Experian (EXPN) Operational Quality Rating (A)

(A) | Financials | Global Credit & Information Services
By: Old York Financial
A Private Principal Report

the verdict

Old York Financial has assigned Experian (EXPN) an Operational Quality (A) Rating. After wrapping up our forensic sweep of the "Big Three" credit bureaus, Experian emerges as the clear thoroughbred of the group. While Equifax (BBB) struggled through a multi-year cloud migration and TransUnion (B) choked on debt-fueled acquisitions, Experian has maintained a superior balance of organic growth and capital efficiency.

Experian earns an (A) because it is the only member of the trio that actually hits our 15% ROIC hurdle (Clocking in at 16.6% for FY2025). It possesses the most diversified global footprint dominating the hyper-growth Brazilian market, and has successfully scaled its consumer "free member" ecosystem to over 208 million users. It misses the (AA) tier only because its "Asset Light" status is still contested by a heavy 8–9% CapEx-to-revenue ratio required to maintain its massive data infrastructure.

the old york analysis

owner earnings: the global cash engine

Experian’s cash conversion is elite, consistently hitting the 90%+ mark. Unlike its peers, Experian’s "transformation" costs are baked into its steady-state operations rather than treated as "one-time" excuses.

• 2025 Benchmark Revenue: $7.51 Billion (USD)

• (-) Maintenance CapEx (Tech & Data): ($0.65 Billion)

• (-) Net Interest & Tax: ($0.48 Billion)

• OLD YORK OWNER EARNINGS: $1.41 Billion

Analyst Note: Experian’s owner earnings are "higher quality" than Equifax's. They don't have the same level of mortgage-market cyclicality because their Latin America and Consumer Services segments provide a massive non-cyclical buffer.

growth & market dominance

• The Brazil Monopoly: Through Serasa Experian, they own the credit data of an entire emerging economy. This is a "Sovereign" moat that Equifax and TransUnion simply cannot replicate.

• Consumer Direct: With 208M members, they’ve turned a "B2B data file" into a "B2C Brand." This allows them to upsell insurance and credit products directly, bypassing the banks.

• Vertical Expansion: 20% of revenue now comes from "high-growth verticals" like Health and Automotive.

operational efficiency

• ROIC: 16.6% (Post-Tax ROCE).

  • Forensic Note: Experian is the winner. They are the only major bureau to consistently clear our 15% benchmark. Their capital velocity is roughly 2x higher than Equifax’s and 4x higher than TransUnion’s.

• Net Profit Margin: 15.6% (Benchmark).

• Operating Margin (EBIT): 28.1% (Expanded 50bps in 2025).

• EPS Growth: 11% (FY2025) / Guidance 2026: 12-14%.

Analyst Note: They are projecting double-digit EPS growth even as they lap tough comparables. This is a sign of true Pricing Power.

the fortress check

• The Reduction Factor: ACCELERATING.

  • 2025 Performance: Returned over $529 Million to shareholders.

  • 2026 Power Move: On January 30, 2026, the Board launched a $1 Billion share repurchase program.

  • Net Dilution: Negative. They are retiring shares with surgical precision using organic cash flow, not debt.

• Asset Light: MODERATE. While their data is digital, the "Cloud dual-run" costs (running legacy and cloud simultaneously) are still eating 8% of revenue.

why it’s rated (A)

• The ROIC King: They are the only ones in the sector meeting the Registry's efficiency standard.

• Geographic Moat: Their dominance in the UK and Brazil provides "Macro-Diversification." When the US mortgage market slows, Brazil usually picks up the slack.

• Reduction Discipline: The $1B buyback launch in 2026 is a massive signal of "Registry Alignment."

final determination

Rating: Old York Quality (A)

Classification: The Global Data Sovereign.

Experian is the "Gold Standard" of the credit world. It has the best margins, the best ROIC, and the best international exposure. It’s an (A) the bedrock of any financial data registry.

Disclaimer: Old York Financial operates privately as a principal and sells corporate advisory. Old York Financial is not an accountant, a financial advisor, a broker, an agent, a lawyer, or a portfolio manager.