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MortgagePolitics & Money

EquifaxÕ bottom line not dented by data breach, profits rose 20% in 2017

Net income up 40% in fourth quarter

It appears that Equifax’s massive data breach, which impacted nearly 148 million people in the U.S. alone, didn’t hurt the company’s bottom line in 2017.

The credit reporting agency reported Thursday that its net income was $587.3 million in 2017, up 20% from 2016.

The company’s revenue was also up in 2017, rising to $3.4 billion, an increase of 7% from 2016.

Interestingly, the company’s revenue and net income were both up year-over-year in the fourth quarter, the time period directly after the company first disclosed the data breach.

The credit reporting agency said in September 2017 that the names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers, of approximately 143 million consumers were stolen in the data breach.

Later, the company updated the number of victims to 145.5 million, and then to nearly 148 million.

But in the subsequent quarter, Equifax saw its revenue rise 5% over the previous year to $838.5 million.

The increase in Equifax’s net income in the fourth quarter was much more substantial.

In the fourth quarter of 2017, again directly after the company revealed the data breach, Equifax saw its net income rise by 40% over the previous year to $172.3 million.

The company’s fourth quarter performance was aided by the Republican-led Tax Cuts and Jobs Act, which reduce the corporate tax rate from 35% to 21%.

As a result of the tax plan, Equifax recorded a net tax benefit of $48.3 million in the fourth quarter of 2017.

While the data breach didn’t turn Equifax’s profits into losses, the company did feel the impact of the breach in its financials.

According to the company, it recorded data breach-related expenses of $113.3 million in 2017. Expenses include costs to investigate and remediate the cybersecurity incident and legal and other professional services, the company said.

As for where the increase in revenue came from in 2017, it turns out that Equifax’s international business was the big driver.

Equifax’s operating revenue from its international business was $932.3 million, up $128.7 million over 2016’s total of $803.6 million.

In the U.S., Equifax’s revenue was up as well, but on a much smaller scale.

The company’s U.S. information solutions business saw its revenue rise from $1.24 billion in 2016 to $1.26 billion in 2017. That includes a 5% increase in its mortgage solutions business, which saw its revenue rise form $142.2 million to $148.9 million.

“Our fourth quarter results underscore solid progress on multiple fronts,” said Paulino do Rego Barros, interim CEO at Equifax.

“We invested heavily in advancing our data security infrastructure and improving our consumer support, and we delivered on our financial commitments. While the job is not over, I believe we have responded well thanks to the strong support of our board of directors, the commitment of our senior leadership team, outside partners, and the dedication of our 10,000+ employees around the world,” Barros continued.

“There will be a lot of heavy lifting in 2018 and 2019 as we implement new data security initiatives and restore confidence with our customers and consumers. The DNA of this company is underpinned with both a deep commitment to strong ethical principles and values and a strong focus on execution,” Barros added. “As I have met with our employees throughout the world, I sense a great level of enthusiasm and commitment to move this company forward with a heightened level of focus on protecting and safeguarding all of the consumer and commercial information we store and manage.”

3d rendering of a row of luxury townhouses along a street

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