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S&P 500   5,011.12
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Stock market today: Asian markets sink, with Japan’s Nikkei down 3.5%, as Mideast tensions flare
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S&P 500   5,011.12
DOW   37,775.38
QQQ   423.41
What's Driving Tesla Lower Ahead of its Earnings?
Stock market today: Asian markets sink, with Japan’s Nikkei down 3.5%, as Mideast tensions flare
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'There is no time to waste': EU leaders want to boost competitiveness to close gap with US and China

Equifax Q3 2022 Earnings Call Transcript


Listen to Conference Call View Latest SEC 10-K Filing View Latest SEC 10-Q Filing

Participants

Corporate Executives

  • Trevor Burns
    Senior Vice President, Head of Investor Relations
  • Mark W. Begor
    Chief Executive Officer
  • John W. Gamble, Jr.
    Chief Financial Officer and Chief Operations Officer

Presentation

Operator

Greetings, and welcome to the Equifax Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Trevor Burns, Senior Vice-President, Head of Corporate Investor Relations. Thank you. You may begin.

Trevor Burns
Senior Vice President, Head of Investor Relations at Equifax

Thanks, and good morning. Welcome to today's conference call. I'm Trevor Burns. With me today are Mark Begor, Chief Executive Officer; and John Gamble, Chief Financial Officer. Today's call is being recorded. An archive of the recording will be available later today in the IR Calendar section of the News and Events tab at our IR website, www.investor.equifax.com. During the call, we'll be making reference to certain materials that can also be found in the presentation section of the News and Events tab at our IR website. These materials are labeled Q3 2022 earnings conference call. Also, we will be making certain forward looking statements including Fourth Quarter and Full-Year 2022 guidance to help you understand Equifax and its business environment. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from our expectations. Certain risk factors that may impact our business are set forth in filings with the SEC, including our 2021 Form 10-K and subsequent filings. We'll also be referring to certain non-GAAP financial measures, including adjusted EPS attributable to Equifax and adjusted EBITDA, which will be adjusted for certain items that affect the comparability of our underlying operational performance. These non-GAAP measures are detailed in reconciliation tables, which are included with our earnings release and can be found in the Financial Results section of the Financial Info tab at our IR website.

Now, I'd like to turn it over to Mark beginning on Slide 4.

Mark W. Begor
Chief Executive Officer at Equifax

Thanks, Trevor. Equifax delivered another very solid quarter with continued execution against our EFX's 2025 strategic priorities in a challenging economic environment. Third quarter revenue of $1.244 billion [Part 1 end] Was up 2% or 4% in constant-currency and was above the high-end of our guidance driven by strong non-mortgage revenue growth in the quarter. This strong revenue performance was well-above our July framework and delivered despite a more negative FX environment than we expected which at 200 basis-points or $29 million was $5 million or about 50 basis-point greater headwind for FX than we expected when we put our July guidance. Adjusted EPS of $1.73 per share was also stronger than our July guidance. We are continuing to significantly outperform our underlying markets as we navigate the challenging economic environment and mortgage market decline. Our global non-mortgage businesses which now represent over 78% of total Equifax revenue were very strong with 20% total and 13% organic non-mortgage constant-currency dollar revenue growth, stronger than we expected when we provided guidance for July, and stronger than our 8% to 12% long-term growth framework. We're now tracking to 20% non-mortgage constant dollar growth in 2022 which is up about 100 basis-points from our July guidance. The outperformance was again led by outstanding performance at Workforce Solutions that delivered 40% total and 20% organic non-mortgage revenue growth. USIS B2B non-mortgage grew 9% online and 5% total, which is about consistent with second-quarter but weaker than we expected. International delivered a record quarter up a very strong 17% constant dollar growth and 15% organic constant dollar growth well-above our expectations. Equifax total mortgage revenue was down 30%, about as expected and outperformed the underlying market decline by over 10 points from pricing, new TWN records, penetration, system-to-system integrations and new products. The US mortgage market as expected weakened substantially in the third quarter with originations estimated at down 50% in the quarter which was about nine points weaker than our July guidance. As a reminder, Workforce Solutions mortgage revenue is more closely tied to originations. USIS mortgage credit inquiries were down 41% in the quarter and better than our expectations from increased shopping activity despite the weaker-than-expected mortgage originations. We're continuing to see higher than normal levels of shopping which continued throughout the quarter and tends to benefit USIS credit file pulls. Combined a negative mortgage market impact on Equifax was about as expected as the more negative marketing impact from originations and EWS was offset by the less negative impact on USIS from increased shopping activity. We saw continued weakening of the mortgage market as we moved through September and into the first few weeks of October as mortgage rates continue to rise to their highest-level since 2008. We now expect mortgage originations to decline over 60% in the fourth quarter versus our July framework of 48%, and USIS credit inquiries to decline over 50% versus our July guidance of 46%. John will talk about our updated mortgage framework in a minute. Third quarter adjusted EBITDA totaled $405 million and was flat compared to last year. Adjusted EBITDA margins of 32.5% were slightly below our expectations for the quarter principally to -- due to higher sales and marketing expenses driven by our outperformance in non-mortgage verticals. John will walk you through our margin performance in the third quarter and expectations for fourth quarter later in the presentation. We continue to make significant progress executing the EFX cloud data and technology transformation. We're now approaching 70% of North-America and 60% of total EFX revenue being delivered from the new EFX cloud. Our focus for the remainder of '22 and 2023 is accelerating four customer migrations [Phonetic] in North-America to enable decommissioning of our applications in datacenters. Our new FX EFX cloud infrastructure is delivering always on capabilities and faster new product innovation with integrated datasets, faster data delivery, and industry-leading enterprise-level security. We are convinced that our EFX cloud and single data fabric will provide a competitive advantage to Equifax for years to come. We're in the early days of leveraging our new EFX cloud infrastructure and single data fabric and are seeing acceleration of innovation and new product rollouts. Our new product vitality index of 14% in the quarter is a record and over 500 basis-points improvement from our 9% vitality index last year and well-above our 10% long-term goal for vitality. As a reminder, our vitality index is a percentage of revenue derived from new products launched in the past three years. Our strong momentum on NPI rollouts leveraging the new EFX cloud allowed us to raise our full-year vitality index outlook for 2022 for the second time this year from 11% to 13%, which is up 300 basis-points from our long-term framework and from the framework we started earlier this year. This strong NPI performance gives us momentum into 2023 as most new products reach commercial maturity in years two and three. In third quarter we continued to execute our bolt-on acquisition strategy completing two acquisitions, while Logix which will further strengthen Workforce Solutions on-boarding and I-9 Solutions, and Midigator which will strengthen count and broaden our identity in fraud franchise. These are our 11th and 12th bolt-on acquisitions since January 2021 and aligned with our M&A strategy to strengthen Workforce Solutions our largest and best growing business, add unique and differentiated data, and expand in the fast-growing identity and fraud market. Bolt-on acquisitions that broaden and strengthen Equifax are strong levers for future growth and are central to our long-term growth framework to add 100 basis-points to 200 basis-points annually to our revenue growth from strategic bolt-on M&A. Our guidance for 2022 revenue of just under $5.1 billion is essentially unchanged from the framework we provided in July. With third quarter revenue -- third quarter revenue was stronger than our July guidance by about $25 million, our current guidance reflects a decline in fourth quarter from our prior implied view by about $25 million from the weaker mortgage market and FX. The continued weakening in the US mortgage market is negatively impacting fourth quarter revenue by about $45 million, and negative FX is impacting revenue in the fourth quarter by about $15 million. Partially offsetting this $60 million negative impact is stronger non-mortgage revenue in Workforce Solutions and International and the acquired revenue from LawLogix and Midigator. The strong 20% constant dollar non-mortgage growth in 2022 gives us great momentum as we look to 2023 and a bottoming of the mortgage market in the coming quarters. Our guidance for adjusted EPS of $7.54 a share is down about $0.13 from the midpoint of our July guidance. As our third quarter adjusted EPS was about $0.08 per share stronger than our July guidance, this results in a reduction in the fourth quarter from our implied EPS of about $0.21 a share or about $33 million in pretax income. The most significant drivers of this reduction in EPS are first, the $45 million reduction in higher-margin fourth quarter mortgage revenue due to the weakening mortgage market which more than drives this level of reduction in pretax income; and second, higher interest expense. These negative impacts were partially offset by stronger non-mortgage growth and the addition of acquisition-related non-mortgage revenue from LawLogix and Mitigator. And again, John will provide details on fourth quarter and full-year guidance shortly. We were very pleased with our continued very strong constant dollar non-mortgage revenue growth of 20% total and 13% organic which is well-above our 8% to 12% long-term framework, and our ability to outperform the underlying mortgage market as shown by our third quarter results. Turning to Slide 5, a critical deliverer of our strategic priorities and the continued expansion of our addressable market data sources in revenue. Equifax is much more than a credit bureau today and our addressable TAM has expanded 3 times to over $45 billion. Over the past several years, we've expanded into faster-growing markets outside Financial Services and mortgage. These faster-growing markets include identity and fraud, talent management, government and employer services verticals. This has accelerated our growth outside of financial services and mortgage and increased the resiliency and diversity of EFX by broadening our revenue streams including markets that are expected to deliver future growth at levels above our traditional markets. As shown on this slide, since 2019 we've grown our total non-mortgage business by over $1.1 billion with a combined CAGR since 2019 of 12%, which is at the high-end of our 8% to 12% long-term growth framework. In 2022, we expect non-mortgage revenue to represent over 75% of total Equifax revenue, and in the fourth quarter it will be well over 80%. Also since 2019 we've grown our non-credit bureau based revenues by $1.5 billion, or a very strong CAGR of about 30% to over half of Equifax total revenue. This was led by our $2.4 billion Workforce Solutions business which is up $1.4 billion since 2019 at a very strong CAGR of about 35%, but alss supported by strong double-double digit growth in identity and fraud from count and Midigator as well as strong growth in debt services. We've also completed 12 acquisitions since 2021 that are all in the mortgage space and are delivering strong double-digit growth. Workforce Solutions strong above-market growth in verticals like employer solutions, talent and government, our expansion into identity and fraud, and our focus on new product investments coupled with our bolt-on acquisitions focused on non-mortgage priorities will continue to accelerate the growth of these non-credit and non-mortgage revenue streams at Equifax. Turning to Slide 6. In third quarter, Equifax core revenue growth the green section of the bars grew a very strong 16% reported and 19% [Part 2 end] In constant-currency which was consistent with our July guidance. Constant dollar core revenue -- organic revenue growth of 14% in the quarter was also substantially above the organic growth in our long-term financial framework of 7% to 10%. Non-mortgage constant dollar organic revenue growth of 13% drove 3/4 of the organic constant dollar core growth in the quarter. Core mortgage outperformance predominantly in EWS drove the remainder of core organic constant dollar revenue growth. We continue to expect strong core revenue growth of 17% total and 19% in constant-currency in 2022, which again is well above our 8% to 12% long-term growth framework and 300 basis-points higher than the core growth for 2022 provided last November at our Investor Day. This strong constant-currency growth is driven by stronger non-mortgage revenue growth of 20% total and 13% organic due to broad-based performance across Workforce Solutions and strength in International. As detailed on Slide 7, US mortgage revenue was down about 30% in the quarter. This compares to third quarter mortgage originations of down 57% as estimated by mortgage industry third-parties and USIS credit inquiries that declined 41%. As a reminder, in a rising rate environment we believe consumers tend to rate shop more frequently creating a favorable variance between mortgage credit inquiries and originations that benefits USIS credit file pulls from shopping. In the third quarter we saw mortgage credit inquiries perform in the order of 16 points better than the change in the estimated mortgage originations. USIS revenue declined 35% in the quarter, about six points better than credit inquiries. However, TWN income and employment is typically pulled later in the mortgage application process and a closing. As a result EWS does not benefit as much from the upfront shopping trend that occurs in a rising rate environment as TWN increase are more closely aligned with completed mortgage originations. TWN mortgage revenue declined 28% in the quarter. EWS core mortgage revenue growth that was up a strong 14% in the quarter and when adjusting for the 16 point negative spread between mortgage inquiries in originations was up a very strong 30% and consistent with prior quarters. Overall, Equifax's mortgage revenue outperformed USIS credit inquiries by 11% or 11 points in the quarter and outperformed estimated mortgage originations by a strong 27 points in the quarter. This reflects the strength of our US enterprise mortgage sales and operations team to bring the combined USIS and EWS products and solutions to market in this challenging mortgage macro. Turning to Slide 8. Workforce Solutions delivered another outstanding quarter with 32% core revenue growth, driven by very strong non-mortgage non UC and ERC growth of 62%. As a reminder, non-mortgage revenue is now about 70% of Workforce Solutions and a big Workforce Solutions driver for future growth from their fast-growing talent and government verticals. Workforce Solutions above-market 32% core growth in the quarter continues to be driven by very strong performance on TWN record additions, new products and pricing, system-to-system integrations, and greater penetration. Their market outperformance is very strong particularly in a period of declining market transaction volumes for mortgage. We expect to see continued very strong core growth in fourth quarter from Workforce Solutions. Rudy Ploder and the Workforce Solutions team continue outstanding execution across their key growth drivers detailed on the right-hand side of the slide. Over the past 12 months, we've signed ten new agreements with payroll processors in the US, including three new agreements in the third quarter that will be added to the TWN database over the next several quarters. These new partnerships along with continued growth in our direct contributors through our Employer Services business are delivering continued strong growth in the TWN database with current records up 16% reaching 146 million current records in the third quarter. There are 111 million unique individuals in TWN deliver very-high hit rates and represent over two-thirds of the 165 million US non-farm payroll. And as a reminder, about 50% of our TWN records are contributed directly from individual employers that we have long relationships with. The remaining are contributed through partnerships principally with payroll companies. In addition to traditional W2 wage earners, we estimate there are approximately 30 million to 40 million gig workers and 20 million to 30 million pensioners in the US who will also bring valuable income and employment insights to lenders, background screeners, and government agencies. We recently signed an agreement with a payroll processor to gain access to their pensioner [Phonetic] records and we have an active pipeline with other companies to acquire new pension records to the TWN database. We're in the very early innings of collecting records on these 50 million to 70 million gig and pensioner records but expect to make significant progress as we move through 2023 and beyond. TWN record additions will continue to drive workforce Solutions revenue going forward from higher hit rates, and we have the ability to double our records in the future to the roughly 220 million total W2, gig, and pension recipients in the United States. This is incredibly powerful lever for future growth at Workforce Solutions and a key driver of their 13% to 15% long-term growth rate -- growth outlook. Turning to work -- Slide 9 with some more detail on Workforce Solutions. They really had an exceptional quarter delivering revenue of $559 million. Revenue was up a strong 9% with overall organic revenue growth of about flat overall despite the significant 28% decline in EWS mortgage revenue in the quarter. Non net mortgage revenue was up a very strong 40% and is now 70% of Workforce Solutions. Verification Services revenue of $455 million was up 13% more than offsetting the 57% decline in estimated mortgage originations. Non-mortgage verticals now represent over 60% of verify revenue, and delivered 72% total and 30% organic growth. The Insights business which we inquired -- which we acquired late last year, continues to perform very well driven by strong performance in their largest verticals Risk Intelligence and Justice. Risk intelligence helps background screeners analyze people's risks via background checks and continuous monitoring. Justice intelligence helps channel partners assist law enforcement agencies in their investigations. Talent and Government Solutions which now represent almost 40% of verifier non-mortgage had outstanding quarters.Talent Solutions delivered 100% --110% total and over 50% organic growth in the quarter from record growth pricing and strong new product rollouts. We also saw strong growth in government -- in the government vertical with revenue up 90% total and 44% organic, driven by strong penetration at the state-level. The EWS government vertical is benefiting from penetration, pricing, record growth and leveraging a strong product portfolio including Insights data at the federal, state and local level across the United States. The continued expansion of Workforce Solutions data hub through our new Total Verify solution is driving very strong growth in the fast-growing $5 billion Talent and $2 billion Government markets. Our new -- our Total Verify solution is enabling our customers to access multi-data solutions derived from an unparalleled set of differentiated information assets spanning employment, income, education, incarceration, healthcare credentialing and identity. As of the third quarter, EWS has over 580 million total records in a TWN database both current and historic that provide both current and previous employment information on individuals, allowing us to increasingly provide an instant digital resume or employment verification on both current and historical job histories. The non-mortgage EWS consumer lending business principally in card, auto, and consumer finance and led by our US enterprise sales teams also showed good growth with revenue up 18% in the quarter. Employer Services revenue of $104 million was down 7% due to the expected decline in our unemployment claims and employee retention credit businesses. We expected total UC and ERC revenue to be down about 20% in 2022 driven by the lower jobless claims and ER transit -- ERC transactions as a COVID federal tracks -- COVID federal tax program runs out. Employer Services revenue excluding UC and ERC was up a strong 29% in the quarter driven by broad-based double-digit growth in our I-9 and onboarding, healthy FX, and our tax credit businesses. We are increasingly seeing the ability to deliver bundled packages of our differentiated Employer Services solutions to customers. In the third quarter, we signed a large multi year agreement to provide a broad suite of EWS solutions including I-9, W4, tax services and other HR Solutions to a large multinational company with annual guaranteed Workforce Solutions revenues approaching $20 million with total annual revenue opportunities with the agreement of over $30 million. Workforce Solutions adjusted EBITDA margins of 29.5% were lower than our July guidance and the over 50% margins we expect from EWS on an ongoing basis. The main drivers of the lower-than-expected margin was negative mix due to lower [Part 3 end] Mortgage revenue, higher sales and marketing costs principally due to very strong non-mortgage revenue growth, and costs to add the new TWN contributors I talked about earlier. The decline in EBITDA margins versus last year was driven by similar factors including negative product margin mix as higher-margin mortgage declined as a percentage of revenue and was replaced with Verifier non-mortgage revenue and revenue from the most recent acquisitions which at this point have lower margins than Verifier overall. And second, increased marketing and sales expense from both investments to drive NPI and driven by our extremely strong non-mortgage sales and record acquisition performance; and then lastly as I mentioned costs related to onboarding new TWN contributors. We expect these same factors to impact margin TWN -- sorry, EWS margins in fourth quarter as we see further declines in mortgage revenue with EWS EBITDA margins of about 48.5% in fourth quarter. As we look to 2023, we expect to see EWS margins return to above 50% as product and pricing initiatives expand profitability and we see additional savings from their cloud transformation. The strength of EWS and uniqueness in value of their TWN income and employment data in employer services businesses were clear again in the third quarter. Rudy Ploder and EWS team delivered another above-market quarter with 9% revenue growth and 32% core growth, and are well-positioned to deliver very strong 2022 and continue above-market growth in the future. As shown on Slide 10, USIS revenue of about $397 million was down 9% and slightly better than our expectations. USIS mortgage revenue was down about 35% and was also better-than-expected with a 41% decline in credit inquiries versus the 46% we had expected. At $97 million mortgage revenue is now about 25% of total USIS revenue. B2B non-mortgage revenue was $250 million which represents over 60% of two -- total USIS revenue and was up 5% with organic revenue growth of 3%. This was below the low-end of the 6% to 7% growth we discussed in July. Importantly, B2B non-mortgage online revenue growth remained strong at 9% total and 6% organic assigned at lenders continue to originate. During the quarter we saw double-digit growth in Commercial and Telco and solid single-digit growth across Financial Services, auto and insurance offset by a decline in our direct-to-consumer business. Kount which provides unique identity and fraud solutions continues to execute very well developing joint solutions leveraging both Kount and Equifax data with 2022 global revenue expected to exceed 20%. The recent acquisition of Midigator will continue to strengthen our identity and fraud franchise and growth. Its -- as relative to expectations in the quarter was again in Financial Marketing Services our B2B offline business that had revenue of $51 million down 8% and lower than our expectations. As we discussed in previous quarters, the principal driver of decline in FMS services was our fraud and data services vertical where we provide header data principally to providers of identity and fraud services and to a much lesser extent in our risk management and portfolio review business where we provide data and analytical services to financial institutions to evaluate the health of their existing portfolios or in some cases portfolios they're acquiring. As we discussed in prior quarters, we expect the declines in these businesses to continue through the fourth quarter with improvements in 2023 as we introduce new products leveraging unique and differentiated data assets available through the new Equifax single data fabric. We also saw a decline in batch marketing services where we provide data and decisioning principally to financial institutions for pre-screeners as well as delivering our IXI data for marketing activities as some customers cut-back on originations. We've seen high-single-digit -- single-digit growth in marketing services in the first-half so this is the first signs of any pullback in marketing. For fourth quarter B2B non-mortgage we expect online to continue to be strong with growth rates above third quarter from commercial execution as well as progress in pricing and new product rollouts that overcome a somewhat slower growth in financial services. We expect Financial Marketing Services to continue to be weak down over 10% with declines across header, risk and marketing continuing in the fourth quarter. Overall for B2B non-mortgage we expect fourth quarter organic revenue growth to be about the levels we saw in the third quarter. USIS Consumer Solutions business had revenue of $50 million down 1% in the quarter but up 2% sequentially. We expect fourth quarter revenue to grow again sequentially with positive growth rates in the fourth quarter. USIS adjusted EBITDA margins were 34.1% in the quarter and slightly below our expectations principally due to continued investments in sales resources focused on non-mortgage growth. International revenue was -- shown on Slide 11 was up $288 million, up a very strong 17% on a local-currency basis and 15% on an organic constant-currency basis. We're seeing broad-based execution from our international businesses. Europe local-currency revenue was up 24%, principally driven by over 75% growth in our U.K. debt management business. We've seen significant increases in debt placements from the U.K. government over the past several quarters. Our European CRA revenue accelerated in the third quarter with revenue of 7% and above our expectations driven by broad-based product execution across our B2B online products and identity and fraud, slightly offset by lower consumer revenue. Asia-Pacific which is principally Australia-New Zealand business delivered local-currency revenue of 6% driven by strong growth in our commercial and identity and fraud businesses and to a lesser extent growth in consumer. Latin-America local-currency revenue was up a strong 34% driven by double-digit growth in Chile, Argentina, Uruguay, Paraguay, Ecuador and Central America. The team's new product introductions over the past three years and pricing actions continue to drive strong growth across all product lines. This is the third consecutive quarter of double-digit growth for Latin-America. Canada local-currency revenue was up 12% and above our expectations. We saw growth in Commercial, Analytics solutions, decisioning, and identity and fraud revenue which was partially offset by some one-time revenue in the quarter from mortgage volume declines. Consumer revenue also returned to growth during the quarter. We expect Mid-single-digit revenue growth from Canada in the fourth quarter. International adjusted EBITDA margins at 26.8% were down 200 basis-points -- down 210 basis-points sequentially and above our expectations given strong revenue growth. EBITDA margins were up slightly versus last year but up about 150 basis-points adjusting for the loss of equity income from the Russian joint-venture that we sold. As shown on Slide 12, we had a very strong new product quarter with vitality index at 14% which is our highest vitality index ever, and it was over, 500 basis-points above last year's results and 400 basis-points above our 10% long-term growth framework for vitality. We delivered about 80 new products so far in 2022 leveraging our new EFX cloud capabilities. We now expect to deliver vitality index of 13% in 2020 up 200 basis-points from our previous guide of 11% which equates to over $650 million of new product revenue in the year. The growth in our 2022 vitality index is principally coming from Workforce Solutions which is encouraging as they are further along in completing their cloud transformation. It's positive to see the strong NPL results in the early innings of the Equifax cloud, new products leveraging our differentiated data, our new Equifax cloud capabilities in single data fabric are central to our long-term growth framework and driving future Equifax topline growth. This week at the Annual Mortgage Bankers Association conference we will showcase a new offering that delivers telecommunications, Pay-TV and utilities attributes alongside the traditional mortgage credit report to help streamline the mortgage underwriting process. Delivering telco, Pay-TV and utilities attributes to mortgage lenders alongside the traditional credit reports will also help expand access to credit and help create greater home ownership opportunities for US consumers. The use of these expanded data insights can also provide visibility to millions of credit invisible consumers those without traditional credit files and enhance the financial profiles of thin, young and unscorable [Phonetic] consumers as they complete their first mortgage applications. [Technical Issues] offers -- offering leveraging the Equifax cloud will provide powerful new insights that will help to automate, save time and resources and streamline the first mortgage process for every applicant creating more opportunity for consumers to secure a loan. And Equifax is the first and only in the industry to offer these unique insights to the mortgage industry. Turning to Slides 13, we outlined the 12 strategic bolt-on acquisitions we completed since January 2021 you expect will deliver over $450 million of principally non-mortgage run-rate revenue. As you know, our 8% to 12% long-term growth framework includes 1% to 2% of annual revenue growth from strategic bolt-on M&A aligned around our three strategic priorities; first, expanding and strengthening Workforce Solutions, our fastest-growing and most profitable business. Second, building out our identity and fraud capabilities. And third, adding unique data assets. And with that, I'll turn it over to John to provide more details on the mortgage market [Part 4 end] And our fourth quarter and full-year 2022 guidance.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

Thanks, Mark. As Mark mentioned and as shown on Slide 14, our guidance reflects an expectation that the decline in the US mortgage market will steepen in the fourth quarter with mortgage originations declining over 60% and mortgage credit inquiries declining over 50%. This is a significant reduction from our expectations in July, and as Mark referenced earlier, this expectation of a further weakening of the mortgage market negatively impacts 4Q revenue by almost $45 million. 3Q mortgage revenue was 21.9% of total Equifax revenues compared to 29.5% and 24.7% in 1Q '22 and 2Q '22 respectively. In 4Q, we expect mortgage revenue to be about 16% of total Equifax revenues.

The rapidly changing and unprecedented macro-environment makes forecasting the impacts on the US mortgage market incredibly challenging. We will continue to be transparent with you about changes in the mortgage market and the impacts on our business. EBITDA margins at 32.5% were slightly below the level of at or below 33% we discussed in our July guidance. Mark discussed the main drivers in each BU, partially offsetting these items were lower corporate and corporate technology expenses.

Slide 15 provides our guidance for 4Q '22. We expect revenue in the range of $1.165 billion to $1.185 billion reflecting revenue down about 6.3% year to year at the midpoint of our guidance or down about 3.7% on a constant-currency basis. 4Q '22 EBITDA margins are expected to be about 31.5%. We're expecting adjusted EPS in 4Q '22 to be $1.45 to $1.55 per share compared to 4Q '21 adjusted EPS of $1.84 per share. As Mark shared earlier, the decline in our 4Q '22 guidances as compared to implied levels we shared in July is driven by the significant reduction in our expectations for the US mortgage market in the fourth quarter. 4Q '22 revenue and our current guidance relative to our implied view in July is down about $25 million. Mark covered this earlier as a $45 million decline from the weakening US mortgage market and $15 million decline driven by FX are partially offset by revenue from the acquisitions of LawLogix and Midigator and stronger non-mortgage revenue growth. 4Q 2022 Adjusted EPS and our current guidance relative to our implied view in July is down about $0.21 per share or about $33 million in pretax income. This decline is driven by the impact of the decline in the US mortgage market on revenue of $45 million which given high variable margins drives the pretax income decline that exceeds the total variance level. Strong core revenue growth both from the acquisitions of LawLogix and Midigator as well as stronger organic growth are delivering improvements in pretax income, however these improvements are being offset by the higher marketing sales and G&A expense that we referenced earlier and higher interest and other expenses.

Reflecting the above, our expectations for the BUs in the fourth quarter are as follows. EWS revenue is expected to have an about 3% or greater decline. Continued strong non-mortgage organic revenue growth is expected to offset the bulk of the impact on EWS mortgage revenue of the expected over 60% decline in mortgage originations. EWS EBITDA margins are expected to be about 48.5% in the quarter. USIS revenue is expected to have an about 7.5% or greater decline reflecting the greater than 50% assumed decline in the US mortgage credit -- and credit inquiries. B2B non-mortgage revenue growth is expected to improve from the levels we saw in the third quarter, and B2B online continuing with high-single-digit growth. USIS EBITDA margins are expected to approach 36%.

International continues to deliver a strong year and is expected to deliver constant-currency revenue growth of up to 8.5% down from the third quarter as we lap growth from our U.K. debt management business. International EBITDA margins are expected to be up sequentially approaching 29%. The declines in both revenue and adjusted EPS in 4Q 2022 year to year are also principally driven by the significant decline in the US mortgage market and the significant impact of FX. Looking at revenue at the midpoint of our guidance of $1.175 billion revenue is down about $78 million. FX is negative about $35 million or 2.6% year to year. So on a constant-currency basis, revenue is down about $43 million. The impact of the decline in the US mortgage market using originations declines for EWS and Credit inquiries declines for USIS is negative about $185 million or almost 15 points. Excluding these factors effectively constant dollar revenue growth excluding the impact of the US mortgage market, revenue is up over $140 million reflecting predominantly the very strong non-mortgage growth principally in EWS and International and also in the US B2B online, and strong outperformance in mortgage relative to the overall market predominantly in EWS. Looking at adjusted EPS at the midpoint of our guidance of $1.50, adjusted EPS was down about $0.34 a share. The low operating income items, principally, higher interest expense and the loss of equity income from our Russia JV as well as the impact of FX explain just over half of the decline in adjusted EPS. The remainder of the decline is principally driven by the reduction in constant currency revenue of about $43 million.

Slide 16 provides the specifics on our 2022 full-year guidance. We expect revenue of approximately $5.1 billion and adjusted EPS is expected to be $7.49 to $7.59 per share. For the full-year of 2022, we expect capital expenditures to be over $550 million. Capital expenditures are above the levels we expected in July as we maintained capital spending at first-half 2022 levels in the third quarter to continue the pace of migration of major exchanges to our cloud infrastructure. We expect to bring down capital spending in 2023 consistent with the completion of the migration of the major North American exchanges.

We believe both our fourth quarter and full-year guidance is centered at the midpoint of the revenue and adjusted EPS ranges we provide. As you consider the first-quarter of 2023 we wanted to provide some general perspective on our current thinking on the US mortgage market for the quarter. Using our current view of mortgage credit inquiries in the fourth quarter as a base, we currently expect mortgage credit inquiries to be down about 50% year to year in the first quarter of '23. As we move through 2023, the year to year compares gets substantially easier particularly in the second-half.

Now. I would like to turn it back over to Mark.

Mark W. Begor
Chief Executive Officer at Equifax

Thanks, John. Turning to Slide 17, we have some very unique macros in our industry and EFX growth levers driving our performance in 2023 and beyond. The acceleration of the digital macro across every industry is expanding the use of identity data signals and solutions to drive better decisions across new and existing verticals Equifax is well-positioned to take advantage of the accelerating digital macro through our EFX cloud, investments in our recent acquisitions of Insights, Kount and Midigator. Although we've been impacted by the significant declines in the US mortgage market, we believe we have unique levers at Equifax to deliver strong future growth including Workforce Solutions above-market growth in margins and our expanded focus on new data assets like Insights, USIS non-mortgage growth, and Kount and Midigator identity and fraud growth, our new EFX cloud driving competitive NPIs topline and of course cost-savings in '23 and beyond. NPIs leveraging the EFX cloud and our expanded resources and focus on new products and bolt-on M&A to broaden and strengthen Equifax. These attractive market macros along with the broad EFX growth levers and our strong core outperformance -- strong core and non-mortgage outperformance in the past few years gives us confidence in our ability to deliver above-market growth in the future. And though we do see further economic weakness driven by slowing consumer demand, we believe Equifax is well-positioned for continued growth.

As we shared with you in July, turning to Slide 18, the new Equifax is a much different and more diverse business than we were in the last recession. We are more resilient and better-positioned for stronger revenue and earnings growth in challenging economic environments. During the '08, '09 global financial crisis, Equifax performed very well and exhibited the resiliency you would expect from data analytics businesses. In 2009, we saw only a 6% decline in total revenue. Importantly, EWS grew throughout the global financial crisis and showed substantial growth of 17% in 2009. We believe that Equifax business mix today is much better-positioned for a potential economic event than in 2009.

First, strong EWS growth has increased their relative size in Equifax from 16% of revenue in 2019 to almost 50% today with margins over 50% and over 15 percentage points higher than the Equifax average. EWS is benefiting from strong growth levers that are not directly tied to economic activity including record growth, penetration in new and fast-growing verticals like Talent and Government, system to system integrations, deploying new higher-value products, as well as measured price actions taking advantage of the scale of the TWN database. Second, completion of the Equifax Cloud will deliver cost-savings in 2023 and beyond that we expect will drive about half of our targeted 500 basis-point margin expansion from 2022 to 2025. The cloud migration cost-savings are independent of any economic event and driven solely by our execution. And then last, we're leveraging the new Equifax Cloud to accelerate [Part 5 end] New product rollouts with a globe -- goal of 13% vitality in 2022 which is over $650 million of annual incremental revenue from Equifax. As a reminder, NPIs rolled-out in '21 and '22 will drive top-line growth in 2023 and beyond as they mature in the marketplace. Today, we believe about 50% -- 54% of our global business is recession-resilient or counter-cyclical and will grow in a recession. This is a big change and a strong position compared to Equifax in the '08, '09 global financial crisis where only about 37% of our businesses were either recession-resilient or countercyclical. The meaningful revenue growth in Workforce Solutions, US -- mortgage and identity and fraud since 2009 as well as cloud transformation cost-savings position Equifax very well if there is an economic event recession in 2023 and beyond. Wrapping up on Slide 19, Equifax delivered another strong and broad-based quarter driven by 13% organic and 20% total non-mortgage constant current --constant dollar growth that more than offset the 41% decline in the mortgage market reflecting the broad-based strength of Equifax in this challenging economic environment. This was our seventh consecutive quarter of double-digit core growth and our sixth consecutive quarter of double-digit non-mortgage growth. Against the declining mortgage market, Equifax is resilient, on offense and investing for future growth. Against the unprecedented 37% mortgage market decline in 2022, we expect to deliver constant-currency revenue growth of over 5% due to the breadth and strength of our underlying businesses. More importantly, our core revenue growth -- our core revenue growth of 17% and non-mortgage constant-currency growth of 20% are both well-above our 8% to 12% long-term framework and reflect the strength of the underlying Equifax business model. This strong momentum positioned us well in 2023 and beyond. EWS continues to deliver above-market growth and is our largest, fastest-growing and highest-margin business. Workforce Solutions above-market revenue growth over the past three years is powering Equifax growth as they approach 50% of our revenue. And new products leveraging the new Equifax cloud are also driving growth. Our 13% vitality from NPIs in 2022 will drive growth in 2023 and beyond. And we're in the early days of leveraging the new Equifax Cloud to drive innovation, new products, and expect to deliver strong vitality in the future. Our 12 bolt-on acquisitions since January 2021 have expanded our capabilities and are delivering strong topline growth, and will deliver synergies in 2023 and beyond. And then lastly, we're in the final chapters of completing our new Equifax cloud data and technology transformation that will deliver top-line growth and cost benefits in '23 and beyond as we complete the cloud and leverage our new cloud capabilities in single data fabric. Even in this uncertain economic environment, Equifax continues to be on offense and reinvesting in the new Equifax cloud, new products, data and analytics and bolt-on M&A to drive future growth. We continue to be confident in our long-term growth framework of 8% to 12% total revenue growth and 7% to 10% organic revenue growth with ongoing margin -- expansion of margins of 50 basis-points per year. We also remain focused on delivering on our 2025 goal of $7 billion in revenue and 39% EBITDA margins that we set at our Investor Day a year-ago. Our ability to deliver non-mortgage growth of 20% in 2022 that is well-above our long-term growth framework, gives us confidence in the future. We remain energized about our performance in 2022 in a challenging mortgage macro and even more energized about the future of the new Equifax, a faster-growing, higher-margin, cloud-native data analytics company. And with that operator, let me open it up for questions.

Questions and Answers

Operator

Thank you. we will now be conducting a question-and-answer session. [Operator Instructions] Our first question is coming from the line of Manav Patnaik with Barclays. Please proceed with your questions.

Manav Patnaik
Analyst at Barclays

Thank you. Mark, I was hoping just on Slide 17 you gave us some of the kind of the levers for '23. I think I was hoping you could touch on some of the macro trends you're seeing in the card and Auto verticals. Just some perspective on where we are today in those categories relative to pre-COVID or history and some of the trends you're seeing there whether they're decelerating or staying the same or any color around those would be helpful.

Mark W. Begor
Chief Executive Officer at Equifax

Yeah, we talked a bunch -- Manav, good morning, about mortgage so we're happy to talk more questions on that. Maybe if you step back kind of where we are with the consumer and our customers, the consumer continues to be exceptionally strong. Their credit scores are still up from 2019. They are working. We haven't seen real changes in delinquencies except at the subprime level there are some small changes but even there delinquencies are lower than they were in 2019. So you've got consumers that have had wage growth. Employment is low. So it's a very good environment for the consumer which really impacts the verticals you talked about. And then our customers are still very strong. There's no question about that. When you think about the last economic event we had in the global financial crisis, you had both the traditional financial institutions, banks and fin-techs that really had balance sheet problems. That's not the environment we have today. So similar to our dialog that we had in July and back in April, we see a strong consumer continuing through the fourth quarter and into 2023 and the same thing with our customers. So with regards to what kind of activity around originations in some of those verticals, not a lot of change. There's still some challenges in Auto around supply-chain, availability. I think there's expectations that it's going to get better in the coming quarters but it's still hard to find a car particularly at certain models that you want to get which is resulting in auto being down some from a year-ago. But again, kind of at our expectation. No real change in cards. I think we mentioned in our comments that we've seen a little bit of weakening in some marketing but I wouldn't call that a trend. Broadly, our customers are still focused on originations. Card volume is very, very strong. Card originations is very, very strong. And again, you go back to you've got consumers that are very strong. I think everyone is watching very closely, both us and our customers, when will there be a change in delinquencies. And as you know my history, I ran a card business for a decade at GE Capital and that was what I watched. The minute you see delinquencies start to move, you think about changing your originations going-forward. And we just haven't seen that yet with employment being so high and unemployment being so low.

Manav Patnaik
Analyst at Barclays

Got it.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

If you just look at non-mortgage online organic growth rates in the third quarter, we saw Telco was up double-digit FI, Insurance and Auto were up mid to high single digits. So again... I would say, again very, very strong.

Manav Patnaik
Analyst at Barclays

Got it. And then just on the Workforce Solutions, two-thirds of non-farm payroll data now in your database. It sounds like you've -- I think you've been closing that gap maybe faster than we had expected. Just some thoughts if that's -- if it's the same case versus your internal expectations. But the question is, how much of that is really locked in exclusive per se like just so that competition isn't the worry here.

Mark W. Begor
Chief Executive Officer at Equifax

Yeah. I think Manav, a couple of points on that. We're increasingly looking beyond non-farm payroll as you know, adding into gig economy as well as the pensioners, and when we think about our 146 million records and 111 million uniques or individuals in our dataset, there's about 200 plus million, 210 million, 220 million total working Americans and pensioners so there's a long runway for us between W2, traditional employees, self-employed. And remember, self-employed we think about gig workers are being Uber drivers, DoorDash etcetera but think about self-employed doctors, self-employed lawyer, self-employed accountants, self employed contractors, it's a large population. And the pension base is quite large. And we mentioned in comments earlier that we've been starting to add pension records and gig records and we signed an agreement with a company that does pension payroll if you will for various companies where we're gonna do the income and employment verification for them. So we have the ability to double our dataset over a lot of years going-forward. Ad I think as you know we've talked to you before that we've got a 13% to 15% long-term growth rate for Workforce Solutions. That sits inside of Equifax's 8% to 12% growth rate, and we've got three to four points of that from record growth in to 13% to 15%. So there is no question we've had above expectation record growth over the last -- it's not new, wasn't [Part 6 end] Last quarter, it's really been for three or four years. A lot of that has been for many of the payroll processors that you go back three or four years ago were not contributing our records and now they are, and as well as continued growth from our core records which are from individual companies. So with regards to the competitive position we have, we feel very good about it. The agreements that we've signed are on an exclusive basis since in 2022 and since I've been here it's the right relationship between our partners and Equifax. They want it and we want it. And when we think about half of our records coming from individual companies, those are from long-term relationships where we're providing those broad suite of services whether it's I-9, W2 management, unemployment claims, work opportunity tax credit, HCA benefits, all those solutions to companies, we also do income and employment verification for them as a part of that relationship for free. So that's a very sticky relationship from our perspective. And you probably heard in my comments earlier that Workforce Solutions is really doing a much better job going to market with a full suite of employer solutions we have, and we signed a contract with a large multinational that's going to -- once it's implemented, will be $20 million a year of Equifax revenue where we're providing all those employers solutions services to that multinational. Of course we're also doing their income and employment verification. So we're quite energized about our progress of adding new records to the dataset. I think as you point out, it's certainly been above the long-term framework, and broadly it's been quite positive for us. And maybe a last point that you are well aware of, as you know the day we add the records we're already able to monetize them because we're getting inquiries from our customers either through system to system integrations or through their access to our website for all of their applicants. So the day we add another record it's monetized either in a mortgage application, a credit card application, a personal loan, an auto loan, in a background screen or in a government social services, so we've got various verticals that are looking for more records, and we already have them in our order book, we just can't fulfill them until we grow the dataset. So it's a very powerful growth lever for Workforce Solutions.

Manav Patnaik
Analyst at Barclays

Got it. Thank you.

Operator

Thank you. Our next question comes from the line of Ashish Sabadra with RBC Capital Markets. Please proceed with your questions.

Ashish Sabadra
Analyst at RBC Capital Markets

Thanks for taking my question. One of the questions we're getting is more around if we use the fourth quarter EPS and annualize that it implies for next year a significant decline in earnings. I understand there are some puts and takes here, obviously there was a discussion around cloud benefits coming in 2023, but I was wondering if you could help us parse what are some of the headwinds, puts and takes in the quarter which may not exist going into 2023, and what are the tailwinds as we think about '23. Thanks.

Mark W. Begor
Chief Executive Officer at Equifax

Yeah, I'll start and then John can jump in. Obviously you want to start with revenue. We expect to have attractive non-mortgage growth next year. We're clearly going to have, John talked about it, a grow over challenge in the first-half of next year meaning that the mortgage market will be down versus first-quarter and second-quarter of 2022 based on where current trends look. We don't have an outlook yet but there was a strong mortgage market in the first-quarter and it started declining in the second and more rapidly in the third. So that's clearly going to be a part of our outlook going-forward.

You also have our new product rollouts, will be a positive for us. That vitality index being above 10% gives us momentum next year to drive the top-line with those new solutions. And as I commented earlier, the new products we're rolling out this year, the 80 products we've rolled-out so far, most of, those aren't really in the revenue in a meaningful way in 2022. They really mature in '23 and in 2024. Last point I would make is that we've made a number of acquisitions in the last 25 months or 20 months actually. And those acquisitions are obviously in our run-rate revenue but the synergies that we expect to get typically kick in in years two and three, so meaning in '22 and '23 we're going to get benefits from acquisition growth that we have going-forward. John, maybe you add to that and maybe talk a little bit about some of the margin stuff.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

Sure. So as Mark already really covered, so non-mortgage revenue growth both from NCI but also from new product and also very importantly from pricing will absolutely benefit as we go into next year. Generally speaking, I think most people know a lot of new products in mortgage and other verticals that we serve actually tend to get launched at year end and pricing actions tend to happen at year end. So we tend to get a nice benefit as you move from fourth quarter to first-quarter every year and it's done very consistently. We also expect to have as Mark mentioned, improved cost position as we move into next year as we continue to migrate more and more of our major systems to the cloud we start to be able to decommission more systems, we're starting to see savings as we move through 2023. That's certainly a benefit. Some of the marketing and sales of incremental cost we talked about this quarter that would affect our next quarter are really driven by the fact that we're performing so very strongly this year that we're paying compensation appropriately at very-high levels into those organizations because they're substantially outperforming. Obviously when you get into a new plan year, those things all reset. So we think there's certainly cost opportunities that will help margin but also for us the fact that we're driving very strong non-mortgage growth with new product and pricing, and obviously that flows through at extremely high margins is real benefit to us as we go into next year. So again, we're not providing guidance yet as we didn't in this call but we have a lot of levers that can help strengthen 2023. Maybe just the last one is that we commented that there are some unusuals or things that are going to work out in Workforce Solutions margins in the third and fourth quarter from the mix of mortgage and some additional costs associated with our sales and marketing that we made the comment that we clearly expect that workforce to be back at 50% plus margins in 2023 which will be a -- obviously a positive too.

Ashish Sabadra
Analyst at RBC Capital Markets

Very helpful color. And maybe just a quick follow-up on EWS. The expectation for revenues to be down 3%, that's a significant moderation from 9% growth. Obviously mortgage is a headwind there and maybe some of the acquisitions are [Indecipherable] but I was wondering if you could help parse what should --how we should think about the organic Verifier non-mortgage growth as we head into fourth quarter and next year. Thanks.

Mark W. Begor
Chief Executive Officer at Equifax

Sure. I think we talked about organic revenue growth for EWS and we said it was about 20%. Negatively impacting that was -- is almost 15 points from reductions in UC and ERC. So if you exclude UC and ERC we're seeing organic growth across Workforce Solutions of approaching 35%, but we think it's a very...

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

It's a very good number.

Mark W. Begor
Chief Executive Officer at Equifax

Very strong in the third quarter, right?

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

It's well-above the 13% to 15% long-term growth rate.

Mark W. Begor
Chief Executive Officer at Equifax

And so even as we look into next quarter when we compare the 20% that they delivered this quarter, we expect to have very strong performance again next quarter also in non-mortgage. So again, we think EWS non-mortgage revenue growth has been really outstanding and continues to grow.

Ashish Sabadra
Analyst at RBC Capital Markets

Thank you. Thanks for the color.

Operator

Thank you. Our next question is coming from the line of Andrew Steinerman with JPMorgan. Please proceed with your questions.

Andrew Steinerman
Analyst at JPMorgan Chase & Co.

Hi, John, I just wanted to verify that we have some figures here just for these questions if it's, okay, let's put aside core when I ask these mortgage questions. So I think we know mortgage as a percentage of total third quarter revenues, I think that's 22% the inverse of the 78% on the first-quarter, just please verify that. And the second thing I want to make sure that we have non-mortgage organic revenue growth, and I think that's 13%, I think that's what you gave on Slide 4. And if you could just make a comment about fourth quarter, what's implied in terms of non-mortgage organic revenue growth?

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

Yes, so I believe both of the numbers you quoted were in the presentation. So yes, I think they're correct. And in terms of non-mortgage growth, we are expecting non-mortgage growth to continue to be strong. Mark talked about the fact that for the full-year we're continuing to expect 20%, and we're expecting a strong fourth quarter. Not quite probably as strong as the third quarter, so slightly -- so somewhat below the third quarter, but still a very strong number and we're expecting to see the strength that you've been saying all year continue.

Andrew Steinerman
Analyst at JPMorgan Chase & Co.

Okay. Thank you, John.

Operator

Thank you. Our next question will come from the line of Kyle Peterson with Needham & Company. Please proceed with your questions.

Kyle Peterson
Analyst at Needham & Company LLC

Hey, good morning, guys. Just wanted to follow-up on the margin a little bit. Maybe if you guys could run us through some of the puts and takes in the 4Q step down, is it really most or all of that just mortgage and lower volumes kind of running through and the full quarters [Indecipherable] or there's no like the cost inflation or anything you guys are seeing material in your business.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

No cost really inflationary impact, it's really the mix [Part 7 end] Of the loss of that mortgage revenue is just such high-margin. And then I think we also talked about some costs from sales and marketing and onboarding, some TWN contributors. But the majority of it is the margin mix from a mortgage...

Mark W. Begor
Chief Executive Officer at Equifax

Absolutely. The step-down in 4Q from 3Q is really driven by lower revenue in general because of -- but it's driven by lower -- because mortgage is lower and obviously mortgage has a very-high variable margin. So that's the driver.

Kyle Peterson
Analyst at Needham & Company LLC

Got it, that's helpful. And then just a quick follow-up on International. Obviously the constant-currency trends have looked really good for you guys. I know FX is kind of a problem for you guys and a lot of companies, but a little surprising to us that I guess with all the recessionary fears and such, are you guys seeing any slowdown or caution especially in parts of Europe and such with your clients or has at least through October so far have those trends still held up and been pretty stable and healthy?

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

Yeah, as you know Europe for us is primarily U.K. but also Spain is where we participate. And while inflation is a challenge, they're still working, right? And so we really haven't seen any meaningful change in what's happening with our customers. Everyone is worried about inflation but when you've got people working they're generally going to pay their bills, they are also going to spend money and they operate. And as you saw from our comments, our U.K. business which is most of Europe had a very, good quarter. I think it was up 7%. So no we haven't seen it yet even with all the inflation fears.

Kyle Peterson
Analyst at Needham & Company LLC

Got it, helpful. Thanks, guys.

Operator

Thank you. Our next question comes from the line of Kal Ci Xu [Phonetic] with Autonomous Research. Please proceed with your questions.

Unidentified Participant
at Equifax

Hey, Mark. Hey, John. For EWS for this quarter when I look at non-mortgage verifier revenue, it seems to be down a little bit sequentially. Can you just help us understand a little bit in terms of what's going on there? Is that the consumer lending [Phonetic], is it parallel government or other verticals.

Mark W. Begor
Chief Executive Officer at Equifax

Yes, so EWS non-mortgage in Verifier but broadly was very strong, right? So again, the growth rates we're talking about are extremely high. We think Government and Talent continued to perform very, very well. What we -- if you're just looking at growth rates obviously as you move through the year comps get tougher because we grew very strongly in 2021. But overall as we take a look at Talent Solutions, I think we gave the growth rates. Yes, they're slightly lower but it is also driven by comps. Government, very strong. I think we saw very good performance in kind of commercial in the non-mortgage finance segment which again was very strong. So we feel very good about the trajectory and the trend and continuing very strong non-mortgage growth rates there.

Unidentified Participant
at Equifax

Gotcha. And just a quick follow-up on either we margin. With the current mortgage environment, I'm trying to figure out what sort of like a new normal for EWS margins, should we basically be thinking about that as in-line with what we've seen this quarter or even Q4 kind of in the 49% range?

Mark W. Begor
Chief Executive Officer at Equifax

No, like we said in our comments and hopefully you heard it that we clearly expect margins at EWS to return to that 50% plus level in 2023. We view this mortgage mix as being a challenge in the third and fourth quarter that will definitely impact our margins as well as some of the additional costs and sales and marketing and TWN contributor onboarding in the third and fourth quarter. I think we talked about nine -- is it nine or ten additions of new contributors -- ten additions of new payroll processors that are adding records, there's generally some incremental costs when those get added. And our non-mortgage growth is so high we're having some additional sales and marketing costs in EWS. But to be clear, we expect EWS margins over the long-term to be at that 50% plus rate versus where they are at this quarter and next quarter.

Unidentified Participant
at Equifax

Thanks, very helpful.

Operator

Thank you. Our next question comes from the line of Andrew Jeffrey with Truist Securities. Please proceed with your question.

Andrew Jeffrey
Analyst at Truist Securities

Hi, good morning. Appreciate all the detail and color as usual, guys. John, just a question for you on overall consolidated EBITDA margin progress. I think you've touched on some of the potential tailwinds next year. But given the challenges especially early in the year with mortgage, I'm thinking about margins being flattish maybe up a little and that's my number, not yours, and then a bit of an improvement in '24. It just seems like a heavy-lift to get to 39% by '25. Is there a step-function that we need to be thinking about? I'm just trying to understand that.

Mark W. Begor
Chief Executive Officer at Equifax

John, you should jump-in but remember, a big piece of that path to 39% is the cloud transformation completion, and we get to meaningful impact on cost takeout and we telegraphed before and every quarter we talk about it that roughly half of that lift from our margins last year to the 39% is from cloud execution. And that's in our hands, so we know how to do it, it's not economic related. We're going to -- whether the economy is up, down or sideways we're going to complete the cloud and that plugs in. You've got Workforce Solutions growing faster than the rest of Equifax if they're 50% plus EBITDA margins, that accretes in margin between now and 2025. You've also got our new product rollouts, our non-mortgage growth that we expect to deliver, is also going to deliver margin expansion over that timeframe.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

As we get to 2025 and the framework even we laid out last November, we indicated we expect markets that we're in to be somewhat normal. So we're expecting kind of a normal non-mortgage market and we're expecting the mortgage market itself to move back toward more normal levels, right? So a big part of -- in addition to the cost takeout related to tech transformation which Mark already referenced, a big part of the mortgage increase is related to that revenue growth. And clearly we do need in order to deliver those levels, we do need to see some recovery in the mortgage market and moving -- and having to move back toward more normal and then obviously some normal non-mortgage markets. And given the fact that we're performing so well on non-mortgage growth, it gives us comfort that we have a path there to that $7 billion. But we do need to see some recovery in some of the markets we're serving particularly mortgage.

Andrew Jeffrey
Analyst at Truist Securities

Okay, no I get that, that's helpful, thank you. And then Mark, your comments in USIS about mortgage shopping being a tailwind. I appreciate that. I just wonder as rates really have blown out here in the ten years the yield has helped again today remarkably. How long can that persist. There just comes a point where rates and accordingly housing affordability reaches a level where you're just not going to see that kind of behavior. And -- is that something you're contemplating as you think about the ultimate '23 guidance you offer us?

Mark W. Begor
Chief Executive Officer at Equifax

It's not. Just our view is and what we've seen and we continue to see is that these higher rates consumers just spend more time shopping around and when they do that shopping USIS benefits from that credit pull that happens in the shopping process, and we do not expect that to change. I think your question maybe is a little bit different around at these high rates are people going to still buy houses? And at these high rates are people still going to do some level of refis which there's some, it's obviously down a bunch but it's more cash-out refi to access the multi-trillion dollars of untapped home equity in the US. And as you know, the mortgage market doesn't disappear. It certainly declined further and more rapidly than we'd expected. As you know we've been -- revised our mortgage guidance three times this year because we didn't -- we couldn't forecast where the Fed is going to take these rates and I don't think anybody can except higher from where they are now. We're actually getting better at forecasting out a couple of months meaning inside the quarter but as you get out past the quarter looking out with what's happening with the volatility of where rates are going, it's more challenging. So we'll certainly take all of these factors in place when we put out our 2023 guide in February, and you have a clear view hopefully then of what the mortgage market is going to look like. But there's no question the mortgage market is going to bottom at some point. And it doesn't go obviously to zero, there's going to be an area where people still move and even at this interest rates and it's happened before in the US, people still buy homes. So meaning, they buy homes and get mortgages. So there is that level of flow. I think we're all struggling with where it is, and we'll have a better view in a few months of what that looks like for 2023. And as John talked earlier, first and second quarter we're going to have tougher comps against very strong mortgage market in first quarter this year, but as we get to third and fourth we'll start comping more towards what should be the -- a floor until [Part 8 end] We get past whatever economic event we're in here.

Andrew Jeffrey
Analyst at Truist Securities

Appreciate it. Thank you.

Operator

Thank you. Our next questions come from the line of Kevin McVeigh with Credit Suisse. Please proceed with your questions.

Kevin McVeigh
Analyst at Credit Suisse Group

Great. Thanks so much, Hey, obviously lot of uncertainty mortgage but with the inquiry guidance in Q1 is there any way to think about what percentage of revenue mortgage could be in the first quarter and then any way to think about how you think that will progress over the course of '23 just as a percentage of revenue more broadly?

Mark W. Begor
Chief Executive Officer at Equifax

I think as I -- Kevin as we talked a few minutes ago with Andrew, we're not doing any guidance on anything on '23 right now, we're focused on the fourth quarter and we'll certainly give that guidance as -- when we get to likely our February fourth quarter earnings discussion.

Kevin McVeigh
Analyst at Credit Suisse Group

Okay. And then Mark, you talked within EWS obviously kind of the relative outperformances kind of record penetration, systems to systems, direct integration, pricing. Is there a way to ring-fence the contribution across each one of those, like is it primarily the record growth that drives it or just -- so we get a sense of across those five buckets or is it kind of evenly distributed?

Mark W. Begor
Chief Executive Officer at Equifax

Yeah. I wouldn't say even but they're all important. There's not one that's disproportionate. Look, record additions are very attractive and very unique for the Workforce Solutions business because it drives revenue day two after you add the records. And as you -- 16% record growth in the quarter and we've driven records up double-digits for the last number of years, that's certainly a positive. We take prices up every year, so that's something we'll do in January with all the verticals and Workforce and across Equifax. New products we talked about Workforce Solutions is indexing kind of north of our 14% in the quarter and our 13% guide for the year of new product introductions, that's very attractive for Workforce. And we talked in our prior meetings about continuing to drive system to system integrations. And penetration is a big opportunity in Workforce. If you think about the credit file, it's very highly penetrated in all financial services verticals. Workforce is not even in mortgage, there are still 40 odd percent of mortgages that we don't see that are still done with paper pay stubs. We only do roughly one in ten roughly background screens. In government you've got a $2 billion TAM and we've got a $300 million roughly business there so there's a lot of government penetration opportunity. So you can see each of them are attractive and very valuable which is why we have a lot of confidence in Workforce Solutions, 13% to 15% long-term growth rate.

Kevin McVeigh
Analyst at Credit Suisse Group

Great, thank you.

Operator

Thank you. Our next questions come from the line of Shlomo Rosenbaum with Stifel. Please proceed with your questions.

Shlomo Rosenbaum
Analyst at Stifel Nicolaus

Hi, good morning. Thank you for taking my questions. Mark, can you talk a little bit about the NPIs and whether there's been any kind of change in strategically about how you approach that. We are seeing is much higher NPI like 14% but we're seeing the numbers of new products obviously much lower than we saw last year. Is there some kind of strategy that you have in terms of less shots on goal but more higher percentage shots of goal or just is that just very year per year and we really can't look that much into the numbers of NPI like we used to?

Mark W. Begor
Chief Executive Officer at Equifax

Numbers are important obviously. I think just maybe spooling back to kind of two years ago when we really ramped-up our new product resourcing, we brought in a Chief Product Officer, we've got more of a cadence around it. We did that intentionally in advance of our single data fabric and in advance of our Cloud capabilities because we were convinced that the cloud which again we still have to complete, we're well down the road, and a single data fabric will allow us to bring things to market we couldn't do before. Use the example of the product we rolled-out this week at the Mortgage Bankers Association of taking our Telco utility cellphone data and embedding it in the credit file. That's a very sophisticated product, it's going to drive higher hit rates, higher approval rates, higher originations for our customers, and it's something that only Equifax can deliver. So that multi-data solution is a big part of our new product capabilities. The second area is really leaning more into our trended data, our historical data. Workforce Solutions now gets, what, 40% of revenue from historical records?

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

Almost 50%.

Mark W. Begor
Chief Executive Officer at Equifax

Almost 50% now. So you think about how they've changed that in the last couple of years through their new product capabilities and think about a mortgage solution that shows historical income data on a consumer back a year, two years, three years, four years that helps in the underwriting process. We sell that at a higher price point. Think about in the Talent vertical, a history of job employment that's required, as you know we have 560 million total records now in the TWN database and that's well over 5.5 jobs in the average American. So that multi data as well as historical solution. I think the other thing that's quite encouraging I mentioned in my comments earlier is that Workforce Solutions it's further down the road in the cloud is delivering well north of the 14% vitality. They're one of the big drivers of that guide up for the year on new products. And that's what we wanted to see, that's what we expected to see, and I think the good news is we're seeing it. Meaning, as we get further into the cloud, we're able to deliver those new solutions to our customers and I think as you know new products are also very high -- obviously they drive incremental revenue growth but they're very high incremental margins. You're thinking 70%, 80% kind of incremental margins on new products. It's why we're driving the initiative. But it also makes us more valuable to our customers. We're bringing them solutions that helps them solve problems and either drive their top-line, their bottom-line or both in a very positive way. So it's a big focus of ours and it's going to -- it's the one that's central to our long-term growth strategy. And you remember back-in November at our Investor Day, we talked a bunch about that being one of the factors of increasing our long-term growth rate to the 8% to 12% was our expectation and now you're seeing it, our ability to deliver that 10% vitality in our long-term growth rate.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

And just a clarification, the almost 50% I quoted is a Verifier revenue.

Mark W. Begor
Chief Executive Officer at Equifax

From a historical point.

Shlomo Rosenbaum
Analyst at Stifel Nicolaus

Just to clarify then, I understand it's important, what I'm just trying to understand is the difference between the 14% in the amount of record -- of NPIs that's coming that's kind of the [Speech Overlap] used to get at.

Mark W. Begor
Chief Executive Officer at Equifax

Sure, you used the term shots on goal or did you want to have more shots that go into, more shots on goal, and we want both, right? So you have a bell curve with any new product portfolio you put in-place. You're gonna have some products that are screaming winners that really hit the mark with our customers and some that are less successful. And then there's also a maturity cycle to them as I mentioned. We'll rollout products in the second-half of this year that won't deliver any revenue in 2022 but will start maturing in '23, '24, '25. That's really what you have from a cycle standpoint. So to answer your specific question, we're looking to have more and obviously having more that deliver larger revenue, and I think we're just getting better at that primarily because we're really being quite deliberate around collaborating with our customers. Instead of creating a product we think the market wants, we're creating a product that we know our customer wants because we're collaborating with them and then once it works with one customer or two then we productize it to take it out to the rest of our customer-base.

Shlomo Rosenbaum
Analyst at Stifel Nicolaus

Okay, that's helpful. Thank you. And then just one just for John. Obviously I thought that the AR DSO would improve sequentially this quarter because I thought the debt billing system conversion would be behind you. Is that something that we should still be thinking about for the fourth quarter or is there something just is this level AR DSO just by the mix of revenue more natural.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

No, so the conversion you're talking about. So part of -- as part of transformation as you said we're moving financial systems to the cloud as well, and the major movement of financial systems including billing systems actually runs through October, little bit in November. So some of the level of elevated DSOs we saw in the second-quarter did continue into the third quarter, it's related to those transacted to that system migration and we expect to see substantial improvement as we move through the fourth quarter.

Shlomo Rosenbaum
Analyst at Stifel Nicolaus

Great, thank you.

Operator

Thank you. Our next question comes from the line of Craig Huber with Huber Research Partners. Please proceed with your question.

Craig Huber
Analyst at Huber Research Partners

Yes hi, good morning. My first question, your Appriss acquisition, can you maybe just tell us how the integration is going here in the last year and I'd be curious what the pro-forma organic year-over-Year revenue growth was in the third quarter for the acquisition and what was the [Speech Overlap]

Mark W. Begor
Chief Executive Officer at Equifax

Yes, so the Appriss Insights acquisition as you know is our incarceration data business. We're really pleased, we bought it really just a year-ago, so it's 12 months in, and the integration is [Part 9 end] Progressing very positively. We talked about some of the joint solutions that we're already bringing to market, putting their data into our total verified data hub, and we've got new products in the pipeline, both on enhancing their solutions with their data but also combining their data with some of the other data that's used either in the Talent or in the Government verticals to deliver a single pull with either employment data plus the incarceration data or employment education and incarceration. So we've seen really positive opportunities there. And as far as growth rates it was growing kind of mid-teens when we bought it and it's still is. We're very pleased with the growth of the business.

Craig Huber
Analyst at Huber Research Partners

Okay, great. My other question is you've talked on this call and prior ones that the health of the US consumer being quite strong versus pre-pandemic 2019 levels. I'm curious are you saying that you -- with all the data you look at that it's not materially getting worse versus three and six months ago the US consumer.

Mark W. Begor
Chief Executive Officer at Equifax

Absolutely not. No. They're still strong and there really hasn't been a change in 2022 about -- around the consumer. As you know employment has --unemployment has gone down and employment has gone up since the beginning of the year, so it's good for consumers. Wage growth is up which is good for consumers and that helps their balance sheet. Obviously inflation is a bad guy, it's hurting lots of consumers but even with inflation consumers are still out there spending in traveling and doing all the things that they do in their lives. So credit scores are up 15 points from 2019, that hasn't really changed, they are in good shape. You really have to watch employment and unemployment. That's where things generally change with the consumer. Obviously inflation is challenging particularly for the kind of the lower-income demographic, but the rest of the population is is doing okay.

Craig Huber
Analyst at Huber Research Partners

Great, thanks a lot.

Operator

Thank you. Our next question comes from the line of Andrew Nicholas with William Blair. Please proceed with your question.

Andrew Nicholas
Analyst at William Blair

Thanks, good morning. In the International business, how much of the recent strength would you attribute to share gains versus end-market strength at the country-level, and to what extent would you say the cloud transformation is already paying dividends in terms of growth and vitality index there?

Mark W. Begor
Chief Executive Officer at Equifax

Yeah, so I would add a couple of things to the list. I wouldn't call -- obviously end-market in 2022 is stronger than 2021 as the international markets came out of-the pandemic earlier this year, but the end-markets aren't -- like in Latin-America the end-markets are always strong just because the underlying growth there. But I wouldn't say there's been a change in the end-markets. Our team is executing well, so there is some commercial strength there. New products are a big deal as far as bringing new solutions, new products to market. For example, we're bringing our Kount identity and fraud solutions to a lot of our international markets so we're starting to get some traction there which is helping our International platforms. Cloud isn't really a benefit to them yet, they're further behind the North-America intentionally in cloud with the exception of Canada, so their cloud benefits are really going to be more in '23 and really --actually more in '24 is they complete the cloud. Would you add to International, John?

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

Just the debt management. I mean they are growing very fast, right? I don't know if you call that share or not but what it is we have certain large customers that we have very high positions with that are growing very fast and it's principally the U.K. government, so that's driving a nice piece of growth obviously [Indecipherable] in the U.K.

Andrew Nicholas
Analyst at William Blair

That's helpful, thank you. And then for my follow-up, John maybe a question for you just a quick cleanup item. Corporate expenses ticked down pretty significantly on a sequential basis. Could you speak to the driver there and how sustainable kind of that new level is, it's obviously ticked down quite a bit here a couple of quarters in a row, I just want to make sure I understand the dynamics driving that. Thank you.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

Yes, so if you're just doing sequential third versus second, the big drivers were corporate technology spend and also tech transformation spend. Some of that was just good cost management, some of that is around tech transformation and that can move between BUs and corporate and we saw some of that in the third quarter as projects complete in corporate or teams move between Corp. and the BUs, you can see expenses come down in corporate. We had a little bit of that in the third quarter. We also saw some good cost management and some sequential declines across corporate expenses in general, and we did see some lower expenses specifically related to compensation and variable compensation broadly because we took the year down. So I'd say those were the big drivers. I think we expect to be at lower levels of expense than last year substantially and what you've seen all this year. Probably in the fourth quarter you're going to see some of those expenses tick back up again because we'd expect to see some more investment in technology and corporate technology. So some of the benefit we got in the third quarter we will give back because we're spending up -- we're spending more on transformation. So for example, Shlomo's question around financial system transformation, some of that's occurring in the fourth quarter. So hope that helps.

Andrew Nicholas
Analyst at William Blair

It does. Thank you very much.

Operator

Thank you our next questions from the line of Jeff Mueller with Baird. Please proceed with your questions.

Jeff Mueller
Analyst at Robert W. Baird

Yes, thank you and good morning. Mark, any additional perspective you can provide on what you're hearing from customers on the pre-screen and marketing activity starting to pull-back just given the health of the consumer at this point and bank balance sheet health so would just love to kind of square those two points.

Mark W. Begor
Chief Executive Officer at Equifax

Yeah, as I said earlier Jeff, broadly the consumer is unchanged from second-quarter and so our bank balance sheets are very strong, so there's no change there so don't take whatever you heard earlier is some message around that we're seeing big pullbacks. What I will tell you is every time I meet in the C-Suite or with CROs, we're all talking about because we all watch CNBC, we all watch what's happening with inflation, we all see what's happening with interest rates, when will it have an effect on consumers and when will it have effect on the ability to pay and delinquencies. And again, my view of someone who has been around financial services for multi-decades, it all starts with employment. And that's the indicator that we watch, I watch, and then after that it's delinquencies. But we're seeing still a strong job market. I think there's not quite too but there is 1.7 jobs open for anyone who is out of a job now, something like that. So it's still very vibrant. And we don't see indications of what I would call pullback. But everyone's watching it. It's clearly a conversation in every meeting.

Jeff Mueller
Analyst at Robert W. Baird

Got it. Appreciate the perspective. And then within TWN 16% records growth is great, as you said way above the long-term framework to drive really good growth model. But growth decelerated year-over-year and the comp doesn't much tougher, sequential growth seemed just okay considering you're still onboarding partners and non-farm payrolls are growing. So any perspective on on that figure and if you can confirm if there was any partner record attrition. Thanks.

Mark W. Begor
Chief Executive Officer at Equifax

Yeah. There's sub levels, it's very de-minimis of what I would call churn inside of the records but obviously they are generally growing when you're up 16% so that's not something that we see -- there is obviously some changes in employment with some of our partners as you go through the year, there is a seasonality as you might imagine where there is hiring and some industries, think about retail warehouse related to the holiday season that we see an increased employment which resulted in increased records for us call it in the second-half of the year and then a change in the first-half of the year when some of that comes -- some of that holiday hiring comes out of the system. But broadly, we are seeing obviously a 16% strong record growth inside of the TWN set.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

I'd say it's generally true that we're seeing -- it has actually been a very good year both in terms of signing new partners but also direct contributors. So I think we feel like in terms of the execution of the team on building new contributors, it's really been an outstanding year.

Jeff Mueller
Analyst at Robert W. Baird

Yeah, got it. Thank you. Thank you. Our next questions come from the line of David Togut with Evercore ISI. Please proceed with your questions.

David Togut
Analyst at Evercore ISI

Thank you, and good morning. Just bridging to some of the earlier questions on revenue but focusing specifically on EWS. If we take your fourth quarter 2022 revenue growth guide of down at least 3% and kind of think through your commentary on Q1 mortgage credit increase being down 50% or so year-over-year, how should we think about the starting point for EWS revenue in 2023?

Mark W. Begor
Chief Executive Officer at Equifax

Yeah, again we don't want to get into 2023 guidance. We gave you our fourth quarter guidance, it's too early to talk about 2023. And I think we talked about obviously mortgage in -- for sure in the first-half [Part 10 end] Will be a challenge because of the strong mortgage market in the first-quarter last year. But we in some of the previous questions talked a bunch about what are the positives if you will having the non-mortgage total growth of 20% and organic growth of 13%, that's momentum coming out of 2022 into 2023 that is obviously going to be important to us. We talked about the fact we do pricing actions typically on one-one. So that's going to be a positive for us in 2023. The new products that we talked about, the acquisition synergies and growth going into 2023. What else would you add, John?

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

[Speech Overlap] to the earlier question, I think it's a pretty good list. So specific to EWS and specific to Verifier, records growth was obviously outstanding so far this year.

Mark W. Begor
Chief Executive Officer at Equifax

Well, 16% records growth carries through till...

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

Absolutely.

Mark W. Begor
Chief Executive Officer at Equifax

Next year and I think we talked about ten new partners being signed up, three in the quarter. Those won't go online in the fourth quarter, those will be additions that will happen in 2023 that will drive records and of course we're out there working to add more records that will help EWS.

David Togut
Analyst at Evercore ISI

Understood. Just as my follow-up, the 38% organic non-mortgage growth at Workforce Solutions in Q4, Talent up 50% organic, Government up 44% organic. How should we think about the runway for growth for both Talent and Government in 2023? Are these types of growth rate sustainable or have they peaked?

Mark W. Begor
Chief Executive Officer at Equifax

Yeah, we're not giving growth rate outlook for 2023, that's not the intention of this meeting yet but when you think about those two verticals, I talked about it earlier you think about Talent is a $5 billion TAM where we have a ton of penetration opportunity because we're only doing one in ten or two in ten background screens so that's a opportunity there. And then in the Government very similar. Government is about $2 billion TAM for that kind of verification of the income and employment in some cases, and we've got $300 million businesses. A lot of growth potential there. And add on top of it kind of the core Workforce Solutions growth levers outside of penetration of adding more records is going to drive hit rates in both businesses whether it's for background screening or government, social services, you add-in our new products, pricing changes that we're going to do early in the year, system to system integrations drive revenue for us in both of those verticals. So those are the kind of growth levers the team is going to work on and is in flight on, as well as the momentum that we have coming out of the year which is quite strong.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

But over the longer-term, we have a 13% to 15% long-term growth rate, so obviously the growth rates we're delivering today in those specific verticals are well above that. So we would expect over time we're going to have very good performance in those verticals but growth rates over time we would expect in general in non-mortgage are going to converge more down toward our long-term model.

David Togut
Analyst at Evercore ISI

Understood. Thank you.

Operator

Thank you. Our next question is coming from the line of Toni Kaplan with Morgan Stanley. Please proceed with your questions.

Toni Kaplan
Analyst at Morgan Stanley

Thanks very much. Just looking ahead, how should we be thinking about your ability to pass-on price increases in EWS versus prior years if we do have an economic slowdown? Like does that impact pricing do you temper what you're trying to push through, and just maybe if you could ground us on how we should be thinking about like a normal pricing baseline for EWS for price increase?

Mark W. Begor
Chief Executive Officer at Equifax

Yeah, we don't see any real change in not only EWS but across the Equifax about what we're gonna do in price in 2023 and like it's already happening. So it's not going to -- we're already in-flight talking to customers about what our plans are around price for 2023 because most of the pricing goes into effect one-one. Workforce as you know is a very unique solution that delivers really unique value to our customers, so we have more pricing power there or flexibility, but we're always balanced about price whether it's a good or bad economic times. But I would say broadly we don't think about pricing being different if there's an economic event. And again, there is an economic that hasn't happened yet. Outside of the mortgage macro, the economy is quite good. Our non-mortgage business is very strong, our customers are strong and consumers are strong. So we're kind of doing what I would characterize as kind of a normal process in January.

Toni Kaplan
Analyst at Morgan Stanley

Great. And then you've talked for some time now about getting the gig and pensioner records. Have you been having success in getting those, and is there a different process for getting gig records versus W2 records? Are they harder to get because it's more maybe fragmented outside of ride-sharing, just how is the update on the process and how your success is and how different it is? Thanks.

Mark W. Begor
Chief Executive Officer at Equifax

Yeah, there's still a bunch of runway in W2 which you heard and we're penetrating that, which is most of our records today are W2 so that 16% growth is primarily in that set and there is still another 40 million, 50 million records to get there, and then if you go to gig it is more dispersed and we've got a number of strategies underway to go after those records which are equally valuable, and we've got some traction around pensioner records. As I mentioned, we've signed a big partner to bring some records in. We're also getting records directly from large kind of legacy companies that do their own pensioner payroll processing or pensioner payment processing. So we're working on all those avenues and we've got dedicated teams on them and our expectation is to continue to add records from all three areas as we move through the fourth quarter and into '23 and beyond. And what's energizing for us is the opportunity is still double the dataset. The 111 million uniques and call it 210 million or thereabouts of total employed or pension payment recipients in the United States, we have got a long runway to add new records to the TWN dataset. And again, I mentioned this a couple of times. I know it's not lost on you Toni that we're already getting inquiries on those. So we get inquiries on half of the records we don't have, so it's just a matter of adding them to drive our revenue growth.

Toni Kaplan
Analyst at Morgan Stanley

Perfect. Thanks.

Operator

Thank you. Our next question comes from the line of Simon Clinch with Atlantic Equities. Please proceed with your questions.

Simon Clinch
Analyst at Atlantic Equities

Hi. I wanted to go back to Verification Services revenues. It's something I've been sort of tracking has been non-mortgage revenues on a sort of per average record basis and. I think since the since the pandemic has just been moving up steadily pretty much every quarter since then it's ticked down for the first time. I'm just wondering is there anything in particular that -- in terms of that kind of structural opportunity on the revenue per record basis going forward? If we --should it be capped out at any particular time or is there anything we should read into that?

Mark W. Begor
Chief Executive Officer at Equifax

Yes, we've been growing revenue for record quite meaningfully. And again, the way you should think about it and it's a way we think about it is as we get into new verticals like Talent and Government or even I would characterize Cards in -- as a newer vertical, Auto is underpenetrated, all of those verticals, as we add those new revenue sources the records become more valuable because we're monetizing that same record multiple times when someone applies for mortgage and then a credit card and then an auto loan or a fee loan and then they apply for new job or then they have to get government social services, you've got multiple avenues to monetize that record. So it's part of the power of the business.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

The only thing I'd add, and you know Simon already that the -- obviously the different verticals we have have very different price points and very different product structure. So you can see mix changes in any given period when you're taking a look at transactions and records and revenue. So just make sure you keep that in mind as you're running your analytics.

Simon Clinch
Analyst at Atlantic Equities

Okay, thank you. And just as a follow-up. We talked a lot about how the mortgage revenue declines are really impacting margins, very-high incremental margin. I just wanted to just confirm again that should mortgages have to rebound, should we just assume that it carries that kind of 80% incremental margin on the way up as well, is there any reason not to assume that? And then longer-term, is there any reason why the non-mortgage revenues shouldn't carry the same kind of incremental margins as the mortgage business does today?

Mark W. Begor
Chief Executive Officer at Equifax

So are you specifically talking about Verifier?

Simon Clinch
Analyst at Atlantic Equities

Oh yes, Verifier.

Mark W. Begor
Chief Executive Officer at Equifax

Okay. Yes, so variable margins or the contribution margins for mortgage obviously going in coming out should be very similar. Whether or not we reinvest some of the incremental profit generated would be a different discussion but they certainly should be similar in terms of the contribution margin of both. Generally speaking, the margins across Verifier are similar. They can be somewhat different depending on the relative price point and the volumes relative to the price points where you can see some higher cost for the different -- kind of to your earlier question, but broadly speaking, yes, the margins [Part 11 end] For the products across Verification Services are relatively similar.

Simon Clinch
Analyst at Atlantic Equities

Okay, it's just a question of reinvestment. Okay, thank you.

Operator

Thank you. Our next question comes from the line of Seth Weber with Wells Fargo. Please proceed with your questions.

Seth Weber
Analyst at Wells Fargo Securities

Hi, good morning, guys. I just wanted to ask about the sequential improvement in USIS EBITDA margin that you guys are forecasting for the fourth quarter. It looks like revenues are kind of flattish sequentially. Is that just some of the sales and marketing expenses are going out, or it doesn't seem like mix is really changing a lot. So just if there's any color on the 200 basis-points of uptick 3Q to 4Q.

Mark W. Begor
Chief Executive Officer at Equifax

Yes so sequentially generally we see a little bit of an uptick. Certainly -- we definitely see an uptick in non-mortgage revenue generally in the USIS in the fourth quarter so we would expect to see some of that and that tends to drive very-high variable margins. So -- and given that we expect to see a little more leverage on some of the opex. That's all.

Seth Weber
Analyst at Wells Fargo Securities

Okay. I mean, I'm just trying to understand, over the last -- prior to the second-quarter the business was sort of high 30% margin, so I'm just trying to think through if there was any reason why you wouldn't get back to that level relatively quickly next year. It sounds like you're moving back in that direction.

Mark W. Begor
Chief Executive Officer at Equifax

So relatively quickly, yeah, obviously the mortgage market decline is weighed on that.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

Very heavily, right? So obviously as we get into 2023 we'll give you a better view as to what we expect 2023 USIS margins to do.

Seth Weber
Analyst at Wells Fargo Securities

Right, okay. And then just a clarification. You guys talked about a couple of times you referenced M&A synergies expected over the next couple of years. Is that revenue synergies or expense synergies or both or just how should we think about that?

Mark W. Begor
Chief Executive Officer at Equifax

Well, yeah, when we do these bolt-on acquisitions, part of our strategy is to bring in unique data assets that we can combine with other Equifax data assets in order to drive new solutions to-market, and that generally takes time. We got to integrate the business, integrate their dataset into our single data fabric, and that usually takes call it a year in change, and then we can start bringing those to market and then those drive the topline and the bottom-line.

Seth Weber
Analyst at Wells Fargo Securities

Got it, okay. Thank you, guys. Appreciate it.

Operator

Thank you. Our next question comes from the line of Faiza Alwy with Deutsche Bank. Please proceed with your questions.

Faiza Alwy
Analyst at Deutsche Bank Aktiengesellschaft

Yes, hi, good morning, thank you. I just -- I wanted to talk about EWS margins again, and I'm curious when you first gave the margins earlier this year, I think you talked about 54%. And just wanted to understand is the deceleration from that to where we are today entirely mortgage related or is there anything else in the underlying business that has impacted that change?

Mark W. Begor
Chief Executive Officer at Equifax

The biggest driver in margin degradation by far is the impact on revenue and have very-high variable margins we get for mortgage. So that's the biggest driver. We have talked about some increased expenses, we talked about some marketing investments and things we're making this year to drive NPI which had been very successful but generally overall the biggest driver in the movement has been related to the reduction in revenue related to mortgage.

Faiza Alwy
Analyst at Deutsche Bank Aktiengesellschaft

Okay, got it. And then just as we think about those margins -- I appreciate, I know you're not providing '23 guidance but I appreciate you giving us EWS margin outlook of above 50%. I'm curious if you can give us just not numbers but just the holistic thoughts around how we should think about I guess a quarterly cadence. I mean, I'm thinking we should build through the course of the year. Is there anything you can say about 1Q margin just given that you did provide a outlook for mortgage inquiries for the first-quarter?

Mark W. Begor
Chief Executive Officer at Equifax

Yeah we're not ready to talk about 2023 guidance. We did want to make clear that first-quarter is going to have a tough comparison given the fourth quarter exit and the strength in the first-quarter last year. And then on EWS you said about 50%, we actually said over 50% just to be accurate. But yeah, we'll be ready to give '23 guidance when we get into 2023. Perfect. Thank you.

Operator

Thank you. Our next question is coming from George Tong with Goldman Sachs. Please proceed with your questions.

George Tong
Analyst at The Goldman Sachs Group

Hi, thanks, good morning. You mentioned that non-mortgage growth in 4Q will be strong but not as strong as 3Q. Can you discuss the data points that you're seeing in the bank card and auto lending sectors that suggest an incremental moderation in strength in those categories?

Mark W. Begor
Chief Executive Officer at Equifax

I don't know if you were listening George but we got that question from -- earlier that we're not seeing any change. The non-mortgage growth rates that we're talking about are very, very high and we expect them to still be very strong in the fourth quarter.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

And we did give a view of International in the fourth quarter. International was outstanding in the third quarter, it's going to be very strong in the fourth quarter but its growth rate is somewhat lower and obviously international, their revenue is virtually all non-mortgage.

George Tong
Analyst at The Goldman Sachs Group

Okay, got it. As you look at the mortgage category, certainly there was a significant amount of refinancing activity that was pulled forward into 2020 and 2021. To what extent does this pull-forward structurally lower the medium-term mortgage revenue growth outlook for Equifax?

Mark W. Begor
Chief Executive Officer at Equifax

Obviously we're seeing the impacts of that right now since refinances is dried up predominantly. So what's left is just cash-out refis and we're actually now starting to see substantial growth in HELOCs replacing even some of the cash-out refi. So think we're living through the -- obviously the impact of that dramatic reduction in refinance right now. We gave a view of first-quarter mortgage but again in terms of giving a view as we go-forward which is kind of for us the 2023 would be mid term, it's just a little bit earlier. Unfortunately you're just going to have to wait until we get into the first-quarter and -- for us to give our 2023 guidance.

George Tong
Analyst at The Goldman Sachs Group

Yeah, well, it really wasn't a 2023 question, more like a medium-term, longer-term question, since you've in the past given longer-term guidance targets before.

Mark W. Begor
Chief Executive Officer at Equifax

I don't know what you mean by medium-term, longer-term. Do we expect the mortgage market over the long-term to return to a more normal level? Absolutely, no question about it. Is that what you mean?

George Tong
Analyst at The Goldman Sachs Group

Well, medium-term. So I guess over the next two to three years or two to four years.

Mark W. Begor
Chief Executive Officer at Equifax

What's going to happen with the economy in the first year or two of that cycle. And then if the Talent that you said two to four, you get-out to four years it would -- my expectation is you'd get back to a more normal level but I don't know what's going to happen with the economy. I don't think you do either George.

George Tong
Analyst at The Goldman Sachs Group

Got it. Okay, helpful. Thank you.

Operator

Thank you. Oour next question comes from the line of Heather Wolski with Bank of America. Please proceed with your questions.

Heather Wolski
Analyst at Bank of America

Hi, thank you for taking my question. I wanted to just clarify -- well I've two questions. One, I wanted to clarify the benefit you see next year from the cloud transformation. You said half of 500 basis-points so is that a gross or net 250 basis-point benefit flowing through. And also does that include sort of rolling-off some of the additional costs -- is that the savings or is that also rolling-off the costs from the implementation? And then the other question totally separate but just on the Talent Solutions side, you talked about sort of the white space there, just sort of what can get you further penetrated in the background tech industry? Thanks.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

So on transformation, the savings are related to all costs related to transformation in both the lower COGS as well as the lower investment levels. And then also they're going to be more back-end loaded than front-end loaded, right, because you get the savings as all customers migrate and you can actually decommission systems. So we will start getting savings in 2023 as we said and we feel-good that that's going to happen but the bigger savings happen as you get into '24 and '25. So you should think about that type of a cadence. What was your second question again, Heather, sorry.

Heather Wolski
Analyst at Bank of America

Just on the cloud transformation, the 250 basis-points, is that the flow-through this year or into next year.

Mark W. Begor
Chief Executive Officer at Equifax

No, I think as John said and we said consistently not only in this call, on prior calls, the 250 basis points is really between '22 and '25 and it's that path to 39% EBITDA margins in 2025 that's our goal. That happens over '23, '24 and '25. That's not a '23 change.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

And I think and more of that would be back-end loaded as I just said because it happens as systems actually decommission. So we'll see some in '23 yes but you're going to see more of it in '24 and '25.

Heather Wolski
Analyst at Bank of America

Thank you very much.

Operator

Thank you. Our next question comes from the line of Surinder Thind with Jefferies. Please proceed with your questions.

Surinder Thind
Analyst at Jefferies Financial Group

I'd like to start a question regarding your long term framework. Can you maybe talk about is that intended to be like a rolling three-year measurement period or like a five-year period? And then maybe when we think about something like EWS nonmortgage which continues to grow well above that framework. How often do you revisit frameworks such as that and maybe some of the factors that underpin it. Like for example at some point whether it's three years, five years out, the W2 records within the TWN database will mature. So how do we think about some of those longer term drivers of the business?

Mark W. Begor
Chief Executive Officer at Equifax

Yeah, I think as you know we put this in place a year ago and I believe that was the first change in Equifax's long term framework in like five or six years?

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

At least, yeah.

Mark W. Begor
Chief Executive Officer at Equifax

So maybe longer. The old framework was 7% to 10%, we moved to 8% to 12%, 100 basis-points on the low end and 200 basis-points on the high end. It was intended to be a long-term framework and we can all talk about long term but let's say five years plus, meaning we expect the company to grow in that range short of economic events, those are something you can't put in a long term framework but 8% to 12% growth. For Workforce in particular inside of the 8% to 12%, and we talked about this already this morning, we have an expectation of them growing 13% to 15%. That's their long-term framework inside of our 8% to 12%, meaning they're going to be highly accretive and grow faster than the rest of Equifax. That's something that we expect. As you point out, they've been outgrowing that 13% to 15% which sits inside of our 8% to 12% which is good news. In our eyes, that gives us confidence in the 13% to 15% over the long-term. And of course the 13% to 15% is made up of record additions. It's made up of new product rollouts. It's made up of penetration. And they've got uniquely a lot of penetration opportunities in all of their verticals because our income and employment data is still a fairly new data asset in the scheme of data assets. The credit file has been around for 70 years. Income and employment data has been around in a digitized way only for 15 years. So we've got a lot of confidence. In the 13% to 15% for Workforce because of all of their growth levers but also because they've been outgrowing that 13% to 15% for the last three or four years.

And your question I think you also asked a question about when will we revisit this. It's just -- it's actually not even 12 months old. Our Investor Day was I think on November 7th last year. So we're very confident and comfortable with what it is today after almost 12 months. And with the right time if things change we would look at it again but we see no reason to change it and we still have a lot of confidence in it.

Surinder Thind
Analyst at Jefferies Financial Group

That's helpful. And then maybe as a follow on. When we think about the contribution of new products to revenues is measured by the vitality index. So is that intended to be all growth on top of existing revenue base or is there some cannibalization of revenues that we need to consider or that -- maybe the play between the two? How should we think about the actual measurement of that and what it means from a modeling perspective?

Mark W. Begor
Chief Executive Officer at Equifax

Yeah. I think in our long-term framework John we talked about new products in November last year adding one to two points.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

Yeah, we said vitality 10% so...

Mark W. Begor
Chief Executive Officer at Equifax

Yeah, and that translated into -- that was one of the drivers of us bringing up our long-term growth rate from 7% to 10% to 8% to 12% was the increased new product rollouts is going to be a factor of that change in our long-term growth rate. And then add to it Workforce Solutions growing faster than the rest of Equifax it approaching 50% of Equifax, that's accretive to that growth rate if they're growing 13% to 15%, and then the average for our long-term is 8% to 12% that's accretive. And then we believe the cloud completion and cloud competitiveness also was a factor in that change from 7% to 10% to 8% to 12%. I don't know if that's helpful.

John W. Gamble, Jr.
Chief Financial Officer and Chief Operations Officer at Equifax

And our vitality index is supposed to represent truly new products. I mean, certainly even new products can cannibalize an existing product but they're not supposed to be tweaks. We don't tweak a product and call it a new product. It needs to be a product that's substantially different or substantially new to Equifax.

Surinder Thind
Analyst at Jefferies Financial Group

So this will be claims generally buying these on top of whatever existing products they're buying?

Mark W. Begor
Chief Executive Officer at Equifax

Yeah, there's clearly that it will replace some products but they're generally as John pointed out unique additions. And use the example I shared this morning of the mortgage credit file that we've been delivering to the marketplace for 70 years in some fashion. We rolled out a new solution that's going to be our file plus these telco utility cell phone data that's going to differentiate our mortgage credit file. That's a new product. Some customers will only buy the new product. Some will continue to buy just the credit file. That's really -- so there -- is there some cannibalization? Could be. But there's also should be we expect share gain, meaning our credit file is more valuable than our competitors' credit file because the addition of that unique data to it.

Surinder Thind
Analyst at Jefferies Financial Group

That's very helpful, thank you.

Operator

Thank you. There are no further questions at this time. I would now like to turn the callback over to Trevor Burns for any closing comments.

Trevor Burns
Senior Vice President, Head of Investor Relations at Equifax

I think everybody had full time today. If you have any follow up questions, feel free to reach out. Thank you.

Operator

[Operator Closing Remarks]

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