Feb 9, 2017
Executives
Jeff Dodge - IR Rick Smith - Chairman & CEO John Gamble - CFO
Analysts
Gary Bisbee - RBC David Togut - Evercore ISI Brett Huff - Stephens Ramsey El-Assal - Jefferies Andre Benjamin - Goldman Sachs Tim McHugh - William Blair Toni Kaplan - Morgan Stanley Manav Patnaik - Barclays Andrew Jeffrey - SunTrust Kevin McVeigh - Deutsche Bank George Mihalos - Cowen Andrew Steinerman - JPMorgan
Operator
Good day and welcome to the Equifax Fourth Quarter 2016 Earnings Call. Today's conference is being recorded.
At this time, I would like to turn the conference over to Mr. Jeff Dodge.
Please go ahead.
Jeff Dodge
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 in 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 businesses are set forth in filings with the SEC including our 2015 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 fourth quarter of 2016, adjusted EPS attributable to Equifax excludes acquisition related amortization expense, the transaction and integration expenses associated with our acquisition of Veda, the charge for our settlement with the CFPB which was announced earlier this year, and a charge for the realignment of internal resources which is largely concentrated in the International business segment. 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 impact of certain one-time items including the transaction and integration expenses associated with the acquisition of Veda, the charge for our settlement with the CFPB, and the charge for the realignment of internal resources.
These non-GAAP 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.
Rick Smith
Thanks, Jeff, and good morning everyone and thank you for joining us especially those who are up in the Northeast have got some inclement weather, we appreciate that. Not a very strong broad based performance in the fourth quarter completes which I think you will agree with an outstanding year for Equifax.
The operating DNA of this company has enabled us to consistently and successfully execute the strategy that we've been pursuing now 11.5 years. With the momentum the team has created, I feel very good as is John about how we are positioned for continued solid growth in 2017; we will talk about that in fair amount of detail in my closing comments.
Our performance for the fourth quarter was outstanding as this team sets up and delivered beyond our expectations. Total revenue for the quarter was $801 million, up 20% on reported basis and up 23% on local currency basis from 2015.
For the quarter FX created a $20 million year-over-year headwind. The adjusted EBITDA margin was up 200 basis points year-on-year, up from 34.5% a year ago to 36.5% this year.
Adjusted EPS was $1.42, up 25% from $1.14 last year and exceeded the upper end of the guidance range we provided to you, which was between $1.35 and $1.38. And given the strong performance in 2016, the Board of Directors approved an 18% increase in our quarterly dividend, which now is $0.39 a quarter.
This is the seventh consecutive double-digit increase in our dividend rate. As I look back at the full-year of 2016 it too was another record performance and one we're very, very proud of on many fronts from integrating our acquisition of Veda, which was the largest in our company's history, to delivering results that exceeded our expectations again on NPI, EGI, LEAN, customer LEAN and just overall execution of many programs across the globe.
For the year, total revenue was $3.1 billion, up 18% on a reported basis, and up 21% on a local currency basis versus 2015. For the year, FX created a $75 million year-over-year headwind.
Organic constant currency growth was a very strong 12% for 2016. The adjusted EBITDA margin was 35.8% for the year, up 110 basis points from 34.7% in 2015 and that was well above the guidance we provided at the beginning of the year.
Adjusted EPS was $5.52, up 23% from $4.50 a year ago and that was up significantly from the original guidance we gave you a year ago, which was between $4.95 and $5.05. Let me go through some of the business unit commentary and I will come back and talk you about some of the corporate highlights and then John will go into the financial details and also talk about framework probably thinking about 2017 as well.
First, with USIS, they delivered a strong 7% growth in the fourth quarter ending the year with an impressive 6% revenue growth which was nicely above our expectations for the year. Some individual highlights for USIS: in December, we executed an enterprise-wide agreement with a world-class Silicon Valley firm to provide a number of products including our household income estimate, which will be used by the customers to select consumer audiences towards they want to advertise and promote products.
This is a multi-year agreement that we will expect to position us very well in the digital marketing space in 2017 and beyond is what our first big foray of the digital marketing. We continue to make significant progress with some of our large financial institutions regarding opportunities to assets or Cambrian platform.
Our customers are seeking greater speed to market and the Cambrian platform and demonstrably reduced development times for months to days. The co-development relationships we created trended data attributes, integrate their customer data and deliver more frequent redevelopment of decisioning solutions.
These opportunities significantly enhance our relationships by deeply embedding Cambrian and our local expertise into our customers' development and go-to-market strategies. USIS fraud authentic management solutions continue to trend strong double-digit growth growing 21% for the year.
While years it has been a big focus for us, an area where we are continuing to invest in both platforms and capabilities. We also achieved a significant milestone in the year launching online trended data solution for mortgage market or with our partner Fannie Mae.
This solution contributed significantly to USIS revenue growth in 2016 and will make people more contributions to growth in 2017. Well still early there are some additional very promising opportunities to leverage credit data information to improve decisioning in other emerging categories.
Automotive is one that we are very excited about for an example. In 2017, we launched an EGI focus specifically on trended data solutions.
Our efforts include all of our major data assets trending data for up to 72 months and across all of our key verticals. We will also apply machine learning algorithms to assist and develop high value credit data attributes.
This effort will be globally focused on U.S., Canada, Australia, and key countries in Europe and in Latin America. One last highlight for USIS is our commercial financial network comprises of tradeline data from banking and other financial institutions.
Similar to the SBFE as well as communications, utility, wholesale trade, printing, publishing, chemicals, rental, and leasing data on approximately 30 million small businesses that provides very strong market position and enables us to offer our customers very unique and powerful decision solutions. Our CFN data is populated in Cambrian along for decisioning solutions that combine both our commercial and our consumer data.
On to international, they delivered 54% local currency growth in the year 2016, organic constant currency growth was a strong 12% driven by double-digit growth in our Latin American and Europe, along with inorganic contribution from our acquisition of Veda almost a year ago. EBITDA margin increased over 200 basis points to 28.3%.
Revenue from international's four largest verticals FI, SMEs, Telcos, and government represent almost 84% of organic revenue growing impressive 30% in 2016. Decisioning platforms and local services and debt management revenue delivered organic growth of very impressive 24% for the year.
The team has done an outstanding job with the integration of Veda into the Equifax family. As a result, we are rapidly approaching a business as usual state for the business.
For the year, Veda delivered the financial performance we were expecting and have previously communicated to you. Equifax COE sort of excellence model has been stood up with a formal operations function, a lean rebuild program, integration into our new product innovation process, and operating process including our global finance and human resource systems.
We have also initiated a number of global platform deployments including fraud, Cambrian, interconnect on accelerated timeline, those were keys for us to generate incremental long-term revenue as you recall in that part of the world and we're ahead of schedule. We have also identified a number of Veda products that represent a potential to take their products to other segments, other geographies around the world, and our product teams are doing that as we speak.
The teams in Australia and New Zealand have collaborated well with their counterparts in the U.S. and international.
As a result, this has been one of the smoothest acquisition integrations, we've experienced here at Equifax. Our debt management business in the UK with UK government is performing very well.
Revenue for 2016 exceeded the budget; we awarded all six of the founding government agencies and have added an additional agency in Ministry of Justice. We have signed additional contract for work and development and new debt solutions for HMRS which is the largest entity of the government we are dealing with right now.
And most importantly, the team has exceeded the collection performance expectations that the client and we have established a year ago. In December, our UK operations leveraged the partnership we have with a very good global partner LexisNexis and have executed in UK a 10-year multi-million dollar agreement.
We are provisioning data and jointly developing product offerings for their customers in the UK. Latin America continues to broaden its product portfolio, expand its set of solutions with socioeconomic information and geographic analysis to enhance customers marketing decisions in Chile and Peru.
New product innovation in Canada is accelerating; and looks very promising for growth opportunities this year and beyond. In the fourth quarter, our Cambrian data analytics platform was launched enabling them to develop powerful trended data solutions for our customers across all verticals in Canada.
The Canadian team also won and implemented our first major debt management contracts with very large strategic customer in Canada. And we're also fast forward as we launch our workforce solutions business in Canada, while the services and strategies will differ slightly from our U.S.
based business we will be able to leverage the IT investments to operating platform and processes, we develop accelerating our time to launch in Canada and solve problems for our good customers, we couldn't solve before. Speaking of workforce solutions what a year they had, yet another outstanding performance, revenue was up 22% for the year, along with a very, very impressive 310 basis points margin expansion and the adjusted EBITDA margin.
That business continue to reinforce power, innovation and execution as we develop new solutions for our customers. Verification services with very strong growth for 2016 was driven by double-digit growth across virtually all verticals including mortgage, auto, consumer finance, government, card, and predeployment.
At the year-end 2016, the Work Number database approached 300 million records to over 7,100 companies contributing to that database. We're very excited about Fannie Mae's decision to incorporate our employment and income verification services into their underwriting platform.
While the revenue impact for 2016 was minimal, the opportunities for 2017 and beyond are expected to be significant as it positions the workforce solutions as a premier provider of important and critical underwriting decision in the area of VOE and VOI. The auto vertical is a key focus for employment and income verification and we've made great progress in 2016.
In 2017, we will further our presence in the industry through the partnership with Pfizer. As some of you may already know, we recently announced a partnership with Pfizer which integrated our employment and income verification services into their automotive loan originations system.
Pfizer was one of the top providers of loan origination and servicing systems completing almost 5 million originations in 2016. Customers will now be able to quickly retrieve income deployment data and approve applications quicker for fewer stipulations and errors.
Employer services they also had outstanding year in 2016 growing 24% for the year. Unemployment claims, I9, and tax management services which represent almost 80% of employer services revenue grew a very good 7%, particularly impressive given the very low unemployment claims environment.
Our Workforce Analytics business, which provide solutions to allow employers to ensure their compliance with the Affordable Care Act grew substantially in 2016. John will provide more detail in our ACA-related revenue in 2016 and the expectations that we have with the regulatory changes we expect ahead of the earnings financial review that follows.
On to our Global Consumer Solutions they grew 16% for the year and on reported revenue an 18% growth on local currency basis. That was just an outstanding performance.
GCS also delivered a 30.3% adjusted EBITDA margin for the year. Our direct to consumer resellers which include great partners like Credit Karma, White Rock and number of others are driving good growth for us.
In the fourth quarter, we signed as you never call a multi-year contract extension with Credit Karma representing almost comprehensive and largest in the company's history. They will also be using our Cambrian platform to provide greater credit insights to their consumer base and to better target more relevant offers.
As many of you know LifeLock has been acquired by Symantec who operates on a global scale. We have a very good relationship with LifeLock and view this project as we anticipate even more opportunities for global expansion and revenue growth for GCS.
International revenue for GCS was up a solid 7% for the year. Finally, we completed development of our new platform for GCS, we call that Renaissance.
We talk about that before, it gives us great flexibility in building changing product offerings to the market and that is now going for GCS. Well John will give his comments on the financials let me transition back to corporate and talk about a few highlights at the corporate level.
I will start with our 2016 class and new product launches, it was the strongest in the history of our company. For the year, we launched 53 products and our NPI revenue was 9.2% overall our target for the year.
We feel very good about our ability to continue driving meaningful growth through our innovation process. Over the past few years, we have re-launched NPI we've talked to you about this; we called it NPI 2.0 that was really focused on increasing the funnel of ideas and improving our execution and importantly shortening our time to revenue.
I can tell you that the NPI 2.0 the great work that the marketing team has done is working. As a result, the anticipated year three revenue for 2016 launch is expected to be almost five times what we expected full-year revenue to be from our 2014 launch that is really impressive.
And the pipeline on 2017 launches is off to a great start with an initial portfolio of 106 products in the funnel. Also, our data and analytics platform Cambrian has significantly enhanced our product development cycle time and quality and value of our new offerings, the technology infrastructure continues to support our growth initiatives, the contemporary platforms or global capabilities include fraud, the consumer solutions, we did Renaissance, Cambrian, and our interconnect just to name a few.
Operationally, our enterprise growth initiatives exceeded their target by almost 50% for the year that bodes well for 2017. And our lean initiatives exceeded their target by almost 30%.
On the regulatory front, we most likely read that we reached a settlement with the CFPB and the CIV rate issues in connection with our Global Consumer Solutions business. The settlement requires changes to be made in how we market, to interact with our consumers who come to our website at www.equifax.com, many require changes were implemented more than two years ago, this settlement and our obligations under it do not change in anyway the opportunities for the financial health of that business.
Additionally, the CFPB has closed their CIV investigation of the Workforce Solutions business that we talked about in the past with you. Obviously, we're going to have both of these issues behind us.
That's my opening comments. With that let me turn over to John for some financial details and I will close out the call before we go to Q&A with a look at 2017.
John?
John Gamble
Thanks, Rick, and good morning everyone. Before I will generally be referring to the financial results from continuing operations represented on a GAAP basis.
USIS revenue in the 4Q 2016 was $316 million, up 7% when compared to the fourth quarter of 2015. For the full-year, revenue of $1.2 billion was up 6%.
This compares favorably to our original expectations for USIS to be at the low-end of their 5% to 7% growth. The adjusted EBITDA margins for USIS was 51% in 4Q 2016 and 50.2% for calendar year 2016, up 230 and 40 basis points respectively.
This is the first time USIS has delivered full-year adjusted EBITDA margins in excess of 50% an outstanding performance. Online information solutions revenue was $211 million in 4Q 2016, up 4% year-to-year and $879 million for the full-year also up 4% when compared to the prior year.
Total mortgage-related revenue was up 41% and 36% in the quarter for USIS and Equifax respectively. We also saw a mix shift towards mortgage solutions versus online in 4Q versus 3Q.
For calendar year 2016, mortgage-related revenue was up 25% and 24% for USIS and Equifax respectively and represented just under 18% of total Equifax revenue. Our 4Q and calendar year 2016 growth compared favorably to the average mortgage bankers application index, which was up 1% in the fourth quarter and 17% for the calendar year.
Mortgage solution revenue was $36 million in 4Q 2016, up 29% year-to-year and $142 million for the calendar year, up 15%. Financial Marketing Services revenue was $69 million in 4Q 2016, up 7% year-to-year and up $215 million for calendar year 2016, up 5% year-to-year.
Identity and fraud solutions also continues to grow strongly, up 15% in 4Q and 21% for calendar year 2016 driven largely by our multi-factor authentication and IT management solutions. U.S.
direct to consumer revenue principally our online revenue with other CRAs was down almost 30% in the quarter and 20% for calendar year 2016. The decline in these customers negatively impacted USIS growth by over two points in 4Q 2016 and approximately 1.5 in 2016.
The impact on OIS in 4Q 2016 was over 300 basis points, up over 100 basis points from the impact in 3Q 2016. Workforce Solutions revenue was $174 million in the quarter, up 21% year-to-year and $702 million in calendar year 2015, up 22% year-to-year.
The Workforce Solutions adjusted EBITDA margin was 45.8% in 4Q 2016 and 48.2% in calendar year 2016, up a very strong 150 basis points and 310 basis points respectively. This reflects continued very strong growth in verification services, up 24% in the fourth quarter and 20% year-to-year.
Employer Services also delivered a very strong performance up 15% in 4Q 2016 and 24% in calendar year 2016. As Rick indicated, our unemployment, I9, and tax services products offered independently and through our compliance center offering represent almost 80% of Employer Services revenue and grew stronger than expected in 4Q, up 16% with organic growth of over 10% and up 7% for calendar year 2016.
Our ACA Solutions delivered high single-digit percentage growth in 4Q 2016. As a reminder, total revenue related to the Affordable Care Act in 2016 was only 2% to 2.5% of Equifax total revenue.
Approximately 75% of that revenue was in workforce analytics, a part of employer services, which provides a service to ensure employers are in compliance with the employer mandate of the ACA, margin for this products are below the average for Workforce Solutions. The remaining 25% is in verification services, where it provides current income validation for people who enroll in the Healthcare Exchange through Federal or state sites.
This was part of the means test and had margins higher than the Workforce Solutions average. Our current planning reflects the expected repeal or substantial modification of the ACA including an expected transition period, so that the repeal or modification takes effect in 2018 or later.
As such, we expect our ACA revenue to be about flat in 2017 with 2016. Combined revenue for USIS and Workforce Solutions, our total U.S.
B2B revenue was $490 million in 4Q 2016, representing growth of 11%. Full-year revenue was $1.9 billion also up 11%.
International's revenue was $212 million in 4Q 2016, up 49% on a reported basis and up 62% on a local currency basis. Revenue was $804 million for calendar year 2016, up 41% on a reported basis and up 54% on a local currency basis.
Constant currency organic growth in international was a strong 13% in 4Q 2016, the strongest quarterly organic growth for the year and 12% for calendar year 2016. International's adjusted EBITDA margin was 30.3% in 4Q 2016 and 28.3% in calendar year 2016.
By region, Europe's revenue was $64 million in 4Q 2016, up 4% in U.S. dollars and up 21% in local currency.
For calendar year 2016, Europe revenue was $254 million, up 7% in U.S. dollars and up 18% in local currency reflecting the impact of the sharp drop in FX rates in the second half due to Brexit.
Latin America's revenue was $48 million in 4Q 2016, down 4% in U.S. dollars but up 11% in local currency.
Revenue was $184 million for calendar year 2016, down 8% in U.S. dollars again but up 12% in local currency.
Latin America showed outstanding local currency growth throughout 2016 led by strong growth across Argentina, Chile, and Paraguay. Canada revenue was $31 million, up 4% in U.S.
dollars and up 4% in local currency. Revenue for calendar year 2016 was $122 million flat in U.S.
dollars, but up 3% in local currency. Asia-Pacific revenue was $71 million in 4Q and $244 million for the year.
As Rick mentioned, for 2016, data performed well and ahead of our expectations. Global Consumer Solutions revenue was $99 million in 4Q 2016, up 18% on a reported basis and up 20% on a local currency basis.
Revenue in calendar year 2016 was $403 million, up 16% on a reported basis and up 18% on a local currency basis. Adjusted EBITDA margin was 34.5% in 4Q 2016 and 30.3% for the calendar year.
Our B2C business grew over 35% in 4Q 2016 and was up 60% in calendar year 2016. Our consumer business both directly through Equifax.com and through indirect white label applications grew almost 5% in 2016 despite the tremendous growth free offerings that drove the growth of our B2C business.
In the fourth quarter, general corporate expense was $69 million. Excluding the integration expenses associated with the Veda acquisition, the CFPB settlement, and the realignment charge, general corporate expense was $56 million and in line with the expectation we indicated during our 3Q earnings call.
For calendar year 2016, corporate expense excluding the Veda integration expense and the other one-time items was $210 million, up from $198 million or 7% from 2015, driven by an increase in technology spend as we expand our global technology platforms. Adjusted EBITDA margins were 36.5% in 4Q 2016 and 35.8% in calendar year 2016, up 200 basis points and 110 basis points respectively.
Our GAAP effective tax rate for the fourth quarter was 31.7%. This was modestly lower than expected primarily reflecting a decrease in the tax rate in some foreign jurisdictions.
For the full-year, our non-GAAP effective tax rate was 31.8%. Looking forward into 2017, our expectation for the effective tax rate is approximately 32.5%.
For 1Q 2017, our expectation is for the effective tax rate to be slightly above 33%. Operating cash flow was $260 million in 4Q 2016 and $785 million in calendar year 2016.
Free cash flow equal to operating cash flow less capital expenditures was very strong in 2016 at $618 million. We expect free cash flow to be up again in 2017 however as in past years; 1Q will be weaker than the other quarters due to employee variable compensation payments following a very strong performance in 2016.
Capital spending, which includes our capital expenditures in the period plus commitments we have made that will be paid in 2017, were $53 million in the quarter and $192 million for calendar year 2016 just over 6% of revenue. As we look forward into 2017, we expect capital spending to again be about 6% of revenue and in the range of our long-term model of 5% to 6% of revenue.
Total debt at year-end was $2.67 billion. We continue to reduce our leverage following the Veda acquisition which is now down to 2.39 times EBITDA.
Depending on the pace of acquisitions, we expect to be repurchasing shares again in the second half of 2017. Now let me turn it back to Rick for a for a discussion of our 2017 outlook, for perspective, the outlook for 1Q 2017 and 2017 that Rick will discuss is based on foreign exchange rates as of February 1, 2017.
Rick Smith
Thanks, John. I will start with some summary comments for the corporation and give you some framework thoughts at the BU level and then will go to operator for the questions they may have.
2016 quickly in summary, I think on so many dimensions characterizes what I would say is the best year since I joined the company 11.5 years ago. Each of the business units delivered outstanding performance to leverage our key disciplines around new talent acquisition, new product innovation, enterprise growth initiatives, value-based pricing, enterprise channels, and marketing verticals, acquisition integration, all the things this company has done, I think fairly well for the past 10 or 11 years.
These disciplines have been routinely refined and are integral to the execution of our overall strategic initiatives. These disciplines will also make important contributions to what we feel strong 2017 and beyond.
During our third quarter earnings release in October we shared with you our preliminary views on the revenue growth through 2017. At that time, we stated that we remained confident in our ability to deliver revenue growth at the high-end of our long-term constant currency financial model which you know is 7% to 10%.
We also indicated that our outlook was based upon a flat mortgage market. Since that time, as you know since the elections, the outlook for the mortgage market has deteriorated significantly and while these estimates vary a great deal depending on who you want to talk to, the consensus, these originations to be down double-digits in 2017.
Our current outlook is for mortgage originations to be down about 50% in 2017 and flat to slightly down in the first quarter. In addition, our expectation for ACA revenue in 2017 is flat when compared to 2016.
As John discussed, in 2016, ACA was very nice growth driver for EWS and for Equifax. Combined, these two items, ACA and mortgage versus the discussion back in October represent about approximately 3% headwind to our 2017 growth when compared to October expectation.
However with that headwind, we still remain very confident that we can offset the mortgage and ACA drag and deliver total constant currency revenue growth in 2017 in the top half of our long-term 7% to 10% range. We are exiting 2016 with strong momentum across our businesses driven by new product innovation and expectations for accelerated growth in our non-mortgage segments of USIS, Workforce Solutions, and continued very good performance from GCS and International.
So with that preamble, as a result our guidance for 2017 is for total revenue to be between $3.375 billion and $3.425 billion, reflecting constant currency revenue growth of 8% to 9%, partially offset by approximately 1% of FX headwinds. Adjusted EPS is expected to be between $5.96 and $6.10 which is up 8% to 10% year-on-year excluding slightly over $0.02 per share negative impact from FX.
This reflects constant currency earnings per share growth of 9% to 11%. We also expect adjusted EBITDA margin to expand by at least 100 basis points for the full-year coming off again another 110 basis point expansion in 2016.
Onto the individual business units, I will give the framework here, first USIS growth we expect that to be somewhat below their long-term range of 5% to 7% reflecting the expected weak mortgage market we've discussed. EBITDA margins are expected to increase slightly from very strong levels delivered in 2016.
Workforce Solutions is expected to deliver growth at or above the high-end of their long-term growth range, which you'll remember is 9% to 11% and that is despite again the expected weak mortgage market and flat ACA business versus historically a growth ACA business. EBITDA margins are also expected to increase from strong levels delivered in 2016.
GCS is expected to continue its growth above its long-term growth range of 6% to 8% with EBITDA margins above -- remaining about 30%. International is expected to deliver growth above their long-term model of 8% to 10% principally driven by another record year of NPI organic growth and the growth from Veda acquisition; we get approximately two months of incremental benefit in 2017 versus 2016.
EBITDA margins are expected to increase nicely. We see 30% in international for 2017.
Quick look at the quarter. For the first quarter we expect total revenue between $822 million and $826 million reflecting constant currency revenue growth of 14% partially offset by almost 1% of FX headwind.
Adjusted EPS is expected to be between $1.39 and $1.42 for the quarter which is up 13% to 15% excluding just under $0.01 per share negative impact from FX. This reflects constant currency organic growth of 14% to 16% for the first quarter.
One final announcement before we open up for Q&A and that is that we got a individual amongst us very important partner for us who is after 25 great years with the company has announced he's going to be retiring, he's going to leave us Jeff Dodge, we will see on the phone no Jeff intimately and all of us around this table thanks Jeff for a fabulous 25 years. Jeff has been doing great work since my last 12.5 years you've even held the job.
And there will be plenty of time for farewells and fanfare and [indiscernible] where you can gather en suite for those of you interact with Jeff. We also are pleased to announce we have got a very smooth and thoughtful transition plan that we have announced here internally and that is Doug Brandberg he was with us here this morning.
Doug will be transitioning into the role it will be a smooth process we have been working together already for a couple of months and Doug will shadow work with Jeff and with John Gamble for the entire year and calendar year from now for the start of 2018, will be ready to take over the IR role. Doug is a seasoned financial executive.
He has been with us for a number of years. He was the CFO for us in our P-Sol business, CFO in our USIS business he has been CFO for 20 years, he is a CFA Chartered Holder, he has been with First Data, BellSouth, AT&T, holds an undergraduate degree from Virginia and a MBA from Georgia Tech.
And I'm convinced this will be a very smooth transition for us. With that, thank you Jeff for your 25 years and again plenty of time to celebrate and Doug welcome to board.
With that operator, we'll turn it over for any questions that guys in the call might have.
Operator
Thanks. [Operator Instructions].
We will take the first question from Gary Bisbee from RBC.
Gary Bisbee
Hi good morning and congratulations on a strong quarter. I appreciate all the color on mortgage, I guess can you give a little more color on what the drag is at the Workforce Solutions business and I guess as part of that the growth you're projecting continues to be incredibly strong.
What are some of the areas that are -- mostly to be accelerating or just really driving strong growth to offset what should be much weaker mortgage volumes over the course of the year? Thank you.
Rick Smith
Yes, thanks Gary. I will take a crack at that, this is Rick and John will jump on the same, first my comments.
Overall for company I think we discussed three points of headwind and from mortgage and a little bit more headwind when you add in Workforce Solutions. We don't break out exact headwind for EWS versus USIS; you've got enough data I think you can break that down for a pretty good estimate.
But mortgage is a very important part of Verification Services and has been an important part of all EWS. The components that give us confidence in our ability to offset was the same thing renewal for 11 years and I gave some color, Gary our pipeline -- our success of NPI last year was unbelievably strong and we expect the revenue in third year to be five times our revenue was in 2014, so that's unbelievable.
So we just want very comprehensive review with Greg Locker and his team working for pipeline of products 2017 and 106 of breadth and depth, quality of those products in the pipeline are unbelievable. We will not launch all 106 but the number of products we're going to launch or confident in launching in again 2017 which is income or revenue are fabulous.
Number two the enterprise growth initiative process we've been at now for wherever it's been seven years or so is we'll have a record year, I said that in my comments in 2016 which positions us very well for 2017. With all the core things that we have been -- the team has been delivering for our customers now for seven to 10 years.
John Gamble
EDS -- EWS performance in the fourth quarter as you know it's outstanding right, so again north of 20% growth, so we are not really seeing a slowdown in the performance, all you are seeing as Rick mentioned is you will see an impact from mortgage next year and then some of the growth that was contributed in 2016 from ACA we just don't see repeat. But the rest of the businesses are growing very, very well.
Rick Smith
Gary one last thing, one final color might be that another contributor to incremental growth in 2017 is going to be slightly improving economies in some major places which we operate in U.S. will be modestly better in our opinion, UK will be modestly better for the full-year and Spain will be modestly better, I mentioned this before Argentina we are confident Argentina will have a GDP perspective most better year and 2017 versus 2016.
So again global so modest global economic health and 80-plus-percent of all the revenues is non-mortgage we have did 15%, 17% mortgage closed. So on economies tend to grow that tends to help our core business.
Gary Bisbee
Great, thanks. And then just one quick follow-up, you mentioned this digital marketing opportunity in a Silicon Valley company.
Could you help us understand what exactly that opportunity is what you are providing and should we think this is more of a one-off or the beginning of what you see is it incremental new opportunity?
Rick Smith
It's just short I will give Gary; it's a world-class so nothing sourced [ph] in any. You can think from our digital marketing companies in Silicon Valley and we have partnered with, it's a great revenue generator for us this year.
More importantly than that it is giving us a market credibility in the digital marketing space by leading -- by working with and building products and solving solutions for world-class digital marketing company and we will leave it at that think of it as an on trade sales force.
Operator
We will take the next question from David Togut from Evercore ISI.
David Togut
Good morning and thanks for everything over the years Jeff.
Jeff Dodge
Yes Dave, thank you. You are welcome.
Rick Smith
You're welcome.
David Togut
Rick I appreciate you calling out the expected headwind from mortgage for 2017 putting some numbers around it. I noted that you grew 25% in mortgage in the fourth quarter despite the NBIA being up only 1%, so in that 3% headwind you are calling out, are you sort of baking in a very significant impact from mortgage in line with the NBIA outlook or you incorporating some continued expectation that you would likely significantly outgrow the mortgage market as you have in the past?
Rick Smith
Great question, David. So the commentary on the guidance was for mortgage market to be down 15% and equates three points of headwind for us.
Our expectation as you kind of noted there is to continue to innovate and gain share build new products and grow at much faster rate in the market or in this case decline at a much slower rate than the mortgage decline.
David Togut
Got it. And then just as a follow-up, if you could talk about some of the other big drivers of consumer credit reporting demand for 2017 for example, auto, credit card, what is your outlook for those?
Rick Smith
Yes, for us if you think about the enterprise channel what we use we will take all of our products in EWS products and credit products, we are expecting automotive to be as a market relatively flat with 2016, we expect credit card issues to be up, we expect mortgage to be down. Then when you look at other markets, home equity lending to be up on the mortgage side, it's tale of two stories refinancing will be extremely negative make sure it's the exact number but home sales is expected to be up and then when you think about businesses in that environment, you think about EWS and even though automotive is a marketplace is expected to be flat, we expect significant growth in EWS because we are widely penetrated.
We talked about Pfizer partnership which gives us platform to fully distribute our products to them. So we've got improving markets in some cases, stable markets in others, and declining others in aggregate that's why we get the kind of forecast we gave you for USIS but also continued strong growth in EWS because of market penetration I think is still significant.
David Togut
Understood, thanks. Nice to see the 18% dividend increase.
Rick Smith
Thank you.
Operator
We will now take the next question from Brett Huff from Stephens. Please go ahead.
Brett Huff
Good morning and thanks for taking my question. Two quick ones.
One of the things that I think folks always try and contemplate with your guidance is how conservative is it how comfortable do you feel with that is often you sort of raise that guidance through the year, given that you sort of accommodated this 3% headwind that you originally didn't, can you comment on how much comfort do you have with that achievability or conservatism in that guidance?
Rick Smith
Brett, this is Rick. We take obviously as most companies do, the framework of guidance extremely service label to all parts of business John and I and many others from the company and we go into a period like this on a quarterly basis with updated guidance with those all the facts we possibly have at our fingertips and we give guidance following any unforeseen macro changes we cannot expect to follow through may be but we give guidance we think we are very likely to attain.
So we try to say actually it's structuring a plan that if we tell you we're going to deliver $3.375 billion to $3.425 billion, we're going to hit that number. So I wouldn't call it conservative, I just call it, it's balanced and it's based on all the facts I hope it's done.
Brett Huff
Okay, thanks. And then you talked a little bit about qualitatively some of the new products that you have been working on including TDX or the new project some things like that and you said they are going to be good in 2017, is there any qualitative measure that you can start putting around those four so we just get lot of questions from investors on that?
Rick Smith
Let me give you a response and John will jump in. The qualitative framework we are talking to investors about our ability to continue to grow with two segments so on and so forth is again the product class of 53 months last year is the strongest class we have had ever.
We expected revenue five times in 2014 combine that with EGI continue to outperform and that bodes well for 2017 that's the enterprise focus its breadth and allows to budget pipeline of 106 new products in the front-end for this year. So those are all the qualitative things that I talked about that we are doing -- have been doing for quite some time on innovation.
Brett Huff
Okay. And then just one last question anything in the guidance from the change in the stock-based comp accounting rules?
John Gamble
Yes, so we have assumed that we are going to remove that from our non-GAAP reporting. So we will just exclude that, since it will be very difficult for us to forecast the impact of any given quarter, our current thinking is we will exclude that.
To the extent there becomes a trend in either direction that makes us have to revisit that decision, we certainly can but our guidance assumes that it will be excluded.
Brett Huff
Okay. So it's an apples-to-apples to 2016?
John Gamble
Absolutely, yes.
Operator
We'll now take our next question from Ramsey El-Assal from Jefferies. Please go ahead.
Ramsey El-Assal
Thanks guys. Your ability to offset these mortgage headwind speaks to some resiliency in the model obviously, can you speak to the degree to which changes in your mix or diversification over the past two years have changed your overall sort of macro cyclical sensitivity.
I think that's been an ongoing trend but this -- does this represent some kind of an inflection point in that direction?
Rick Smith
Yes great question. I think Ramsey the change really started strategically and then exactly from an execution perspective 10 years ago when we made the decision to pivot from being solely dependent on credit based data assets and largely U.S.
geographic exposure to a units assets company with more geographic focus in just in U.S. and secondarily when we have the technology platforms invested in data assets or ability to build products and innovate and where you see that we have never done before, you navigate changes in macroeconomic environment that we couldn't do before.
As you know, that process takes time we launched with the acquisition of TALX and NPI back in 2007 we gained momentum that we had a recession and we come out of the recession with this great robust processing capability and we continue to add the data assets and done nothing but mature, mature, mature get better every year, talk about the NPI 2.0 we launched with [indiscernible] we've got to reinvent and reinvigorate innovation that's paying great dividend, I should say.
Ramsey El-Assal
That makes a lot of sense. I mean given sounds like your guidance obviously your 2017 guidance would have been 3% higher without mortgage in ACA.
And it doesn't really sound like you had to put any emergency plans into effect, it seems like a lot of the stuff was in the pipeline already. I mean is the implication of your long-term guidance is getting to be a little bit too conservative for those factors?
Rick Smith
I don't know, I think about 118-year-old company growing top-line and bottom-line and NPI and EBITDA margin that has been certainly conservative. I think it's something we are very proud of.
That to your point there are no emergency plans that have been pulled off the shelf it's just that one thing it'll reflect back upon the quality of the solutions we developed last year in NPI and you had the hindsight of pretty similar months of visibility that was just stronger than we expected then.
Ramsey El-Assal
Got it and thanks so much.
John Gamble
To be specific in our long-term model we are not envisioning change in the long-term model.
Ramsey El-Assal
Okay, thanks a lot.
Operator
We'll now take the next question from Andre Benjamin from Goldman Sachs.
Andre Benjamin
Thanks good morning. I know you guys have talked a bit about the use of trended data potentially going to other loan categories besides mortgages.
I was wondering any color you can give on how those conversations are going about the tradeoff between cost and incremental lift to some of those categories and how are you thinking about making it more cost effective for say lower dollar value categories like credit cards.
Rick Smith
Yes I think Andre we are making great progress like I mentioned in my prepared comments that we are not looking Cambrian gives us great ability to use all of our data assets we never could before. And this will be a needle where we are going to take all of our data assets and use to our company, putting in Cambrian turned about 72 months in some cases actually application value will be determined on the ROI if the customer gets them.
I mentioned one more seems to be very helpful is automotive. Obviously we are doing mortgage undoubtedly another top routinely about you need to get to a point that no longer talking at 5,000 foot level at an industry about where you trended, you go to look at what type of data are you trending, how long are you trending it, what vertical you are looking at, what geography and what vertical and which sub-vertical and vertical, so is the automotive improved, sometime with the list you get there and then hence with those value, you can determine the price.
We've made great progress there and we'll continue to make very good progress. I'm confident over the prior year, we have earnings calls update we will continue to have visibilities throughout this.
Next step is the on payment.
Andre Benjamin
And then just one follow-up on Personal Solutions, I know you said you expect the growth there to remain above your long-term trend it is definite in the case over the last couple of years. Any color you can provide on how you expect the growth for the direct versus indirect channel?
Rick Smith
Obviously the indirect channel has been and will be a greater revenue contributor. But we expect growth out of both and we expect growth globally, not just in the U.S.
and I think one of things you can't underestimate is the multi-year journey that that business has been on to build, launch, and work globally, we in fact we call it Renaissance it's our platform and the goal that gives you on the direct side to build, modify, launch, create products much faster than we ever did before, create a user interface that is much more friendly not knowing to do in the past as well. So that would be a great enabler for growth for those guys.
Operator
We will take the next question from Tim McHugh from William Blair.
Tim McHugh
Hi guys, thanks. Just can you elaborate on the trends you're seeing in Europe, the growth continues to be incredibly strong I know, you talked about the TDX contract?
But I mean this is more than that, so I mean can you talk about bit more about what's driving the strength there and connect, can you determine?
Rick Smith
Yes, I think strategically, Tim, it's the same that goes to the world, you are saying that the ballpark in EDI and EPI. So the core processes we will use to grow around the world it's on Europe.
In addition to those core processes, yes you do have the industrial contract, TDX contract and you know TDX is not just in the UK, TDX is now part of our debt management strategy globally but is revenue being generated beyond just investor or government contract in the UK. Beyond that as I mentioned in my comments we are seeing a modestly improving economic environment even with Brexit in the UK, we are seeing really good performance by our team and we are seeing that for years now, we continue to really good job and executing core growth in NPI and EGI.
So it's broad based.
Tim McHugh
Okay. Thanks and then international margins seems to be a big part of kind of the margin story as we think about at least above average sort of expansion for 2017?
Is that just leverage on growth, is there something is it savings from some of the realignments that you have done there and then implication of Cambrian, I guess what is -- what is it that's driving a little faster expansion now as we go into 2017?
Rick Smith
Great question. One we did great framework, the commitment we have given you our investors and ourselves is to continue to drive EBITDA margin up to that 40% range, approximately 40% once we've carried around including international.
International by default is less efficient in where they operate in a USIS or a EWS is because so many geographies. So you continue to see us through couple of things.
We took after reposition the business to take inefficiencies out and we've done a lot of that and we've not slightly short from on this earnings call to do just that. Number two for years now we have been at the standardization of technology platforms around the globe where you can transfer platforms from U.S.
with one part of the world to another part of the world take cost out drive efficiency. So those are the two main things we have done and third if you do acquisitions over time those acquisitions become more efficient that will run and as the incremental margins.
So those were and I think we guided long-term model for international in mid-30s and you are seeing a nice step up in 2016, you'll see another nice step in 2017.
Operator
We will take the next question from Toni Kaplan from Morgan Stanley.
Toni Kaplan
Congratulations on the strong quarter guys and Jeff congratulations on your pending retirement. Rick I think you mentioned you expect margins will expand at least 100 basis points in 2017, which is obviously, well in excess of the 25 basis point annual target you've talked about in the past.
As you think about our models in 2018 and beyond, I'm wondering if 25 basis points is still sort of the right number and then I have a follow-up.
Rick Smith
Again our goal is to exclude, as you know is to manage levels of investment to give us the growth rate that we, we want to customers desire the price we need to build to satisfy the problems with maximizing margin and the model we have a 7% to 10% growth, 11% to 14% multiple year -- 11% to 14% EPS growth and at least 25% margin expansion. We have a goal to get the 40% margin.
There you see years like you saw last year we get 110% you can see years like you see this year we're guided over 100 basis points again and you'll see years we're down 25 basis points. So just think of the long-term model growth on revenue growth on EPS and getting to that 40% margin.
Toni Kaplan
Got it. That makes sense.
And just sort of as a follow-up I wanted to ask about Global Consumer Solutions margins which were up obviously very nicely compared to the fourth quarter of 2015 is there anything to call out there that was sort of one-time high margin revenue or anything else that might be driving that.
John Gamble
No I think the fourth quarter that the investment and marketing was a little lower than normal. Actually you're seeing margins a little higher than you would normally see.
And then if you remember, earlier in the year they had quite a bit of expense to board a new major customer LifeLock and that was pretty much completed by the time you got to the fourth quarter. So you put those two things together and our margins look a little better.
That's why we indicated we expect next year's margins to be slightly over 30%, but on average that's where they played out this year, we would expect the same type of thing to play out in 2017.
Operator
We'll now take our next question from Manav Patnaik from Barclays.
Manav Patnaik
Thank you. Good morning, gentlemen.
Rick you said a lot of great things in the core and then you left the worst to the last announcing Jeff retirements so you could done the first way you thought. Congratulates -- congratulations and thank you, Jeff.
So I hope we would still have some more time with you. My first question is just in the offset to be 3% headwind that you're seeing.
I understand it's obviously a clear testament to your NPI initiatives, EGI and so forth but in terms of the components that offset was there -- did you have to pivot into different products and areas that maybe work better in a rising rate environment or is that how we should think of it or was it something that you sort of already had in your armory and you just sort of using it now.
Rick Smith
Yes, it's more the latter in pivoting on product innovation is always speed but you can just quickly change it is a pipeline that's been developed for quite some time and really what happened look Manav, is we gave guidance, sort of framework, you shouldn't call guidance in October and that was a value of the time looking back in February, number of prices launched already are out that are being used are at a one rate far higher than we had thought, we could achieve at that point in time. So it's really more the latter rather than pivot to say it was launched our products do well high in share development.
Manav Patnaik
Got it. And then in Workforce I think you said you guys are launching in Canada.
I guess what I'm trying to just understand is, how we should think about the timeline on how that plays out?
Rick Smith
Yes, I think, yes, be patient with us. We have the ability to make multiple -- multiple investments for the long-term benefit of our shareholders and customers.
I think its international number of Canada, UK, Australia, some places. Latin America has been a longer-term Vietnam versus a 2017.
These are working really hard you will see, have seen peel back some margin and look at the assets an example, we invested nicely in the fourth quarter we will continue to invest in 2017 and standing up capabilities for the international were number. And we can do that by the way, we can do that, what you guys do, you'll have to still hit we're committed year over at a more to mid-50s kind of EBITDA margin for EWS.
But think about being revenue being generated international numbers being kind of 2018, 2019 timeframe.
John Gamble
In terms of your concerns about Jeff Dodge, let me hear from your end, you can do a farewell super. You'll have an opportunity to see him again don't worry.
Jeff Dodge
That's okay. I think it's going to be a revenue generator.
Manav Patnaik
Last question for me was just around M&A pipeline. You've obviously got your leverage bring down you're pretty close to getting to your official target.
How should we think about -- what's in the cart there especially may be you talked about Brazil, getting better. Does that increase your attractiveness there?
Rick Smith
Yes. Thank you.
Goal number one we make sure that the Asian experienced Veda was integrated properly and we're getting the resources they need long-term to grow. As I mentioned in my prepared comments that is going to extremely well I see as being behind us now.
So just to be on sure we're delevering as you mentioned before we got a clear strategy. We got a solid pipeline, we got a balance sheet to do acquisitions and you should expect us to think about getting back in the market of M&A.
Operator
We'll now take the next question from Andrew Jeffrey from SunTrust.
Andrew Jeffrey
Hey good morning. Thanks for squeezing me in here.
Very thorough job as usual Rick, the comments on data and in particular are pretty encouraging. I'm wondering if you could frame up a little bit what the internal growth rate is there and how much that might be contributing to the 2017 organic growth as that business anniversaries.
Rick Smith
Yes, I think we bought the company we bought it because it was a great franchise, it was a great cash, there is a geographical expansion in the area we like a lot. But the gross rate as we stand up would about be the rate of internationals [indiscernible] growth rate so.
When you think about the organic growth of Equifax think of Veda bringing us in a range we're taking for a company.
Andrew Jeffrey
Okay. So neutral to the consolidate company outlook?
Rick Smith
Yes.
Andrew Jeffrey
And I assume that some of the efforts Cambrian and EGIS et cetera are poised at some point to accelerate that growth?
Rick Smith
Yes, we're ahead of schedule in deployment of platforms as you know it's taking time to contraction we get customers that from to get technology in place through could be a adoption of the customers. And the hope would be over multiple years in the future that those are enablers with different areas of growth which is facilitating potentially in faster growth.
Andrew Jeffrey
Okay. And to the extent just kind of looking forward and thinking about this remarkable ability to offset a three PPT headwind if we think two kind of worst-case scenarios if ACA is 2 to 2.5 point headwind in 2018 can we think about momentum from NPI the class of 2016, the classes, may be not 2017 quite yet, but those things potentially offsetting that the framework of your long-term growth targets.
John Gamble
That’s a goal. Our goal is to deliver over multiple years that 7% to 10% top-line growth and that's organic growth, that's the M&A and stay committed to that.
So innovation big part of it, we are going up to 10 years and also thinking today and we'll know more -- you will know more and more as we go throughout the year. What does a repeat and replace really mean?
And will that be means testing. Will it be a corporate mandate?
We're just taking a look-alike and our goal is to make sure we're innovating this fact as we can today to navigate headwinds as we've just did in 2017 any new headwinds making up 2018.
Operator
We'll now take the next question from Kevin McVeigh from Deutsche Bank.
Kevin McVeigh
Great, thank you very much. And congratulations I wonder the new administration being so per growth as you think about growth opportunities obviously seeing being a potential headwind but there are other areas that could be sources of growth as the government tries to enhance economy beyond traditional GDP.
And is there any sensitivity beyond that we've been in this less than optimal GDP environment to the extent we do get 3%. How does that impact the longer-term organic growth target?
Rick Smith
Kevin may be three points; obviously strength in the overall economy is good for us. Our customer who go to faster rate that helps us do more.
Number two, corporate tax reform, if corporate tax reform is passed in a comprehensive manner the ability to company generate more earnings and [indiscernible] best practice and that ability to grow, which will help us grow that's beneficial to us. Number three is if there is a meaningful change in the regulatory landscape that helps our customers, be able to attract more customers underwrite more products and expand those are three areas that all help us.
John Gamble
Specific to us corporate tax reform we're likely on the good side of the ledger, positive. We have been specific about how much, and we'll have a way to wait to see what it looks like.
But generally speaking, it would be a positive forever.
Kevin McVeigh
Super. And then just a great boost to dividend in terms of 18% boost how do we think about that relative to buybacks.
And then I know you mentioned buybacks potentially in the back half of the year is that already incorporated in the guidance or would that be a potential source outside.
Rick Smith
Yes so, again as our leverage comes down we will execute buybacks based on the pace of our acquisitions. So I think we're extremely successful in acquisitions, you'll see a lower level of buybacks.
But, yes, we've already assumed the level of repurchases in the second half of 2017 in our guidance.
John Gamble
Kevin, you may recall, I can't years ago was the -- well, we committed to the dividend policy that was 25%, 35% of our adjusted net income, we go back every year in the form of the dividend, that is safe as far as some of that.
Operator
We now take the next question from George Mihalos from Cowen.
George Mihalos
Great, congrats on another nice quarter guys and Jeff congrats on your retirement, it sounds like we'll have a fair amount of time to tell about you, which is good. Rick and John I'm going to trying to ask this question a bit of another way but if we sort of look at 20% of your business between ACA and mortgage being down effectively double-digit.
That means the other 80% to get to that 8% to 9% constant currency growth for the whole company that's up almost kind of in the mid-teens. And I'm just wondering if you might be order to rank order, what are some of those drivers whether it would be verticals or geographies that really stand out for you to give you that strong growth?
Rick Smith
Let me see if I can deconstruct your view which is a good view as stated it is in the teams you also have not too much of Veda benefit in 2017 than you have in 2016 so that's part of the contributor. Then what you are saying is true, you have very high once again very high kind of organic non-mortgage, non-HCA growth and there is no magic there, George that is the same thing we've been doing in NPI and ETI.
So it's truly is broad based and if I went through I can't remember that's an example I think I gave and even U.S. the number of verticals have grown double-digit, I can do the same thing in international, I pick different countries and different verticals of different countries, I can take that verticals in the USIS and see how they are growing.
It is so broad based, it's not one vertical, it's not two verticals it's not one part, two part it's a combination of all those things coming together.
John Gamble
And as Rick mentioned in his script we are seeing continued very strong double-digit growth out of EWS and then out of international and then GCS growing above their long-term model rate. So the areas of growth are really concentrated there.
USIS still performing well relative to mortgage but the growth is concentrated in those businesses as we have talked about.
George Mihalos
Okay great. If I could sneak one more in the financial marketing line, I mean that was up nicely, I think it was almost 7% in the quarter, should we be viewing that as a sign of your customers, your banks wanting to get more aggressive on the lending front?
Rick Smith
Yes traditionally that has been the case but pre-screen is the pre-cursor to underwriting which that puts your online stuff. So we have not explicitly baked that into guidance, what we expect though rather than what pre-screen that was actually go more lending which is good for us.
Operator
We now take the next question from Andrew Steinerman from JPMorgan.
Andrew Steinerman
Hi it's Andrew, Rick, I just want to make sure I understand the 3% headwind that 3 percentage only from mortgage right and when you say the ACA being flat rev, that's in addition to the 3% headwind. And then on the offset are you saying that the increased revenue activity fully offset those headwinds or mostly offset those headwinds, I know you are counting on that activity from banks higher interest rate environment in addition to higher NPI?
Rick Smith
Good point. So to answer your first question is ACA was not directly counted as percentage of mortgage headwind alone.
We kind of say, [indiscernible] said what we knew you can do the math was a growth driver in the past; it was the growth driver to flat that is a headwind for us. The EWS has got to offset and we got to offset, thinking about the guidance that we gave you as being offset by things we are already doing, so it's a combination of NPI and EGI.
Andrew Steinerman
Okay, thank you.
Rick Smith
Thank you. One of the things may be before hopefully you guys starting to phone is I -- just I could just two points, came up with a few right of thought things that will probably be addressed.
One was around the OIS revenue when compared to others we got 4% versus what you expected from your larger point of clarification you just made some you just is that was -- that is burdened by two points, there is two points, three points of headwind from what we call direct to consumer business. Now we credit GCS, you said most of our consumer business going [ph] with the GCS.
We left behind reports month to [indiscernible] experience that has been declining, that declined even faster in the fourth quarter, we've heard experience announced that reach last year in the fourth quarter and then repeat. So that three points headwind this year versus less that one in the first few quarters of the year.
The other question was raised sequential margin change in EWS. I will just quickly talk about that.
That was driven by two things. We got to see now total cost with mix we're still lower in the high margin from [indiscernible] you may have seen in the third quarter.
Secondly as I mentioned and John mentioned we are investing nicely in setting up the international. So those are two small points that are sequentially looking to margin, EWS explain that, that business is still well and trading at 50 and mid-50s margin, so I can clarify that one.
Jeff you want to finish on just talking about that is that.
Jeff Dodge
I want to thank everybody for their interest and their time in Equifax and I've got a lot of time and job and you've all been a big part of that, we will get to meet again in the coming months. We also wanted to thank Rick and John for giving me the latitude and the support to do a job I enjoy and once again I want to thank everybody and with that operator, we will terminate the call.
Operator
Thank you. That will conclude today's conference call.
Thank you for your participation, ladies and gentlemen. You may now disconnect.