Equifax grew Q2 2026 revenue 10.6% to $1.70 billion on a 25% jump in U.S. mortgage revenue, but a $40 million legal settlement, higher royalty costs and cloud amortization cut net income 4%; GAAP EPS rose 1% to $1.54 and adjusted EPS 13% to $2.25.
Revenue
$1.7B
+10.6% YoY
Net income
$184M
-3.9% YoY
Diluted EPS
$1.54
+0.7% YoY
Operating margin
18.5%
Revenue up 11%, profit down: a $40 million legal settlement and rising score royalties ate the gain
Equifax, one of the three big U.S. credit bureaus, grew second-quarter 2026 revenue 10.6% to $1,700.1 million. Operating income, though, rose only 1% to $314.2 million, and net income attributable to Equifax fell 4% to $183.9 million. Three things explain the gap, all named in the 10-Q's management discussion (MD&A):
A legal settlement. Equifax accrued $100.0 million to settle a class action over a "previously-disclosed coding issue" that affected how some credit scores were calculated during a three-week period. It expects insurance to cover $60.0 million, so the net charge was $40.0 million before tax ($30.2 million after tax), per the July 21 earnings release (8-K Exhibit 99.1).
Higher royalty and revenue-share costs. Cost of services — what it costs to deliver the products, before depreciation — rose 16% to $773.7 million, faster than revenue. The 10-Q attributes this "primarily" to "higher royalty and revenue share costs". In U.S. Information Solutions it specifically cites "mortgage related royalty costs".
Amortization from the cloud rebuild. Depreciation and amortization rose 7% to $189.7 million. The 10-Q says this was "primarily due to increased amortization of capitalized internal-use software costs resulting from technology transformation capital spending incurred previously". In plain terms, the multi-year cloud migration was paid for up front and is now being expensed a slice at a time.
Diluted EPS (earnings per share) was $1.54, up only 1% from $1.53. It rose even though net income fell because buybacks cut the diluted share count 4.6%, from 125.0 million to 119.2 million.
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Revenue
$1,700.1M
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Adjusted EPS, adjusted EBITDA margin and mortgage revenue growth come from the earnings release, not the 10-Q. Operating margin is operating income as a share of revenue: what is left from each dollar of sales after running the business, before interest and tax.
Year to date (six months): revenue $3,349.0M (+12%), operating income $601.9M (+10%), operating margin 18.0% (vs. 18.4%), net income attributable to Equifax $355.4M (+10%), diluted EPS $2.96 (+14%). The first half looks better than the second quarter alone because the settlement charge fell entirely in Q2.
GAAP vs. adjusted EPS: a $0.71 gap
Equifax's "adjusted" EPS of $2.25 is $0.71 above GAAP EPS. GAAP (generally accepted accounting principles) is the standard, audited way of counting profit. Per the release's reconciliation, the gap comes mostly from two items:
Amortization of acquired intangibles: $61.2 million pre-tax ($48.9 million after tax). This is a recurring non-cash charge for the value of customer lists, data and technology bought in past acquisitions. It is excluded every quarter, not just this one.
The legal settlement: $40.0 million pre-tax. This one is genuinely one-off.
Smaller items included $7.0 million of acquisition integration costs. On an adjusted basis, net income rose 8% to $268.6 million, and fewer shares turned that into 13% EPS growth. The 13% headline is fair for the underlying business, but it is flattered by the ~4.6% lower share count, and it excludes a real cash settlement (net of insurance).
A rough cross-check: $30.2 million after tax spread over 119.2 million diluted shares is about $0.25 per share. Without the settlement, GAAP EPS would have been roughly $1.79, up about 17%. Without its $40 million, the operating margin would have been about 20.8%, slightly above last year's 20.2%. So the underlying margin held, while royalties and amortization offset most of the operating leverage from 11% revenue growth.
Segments
Segment
Q2 2026 revenue
YoY
Q2 2026 op. margin
Q2 2025 op. margin
Workforce Solutions
$705.4M
+7%
44.9%
46.4%
U.S. Information Solutions (USIS)
$611.6M
+17%
22.5%
22.6%
International
$383.1M
+8% (+4% local currency)
12.1%
10.9%
General corporate expense (costs not charged to any segment) rose 22% to $186.6 million. The 10-Q attributes this "primarily" to the settlement charge.
Workforce Solutions (The Work Number)
This is Equifax's most profitable business. Its main product is The Work Number, a database of payroll records that lenders, employers and government agencies query to verify someone's employment and income.
Verification Services revenue rose 7% to $607.6 million. The 10-Q credits growth in the talent solutions (pre-hire background checks), mortgage and consumer-lending verticals. It says this was "partially offset by a decline in the government solutions vertical" in the quarter; the government vertical still grew over the six months. The release says Workforce Solutions mortgage revenue grew 8%. It also says the unit signed government contract wins and renewals worth about $300 million in annual contract value in the first half, which "will principally benefit 2027 and beyond".
Employer Services (outsourced HR tasks: I-9 checks, onboarding, unemployment claims, Affordable Care Act forms) rose 3% to $97.8 million, on I-9 and onboarding. It fell 1% for the half because of lower ACA-related revenue.
Margin fell 1.5 points to 44.9%. The 10-Q cites "higher revenue share costs" (payments to the payroll providers and employers that contribute data) and cloud-related software amortization. Over the six months the margin still rose, to 45.1% from 44.6%.
U.S. Information Solutions (the credit bureau)
This is the traditional consumer and commercial credit-report business. It was the fastest-growing segment.
Online Information Solutions revenue rose 19% to $545.4 million. The 10-Q says this came from mortgage-related services, "primarily due to product pricing and higher volumes", plus growth in diversified (non-mortgage) markets. The release puts USIS mortgage revenue growth at 40% and USIS diversified-markets growth at 6%.
Financial Marketing Services (batch credit data used for marketing and portfolio reviews) rose 4% to $66.2 million.
The margin was flat at 22.5% despite 17% revenue growth. The 10-Q blames "an increase in mortgage related royalty costs". This is the key tension in the quarter. Mortgage credit files earn more per pull, but much of the extra revenue is passed through as higher royalties. The filing does not say who receives these royalties or how scores are priced. It does not name FICO, VantageScore or any change in mortgage credit-score competition. So this report doesn't attribute the royalty increase to any specific score provider's pricing.
International
Revenue rose 8% reported but only 4% in local currency. That means about half of the growth came from a weaker U.S. dollar: exchange rates added $14.9 million. Asia Pacific grew 17% reported but 7% in local currency, on commercial and identity/fraud products in Australia and on India. Canada grew 6%, Latin America 3% (local currency), and Europe 1%, where U.K. consumer-credit growth was offset by declines in U.K. direct-to-consumer and debt services. The margin improved to 12.1% from 10.9% on higher revenue.
Mortgage: pricing is doing the work
U.S. mortgage revenue grew 25% company-wide, according to the release. Management said this was "in line with our expectations despite higher mortgage rates throughout the second quarter." Yet the 10-Q's own planning assumption is that 2026 U.S. mortgage originations will be "slightly below the levels of activity seen in 2025". Revenue growing 25% in a market expected to be roughly flat to down means most of the gain comes from price per transaction, not more home loans. The 10-Q lists "product pricing" first among the USIS mortgage drivers. That growth is more durable than a refinancing boom, but it also comes with higher royalty costs, as the flat USIS margin shows.
Cash, buybacks and debt
Buybacks: 1.76 million shares for $300.0 million in Q2, and 3.11 million shares for $560.0 million in the first half. That compares with $127.4 million in the first half of 2025. About $1.5 billion remains under the $3 billion authorization.
Dividends: raised to $0.56 a quarter (from $0.50); $133.5 million paid in the first half.
Cash flow: operating cash flow in the first half was $581.7 million (vs. $585.0 million), and capital expenditures were $255.4 million (vs. $229.4 million). Free cash flow, calculated here as operating cash flow minus capital spending, was about $326 million, down from about $356 million.
Funded partly with debt: total debt rose 12% year on year to $5,467.1 million. Commercial paper (short-term corporate IOUs) outstanding was $1.4 billion, which also refinanced $275.0 million of 3.25% notes repaid in Q2. Interest expense rose 13% to $59.8 million. Buybacks plus dividends ($693.5 million in the half) exceeded free cash flow by more than double.
Acquisition: in July Equifax agreed to buy Círculo de Crédito, a Mexican credit bureau, for an enterprise value of $750 million. It expects the deal to close in Q4 2026, which will add further debt or reduce buybacks.
Takeaway: Equifax's revenue engine is running at double digits, but most of this quarter's gain went to higher mortgage royalty and revenue-share costs, cloud-era amortization and a $40 million settlement, rather than to shareholders' GAAP earnings. Excluding the settlement, the operating margin was roughly flat year on year. The mortgage story is price-led, and the costs rise alongside the price.
Outlook
Guidance from the July 21 earnings release:
Q3 2026
Full year 2026
Revenue
$1.680B – $1.710B (+8.7% to +10.7%)
$6.710B – $6.780B (+10.5% to +11.6%)
Local-currency growth
+8.4% to +10.4%
+9.8% to +10.9%
Adjusted EPS
$2.15 – $2.25
$8.39 – $8.69
With $3,349.0 million of revenue in the first half, the full-year range implies $3.36–3.43 billion in the second half. That is only modestly above the first half, consistent with mortgage volumes expected to be soft. Management also doubled its 2026–2028 target for AI-driven cost reductions to $150 million, which is aimed at the cost pressures described above.
Our read: the things to watch are whether USIS margins can rise while mortgage royalty costs keep climbing, and when the government contract signings show up in Workforce Solutions revenue (management says mostly 2027). Also watch whether the pace of buybacks is maintained once the Círculo de Crédito purchase closes, with debt already up $569 million in a year. The legal settlement is a one-off. The royalty and amortization pressures are not, and they are why 11% revenue growth turned into only 1% operating-income growth this quarter.
Source: Equifax Form 10-Q for the quarter ended June 30, 2026 (filed July 21, 2026). Adjusted EPS, adjusted EBITDA, mortgage revenue growth rates, the settlement's after-tax amount and guidance are from Equifax's Q2 2026 earnings release (Form 8-K, Exhibit 99.1, July 21, 2026).