Technology
Equifax Delivers Strong Second Quarter 2024 Revenue Growth of 9% Led by Workforce Solutions Non-Mortgage Verification Services
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2 years agoon
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ATLANTA, July 17, 2024 /PRNewswire/ — Equifax® (NYSE: EFX) today announced financial results for the quarter ended June 30, 2024.
Second quarter 2024 revenue of $1.430 billion grew a strong 9%, with 13% non-mortgage local currency revenue growth.U.S. mortgage revenue grew 4% in the second quarter despite a 13% decline in USIS mortgage credit inquiries.Workforce Solutions second quarter revenue grew 5%, with 12% non-mortgage revenue growth from 20% Verification Services non-mortgage revenue growth led by Government and Talent Solutions. Mortgage revenue was down 12%.USIS second quarter revenue growth of 7% with 27% mortgage revenue growth and 1% non-mortgage revenue growth.International second quarter revenue growth of 17% on a reported basis and up 28% on a local currency basis, with organic local currency revenue growth of 12%.Significant new product innovation leveraging new EFX Cloud with 12.5% new product Vitality Index in the second quarter and 89% of new models and scores built using Artificial Intelligence and Machine Learning.Maintaining full-year 2024 guidance with midpoint expectation for revenue of $5.720 billion, up 8.6%, with strong non-mortgage local currency revenue growth of over 10% and Adjusted EPS of $7.35.
“Equifax had a strong second quarter against our EFX2026 strategic priorities in a challenging mortgage market delivering revenue of $1.430 billion, up a strong 9%. EWS Verification Services revenue was up a very strong 9% driven by Government revenue up 30%. Our U.S. mortgage business grew 4% despite a 13% decline in USIS mortgage credit inquiries. USIS had strong 27% growth in mortgage revenue, with EWS mortgage revenue down 12% – both as expected.
“Our non-mortgage business, which was about 80% of Equifax revenue in the second quarter, delivered very strong broad-based 13% local currency revenue growth, from continued significant new product performance with a New Product Vitality Index of 12.5% and 89% of new models and scores built using AI and ML. Workforce Solutions delivered very strong 20% non-mortgage Verification Services revenue growth led by the Government and Talent Solutions businesses, with 12% overall non-mortgage revenue growth. International delivered strong 12% organic local currency revenue growth, led by Latin America and Europe. USIS non-mortgage revenue growth of 1% was consistent with the first quarter. We expect improving USIS non-mortgage growth in the Second Half as we complete the full migration of our USIS consumer business to the Cloud early this quarter,” said Mark W. Begor, Equifax Chief Executive Officer.
“We are maintaining our full-year 2024 guidance with a midpoint expectation for revenue of $5.720 billion, up 8.6% on a reported basis and organic local currency growth of 8.5%, and Adjusted EPS of $7.35. While Equifax continues to execute well against its EFX2026 strategic priorities, our 2024 guidance reflects an expectation of a decline of about 11% in our 2024 U.S. mortgage credit inquiries, which is consistent with the current run-rates, and compares to down 34% in 2023. Adjusted EBITDA and Adjusted EPS continue to benefit from organic revenue growth and the additional cost savings from Cloud spending reduction plans.
“We have strong momentum in 2024 and are confident in the future of the New Equifax as we deliver strong non-mortgage revenue growth, move towards completion of our Cloud transformation, leverage our new Cloud capabilities to accelerate new product roll-outs that ‘Only Equifax’ can provide, and invest in new products, data, analytics, and AI capabilities, which are expected to drive growth in 2024 and beyond. We are energized about the New Equifax and remain confident in our long-term 8-12% revenue growth framework that is expected to deliver higher margins and free cash flow.”
Financial Results Summary
The Company reported revenue of $1,430.5 million in the second quarter of 2024, up 9% on a reported basis and up 11% on a local currency basis compared to the second quarter of 2023.
Net income attributable to Equifax of $163.9 million was up 19% in the second quarter of 2024 compared to $138.3 million in the second quarter of 2023.
Diluted EPS attributable to Equifax was $1.31 per share for the second quarter of 2024, up 17% compared to $1.12 per share in the second quarter of 2023.
Workforce Solutions second quarter results:
Total revenue was $612.9 million in the second quarter of 2024, up 5% compared to the second quarter of 2023. Operating margin for Workforce Solutions was 44.5% in the second quarter of 2024 compared to 42.0% in the second quarter of 2023. Adjusted EBITDA margin for Workforce Solutions was 52.8% in the second quarter of 2024 compared to 51.5% in the second quarter of 2023.Verification Services revenue was $515.9 million, up 9% compared to the second quarter of 2023.Employer Services revenue was $97.0 million, down 11% compared to the second quarter of 2023.
USIS second quarter results:
Total revenue was $478.3 million in the second quarter of 2024, up 7% compared to the second quarter of 2023. Operating margin for USIS was 20.6% in the second quarter of 2024 compared to 23.1% in the second quarter of 2023. Adjusted EBITDA margin for USIS was 33.2% in the second quarter of 2024 compared to 36.0% in the second quarter of 2023.Online Information Solutions revenue was $377.8 million, up 5% compared to the second quarter of 2023.Mortgage Solutions revenue was $40.4 million, up 33% compared to the second quarter of 2023.Financial Marketing Services revenue was $60.1 million, up 7% compared to the second quarter of 2023.
International second quarter results:
Total revenue was $339.3 million in the second quarter of 2024, up 17% and up 28% compared to the second quarter of 2023 on a reported and local currency basis, respectively. Operating margin for International was 11.9% in both the second quarter of 2024 and the second quarter of 2023. Adjusted EBITDA margin for International was 25.6% in the second quarter of 2024, compared to 24.2% in the second quarter of 2023.Latin America revenue was $97.3 million, up 71% compared to the second quarter of 2023 on a reported basis and up 124% on a local currency basis.Europe revenue was $88.2 million, up 12% compared to the second quarter of 2023 on both a reported basis and a local currency basis.Asia Pacific revenue was $84.6 million, down 4% compared to the second quarter of 2023 on a reported basis and down 2% on a local currency basis.Canada revenue was $69.2 million, up 4% compared to the second quarter of 2023 on a reported basis and up 6% on a local currency basis.
Adjusted EPS and Adjusted EBITDA Margin:
Adjusted EPS attributable to Equifax was $1.82 in the second quarter of 2024, up 6% compared to the second quarter of 2023.Adjusted EBITDA margin was 32.0% in the second quarter of 2024 compared to 32.7% in the second quarter of 2023.These financial measures exclude certain items as described further in the Non-GAAP Financial Measures section below.
2024 Third Quarter and Full Year Guidance
Q3 2024
FY 2024
Low-End
High-End
Low-End
High-End
Reported Revenue
$1.425 billion
$1.445 billion
$5.690 billion
$5.750 billion
Reported Revenue Growth
8.0 %
9.5 %
8.1 %
9.2 %
Local Currency Growth (1)
9.9 %
11.4 %
9.9 %
11.0 %
Organic Local Currency Growth (1)
8.6 %
10.1 %
7.9 %
9.0 %
Adjusted Earnings Per Share
$1.75 per share
$1.85 per share
$7.22 per share
$7.47 per share
(1) Refer to page 8 for definitions.
About Equifax
At Equifax (NYSE: EFX), we believe knowledge drives progress. As a global data, analytics, and technology company, we play an essential role in the global economy by helping financial institutions, companies, employers, and government agencies make critical decisions with greater confidence. Our unique blend of differentiated data, analytics, and cloud technology drives insights to power decisions to move people forward. Headquartered in Atlanta and supported by nearly 15,000 employees worldwide, Equifax operates or has investments in 24 countries in North America, Central and South America, Europe, and the Asia Pacific region. For more information, visit www.equifax.com.
Earnings Conference Call and Audio Webcast
In conjunction with this release, Equifax will host a conference call on July 18, 2024 at 8:30 a.m. (ET) via a live audio webcast. To access the webcast and related presentation materials, go to the Investor Relations section of our website at www.equifax.com. The discussion will be available via replay at the same site shortly after the conclusion of the webcast. This press release is also available at that website.
Non-GAAP Financial Measures
This earnings release presents adjusted EPS attributable to Equifax which is diluted EPS attributable to Equifax adjusted (to the extent noted above for different periods) for acquisition-related amortization expense, accrual for legal and regulatory matters related to the 2017 cybersecurity incident, fair market value adjustment and gain on sale of equity investments, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, income tax effect of stock awards recognized upon vesting or settlement, Argentina highly inflationary foreign currency adjustment, and realignment of resources and other costs. All adjustments are net of tax, with a reconciling item with the aggregated tax impact of the adjustments. This earnings release also presents (i) adjusted EBITDA and adjusted EBITDA margin which is defined as consolidated net income attributable to Equifax plus net interest expense, income taxes, depreciation and amortization, and also excludes certain one-time items, (ii) local currency revenue change which is calculated by conforming 2024 results using 2023 exchange rates and (iii) organic local currency revenue growth which is defined as local currency revenue growth, adjusted to reflect an increase in prior year Equifax revenue from the revenue of acquired companies in the prior year period. These are important financial measures for Equifax but are not financial measures as defined by GAAP.
These non-GAAP financial measures should be reviewed in conjunction with the relevant GAAP financial measures and are not presented as an alternative measure of net income or EPS as determined in accordance with GAAP.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures and related notes are presented in the Q&A. This information can also be found under “Investor Relations/Financial Information/Non-GAAP Financial Measures” on our website at www.equifax.com.
Forward-Looking Statements
This release contains forward-looking statements and forward-looking information. These statements can be identified by expressions of belief, expectation or intention, as well as statements that are not historical fact. These statements are based on certain factors and assumptions including with respect to foreign exchange rates, revenue growth, results of operations and financial performance, strategic initiatives, business plans, prospects and opportunities, the U.S. mortgage market, economic conditions and effective tax rates.
While Equifax believes these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Several factors could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These factors relate to (i) actions taken by us, including, but not limited to, restructuring actions, strategic initiatives (such as our cloud technology transformation), capital investments and asset acquisitions or dispositions, as well as (ii) developments beyond our control, including, but not limited to, changes in the U.S. mortgage market environment and changes more generally in U.S. and worldwide economic conditions (such as changes in interest rates and inflation levels) that materially impact consumer spending, home prices, investment values, consumer debt, unemployment rates and the demand for Equifax’s products and services. Deteriorations in economic conditions or increases in interest rates could lead to a decline in demand for our products and services and negatively impact our business. It may also impact financial markets and corporate credit markets, which could adversely impact our access to financing or the terms of any financing.
Other risk factors relevant to our business include: (i) any compromise of Equifax, customer or consumer information due to security breaches and other disruptions to our information technology infrastructure; (ii) the failure to achieve and maintain key industry or technical certifications; (iii) the failure to realize the anticipated benefits of our cloud technology transformation strategy; (iv) operational disruptions and strain on our resources caused by our transition to cloud-based technologies; (v) our ability to meet customer requirements for high system availability and response time performance; (vi) effects on our business if we provide inaccurate or unreliable data to customers; (vii) our ability to maintain access to credit, employment, financial and other data from external sources; (viii) the impact of competition; (ix) our ability to maintain relationships with key customers; (x) our ability to successfully introduce new products, services and analytical capabilities; (xi) the impact on the demand for some of our products and services due to the availability of free or less expensive consumer information; (xii) our ability to comply with our obligations under settlement agreements arising out of the 2017 cybersecurity incident; (xiii) potential adverse developments in new and pending legal proceedings, government investigations and regulatory enforcement actions; (xiv) changes in, and the effects of, laws, regulations and government policies governing our business, including oversight by the Consumer Financial Protection Bureau in the U.S., the U.K. Financial Conduct Authority and Information Commissioner’s Office in the U.K., and the Office of Australian Information Commission and the Australian Competition and Consumer Commission in Australia; (xv) the impact of privacy laws and regulations; (xvi) the economic, political and other risks associated with international sales and operations; (xvii) the impact on our reputation and business if we are unable to fulfill our environmental, social and governance commitments; (xviii) our ability to realize the anticipated strategic and financial benefits from our acquisitions, joint ventures and other alliances; (xix) any damage to our reputation due to our dependence on outsourcing certain portions of our operations; (xx) the termination or suspension of our government contracts; (xxi) the impact of infringement or misappropriation of intellectual property by us against third parties or by third parties against us; (xxii) an increase in our cost of borrowing and our ability to access the capital markets due to a credit rating downgrade; (xxiii) our ability to hire and retain key personnel; (xxiv) the impact of adverse changes in the financial markets and corresponding effects on our retirement and post-retirement pension plans; (xxv) the impact of health epidemics, pandemics and similar outbreaks on our business; and (xxvi) risks associated with our use of certain artificial intelligence and machine learning models.
A summary of additional risks and uncertainties can be found in our Annual Report on Form 10-K for the year ended December 31, 2023 including, without limitation, under the captions “Item 1. Business — Governmental Regulation” and “– Forward-Looking Statements” and “Item 1A. Risk Factors” and in our other filings with the U.S. Securities and Exchange Commission. Forward-looking statements are given only as at the date of this release and Equifax disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
EQUIFAX INC.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended June 30,
2024
2023
(In millions, except per share amounts)
(Unaudited)
Operating revenue
$ 1,430.5
$ 1,317.6
Operating expenses:
Cost of services (exclusive of depreciation and amortization below)
630.9
588.0
Selling, general and administrative expenses
352.6
343.1
Depreciation and amortization
164.8
149.6
Total operating expenses
1,148.3
1,080.7
Operating income
282.2
236.9
Interest expense
(57.3)
(60.7)
Other (expense) income, net
(0.3)
15.9
Consolidated income before income taxes
224.6
192.1
Provision for income taxes
(59.4)
(52.7)
Consolidated net income
165.2
139.4
Less: Net income attributable to noncontrolling interests including redeemable noncontrolling interests
(1.3)
(1.1)
Net income attributable to Equifax
$ 163.9
$ 138.3
Basic earnings per common share:
Net income attributable to Equifax
$ 1.32
$ 1.13
Weighted-average shares used in computing basic earnings per share
123.7
122.7
Diluted earnings per common share:
Net income attributable to Equifax
$ 1.31
$ 1.12
Weighted-average shares used in computing diluted earnings per share
124.8
123.8
Dividends per common share
$ 0.39
$ 0.39
EQUIFAX INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2024
December 31, 2023
(In millions, except par values)
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$ 181.9
$ 216.8
Trade accounts receivable, net of allowance for doubtful accounts of $16.7 at June 30, 2024 and December 31, 2023
1,012.4
908.2
Prepaid expenses
148.5
142.5
Other current assets
74.8
88.8
Total current assets
1,417.6
1,356.3
Property and equipment:
Capitalized internal-use software and system costs
2,698.0
2,541.0
Data processing equipment and furniture
253.7
247.9
Land, buildings and improvements
283.9
272.9
Total property and equipment
3,235.6
3,061.8
Less accumulated depreciation and amortization
(1,350.3)
(1,227.8)
Total property and equipment, net
1,885.3
1,834.0
Goodwill
6,746.5
6,829.9
Indefinite-lived intangible assets
94.8
94.8
Purchased intangible assets, net
1,690.3
1,858.8
Other assets, net
317.8
306.2
Total assets
$ 12,152.3
$ 12,280.0
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt and current maturities of long-term debt
$ 769.6
$ 963.4
Accounts payable
201.9
197.6
Accrued expenses
238.4
245.1
Accrued salaries and bonuses
144.6
168.7
Deferred revenue
104.6
109.5
Other current liabilities
327.8
334.7
Total current liabilities
1,786.9
2,019.0
Long-term debt
4,742.7
4,747.8
Deferred income tax liabilities, net
426.6
474.9
Long-term pension and other postretirement benefit liabilities
95.8
100.1
Other long-term liabilities
266.7
250.7
Total liabilities
7,318.7
7,592.5
Redeemable noncontrolling interests
120.8
135.1
Equifax shareholders’ equity:
Preferred stock, $0.01 par value: Authorized shares – 10.0; Issued shares – none
—
—
Common stock, $1.25 par value: Authorized shares – 300.0;
Issued shares – 189.3 at June 30, 2024 and December 31, 2023;
Outstanding shares – 123.7 and 123.3 at June 30, 2024 and December 31, 2023, respectively
236.6
236.6
Paid-in capital
1,856.8
1,761.3
Retained earnings
5,800.4
5,608.6
Accumulated other comprehensive loss
(544.3)
(431.2)
Treasury stock, at cost, 65.0 and 65.4 shares at June 30, 2024 and December 31, 2023, respectively
(2,647.6)
(2,635.3)
Stock held by employee benefits trusts, at cost, 0.6 shares at June 30, 2024 and December 31, 2023
(5.9)
(5.9)
Total Equifax shareholders’ equity
4,696.0
4,534.1
Noncontrolling interests
16.8
18.3
Total shareholders’ equity
4,712.8
4,552.4
Total liabilities, redeemable noncontrolling interests, and shareholders’ equity
$ 12,152.3
$ 12,280.0
EQUIFAX INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30,
2024
2023
(In millions)
(Unaudited)
Operating activities:
Consolidated net income
$ 291.2
$ 252.9
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization
333.5
304.3
Stock-based compensation expense
60.3
52.2
Deferred income taxes
(39.6)
(5.6)
Gain on fair market value adjustment and gain on sale of equity investments
—
(13.6)
Changes in assets and liabilities, excluding effects of acquisitions:
Accounts receivable, net
(111.0)
(75.3)
Other assets, current and long-term
3.8
(10.0)
Current and long term liabilities, excluding debt
(18.0)
(91.9)
Cash provided by operating activities
520.2
413.0
Investing activities:
Capital expenditures
(268.6)
(321.3)
Acquisitions, net of cash acquired
—
(4.3)
Cash received from divestitures
—
6.9
Cash used in investing activities
(268.6)
(318.7)
Financing activities:
Net short-term payments
(194.2)
(411.2)
Payments on long-term debt
(8.8)
(575.0)
Borrowings on long-term debt
—
872.9
Dividends paid to Equifax shareholders
(96.4)
(95.6)
Distributions paid to noncontrolling interests
(3.4)
(2.1)
Proceeds from exercise of stock options and employee stock purchase plan
38.1
16.5
Payment of taxes related to settlement of equity awards
(16.0)
(16.9)
Debt issuance costs
—
(5.8)
Cash used in financing activities
(280.7)
(217.2)
Effect of foreign currency exchange rates on cash and cash equivalents
(5.8)
1.8
Decrease in cash and cash equivalents
(34.9)
(121.1)
Cash and cash equivalents, beginning of period
216.8
285.2
Cash and cash equivalents, end of period
$ 181.9
$ 164.1
Common Questions & Answers (Unaudited)
(Dollars in millions)
1. Can you provide a further analysis of operating revenue by operating segment?
Operating revenue consists of the following components:
(In millions)
Three Months Ended June 30,
Local
Currency
Organic
Local
Currency
Operating revenue:
2024
2023
$ Change
% Change
% Change (1)
% Change (2)
Verification Services
$ 515.9
$ 474.0
$ 41.9
9 %
9 %
Employer Services
97.0
108.8
(11.8)
(11) %
(11) %
Total Workforce Solutions
612.9
582.8
30.1
5 %
5 %
Online Information Solutions
377.8
358.6
19.2
5 %
5 %
Mortgage Solutions
40.4
30.3
10.1
33 %
33 %
Financial Marketing Services
60.1
56.1
4.0
7 %
7 %
Total U.S. Information Solutions
478.3
445.0
33.3
7 %
7 %
Latin America
97.3
56.9
40.4
71 %
124 %
30 %
Europe
88.2
78.7
9.5
12 %
12 %
12 %
Asia Pacific
84.6
87.7
(3.1)
(4) %
(2) %
(2) %
Canada
69.2
66.5
2.7
4 %
6 %
6 %
Total International
339.3
289.8
49.5
17 %
28 %
12 %
Total operating revenue
$ 1,430.5
$ 1,317.6
$ 112.9
9 %
11 %
8 %
(1)
Local currency revenue change is calculated by conforming 2024 results using 2023 exchange rates.
(2)
Organic local currency revenue growth is defined as local currency revenue growth, adjusted to reflect an increase in prior year Equifax revenue from the revenue of acquired companies in the prior year period. This adjustment is made for 12 months following the acquisition.
2. What is the estimate of the change in overall U.S. mortgage market credit inquiry volume that is included in the 2024 third quarter and full year guidance provided?
The change year over year in total U.S. mortgage market credit inquiries received by Equifax in the second quarter of 2024 was a decline of 13%. The guidance provided on page 3 assumes a change year over year in total U.S. mortgage market credit inquiries received by Equifax in the third quarter of 2024 to be a decline of about 7%. For full year 2024, our guidance assumes a decline of about 11%.
Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Financial Measures (Unaudited)
(Dollars in millions, except per share amounts)
A. Reconciliation of net income attributable to Equifax to diluted EPS attributable to Equifax, defined as net income adjusted for acquisition-related amortization expense, accrual for legal and regulatory matters related to the 2017 cybersecurity incident, fair market value adjustment and gain on sale of equity investments, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, income tax effect of stock awards recognized upon vesting or settlement, Argentina highly inflationary foreign currency adjustment, realignment of resources and other costs and aggregated tax impact of these adjustments:
Three Months Ended June 30,
(In millions, except per share amounts)
2024
2023
$ Change
% Change
Net income attributable to Equifax
$ 163.9
$ 138.3
$ 25.6
19 %
Acquisition-related amortization expense of certain acquired intangibles (1)
65.3
60.3
5.0
8 %
Accrual for legal and regulatory matters related to the 2017 cybersecurity incident (2)
—
0.3
(0.3)
nm
Fair market value adjustment and gain on sale of equity investments (3)
—
(10.5)
10.5
nm
Foreign currency impact of certain intercompany loans (4)
0.4
(1.8)
2.2
nm
Acquisition-related costs other than acquisition amortization (5)
14.5
26.9
(12.4)
(46) %
Income tax effects of stock awards that are recognized upon vesting or settlement (6)
(0.6)
(0.8)
0.2
(25) %
Argentina highly inflationary foreign currency adjustment (7)
0.1
0.1
—
— %
Realignment of resources and other costs (8)
—
17.5
(17.5)
nm
Tax impact of adjustments (9)
(17.0)
(18.5)
1.5
(8) %
Net income attributable to Equifax, adjusted for items listed above
$ 226.6
$ 211.8
$ 14.8
7 %
Diluted EPS attributable to Equifax, adjusted for items listed above
$ 1.82
$ 1.71
$ 0.11
6 %
Weighted-average shares used in computing diluted EPS
124.8
123.8
(1)
During the second quarter of 2024, we recorded acquisition-related amortization expense of certain acquired intangibles of $65.3 million ($52.0 million, net of tax). We calculate this financial measure by excluding the impact of acquisition-related amortization expense and including a benefit to reflect the significant cash income tax savings resulting from the income tax deductibility of amortization for certain acquired intangibles. The $13.3 million of tax is comprised of $17.4 million of tax expense net of $4.1 million of a cash income tax benefit. During the second quarter of 2023, we recorded acquisition-related amortization expense of certain acquired intangibles of $60.3 million ($49.0 million, net of tax). The $11.3 million of tax is comprised of $15.4 million of tax expense net of $4.1 million of a cash income tax benefit. See the Notes to this reconciliation for additional detail.
(2)
During the second quarter of 2023, we recorded an accrual for legal and regulatory matters related to the 2017 cybersecurity incident of $0.3 million ($0.2 million, net of tax). See the Notes to this reconciliation for additional detail.
(3)
During the second quarter of 2023, we recorded an unrealized gain on the fair market value adjustment and gain on sale of equity investments of $10.5 million ($6.8 million, net of tax). The fair value adjustments were recorded to the Other income, net line item within the Consolidated Statements of Income. See the Notes to this reconciliation for additional details.
(4)
During the second quarter of 2024, we recorded a foreign currency loss on certain intercompany loans of $0.4 million. During the second quarter of 2023, we recorded a foreign currency gain on certain intercompany loans of $1.8 million. The impact was recorded to the Other income, net line item within the Consolidated Statements of Income. See the Notes to this reconciliation for additional detail.
(5)
During the second quarter of 2024, we recorded $14.5 million ($10.8 million, net of tax) for acquisition-related costs other than acquisition amortization. During the second quarter of 2023, we recorded $26.9 million ($21.2 million, net of tax) for acquisition-related costs other than acquisition amortization. These costs primarily related to integration costs resulting from recent acquisition activity and were recorded in operating income. See the Notes to this reconciliation for additional detail.
(6)
During the second quarter of 2024, we recorded a tax benefit of $0.6 million related to the tax effects of deductions for stock compensation in excess of amounts recorded for compensation costs. During the second quarter of 2023, we recorded a tax benefit of $0.8 million related to the tax effects of deductions for stock compensation expense in excess of amounts recorded for compensation costs. See the Notes to this reconciliation for additional detail.
(7)
Argentina experienced multiple periods of increasing inflation rates, devaluation of the peso, and increasing borrowing rates. As such, Argentina was deemed a highly inflationary economy by accounting policymakers in 2018. During both the second quarter of 2024 and 2023, we recorded a foreign currency loss of $0.1 million related to the impact of remeasuring the peso denominated monetary assets and liabilities as a result of Argentina being a highly inflationary economy. See the Notes to this reconciliation for additional detail.
(8)
During the second quarter of 2023, we recorded $17.5 million ($12.4 million, net of tax) of restructuring charges for the realignment of resources and other costs, which predominantly related to the reduction of headcount and the realignment of our internal resources to support the Company’s strategic objectives. See the Notes to this reconciliation for additional detail.
(9)
During the second quarter of 2024, we recorded the tax impact of adjustments of $17.0 million comprised of (i) acquisition-related amortization expense of certain acquired intangibles of $13.3 million ($17.4 million of tax expense net of $4.1 million of cash income tax benefit) and (ii) a tax adjustment of $3.7 million related to acquisition-related costs other than acquisition amortization.
During the second quarter of 2023, we recorded the tax impact of adjustments of $18.5 million comprised of (i) acquisition-related amortization expense of certain acquired intangibles of $11.3 million ($15.4 million of tax expense net of $4.1 million of cash income tax benefit), (ii) a tax adjustment of $0.1 million related to an accrual for legal and regulatory matters related to the 2017 cybersecurity incident, (iii) a tax adjustment of $3.7 million related to the fair market value adjustment and gain on sale of equity investments, (iv) a tax adjustment of $5.1 million related to the realignment of internal resources and other costs, and (v) a tax adjustment of $5.7 million related to acquisition-related costs other than acquisition amortization.
B. Reconciliation of net income attributable to Equifax to adjusted EBITDA, defined as net income excluding income taxes, interest expense, net, depreciation and amortization expense, accrual for legal and regulatory matters related to the 2017 cybersecurity incident, fair market value adjustment and gain on sale of equity investments, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, Argentina highly inflationary foreign currency adjustment, realignment of resources and other costs and presentation of adjusted EBITDA margin:
Three Months Ended June 30,
(In millions)
2024
2023
$ Change
% Change
Revenue
$ 1,430.5
$ 1,317.6
$ 112.9
9 %
Net income attributable to Equifax
$ 163.9
$ 138.3
$ 25.6
19 %
Income taxes
59.4
52.7
6.7
13 %
Interest expense, net*
54.6
58.2
(3.6)
(6) %
Depreciation and amortization
164.8
149.6
15.2
10 %
Accrual for legal and regulatory matters related to 2017 cybersecurity incident (1)
—
0.3
(0.3)
nm
Fair market value adjustment and gain on sale of equity investments (2)
—
(10.5)
10.5
nm
Foreign currency impact of certain intercompany loans (3)
0.4
(1.8)
2.2
nm
Acquisition-related amounts other than acquisition amortization (4)
14.5
26.9
(12.4)
(46) %
Argentina highly inflationary foreign currency adjustment (5)
0.1
0.1
—
— %
Realignment of resources and other costs (6)
—
17.5
(17.5)
nm
Adjusted EBITDA, excluding the items listed above
$ 457.7
$ 431.3
$ 26.4
6 %
Adjusted EBITDA margin
32.0 %
32.7 %
nm – not meaningful
*Excludes interest income of $2.7 million in 2024 and $2.5 million in 2023.
(1)
During the second quarter of 2023, we recorded an accrual for legal and regulatory matters related to the 2017 cybersecurity incident of $0.3 million ($0.2 million, net of tax). See the Notes to this reconciliation for additional detail.
(2)
During the second quarter of 2023, we recorded an unrealized gain on the fair market value adjustment and gain on sale of equity investments of $10.5 million ($6.8 million, net of tax). The fair value adjustments were recorded to the Other income, net line item within the Consolidated Statements of Income. See the Notes to this reconciliation for additional details.
(3)
During the second quarter of 2024, we recorded a foreign currency loss on certain intercompany loans of $0.4 million. During the second quarter of 2023, we recorded a foreign currency gain on certain intercompany loans of $1.8 million. See the Notes to this reconciliation for additional detail.
(4)
During the second quarter of 2024, we recorded $14.5 million ($10.8 million, net of tax) for acquisition-related costs other than acquisition amortization. During the second quarter of 2023, we recorded $26.9 million ($21.2 million, net of tax) for acquisition-related costs other than acquisition amortization. These costs primarily related to integration costs resulting from recent acquisition activity and were recorded in operating income. See the Notes to this reconciliation for additional detail.
(5)
Argentina experienced multiple periods of increasing inflation rates, devaluation of the peso, and increasing borrowing rates. As such, Argentina was deemed a highly inflationary economy by accounting policymakers in 2018. During both the second quarter of 2024 and 2023, we recorded a foreign currency loss of $0.1 million related to the impact of remeasuring the peso denominated monetary assets and liabilities as a result of Argentina being a highly inflationary economy. See the Notes to this reconciliation for additional detail.
(6)
During the second quarter of 2023, we recorded $17.5 million ($12.4 million, net of tax) of restructuring charges for the realignment of resources and other costs, which predominantly related to the reduction of headcount and the realignment of our internal resources to support the Company’s strategic objectives. See the Notes to this reconciliation for additional detail.
C. Reconciliation of operating income by segment to adjusted EBITDA, excluding depreciation and amortization expense, other income, net, noncontrolling interest, accrual for legal and regulatory matters related to the 2017 cybersecurity incident, fair market value adjustment and gain on sale of equity investments, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, Argentina highly inflationary foreign currency adjustment, realignment of resources and other costs and presentation of adjusted EBITDA margin for each of the segments:
(In millions)
Three Months Ended June 30, 2024
Workforce
Solutions
U.S.
Information
Solutions
International
General
Corporate
Expense
Total
Revenue
$ 612.9
$ 478.3
$ 339.3
—
$ 1,430.5
Operating income
272.7
98.6
40.4
(129.5)
282.2
Depreciation and amortization
44.4
57.0
43.5
19.9
164.8
Other income (expense), net*
—
0.3
0.6
(3.9)
(3.0)
Noncontrolling interest
—
—
(1.3)
—
(1.3)
Adjustments (1)
6.6
2.7
3.7
2.0
15.0
Adjusted EBITDA
$ 323.7
$ 158.6
$ 86.9
$ (111.5)
$ 457.7
Operating margin
44.5 %
20.6 %
11.9 %
nm
19.7 %
Adjusted EBITDA margin
52.8 %
33.2 %
25.6 %
nm
32.0 %
nm – not meaningful
*Excludes interest income of $2.1 million in International and $0.6 million in General Corporate Expense.
(In millions)
Three Months Ended June 30, 2023
Workforce
Solutions
U.S.
Information
Solutions
International
General
Corporate
Expense
Total
Revenue
$ 582.8
$ 445.0
$ 289.8
—
$ 1,317.6
Operating income
244.6
102.8
34.4
(144.9)
236.9
Depreciation and amortization
44.3
50.5
33.6
21.2
149.6
Other income, net*
—
0.7
12.2
0.5
13.4
Noncontrolling interest
—
—
(1.1)
—
(1.1)
Adjustments (1)
11.2
6.0
(8.9)
24.2
32.5
Adjusted EBITDA
$ 300.1
$ 160.0
$ 70.2
$ (99.0)
$ 431.3
Operating margin
42.0 %
23.1 %
11.9 %
nm
18.0 %
Adjusted EBITDA margin
51.5 %
36.0 %
24.2 %
nm
32.7 %
nm – not meaningful
*Excludes interest income of $0.9 million in International and $1.6 million in General Corporate Expense.
(1)
During the second quarter of 2024, we recorded pre-tax expenses of $0.4 million for a foreign currency loss on certain intercompany loans, $14.5 million for acquisition-related costs other than acquisition amortization, and a foreign currency loss of $0.1 million related to the impact of remeasuring the peso denominated monetary assets and liabilities as a result of Argentina being a highly inflationary economy.
During the second quarter of 2023, we recorded pre-tax expenses of $0.3 million for an accrual for legal and regulatory matters related to the 2017 cybersecurity incident, a $10.5 million unrealized gain on the fair market value adjustment and gain on sale of equity investments, a $1.8 million foreign currency gain on certain intercompany loans, $26.9 million in acquisition-related costs other than acquisition amortization, a $0.1 million foreign currency loss related to the impact of remeasuring the peso denominated monetary assets and liabilities as a result of Argentina being a highly inflationary economy, and $17.5 million of restructuring charges for the realignment of resources and other costs.
Notes to Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Financial Measures
Diluted EPS attributable to Equifax is adjusted for the following items:
Acquisition-related amortization expense – During the second quarter of 2024 and 2023, we recorded acquisition-related amortization expense of certain acquired intangibles of $65.3 million ($52.0 million, net of tax) and $60.3 million ($49.0 million, net of tax), respectively. We calculate this financial measure by excluding the impact of acquisition-related amortization expense and including a benefit to reflect the material cash income tax savings resulting from the income tax deductibility of amortization for certain acquired intangibles. These financial measures are not prepared in conformity with GAAP. Management believes excluding the impact of amortization expense is useful because excluding acquisition-related amortization and other items that are not comparable allows investors to evaluate our performance for different periods on a more comparable basis. Certain acquired intangibles result in material cash income tax savings which are not reflected in earnings. Management believes that including a benefit to reflect the cash income tax savings is useful as it allows investors to better value Equifax. Management makes these adjustments to earnings when measuring profitability, evaluating performance trends, setting performance objectives and calculating our return on invested capital.
Accrual for legal and regulatory matters related to the 2017 cybersecurity incident – Accrual for legal and regulatory matters related to the 2017 cybersecurity incident includes legal fees to respond to subsequent litigation and government investigations for both periods presented. During the second quarter of 2023, we recorded an accrual for legal and regulatory matters related to the 2017 cybersecurity incident of $0.3 million ($0.2 million, net of tax). Management believes excluding this charge is useful as it allows investors to evaluate our performance for different periods on a more comparable basis. Management makes these adjustments to net income when measuring profitability, evaluating performance trends, setting performance objectives and calculating our return on invested capital. This is consistent with how management reviews and assesses Equifax’s historical performance and is useful when planning, forecasting and analyzing future periods.
Fair market value adjustment and gain on sale of equity investments – On August 7, 2023, we purchased the remaining interest of our equity investment in Brazil. Prior to the acquisition, the investment in Brazil was adjusted to fair value at the end of each reporting period, with unrealized gains or losses recorded within the Consolidated Statements of Income in Other income, net. During the second quarter of 2023, we recorded a $10.5 million ($6.8 million, net of tax) unrealized gain related to adjusting our investment in Brazil to fair market value and gain related to the sale of an equity method investment. Management believes excluding this charge from certain financial results provides meaningful supplemental information regarding our financial results for the three months ended June 30, 2023, since the non-operating gain is not comparable among the periods. This is consistent with how our management reviews and assesses Equifax’s historical performance and is useful when planning, forecasting and analyzing future periods.
Foreign currency impact of certain intercompany loans – During the second quarter of 2024 and 2023, we recorded a loss of $0.4 million and a gain of $1.8 million, respectively, related to foreign currency impact of certain intercompany loans. Management believes excluding this charge is useful as it allows investors to evaluate our performance for different periods on a more comparable basis. This is consistent with how management reviews and assesses Equifax’s historical performance and is useful when planning, forecasting and analyzing future periods.
Acquisition-related costs other than acquisition amortization – During the second quarter of 2024 and 2023, we recorded $14.5 million ($10.8 million, net of tax) and $26.9 million ($21.2 million, net of tax), respectively, for acquisition-related costs other than acquisition amortization. These costs primarily related to integration costs resulting from recent acquisitions and were recorded in operating income. Management believes excluding this charge from certain financial results provides meaningful supplemental information regarding our financial results, since a charge of such an amount is not comparable among the periods. This is consistent with how our management reviews and assesses Equifax’s historical performance and is useful when planning, forecasting, and analyzing future periods.
Income tax effects of stock awards that are recognized upon vesting or settlement – During the second quarter of 2024, we recorded a tax benefit of $0.6 million related to the tax effects of deductions for stock compensation in excess of amounts recorded for compensation costs. During the second quarter of 2023, we recorded a tax benefit of $0.8 million related to the tax effects of deductions for stock compensation in excess of amounts recorded for compensation costs. Management believes excluding this tax effect from financial results provides meaningful supplemental information regarding our financial results for the three months ended June 30, 2024 and 2023 because these amounts are non-operating and relate to income tax benefits or deficiencies for stock awards recognized when tax amounts differ from recognized stock compensation cost. This is consistent with how management reviews and assesses Equifax’s historical performance and is useful when planning, forecasting and analyzing future periods.
Argentina highly inflationary foreign currency adjustment – Argentina experienced multiple periods of increasing inflation rates, devaluation of the peso, and increasing borrowing rates. As such, Argentina was deemed a highly inflationary economy by accounting policymakers. We recorded a foreign currency loss of $0.1 million during both the second quarter of 2024 and 2023 as a result of remeasuring the peso denominated monetary assets and liabilities due to Argentina being highly inflationary. Management believes excluding this charge is useful as it allows investors to evaluate our performance for different periods on a more comparable basis. This is consistent with how management reviews and assesses Equifax’s historical performance and is useful when planning, forecasting and analyzing future periods.
Charge related to the realignment of resources and other costs – During the second quarter of 2023, we recorded $17.5 million ($12.4 million, net of tax) of restructuring charges for the realignment of resources and other costs, which predominantly relates to the reduction of headcount and the realignment of our internal resources to support the Company’s strategic objectives. Management believes excluding this charge from certain financial results provides meaningful supplemental information regarding our financial results for the three months ended June 30, 2023, since the charges are not comparable among the periods. This is consistent with how our management reviews and assesses Equifax’s historical performance and is useful when planning, forecasting and analyzing future periods.
Adjusted EBITDA and EBITDA margin – Management defines adjusted EBITDA as consolidated net income attributable to Equifax plus net interest expense, income taxes, depreciation and amortization and also excludes certain one-time items. Management believes the use of adjusted EBITDA and adjusted EBITDA margin allows investors to evaluate our performance for different periods on a more comparable basis.
Contact:
Trevor Burns
Kate Walker
Investor Relations
Media Relations
trevor.burns@equifax.com
mediainquiries@equifax.com
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SOURCE Equifax Inc.
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NAVER Partners with Brookfield and NVIDIA to Expand Korea’s National AI Factory Infrastructure Buildout
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SAN FRANCISCO, July 25, 2026 /PRNewswire/ — NAVER, Brookfield and NVIDIA announced an expansion of Korea’s sovereign AI factory infrastructure. New investments will increase the initial NVIDIA DSX™ AI factory deployment from 55 megawatts to 200 megawatts.
Announced during Korea President Jae Myung Lee’s AI Summit visit to San Francisco, the planned 200-megawatt expansion will be built with the NVIDIA DSX platform at NAVER’s GAK Sejong hyperscale data center in Sejong, South Korea. The expanded infrastructure will provide Korea- and U.S.- based AI innovators with access to production-scale AI compute for building next-generation models, agents and AI-powered services.
Under the terms of the agreements, Brookfield will fund up to $9 billion as the exclusive capital partner, NVIDIA will invest $1 billion and NAVER will fund the remaining amount to finance the $10 billion project.
This builds on NAVER’s June announcement to extend its GAK Sejong data center with NVIDIA DSX, with a long-term path to gigawatt-scale sovereign AI infrastructure serving Korea’s enterprises, industries, government organizations and global AI cloud customers. Combining Brookfield’s capital with NVIDIA’s computing platform, the investment supports NAVER’s AI factory deployment.
“NVIDIA’s strategic investment and our infrastructure supply agreement with Brookfield have propelled NAVER’s vision for the AI Factory business into a robust execution phase,” said Haejin Lee, Founder and Chairman of NAVER. “Leveraging the solid partnerships with our global partners, we will drive technological innovation, foster a sovereign AI ecosystem, and spearhead efforts to strengthen South Korea’s AI competitiveness.”
AI Factory Expansion and Open Model Collaboration to Fuel AI Innovators
NAVER, as an NVIDIA Cloud Partner, provides deep expertise in operating hyperscale infrastructure powered by the full-stack NVIDIA AI platform. The 200-megawatt AI factory, featuring NVIDIA Vera Rubin and Blackwell platforms, will establish a dedicated resource pool for emerging AI companies, providing the compute, software and support needed to develop and deploy competitive AI models and applications at scale.
This expanded infrastructure also builds on NAVER and NVIDIA’s collaboration on open model development for agentic and physical AI. NAVER is advancing its HyperCLOVA X models to be based on NVIDIA Nemotron™ 3 Ultra open models with its proprietary data and training expertise. NAVER is also the first Korean company to join the NVIDIA Nemotron Coalition, contributing to open model development across pretraining, post-training and reinforcement learning.
NAVER plans to launch an AI agent platform in Korea in the second half of the year, powered by NVIDIA Agent Toolkit software including NVIDIA NemoClaw™ blueprints. NAVER is also developing a Seoul World Model using proprietary urban street-view and spatial modeling data, built on NVIDIA Cosmos™ world foundation models.
About NAVER
Founded in 1999, NAVER is Korea’s largest Internet company and one of the world’s top tech companies. Leading cutting-edge technologies, NAVER operates the No.1 search engine in Korea and holds various business portfolios encompassing commerce, fintech, cloud, AI and robotics.
NAVER recorded sales of KRW 12.04 trillion (USD 8.18 billion) in 2025. TEAM NAVER continues to enhance its business portfolio and expand its global presence across Japan, North America, and Europe, while pursuing innovation through continuous research and development in future technologies.
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Beijing Review: Walking Through Time: China and U.S. Youths Explore Dali’s Past and Future
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BEIJING, July 24, 2026 /PRNewswire/ — On July 17, a China-U.S. youth delegation came to Dali of Yunnan Province. By examining how Dali’s rich history intersects with modern development, the delegates explored new pathways for rural development.
They visited Dali Old Town, tried their hand at making the Bai people’s Three-Course Tea and also explored the ancient town of Xizhou, where they learned how modern tourism and indigenous life coexist.
In Yunnanyi Village, they explored its history as a stop along the Tea Horse Road and learned about the role it played during the Second World War (WWII).
Tyler James Smith
“I think it’s a very underappreciated part of World War II history. Hearing these stories of different countries working together despite cultural differences is incredibly inspiring.
I also think there are many stories like these that haven’t been widely told, simply because World War II is such a complex period in history. That’s why I think it’s so meaningful to visit museums like this and experience these stories firsthand.”
At Xiangyun Economic and Technological Development Zone, they visited a local new energy company to see how green, low-carbon development is driving regional growth.
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“I recently started studying energy transitions. I know China has been really big in the renewable energy sector. So actually getting to hear more about [China’s] 2060 [pledge], learning more about carbon neutrality [goals], as well as other zero-carbon goals, was cool.”
During their stay in Dali, they also strolled along the Erhai Lake Ecological Corridor.
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“I’d describe this journey as “to be continued,” because my own connection with Yunnan is far from over. For the U.S. delegates, this was only their first visit, so they’ve only had a glimpse of what Yunnan has to offer. I hope they will have more opportunities to come back to China, explore other cities in Yunnan, and discover even more of its people, culture and traditions.”
After Dali, the delegates will visit Beijing for more tours and exchanges. The event was co-hosted by China International Communications Group (CICG) Center for the Americas and the U.S.-based International Student Conferences.
https://x.com/beijingreview/status/2080104404552663067?s=46&t=yfVMVdMyE2zKAFrYaLoV-g
https://www.facebook.com/share/v/1EtGCCKzy4/?mibextid=wwXIfr
https://youtu.be/jGONWTqwduc?is=KfL-Zn3HyVYE-KEm
Contact: Jiaweibellapeng@163.com
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SOURCE Beijing Review
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Hyundai Motor Group Executive Chair Euisun Chung Announces Physical AI Vision at San Francisco AI Summit
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July 25, 2026By
Hyundai Motor Group shares roadmap for realizing its Physical AI vision and collaboration strategy with global tech leaders at the San Francisco AI SummitExecutive Chair Euisun Chung presented, “Hyundai Motor Group is evolving beyond the traditional boundaries of automotive manufacturing to become a Physical AI solution company,” adding, “The ultimate Physical AI vision we pursue is the realization of integrated intelligence at the city level”The Group to leverage manufacturing competitiveness and leading robotics capabilities centered on Boston Dynamics, while establishing a data flywheel system connecting real-world operational data with continuous AI model advancementThe Group to leverage strategic partnerships with global technology leaders, including NVIDIA and Waymo, as well as Boston Dynamics’ strategic partnership with Google DeepMindThe Group to collaborate with NVIDIA to develop a Robot Reference Platform that combines Hyundai Motor Group’s and NVIDIA’s Physical AI capabilities
… The initiative to support Korea’s Physical AI industry through an open ecosystem
The Group to cultivate strategic domestic hubs through investments in Saemangeum AI Valley and future advanced industries in Korea’s Yeongnam region
SAN FRANCISCO, July 25, 2026 /PRNewswire/ — Hyundai Motor Group (the Group) Executive Chair Euisun Chung today outlined the Group’s vision and strategy for Physical AI at the San Francisco AI Summit held in San Francisco, California.
The event brought together approximately 150 attendees, including Executive Chair Chung, business leaders from major Korean companies, executives from leading U.S. technology firms, startup representatives and students.
At the summit, Executive Chair Chung presented the Group’s roadmap for advancing Physical AI and outlined strategic collaboration plans with global technology leaders.
“Hyundai Motor Group is evolving beyond the traditional boundaries of automotive manufacturing by expanding into autonomous driving, robotics and AI Defined Factories, accelerating our transformation into a Physical AI solution company.” — Hyundai Motor Group Executive Chair Euisun Chung
Accelerating the Transition to a Physical AI Solution Company
Hyundai Motor Group’s Physical AI vision extends beyond intelligent devices such as vehicles and robots to intelligent spaces, including AI factories where AI seamlessly connects and optimizes entire operations. Ultimately, the Group envisions integrated intelligence at the city level, where urban infrastructure is organically connected and operated through AI.
A key differentiator for the Group is its ability to create a data flywheel that continuously connects real-world operations with AI advancement. Drawing on extensive experience in large-scale manufacturing, mobility, robotics and service operations, the Group is positioned to deploy, refine and scale Physical AI technologies in real industrial environments.
Executive Chair Chung also outlined strategic partnerships with leading technology companies, including NVIDIA and Waymo, as well as Boston Dynamics’ strategic partnership with Google DeepMind, to further advance Physical AI capabilities.
By combining Hyundai Motor Group’s manufacturing competitiveness, mobility and robotics technologies and extensive operational data with the AI infrastructure and algorithm capabilities of global technology leaders, the Group aims to help foster a new innovation ecosystem for the Physical AI era.
Executive Chair Chung also introduced initiatives designed to support the growth of Korea’s robotics and AI ecosystem, including the development of a Robot Reference Platform with NVIDIA that combines Hyundai Motor Group’s and NVIDIA’s Physical AI capabilities, as well as investments in initiatives such as the Saemangeum AI Valley.
Physical AI Vision: From Intelligent Devices to Integrated Intelligence at the City Level
During the summit, Executive Chair Chung presented Hyundai Motor Group’s Physical AI vision.
“The ultimate Physical AI vision Hyundai Motor Group pursues begins with intelligent devices such as vehicles and robots, expands to intelligent spaces such as AI factories, and ultimately realizes integrated intelligence at the city level, where urban infrastructure is seamlessly connected and operated.” — Hyundai Motor Group Executive Chair Chung
The Group’s vision begins with intelligent devices, where AI capabilities enhance vehicles and robots. It then expands to intelligent spaces, including AI factories where AI autonomously integrates logistics, production and quality management across entire operations.
Ultimately, Hyundai Motor Group envisions city-level intelligence, where critical infrastructure and assets — including energy, mobility and robotics systems — are connected and optimized in real time.
Executive Chair Chung also highlighted the Group’s key strengths in realizing its Physical AI vision:
World-class manufacturing competitiveness: Hyundai Motor Group has built extensive expertise through decades of operating global manufacturing facilities, managing quality systems and optimizing supply chains. This foundation enables the Group to apply AI technologies to products, processes and services while rapidly validating and scaling innovations in real-world environments.Leading robotics capabilities: Hyundai Motor Group has established robotics as a key pillar of its future business portfolio. Boston Dynamics’ quadruped robot Spot®, logistics robot Stretch®, and Hyundai Motor Group Robotics LAB’s next-generation mobile robot platform MobED are recognized for combining technological competitiveness with real-world applicability.
In particular, the humanoid robot Atlas® is emerging as a representative example of Physical AI, supporting and collaborating with people across manufacturing, logistics and mobility environments.
Establishing a data flywheel system: Hyundai Motor Group is establishing a data flywheel system that leverages data generated across manufacturing operations, vehicles, logistics systems and robotics demonstrations to continuously advance AI models. Enhanced algorithms are then reapplied to real-world operations, creating a virtuous cycle that improves performance and strengthens Physical AI capabilities.
Accelerating the Future of Physical AI Through Partnerships with Global Tech Leaders
Executive Chair Chung also outlined concrete initiatives to position Hyundai Motor Group as a leader in human-centered Physical AI through strategic collaborations with NVIDIA and Waymo, as well as Boston Dynamics’ strategic partnership with Google DeepMind.
“By combining Hyundai Motor Group’s strengths in manufacturing, robotics and data with the capabilities of global technology leaders, we can help create a new innovation ecosystem for the Physical AI era.” — Hyundai Motor Group Executive Chair Euisun Chung
NVIDIA – Advancing Physical AI infrastructure and talent development
Hyundai Motor Group is expanding collaboration with NVIDIA to strengthen Physical AI infrastructure and cultivate AI talent. Building on a supply agreement for 50,000 NVIDIA Blackwell GPUs and a memorandum of understanding signed last year to advance Korea’s Physical AI capabilities, the Group is pursuing a range of initiatives, including the establishment of Hyundai Motor Group Robot Application Center, as well as various collaborations aimed at strengthening Korea’s Physical AI infrastructure and AI talent ecosystem, including the NVIDIA’s AI Technology Center.
In manufacturing, the Group is leveraging NVIDIA’s platform to create more sophisticated digital twins of production facilities, enhancing process design, operational optimization and validation efficiency. The collaboration also includes the integration of NVIDIA’s autonomous driving solutions, including automotive semiconductors, sensors and architecture, with Hyundai Motor Group vehicle platforms.
Waymo – Strengthening autonomous driving collaboration
Hyundai Motor Group continues to strengthen its strategic partnership with Waymo in the autonomous driving sector to support the development of a safe and innovative autonomous driving ecosystem. Autonomous driving vehicles require a wide range of specialized capabilities, including redundant systems for steering, braking, power and communications, dedicated features such as power-operated doors, as well as enhanced functional safety and cybersecurity technologies.
Hyundai Motor Group plans to produce IONIQ 5 vehicles with specific autonomous-ready modifications at Hyundai Motor Group Metaplant America (HMGMA) in Georgia.
Google DeepMind – Accelerating next-generation humanoid robotics
Boston Dynamics has established a strategic partnership with Google DeepMind to accelerate the development of next-generation humanoid robots. Advanced AI models and training systems are essential for robots to perform complex tasks in real-world environments and collaborate effectively with people. Through this partnership, Boston Dynamics robots are expected to achieve greater autonomy and adapt more effectively to complex operating environments.
Hyundai Motor Group plans to establish a robot production facility in the U.S. with an annual capacity of up to 30,000 units by 2028. The Atlas humanoid robot will first be deployed at production facilities including HMGMA before broader deployment is expanded through phased validation.
Building an Open Ecosystem Through the Robot Reference Platform and Continued Investment in Korea’s Physical AI Future
Executive Chair Chung also outlined initiatives aimed at supporting the growth of Korea’s Physical AI ecosystem through open collaboration and continued investment.
“The outcomes of collaboration with global technology leaders should contribute to the growth of Korea’s Physical AI industry. To that end, Hyundai Motor Group plans to foster an open ecosystem that supports innovation in robotics and AI technologies.” — Hyundai Motor Group Executive Chair Euisun Chung
Key initiatives to build an open ecosystem for robotics and AI innovation include:
Robot Reference Platform: Hyundai Motor Group and NVIDIA are collaborating to develop a Robot Reference Platform that combines Hyundai Motor Group’s and NVIDIA’s Physical AI capabilities.
The platform will provide research robot models to universities, research institutes and startups, helping foster an open ecosystem that supports technological innovation and the development of Physical AI talent while contributing to the broader growth of Korea’s robotics and AI industries.
Supporting universities, research institutes and startups: The Robot Reference Platform is expected to provide universities, research institutes and startups with a standardized hardware and software environment, enabling them to more easily develop and validate Physical AI technologies. The initiative aims to help address challenges faced by organizations with innovative ideas but limited access to commercialization opportunities and validation infrastructure.
Hyundai Motor Group is also continuing large-scale investments aimed at driving the next leap forward in Korea’s industrial and technology ecosystem. Continued investments in Korea’s industrial and technology ecosystem include:
Saemangeum AI Valley: In the Saemangeum region of Jeonbuk State, the Group is developing Saemangeum AI Valley, which includes an approximate KRW 9 trillion investment in AI data centers, robotics manufacturing clusters, electrolyzer plants and AI hydrogen city infrastructure.
In particular, the robotics manufacturing cluster will serve not only as a production base for the Group’s own robotics products, but also as a robotics foundry that provides manufacturing services for small and medium-sized enterprises that lack manufacturing expertise.
Advanced industrial hubs in the Yeongnam region: Hyundai Motor Group plans to invest a total of KRW 42 trillion over the next decade to foster advanced industrial hubs focused on AI-driven manufacturing, future aerospace industries and sustainable energy infrastructure.
Through these initiatives, Hyundai Motor Group aims to strengthen key foundations for the Physical AI era, including data and energy infrastructure, robotics production capabilities and real-world validation capabilities. The Group also expects these investments to contribute to enhanced industrial competitiveness, balanced regional development, job creation and broader economic vitality in Korea.
About Hyundai Motor Group
Hyundai Motor Group is a global enterprise that has created a value chain based on mobility, steel, and construction, as well as logistics, finance, IT, and service. With about 250,000 employees worldwide, the Group’s mobility brands include Hyundai, Kia, and Genesis. Armed with creative thinking, cooperative communication, and the will to take on any challenges, we strive to create a better future for all.
More information about Hyundai Motor Group can be found at: http://www.hyundaimotorgroup.com or Newsroom: Media Hub by Hyundai, Kia Global Newsroom, Genesis Newsroom
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SOURCE Hyundai Motor Company
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