S&P Global Inc. (SPGI) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary and Q&A indicate a positive outlook for S&P Global. The company raised guidance for revenue growth and adjusted EPS, reflecting strong performance across divisions. Despite some uncertainties in specific areas like bank loan issuance, the overall sentiment is positive due to AI investments, strategic partnerships, and optimistic guidance. Shareholder returns and margin expansion are also expected to contribute positively. The sentiment remains positive, as the company is well-positioned for future growth, despite some market challenges.
Key Financial Performance
Revenue Reported revenue grew 9% while organic constant currency revenue rose 8%. This growth was driven by strong subscription growth in Market Intelligence and Energy, as well as double-digit growth in Ratings and Indices. The reasons for the growth include robust debt issuance, equity market appreciation inflows, and strong demand for subscription offerings.
Operating Margins Adjusted expenses increased 8%, resulting in 60 basis points of year-on-year margin expansion to 47.3%. Excluding the contribution from OSTTRA in 2024, margin expansion would have been 130 basis points year-over-year. The margin expansion was due to continued expense discipline and strategic investments.
Earnings Per Share (EPS) Adjusted diluted EPS grew 14% in the quarter, resulting in full-year EPS at the higher end of the guidance range. The growth was driven by operating income growth and share count reduction, partially offset by a higher tax rate.
Free Cash Flow 113% of adjusted free cash flow was returned to shareholders. This was achieved through dividend increases and stock repurchases, including more than $5 billion in stock repurchases in 2025.
Private Markets Revenue Private Markets revenue grew 16% year-over-year, driven primarily by the Ratings and Market Intelligence divisions. The growth was due to strong demand for debt ratings, private credit analysis, and credit estimates in the private credit market.
Energy Revenue Energy revenue grew 6% in the fourth quarter, driven by continued strength in Energy & Resources Data and Insights and Price Assessments. However, sanctions announced in the second half created a $3 million headwind on fourth-quarter revenue.
Indices Revenue Indices revenue grew by 14%, with double-digit growth across all business lines, including Asset-Linked Fees, Exchange-Traded Derivative revenue, and Data & Custom Subscriptions. The growth was driven by equity market appreciation, strong net inflows, and new business growth in end-of-day contracts.
Mobility Revenue Mobility revenue grew 8% year-over-year, with double-digit growth in Dealer and Financials & Other. The growth was driven by strong subscription growth in CARFAX and automotiveMastermind, despite a complicated environment for automotive OEMs.
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Operating Highlights
AI Products and Features: Launched new AI products and features in every division, including collaborations with major technology partners and platform-agnostic GenAI solutions.
Private Markets Tools: Enhanced private market tools like iLEVEL with new AI functionality and launched private equity benchmarks and indices.
Energy Capabilities: Introduced AI capabilities for energy research, enhanced gas, power, and commodity flow intelligence, and launched Integrated Energy Scenarios.
Decentralized Finance: Launched the S&P 500 index on-chain in collaboration with Centrifuge.
Private Markets Expansion: Acquired With Intelligence and partnered with Cambridge Associates and Mercer to build a comprehensive solution set for private markets.
Energy Expansion: Integrated the 451 team with the Power team to provide insights on data centers and power, and capital continues to flow into the energy ecosystem.
Chief Client Office (CCO): Established to deepen engagement with strategic customers, enabling co-development of solutions and scaling them across the customer base.
Enterprise Data Office (EDO): Reduced manual data processing significantly, eliminated 10% of applications, and simplified the technology stack to reduce costs.
Integration of With Intelligence: Shortened acquisition close process to less than 6 weeks, linked 75% of data sets in a month, and realized millions in cost synergies.
Advancing Market Leadership: Focused on growing in existing markets, identifying new use cases, and innovating foundational products.
Expanding High-Growth Adjacencies: Targeted areas like private markets, energy, supply chain, and decentralized finance for growth.
Amplifying Enterprise Capabilities: Scaled enterprise capabilities through process engineering, upskilling, and leveraging AI solutions.
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Risk or Challenges
Ratings Business: Disruption in issuance markets following Liberation Day in April and incremental sanctions impacting the Energy business midway through the year created challenges. Volatility in volume-driven products also emerged in Market Intelligence.
Energy Business: Sanctions announced in the second half of 2025 created a $3 million revenue headwind, negatively impacting Energy & Resources Data and Insights and Upstream Data & Insights revenue. Lower oil prices and ongoing market uncertainty are expected to persist into 2026.
Market Intelligence: A slowdown in volume-driven products tied to capital markets activity was observed in the fourth quarter of 2025, which had previously provided a tailwind to recurring variable revenue growth.
Private Markets: Ongoing uncertainties have led many customers to slow spending in consulting engagements and onetime transaction spend in certain geographies, particularly in the Energy Transition and Sustainability areas.
Upstream Data & Insights: Lower oil prices and ongoing market uncertainty are expected to continue impacting growth in upstream data and insights, with stabilization efforts expected to take several quarters.
Billed Issuance: The challenging comparison for 2026 due to record issuance in 2025, along with potential macroeconomic distress, elevated market volatility, or a slowdown in economic growth, could negatively impact billed issuance.
Sanctions Impact: Sanctions-related impacts are expected to persist into 2026, particularly affecting the Energy division.
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Guidance & Outlook
Revenue Growth: The company expects organic constant currency revenue growth of 6% to 8% in 2026. Reported revenue growth is expected to be approximately 60 basis points higher due to acquisitions, divestitures, and currency movements.
Operating Margins: Excluding contributions from OSTTRA in 2025, operating margins are expected to expand by 50 to 75 basis points in 2026. Including OSTTRA, adjusted operating margins are expected to expand by 10 to 35 basis points.
Earnings Per Share (EPS): Adjusted diluted EPS is projected to be in the range of $19.40 to $19.65, representing growth of 9% to 10% year-over-year.
Market Intelligence Division: Expected organic constant currency revenue growth of 5.5% to 7% in 2026, driven by strong subscription revenue growth closer to the top half of the range, offset by slower growth in one-time sales and volume-driven products.
Ratings Division: Anticipated organic constant currency revenue growth of 4% to 7% in 2026, with billed issuance growth in the low to mid-single-digit range. Transaction and non-transaction revenue are expected to grow at similar rates.
Energy Division: Projected organic constant currency revenue growth of 5.5% to 7% in 2026, with a 60 basis point headwind from customer sanctions. Stabilization and repositioning of the upstream portfolio are ongoing.
Mobility Division: Forecasted organic constant currency growth of 7.5% to 9% in 2026, driven by strong subscription base and mission-critical products. Modest growth is expected in manufacturing.
Indices Division: Expected organic constant currency revenue growth of 10% to 12% in 2026, supported by normalized equity market performance and contributions from Exchange-Traded Derivatives.
Billed Issuance: Base case assumption for billed issuance is up low to mid-single digits in 2026, with growth rates fluctuating quarter-to-quarter. Potential upside exists with elevated M&A and infrastructure projects.
Macroeconomic Assumptions: Guidance assumes favorable market conditions, including low spreads and two rate cuts from the U.S. Fed in the back half of 2026. Elevated market volatility or economic slowdown could impact projections.
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Shareholder Return Plan
Dividend Increases: S&P Global announced the 53rd consecutive year of dividend increases.
Share Repurchase: S&P Global repurchased more than $5 billion in stock in 2025.
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Key Q&A
Q:Can you provide more details on the softness in Market Intelligence's volume-driven products and the unpredictability for 2026?
A:Market Intelligence's subscription revenue, which makes up 85% of its revenues, grew by 6.6% in the quarter. However, volume-driven revenue growth fluctuated due to market dynamics. Some products like WSO and Notice Manager saw strong growth, while others like investment-grade fixed income products and equity issuances were lighter. The unpredictability stems from market dynamics, and the company is cautiously optimistic about 2026, guiding Market Intelligence growth at 5.5% to 7%.
Q:How will Anthropic's open-source plug-ins for Claude Cowork impact S&P's business?
A:S&P views such developments as exciting and sees AI as a net tailwind for its business. S&P has partnerships with major AI players, including Anthropic, Google, and OpenAI, and is embedding AI into its products to enhance customer functionality. S&P maintains control over its data and does not allow AI providers to train on its data. Customers are demanding more AI functionality, and S&P is focused on delivering strong growth and profitability.
Q:Why is the Ratings guide below the long-term framework despite positive tailwinds?
A:The Ratings guide assumes modest M&A growth, limited refinancing pull-forward from 2027-2028, and modest growth from hyperscale players. The company is cautious about the timing and materialization of these factors. If hyperscale issuance exceeds 2025 levels, it could add a few percentage points to billed issuance, but the company is guiding prudently.
Q:How does S&P plan to address market concerns and confusion related to AI?
A:S&P emphasizes its unique and differentiated benchmark data and critical workflows. Its workflow tools, like iLEVEL and Cap IQ Pro, are enterprise-grade solutions embedded with AI functionality. These tools are integrated into sophisticated ecosystems and comply with complex regulations. Customers prefer S&P's comprehensive solutions over expanding their vendor list, and S&P is confident in its position as a leading provider of benchmarks and AI-enabled tools.
Q:What is S&P's assessment of AI technology and its structural impact on the company?
A:S&P has invested $1 billion in AI since acquiring Kensho in 2018. AI is being deployed internally to improve productivity and accelerate product innovation. Examples include Automated Data Ingestion for iLEVEL and energy research integration into Copilot. S&P expects revenue growth to outpace headcount growth, with some areas reaching peak headcount. AI is transforming internal processes, enabling margin expansion and EPS growth.
Q:How will AI enhancements impact S&P's top-line growth and pricing strategy?
A:AI is expected to add value by enabling customers to use S&P's data in more ways, driving value-based renewal discussions and demand for add-ons. Customers are showing increased interest in new data sets. S&P tracks retention, renewal rates, add-ons, and new product sales to measure AI's impact. The pricing strategy remains focused on enterprise opportunities, with AI contributing to both revenue growth and competitive wins.
Q:What were the pull-forward investments in Market Intelligence in Q4, and what is the expected growth in expenses for 2026?
A:Pull-forward investments in Q4 included technology enhancements, AI infrastructure, and sales enablement tools. These investments aim to drive future growth. Market Intelligence is expected to deliver margin expansion in 2026, with growth solidly in the middle of the 50-75 basis point margin guide. Volumetric revenue growth will depend on external factors, and the company is cautiously optimistic.
Q:What is the outlook for bank loan issuance in 2026?
A:Bank loan issuance is expected to remain soft due to a mix of market factors. In Q4, investment-grade issuance increased by 50%, impacting the overall mix. Near-term maturity walls are evenly mixed between high yield and investment grade. The company is being prudent in its guidance, considering potential rate cuts and spread environment changes.
Q:What are the priorities for Private Market Solutions in 2026?
A:S&P is focused on expanding Private Market Ratings, leveraging With Intelligence, and innovating in private market indices. Early momentum in cross-sells and positive feedback on the Cambridge Mercer beta and private market taxonomy are promising. The company sees opportunities in private market ratings, index launches, and data integration.
Q:How strategically important is Cap IQ to Market Intelligence?
A:Cap IQ Pro is a critical platform, representing 6% of enterprise revenue. It integrates unique S&P data and AI-enabled capabilities, such as Document Intelligence and Salesforce integration. Customers value its interconnectedness and functionality, and it plays a significant role in cross-sells and enterprise opportunities.
Q:Review of Unclear Management Responses
A:Management avoided providing specific guidance on the exact contribution of AI to revenue growth, stating that they are not breaking out AI's impact separately. They also did not provide detailed explanations for the softness in bank loan issuance beyond general market factors, leaving some uncertainty about the drivers of this trend.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CCO
Cheung
Chief Client
Client Office
EDO
Enterprise Office
Essential Intelligence
Global Full
Instructions
Office Chief
Relations Treasurer
accomplishment
application
backdrop
base case
case assumption
challenge
collaboration
compare
confidence
customer end
development
disruption
energy expansion
enterprise capability
expectation rate
finance area
goal
infrastructure
market energy
market factor
mission Essential
objective
partner
people
process
range
scale
tailwind headwind
technology AI
technology team
vision
wall maturity
way solution
SPGI Transcript
S&P Global Inc. (SPGI) Q4 2025 Earnings Call Transcript
Positive2-10
The earnings call summary and Q&A indicate a positive outlook for S&P Global. The company raised guidance for revenue growth and adjusted EPS, reflecting strong performance across divisions. Despite some uncertainties in specific areas like bank loan issuance, the overall sentiment is positive due to AI investments, strategic partnerships, and optimistic guidance. Shareholder returns and margin expansion are also expected to contribute positively. The sentiment remains positive, as the company is well-positioned for future growth, despite some market challenges.
S&P Global Inc. (SPGI) Presents at Goldman Sachs 2025 U.S. Financial Services Conference Transcript
Neutral12-9
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S&P Global Inc. (SPGI) Q3 2025 Earnings Call Transcript
Positive10-30
The earnings call summary indicates strong financial performance across multiple divisions, with significant revenue growth in Commodity Insights, Mobility, and Indices. The Q&A section highlights positive sentiment towards AI-driven growth and productivity, strong Ratings business outlook, and strategic partnerships enhancing Private Markets growth. Despite some unclear responses, overall guidance and market strategy appear optimistic. The positive sentiment is reinforced by strong adjusted operating margins and a stable subscription model. Given these factors, the stock price is likely to move positively, although the lack of market cap information limits precision.
SPGI Slides
SPGI Report
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