S&P Global(US:SPGI)2025-10-30 13:30Financial Data and Key Metrics Changes - The company reported record revenue, operating profit, and EPS for the third quarter, with revenue increasing by 9% year over year and subscription revenue growing by 6% [5][22] - Adjusted EPS increased by 22%, and the company achieved 180 basis points of margin expansion on a trailing 12-month basis [5][22] - The company returned nearly $1.5 billion to shareholders through dividends and buybacks since the last earnings call, with an additional $2.5 billion share repurchase expected in the fourth quarter [5][6] Business Line Data and Key Metrics Changes - Ratings revenue increased by 12% year over year, driven by strong demand in high yield and structured finance [29] - Market Intelligence saw an 8% organic constant currency growth, marking the strongest growth in six quarters, with double-digit growth in volume-driven products [26][29] - Commodity Insights revenue grew by 6%, supported by double-digit growth in energy and resources data and insights [30] Market Data and Key Metrics Changes - Bond issuance increased by 13% year over year, particularly in high yield and structured finance [10] - The equity markets performed well, contributing to a strong quarter in the Indices business [10] - The company expects bond issuance growth in the mid to high teens range for the fourth quarter [11] Company Strategy and Development Direction - The company announced the planned acquisition of With Intelligence, expected to close by early 2026, which will enhance its data offerings in private markets [12][13] - A focus on innovation, particularly in AI, is evident with recent product launches and partnerships aimed at enhancing customer value [15][19] - The company is streamlining its business through divestitures, including the Enterprise Data Management and ThinkFolio businesses, to better align its portfolio [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current market conditions, noting strong investor demand and resilient market sentiment [10][29] - The outlook for the rest of the year assumes continued favorable market conditions, with expectations for bond issuance growth and stable equity markets [11][36] - Management highlighted the importance of ongoing innovation and strategic investments to drive future growth [39] Other Important Information - The company achieved its merger revenue synergy target ahead of schedule, exiting the quarter with $255 million of run rate synergies [25] - Adjusted expenses increased by 1% year over year, primarily due to higher base compensation, but were offset by productivity savings [28] Q&A Session Summary Question: Market Intelligence organic growth of 8% - Management attributed the growth to strong execution, product innovation, and alignment within the sales teams, leading to competitive wins [51][52] Question: Ratings issuance normalization and future growth - Management noted that growth exceeded expectations, with a favorable outlook for ratings issuance driven by strong maturity walls and refinancing activity [64][66] Question: Role of AI in Market Intelligence margins - Management emphasized that AI investments have positioned the company well for growth and productivity, with ongoing innovations expected to drive margin expansion [73][78] Question: Strength of private markets growth - Management highlighted strong issuance within ratings and the positive impact of partnerships and acquisitions on private markets data offerings [82][84] Question: Size of EDM and ThinkFolio divestiture - Management indicated that the divestitures were not material to consolidated financials but would be slightly accretive to revenue growth and margins in 2026 [87][88]