our ability to deliver that 400. There's a lever in there of about another 400 basis points into 13% to 15% from price and product. We have meaningful pricing power in that business. I wouldn't put it in the same zip code as FICO, but we have a very unique data asset, just like they have with the FICO score. Only Equifax has that income unemployment data. So we bring price to the marketplace every year. We've already got our January 1, 2023, price increases in the market. They went in a couple of months ago. So we know what price is going to be in 2023. And we have more pricing power here than we have in other businesses. And if you think about 4% from price and product, beside how you split the 4%, I won't do it for you. But we have an ability to grow price well in excess of GDP, using that as an example. So that gives us a lot of confidence in the price portion of that 400 basis points. The other 400 is around product and the ability to bring new solutions to market. Workforce Solutions, up until the last couple of years, basically sold the same product for 10 years, which was a snapshot on George's income and employment at Goldman Sachs in 50 different attributes, and we sell it for between $40 and $50. Now that we're in the cloud, the last 12 months, we've been able to roll out new solutions that are primarily focused on leveraging their historical data. So your income is very important when you're applying for a mortgage today. And it may be even more important with your historical data. A lot of employees have bonus income. They got a bonus in February or January or December, that's not in your income snapshot today. So when we go back and show 24 months, 36, 48 months with a history, sold at a higher price point. In the mortgage space, instead of selling $40 or $50, we're selling historical data at $150, $175, $200. So that's all revenue growth, high-margin -- incremental margin in part of that 400 basis points that I talked about. There's another 400 basis points in that 13% to 15% around penetration. And as you know, this is our most diverse business as far as verticals. Most of Equifax's businesses are in the FI world. So in Workforce Solutions, we have mortgage. And even in mortgage, where every mortgage pulls a credit file in the United States, still 40% of mortgages are originated with paper pay stubs versus using our data. It's a matter of time before we move that from 60% to 65% to 70%. Two years ago, it was in the 50s, and we moved it up to 60%, so that penetration growth, even in a vertical that's very large. And what we deliver with our income and employment data is speed and accuracy. And speed is really important in every vertical we're in to have that instant decision so you can shorten the time frame to complete the transaction. And if you go across the cards, P loans, lot of penetration opportunity there. And I think as you know, uniquely in this business, we have a big vertical in talent, as we call it, which is the background screening space, where we sell our data to background screeners where we have the job title, we get every pay record. So of the 50 attributes, one of those is your job title. In that job title we have been collecting for 20 years, and we have almost 600 million job titles or jobs in our database. So we have, on average, 5.5 jobs on the average American. So we're selling that to the background screening space to help them digitize their process. That's about a $4 billion TAM. We have about a $400 million business in Workforce Solutions. So we're doing roughly 1 in 10 or 2 in 10 background screens are using our data today. So the penetration opportunity in that business, as you know, in the third quarter was up over 50% organically, and we expect it to be up in that range for 2022 as we drive penetration, product, price, records. And then the last vertical, just to touch on it, to round it out for the group, is our government vertical. And this is around the delivery of social services across the United States. So think about unemployment claims, food stamps, rent support, child care support, student lending support, all of those services are needs-based. Meaning if you make less, you get more services. Today, it's primarily manually verified, meaning someone has to bring documents into the agency to say, I qualify for food stamps, here are all my payroll records. They bring paystubs in with them. We're digitizing that space. So that's a $2 billion TAM, very diverse at all 50 states. There are agencies in each state that are independent. So there's the food agency, there's a child care agency, there's the rental agency, there's unemployment claims. You have to connect to all of those. And that's a business that is about a $2 billion TAM, as I mentioned. We have about a $350 million business today. It was up 50% in the quarter, so big penetration opportunity. We're at about 20% there. And then the last piece is that 13% to 15%, I've taken you through kind of the walk of our long-term framework. It's really around new verticals and market growth just kind of broadly. So when we think about -- your question was the sustainability of non-mortgage growth, I gave you the sustainability of kind of broadly, Workforce Solutions growth. We're way out growing the 13% to 15%. We have a lot of confidence in the 13% to 15%, which gives us confidence in our 8% to 12% long-term framework.

Right. Makes sense. I'm going to pause there and see if there are any questions from the audience. No? Okay, let's move on to pricing. You touched a little bit on pricing within EWS. How are pricing -- how much is pricing going up by in other areas within the company...

Yes, we don't -- for competitive reasons, we don't talk about how much our price increase is. We consistently -- it's not new this year. We did it last year, we did the year before. We take price up across all the Equifax businesses. We have clearly more pricing power in Workforce Solutions than we do in the other Equifax businesses, period. We've already rolled out our price increases for 2023. So that gives us real visibility on the revenue growth that's going to come from that. They're broadly effective 1/1. We roll those out with our customers kind of in the September, October, November time frame. And we're having conversations with customers as we speak like most companies do. And so that's effective going forward. And again, remember, at least using the example of the 13% to 15% Workforce Solutions long-term framework, we're only talking between price and product around 400 basis points to drive that 13% to 15%. Between the two, we're way outperforming that in the last many number of years in Workforce.

Right. Let's touch on margins a little bit. If you look at the mortgage vertical, certainly high-margin business, but the volume pressures there are weighing on margins a bit. As you think about gross margin performance outside of mortgages, how is that trending? How is that performing? Input cost inflation relative to pricing, how would you lay that out?

Yes. We haven't seen any real inflation. Even labor inflation for us is manageable. Meaning it's -- when you think about our costs, the biggest chunk of our costs are really technology, running our data centers. And as you know, moving to the cloud, we're going to get a big cost save from that. And in our cloud environment, we have long-term contracts on those. So there are a lot of stability around that piece of it. We have a lot of employees, but we're not seeing a change in inflation there. We don't have a lot of hourly employees where there's a lot of inflation in that category. That's a small group. So inflation really doesn't broadly impact us from our perspective. Where we get margin growth is -- we talked about all the levers, driving price, driving new products. New products are always driving incremental revenue. And when you drive incremental revenue in data analytics business, you get very high incremental margin growth from that next dollar of revenue. You all understand quite broadly, I'm sure, as you've paid for the data in the last 2 transactions, however described. You keep reselling the same data as you drive revenue growth from that, you get very high 60%, 70%, 80% incremental margins from the business. And your Workforce adding records drives margins, driving new products broadly across Equifax, drives margins. The incremental growth in all the verticals we talked about is incremental revenue growth that drives margins. And that's why we increased our long-term margin growth rate from 25% to 50%, and we have the growth rate between now and 2025 of 500 basis points, and you get that -- half of that from the cloud transformation that we already talked about.

Right. In 2021, Equifax converted a little over 50% of its EBITDA and free cash flow. What do you think is your longer-term potential for free cash flow conversion? And what are your capital allocation priorities?

Yes. So it's a great question, George, because it's really the next chapter of Equifax is completing the cloud, our CapEx is going to come down meaningfully, which is where we're using a bunch of free cash flow now. We're -- kind of been north of 10%, we're going to head to 7.5%. So that's going to drive our free cash flow. And then as we expand our EBITDA margins from 34% to 39%, that expands our free cash flow. And then, of course, the 39% in a larger company, growing our top line kind of 8% to 12% or use the $7 billion number increases our EBITDA and our leverage capability. So when we get out to 24%, 25%, we believe we're going to have excess free cash flow that we'll use to return to shareholders at the right time through dividend and buyback of $1 billion to $2 billion per year, which is quite substantial. And that's what we've been investing in the cloud for. That's what we've been driving our new product capabilities for. So our free cash conversion gets up in the kind of 90s, gets to be a very high number.

Great, okay. We have about a minute left. Any other questions? I think we've got 1 there. Let's wait for the mic.

Yes. Maybe just a quick 1 on the FHFA announcement, the bi-merge from tri-merge and the FICO implications.

Yes. We were surprised actually by both. First half of the announcement was they're going to acquire both scores be pulled for every mortgage. The view, I believe, is that, that's going to drive access to credit. So that's good news for Equifax. We're going to sell 2 scores instead of 1. Vantage and FICO, and it's good for the industry, meaning the other 2 credit bureaus. They also said that they were going to go from, not a requirement, but they're going to have the option to either do 3 credit bureau polls or 2. We're not sure where the industry is going to go. There's still a lot of lift that comes from pulling 3 credit bureaus. And simply, if you look at your credit score on all 3 websites, Equifax, Experian, TransUnion, they're all different. It's because the contributors are slightly different. So there's value in the 3 credit files, particularly in a big-ticket transaction like mortgage, meaning you can originate more mortgages. Regardless of where it goes on the 3 to 2, we think it's going to take time, meaning it's not going to happen overnight. There are a lot of systems implications. There are a lot of underwriting implications, meaning what's the mortgage company going to want to do. And then last is we're working to differentiate our file versus our competitors. And you may have seen a week before the FHFA announcement, which we didn't know was coming. We announced a new Equifax mortgage credit file where we're going to add 15 attributes that are not in the TU or Experian file from our cellphone utility database that makes our file more predictive. So we're trying to position our file in a 2D world, if there is one or where there is one to be one of the 2, meaning it's advantaged. And that's something that we have a 220-million-person database on cell phone utility data records. Those payment records are very valuable when you add, "Mark paid his cell phone on time. Mark paid his satellite TV on time. He paid utilities on time." When you add those to the credit file, only your credit file will have those additional attributes. So that is one thing that we were doing regardless of the FHFA announcement to position for.

Great. Well, Mark, great conversation. Thanks for the time and the insights.

Thank you George.

Thank you, Mark. Thanks a lot.