Credit reporting giant Equifax (NYSE: EFX) met Wall Street’s revenue expectations in Q2 CY2026, with sales up 10.6% year on year to $1.7 billion. On the other hand, next quarter’s revenue guidance of $1.70 billion was less impressive, coming in 1% below analysts’ estimates. Its non-GAAP profit of $2.25 per share was 2.3% above analysts’ consensus estimates.

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Company Overview

Holding detailed financial records on over 800 million consumers worldwide and dating back to 1899, Equifax (NYSE: EFX) is a global data analytics company that collects, analyzes, and sells consumer and business credit information to lenders, employers, and other businesses.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years.

With $6.44 billion in revenue over the past 12 months, Equifax is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions.

As you can see below, Equifax grew its sales at a decent 6.8% compounded annual growth rate over the last five years. This shows its offerings generated slightly more demand than the average business services company, a useful starting point for our analysis.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Equifax’s annualized revenue growth of 8.6% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

We can better understand the company’s revenue dynamics by analyzing its most important segments, Workforce Solutions and U.S. Information Solutions, which are 41.5% and 36% of revenue. Over the last two years, Equifax’s Workforce Solutions revenue (HR services) averaged 6.9% year-on-year growth while its U.S. Information Solutions revenue (credit services) averaged 12.9% growth.

This quarter, Equifax’s year-on-year revenue growth was 10.6%, and its $1.7 billion of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 9.7% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 10.2% over the next 12 months, an improvement versus the last two years. This projection is healthy and implies its newer products and services will fuel better top-line performance.

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Adjusted Operating Margin

Adjusted operating margin is a key measure of profitability. Think of it as net income (the bottom line) excluding the impact of non-recurring expenses, taxes, and interest on debt - metrics less connected to business fundamentals.

Equifax has been a well-oiled machine over the last five years. It demonstrated elite profitability for a business services business, boasting an average adjusted operating margin of 20.7%.

Looking at the trend in its profitability, Equifax’s adjusted operating margin decreased by 4.3 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q2, Equifax generated an adjusted operating margin profit margin of 18.5%, down 2.5 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

Equifax’s EPS grew at a weak 1.1% compounded annual growth rate over the last five years, lower than its 6.8% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

Diving into the nuances of Equifax’s earnings can give us a better understanding of its performance. As we mentioned earlier, Equifax’s adjusted operating margin declined by 4.3 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Equifax, its two-year annual EPS growth of 9.4% was higher than its five-year trend. Accelerating earnings growth is almost always an encouraging data point.

In Q2, Equifax reported adjusted EPS of $2.25, up from $2 in the same quarter last year. This print beat analysts’ estimates by 2.3%. Over the next 12 months, Wall Street expects Equifax’s full-year EPS to grow 13.7% from $8.24 to $9.37.

Key Takeaways from Equifax’s Q2 Results

It was good to see Equifax beat analysts’ EPS expectations this quarter. On the other hand, its EPS guidance for next quarter missed and its revenue guidance for next quarter fell slightly short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 12.1% to $158.31 immediately after reporting.

Equifax may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).