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2026_GPTW_best-places-by-industry-Financial_Services+Insurance-S&P_Global_Inc._US1_US

Employees say:&nbsp;"What makes S&amp;P Global an exceptional place to work is the thoughtful way it invests in its people, often in ways that aren't typical. From Wellness Days and comprehensive wellness benefits that encourage real recharge, to tuition reimbursement that supports continuous learning and growth, employees are genuinely empowered to thrive. A collaborative, inclusive culture and strong commitment to work-life balance are paired with a generous time-off policy that reflects trust and respect. All of this is reinforced by a clear focus on innovation, giving people both the flexibility and the support to do meaningful, forward-thinking work."

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Employees say:"The company has a fantastic culture, great people, and provides great benefits. Managers are great about caring about you individually, and Directors and Managers are always super supportive of projects, initiatives, or ideas that you have to make our work better. Whenever I have brought up ideas, my directors or managers have been supportive and have recognized good ideas while giving very helpful feedback. You can do meaningful work in a fun environment, and work/life balance is very much respected. It is a great place to work!"

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Employees say:"The company has fantastic culture, great people, and provides great benefits. Managers are great about caring about you individually, and Directors and Managers are always super supportive of projects, initiatives, or ideas that you have to make our work better. Whenever I have brought up ideas, my directors or managers have been supportive and have recognized good ideas while giving very helpful feedback. So you can do meaningful work in a fun environment, and work/life balance is very much respected. It is a great place to work!"

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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.

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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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Best Companies

Rank last year

Years on list

U.S. employees

U.S. job openings

Year founded

Benefits

Subsidized childcare

Compressed work weeks

Option to work remotely

Minimum requirement in-office attendance (days per week)

Mental health coverage

Free mental health sessions (per year)

Free backup childcare time off (days)

Maximum $ amount covered for fertility services

Fully paid maternal leave (days)

Fully paid paternal leave (days)

Fully paid adoptive leave (days)

Maternal leave in addition to regular time off (days)

Paid days off for volunteering

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Current All-Star Rank

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Use of Corporate Assets

Social Responsibility

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Financial Soundness

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Global Competitiveness

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Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

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Profit as % of Revenues

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Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

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EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

Best Workplaces In New York

Founded

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Best Workplaces In Financial Services And Insurance

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.

Q2 2026

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Q4 2025

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Q4 2024

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 Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. I'd like to inform you that this call is being recorded for broadcast. All participants are in a listen only mode. We will open the conference to ask 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 Fourth Quarter and Full Year twenty twenty four Earnings Call. Presenting on today's call are Martina Chung, President and Chief Executive Officer and Chris Craig, Interim 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.

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 K and 10 Q filed with the U. S. Securities and Exchange Commission.

In today's press release and during the conference call, we are 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 press release contains financial measures calculated in accordance with GAAP that correspond to the non GAAP measures we are 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. By any measure, 2024 was an incredible year for S and P Global. Excluding engineering solutions, which was divested in 2023, revenue increased 15% and revenue from our subscription products increased 7%. We benefited from strong market trends, including record debt issuance for our ratings business and strong equity valuations for our index business. However, we also continue to demonstrate the discipline and operational excellence our shareholders have come to expect from us, delivering accelerated revenue growth in commodity insights and strong steady growth in both market intelligence and mobility despite some market headwinds on those two businesses.

We continue to take a balanced approach to profitability and investment, which allowed us to make important investments in technology, AI and products while still expanding margins more than 300 basis points. We delivered 25% growth in adjusted EPS in 2024. This exceeded the midpoint of our initial guidance range by more than 13%. Our disciplined approach to capital allocation allowed us to return $4,400,000,000 to shareholders over the course of 2024 through our cash dividend and the repurchase of 6,700,000.0 shares. We expect to continue strong capital returns in 2025 as we recently announced the fifty second consecutive increase to our cash dividend and a newly approved share repurchase authorization up to $4,300,000,000 In total, you'll see this would allow us to maintain our target of returning 85% or more of the $6,000,000,000 in adjusted free cash flow we are expecting in 2025.

I've been very impressed with our people's ability to execute and deliver such strong results, embracing the leadership transition and the increased focus on our customers and our enterprise advantages. With that increased focus on serving our clients at the enterprise level, we announced the establishment of the Chief Client Office and the Enterprise Data Office. We're excited to share the successes from these initiatives with you as we progress through the year. We're also pleased to share that our new Chief Financial Officer, Eric Abloff, will be joining us officially on February 19. We are gaining momentum in our product innovation and AI initiatives across the organization as well as I'll share with you in a moment.

Lastly, we continue the cycle of optimizing our portfolio of businesses so that we are best positioned for long term profitable growth. In 2024, we acquired best in class solutions to support strategic growth through Visible Alpha, Pronto NLP and world hydrogen leaders. We also divested non core businesses Centric and PrimeONE. One of my first priorities as CEO was to strengthen and deepen our relationship with key strategic customers at the highest levels of leadership. I had more than 100 meetings with some of our most important stakeholders to ensure a smooth transition of these key relationships.

These important discussions include not just our customers, but also strategic commercial and technology partners. Together with our new chief client officer, I met 85% of our largest strategic customers just in the last one hundred days. We are instilling in our executive leadership team a clear need to be where our customers are. Our success depends on the value we create and deliver for our customers. So I've asked our division leadership to make these relationships a personal priority for them as well.

This emphasis on customer engagement is a natural evolution for S and P Global. We've always made customer value a focus. But by making customer engagement a higher priority at the executive level, we are building stronger relationships so that we can accelerate our response to customers' challenges. This engagement can also serve as opportunities to partner or co invest with our customers. One such example is the UBS Leveraged Loan Index Partnership.

Through these many meetings, I'm picking up a consistent set of themes, which align very well with our competitive advantages and reinvigorate our optimism and confidence in our ability to compete and win. While generative AI is not a new topic for our customers, they're moving beyond just considering what this technology can do and focusing on use cases that can scale quickly and contribute to strong financial results. Customers increasingly turn to us to benefit from our years of experience scaling AI technology from Kensho. We continue to see impactful headlines and market news on a near daily basis. Customers are deeply engaged to determine the potential impact to their business from tariffs, regional competitiveness and other aspects of global trade.

S and T Global is a world class provider of data insights and thought leadership in these vital areas. And our customers are turning to us for that expertise. Customers continue to feel the impact of the innovation taking place in financial markets with the flow of capital to passive funds, but also increasing need to private markets and digital assets. Through our leadership in benchmarks, private credit, private equity workflow tools and innovation like our stablecoin assessments, our customers see us as a critical partner in navigating this sea change over the coming years. Additionally, customers recognize our leadership and seek our insights in energy transition.

Energy transition is a complex issue encompassing energy security, technology innovation and the financing of the various investments needed over the coming decades, for example, in utilities. The depth and breadth of our expertise and data sets across oil, liquid natural gas, carbon, renewable energy, electric utilities and reporting all helped drive the 23% growth in revenue from our energy transition and sustainability products in the fourth quarter. As we look to 2025, we are hearing general expectations for some improvements in the macroeconomic environment. There is some variability by geographic region here with caution and uncertainty around Europe and Asia, providing some ballast against general optimism we're seeing in The U. S.

Markets. We are seeing strong demand for our products and some modest tailwinds from vendor consolidation. We continue to see the benefits from the breadth of our offerings as our enterprise approach allows us to meet more of our customers' needs in a more cost effective way. As we've discussed for some time now, we continue to see conditions in the financial services end market below what we would consider normal, though we do expect a gradual improvement over the course of the year. We are also experiencing a highly competitive environment in financial services and somewhat elevated price sensitivity, most notably impacting market intelligence.

Now turning to the twenty twenty four issuance environment. We saw nearly $4,000,000,000,000 in build issuance in 2024, significantly outpacing our expectations. With extremely favorable market conditions, including tight credit spreads and lowering interest rates, we saw many issuers take advantage in 2024 to refinance debt and saw very strong activity in CLO volumes as well as repricing and amend and extend activity. While this does create a very difficult compare for 2025, we believe the refinancing walls and a recovering M and A environment will contribute to modest growth in build issuance this year as we'll discuss in more detail in a moment. As we look next to the vitality index, I'm encouraged that this index continues to accomplish its intended purpose.

When we introduced this metric at our Investor Day in 2022, we discussed the importance of making sure we were prioritizing new products that can contribute to our financial performance over time. We also noted that new products would remain in the vitality index for a finite time and would eventually mature out. The focus is to make sure that revenue from maturing products is replaced by new and enhanced products that can scale quickly. At the beginning of 2024, we had a number of meaningful products mature out of the vitality index. Those products contributed a combined $330,000,000 to the index in 2023, nearly 25% of the total index.

By continuing to innovate and invest in fast growing products, we were able to more than replace that mature revenue and end the year with an index of $1,500,000,000 representing nearly 11% of total revenue. At the end of twenty twenty four, we had another group of products mature out of the vitality index and we are confident that our focus on customer value and rapid innovation will once again enable us to deliver a vitality index at or above 10% this year. Turning to just a few examples of that innovation. As the world's leading provider of benchmarks, we continue to invest and innovate to launch new benchmark products and make our existing benchmarks better. In 2024, we expanded the collection of multi asset class indices offered through S and P Dow Jones indices and we launched the leverage loan indices in partnership with UBS.

We continue to introduce new class price assessments every year and 2024 saw the launch of new assessments for various chemicals, beef and poultry. We also introduced a first of its kind product in the digital assets phase to assess stablecoins. We know that data and technology lay at the heart of almost everything we do. So, we continue to make meaningful investments in our internal technology and our technology products. We are finding new ways to leverage the remarkable data estate that we have And just one example of that in 2024 was the introduction of the market fixed income securities data in Capital IQ Pro.

Part of our focus on technology must include a strategy to leverage the incredible technological advancement taking place in the world today such as generative AI. First, beginning with our people, we are continuing to build a culture that embraces AI and we are empowering our people with the tools, training and resources they need to thrive. In 2024, we introduced our internally developed co pilot called SPARK Assist. Since introducing SPARK Assist, we have seen over 1,300 different use cases developed and shared internally across what we call our Spark store. As we focus on developing AI skills across our entire workforce, we are seeing our people truly embrace the use of these powerful tools to automate workflows, more quickly ingest new information and more efficiently generate their own work products.

We firmly believe that as we embrace the use of AI internally, it will unlock significant potential for product innovation as well. Just as we learned with Kensho's incredible innovations over the years, tools and resources that improve our productivity and efficiency will likely benefit our customers as well. Through ongoing customer meetings, we hear again and again they want to be able to access and integrate S and Global's data into their AI workflows. In order to expand and facilitate how and where customers can connect to our data, we launched a new solution, Kensho LLM ready API that enables users to seamlessly integrate complex, high priority S and P global datasets into generative AI models for their own internal use. It integrates with large language models like GPT, Gemini or Claude allowing customers to use natural language to query our tabular datasets.

This is all part of our ongoing effort to bring our data into this new era of GenAI and ensure that we are meeting customers where they are and where they are going in their AI journey. We also embedded generative AI functionality in our major desktop applications, including Chassis AI for PathConnect as well as ChassisQ and documents intelligence for Capital IQ Pro, all with the same vision of empowering our customers to more quickly and effectively gain insights from our data with AI. We also identified and acquired market leading solutions that we believe strengthen our competitive position in multiple areas while contributing to the immediate financial results of the company. These include Visible Alpha and Pronto NLP in our Market Intelligence division and world hydrogen leaders in our Commodity Insights division. With the ultimate goal of driving profitable long term revenue growth, we will continue to lean into these kinds of innovation, development of tools for our own efficiency and productivity, organic development of new products for our customers, partnerships to develop new products and tuck in acquisitions to accelerate the pace of scale and leadership.

You'll notice that across these examples of innovation runs a common thread of generative AI. When we look at the potential for generative AI across the business over the next several years, there are seemingly endless opportunities to innovate and add value for our customers. Amid all this possibility, we will ensure that S and P Global remains an indispensable partner to our customers as they adopt AI into more and more of their workflows. We are doing this in many ways, including building sophisticated Gen AI experiences, laying the groundwork for Adjentic workflows and investing in foundational AI capabilities that help our customers more quickly and effectively gain insights from our data. In the coming quarters and years, you'll see us lean more into practical applications that have the potential to move the needle on financial performance and enhance the value of our products.

We will prioritize those use cases that improve our revenue growth potential, improve our operational productivity and efficiency, improve the capabilities and skills of our people, and safeguard the security around our proprietary data and our systems. This will require us to say no to a lot of things, but will allow us to effectively put investment dollars to work in ways that have the greatest potential to create real value. You've seen us do that in recent years with Sparkas', ChatIQ and many of the important innovations from our Kensho team and we will continue to highlight our progress in this important area going forward. Now turning to our financial results. Chris will walk through the fourth quarter results in more detail in a moment, but we are pleased and encouraged by the results we delivered for our shareholders in 2024.

We continue to see strong growth in our market driven and our subscription businesses with total revenue increasing 14% or 15% excluding the impact of engineering solutions. We also delivered over 300 basis points of margin expansion in the year. As Chris will discuss in a moment, we saw some elevated expenses in 2024 related to incentive compensation and commissions due to the very strong revenue beat this year. Were it not for that increase in compensation expense, we would have had year over year margin expansion in every division. Now, I'll turn to Chris to review the financial results.

Thank you, Martina. We finished 2024 with strong results as fourth quarter revenue grew by 14% compared to the prior year with growth across all of our divisions. Notably, our market driven businesses, ratings and indices each grew by over 20% in the quarter as we capitalized on favorable conditions in both the debt and equity markets. Adjusted diluted earnings per share increased 20% year over year to 3.77 This is driven by a combination of our strong revenue growth, margin expansion of two sixty basis points and a 2% reduction in fully diluted share count. Now turning to strategic investment areas where I'm excited to share that there was positive momentum across our key initiatives, all of which are helping drive sustainable growth for the company.

Energy transition and sustainability revenue grew 23% to $104,000,000 in the fourth quarter. Growth was driven primarily by strong performance in commodity insights energy transition offerings and positive fund flows in sustainability focused indices. In Private Markets Solutions, revenue growth accelerated 29% to $146,000,000 in the fourth quarter. Growth was driven primarily by continued strong demand for our private market ratings and assessments within S and P Global ratings. For revenue synergies, we exited the fourth quarter with an annualized run rate of $284,000,000 representing 81% of the target synergies we expected to achieve in 2026.

During the quarter, we realized $74,000,000 in revenue synergies. We are pleased to see both cross sell and new product revenue synergies coming in above our expectations in Q4. Finally, we generated approximately $4.00 $9,000,000 in Vitality revenue during the fourth quarter, resulting in an 11% Vitality Index. As previously highlighted, we anticipate a steady stream of innovative offerings to place any products graduating from the index, ensuring sustained momentum in our product lineup. Now turning to expenses.

We saw a total increase of 9% in the fourth quarter. This is primarily driven by ongoing investments in our core business and growth initiatives coupled with increased incentives, commissions and compensation. The significant outperformance in our ratings and indices divisions during the fourth quarter increased incentive compensation across the enterprise. Turning to our divisions. Market Intelligence revenue increased 5% in the fourth quarter or 6% excluding acquisitions and divestitures with positive revenue growth in every business line.

We continue to see the effect of cancellations earlier in 2024 impacting revenue growth in the fourth quarter. However, the fourth quarter is the largest renewal quarter of the year in MI and we are pleased to see retention rates improve to the highest rates we've seen since 2023. We also had significant competitive wins in each of the business lines in Market Intelligence and no significant competitive losses. Lastly,

a very strong quarter of net new sales for Capital IQ Pro. Importantly, annualized contract value or ACV growth outpaced revenue growth soundly in the fourth quarter. This should position Market Intelligence to see gradually improving revenue growth rates as we progress through 2025. Desktop grew 8%, though growth would have been less than 1% excluding Visible Alpha. Data and advisory solutions grew 4% or 5% when excluding the impact of the PrimeONE divestiture, driven by strong demand for pricing and reference data, especially in the loan and CVS asset classes and industry and company data.

Enterprise Solutions grew 6% or 16% when excluding the impact of the FinCentry divestiture. Growth was driven by strong demand for our lending solution offerings, including Clearpar and Notice Manager and renewals for our enterprise data management software. Credit and risk solutions grew 2% despite lapping a significant retroactive revenue benefit from a renewed and extended customer contract in the fourth quarter of twenty twenty three. Excluding this one time item, the growth in the business line would have accelerated to 7%, primarily driven by strong renewals and net new sales. Adjusted expenses increased 8% year over year, primarily driven by growth in compensation and cloud costs.

Operating profit growth was positive in the quarter, while operating margin decreased 160 basis points to 32.6%. Full year margin contracted 50 basis points to 32.5%. As Martina mentioned, incentive compensation was elevated due to the company's overall performance in 2024. Were it not for this impact, full year margins in Market Intelligence would have expanded year over year. As we noted in the slides, beginning with the first quarter of twenty twenty five, we will be reporting Market Intelligence results in three business lines.

Enterprise solutions and credit and risk solutions will be unchanged, but we will be combining desktop with data and advisory solutions in a single reporting line called data analytics and insights. This should make our results more easily comparable to others in the space. Now turning to ratings. In the fourth quarter, we saw refinancing activity drive issuance as spreads narrowed to historically low levels and the continued strength in CLO volumes. As a result, Ratings revenue increased 27% exceeding our internal expectations.

Transaction revenue grew by 54% in the fourth quarter fueled by market conditions highlighted earlier that spurred robust demand for bond and bank loan ratings. This growth was further amplified by heightened activity in what is usually a seasonally low issuance period during the holiday season. Non transaction revenue increased 8%, driven by an increase in annual and program fees and an increase in new rating mandates. Adjusted expenses increased 10%, primarily due to increased incentive compensation. This resulted in a 42% increase in operating profit and a six thirty basis point increase in operating margin to 59.7%.

For the full year, ratings margin expanded six fifty basis points to 63%. And now turning to commodity insights. Revenue increased 10% driven by double digit growth in energy and resources data and insights and advisory and transactional services. Price assessments in energy and resources data and insights grew 910% respectively. Growth was driven by strength in our traditional offerings such as our crude and refined product suite.

In addition, both business lines continue to benefit from favorable commercial conditions. Advisory and transactional services revenue grew by 27% or 18% when excluding the impact from the World Hydrogen Leaders acquisition. This is primarily driven by continued strong demand for energy transition products and services as well as strong trading volumes across all commodity sectors in global trading services. Upstream data and insights revenue increased by 3% driven by growth in our research insights offerings and strong demand for subscription based software and analytics products. Adjusted expenses increased 9%.

Operating profit for Commodity Insights increased 11% and operating margin expanded by 60 basis points to 45%. Full year margin increased by 70 basis points to 46.8%. And now turning to mobility. Revenue increased 9% in the fourth quarter driven by demand for the CARFAX product suite and strong performance from our insurance related products. Dealer revenue increased 10% year over year driven by continued new business growth at CARFAX and Automotive Mastermind offerings.

Manufacturing revenue increased 1% as the business line continued to see lower transaction revenue related to our recall business, offsetting strong growth in our subscription based offerings. The headwinds facing our recall business began in early twenty twenty four and we expect to fully lap that headwind by the second quarter of twenty twenty five. Growth in Financials and Other accelerated to 18% as the business line benefited from strong underwriting volumes and market share growth. Adjusted expenses increased 7%. This resulted in operating profit increasing by 12% for the quarter and operating margin expanding by 100 basis points to 34.7%.

Full year margin increased by 20 basis points to 39. Now turning to S and P Dow Jones Indices. Revenue increased 21%, primarily driven by growth in asset linked fees, which benefited from higher AUM as well as growth in data and customs subscriptions. Asset linked fees were up 31% driven by market appreciation and inflows. In the fourth quarter, we recorded net inflows of $486,000,000,000 which along with market appreciation brought total ETF AUM to approximately $4,400,000,000,000 Exchange traded derivatives revenue grew 4%, primarily driven by an increase in realized revenue per contract, partially offset by slightly lower contract volumes.

Data and custom subscriptions increased 5% year over year as we continue to implement commercial initiatives across the various product offerings within the business line. However, growth in the fourth quarter was partially offset by a retrospective revenue adjustment. Excluding the impact of this one time headwind, data and custom subscriptions would have grown by 10%. Adjusted expenses increased 15% year over year, primarily due to increased incentive compensation combined with continued investment in our strategic growth initiatives. Indices operating profit increased 24% and operating margin expanded by 180 basis points to 67.9%.

For the full year, Indices operating margin expanded by 140 basis points to 70.3%. Twenty twenty four was a tremendous year and our financial results reflect that. As we look to 2025 and beyond, the innovation and investment that we made in 2024 position us very well to continue delivering long term profitable growth and create meaningful value for our shareholders. With that, I'll hand it back to Martina to walk through the outlook and the guidance.

Thank you, Chris. Our financial guidance for 2025 assumes global GDP growth of 3%, U. S. Inflation of 2.3% and an average price for Brent Crude of $72 per barrel. These all represent some degree of mean reversion from the figures we've seen over the last couple of years, which we think should contribute to a stable issuance environment and a gradually improving backdrop for our financial services customers as we progress through 2025.

We acknowledge, however, the degree of macro and geopolitical uncertainty that exists right now and that there is a range of potential outcomes beyond our base case assumptions. Our base case assumption is that we see at least one more rate cut this year in The US. We recognize that market expectations around the pace of 2025 rate cuts have moderated over the last several months. But as we've seen in recent years, these rate movements are difficult to predict with a high degree of confidence. As such, we are taking a prudent approach to our forecast for build issuance.

We expect low single digit growth in build issuance in 2025 from a record high base in 2024. Turning to our most recent refinancing study. When we compare these refinancing walls to last year's study, we see that next twelve month maturities, meaning twenty twenty five maturities now compared to twenty twenty four maturities measured at this time last year are approximately 4% higher than they were at this point last year. The maturities expected over the next three years, however, are approximately 1% lower than they were twelve months ago. Our build issuance forecast takes both of these rates into account.

The maturity walls make up just one of the factors we consider when providing an outlook on both issuance. Given the record issuance here we've had and the deceleration we are expecting in 2025, we wanted to provide some additional context around our outlook for low single digit growth in build issuance. Importantly, we saw an acceleration in the pull forward of the 2025 maturity wall during the fourth quarter, which impacts our outlook in two ways. First, it drove stronger issuance than we expected during the fourth quarter of twenty twenty four. We saw that in our financial results, and it creates a more difficult compare this year.

Second, it obviously decreases the amount of near term maturities that are available to get refinanced in 2025. We continue to expect favorable market conditions around stable rates and credit spreads, and we are encouraged by the robust maturity walls over the next few years, all of which inspires confidence that issuance will see positive growth in 2025. Our outlook for the ratings division assumes the refinancing of 2025 maturities and modest pull forward from the 2026 and later maturities. We also expect some improvement in the M and A environment relative to the last couple of years and there should be some tailwinds to issuance as a result. Lastly, our expectation is that the mix of issuance is likely to shift slightly in favor of investment grade compared to what we saw in 2024.

Against that backdrop, we are introducing our financial guidance for 2025. This slide illustrates our guidance for GAAP results. Moving to our adjusted guidance, we expect revenue growth in the range of 5% to 7% in 2025. We expect adjusted operating margin in the range of 49% to 50%, which represents up to 100 basis points of margin expansion beyond the high profitability level reported in 2024. Through a combination of robust organic revenue growth, disciplined execution and strong capital return, we expect to generate adjusted diluted earnings per share in the range of $17 to $17.25 representing double digit growth at the high end.

Turning to our outlook by division. In Market Intelligence, we expect revenue growth in the range of 5% to 6.5%. We exited 2024 with a very strong renewal quarter with the highest retention rate we've seen in the last six quarters. That sets up the subscription business for improving growth, but we will still be lapping the elevated cancellations from the prior quarters. As a result, we expect the growth rate to be the lowest in the first quarter and improve as we progress through the year.

Due to the timing of revenue recognition, the lapping of acquisitions and divestitures and the phasing of investments, we also expect margins to be the lowest in the first quarter. However, we expect to take a very disciplined approach to expense management and market intelligence this year and expect to deliver margins in the range of 33% to 34%, representing 50 to 150 basis points of margin expansion year over year. For ratings, we expect revenue growth in the range of 3% to 5% as build issuance growth and modest price increases are somewhat offset by expected unfavorable mix of build issuance. We continue to take a balanced approach to investments and profitability and ratings. And through continued expense discipline and improved efficiencies, we expect to deliver margins in the range of 63% to 64%, despite the slower expected growth in 2025.

In commodity insights, we expect revenue growth in the range of 7% to 8.5% and margins in the range of 47% to 48%. We expect continued robust demand for our energy transition products as well as our market leading Platts price assessments. Given the long runway and secular tailwinds in this business, we continue to invest to further distance ourselves from competitors in this space. Despite the ongoing investments, we expect to deliver 20 to 120 basis points of margin expansion in CI with an expected margin range of 47% to 48% in 2025. In mobility, we expect continued strong growth in the range of 7% to 8.5.

We have reinvested revenue upside in the last couple of years, which has tempered margin expansion, but we expect the necessary pace of investment to slow somewhat in 2025. As such, we are expecting margins in the range of 39% to 40%, representing approximately 50 basis points of margin expansion at the midpoint. Lastly, in indices, our guidance assumes relatively flat equity asset prices from the end of twenty twenty four given the very strong returns in the S and P 500 over the last two years. As such, we expect revenue growth in the range of 8% to 10%. Given margins are already above our medium term targets and given the attractive slate of investment opportunities in indices, we are making the decision to reinvest incremental profits for future growth in 2025.

As a result, we expect margins to remain relatively flat to 2024 levels and are guiding to a range of 69.5% to 70.5%. I refer you to our supplemental materials on our Investor Relations website for some additional details on our financial guidance, but we are also expecting to deliver approximately $6,000,000,000 in adjusted free cash flow in 2025. Since the merger closed, our free cash flow conversion rate or adjusted free cash flow as a percentage of adjusted net income has been at or above 100% every year and peaked in 2024 as we optimize our working capital and streamlined cash collections. This does create a difficult compare for working capital and free cash flow growth in 2025, but we expect to maintain a free cash flow conversion rate at or above 100% in 2025 as well. In closing, through the various leadership roles I've held over the last fifteen years as an S and P Global, I've seen the ins and outs of our businesses up close at every stage of the cycle.

Our company sits at the crossroads of so many vitally important secular trends: data and artificial intelligence, energy transition, active to passive management and public and private market dynamics. We also sit at the nexus of all the major global markets: equity, fixed income and commodities. We have the right people in place. We are making the right investments and we are building the right strategy. It's an incredibly exciting time to be at S and P Global.

With that, we will turn the call back over to Mark for your questions.

Our first question comes from Manav Patnaik with Barclays. Your line is open.

Thank you. Good morning. Martina, maybe I just want to focus broadly on the Market Intelligence segment. Just first, in terms of the portfolio, the two divestitures you already did, Just curious on what we should expect in terms of if there's other areas in there that you wanted to clean up. And just to clarify, I think you talked about ACV and bookings and stuff been really good in the fourth quarter.

But then in the prepared remarks that you still mentioned there's a lot of desktop competition and pricing pressure. So was that ACV comment specific to a particular area within Market Intelligence? Just wanted to clarify that.

Hi, Manav. Thanks so much for your question. I would say as a matter of course and for a complete management team, we're always looking at optimizing across our overall portfolio to make sure we're the right owners of any particular products. And we want to make sure, of course, that the collection products that we have is doing best possible to create value for our clients and also, of course, for our shareholders. So that's something that we'll continue to do across the enterprise.

In terms of the Market Intelligence performance going into 2025, maybe I'll go back to a little bit of some of the remarks and add some additional context. So for example, in Q4, as we mentioned, we had very strong performance on retention. We had the lowest level of cancels that we had in well over a year and we were able to do that through strong customer engagement and really strong differentiation in the products that we have. Importantly, we saw good competitive wins and no competitive losses in that quarter. And we did that without needing to pull forward any of the pipeline from Q1, for example.

So we do feel that we are starting off with the new leadership team in a good position. The new leadership team has been incredibly focused on making sure that we're aligning our go to market efforts to best meet our customers' needs and also focused on simplifying and making sure that we are completely overall focused on growth in the business. To your question on the ACV and the specific pressures, that was a comment overall for Market Intelligence. And specifically, just calling back to the earlier quarters last year where we did see elevated cancellations and we did see some softness that we were calling out in the financials end market. In Q4, we had that very strong retention rate with lower cancellations.

So on the one hand, we would expect to continue to experience and lap the cancellations from earlier in the year. That informs our view on maybe a softer start to the year and gradual improvement throughout the course of the year as we lap those cancellations. But also, we saw what we think is the beginnings of a recovery in the financial end markets, and we'd expect that to gradually improve throughout the course of the year as well. Thanks for the question.

Thank you. Our next question comes from Alex Kramm with UBS. Your line is open.

Yes, good morning. Just to follow-up on Market Intelligence and hopefully I'm not asking the same question again. But on ACV growth, can you be more specific how much that ACV growth actually was and how much of revenue that typically encompasses? And then related to that, there's new management in that segment. You talked a little bit about the changes that you're doing on a company wide basis, but can you maybe be specific in terms of what has happened so far in terms of any changes in go to market strategy, any other things that have been implemented to maybe squeeze out that extra couple of percent of growth that we're all hoping for?

Great. Hi, Alex. Thanks so much for the question. What I would say is on the ACV growth, that was contributed to a point or two of additional revenue growth for us, faster revenue growth for us. But maybe just to take a step back on what happened in Q4.

Q4 is actually our largest renewal quarter and that's one of the reasons why we're very, very pleased with the results that we saw there and the positioning for us going into 2025. And then to the management changes, I would say it's a new leadership team. We are very focused on simplification, eliminating silos in the business, making sure that the business lines are communicating and working very well together to ensure that we're bringing the greatest value to our customers. We're also incredibly focused on making sure that we can accelerate where possible the go to market strategy around new products. And some of those that are very interesting and give us a great step in the door with our clients would be some of the new additions to our desktop, for example, document intelligence and chat IQ, but also things like getting our market fixing and data out onto our desktop product as well as our Kensho LLM ready APIs.

So a lot of innovation focused on execution, focused on making sure that the team is operating in the highest level of efficiency and integrating Gen AI where possible.

Hey, Alex, just one quick thing. This is Mark. We had just a little bit of feedback in the room here. I wanted to clarify one point. The ACV growth in Market Intelligence was about a point or two faster than the revenue growth in MI.

So just wanted to make sure we get that clearly. Thanks.

Hey, Alex. Just one point I'd also add on. Subscription revenue growth actually grew about 4% and recurring variable revenue increased about 20%, primarily driven by Enterprise Solutions, Lending and Notice Manager and Clearpark Products. On a combined basis, subscription revenue came in at 6% overall, which came in at the low end of our guidance.

Thank you. Our next question comes from Faiza Alwy with Deutsche Bank. Your line is open.

Yes. Hi. Thank you. So I wanted to ask about ratings outlook. I think Martina, you mentioned that you're being prudent.

So curious around how much visibility do you have at this point? What are you expecting in terms of an M and A contribution? And maybe the best way to answer this is if you could give us any color with respect to quarterly cadence around revenue growth within the Ratings segment?

Hi, Faiza. Thanks so much for the question. Maybe just to answer the last question there, the last part of that, we don't guide on a quarterly basis. But let me take a step back and give you a little bit of context for how we're thinking about the Ratings outlook. Our base case as we outlined includes, we would say kind of modest expectations on the rate cut front, just one more cut to about 4.1%, for example, in The U.

S. In 2025. I think importantly, we don't assume a protracted trade war. We do not assume massive changes around economic growth both in The U. S.

And as well as across our existing assumptions for and forecast for economic growth in other regions. And I think it's important to note that we would assume we continue to see favorable conditions with tight spreads as we go throughout the year for 2025. Then more specifically, we had in Q4 an interesting quarter. We had been signaling through the course of last year that we did expect the back half of the year to be slower. And then obviously as we went through into Q3, we were still signaling and we thought Q4 was going to be a bit softer and then Q4 outperformed as you saw in our financial results.

The results there, of course, is that it has reduced the level of maturities that we were anticipating to come to market in 2025. Now that being said, as I said in the prepared remarks, we're still about 4% higher relative to this time last year in terms of in year maturities. So the low single digit guide on the build issuance point is a combination of full maturity drawdown for 2025, some very modest pull forward from 2026 and out years. And then we have modeled in what I would characterize as modest expectations for recovery in M and A. We're not overly optimistic on that.

We're still keeping a very balanced view on what we do expect from an opportunistic issuance standpoint. I guess the only other point I would make just on the issuance point is just calling your attention to the fact that we expect a slight skew towards investment grade. And of course, if that comes under frequent issuer programs, you wouldn't see it in the build issuance guide. And so that's all taken into consideration. And then maybe just the other point on non transaction, we'd expect to see that grow around the same level as the transaction driven primarily by surveillance fees.

Thank you. Our next question comes from Ashish Sabadra with RBC Capital Markets. Your line is open.

Thanks for taking my question. I wanted to focus on the margins. Margins are now the margin guidance are more at the higher end of the midterm guidance and was better than I think what we were expecting. You mentioned disciplined approach to expense management as well as balanced approach in investments and profitability more than MIN ratings. How should we think about the incremental margins going forward and not only for '25, but over the next several years?

Yes. Hi, Ashish. Thanks so much for your question. And maybe just to take a step back, we're obviously very pleased with the 2024 full year results on margins and achieving our IR Day margin range. We as you see from our guidance in 2025, we're at the high end of the guidance range from IR Day.

S&P Global (SPGI) Q4 2024 Earnings Call Transcript

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