Good day, and welcome to the Equifax First Quarter 2017 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Jeff Dodge. Please go ahead, Sir.

Thanks, and good morning, everyone. Welcome to today's conference call. I'm Jeff Dodge, Investor Relations; and with me today are Rick Smith, Chairman and 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 Investor Relations section of the About Equifax tab of our website at www.equifax.com. During this call, we will be making certain forward-looking statements 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 inherent in our business are set forth in filings with the SEC, including our 2016 Form 10-K and subsequent filings. Also, we will be referring to certain non-GAAP financial measures, including adjusted EPS attributable to Equifax and adjusted EBITDA margin, which will be adjusted for certain items that affect the comparability of the underlying operational performance. For the first quarter of 2017, adjusted EPS attributable to Equifax excludes the acquisition-related amortization expense, the transaction and integration expenses associated with our acquisition of Veda, the income tax effects of stock awards recognized upon vesting or settlement and adjustments resulting from the conclusion of tax audits. Adjusted EBITDA margin is defined as net income attributable to Equifax, adding back income tax expense, interest expense, net of interest income, depreciation, amortization and the onetime impact of certain transaction and integration expenses associated with our acquisition of Veda. These non-GAAP financial measures are detailed in reconciliation tables, which are included with our earnings release and are also posted on our website. Please refer to our various investor presentations, which are posted in the Investor Relations section of our website for further details. Now I'd like to turn it over to Rick.

Thanks, Jeff, and good morning, everyone. As always, thanks for joining us on this call. Comes off of a really strong start in '17. A solid first quarter performance across every business unit, every vertical in different geographies around the world. Once again, the growth that the team has delivered was very broad-based. We entered 2017 with great momentum than 2016, which I think you'll agree was a record year on so many fronts, including new product innovation and the international expansion with our acquisition of Veda last year. The management team is building on the momentum from 2016 with each of our business units and COEs executing at a high level. Total revenue for the quarter was $832 million, up 14% on a reported basis and up 15% on local-currency basis in the first quarter of 2016. For the quarter, FX created $8 million of year-over-year headwind. Adjusted EBITDA margin was 36%, up a solid 180 basis points from a year ago, well above the guidance we provided for the quarter and for the year. Adjusted EPS was $1.44, up 17% and now I'll jump into individual BUs as I typically do. I'll start with USIS. They delivered a solid 5% revenue growth in the quarter driven by mortgage, new product innovation and enterprise growth initiatives. In the quarter, USIS had strong double-digit growth across the mortgage, government and communications verticals and high single-digit growth in several areas, including Prescreen and Identity and Fraud Solutions. But much of this growth is supported by continued strong growth in our enterprise and alliance channels. USIS delivered this growth in the quarter despite a drag from DTC resettle revenues of 1.4 percentage points. You remember, we've talked about that before. That's a piece of DTC that's not in GCS, it resides in…

Thanks, Rick, and good morning, everyone. As before, I'll generally be referring to the financial results from continuing operations represented on a GAAP basis. As Rick discussed, in 1Q '17, we performed ahead of our expectations, putting us nicely on the path for 2017. The mortgage in ACA headwinds we discussed in our February earnings call impacted us, as expected, in USIS and Workforce Solutions. USIS revenue in 1Q '17 was $310 million, up over 5% when compared to the first quarter of 2016 and consistent with our expectations. Online Information Solutions revenue was $225 million, up 3% when compared to the year-ago period. Online Information Solutions revenue was driven by growth in mortgage, telco, government and fraud. USIS direct to consumer revenue, principally our revenue with other CRAs, declined in the quarter, negatively impacting 1Q '17 Online Information Solutions and total USIS revenue growth by approximately 1.9 and 1.4 percentage points respectively. Our commercial rich related revenues, which are also included in OIS, were also down in the quarter. Total mortgage-related revenue for USIS was up 27%. Total mortgage-related revenue for Equifax, including Workforce Solutions mortgage revenue, was up 22%. Mortgage Solutions revenue and USIS was $39 million, up 22% year-to-year. In 1Q '17, mortgage market volumes were generally in line with our expectations. Our revenue performance was much stronger than the market, reflecting trended data, as well as new products and further market penetration. In 2Q '17, we expect mortgage market volumes to be down mid-single digits year-to-year. Compared to 1Q '17, this creates a drag on total Equifax 2Q '17 organic growth of over 1%. For all of 2017, we continue to expect mortgage market volumes to be down about 15%, and we expect continued over-performance versus the market. Financial Marketing Services revenue was $46 million in…

Thanks, John. For the second quarter, we expect revenue to be between $857 million and $862 million, reflecting constant currency growth of 7% to 7.5%, partially offset by 1% of FX headwind. Guidance reflects the shift that John mentioned, of over $5 million in revenues in GCS that we previously expected to hit in the second quarter but delivered in the first quarter, and that negatively impacts the second quarter growth by approximately 0.7% of a percentage point. Adjusted EPS is expected to be between $1.55 and $1.58, excluding a dollar -- $0.01 a share of negative FX. This reflects constant currency EPS growth of 10% to 12%. In the second quarter, our mortgage outlook for the market volumes is down mid-single digits. Compared to the first half of 2016, our outlook reflects first half constant currency revenues up 11% and first half adjusted EPS up 14%, well above our long-term model. Furthermore, our multi-year growth has been very strong, I think you'll agree, from a perspective compared to the first half of 2014. Our first half of 2017 outlook reflects compounded annual growth for revenues of 12% compound annual growth for adjusted EPS of 18% over that period of time. On to the full year. Our full year 2017 guidance for Equifax revenue and EPS are solid and are unchanged from our February call. As we discussed on this call, our 2017 revenue expectations for International has increased from our February earnings call. While our expectations for GCS revenue has moderated a bit, but still within their long-term trends. In total, we continue to expect Equifax revenue for the year to be between $3.375 billion and $3.425 billion, again unchanged from our previous guidance. This reflects constant currency revenue growth of 8% to 9%, partially offset by 1% of…

Thank you. [Operator instructions] And we're going to take our first question from Manav Patnaik with Barclays.

Yes. Thank you. Good morning, gentlemen. First, just a near-term question. In terms of the guidance you've given, even though there are a bunch of headwinds you called out in USIS, just curious why are there any particular products or pieces that gives you confidence that it still improves in the second half?

Manav, specific to the USIS business or in general terms?

Well, I guess general as well, but I think USIS to start off with maybe.

Yes, I'd say USIS is the microcosm of the entire confidence we have for the company, and that is the thing that you know so well that we've been doing now for 10-plus years. It's all the stuff we have in NPI. We've talked about the classifieds last year have been very strong, they're starting to ramp up, in fact the last part's 2017. In fact, USIS is NPI progress at the end of 2016 and in the starting of 2017 is as strong as it's ever been. So, specific to USIS is what that comp is, but also, they're leveraging the same things everyone else is leveraging, things like EGI. Over 15 EGIs, USIS participates in those as well. So, there's no magic. But one of the things I love to think about is sitting back here, talking to you guys back in fourth quarter pre-election, we gave a framework for 2017, which was, we thought robust, you thought robust and all of a sudden, the world changed with Trump's election. And we thought "My God, the world will change and mortgage rates are going to go up, ACA is going to be repealed." And yet, because of the continuity of execution and consistency of our initiatives for the past 10 years, we're able to maintain that guidance this year. So, I'm as confident now and John is as confident now in USIS's ability to deliver those numbers and the company's ability to deliver those numbers, as I've ever been.

So basically, what you're saying is it's just a broad-based NPI through all those, but you have the visibility? Okay. And then just on a bigger picture, clearly, a lot of good things still going on in the company, sounds like we have been getting better. I'm just thinking more, given you've digested, well, somewhat digested Veda and it's going well, like how should we think about capital return at this point in time to balance between doing the strategic M&A versus picking the buybacks back up?

We're deleveraging as expected. We're thought to be getting our leverage back around 2.25. We'll be there as we exit the second quarter. At that point, John and I will look at both getting back into share repurchase, as well as getting back in M&A. So, everything is performing on track. In fact, then we'll be levering at slightly faster rates on than maybe what we've anticipated last year.

Absolutely. And we don't feel any constraints with executing M&A. We're continuing to go as fast as we can, and we continue to think we have a nice pipeline, as we look at the rest of this year.

Okay. And then just last one. The commentary you made, I think you had expected that last quarter as well, in the improvement in Latin America. Can you maybe address your latest news on Brazil?

I was just down there, as I mentioned in my prepared comments, in South America. And what we always do is meet with business leaders and meet with economists. And even though we have a small operation in Brazil, as a country, I still remain concerned about Brazil short term. As you know, they had a significant recession last year. I think the outlook this year is for modest improvement with positive GDP but very, very modest. So, short term, I'm still bearish on Brazil. I like our partnership in Brazil. We continue to work close with our Brazilian partners, and I don't feel that right now is the time to make a decision to be bigger, stronger, better in Brazil at this juncture.

Got it. Thanks a lot, guys.

Thank you.

And we'll take our next question from George Mihalos from Cowen & Company.

Great. Good morning, guys and congrats on the nice start to the year. Wanted to start off on the guidance. It looks like, from a revenue perspective, you're talking about a pretty consistent 7 percentage type growth over the remainder of the year. And I'm just wondering, given that the mortgage comparisons will get tougher in the back half and you've lapped the trended data pricing benefit, what do you expect to sort of perk up to maintain that level of 7% constant currency organic growth?

Great question. As we've talked about -- remember -- if you remember the call in February where there was significant concern at that time because of the mortgage market rates going up and mortgage market declining, ACA being repealed. And we talked then about our confidence levels driven by EGI and NPI, that remains the case today. I alluded to, in the February call, I think even a couple of times last year, George, that our classified last year was an unbelievable classifieds that will bode well for that year, minus ramp up at the back half of the year. Secondly as I said in my prepared comments, the class of products that we're launching, the pipeline of products in 2017 is as strong as ever.

And if you look at the constant currency growth we're talking about in 2Q '17, if you add back the drag from mortgage, it really looks pretty consistent what we delivered in the first quarter. And then if you take a look at total constant currency growth for the first half, we're looking at 11%, right? So, I think the performance overall in the first quarter and the second quarter and when you take a look at the entire first half growth at 11%, it looks very, very good.

Well said.

Yes, that's great. If I could just sneak in two quick follow-ups. Just John the, within USIS, the financial marketing line, that's been a little bit more volatile the last couple of quarters. It seems to have a really strong quarter, then the growth rate comes in a little bit, a little bit more volatile than what I think we've been used to seeing historically. Any sort of commentary or insight around that? And then as it relates to the USIS margins, they were pretty much in line with the year ago. We've kind of gotten used to them sort of expanding consistently. Just any color you could provide around that. Thank you.

Sure. Financial marketing line, as you know, that can be a little bit lumpy. We're seeing nice growth in prescreen, and we think that's an area where we're probably going to see good performance throughout the rest of this year. But it will be lumpy as you look through the rest of the year as well. In terms of USIS margins, we're very happy with our margins. They were basically flat. We're continuing to expect them to go up. The small movements that you see in any given quarter are really just mix related, and sometimes related to the lumpy revenue that we just talked about. But generally speaking, USIS margins have been outstanding and we're expecting very good performance this year.

George, the model we gave, if I could just add on, is for USIS's margin to be -- EBITDA margins to be in the low 50s over time. That's still the goal and you'll see movement throughout any 1 quarter. As you know, there's just a lot of moving parts and, but they're still well on track to make that mid-50s over time and I -- we expect to -- second quarter 2017 to be better than first quarter 2017.

Great. Thank you, guys.

We'll take our next question from Brett Huff with Stephens Inc.

Good morning, guys. Thanks for taking my question. As you look forward to guidance, Rick, I asked you this question in the last call and there's just some concern in the market that you guys usually have some cushion in your guidance that allows you to kind of have some raises through the year, but there is some concern, given you had to absorb the 300-basis-point headwind from mortgage and a little more from ACA. I think before, you said it was kind of a balanced view of guidance. Anything to update us on that given that mortgage seems to be a little bit better maybe than we're expecting, at least it was in 1Q? Maybe a little bit more insight into the NPI drivers in the back half of the year? Any sort of updated thoughts on your take on guidance?

Sure. I, and John and I feel as confident today towards the year outlook and guidance as we were when we gave it to you in February, we take that very seriously. As far as mortgage goes, no, as I said in my prepared comments, the mortgage performance for us came in largely as expected in the first quarter. The team continues to significantly outperform the market, but the actual revenue drive for mortgage was in line with our expectations. At this juncture, we continue to stick to our 15% total market down for the year. So, no little change there. So, it's just now a matter of the team continue to what they've done for years, which is execute on NPI, execute on EGI, execute on Lean and deliver those goals. So, I remain very confident.

That's helpful. And then just my follow-up is, as we look, I know we're not talking about guidance for '18 and that's a long way away, but what are the puts and takes on growth that we should be thinking about as we move into '18? And, I guess, just thinking out loud, mortgage, as well as maybe the even better '17 class of NPI products that you've been talking about. Maybe TDX gets a little bit better. What kind of the -- what are the pros and the cons we need to think about as we think about '18? I think many investors are thinking about what does that growth look like?

Yes, Brett, just off the top of my head because you're right, that is a long way away. One thing you have is you got about 5, 6, 7 weeks of Veda this year we didn't have last year, which we'll anniversary that. We have anniversaried that. That goes away. Mortgage, I got to believe that majority of the mortgage will bottom out this year, maybe some stability next year, that could be a help. Number three, may have improvement with the classifieds. As you know, with the classifieds from '16, we launched extra few years to truly materialize and reach their full inflection points, so that should be a benefit, same with classified '17, so. I also think that if the economists are right and the parts of the world in which we operate, we just got an economic update the other day, that the economies that are important to us should continue to improve. And if they improve, our business improves.

Great. That's what I needed. Thanks for your time guys.

We'll take our next question from Kevin McVeigh with Deutsche Bank.

Great. Thank you very much. I wonder if you could just give us a sense. It sounds like trended data in mortgage is the largest opportunity. I'm trying to really frame out what it would be in auto and other areas as you roll that out.

Yes. Thank you, Kevin. We're optimistic. And we've talked about this now for about a year. I think the industry got a little ahead of itself in the optimism on trended data, before the analytics was completed. We're largely, as I said in my prepared comments, we'll complete that analysis very, very soon in the U.S. then we'll take it to other parts of the world where we're looking at verticals and the sub-verticals. So, auto versus prime vs sub-prime card, prime versus sub-prime versus neoprime, home equity so on, and so forth. So, this year, you should think of the revenue as far as the guidance goes, including trended data benefit from mortgage only will be the outer years, will get the lift in other verticals, but we're not prepared to frame that up yet.

Got it. Helpful. And then just real quick. If we did get these changes in terms of personal, obviously the corporate will -- is beneficial, but personal income tax rate changes. How does that impact the business, particularly TALX? Does that provide incremental revenue opportunities as we work our way through '17 and into '18, based on just new rates?

All right, by individual tax reform in the U.S, is that your question, Kevin?

Yes, sir.

In theory, any time that we get more cash in the pockets, they're more likely to spend the cash, to do as to fuel economic growth. So -- and again, as the economy grows, our business grows better.

Awesome. Thank you, guys.

We'll take the next question from Andre Benjamin with Goldman Sachs.

Thank you. Good morning. For my first question, you talked a little bit about the progress of the verification product in Canada. I was just wondering if you can maybe give us an update on -- or a little more detail on potential timing of when that could be up and running. What's left to get it across the finish line? And then maybe, I know it's a little long term, but how that size is versus what you're thinking -- what will you see in the U.S.

I missed that last part Andre, if you could…

How -- I know it's long term, but how big you think that opportunity could be versus the business in the U.S, given what you've seen about, in that vein.

Overall, we're thrilled, as you know, with the overall progress in the context with the EWS in it. It's been an unbelievable home run for us. It's hard to believe it's been 10 years now. And the Work Number is one of the, obviously, the gems within that business. And long term, as you know, it is not just Canada. It's taking you to other developed parts of the world where we have a need. We've got a full-time dedicated team now. We've got dedicated technology platforms, we have strategies beyond Canada. So, expect to wake up in a few years and see us in far more than just Canada as we talked about Australia and interest goes, U.K. and other places. Specific to Canada it's going well, as I alluded in my prepared comments the contribution of records is exceeding our expectations. I caution everyone to think about that as a multi-year return and not a single return. And once you get into a country with a platform like that, your ability to add different products, to solve different problems for customers in that arena are expanded. So, the opportunity would be beyond just the Work Number and Verification Services in Canada and other parts will augment it with other products as well. But think of it as a nice way of a multiple years to continue to expand the size, the profitability of EWS.

And then on the opportunities for trended data outside mortgage, we understand you're kind of working through the sizing of that and what customers, ultimately, will want from you. Could you maybe talk a little bit about just based on what you're seeing so far, maybe a handicap, which ones you think are likely to become earlier contributors between all autos, cards and home equity?

I would think auto will be #1, followed by card and home equity. If I had a handicap, it seems similar order, and that's in the U.S. and we're still doing work outside U.S.

Okay. Thank you.

Thank you.

We'll take our next question from Tim McHugh with William Blair.

Hey guys. Thank you. Just want to -- I think you mentioned you thought USIS would grow faster in the second quarter than the first, this is some improvement in some parts of the business, besides mortgage, I guess. Can you elaborate on what you see performing better as we move into the second quarter?

Yes. Tim, I'll start and John can add to it. But anytime you look at it, a particular quarter, particularly BU, you're going to see lumpiness. And that's probably what you've seen in the second quarter versus the first quarter of USIS is probably some contracts, new product innovation and USIS is ramping up. I talked about InstaTouch that's starting in USIS. Some fraud products that are being launched and will benefit in the second quarter. So, it's a variety of things you'll see in the second quarter that you didn't see in the first quarter. But again, I think the more important thing is to try to get context for the full year. And we gave guidance for USIS the framework for that back in February, and they're going to be in that range for the full year. So slightly maybe below, actually they're in the range in the first quarter. Will be above that range in the second quarter, but full year, solidly within the range.

And the growth is really across multiple segments, right? If you take a look at USIS, we think, we're going to see expanded growth, generally speaking, across the bulk other segments, other than mortgage, right?

Okay. And -- I think you said commercial was down. Is there any change in -- or was that just timing as well for, I guess, for Q1?

Yes, John did say that in his prepared comments. And Tim, 2 things. Again, any context is important commercial, small as you know is slightly down in the first quarter, but we're making a transition, as you know, from this platform exchange called SPFE to a new exchange called CFN. CFN is starting to ramp up. That has some impact for SPFE and you won't fully see CFN fully ramped up until later on this year. And as we exit this year and go in 2018. So that's what you're seeing this lumpiness during SPFE and CFN.

The nice thing about CFN at this point is in terms of the creation of the exchange and the contributors it's just gone incredibly well. And we, at this point, have garnered the vast majority of the contributors we hoped to achieve, including Telcos, including other top side of the traditional banking industry. So, we think it's a superior exchange, and we're very happy with the way it's been built.

Well said.

Okay. Thank you.

We'll take our next question from David Togut with Evercore ISI.

Thanks. Good morning. Rick, could you give us an update on where you stand in Workforce Solutions and in terms of building out the number of work number records? And in connection with that, any insights you have into hit ratio on that business would be appreciated?

Thanks, David. I am thrilled. I was just out in St. Louis, I think it was last week ,for a review with Murray and his team. And the progress they are making is unbelievable. On active records, total records, partner relationships was established to solve problems and create a network effect is unbelievable, and I gave you some comments there in -- my comments -- in my prepared comments today, which is now we are linking together the credit, the data in the credit file with The Work Number records to augment and expand our ability to deliver value back to the customer. So, in the past, I couldn't find someone on The Work Number database. But if I can combine with the credit file, I can enhance that, deliver a yes, move some insight back to the customer, which is proving to be hugely valuable to our customers, which will accelerate growth for us. We just launched that capability of our product late in the first quarter. So that's a way to think about we augmented credit data with a work number database. It's a way to, as you call it, record, get a hit rate or a yes back to a customer for a higher rate than in the past. So, they are -- they're clicking on all cylinders out there.

Got it. And then just as a quick follow-up. On mortgage, we appreciate all the helpful detail. With Equifax's total mortgage revenue up 22% in the quarter against the down U.S. mortgage market, why shouldn't we expect this level of sustained out performance to continue and perhaps, your expectations overall, for mortgage to turn out to be too conservative for this year?

Let me give you some color on that. The mortgage market was as expected in the first quarter. And by the way, when you look at the -- what they call the mortgage banker's index, that's an application look versus the volume look, there's always a lag in application of the volume, we tend to look at volumes. So, the volume performed about as expected. You are correct we did outperform, but clearly expect us to continue to outperform in the second quarter, third quarter, fourth quarter in '18 as well. However, we do expect the volume activity in mortgage, if this 10-year target's is doing we're talking about do decline, the mid-single digits in the second quarter and strong double-digit in the third and fourth quarter, for a total of 15% for the year.

And keep in mind, right, we get the benefit from trended data pricing in terms of the lift for the first effectively 2.5 quarters of the year because we started shipping trended data in August last year.

And Dave, one last thing, we're expecting rate increases. We're expecting 10-year treasuries to go up, obviously, between now and year-end. If they don't go up as strong as we expect them to go, yes, you're right, that would be a tailwind for us. If they go up, or higher than we expect, that'll be more headwind, but right now I think we're in a balanced position.

What assumption do you have for 10-year treasury yields then, by year-end?

We're expecting it, and I'm not sure of the exact number, a couple I think two or three rate increases between now and year-end, David. Similar with what we were talking about, yes.

Okay. Thank you very much.

Thank you, David.

We'll take our next question from Toni Kaplan with Morgan Stanley.

Good morning, everyone. This is Patrick in for Tony. It sounded like growth from the direct-to-consumer business came in maybe a little bit lighter than you'd previously expected. Do you think you're beginning to see an impact from the rapid growth of your indirect channels and partners like Credit Karma?

No. I think, again, this is lumpy but the thing maybe to frame is this, we gave a multi-year framework a couple of years ago. We have reinforced that framework last year and this year of 5% to 8%, and we do expect direct-to-consumer to be in that 5% to 8% for the year.

Got it. And then one quick follow-up, if I could. I'm wondering if you've begun to see a discernible change in demand for the employment and income inquiries since The Work Number become integrated into the desktop underwriter system late last year.

I don't know that. I don't think I have that trend. That's a great question, Patrick. And obviously, if any of you may, I don't have that answer off the top of my head.

No worries. Thanks Rick.

Thank you.

We'll take our next question from Gary Bisbee with RBC Capital Markets.

Hey guys. Good morning. I guess given the mortgage in ACA drag this year that you've talked about and what was obviously a benefit from mortgage last year, is it reasonable to say that your underlying organic revenue growth without that is actually accelerating solidly this year? Is that a fair assessment just from all the NPI success?

Can you ask that one more time to make sure we're clear on what you're parsing there?

If we just -- if we backed out, right, the benefit you had last year for mortgage market volumes but also ignored the negative hit this year and, obviously, the fact that Veda helped growth last year, is the underlying growth ex that accelerating? I mean, just given the commentary in NPI in the last 2.5 years, it would suggest that it should be, and I think it is, I just wondered if you'd confirm that?

In terms of the math, right, last year's organic was very high at around 12%. And yes, mortgage was a benefit we also had a really nice benefit from ACA growth last year, right? So, as you do that analysis, you just need to make sure you take both of those things into account and -- to determine where you think that shakes out. But the growth related to mortgage in ACA were a nice contributor to growth last year, and we're not really going to see either of those this year. So, if you're just backing out mortgage, that maybe a tough comparison.

So, the only thing with that is backing out mortgage and ACA, you'd expect to see organic constant currency growth rate well above, nicely above the long-term range in this year again.

Yes. Yes. It just seems to me if it was several points benefit last year, several points drag this year. You're actually doing better this year without those cyclical market factors from your organic underlying performance, but that's fine. That's good. I'll move on. On the Ignite product, the product launch, what's the revenue model? And can you help us understand how that works with customers? Is this more just increasing the stickiness by giving them more functionality in how they're using the product? And over time if they build new models themselves using it, that's an incremental revenue? Or is there actually going to be a charge associated with the two parts of that offering?

Thanks, Gary. The thing about Ignite and, again, two different buckets. One is direct, one is marketplace, and direct has created this environment, the cloud has our data, their data and these -- the data scientists, more customers can access that, anytime they access it they pay for the data that they're accessing, and also it helps us facilitate the building of new products in the marketplace. Just think of an app-- like an app on your phone where there are configurable apps that the business community where our customers can download those, use those. So, there's typically -- there are two ways you make money. One is there tends to be, in some cases, a fee for setting up the environment for our customers; number two, is obviously they pay if they access the data. So financially the model is very much majority of the model, will be very much like you've seen across the rest of the business, which is accessing our unique data assets.

Okay. Thank you.

We'll take our next question from Andrew Jeffrey with SunTrust.

Hi. Good morning, guys. Rick, your enterprise initiatives seem to be proving out really nicely. Can you sort of characterize the contribution from enterprise spending or enterprise clients in your current revenue composition? What it might tell us about where we are in the credit cycle or if that's even sort of relevant to the growth you've laid out?

Yes, I think strategically it's relevant. What we're trying to do is combine technically, analytically and data and that our go-to-market strategy across multiple -- be used to solve problems for customers. So, we get into it. If you could take a piece of our product more likely a USIS product and a EWS product, bundle those product offerings technically and analytically together, delivering a single solution to the customer that no one else can deliver. That enterprise solution is a differentiation versus others in the marketplace, enables us to take share and drive pricing and drive revenue. So, I don't break it out that way. I just know it's the right thing to do. And we've done the vast majority of the vertical alliance or verticals we've attacked have been driven by USIS. I alluded to in my comments that we still have this government vertical where we had more expertise, bigger channels and pipes through EWS. EWS is now dragging along all of the capabilities we have to solve these problems. So, it's a strategic differentiator is the way to think about it, we don't break out the actual revenue contribution.

Okay. And with regard to auto in particular, what is the risk as you look forward in the back half of '17, maybe '18, if we are indeed at peaks are. What might that mean for revenue growth? Is that a call out, potentially the way mortgage in ACA are?

No, I don't think so. For a couple of reasons. Not nearly as big, number one. Number two, is our assumption that we peak, so the guidance within the industry. And this is the U.S. The guidance we gave -- the framework we gave last year and the guidance we gave in February and the guidance we're reaffirming today is assuming new sales of vehicles in the U.S. and a peak at 17-something. I can't remember what the number is, 17-something for the year. I don't expect that to go up at all. You kind of -- that's a new high for us. However, I do expect us to continue to find ways to partner with others that have pipes and relationships with the channel partners we talked about, Andrew, for quite some time, to continue to help us fuel growth. So, I think in our prepared comments, we talked about auto and EWS was a growth driver for them. I expect that to continue to happen. So, one, you've got to make sure we're putting in context is nowhere near the size of the mortgage for us; two, the result will let it penetrate; three, these channel partners are vital to us and a good source of growth.

Okay. Perfect. Thanks.

We'll take the next question from Andrew Steinerman with JPMorgan.

Hi John, could you just give us the Veda revenues for the first quarter and just give us some sense generally how you expect to do for the year?

Yes. We think for the first quarter, we gave it in the script, right? So those revenues, Asia-Pacific is virtually all Veda revenues. There's almost nothing that was there before. And that the performance of Veda was pretty much as we expected in 2016. I think we indicated when we acquired them long term, we're expecting them to grow kind of consistent with our growth rates, and we're very, very happy with the way they're performing and we expect them to perform on about that basis, as we look at '17 and beyond.

Okay. Thank you.

Okay. I want to thank everybody for their time and their interest in Equifax. And with that, operator, we will conclude the call. Have a great day.

This concludes today's call. Thank you, for your participation. You may now disconnect.