Equifax Inc. Q1 2026 Earnings Call Transcript

Equifax Inc. (NYSE: EFX) Q1 2026 Earnings Call dated Apr. 21, 2026

Presentation

Operator

Greetings, and welcome to the Equifax Q1 2026 Earnings Conference Call and Webcast. [Operator Instructions]

It’s now my pleasure to turn the call over to Trevor Burns, Senior Vice President, Investor Relations. Trevor, please go ahead.

Trevor Burns — Senior Vice President, Investor Relations

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 Investor Relations website.

During the call, we will be making preference to certain materials that can be found in the Presentations section of the News and Events tab at our IR website. These materials are labeled 1Q 2026 earnings conference call. Also, we’ll be making certain forward-looking statements, including second quarter and full year 2026 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 2025 Form 10-K and subsequent filings. During this call, we’ll be referencing certain non-GAAP financial measures, including adjusted EPS, adjusted EBITDA, adjusted EBITDA margins and cash conversion, which are adjusted for certain items that affect the comparability of our underlying operational performance. All references to EPS, EBITDA, EBITDA margins and cash conversion are references to non-GAAP measures. 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.

Mark W. Begor — Chief Executive Officer

Thanks, Trevor. Turning to Slide 4, Equifax delivered very strong first quarter results with reported revenue of $1.649 billion, up 14%, which was $37 million above the midpoint of our February guidance. On an organic constant currency basis, revenue growth of 13%, which was over 200 basis points above the midpoint of our February framework. Ex FICO, revenue growth was up about 10% and at the top end of our 7% to 10% long-term growth framework.

The revenue outperformance was principally in U.S. Mortgage, which was up 38% and better than our February guide from stronger mortgage activity in the middle of the quarter before rates increased due to the Iran conflict. USIS Mortgage also benefited from stronger revenue growth related to its new wins in pre-approval products driven by our TWN Indicator solution. These mortgage customer wins are a good proof point that our differentiated TWN Indicator solutions are resonating with mortgage customers. We also expect customer share gains this year in card, auto and P-loan as we drive TWN Indicator deployment more broadly. As a reminder, we are offering the TWN Indicator as well as our cell phone, utility and pay TV attributes at no cost in mortgage to drive share gains.

Organic Diversified Markets constant revenue dollar growth grew almost 6% in the quarter, consistent with our guidance. This was principally driven by strong broad-based execution in Workforce Solutions. Importantly, first quarter EBITDA of $477 million was up 13% with an EBITDA margin excluding FICO of 31.2%, up a strong 80 basis points and a very strong 110 basis points above the midpoint of our February framework. The 80 basis point expansion versus last year in EBITDA margin was both above our 75 basis point target for the year and 30 basis points above our long-term 50 basis point framework. The strong EBITDA margins were driven by strong operating leverage, mortgage flowthrough and AI-driven cost productivity.

Equifax reported EBITDA margins were 29% in the quarter. EPS at $1.86 per share was also up a very strong 22% and $0.18 above the midpoint of our February guide. As a reminder, first quarter EBITDA margins and EPS are lower than the remainder of the year, primarily due to a large percentage of our employees — employee equity plan expenses being recognized in the quarter. We returned $327 million to shareholders in the quarter, including repurchasing 1.3 million shares or about 1% of shares outstanding for $260 million to take advantage of a weaker Equifax stock price.

And last month, we increased our quarterly dividend by 12% to $0.56 per share. Equifax paid $67 million of dividends in the quarter. We continue to expect strong free cash flow of over $1 billion in 2026 with a cash conversion over 100%, which will deliver capacity of approximately $1.5 billion for bolt-on M&A and return of cash to shareholders while maintaining strong leverage levels. The team also continued to execute very well against our EFX2028 strategic priorities in the quarter by leveraging EFX.AI-based solutions built on our cloud-native infrastructure to drive innovation, new products and growth. In the first quarter, our Vitality Index of 17% was at record levels and reflects the focused execution of our teams in driving customer-focused growth through accelerated innovation based on advanced EFX.AI, leveraging our proprietary data assets.

As a reminder, we added over 40 EFX.AI-based patents in 2025 and 10 more AI-based patents in the first quarter for a total of 400 pending or granted AI-based patents as we continue to invest in differentiated explainable AI capabilities at Equifax. In the middle of the first quarter, we saw strength in Diversified Markets, U.S. credit and mortgage activity as overall economic activity remained robust, inflation expectations moderated and interest rates declined. In March, the Iran conflict drove market uncertainty and higher interest rates and we saw weaker overall U.S. transactional activity from higher interest rates impacting mortgage and to a lesser degree, auto and banking.

Broadly, the U.S. consumers is resilient even in these uncertain times. We’ve seen mortgage activity decline in the last six weeks from elevated levels in February from the higher interest rates and we expect these lower levels of inquiries to continue until the Iran conflict is resolved and interest rates moderate. Current mortgage run rates are slightly below the levels reflected in the 2026 framework we shared in February. Despite our very strong first quarter results and given the significant uncertainty related to the current Iran conflict, we felt it was prudent to maintain our 2026 guidance we put in place in February until there’s more clarity on the direction of the economy and importantly, inflation and interest rates.

Absent the uncertainty and economic conditions related to the Iran conflict, we would have raised our full year guidance based on our strong first quarter results. We are maintaining our 2026 guidance for mortgage revenue growth of over 20%, consistent with the framework we provided in February as a stronger-than-expected first quarter mortgage revenue growth is offset by our expectation of current trends of slightly slower growth over the remainder of the year versus our February guide. For the full year, we continue to expect our Diversified Markets revenue to be up high single-digits, consistent with the guidance we provide in February. We expect strong execution from EFX.AI-driven new products and customer share gains to allow us to deliver at the levels consistent with our February framework.

We also expect to deliver strong full year margin expansion excluding FICO of 75 basis points from operating leverage off strong top line growth, higher-margin new products and AI-driven productivity. The 75 basis points is 25 basis points above our 50 basis point long-term margin framework.

Turning to Slide 5, Workforce Solutions revenue was up over 10% and better than our expectations. Verifier revenue was up a strong 14% with Diversified Markets revenue growth of 14%, which is a great start to the year. Within Diversified Markets, Government had a very strong quarter building off their fourth quarter performance with revenue up mid-double digits from continued strong state-level penetration. We expect Government revenue in the second quarter to be about flat sequentially against a very tough comp from the SSA contract win last year and timing of state contract activations. We continue to see strong momentum in Government from OB3 and the big $5 billion TAM that they operate in.

Talent Solutions revenue was up almost 10% in the quarter. This is the second consecutive quarter of high single-digit revenue growth in a challenging white collar hiring market. In February, we discussed weaker hiring volumes in January that have begun to improve later in the quarter. Despite the overall weaker hiring macro in the first quarter, Talent Solutions continued to outperform their underlying markets driven by client penetration, higher hit rates from record additions, pricing and product penetration, including data incarceration and education solutions. The team is doing a great job delivering new solutions to the market, enabling employers to make the right hires with speed and confidence. EWS mortgage revenue was up a strong 14% in the quarter from better-than-expected volumes, new products, including TWN Income Qualify for mortgage, record growth and pricing.

Consumer Lending continues to perform very well with revenue up strong mid-double digits from double-digit revenue growth in P-loans and auto. This is the seventh consecutive quarter of double-digit revenue growth in these verticals. Consumer Lending is increasingly becoming a larger portion of Verifier revenue. Workforce Solutions EBITDA margins of 52.3% were very strong and up 200 basis points versus last year from operating leverage from higher revenue growth and AI-driven productivity, while continuing to invest in new products, Government and record additions. TWN record additions continue to be very strong again in the first quarter with 211 million active records, up 11% and 120 million total current records, up 9%, which represents 105 million unique SSNs. The record growth drives higher hit rates and revenue growth and outperformance against underlying markets across our EWS Verifier verticals.

In addition to payroll provider partnerships, EWS continues to expand relationships outside of the traditional payroll processing space, including HR software companies to obtain additional sources of income and employment data. We have a long runway for record growth against 250 million income-producing Americans.

Turning to Slide 6, we remain energized about the mid and long-term growth opportunities for EWS Government at both the federal and the state level in meeting new federal requirements regarding accuracy of income validation in Medicaid and SNAP as well as work, education and community engagement requirements and Medicaid benefits. We are seeing strong interest with our pipelines for new and existing expanded Government services up over two times versus last year. As is typical in Government, we are seeing some timing issues in new deal closures and activations as states-managed technology implementations and challenging budget frameworks. We continue to expect to see the benefit of the new OB3 opportunities later in ’26 and in ’27 and beyond.

As state agencies implemented — implement required validations of expanded work requirements and increased redeterminations for certain Medicaid populations and take actions to reduce SNAP error rates, Equifax is serving as a key adviser leveraging our differentiated income and employment data to drive speed, accuracy and productivity. Our new products such as continuous evaluation for SNAP built using EFX.AI that we launched in the first quarter have already delivered strong results for a few states by identifying errors within their beneficiary population. We also see expanding opportunities with multiple federal agencies in support of their focus on reducing improper payments. Given our strong value proposition from TWN on speed of social service delivery, case worker productivity and accuracy of income verifications, we are uniquely positioned with our differentiated TWN data assets and new solutions to help state agencies increase efficiency and strengthen program integrity, particularly with SNAP and CMS. EWS has significant opportunities for long-term revenue growth supporting Government programs and their big $5 billion TAM.

Turning to Slide 7, before discussing USIS results, I’d like to welcome David Smith, our new USIS President, to the team. David’s broad consumer finance experience, proven executive leadership, customer focus, innovation capabilities and regulatory depth will be a big asset for USIS as they drive innovation and revenue growth for their customers. It’s great to have David on the Equifax team. In the first quarter, USIS revenue was up a very strong 21% and 8% excluding FICO, driven by significant mortgage outperformance. The 8% growth is strong and at the high end of our 6% to 8% long-term framework for USIS. USIS Mortgage revenue was up 60% and up a strong 24% excluding FICO and better than our expectations. USIS saw meaningful share gains in mortgage pre-approval, soft pull products with our new TWN Indicator, contributing to mortgage revenue outperformance in the quarter.

And as mentioned previously, USIS saw increased mortgage activity in the middle of the quarter before rate increases from the Iran conflict reduced activity over the past six weeks. USIS Diversified Markets revenue grew 3% in the quarter and were slightly below our expectations with B2B up 2% and B2C up a strong 9%. While B2B delivered low single-digit growth rates, core online auto and FI transaction revenue delivered solid mid-single-digit growth. Offline batch was about flat, principally related to a tough comp due to the strength in offline batch jobs last year. We did not see changes in customer marketing or risk management behavior in the quarter. And we expect USIS Diversified Markets revenue growth to be up mid-single digits in the second quarter. USIS EBITDA margins were 30.3% in the quarter, excluding FICO, USIS EBITDA margins were 37.9% and down slightly compared to last year. Absent some onetime costs incurred in the quarter, margins would have grown at levels consistent with our expectations. We continue to expect USIS EBITDA margins ex FICO to be almost 40% in the year up over 75 basis points versus 2025.

Turning to Slide 8, as a reminder, we make no margin on the sale of FICO scores. FICO mortgage scores revenue is about 50% of the USIS Mortgage revenue and 6% of total Equifax revenue, delivering zero margin. To be conservative, our 2026 framework continues to assume Equifax will calculate and sell only FICO scores this year, and there will be no Vantage conversion in 2026. However, we are seeing strong momentum from mortgage originators on using Vantage. We expect conversions to VantageScore to accelerate once FHFA activates VantageScore and indications are that we’re getting closer to FHFA formally activating VantageScore for agency mortgage originations. A few weeks ago, we lowered our Vantage mortgage pricing from $4.50 to $1 to further incent conversion by the industry. We believe this pricing change will further accelerate mortgage originator conversions to Vantage, given the substantial $1 billion of annual savings opportunity for originators and consumers by using Vantage.

The FHFA’s decision last July to allow mortgage score choice between Vantage and FICO is a win for consumers and for the industry. We currently have over 240 mortgage originators ingesting our free VantageScore with a paid FICO score offering, and we have over 50 principally non-GSE mortgage lenders using Vantage for their mortgage originations. For perspective and to provide data for your analysis, we have included a chart in the appendix of our earnings deck that provides details on the annual $35 million margin upside from full conversion of VantageScore at current mortgage run rates. As we move through 2026 and there is more clarity on Vantage conversion timing or the FICO direct license program, we will update our guidance to reflect this shift and the opportunity for mortgage industry, consumers and Equifax.

Turning to Slide 9, International revenue was up 4% in constant currency and consistent with our expectations of mid-single-digit growth. International saw strong high single-digit revenue growth in Canada and ANZ, and LATAM and the U.K. and Spain CRE businesses delivering mid-single-digit revenue growth in the quarter. International EBITDA margins were 25% in the quarter, up a very strong 80 basis points versus last year.

Turning to Slide 10, as we discussed in February, there’s a strong AI moat around Equifax’ unique and proprietary data. 90% of Equifax revenue is generated from proprietary data sources, including our income and employment exchanges in the U.S. U.K., Canada, Australia, our U.S. and international consumer and commercial credit exchanges and our alternative data sets, including our NCTUE, telco and utility exchange in the U.S. This proprietary data has contributed to Equifax and its uses managed by Equifax and is subject to significant regulatory and privacy controls. To be clear, the data is not available on the web and only Equifax can access this data. Equifax’ scale and proprietary data along with our cloud-native global technology platforms that include implementation of leading AI and ML capabilities is at the center of our momentum on new product innovation that has delivered accelerating NPIs and driven our NPI Vitality Index to almost 14% over the past three years. The application of advanced EFX.AI-based and traditional IT-based analytical techniques allows us and our customers to rapidly develop new solutions that are built off our only Equifax proprietary data.

Turning to Slide 11, our cloud-native technology and EFX.AI capabilities have accelerated our innovation cycle over the past five years since we moved to the cloud. Last year, over 90% of our products were built on our new global cloud-based platforms. With more efficient cloud-native technology, leveraging global platforms and EFX.AI, we have quadrupled the number of products in our innovation funnel and reduced product development life cycles by half resulting in a record level of new products launched in 2025, which is up two times over historic levels. 100% of our new models and scores in 2025 were built using EFX.AI.

We’re building more complex products generating higher performance for our customers with about 50% of our new products now powered by multiple EFX data assets. And last, we’re seeing higher performing products with year three NPI revenue up about 70% in ’25 over historical levels. We are just getting started leveraging the power of our proprietary data, the new Equifax cloud and EFX.AI to deliver higher-performing products, models and scores to help our customers grow and deliver higher growth and free cash flow to Equifax. Recently, we launched Ignite AI Advisor for auto, an AI platform that provides lenders with instant plain English analytics, benchmarking and automated insights alongside conversational agents for deeper exploration by our customers. We expect to launch similar solutions in cards and personal loan portfolios this year while integrating advanced synthetic and credit abuse fraud detection.

As EFX.AI advances, we’ll leverage our new global cloud infrastructure, combined with our Agentic AI and Google Vertex AI capabilities and proprietary data to deliver higher-performing analytical solutions at an accelerating pace, positioning these advanced analytical solutions for more customers. Equifax is on offense with AI.

Turning to Slide 12, as I previously mentioned, USIS is gaining traction with their TWN Indicator solutions in mortgage that supported our strong mortgage revenue growth in the quarter. In April, we were energized to launch The Work Number Record Indicator or TWN Indicator for auto lenders and personal loan originators, which are additive to our suite of TWN Indicator solutions for mortgage, auto dealers and card. These solutions deliver income and employment insights from The Work Number alongside the Equifax consumer credit report at the prequal or marketing stage of the auto or personal loan application process. The TWN Indicator returns a response indicating whether a verification of income or employment is available for an applicant from the EWS Work Number. This immediate visibility gives lenders the ability to instantly segment their workflows, fast-tracking appropriate borrowers through an automated paperless path while proactively identifying those who may require manual documentation.

By reducing guess work from the start of the application process, lenders can offer appropriate loans while borrowers can benefit from a faster approval process. We expect continued share gains from our TWN Indicator suite as we move through 2026. And as a reminder, Equifax is delivering TWN income and employment attributes at no cost to our customers to drive credit file share gains in TWN VOI and VOE growth in the future.

Now I’d like to turn it over to John to provide our second quarter and full year framework.

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

Thanks, Mark. Slide 13 provides the specifics of our 2026 full year guidance. As Mark indicated, we are holding our full year 2026 revenue guidance on a constant currency basis to be unchanged from our February guidance. Even with our strong first quarter performance, there continues to be a heightened level of economic uncertainty as well as uncertainty in the direction of interest rates and therefore, mortgage volumes. We increased our guidance to reflect the impact of FX changes since February, increasing the midpoint of our reported revenue guidance by $25 million to $6.745 billion and adjusted EPS by $0.04 per share to $8.54 per share.

FX is about 90 basis points favorable to revenue growth for the year. Diversified Markets revenue growth at the midpoint is expected to be up high single digits and U.S. Mortgage revenue to be up over 20% with mortgage market originations down low single digits. For your perspective, as you determine your view of the 2026 U.S. Mortgage market based on a review of Equifax data on mortgage home purchase issuances since early 2022, we estimate that there are over 15 million mortgages that were issued with an interest rate over 5%, including about 13.5 million with rates over 6% and over 9.5 million with rates over 6.5%.

This provides a perspective on the pool of mortgages potentially available to refinance as mortgage rates change. Expectations for EWS overall performance in 2026 are unchanged from the levels we discussed in February, with EWS expected to deliver revenue growth of high single digits and EBITDA margins at 51.2% to 51.7%, about flat at the midpoint with 2025. We continue to expect Verification Services revenue to be up high single digits to low double digits. In Employer Services, revenue is now expected to decline slightly in 2026 as work opportunity tax credit legislation has not been extended by the federal government. Historically, when the renewal occurs, it has been retroactive, and we would expect to recover the revenue. USIS and International business unit revenue growth and EBITDA margin guidance expectations are unchanged from February.

The slide also includes additional detail on revenue growth rates and EBITDA margins, excluding FICO mortgage score royalty pass-through revenue and expected BU revenue and EBITDA margins. We expect to deliver growth of 7% to 9%, excluding the impact of FICO mortgage royalties in 2026 within our long-term financial framework and we expect to grow EBITDA margins, excluding the impact of FICO mortgage royalties by a strong 75 basis points, which is 25 basis points above our long-term framework. In 2026, we expect to deliver over $1 billion of free cash flow and a cash flow conversion of at least 100%. As we discussed in February, with EBITDA increasing to about $2.1 billion at the midpoint, we are also generating an additional $400 million in debt capacity at our current debt leverage.

This creates $1.5 billion in capital available in 2026 for M&A and return of cash to shareholders. We continue to look for attractive bolt-on M&A to strengthen Workforce Solutions, our differentiated proprietary data assets as well as International platforms and we have substantial capacity for share repurchases, continuing from the $260 million we repurchased in the first quarter.

Slide 14 provides the details of our 2Q ’26 guidance. In 2Q ’26, we expect total Equifax revenue to be between $1.680 billion and $1.710 billion, up 10.3% on a reported basis year-to-year at the midpoint. Constant dollar revenue growth at the midpoint is up 9.4%. Excluding the impact of FICO mortgage scores, 2Q ’26 reported revenue is expected to be up about 6.5% at the midpoint. Diversified Markets revenue is expected to be up mid-single digits on a constant currency basis and down sequentially from first quarter given the more difficult EWS Government comparison that Mark discussed. U.S. Mortgage revenue is expected to be up over 20% and high single digits, excluding FICO royalties.

EPS in 2Q ’26 is expected to be $2.15 per share to $2.25 per share, up about 10% versus 2Q ’25 at the midpoint. Equifax 2Q ’26 EBITDA dollars are expected to be $537 million to $554 million, up just over 9% at the midpoint. EBITDA margins are expected to be about 32.2% at the midpoint of our guidance. And excluding the impact of FICO mortgage royalties, EBITDA margins in 2Q ’26 would be 34.3% to 34.7%, up over 80 basis points at the midpoint from 2Q ’25 on the same basis. We believe that our full year and 2Q ’26 guidance are centered at the midpoint of both our revenue and EPS guidance ranges. In the supplemental information to this presentation, which will be shared after this call, we have added a slide that provides a five-year view of U.S. Mortgage originations by quarter.

The data is determined based on submissions to Equifax’ U.S. consumer credit file. Going forward, we will update this slide to provide originations data 90 days in arrears. So today, we are providing data through December 2025. As full contributor mortgage origination data can take up to 150 days, we will update this slide each quarter based on any updated data we receive. As we did in February, going forward, our guidance will include our expectations for U.S. Mortgage originations for the current calendar year. As a reminder, this mortgage detail and more analytical detail based on the Equifax U.S. credit files are published monthly in our credit trends reports and can be found on our website under business trends and insights.

Historically, Equifax has provided USIS hard mortgage credit inquiries as a measure of U.S. Mortgage market activity. Given changes that have occurred over the last several years and how mortgage originators use hard and soft mortgage inquiries, during the loan origination process, hard inquiry volumes have become less correlated to changes in the U.S. Mortgage market originations. As such, we will stop disclosing USIS Mortgage hard credit inquiries beginning in 2027.

Now I’d like to turn it back over to Mark.

Mark W. Begor — Chief Executive Officer

Thanks, John. Wrapping up on Slide 15, Equifax is off to a strong start in 2026, executing very well against our EFX2028 strategic priorities in a challenging economic environment. The new Equifax is leveraging the Equifax Cloud, EFX.AI and proprietary data assets to accelerate innovation and help our customers grow. With the EFX Cloud transformation substantially complete, we are focused on leveraging the new cloud capabilities and focusing our team on EFX.AI and NPI initiatives to deliver innovation to our customers, resulting in record levels 17% Vitality Index in the quarter and driving operational efficiencies inside of Equifax. We are using our single data fabric, EFX.AI and Ignite, our analytics platform to develop new credit solutions powered by TWN Indicators in verticals like mortgage, auto, card and P-loan that only Equifax could provide, which is leading to share gains and incremental growth.

Our first quarter financial results are a strong proof point on the broad-based Equifax operating model, including the strong 80 basis point of EBITDA margin expansion in the quarter. Given our strong free cash flow generation with cash conversion over 100% in 2026, we’re also delivering on our commitment to return substantial excess free cash flow to our shareholders. In the first quarter, we returned $327 million to shareholders. And in 2026, we expect to have $1.5 billion available to invest in both bolt-on M&A and return cash to shareholders through share repurchases and dividends. I’m energized about our strong start to 2026, but even more energized about the future of the new Equifax.

And with that, operator, let me open it up for questions.

Question & Answers

Operator

Thank you. We’ll now be conducting a question-and-answer session. [Operator Instructions] Our first question today is coming from Jeff Meuler from Baird. Your line is now live.

Jeff Meuler

Yeah, thank you. How are you thinking about the timing of the revenue from the expanded Government opportunity? I get the tough Q2 comp, but Q1 was really good. So to what extent did the expanded opportunity drive that strength? And then just help us understand what you’re trying to signal when you’re talking about timing factors related to system integration and budget challenges.

Mark W. Begor — Chief Executive Officer

Yeah, Jeff. We remain very bullish about our Government vertical, given the big TAM and also OB3, we’ve talked about that a bunch. We’ve been clear since really last July when OB3 was passed that we expect the substantial portion of that to be later in the year, but really principally in 2027, when that takes effect, whether it’s the Medicaid or the SNAP benefits or the more frequent six-month redeterminations.

We said in our prepared comments that our pipelines for Government are very robust, up two times over where they were a year ago. So we feel good about the pipelines. But government can be bumpy, both on when deals not only close and sign, but also when they activate. And then there’s always budget pressures at the Government level. And as you point out, we had a big win with SSA a year ago in April. So that’s a comp that’s challenging in the second quarter, and we just wanted to highlight that.

Jeff Meuler

Okay. And then for USIS Diversified Markets, what dragged it down in Q1? Because I think the online growth was slower overall than card and auto was. So what dragged it down in Q1? And then maybe it’s because of whatever that factor is, but what drives the acceleration in Q2 because it sounded like there was also a little bit of softening ex mortgage related to rates and macro volatility later in the quarter?

Mark W. Begor — Chief Executive Officer

Yeah. I’ll jump in, and John can also chime in also. First, on the — what happened in the first quarter is we had some larger batch volumes, which can be choppy on when they land during the year and one quarter to another quarter last year versus this year. So I think that’s the principal impact on the first quarter. As we look forward, we’ve got a lot of new products that we’re rolling out. I think we talked a bunch on our prepared comments around the TWN Indicator that we have in market. We just launched it for auto lenders and also for card, and we’ve seen good progress there. We expect that to help as we go through the year. Anything else you’d add, John?

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

Not just what we had in our comments, right? We saw weakening as we went into the March period, and that affected not only online but to a degree as we indicated by batch, right? And it was in auto, it was to a degree in FI and across some other verticals as well. So I think the general economic situation that we ran into in March just resulted in a little slower volumes, not just in online, but as we all know, oftentimes batch is repetitive, right? So some of the batch jobs that occur very frequently just slowed.

Operator

Thank you. Our next question today is coming from Andrew Steinerman from JPMorgan. Your line is now live.

Andrew Steinerman

Yeah. I wanted to ask about EWS mortgage revenue outperformance. What did you see in the first quarter? And what are you assuming in the guide in terms of EWS mortgage revenue outperformance?

Mark W. Begor — Chief Executive Officer

Mortgage had a strong first quarter at EWS. I think we talked about some new products that we’ve rolled out that we’re getting some traction on. Anything else you’d add on that, John, for the first quarter?

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

Yeah. I think we consistently said we expect to see high single-digit type of outperformance relative to transaction volumes, and we saw a very good performance in the first quarter, and that continues to be our expectation going forward.

Andrew Steinerman

Thank you.

Operator

Thank you. Next question today is coming from Toni Kaplan from Morgan Stanley. Your line is now live.

Toni Kaplan

Thanks so much. I wanted to go back to CMS and basically, when you think about competition, we saw an article a couple of months ago about one of your private company competitors who uses connectivity for verification and winning a contract on the Medicaid and SNAP eligibility side. So I was just hoping you could frame for us how you see your product versus maybe a cheaper product like because of the state budgets always seeming to be challenged. Like does that lead to a cheaper solution gaining traction? Or — and then also the friction point you always mentioned, does that resonate as much in this market as in the lending market? Just wanted to understand the sort of go-to-market strategy and positioning between your products, which is maybe more premium and very good accuracy versus maybe a cheaper connectivity product. Thanks.

Mark W. Begor — Chief Executive Officer

Yeah. When you say cheaper connectivity, I think you’re referring to consumer consent and data. And there’s clearly a place for that. As you know, we rolled out last summer, our own solution called Complete Income that we’ve seen traction on. And with this demographic, there’s a lot of W-2 income in here, but there’s also a lot of gig income, which we have less of in our database. So our large coverage is still a big asset for us. Having over 150 million current records is a big asset in our data set that we can deliver instantly.

When you go down the consumer consented path, it adds friction to the process, both for the case worker and for the recipient. They have to do things to participate in it. Where we’ve seen why we invested in it and we launched our solution that’s integrated between hitting our TWN database first and then water falling to our own consumer consented solution. That integrated solution, we think is a superior one, delivers that same benefit. And what the states we’re after is more coverage. It’s really hard to get that income verification. And that consumer consent, it really covers a lot of the records that we don’t have, and that’s why we’ve invested in the solution, and we’ve already landed a handful of states that are now using that solution in the marketplace.

Toni Kaplan

Yeah. Great. And wanted to ask just on VantageScore. I guess, what’s taking so long with the grid? And I guess, when — how is the reception to your lowering the price of the score? And does that sort of lead to FHFA maybe to sort of be less concerned about pricing in the industry?

Mark W. Begor — Chief Executive Officer

Yeah. That’s a hard question. These kind of changes take time. As you know, FICO was used for 30 years, it’s the only score in mortgage. And last July, Director Pulte introduced score competition. It takes a lot of technical time. Our view is that the integrators, meaning the software systems are ready for Vantage. They’ve built that out over the last number of months. Our customers are ready. We talked about 250 customers ingesting the free VantageScore. We felt that there would be an advantage for Equifax and our competitors did the same thing by lowering the price to $1 versus $4.50 to create a real price advantage for customers to really incent them in the industry to really move forward with Vantage.

And the feedback has been very positive. And I think as you’ve seen in various publications, if you use that $1 versus the $10 FICO score, that’s $1 billion worth of run rate annual cost savings for the industry. That’s a big incentive to change. So all indications are we’re getting closer. We had the same indications last time we talked in February, but we’re certainly closer now that we’re in April. And the industry is clearly ready for it. They want to take advantage of it. So we expect it to move forward. But as you know, in our guidance, we laid out that we don’t know when that timing is. So we really can’t forecast Vantage conversion. So we assume that FICO stays there through the year. But just to be clear, and I know you know this, Toni, that we’re — it doesn’t impact our P&L if FICO stays there long term.

There’s an advantage to our P&L with the margin we make on the VantageScore, if there is Vantage conversion. So we think Equifax is well positioned because, as you know, you can’t calculate a credit score without our credit file, and that’s the data that’s used there. So we think we’re well positioned, whether it is FICO or Vantage, but there’s definitely a lot of energy and enthusiasm about moving to Vantage once it gets activated by the agencies.

Toni Kaplan

Thank you.

Operator

Thank you. Next question today is coming from Manav Patnaik from Barclays. Your line is now live.

Manav Patnaik

Thank you. Good morning. I think we all saw the mortgage data kind of taper off in March. But Mark, I think you mentioned there was some impact to a lesser degree in auto and banking. I was hoping you could just elaborate on that just to appreciate the sensitivities and how you think that could be impacted?

Mark W. Begor — Chief Executive Officer

Yeah. It was really — I mean not more in auto. We saw a little bit in banking, but it’s probably harder to find in the rounds. Auto is a big ticket transaction. When rates went up a little bit, we saw some tail off. It’s typically a very — a larger auto financing market around tax season and there was some dampening of that. Part of it’s auto prices, for sure, have increased, and then you add to it, auto rates have increased, but it was still a positive market for us, but we just thought we’d highlight that. Anything you’d add, John?

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

No, I think you covered it. And we saw it run through March, and I think it’s kind of continued into April.

Manav Patnaik

Okay. Got it. And I think your point on reemphasizing the proprietary data, that’s well understood. You also mentioned using Ignite and some of your other analytical tools. I was just wondering how connected or packaged is those Ignite and analytic tools to the data? Just trying to appreciate if you — how you think of the potential disruption risk to the software side of things, which is the big market talk right now?

Mark W. Begor — Chief Executive Officer

Yeah. As you know, the so-called software is a small part of our business. It’s one we certainly invest in, particularly for our — broadly our mid-market customers that don’t have larger tech platforms that they can use to ingest our data. But we sell data. We sell scores, we sell models, we sell products. That’s the vast, vast majority of our revenue. We’re very, very small in the revenue from software sales. And we really have our investments in Ignite and interconnect really to facilitate the sales of our data. We don’t really view it as a way that we deliver our data to market.

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

Yeah. Ignite AI Advisor is to allow smaller customers to ingest more of our data by seeing the value in the scores and the lift they get by using not just credit data but also alternative data and other data sources. So that’s what it’s intended to do. We are very excited about the fact that it’s going to drive more data sales, but it isn’t a licensing play. That isn’t what we do. Yeah.

Manav Patnaik

Got it. Thank you.

Mark W. Begor — Chief Executive Officer

Thanks, Manav.

Operator

Thank you. Next question today is coming from Shlomo Rosenbaum from Stifel. Your line is now live.

Shlomo Rosenbaum

Hi, good morning. Thank you for taking my questions. Mark, can you talk a little bit more about The Work Number indicator? And is there some way to quantify some of the market share gains? It really looks like a unique position that you guys can kind of wedge in there and gain some more share. So I’m wondering if there’s some way to quantify it. Since you’ve rolled it out, where have you seen the share shift? You noted one large client last call, I think, in the mortgage space, but — if you can talk about what’s happened since then? And then has there been any reaction with any of the unique data from the other bureaus that they’ve been putting in for free aside their own credit reports? And then I have a follow-up.

Mark W. Begor — Chief Executive Officer

Yeah, sure. We think, obviously, we have a unique asset in the TWN data set. By adding the TWN Indicator, we think it benefits both our credit file, but also benefits pull-through of our TWN data in the underwriting process because the originator now knows that we have a record. So it’s a benefit really on both sides. And we’ve seen really positive response. As you know, it’s still early days. We really only launched this in the second half of last year and initially in mortgage. And as we talked in February and again today, that’s where we’re seeing the most interest.

And when you think about it, if you’re a mortgage lender and then as you know, we’re rolling it out in auto, cards and P-loans, if you’re underwriting a consumer, you typically, for 20 years, 30 years, have done that off the credit file, the credit score and credit data, but you are really invisible in that marketing process, the early stage in your funnel when you bring a consumer into your application process or pre-application process about whether they’re working or not or what their income is.

And number one, it’s kind of binary if you’re not employed, but you’re applying that generally is going to be more challenging with credit. But if you’re working and then dependent upon your income levels and your ability to pay, it allows the lender to give that consumer a larger loan at a lower interest rate and really drive approval rates. And it really is getting the consumer into the right products. So it’s a very unique solution that we have and one that we’re super energized about. I think you can see in our mortgage results for the first quarter versus the underlying market, you can do the math. There’s clearly some lift in there that we’re seeing with share benefits in the prequal and we attribute that to one of the factors, for sure, is the fact that we’re offering the TWN Indicator there at no charge.

I think I talked about on the February call that some of the early customers that are using that were seeing not only that they’re using more of our credit file because it has that attribute with it, it’s very valuable in that mortgage funnel. But we’re also seeing a lift in some of the TWN poles because they know we have a record and they’re able to access that record later in the process when they’re doing the VOE and VOI full verification versus the thinner set that we have in the TWN Indicator. So we’re very energized about it. And then the feedback we’re getting from the other financial services verticals is very positive. Obviously, getting that kind of rich data for free is very valuable and a differentiator for us.

And then beyond just the TWN Indicator, I think you know that we’re also working to offer in the mortgage space, our cellphone utility attributes in the mortgage file. That’s another very unique Equifax data set, one that only we have. It’s got real scale. It covers most Americans so it’s got a lot of data in there, and we’re adding those attributes to the mortgage file, really same basis at no charge, but to differentiate our mortgage credit file for share gains. So we’re energized, but kind of, I think to encapsulate it’s early days, meaning we’re still in the — we just launched literally this week, some of the solutions in card and auto lenders. So we’re getting in that marketplace, but the response is very positive.

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

In the first quarter, a very meaningful part of that 24 points, excluding FICO was share gains, right, so it was a significant contributor.

Shlomo Rosenbaum

Thank you. And then just as a follow-up, can you talk about where you are in terms of completing the cloud platform in the International markets?

Mark W. Begor — Chief Executive Officer

Yeah. We finished the year a few months ago, 2025 at about 90% of our revenue in the new cloud. That’s substantially all of the United States. As you know, that was our strategy. And what we have left to finish is Australia, a couple of Latin American countries and a few other in India, so a few other pieces. And most of that will be complete this year. It’s really a game changer for us to have the cloud behind us. As I talked in my prepared comments, having that cloud capabilities, our scaled differentiated data, we’re really purpose-built now with the investments we’ve made to really activate our AI initiatives and our multi-data solution initiatives to really differentiate Equifax in the marketplace.

And you’re seeing that in our Vitality Index, the 17% Vitality in the quarter in the large pipeline, we have of new products that we’re planning to roll out, like we just talked about TWN Indicator in really every financial services vertical, that’s really exciting and stuff we couldn’t do before the cloud. So it’s really energizing time for us having the cloud at this stage and substantially behind us, particularly in our large and most profitable and EBITDA generating market in the United States, it’s an exciting time.

Operator

Thank you. Our next question today is coming from Kyle Peterson from Needham & Company. Your line is now live.

Kyle Peterson

Great. Thanks, guys. Good morning. Appreciate taking the question. Just one for me. I wanted to touch on talent. Great to see you guys outperforming. It’s been a pretty tough hiring market. But I wanted to see if you guys could unpack a little bit what kind of the bigger drivers are? Obviously, it seems like records is helping a lot with hit rates and stuff, but maybe between like whether it’s record price, bigger package density like longer background screening. Just any more detail or color there would be really helpful for us.

Mark W. Begor — Chief Executive Officer

Yeah, I think you’ve hit on it. Clearly, records are real positive. And as you know, we had strong record growth again in the quarter which is super attractive for all of our Workforce Solutions verticals. Chad and the team are doing a great job on continuing to expand our data set. We have price and their price is one of the elements. We took price up 11 [Phonetic], so that’s definitely benefiting all of our verticals in Equifax and EWS, including talent. We’ve got a bunch of new products that the team is rolling out.

So really a lot of innovation coming there. And remember, not only are we selling — helping the background screeners by delivering that work history from our data set because we get the job title with every payroll record and we have that digital resume but increasingly, we’re delivering education data, incarceration data and other data elements to the background screeners and then in different formats.

We’re getting more sophisticated in delivering on our customers really requirements around the different job categories and what data is required. In a white collar, in your world, financial services job, there’s a lot of more history, job history and education history than there is in a blue collar job. So we’ve rolled out some more blue collar, which think about it as a last job worked kind of solution versus the last five years of employment. So just being more deliberate around having a suite of products to help our background screening customers.

Kyle Peterson

Great. Appreciate the color. Nice results.

Mark W. Begor — Chief Executive Officer

Thanks.

Operator

Thank you. Our next question today is coming from Jason Haas from Wells Fargo. Your line is now live.

Jason Haas

Hey, good morning, and thank you for taking my question. I’m curious, why did our Government Verification business declined quarter-over-quarter. I think historically, you typically see like that revenue go up from 4Q to 1Q. And then I also had a question just on 2Q. Why is that flat year-over-year just because historically, that typically increases also from 1Q to 2Q?

Mark W. Begor — Chief Executive Officer

Yeah. So it went up in 1Q. We shared that earlier. So we had a very strong quarter, and we’re very pleased with the momentum, not only in the quarter, but in particular, more the long-term pipeline, which we shared was up kind of two times year-over-year. Second quarter, as we talked about in our prepared comments and one of the earlier questions, is we got a tough comp because we had a large win last year with SSA that we’re comping that activated in April of last year. So that’s a tougher comp, which is really driving the performance in the second quarter.

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

Yeah. And seasonally, we’re expecting to see revenue up in the second quarter versus the first quarter, which is not unusual, right? Fourth quarter versus first quarter, I don’t think there’s really anything unusual in the trends that we saw this year.

Jason Haas

Okay. So that SSA contract, was that like a onetime benefit? I thought that that’s launched in 2Q, but then that becomes an ongoing benefit, but…

Mark W. Begor — Chief Executive Officer

It does, but it’s — we’re comping against it because it was a new contract in 2Q. And as you point out, it does go on in the future beyond 2026. But the comp is one that is — one we have to overcome, and it was a big contract.

Jason Haas

Okay. That’s fair. And then just on the margins were really strong for EWS. The guidance now implies it looks like they’re going to be down in the rest of the year. So yeah, what drove the beat? And why does that not continue going forward?

Mark W. Begor — Chief Executive Officer

Yeah. And I hope you saw that Equifax margins were also quite strong in the quarter. And as you know, we’ve got a guide for 75 basis points of margin expansion for the year, which is well above our 50 basis point long-term framework. So we feel really good about the operating leverage. For EWS in particular, they had a very strong first quarter and then that operating leverage flowed through. And that’s why we’re still investing heavily in EWS. We’re — it’s our fastest-growing business over the long term, and we’re continuing to invest in the Government vertical. We’re investing — Chad is investing in a bunch of new products, and we’re also investing in capabilities and record additions. So it’s one that we’re continuing to invest in the business, and you just had the strong operating leverage flow through.

Jason Haas

Okay. All right. Great to see. Thank you.

Operator

Thank you. Next question is coming from Ashish Sabadra from RBC Capital Markets. Your line is now live.

Ashish Sabadra

Thanks for taking my question. The CMS recently launched Emmy, an income verification tool. How is this expected to change any competitive landscape for the Government Verification Services? Thanks.

Mark W. Begor — Chief Executive Officer

Yeah. I think it’s still early days on that solution. It’s one that we think we can be complementary with. As you know, our scale data set provides an instant verification. It has large coverage. It provides a lot of productivity for the case workers at the state level. We think that’s — their solution looks a lot like our Complete Income. Obviously, it’s not integrated in there to go after either records we don’t have or to go after some of the gig income that we may not have in our data set.

But we think it’s — our data set is just so much more comprehensive and instantly available. We think there’s still a large position for us to continue to grow with CMS. And then you add to it some of the new requirements with OB3 on work requirements, education requirements or volunteering requirements, we’re rolling out a solution that will really deliver those capabilities, but it’s going to be integrated with our core TWN data set income offering that we think will be quite beneficial for the Medicaid, Medicare verifications.

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

And it would just be another distribution channel for us. Obviously, we’ll make sure our customers can get to our data in the way they want to.

Mark W. Begor — Chief Executive Officer

Yeah.

Ashish Sabadra

That’s very helpful color. And if I can ask a question around Agentic AI, one of the concerns that we’ve heard is Agentic AI could potentially displace manual verification. And just given that manual verification is one of the key competition in your Verification business, how does — one of the questions that we get is how does the technology shift, if any, Equifax, again, positioning in the Verification business? Thanks.

Mark W. Begor — Chief Executive Officer

Yeah. We think it’s pretty hard because, as you know, that’s all proprietary data. You’re talking about income and employment data is proprietary in our data set, and it’s all permissioned by permissible purpose because of the Fair Credit Reporting Act solution. And then the contributors, we have almost 5 million companies now contributing data to us every pay period, it’s proprietary in their data set or with their payroll process or HR software company. So it has to be consumer permission. There’s a lot of friction with that. I don’t — we don’t see how AI can really facilitate that consumer permissioning to access that data because the data is not available anywhere in the worldwide web.

It’s all in proprietary house environments, including Workforce Solutions at Equifax. So we just don’t see that as a threat, which is really part of that AI data moat that we highlighted in one of the charts in our deck this morning, and we did it again in February that The Work Number as well as our credit data and our other data sets really are quite unique because AI can’t access them. Only Equifax AI can access them or when we deliver it to our customers on a permission basis, they can access it, but it’s just not available on the worldwide web.

Operator

Thank you. Next question today is coming from Faiza Alwy from Deutsche Bank. Your line is now live.

Faiza Alwy

Yes. Hi, thank you. First, I just wanted to clarify on the Government business. I think you said earlier in the call that you expect sort of second quarter revenue to be flat versus first quarter. And then I think you just said in response to a question that you expected to be up. So maybe if you could just sort of…

Mark W. Begor — Chief Executive Officer

No. I did not say that. My intention was to say it was — we had a strong first quarter, which we were pleased with. We also talked about our pipelines, which when we think about pipeline, you’d think about later in the year in 2027, that’s generally how the kind of deal cycle is in Government. It’s longer term. But we did say that we expect the second quarter to be flattish because of the tough comp versus last year.

Faiza Alwy

Got it. And then just to put a finer point on the year. I think previously, we are expecting that you can grow sort of in line with your long-term growth rate for EWS this year, which is up 13% to 15%. Do you think that we sort of do that this year? Or is that more — are you expecting more of that benefit in 2027?

Mark W. Begor — Chief Executive Officer

Go ahead, John?

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

To be clear, we had only provided guidance for EWS and Verification Services in total, right? And EWS and the Verification Services guidance, we’re not. They were below the long-term framework. We think they were very good and nice growth from 2025, right, but no, they weren’t at the long-term framework yet, right? Part of it due to mortgage, part of it due to other factors like weaker hiring market. So I think what Mark covered in his remarks and already is that our expectation is we’re going to continue to see improved performance in Government as we move through this year, but that the major opportunities that we have regarding the new programs that were passed by the Government, etc., that Mark covered in detail, we expect that really to start benefiting us in 2027.

Faiza Alwy

Understood. Understood. Makes sense. And then I just wanted to ask, have you seen any impact on mortgage volumes from the trigger lead legislation? I think, John, you’d previously said that it might — you might shift more towards hard inquiries. So just curious if there’s been any impact on overall volumes or any kind of shift that we should watch out?

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

Not yet. Now admittedly, it’s very new in the quarter, right? So not yet. And I think our guidance doesn’t assume much in the second quarter will occur either.

Operator

Thank you. Our next question today is coming from Kevin McVeigh from UBS. Your line is now live.

Kevin McVeigh

Great. Thanks so much. I guess obviously, the big focus on mortgage, but I wonder if you had any thoughts as to how the VantageScore could impact auto, consumer and some of the other areas from a kind of share perspective and then just from a regulatory perspective as well?

Mark W. Begor — Chief Executive Officer

Yeah, I think it’s a great question. As you know, there’s already large penetration in non-mortgage or Diversified Markets. You’ve got large lenders that have been using Vantage for many years. Number one, because of the performance of the score is more predictive because it includes more data than the current Vantage Classic score. Vantage 10T [Phonetic] will close some of that gap. But it has a performance element. And then there’s just a cost element. It’s a less expensive score.

We charge much less than FICO does over there. I think the other element that we think about is that if you’re a multi — if you’re not a monoline and your financial institution that’s doing mortgage, auto, card, P-loan, you’re doing multiple products, you’re likely going to be incented to move your mortgage volume over because of that significant cost savings and the fact that with an agency mortgage, if it’s approved, they’re going to take that loan and take it into the pools that they’ve purchased from the mortgage originators. But if you’re using Vantage in mortgage, you’re likely going to use the Vantage when you rescue your portfolio.

And we see the same opportunities over the medium and long term to drive more Vantage adoption in the Diversified Markets or non-mortgage spaces. And there already is a lot of adoption there. There’s, as I said, large lenders that are entirely Vantage outside of mortgage because as you know, there’s never — there’s no regulatory requirement in non-mortgage, there only was in the mortgage space by the agencies that require the FICO score up until last July for 25-plus years. So we see it as an opportunity for sure.

Kevin McVeigh

That’s helpful. And then just from a pricing perspective, I know you adjusted the VantageScore pricing for mortgage. Any thoughts around auto?

Mark W. Begor — Chief Executive Officer

Same. Yeah. We’re going to offer the VantageScore. We’re already in the market doing that at a discount to FICO. Again, we sell the credit file plus the score. When we sell the FICO score in mortgage or auto or any other market, we don’t make any margin on that score sale. When we sell Vantage, we make some margin on it. So we’re obviously incented to deliver that to our customers, and we see that as an opportunity going forward.

Obviously, much smaller given the significant $10 price in mortgage versus it’s much less the FICO score in auto, cards and P-loans, but there’s still a performance and a margin opportunity for our customers. So we’re certainly going to take advantage of that. And I think as you know, last summer, we rolled out the free VantageScore with every paid FICO score, not only in mortgage but also in Diversified Markets or non-mortgage. So we’ve got lenders that are taking — that are using FICO, that are taking Vantage to make sure they understand it and understand the performance and evaluate it. So as I said a couple of times, we see that as an opportunity going forward.

Operator

Thank you. Our next question today is coming from Curtis Nagle from Bank of America. Your line is now live.

Curtis Nagle

Terrific. Thanks very much. So maybe just sticking on the subject of Vantage, possible if you could provide a little more detail and I think you said 50 mortgage lenders are currently in production with Vantage. I guess just to confirm, so I think these are non-GSE mortgages? Are they being underwritten? Are they being held on the books, securitized? Any sense of kind of the notionals? Just trying to get a size of sort of where things sit before we get kind of full acceptance with GSEs.

Mark W. Begor — Chief Executive Officer

Yeah. These are admittedly smaller lenders, but they are lenders that a year ago were not using Vantage in the mortgage space. They’re non-GSE, as you point out. They’re some of the other federal agencies that don’t fall under FHFA as well as other lenders. And it’s just reassuring to us to see that they’re taking these loans, in many cases, balance sheeting them, but see the power and the performance of the VantageScore and obviously, the cost opportunity of buying it at a lower price than what FICO is currently charging. And we see that as another indicator that the industry is going to be ready.

I think a more powerful one is the 240 GSE lenders. Many of them also have some element of balance sheet for the non-agency loans or securitizations on their own, but the fact that they’re taking the VantageScore, ingesting it in their system, and obviously, we talk to them all the time, there’s a lot of interest around using Vantage once it gets activated by the agencies.

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

And for lenders that are non-GSE and are exclusively non-GSE, we think the share of Vantage is very high, right? So where the opportunity exists, the movement has occurred. The volumes are very low, but the share is very high.

Curtis Nagle

Okay. Understood. And then maybe just a quick one just on — I think, at least at a high level, you pointed out some cost productivity from AI. Maybe just a little more detail. Is that some, I guess, output of higher throughput? Is it raw expense takeouts, some combination of the two? Something else? Just any more detail there would be helpful.

Mark W. Begor — Chief Executive Officer

Yeah. So maybe I’ll be a little broader on it. Obviously, we were pleased with our margin expansion ex FICO in the quarter, and we’re also pleased and I hope you are too with our guide for the year to be up 75 basis points. You think about that as being — the first big piece there is operating leverage. Having our strong revenue growth that is at the kind of higher end of our long-term framework delivers that incremental margin. So that’s a positive. We also have in the quarter, which was substantially higher than our guide in the first quarter, you had that mortgage lift that we had kind of in the middle of the month before rates went up, that kind of pass through and went through to the bottom line. I think that is indicative of when mortgage markets recover, we’ve been very clear with you that margin is going to drop through and you certainly saw it drop through in the first quarter.

And then last, as you point out, we’re really getting some traction, and I would characterize it as still early days, meaning the runway we have around deploying AI across our operations inside of Equifax. We call it AI for EFX operations. Think about call centers and our paper processing centers is kind of the first frontier there. We’re making a bunch of progress of using agents to start taking calls from consumers, using agents in AI to process hundreds of thousands of paper documents we get every month from consumers here in the United States and around the world. There’s a lot of productivity there. And then we see productivity opportunities going forward in technology where we have a large workforce. We’re seeing real momentum around using some of the AI tools to do coding which we’re very energized about is the opportunity of that going forward.

And then broadly, in our kind of support teams, whether it’s finance, HR, legal, all of the support teams are deploying AI to increase their efficiencies. So I would expect kind of AI-driven productivity to be a multiyear lever for Equifax going forward. And I think it is going to be for all companies. We all read about it, but it’s really real. And the acceleration tools, we’re using things today that we weren’t using six months, nine months, 12 months ago inside of Equifax to drive our speed, efficiencies and accuracy. So it’s really exciting. So I think those three together are really what’s driving our above long-term framework margin expansion for the year, and we’re very pleased with that kind of operating leverage. And then obviously, it generates incremental free cash flow that we can return to shareholders or use for bolt-on M&A.

Operator

Thank you. Next question today is coming from Surinder Thind from Jefferies. Your line is now live.

Surinder Thind

Thank you. John, can you maybe talk about just the hard inquiries versus the overall mortgage originations? Thinking about it from a lender behavior perspective, just any changes that you’re seeing in hard versus soft and what the implications this is from a revenue perspective here? Is it just more usage of soft equals less revenue? Or how should we think about the pending changes here around reporting?

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

I think what we’ve seen over the past several years, right, is a significant acceleration in the use of soft early in the mortgage process to give lenders a better view in terms of who they’re working with, who are submitting the applications or who are they marketing to, right? So I think it’s both. There has been some shift of activity from hard to soft, that’s certainly true. But there’s also been an expansion of opportunity as lenders utilize these lower-cost soft pulls in order to get a better view of how they want to sell and market in the business.

So overall, what we think has happened is you’re just — you have seen more activity over the time period if you combine hard and soft together, right? Also, we think what has happened is that hard inquiries, therefore, have become less indicative of just the trend that’s occurring in originations, as we mentioned in the prepared remarks, right? So that’s why we’re going to start sharing with you the origination data that we have from the credit file. Yes, it’s a little bit in arrears, but we think it’s very valuable information that we can share. And we’ll continue to guide as we go forward based on annual — our expectation on annual origination volume for the industry so we can get a perspective on what our expectation is for the year.

Surinder Thind

Got it. And just to clarify, is the idea here that we’re going to continue to see the mix shift changes? Or are we kind of approaching some point of stabilization?

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

I think we’re going to continue to see changes in the mortgage industry based on the new products we launch, right? So — and we’re continuing to see that occur. So for example, we’re very excited about the growth that we’re seeing in our soft pulls based on TWN Indicator and the other data we’re providing, right? So we’re continuing to offer richer products on the front end, which drive more volume. Exactly how the market shifts as we go forward. I think we’re going to see it together. But at this point in time, what we’re seeing is we’re seeing ourselves drive more growth in soft as we believe we’re taking share by offering more value on the front end.

Surinder Thind

Got it. And then as a follow-up, on the whole VantageScore FHFA debate, I mean when we think about — like do lenders actually care about the performance of the credit scoring model as the current, the market system works, meaning that I feel like the debate has been in VS4 versus Classic FICO, but I also think there’s 10T in the mix. And the preliminary data suggests that there may be differences in performance model and which would be perhaps another consideration in addition to price here, like how do we think about that?

Mark W. Begor — Chief Executive Officer

Yeah, I think that it’s a great question. I think broadly, lenders will use scores that are approved by the agencies. You have to. So I think you got to start with that. And remember that the lenders are broadly originating the loan and then selling it to the Government. So they want to follow the specifications that they have. But I would make sure that we both think about and we do too, is that in that mortgage prequal and application process, if you’ve got a mortgage score or data that’s going to allow you to either approve more customers or put the customers, the consumer, the future homeowner in the right loan because there’s more data.

In the case of Vantage 4.0, there’s just more data used in that score. So it should allow for a more accurate picture on that consumer. And then we believe allow them to originate more, which is a good thing and put them in the right loans because what you don’t want to do is have someone going through the application process and then they get disappointed because either they have to have a higher down payment or the interest rate is higher than they think because of not having as much data information. But — so I think both are true. And from our perspective, I think it’s broadly recognized, although some maybe would disagree with this, but Vantage 4.0 is a score that has more data in it than FICO Classic. I think 10T closes that gap once it’s rolled out than Vantage 4.0. But what’s approved by the agencies is what the originators are going to use, and that’s what’s important.

And I think we’re all — I don’t think there’s a debate. I think we’re all just waiting for when will the agencies be ready to accept the VantageScore, and we just think we’re getting closer to that stage. And again, from an Equifax perspective, we’re advantaged either way. Our guide for 2026 assumes no Vantage conversion. We’ve laid out for you what the upside is, if there is Vantage conversion, it’s only upside. And there’s really not a downside to Equifax because both of these scores are calculated using our credit data and you can’t calculate the score without the credit data. So it’s — we think we’re well positioned going forward, and we’re trying to be responsive to our customers by offering the VantageScore that delivers performance and certainly significant economic value with $1 versus $10.

Operator

Thank you. Next question is coming from Andrew Nicholas from William Blair. Your line is now live.

Andrew Nicholas

Hi, good morning. Just one question for me on maybe the AI front. You talked about operating efficiency from AI, product funnels, development life cycles, patent generation, all the benefits you’re seeing in the way that you use the technology. Could you speak more to how clients are interacting with you and the data differently, if at all? Are you seeing any changes in usage patterns or evolution in how often clients are interacting or wanting to interact with your data? Any insights there would be great. Thank you.

Mark W. Begor — Chief Executive Officer

Yeah. So I think there’s long been a macro and it’s still — we’re still in that macro about our customers want more data. They want more alternative data. They want more differentiated data and that’s one that’s a macro that’s still, in my opinion, in early innings, meaning there are large lenders that only use the credit file today and aren’t using alternative data. And they know that they’re going to get a lift with alternative data. What AI is allowing us to do, and again, Equifax has more alternative data than our competitors, which we think is an advantage for Equifax in an AI world, because it allows you to really ingest that differentiated and additional data that’s going to drive a more predictive or higher-performing solution for either underwriting or identity or whatever the process is.

So we’re super energized around, number one, having the cloud substantially complete. We put all our data in a single data fabric. We’ve got large-scale differentiated data that’s proprietary. We have an AI moat around it. And now we’re really investing in delivering that data to our customers, either the individual data sets or for lots of customers, scores and models that incorporate more data in it. I mean you can’t do that without the explainable AI that as you point out, we’ve been investing in from a technology standpoint and with our patents, around the ability to deliver that explainable AI that our customers require for their regulators and for their own internal processes and the Fair Credit Reporting Act requires.

So really, both of those become another area that is an important differentiator in our space and for Equifax to make sure we’re delivering solutions that have that higher performance. And AI is — we’re really seeing a lot of momentum there. I think we pointed out that 100% of our scores last year were using our AI capabilities, and that means higher performance. Our products now are increasingly using AI and we talked about some of our platforms that are having conversational AI, so our customers can use them more readily inside of their operations. So it’s still very much early innings between the ability to deliver more differentiated data to our customers and then the ability to do that with AI.

Andrew Nicholas

Understood. Thank you.

Operator

Thank you. Next question today is coming from Scott Wurtzel from Wolfe Research. Your line is now live.

Scott Wurtzel

Hey, thanks, guys. Just one for me. We’ve been getting a lot more questions around just whole kind of tri-merge to bi-merge dynamic and the potential of that move taking place, I guess, given some of the rhetoric we’ve heard from industry participants. So just kind of wondering what — if there’s anything you guys have heard from whether it’s your conversation with regulators or other industry participants just around that whole dynamic and the potential for that…

Mark W. Begor — Chief Executive Officer

Yeah. Our conversations are quite broad that it’s well understood that there’s large enough differences between the three credit files, that a tri-merge provides performance, meaning it includes more people, provides a more complete picture. If you think about it, most consumers have multiple bank accounts, not every bank will contribute to all three credit bureaus. And we’ve shared stats before. There’s 10 million roughly consumers, they’re only on one credit bureau. So if you’re pulling one or two, you’re never going to approve or even see that. And then if you ever look at your credit score between the three credit bureaus, it’s going to be different by 30 points, 40 points, 50 points.

And that’s because not every bank contributes to all. So our view is that there’s a broad understanding that the tri-merge delivers both access to credit, meaning having a more complete picture on the consumers, and it also delivers the same in safety and soundness, meaning you’re seeing every trade line that a consumer has, both the good and the bad trade lines. So you’ve got a complete picture. So we think that there’s broad support on the Hill, with the regulators and with our customers about the power of tri-merge and I think I’ve shared before on other calls.

If you look at the more sophisticated, in my opinion, lenders outside of mortgage, think about cards or others, there’s many that pull a tri-merge because they get a more complete picture about the consumer for approvals, meaning they can improve more. And they see all the trade lines, so they make sure that they’re managing their losses, and they’re not missing a trade line that might be a negative trade line in one of the bureaus if they’re only pulling a 1B [Phonetic] or 2B [Phonetic]. So we think there’s a lot of support for it.

Scott Wurtzel

Got it. Thanks guys.

Operator

Thank you. Next question is coming from Ryan Griffin from BMO Capital Markets. Your line is now live.

Ryan Griffin

Thank you so much. I was just wondering what percentage of your volumes are soft versus hard pull? And I was wondering where you see that mix evolving over time with some of the new products benefiting in prequal? Thank you.

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

Yeah. So we don’t specifically disclose soft versus hard and I think what we’ve indicated is over the last several years, what we’ve seen is soft pulls obviously grown meaningfully as a percentage of total pulls.

Mark W. Begor — Chief Executive Officer

And I would point you to our revenue is quite strong in hard and soft pulls, which we were very pleased with.

Ryan Griffin

Appreciate it. And then just on the lenders onboarded thus far, testing the VantageScore. I was wondering if you could give any information on that group in terms of the customer size or type of lending institution, whether it’s banks or independent mortgage brokers? Thank you.

Mark W. Begor — Chief Executive Officer

All of the above. 240 is a lot and includes smaller ones, but a lot of the big ones. So it’s broadly, our customers understand how Vantage operates. They understand that it’s a performing score. They understand that Fannie and Freddie are going to activate it. It’s just a matter of time. It feels like we’re getting closer. And then they also understand the cost advantage, which is significant to them. And remember, one in eight, one in nine, one in seven loans close, the others don’t. And that’s breakage for the mortgage lenders and at $1 of breakage versus $10 times three, it’s a significant cost savings. As you know, it’s been quantified for the industry. It’s over $1 billion of cost saves by moving to Vantage. So that gets the attention of the lenders.

Operator

Thank you. Our next question is coming from Kelsey Zhu from Autonomous Research. Your line is now live.

Kelsey Zhu

Hi. Good morning. Thanks for taking my question. Could you maybe talk a little bit more about your expectation around VantageScore market share gains and future pricing policy and the mortgage vertical over the medium term? Thanks a lot.

Mark W. Begor — Chief Executive Officer

Yeah. It’s hard to put numbers on it and I don’t know how far medium term is, but let’s say, over the next couple of years, in my opinion — I think in our opinion, once Vantage is activated by the agencies, there will be adoption and that will be positive for Equifax. It’s not in our guide. So that will be incremental margin. Our revenue will go down because we’re selling a $1 score versus a $10 score, but our margins will go up because we’re going to make a buck instead of making zero. And over the medium term, I think there’s going to be substantial conversion. Why would a lender, if the agencies are approving Vantage, why would they pay $10 versus $1.

It’s one that’s kind of common sense. As far as pricing, we’re going to be certainly intended to be very competitive. I think the dollar reflects that versus the current FICO pricing. I don’t think any of us know what FICO is intending to do in January of 2027, which is not that far away, whether their price is going to go up, down or sideways, but we’re going to be very competitive going forward. And we don’t need a lot of price to deliver our long-term framework. That’s not how we operate. We’re multifaceted in our ability to grow our business. Price is one element. But more important for us is share gains, new product rollouts. In the case of Workforce Solutions, record additions, new verticals that we’re penetrating. We’ve got multiple levers for growth. And in the case of Vantage, it’s really going to be a margin opportunity for us to grow our margins going forward.

Kelsey Zhu

Got it. Thanks a lot. Second question, I was wondering if you can talk a little bit more about your outlook for volume growth across card, auto, personal loans for the rest of the year? Thanks a lot.

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

So I think we gave guidance for our Diversified Markets for the second quarter. We gave some perspective on the full year, and I think that’s kind of consistent…

Mark W. Begor — Chief Executive Officer

There’s really not a lot of change. Yeah.

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

But not a lot of change, right? It’s pretty consistent across the rest of the year. Yes.

Mark W. Begor — Chief Executive Officer

The consumer is still broadly resilient. Delinquencies are still managed well. Our customers are strong, meaning the financial institutions. I think one variable is how long does this conflict go on in the Middle East? And what is the impact on oil prices? What’s the impact on inflation? What’s the impact on consumer spending and does that impact financial services? That’s hard to handicap how long this is going to go. I think we all hope it gets resolved fairly quickly, and the market seem to reflect that kind of bias. And I think you heard last week and to a lesser degree, this week from the large banks reporting that they’re having good originations and managing their delinquencies broadly quite well. So I think that’s a good outlook for us in FI when you look through the rest of the year.

Operator

Thank you. Our next question is coming from Craig Huber from Huber Research Partners. Your line is now live.

Craig Huber

Good morning. Thank you for taking the question. I think a few people could probably blame you guys for not raising your guidance after the very strong first quarter, just given the macro issues out there. But my very specific question is in the month of March with this war starting, this Iran war starting at the end of February, is there any areas in your business that you saw material movement down in the revenue growth rates given this Iran war that you can attribute to?

Mark W. Begor — Chief Executive Officer

Mortgage.

Craig Huber

Anywhere else though that you can talk about?

Mark W. Begor — Chief Executive Officer

It was meaningfully mortgage for sure, meaning mortgage, we saw an uptick kind of in the middle of the quarter as rates came down before the Middle East conflict started. And then we saw I think a combination of rate increases and probably consumer psyche about something like that happening in the Middle East, things — mortgage slowed [Technical Issues]. And then we talked about — we saw a little bit in auto slowdown from probably higher rates. There’s also the higher prices of cars from the flowthrough of tariffs and other impacts. But we shared earlier that where mortgage is kind of running over the last four weeks, five weeks, six weeks is kind of back down in line with our February guidance for the year.

So that’s why we — it’s slightly below that actually, but that’s why we held the year. And we’re hopeful that if the conflict gets resolved and inflation comes down from the oil impact that there will be some rate reduction. And John pointed out, and I hope you saw that the significant, I would call it, pipeline mortgages at these higher rates that continues to build because mortgage hasn’t stopped, but you’ve got a large pipeline or portfolio consumers that have mortgages at these higher rates of 5%, 5.5% and over 6% that will be ready for a refi. As soon as rates tick down 25 basis points, 30 basis points, 50 basis points, that creates an opportunity for a refi that’s going to be good news for us when that happens. And again, we saw a small piece of that in the middle of the quarter.

Craig Huber

And then my follow-up question if I could. On the securitization market for mortgages, how important is that market there? Any feedback there, etc., for getting VantageScore up and rolling and moving along here with market share gains on mortgages?

Mark W. Begor — Chief Executive Officer

We don’t see it as a real event because there’s a lot of securitization that’s done in the non-mortgage space. In auto and cards, there’s large lenders that are exclusively Vantage that have been securitizing auto portfolios and card portfolios for years, five years, six years, seven years. So it’s well understood. We don’t think it has an impact. It’s really more getting the agencies to get their technology and their pricing tables set up to take in that VantageScore. And the indications we’re getting is that they’re getting close to being ready for that.

Craig Huber

Great. Thank you.

Operator

Thank you. Next question is coming from Zachary Gunn from FT Partners. Your line is now live.

Unidentified Participant

Yeah, this is [Indecipherable] on for Zachary Gunn. Just a couple of questions on employer. Since the macro is causing some deceleration there, can you just talk about the underlying trends you’re seeing? Is it just the tax credit legislation? Are there other factors maybe between blue collar versus white collar, maybe geographically? Thanks.

Mark W. Begor — Chief Executive Officer

The employer, the big impact is the Work Opportunity Tax Credit or WOTC, not being — expiring and not being approved. I think we’re — we and lots of others are lobbying to get that through Congress. There’s, I think, broad support to do it because it promotes the employment of certain individuals that really benefit from that. Just as a reminder, we’re continuing to process the WOTC applications, even though they’re not being accepted for the tax credit, meaning that we’re building a pipeline when it does get activated. And it’s hard to handicap when that’s going to happen. But that’s a meaningful impact in that vertical and employer because it’s a larger business for them that we’re not able to generate any revenue today, but we’re building a pipeline once it does get activated to submit those WOTC applications for approval.

Operator

Thank you. Our next question today is coming from Owen Lau from Clear Street. Your line is now live.

Owen Lau

Hey, good morning. Thank you for squeezing me in. I just have a quick clarification on that $35 million margin upside from VantageScore conversion. Could you please talk about the assumptions behind how can we get to this math by $35 million and the margin profile of VantageScore at $1 per score? Thanks.

Mark W. Begor — Chief Executive Officer

Yeah. The margin profile on a dollar is 100% margin. Think about it that way. It’s zero with our FICO score. And it’s really just taking that dollar times current mortgage activity, and the $35 million assumes full adoption at today’s run rate of mortgage transactions. Obviously, if the mortgage market improves, that becomes a bigger number. Would you add anything, John?

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

No. It’s just based on — its adoption at our 2026 guidance for the mortgage margin, right? It’s just consistent with our guidance. If there was no FICO and 100% Vantage, that’s how you get to the $35 million.

Mark W. Begor — Chief Executive Officer

And again, just to reclarify, our guide for the year assumes 100% FICO delivery and no Vantage conversion. So this is an upside for us. And again, if there is FICO to Vantage conversion, our revenue would come down, but our margins would go up by that run rate of $35 million.

Owen Lau

Got it. So that conversion is 100% conversion from 0% to 100% VantageScore.

Mark W. Begor — Chief Executive Officer

Correct.

Owen Lau

Yeah. Thanks a lot.

Operator

Thank you. Next question is coming from Simon Clinch from Rothschild & Company Redburn. Your line is now live.

Simon Clinch

Hi. Thanks for taking my question. Just wanted to change subject a little bit. And just going back to the discussion you had on consumer permissioning within the Verification business. I note that the current friction we have with consumer permission are I think that the consumer just has to put in their own, offer their login details and passwords. And obviously, that creates a huge amount of friction in the whole process. Is there a world in which the requirement actually input passwords and login details goes away where just actually giving permission allows access to that data via those providers? I’m just curious about your thoughts around that kind of the legal pathway to that kind of environment. Thanks.

Mark W. Begor — Chief Executive Officer

Yeah. It’s hard to see that happening. I don’t know where they would — I think you’re going down the path of like an AI agent somehow would have to get access to that user ID and password from that individual consumer because they’re all individualized by every individual for every account they have and everyone’s got lots of accounts. So it’s hard to see that happening. What we see in consumer permission, and we participate in it, is that there’s a lot of friction with it. And our customers typically don’t want to use it because in an application process, too many consumers drop out when they’re asked to do more, meaning they want a friction-free, very smooth process, which means instant decisioning and you can’t do instant decisioning with consumer permission.

So there’s a place for it. And that’s why we’ve rolled out our Complete Income solution for Government, and we’ve had some wins in the Government space that where that consumer is willing to invest the time, I think that’s where you really get to. And as far as the AI element, it’s hard to see.

Simon Clinch

Okay. That’s helpful. Thanks. And just one quick follow-up. Really from a sort of technical perspective here, when you talk about your ex FICO revenues — revenue growth, how are the — how are your reseller revenues treated now? Are you stripping the FICO revenues out, reseller group as well?

Mark W. Begor — Chief Executive Officer

All the way through.

Simon Clinch

All the way through? So that includes the FICO revenues from the resold FICOs from the other bureaus within that?

Mark W. Begor — Chief Executive Officer

We have a tri-merge business. This really assumes the Equifax piece.

John W. Gamble — Executive Vice President, Chief Financial Officer and Chief Operations Officer

So what we assume is just any revenue that we paid to FICO or any revenue that would be paid to FICO by Experian and TransUnion has effectively passed through to us by the price that they charge us, right? So this is to try to cover as best we can all of the FICO score revenue that we are paying either directly or indirectly.

Simon Clinch

Okay. That’s great. That really clears it up. Thank you very much.

Mark W. Begor — Chief Executive Officer

Thank you.

Operator

Thank you. Our final question today is coming from Arthur Truslove from Citi. Your line is now live.

Arthur Truslove

Good morning. Thank you very much.

Mark W. Begor — Chief Executive Officer

Sorry, Arthur, can you get closer to the phone? We can’t hear you.

Arthur Truslove

Is that better? Can you hear me now?

Mark W. Begor — Chief Executive Officer

No, it’s tricky. That’s a little better.

Arthur Truslove

Hang on a second.

Mark W. Begor — Chief Executive Officer

There you go. Try that.

Arthur Truslove

Sorry about that. So for me, you obviously mentioned earlier that AI is contributing to your margin development, and that’s very positive. Obviously, your sort of midterm margin guide has always been 50 bps since I’ve been involved covering the stock. I guess my question would be, like in what sort of set of circumstances could you see that midterm margin guide being bumped up to 75 basis points or 100 basis points? So I just wondered what might bring that about? Thank you.

Mark W. Begor — Chief Executive Officer

Yeah. It’s a fair question. We’re obviously pleased with our guide for the year and super pleased with our performance in the quarter. And as you know, the margin expansion really has two big levers. One is the core operating leverage from the business and the strong top line growth with the operating leverage you get from that generates some of that margin lift, which is directionally that 50 basis points with our long-term framework for revenue growth. And if we’re able to grow revenue faster, that’s going to be attractive for us as far as operating leverage.

On the AI side, it’s kind of early days. We’re only months into this as far as deploying it. And I think as we get further into it, we see some of the further benefits in operations, which think about that as our call centers and operation centers, which are quite substantial. As I mentioned earlier, as we start getting into the technology side and our ability to use to really accelerate our coding capabilities, which we’re seeing some early progress there. I think as that unfolds and then across the rest of the organization, we see some of the benefits, we’ll certainly, at the right time, take a look at our long-term margin goal. Today, we feel very comfortable with the 50 bps. We’re very pleased with our outperformance guide for 2026 and at 75 bps, and then we’ll certainly look at it in the future as we get further into the AI journey.

Operator

Thank you. We reached the end of our question-and-answer session. I’d like to turn the floor back over to Trevor for any further or closing comments.

Trevor Burns — Senior Vice President, Investor Relations

Yeah. Thanks for everybody’s time today. If you have any follow-up questions, please reach out to Molly and I. Thank you, and have a good day.

Operator

[Operator Closing Remarks]