Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

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Industries included in the sector are advertising, diversified outsourcing services, and financial data services.

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Fortune collaborated with the Diligent Institute to rank the most innovative boards of directors among S&P 500.

Modern Board 2023-S&P Global

<span style="font-weight: 400;">A diverse set of high-powered Wall Street players dominate the 13-person board at market information stalwart S&amp;P Global. The New York–based company employs six current or former CEOs as directors, including Douglas Peterson, the company’s chief executive, and the ex-CEOs of Bank of New York Mellon and Accenture. Gay Huey Evans, former chair of the London Metal Exchange, is among S&amp;P Global’s five female directors. Richard Thornburg, the non-executive chair of the board, was formerly the CFO and chief risk officer of Credit Suisse and a non-executive chair of the financial giant. Gregory Washington, president of George Mason University, who has also led research for the NSF, NASA, and Air Force Research Laboratory, rounds out the board’s expertise. He is one of two Black directors, along with Stephanie Hill, executive vice president of rotary and mission systems at Lockheed Martin. In December, S&amp;P Global unveiled a strategic road map for its next growth phase, revealing plans to leverage A.I. and invest in private markets, sustainability, climate, energy transition, credit and risk management, and emerging markets.</span>

Fortune Modern Board 25

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

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Dealing in financial information and analytics, it is the parent company of subsidiaries such as S&amp;P Global Ratings and S&amp;P Global Market Intelligence. The company also owns a majority stake in the S&amp;P Dow Jones Indices.

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This year's Fortune 500 marks the 66th running of the list.

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The New York-based firm sells financial information and analytics through brands including S&amp;P Global Ratings and S&amp;P Dow Jones Indices.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 65th running of the list.

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This year's Fortune 500 marks the 64th running of the list.

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Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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S&amp;P Global is a leading provider of transparent and independent ratings, benchmarks, analytics, and data to the capital and commodity markets worldwide. The company delivers markets intelligence through its divisions, including S&amp;P Global Ratings, S&amp;P Global Market Intelligence, S&amp;P Dow Jones Indices, S&amp;P Global Commodity Insights, S&amp;P Global Mobility, and Sustainable1. These services support decision-making across various sectors, from finance and commodities to sustainability and mobility. With a history dating back to 1860, S&amp;P Global continues to empower customers with the data and insights needed to navigate complex global markets.

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S&P Global (SPGI): Company Profile, Stock Price, News, Rankings

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S&P Global

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Good morning, and welcome to S and P Global's First Quarter twenty twenty five Earnings Conference Call. I'd like to inform you that this call is being recorded for broadcast. All participants will be in a listen only mode. We will open the conference for questions and answers after the presentation and instructions will follow at that time. To access the webcast and slides, go to investor.spglobal.com.

I would now like to introduce Mr. Mark Grant, Senior Vice President of Investor Relations for S and P Global. Sir, you may begin.

Good morning, and thank you for joining today's S and P Global First Quarter twenty twenty five Earnings Call. Presenting on today's call are Martina Chung, President and Chief Executive Officer and Eric Abouaf, Chief Financial Officer. We issued a press release with our results earlier today. In addition, we have posted a supplemental slide deck with additional information on our results and guidance. If you need a copy of the release and financial schedules or the supplemental deck, they can be downloaded at investor.spglobal.com.

We also issued a release announcing the company's intent to separate its Mobility division into a stand alone public company. That release can also be found at investor.spglobal.com. The matters discussed in today's conference call may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including projections, estimates and descriptions of future events. Any such statements are based on current expectations and current economic conditions and are subject to risks and uncertainties that may cause actual results to differ materially from results anticipated in these forward looking statements. Additional information concerning these risks and uncertainties can be found in our Forms 10 ks and 10 Q filed with the U.

S. Securities and Exchange Commission. In today's earnings release and during the conference call, we're providing non GAAP adjusted financial information. This information is provided to enable investors to make meaningful comparisons of the company's operating performance between periods and to view the company's business from the same perspective as management. The earnings release contains financial measures calculated in accordance with GAAP that correspond to the non GAAP measures we're providing.

And the press release and the supplemental deck contain reconciliations of such GAAP and non GAAP measures. The financial metrics we'll be discussing today refer to non GAAP adjusted metrics unless explicitly noted otherwise. I would also like to call your attention to certain European regulations. Any investor who has or expects to obtain ownership of 5% or more of S and P Global should contact Investor Relations to better understand the potential impact of this legislation on the investor and the company. We are aware that we have some media representatives with us on the call.

However, this call is intended for investors and we would ask that questions from the media be directed to our media relations team whose contact information can be found in the press release. At this time, I would like to turn the call over to Martina Chung. Martina?

Thank you, Mark. S and P Global had a solid first quarter with strong growth in all five of our divisions. Total revenue increased 8% year over year and revenue from our subscription products increased 7%. We continue to demonstrate disciplined execution driving year over year margin expansion of two forty basis points on a trailing twelve month basis and 9% growth in adjusted diluted EPS. We also continued our strong track record of capital allocation returning over $900,000,000 to shareholders in the first quarter through dividends and repurchases.

In addition to our strong financial results, we are acting decisively in our portfolio optimization efforts. As you saw us announce earlier this month, we have signed a definitive agreement to divest the Ostrich joint venture to KKR, which we expect to close in the second half of this year. As we'll discuss in more detail shortly, we have also announced the intent to separate the Mobility division of S and P Global into a standalone public company. We expect this separation to be tax free and to be completed in twelve to eighteen months. We continue to innovate not just in our products themselves, but in how we bring those products to market and how we engage with our customers.

We're encouraged by the early indications from our Chief Client Office as well as the continued momentum of new products and services introduced in the first quarter. Lastly, we plan to host an Investor Day in November. By November, we expect to have made significant progress on the planned separation of Mobility and we look forward to providing a refreshed view of the multiyear strategy for F and P Global at that time. Now turning to what we're seeing in the markets and starting with build issuance. Build issuance increased 9% year over year in the first quarter.

Strength in build issuance was driven by structured finance and bank loans. While we've continued to see spreads widen year to date, they are still below historical norms and issuers saw an attractive window to issue debt in the first quarter. We expect those issuance to moderate from Q1 levels for the remainder of 2025 and we have already seen declines in April. We believe some of the strength in Q1, particularly in investment grade was driven by the pull forward of some issuance to get ahead of April. We expect the tariff discussion and related market volatility is likely leading to some pushback of issuance as well both of which put pressure on issuance volumes in the near term.

As we look at the broader macro and commercial conditions, it's clear that we are going through a phase of unpredictable market movement, geopolitical risk and fluidity in the regulatory landscape. It is also clear to us at S and P Global that our customers need us more in times like these, not less. In the first quarter, we saw a significant increase in engagement with our platforms. Active users across Capital IQ platforms, Platts Connect and Automotive Mastermind increased on average 23% year over year in the first quarter and we have continued to see strong engagement through April. Our customers are looking for insights, data and tools to help them navigate and S and P Global is a destination of choice for decision makers around the world.

We also saw record attendance at two of our marquee conferences in the first quarter. CERAWeek, widely considered the world's preeminent energy conference, had over 10,000 attendees including government officials and 1,600 C suite executives and board directors. For over forty years, the energy industry has gathered at CERoweek to confront some of the biggest challenges facing the world. This year was particularly impactful as we saw business leaders and government officials take advantage of our platform to make major product strategy and policy announcements from the CERAWeek stage. We also had record attendance at our premier shipping and logistics conference, TPM twenty five.

More than ever, customers need insight into how to effectively manage logistics and supply chains, and it was encouraging to see so many industry leaders gather under the F and P Global banner to share ideas and insights on navigating the current environment. We know it's not enough to wait for our customers to come to us, so we have continued our proactive outreach to customers through our global commercial teams in conjunction with the Chief Client Office. Like many of the individuals on this call, our customers are facing variables that are increasingly difficult to predict week to week. We are seeing a slowing pace of decision making in the markets compared to our initial expectations. While we and many others expected some improvement in the M and A environment, many of our customers are less confident in both the timing and the magnitude of that recovery this year.

We consistently hear about the pent up demand and we maintain strong optimism in the long term, but many customers are trying to stay flexible and preserve optionality in the very near term. We benefit however from the resilience of our business mix With recurring revenue accounting for approximately 75% of our total revenue, we aren't overly reliant on market driven factors for our results in any given year. Market volatility can also benefit areas of our business as you can see in the results of our ETD business and indices and the Global Trading Services business and commodity insights. These derivative products built on the IP of S and P Global's index and commodity divisions are crucial to procurement, hedging and other strategies that see heightened demand in periods of volatility. Many of our products are mission critical for our customers with annual and multi year contracts providing additional stability for our business through the cycle.

Even within our Ratings business, nearly half of our revenue comes from non transaction revenue, which is more stable, predictable and consistent in its growth during volatile periods. Despite the near term headwinds facing issuance, we expect continued growth in our non transaction business in 2025. That said, there are a number of market factors that can have incremental impact on our business in the near term. And it's important to pay close attention to how these factors are evolving over the year. Even with a very strong portfolio of market leading products and services, we acknowledge the broad market factors like trade conflict and supply chain risk as well as the evolving geopolitical landscape.

These things make it more challenging to foresee our plan for Central Bank actions or the level of capital markets activity that may take place in 2025. As we look to the global markets, we continue to see secular trends that would benefit S and P Global, like the continued shift from active to passive management and energy transition. For 2025 specifically, we expect asset prices in the equity markets as well as the mix of investment grade versus high yield in the near term maturity walls to be modest headwinds relative to our initial outlook. However, we continue to see other factors like the timing of issuance, market volatility and the fluidity of regulatory actions as having positive impacts on part of our business and modestly negative impacts on others. The base case assumptions underpinning our outlook for 2025 reflect the changes we've seen in the environment since February.

We originally assumed 3% global GDP growth and 2.3% U. S. Inflation. Our current view is that GDP growth will be lower than that forecast, though we do not assume a recession. We also expect inflation to be a bit higher than originally assumed in our guidance.

We expect crude oil prices to average in the low 70s for the year, slightly above the levels we're seeing now, though we do expect volatility in the coming quarters. We've had a strong start to the year for build issuance. But since the end of Q1, we have seen market volatility suppressing volumes, particularly in high yield, and we expect second quarter issuance to decline double digits year over year before returning to more or less flat growth in the second half. As such, we now expect build issuance to be approximately flat year over year compared to our initial outlook of low single digit growth. Maturity walls for the remainder of 2025 and 2026 are still 3% to 5% higher than corresponding walls were a year ago, but our build issuance assumptions now call for M and A volumes to be flat year over year compared to prior assumptions of modest improvements from 2024.

We still see potential for one or more rate cuts from the U. S. Fed in 2025. As we highlighted last quarter, there is a range of potential outcomes beyond our base case assumptions, but we continue to reflect our current thinking and plan to update and refine as we move through the year. All these things are factored into the guidance as Eric will share with you in a moment.

One of the reasons S and P Global is able to deliver strong financial results through the cycle is our commitment to continued innovation and customer value. The first quarter included some important innovations in data benchmarks and artificial intelligence. We integrated Visible Alpha data as an add on module in Capital IQ Pro and we were thrilled that the team was able to get this important integration completed and ready for customers a full quarter ahead of schedule. We are also very excited to discuss the launch of iLevel automated data ingestion. This joint innovation between our Market Intelligence and Kensho teams created an AI powered tool that can pull in data from structured and unstructured sources, tag that data appropriately and load us into iLevel.

This makes it faster and easier for customers to manage increasingly complex portfolios across private equity and private credit. Just as importantly, this tool was developed in a way that lets us leverage its capabilities in other products and even in our own internal workflows like our CRM. It's a great example of our cross divisional teams creating scalable technology that's built once and deployed everywhere. We also introduced important benchmarks in our fixed income indices franchise, including a first of its kind fixed income index in Europe, utilizing rolling fixed maturity credits. In Platts, we introduced new commodity benchmarks in biofuels, fertilizers, chemicals and metals.

We encourage you to look through the quarterly release notes to see the continued rapid pace of new products and content in commodity insights. Turning to our financial results. Eric will walk through the first quarter results in more detail in a moment, but we have had an impressive start to 2025. We saw strong growth in every division and 100 basis points of margin expansion in the quarter. Trailing twelve month margins improved two forty basis points to a record 49.3%.

Now turning to the big announcement we made this morning. We're excited to announce today our intent to spin S and P Global's Mobility division into a stand alone public company. We believe this separation will maximize shareholder value by enhancing S and P Global's strategic focus while creating a scaled and independent mobility business. This decision is the result of a lengthy and very robust internal analysis and the Board and management team are unanimously aligned that this is the right course of action to create value for our shareholders. Looking at the financials of both S and P Global's core businesses and S and P Global Mobility, we see that both have very attractive profiles.

S and P Global's four core businesses, Market Intelligence, Ratings, Commodity Insights and S and P Dow Jones Indices generated nearly $13,000,000,000 in revenue in 2024 at an adjusted operating margin of approximately 50%. Mobility generated $1,600,000,000 at an adjusted operating margin of nearly 40%. Both businesses have a history of innovation, growth, discipline and strong competitive positioning and we expect that to continue following the separation. We believe the separation will create some significant advantages for S and P logo going forward. Our four core divisions have similar characteristics, similar customer profiles and greater ability to share technological and data resources across them.

Our leadership team will be better able to focus attention, energy and resources to accelerate product development and deepen customer relationships while executing against a more unified and cohesive strategy. We're excited to share more about that multiyear strategy at our Investor Day, which we plan to host in New York on November 13. As a standalone public company, we believe the Mobility business will also be better able to execute its long term growth strategy independent of the priorities of S and P Global. Mobility will be a well capitalized company with strong well known brands like CARFAX, Automotive Mastermind, MarketScan and Polk. As our analysts and shareholders know, Mobility has incredible data and technology assets, creating significant customer value for dealerships, automotive OEMs and parts suppliers as well as finance and insurance companies.

We've seen significant growth in the users of Carfax Car Care, now serving over 46,000,000 consumers, leveraging more than 35,000,000,000 vehicle history records. The vehicle history, forecasting, pricing and incentive data of the mobility business serve 100% of the top automotive OEMs, 94% of the supplier markets and includes approximately 72,000,000 lines of monthly forecast. This data and technology is deeply entrenched in the workflows of mobility customers, creating a very strong competitive moat and positioning the business well for profitable long term growth. We are particularly encouraged by the resilience this business has demonstrated through the cycle. We acknowledge the additional attention to the automotive space during these times of trade conflict and supply chain disruption, but we remain very confident in the long term growth of the mobility business.

The secular trends around EV transition, autonomous and software defined vehicles, shifts in the sales motion of new vehicles and continued growth in the used car market, all have the potential to increase the demand and addressable market of this business. With more than 70% of mobility revenue tied to the used car market and more than 80% of revenue coming from subscription products, we remain confident that despite some of the end market challenges among automotive manufacturers, the mobility business is largely insulated from direct impact. We expect both companies to be well capitalized and we will provide the details around capital structure and capital allocation as the transaction progresses. We expect the transaction to qualify as tax free to shareholders for U. S.

Federal tax purposes. We anticipate the process taking between twelve and eighteen months and will be subject to market conditions and the satisfaction of customary regulatory approvals. We are committed to keeping investors up to date as we move through this process and investors can expect a number of milestones over the next twelve to eighteen months. With that, I'll turn the call over to Eric Abouaf, our new CFO, to review the financial results. Eric, welcome to the call.

Thank you, Martina, and good morning, everyone. I'm delighted to be joining for my very first earnings call here at S and P Global and especially pleased to be able to talk through such strong results this quarter. Starting with Slide 18, you'll see on the left panel that we delivered a very strong start to 2025 with solid growth in every division and 9% organic constant currency revenue growth for the company. Revenue growth of 8% and expense growth of 6% allowed us to deliver 100 basis points of margin expansion year over year and 9% in adjusted diluted EPS growth. As Martina mentioned earlier, we continue to engage proactively with customers across the board this quarter while maintaining strict discipline on expenses.

That focus and execution helped us to deliver a strong first quarter and also positions us well to deliver strong results for the rest of 2025. Slide 19 illustrates the progress we continue to make in key strategic growth areas. Sustainability and Energy Transition revenue grew 20% to $93,000,000 in the quarter, driven by strong demand for Commodity Insights Energy Transition products and data and insights from Market Intelligence. We continue to see very strong demand for our sustainability offerings in all divisions and saw a number of competitive wins in the quarter, especially around our physical risk solutions. Moving to Private Markets.

Revenue increased by 21% year over year to $140,000,000 Growth was driven by debt and bank loan ratings as well as continued strength in iLevel and other private market solutions within Market Intelligence. Private credit continues to be a significant driver of growth for us, and we continue to see strong demand for an S and P Global rating on debt, whether it is issued in the public or the private markets. We are also nearing the finish line on our revenue synergies. We exited the first quarter with run rate revenue synergies of $311,000,000 and remain ahead of pace to achieve our target of $350,000,000 by 2026. Finally, we are pleased that we continue to deliver the Vitality Index at or above our 10% target.

In the first quarter, we saw contributions from new and enhanced products in every division and are pleased to see the financial impact of the product investments we've made in recent years. Turning to our divisions. Market Intelligence revenue increased 5% in the first quarter with the net impact of acquisitions and divestitures creating a roughly 30 basis point headwind to growth. Revenue from our data analytics and insights products accelerated on both the reported and an organic basis in the first quarter to 74% year over year respectively. First quarter revenue in the business line includes contribution from Vivobyl Alpha less the lost revenue from the PrimeOne divestiture.

Enterprise Solutions benefited from an increase in issuance volumes in the debt and equity capital markets as well as strong growth in subscription products. Reported revenue growth of 1% includes the impact of $21,000,000 in FinCentric revenue in the year ago period. Excluding that impact, organic growth was 8% year over year. Credit and Risk Solutions grew 6%, supported by strong new sales and price realization, particularly for Ratings Express subscriptions. Consistent with the commentary we made during our last call, margins were below the full year guidance range in the first quarter, but actually came in slightly better than we initially expected based on some tight expense controls we put in place at the start of the year.

Margins of 32.8% improved slightly year over year. We expect some modest improvement in the quarterly revenue growth rates in 2025 as we progress through the year. We see strong growth in the sales pipeline and stable renewal rates, and we expect both of those dynamics to continue as we lap more of the cancellations from 2024. We're also encouraged by the continued momentum we're seeing in our competitive win rates in Market Intelligence as our enterprise approach continues to resonate with more and more customers. Now turning to ratings on Slide 21.

As Martina mentioned earlier, we saw issuers take advantage of favorable financing conditions and open market windows to drive growth in issuance volumes in the first quarter. Q1 was actually the fifth consecutive quarter of more than $1,000,000,000 in revenue for our Ratings division. Ratings revenue increased 8% year over year as we saw positive growth across all revenue categories. Transaction revenue grew by 7% in the first quarter as heightened refinancing activity increased bank loan and structured finance fees. Non transaction revenue increased 10%, primarily due to an increase in annual fee revenue and elevated issuer credit rating or ICR revenue.

Importantly, much of our growth in ICR came from private market mandates as more and more participants in the private markets are looking to capture the value that comes from an S and P Global rating. Given the pullback we've seen in April issuance volumes, we do expect build issuance to be down low double digits in the second quarter and flattish in the second half. This will primarily impact the cadence of transaction revenue, while non transaction revenue continues to grow at a healthy pace each quarter. As Martino mentioned earlier, we benefit from the strong base of non transaction revenue in our Ratings business, and we expect non transaction revenue to grow faster than transaction revenue in a year like 2025. That provides some additional stability to our ratings business through the cycle.

Adjusted expenses increased only 4% in the quarter. We continue to actively monitor the issuance environment and manage expense levers in our market driven businesses tightly to preserve margins and ensure we're positioned to deliver against the profitability targets we set out for 2025. Now turning to commodity insights. Revenue increased 9% following the sixth consecutive quarter of double digit growth in Energy and Resource Data and Insight. Price assessments and data and insights grew 810% respectively.

We continue to see commercial momentum as we transition more customers to enterprise contract relationships. We are approximately one quarter of the way through the eligible customer base in that transition and expect to be nearly halfway through by year end. Advisory and transactional services revenue grew 19%. As Martina noted earlier, times of volatility and uncertainty drive increased demand for a number of our products, and we saw this positive impact in the first quarter. We had a record quarter in Global Trading Services and record attendance at CERAWeek, both of which contributed to the outsized growth we saw here too.

Upstream data and insights revenue grew by 1% year over year, with growth tempered by somewhat elevated cancellations due to the customer consolidation we've seen in the energy space. We expect that consolidation to impact Upstream a bit more in the remaining quarters of 2025. Adjusted expenses increased 8% due to higher compensation costs and ongoing investment in growth initiatives. Operating profit for commodity insights increased 11% and operating margin improved by 90 basis points to 48.1%. Now turning to Mobility.

Revenue increased 9% year over year, though this includes a roughly 70 basis point headwind from currency impacts largely due to exposure to the Canadian dollar. Dealer revenue increased 11% year over year driven by new business growth in products such as CARFAX and Automotive Mastermind. Dealer revenue benefits from its higher exposure to the used car market, which is generally more resilient for the cycle than the new car market. Manufacturing increased 1% with growth impacted by the decline in the transaction revenue related to the recall business. As a reminder, we began calling out the impact of the decline in recalls earlier last year and will lap that impact beginning in the second quarter.

Financials and other increased 11% as the business line continues to benefit from strong underwriting volumes and commercial momentum. Adjusted expenses increased 8% due primarily to the increased advertising and promotional investment. That investment has helped drive significant growth in CARFAX Car Care, which now has approximately 46,000,000 users, a nearly 65% increase since our Investor Day in 2022. Margins for the segment improved 40 basis points year over year to 38.5. Now turning to S and P Dow Jones Indices.

Revenue increased 15%, primarily due to strong growth in asset linked fees, which benefited from higher AUM and continued strength in exchange traded derivative revenue. Revenue associated with asset linked fees was up a strong 18% in the first quarter. This was driven by higher ETF and mutual fund AUMs, benefiting from both market appreciation and net inflows. As a reminder, there is a slight delay in revenue recognition in our asset linked fees, which allows us to continue benefiting from higher equity valuations we saw during the fourth quarter of last year. We do expect growth in asset linked fees to moderate in 2Q and beyond, given the declines we've seen in market valuations since we gave our initial guidance.

Exchange traded derivatives revenue grew 11%, primarily driven by the strong volumes in SPX products and price realization. Data and custom subscriptions increased 7% year over year, driven by new business growth in end of day contracts, which saw mid teens growth in the quarter. Revenue from custom subscriptions, however, somewhat offset the very strong growth in end of day contracts. Adjusted expenses increased 15% year over year, primarily due to increased investments in strategic growth initiatives as well as an increase in compensation expense. Indices operating profit increased 15% and operating margin remained unchanged year over year at a very strong 72.9%.

Now turning to guidance. Given our new debt issuance expectations and the current equity market levels, Slide 25 outlines our enterprise guidance on a GAAP and adjusted basis. We are now expecting total revenue growth in the range of 4% to 6%, with adjusted margins in the range of 48.5 to 49.5%. We remain confident in our ability to deliver solid revenue growth, strong margins and growth in adjusted EPS this year. As I'll discuss on the next slide, we do expect slightly lower growth in ratings and indices, our two market driven and highest margin businesses, but we plan to manage expenses so that we can preserve margin guidance in all five divisions this year.

However, due to the planned closing of the Austro sale later this year, we will see slightly lower operating income with no corresponding revenue impact, which will directly impact margins for the year. The Austria impact and the mix shift in revenue are the primary drivers for the change to our enterprise margin guidance. We expect to use the proceeds from Alstro for additional share repurchases, which will offset much of the EPS impact. And our discipline on both expenses and strong capital returns allows us to keep the high end of our EPS guidance intact. Given the market volatility and variability in our market driven businesses, we think it's prudent to widen the range a bit and now expect adjusted diluted EPS in the range of 16.75 to $17.25 Moving to our division outlook.

Our revenue guidance for Market Intelligence is unchanged. For ratings, based on the current expectation for flattish build issuance this year, we expect revenue growth to be flat to up 4%, slightly lower but also slightly broader range compared to our previous guidance. Revenue guidance for Commodity Insights and Mobility are also unchanged. For Indices, we've obviously seen the market pullback, particularly in U. S.

Equities, since we gave our initial guidance. Given that pullback, we now expect revenue growth in the range of 5% to 7%. This guidance assumes the S and P 500 is flat from April 15 through the end of the year, modest growth in ETD volumes and subscription growth similar to what we saw in the first quarter. On the next slide, we are reiterating the margin outlook for all five of our divisions. While we do expect somewhat lower revenue and ratings and indices, we expect to offset that impact with expense discipline and modest adjustments to incentive compensation.

We have multiple levers that we can pull as needed this year, and we've proactively identified and prioritized those. We want to make sure we are prudent and don't pull them too early or too aggressively though and preserve our ability to invest in the important revenue growth opportunities we see over the next few years. With that, I'll turn the call back over to Mark for your questions.

first question comes from Ms. Toni Kaplan of Morgan Stanley. Your line is open.

Thanks so much. Congratulations on the mobility announcement. I was hoping you could just give some color on timing. So why now? And then maybe the implications for RemainCo, are there any data sets that you'll continue to try to license from the spun entity once that happens?

And then I know it's early, but any initial thoughts on dis synergies? Thanks.

Hi, Toni. It's Martina. Thanks for the question. Well, as I mentioned during the prepared remarks, this is something that we have been thinking about very deeply for some time. We've done an incredibly deep and rigorous assessment, including multiple rounds of dialogue around around this with our board of directors and consulting with external, advisers on this also.

So, we've come to the conclusion that this is the best path to long term shareholder value and that the tax free spin here is the right path forward for us. I would say we certainly would have more details with respect to datasets that we would license. At this point, we're very much in the mode of business as usual and continuing to focus while the process is running in the background.

And, Tony, it's it's Eric. We've obviously done an initial initial look at the at the financials. As you can expect, the carve out process has begun and is fairly intense. You know, high level view of dis synergies, stranded costs, so forth suggests that they're relatively material to our overall financials. But those are the kinds of topics we'll update you on as we move along later this summer, this fall and into next spring.

The next question will come from Faiza Alwy of Deutsche Bank. Your line is open.

Yes. Hi. Thank you so much. I wanted to ask about Market Intelligence and your confidence and the ability to accelerate revenue as we go through the year. Maybe you can comment on what you're hearing from your customers, how bookings have trended and any other color around the end markets?

Hi, Faiza. Thanks for the question. We have had a a very good start to the year with market intelligence and, been quite encouraged with, several of the core metrics there, including some of the ones that Eric mentioned.

We've seen stable retention rates, good sales pipelines, and ACV faster than revenue, which, of course, is a great indicator for the strength of the business going forward. Remember that Eric also mentioned we will be lapping 2024 early year cancels as we go throughout the year. That gives us a lot of confidence in acceleration as we had indicated in our last call for a stronger second half compared to first half of the year. So good indications there. From a customer standpoint, we have made several, I would say, improvements to how the sales teams are aligned to customers, particularly from an account management standpoint.

That has really helped teams to to have more direct connections and engagement with the customers, and we've been hearing very positive feedback, on that realignment. Also hearing very positive feedback on joint go to market between the market intelligence sales teams and our chief commercial office. And we're starting to see some some great deals there. So we, for example, closed a large counterparty manager deal with a large investment bank. In the quarter, we also closed a large primary markets issue book deal with a commercial bank in the first quarter.

So all in good momentum, good first quarter and we'll continue moving ahead. Thanks for the question.

The next question will come from Surinder Thind of Jefferies. Your line is open.

Thank you. Eric, could you maybe talk about the levers as you guys talk about managing expenses and where some of the puts and takes might be in the range of expectations?

Sure. The the levers here are as you'd expect and then the ones that we've actually, I think, pulled and addressed over the last couple of years during the ups and downs of of the environment, but also the same ones that you'd expect at any well well run company. You know, clearly, headcount and hiring for backfills is a lever that we monitor closely, especially in this environment where there's uncertainty.

There's incentive compensation, which will float up and down with with revenue and performance. There's third party spend, professional services, obviously, which has a a degree of flexibility. And then finally, is investments. So I think those are the ones that we typically wanna protect except in very extreme circumstances. So, you know, part of what I've done is I've settled in over the last two months is literally spend time division by division, circling those, making sure we're ready, selectively making some some tactical adjustments.

But that's the those are the areas where we're vigilant. We'll continue to to stay vigilant and disciplined during this environment.

The next question will come from Ashish Sabadra of RBC Capital Markets.

Thanks for taking my question. On the issuance guidance, thanks for providing that incremental color on M and A assumptions. My question was the flat issuance assumptions for the back half of the year. Does that include any kind of pull forward or what are your assumptions around high yield spreads as well as rate volatility? Thanks.

Hi, Ashish. Thanks for the question. Well, as we mentioned, we would expect, our build issuance to be roughly flat for, for the full year. So modestly more cautious than, what we had during our last call. Maybe I can break it down a little bit for you.

So from a refi standpoint, we still expect the 25 refis to go ahead. We saw a little bit, we think, in in pull forward in investment grades ahead of April. But broadly speaking, we're seeing the 25 refis, you know, come to market as we considered. What we have less expectation of this year is pull forward from 2026 and beyond, especially for high yields who would have less of an incentive to come to market in a volatile environment. On the m and a piece, we did say flat year over year.

I think it's worth mentioning, we still see potential for some opportunistic issuance, although we've moderated that a little bit in in the full year guide that we've we've provided for build issuance. And I think maybe the the last point I would make on this is, you know, as we know, this is incredibly difficult to to predict at this point. There are risks to the downside and the upside on this. I mean, look, contemplated in our range is, you know, there's a possibility of negative year over year growth, for example, in in transaction revenues. However, there's also risk to the upside.

We know that there's a lot of pent up demand in m and a. And so we think from a timing standpoint, it's more likely at this point to hit in 2026. But we know issuers are are good at coming to market when they see an opportunity. And so it's possible we could see some of that this year in the second half as well. Thanks for your question, Ashish.

The next question will come from Andrew Steinerman of JPMorgan. Your line is open.

Two quick ones. One, what's the share count implied in the '25 guide? And did change since February? And secondly, you talk a lot about the strong balance sheet and the share buyback activity. What's the view on S and P's M and A ambitions at this point?

Andrew, let me take the first part of that question. I think for share count, you just start with the share count as it's disclosed, you know, factor in the buybacks at, you know, reasonable price expectations, and then just calculate that going forward for the quarters and the the rest of the year. And I think you should be able to to get to what you need.

Great. Hi, Andrew. Regarding your question on m and a ambitions going forward, I'd I'd reiterate a point that I made on the last call, which is we certainly have no intention of any type of transformative m and a as we go forward. We're really focused on what we think are very high quality organic growth opportunities within each of the divisions and across the divisions, and that's that's where we're executing as we go throughout the year. I would say consistent with how we have, you know, how we have taken advantage of certain opportunities in the past.

If if we see a tuck in that is very attractive for either a core business or very attractive for one of our strategic growth teams, of course, we would consider that. And of course, we always do that through the lens of shareholder value as well as the value we create for our customers. Thanks for the question, Andrew.

The next question will come from Scott Wirtzl of Wolfe Research. Your line is open.

Hey, good morning guys and thank you for taking my question. I just wanted to touch on the topic of private credit and wondering if you can share how that performed on the rating side relative to expectations during the quarter and maybe talk about what you're assuming in terms of growth contribution from private credit for the balance of the year? Thanks.

Hi, Scott. It's Martina. Thanks for the question. Well, we continue execute at the highest levels we can and are happy with performance that we've seen in private credit overall across the organization through the really strong products we have in ratings in market intelligence as well as opportunities for our benchmarks in index. Specifically in ratings, we've always said that we would rate the business or the deals wherever they come.

And we've made very good strides with the majority of the sponsors that we've engaged with. There are a lot of there's a lot of demand, as Eric said in his remarks, for an S and P rating, whether it's public or private. And so that's been, I think, a strong contribution. We've cited the mix there in the past. We've certainly seen some great results in middle market CLOs, for example, in NAVs and and other private credit opportunities.

I would say for the remainder of the year, given some of the really tough year over year comps as well as a little bit of moderation in the environment around issuance generally, I wouldn't say we have heroic assumptions for growth specifically in private credit for the remainder of this year. Thanks for your question, Scott.

The next question will come from Alex Kramm of UBS. Your line is open.

Yes. Hey, good morning, everyone. I'm going to have another boring cost question, but it is Eric's first call, so I think it's okay. But it sounds like you mentioned that all the work on the cost base so far has been more as a do we need to pull any sort of levers to show margin expansion, etcetera, if the environment is a little bit tougher. Just wondering how you think about the cost base holistically.

I know it's only been a couple of months for you, but obviously you come from a lower margin company. And look, I think over if you compare some of the peers, in particular Market Intelligence, the margins don't compare as well anymore for S and P Global. So given that you have a history of cost programs in a couple of years, you did a big transaction a few years ago, just wondering if there's room for maybe a more holistic rebasing of the cost program and where that will come from? Thank you.

Alex, it's Eric. Thank you for the question. As you say, in every company and this one included, there's typically and I've seen it here already, a recent history, you know, over the last few years, but certainly embedded in our budgets for this year and our guidance for this year to do more than just, you know, ration, you know, headcount up or down. That's that's not what, you know, what we're focused on. That that that we do for you know, to make tactical adjustments during the year.

I think what I've started to appreciate is that there's a range of initiatives that we've launched over the last year across our various businesses. Some of those, as you know, for example, in MI, we've been removing silos, simplifying operations, consolidating areas of activities. In other areas like commodities insights, we've had a real push on using GenAI for productivity and some of the analytical and research functions. So there's some systemic, efforts underway that I think are, part of what, will help us deliver our, our, expectations and guidance for this year. You know, to the question of, is there more?

Well, there's there's always more to do and, you know, that's the kind of work that, you know, we start planning on now for next year, and we'll start planning on next year for the year after because it's a, it's a muscle that's, think, developed here, but we can continue to refine it and that's what the, the management team will do together.

The next question will come from Manav Patnaik of Barclays. Your line is open.

Good morning. Martina, I just wanted to confirm, I mean, it sounds like from everything you're saying, you're not yet seeing any major changes in your customer behavior. So I was just hoping you could just help elaborate on that, maybe focusing more on the MI and subscription businesses really?

Yes. Thanks, Manav. And that is true when it comes to the subscription businesses. Clearly, in this kind of environment, we've signaled that we see some behavioral changes in ratings, for example, as I mentioned, with some issuers on the sidelines. So we certainly see that downside in the market sensitive areas like ratings and a little bit in index as well.

I would say that we're really close attention to the subscription businesses and looking very closely at this obviously by sector. The fact that, you know, we have, for the most part, multiyear deals really serves as a ballast in times like this. But, of course, we have to be very strongly engaged with our customers to, get a sense for when there may be more pressures. One of the other things that we've been extremely disciplined about, since, last year is making sure that we're positioned, increasingly to benefit from vendor consolidation opportunities. And we have heard in a couple of, recent, discussions, with large clients that they may be accelerating vendor consolidation.

And, of course, we're there, through the work that we've been doing as well with the chief client office. And so those are some examples. I would also say that, you know, there there were upside opportunities. We have, as you know, some of the strongest supply chain data around, you know, multiple sectors, regions. We also just simply by virtue of what we do are being used to our data is being used by our clients even more.

S&P Global Q1 2025 Earnings Call Transcript | Fortune

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