Craig Huber • Huber Research Partners, LLC

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President and CEO Adam Symson characterized the CBS non-renewal in Atlanta as a 'one-off' situation and reiterated his expectation for net retransmission margin expansion, driven by lower programming fees paid to networks. CFO Jason Combs stated that subscriber churn continues to trend in the 'down mid-single digit' range. Combs also quantified the sports impact, noting a $7 million revenue contribution from the NHL and NBA playoffs in Q2 and a low-single-digit percentage lift to full-year core advertising from its local sports deals.

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CFO Jason Combs confirmed that the lower employee cost base in Scripps Networks represents a new, sustainable run rate. He detailed that Local Media core revenue was down 3%, with auto and retail as the weakest categories, down low-double-digits and mid-single-digits respectively. He noted no further significant real estate sales are currently queued. For Networks, the flat Q2 guide is supported by strong CTV growth and an improved scatter market, driven by a full slate of sports. Combs also confirmed retransmission subscribers were down mid-single digits, in line with recent trends and forward-looking models.

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President and CEO Adam Symson declined to elaborate on network negotiations but reiterated that the relationship needs rebalancing. CFO Jason Combs specified that the Scripps News OTA shutdown provides $35 million in annual savings, driving the Networks' margin improvement goal. He noted Q1 auto advertising was trending down in the low-teens range. For Networks, he cited CPG and restaurants as weaker categories. Adam Symson confirmed that live sports programming is significantly more profitable than what it replaced and that future rights deals will be pursued with financial discipline.

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CFO Jason Combs reiterated the $35 million annualized savings from Scripps News and noted the 400-600 basis point margin improvement is largely from expenses, declining to give a 2025 revenue assumption. CEO Adam Symson described the macro environment as 'about the same.' Management stated that while sequential improvement in core advertising is expected, year-over-year comparisons remain challenging and they do not provide intra-quarter pacing details.

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President, CEO & Director Mike Steib cited AI use in automating transcription, video editing, and story identification. Senior VP & CFO Julie Heskett added that technology enables smaller station footprints with lower CapEx and operating costs. For Q3, Heskett projected core advertising to be down in the low-double to mid-teens range, citing tough comps from the prior year's Olympics and the impact of a change in a Premion reseller partnership.

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President & CEO Mike Steib cited AI-driven automation in transcription, video editing, and sales lead generation as key cost-saving measures. CFO Julie Heskett added that Q3 core advertising faces tough comps from the prior year's Olympics and a change in a Premion reseller partnership, projecting a decline in the low-double-digits to mid-teens range, though September is pacing positively.

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CEO Mike Steib acknowledged the long-term potential of ATSC 3.0 for delivering a better over-the-air product and creating new revenue streams like data casting, calling it an opportunity with 'substantial optionality.' However, he stated he could not provide a specific timeline for when it might become a significant revenue source and noted that owning the spectrum is the key asset, positioning TEGNA well for the future transition.

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CFO Julie Heskett reported that Q1 advertising is pacing down low single digits but would be up slightly when adjusting for the Super Bowl shift. She noted the auto category remains challenged. She also confirmed the majority of 2025 retrans renewals are at year-end. CEO Mike Steib added that the FCC has clear authority on in-market deregulation, but less clarity on the national cap.

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CFO Julie Heskett declined to provide specific line-item guidance but reiterated that Premion is expected to return to growth in Q4. She noted post-election ad pacing for December looks sequentially better but remains sluggish. CEO Mike Steib expressed a disciplined M&A philosophy, stating any deal must unlock clear cost savings or revenue synergies and deliver cash flow returns.

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EVP & CFO Lee Ann Gliha reported that The CW's losses improved by $21 million year-over-year and reiterated the full-year outlook for a 25% reduction in losses, with profitability expected in 2026. Chairman & CEO Perry A. Sook described the ad environment as performing as expected, stating they have not seen a significant downturn.

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Chairman and CEO Perry Sook dismissed the reverse retrans cap proposal as 'one man's opinion' in an op-ed with little traction in Washington. EVP and CFO Lee Gliha reiterated the full-year outlook for The CW's losses to improve by about 25% versus 2024. She confirmed Q1 losses increased by more than $10 million year-over-year due to programming amortization seasonality, calling it an anomaly.

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Executive Perry Sook projected that ATSC 3.0 revenue could see a 'step function forward' around 2028 if the proposed transition is approved. CFO Lee Ann Gliha guided Q1 core advertising to be down low-single-digits, an improvement driven by better CW performance, and reiterated that The CW is expected to achieve profitability at some point during 2026.

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Executive Perry Sook and President & COO Michael Biard indicated significant background work on spectrum monetization (ATSC 3.0) is ongoing, with initial proof-of-concept contracts expected this year, but they are waiting for more substantive developments before making major announcements. Regarding The CW, Mr. Sook and CFO Lee Ann Gliha attributed the improved performance to a combination of major programming cost reductions and new revenue from expanded sports programming. For Q4 advertising, Mr. Sook confirmed December pacings are better (less down) than October and November but declined to provide more granular detail.

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President & CEO Martina Cheung responded that the company is enhancing capabilities for quota carriers and support teams across all divisions, integrating GenAI tools and improving metric tracking. While not quantifying the size externally, she confirmed they track capacity and make appropriate investments across divisions and regions. She also noted the Chief Client Office (CCO) remains a small, specialized team.

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President & CEO Martina Cheung responded that the company is enhancing capabilities for quota carriers across all divisions with new tools, including GenAI integrated into the CRM. She emphasized a focus on consistent metrics and talent development but did not quantify the investment or single out one division, noting the approach is broad-based while the Chief Client Office team remains intentionally small and focused.

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CEO Martina Cheung reiterated that the decision was the result of a deep and rigorous analysis over a considerable period. She described Mobility as a 'phenomenal business' but emphasized that a tax-free spin is the optimal structure to create long-term shareholder value, allowing both the separated Mobility company and the remaining S&P Global to pursue their distinct, focused growth strategies.

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President and CEO Martina Cheung noted that sentiment differs by region, with more optimism in U.S. private markets and for M&A, compared to a more neutral outlook in Europe and Asia. She stressed that every conversation is an opportunity to help clients navigate their environment by providing them with valuable data and research.

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Incoming President and CEO Martina Cheung highlighted two new strategic functions designed to drive value. The first is the Chief Client Officer role, which will create a scaled capability for strategic account management and connect opportunities across divisions. The second is the Enterprise Data Office, which will focus on harnessing the company's vast data estate to create new pathways for growth.

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CEO Will Lansing and CFO Steve Weber attributed the expense increase to higher cost of goods in the growing B2C business, increased headcount for innovation, and marketing investments. Regarding market share, they cited third-party analysis placing it in the mid-to-high 90% range for those categories.

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CFO Andrew Wiechmann clarified that the expense guidance range is unchanged. He explained that if current, higher AUM levels persist for the rest of the year, expenses would likely land towards the middle of the range. This is just one of several factors, including business performance, FX movements, and other expense variations, that influence the final outcome.

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Chief Financial Officer Andrew Wiechmann provided a regional breakdown for Sustainability and Climate subscription run rate growth: 14% in EMEA, 4% in the Americas, and 8.5% in APAC. He also stated that the climate-related run rate within the segment is approximately $75-76 million.

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President & COO C. Pettit provided examples of AI-driven efficiencies in data operations and software engineering. For revenue, he pointed to products like AI Analytics Insights and thematic discovery tools for Index. Pettit suggested that while the jury is still out on direct pricing power, AI serves as a massive innovation engine that creates more valuable products, which in turn should drive sales and growth.

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Chairman and CEO Henry Fernandez acknowledged the question's insight, agreeing there might be an overemphasis on weaker areas. He pointed out that while the asset-based fee business and sales to segments like hedge funds are setting records, the softness is concentrated in the large active asset manager segment and ESG. He stated that the company calls 'a spade a spade' but is cautiously optimistic that the active manager segment will recover in 2025.

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CFO John Gamble did not provide specific volume levels but stated that auto has been strong and is expected to continue performing well. He noted that the Financial Institutions (FI) business, which includes credit cards, saw nice sequential growth and is expected to have good performance in the second half of the year after a tough Q2 year-over-year comparison.

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CEO Mark Begor and CFO John Gamble explained that non-mortgage forecasts have high visibility from contracts, pricing, and deal pipelines. Begor highlighted key innovations, including combining USIS and EWS data in the cloud for new mortgage and auto solutions, the "One Score" product using alternative data, and the broad use of AI to lift model performance.

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CEO Mark Begor highlighted several product areas, including international identity and fraud solutions, unique U.S. products combining EWS and USIS data, and advanced scoring models using alternative data. On the cost outlook, Begor and CFO John Gamble noted that benefits from the recent restructuring will flow into 2025, and further savings will come as the remaining cloud migrations complete. They anticipate capital expenditures will continue to decline as a percentage of revenue, with no major step-up in expense-based investment.

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Chief Financial Officer Helen Shan explained that a significant portion of the year-over-year cost increase was due to the normalization of bonus accruals compared to the prior year, along with higher technology expenses. She stated that the sales force headcount is 'relatively flat,' with investments focused on product specialists.

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CFO Helen Shan clarified that the current increase in technology spend is not a special, large-scale program like the one initiated in 2019. Instead, it represents a consistent, ongoing investment in technology and GenAI to support the company's existing mid-to-high single-digit growth targets, funded through the rationalization of the existing expense base.

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Chief Financial Officer Helen Shan confirmed the price uplift from CPI will be lower this year. However, she stated that overall price realization is currently flat year-over-year, as lower realization on some new business is being offset by higher volume. She also noted that the company's underlying rate cards have been increased.

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CFO Helen Shan noted that while lower CPI creates a headwind, overall price realization is currently tracking flat compared to last year. She explained that in competitive situations, lower price realization on the rate card is often offset by higher volume. She also mentioned that the company has increased its rate cards, which affects the price realization percentage calculation.

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CFO Helen Shan described the hedge fund segment as having a fair amount of churn, where funds may close but then reconstitute, providing new business opportunities. She noted particularly good activity from hedge funds in Asia, especially Singapore. For corporates, she mentioned a strong partnership and an uptick in business, with this segment being a significant source of new logos.

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CEO Robert Thomson pointed to the Foxtel deal as a prime example of the company's willingness to make significant structural decisions. He acknowledged discussions around Digital Real Estate but noted the current U.S. property market likely undervalues realtor.com. He stated the company is focused on increasing asset value and reducing the discount to intrinsic value for shareholders.

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CEO Robert Thomson confirmed that the company is 'constantly reviewing the structure' and that the Foxtel deal is 'hard evidence' of this ongoing process. He also defended the value of Realtor.com, highlighting 51% revenue growth in its adjacent businesses and superior user engagement metrics compared to competitors, indicating a high-quality audience.

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CEO Robert Thomson countered that the company has been active, citing the REA bid for Rightmove and ongoing discussions regarding Foxtel. He reiterated the significant gap between the company's asset value and share price, pointing to multiple 'moving parts' like Dow Jones's growth and the U.S. housing market as factors being considered in their active pursuit of maximizing shareholder value.

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Robert Thomson, Chief Executive, responded that the company is 'constantly institutionally introspective' and the process will not continue 'indefinitely.' He noted that significant regulatory work has already been completed and that the process now coincides with the external interest in Foxtel, which must be handled in a 'full and fair manner.'

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CFO Noemie Heuland explained that the company is executing its Q4 efficiency program, leveraging technology and automation to drive gains in Moody's Analytics and corporate functions. She noted that full-year incentive compensation is now expected to be between $400 million and $425 million, which will affect quarterly margin comparisons as the 2024 accrual was above target.

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CEO Robert Fauber did not provide a specific revenue percentage but highlighted significant traction, with nearly 400 private credit mandates in 2024 and 30% of first-time mandates in the FIG group being private credit-related. Michael West, President of MIS, described private credit as a clear tailwind. CFO Noemie Heuland provided the incentive comp figures: $507 million for 2024 ($133 million in Q4), with a projection of $420-$440 million for 2025.

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CEO Robert Fauber attributed the revenue outperformance to a favorable mix, including strong volumes from infrequent issuers, high-growth in mix-friendly leveraged finance, fees from first-time mandates, and consistent pricing initiatives. CFO Noemie Heuland specified that Q3 incentive compensation was approximately $150 million, with a full-year forecast of $490 million.

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CFO Ellen Johnson stated that AI-driven cost savings are in the 'early innings,' with AI being integrated into shared services but more benefits to come. CEO Philippe Krakowsky added that on the client side, AI is core to media and data offerings and is being rapidly adopted by creative agencies for strategy, production, and performance tracking, which could open doors to new revenue models.

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CEO Philippe Krakowsky noted that results in healthcare and retail are distorted by single large account losses but stated tech/telco has returned to growth. CFO Ellen Johnson confirmed the savings run-rate would be higher than $250 million annually but did not provide a specific figure. Krakowsky described the current business tone as 'pretty solid,' with clients engaged despite some macro uncertainty.

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CEO Philippe Krakowsky declined to quantify the 2025 headwind, calling the exercise not constructive. Regarding sector performance, he stated that the tech sector has 'found a floor' and is healthier. He explained that the healthcare sector's results were weighed down by a significant client loss from earlier in the year, which the company will begin to cycle past in the coming quarters.

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CEO Anthony Jabbour reaffirmed his confidence in reaching the 5-7% organic growth target, suggesting it would not take three years and pointing to the post-migration acceleration in the International business as a positive indicator. He explained the sale process was not initiated by D&B but resulted from inbound interest, which the board has a fiduciary duty to evaluate, leading to a series of interesting conversations that have extended the timeline.

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CEO Anthony Jabbour described the macro environment as largely consistent with the past year, noting a slight lengthening of sales cycles. He stated that the Credibility business saw low single-digit growth. On patience, he emphasized that while they are focused on remediating these businesses, the overwhelming priority is the ongoing strategic process for the entire company, which is consuming significant management attention.

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CEO Anthony Jabbour attributed the confidence to strong momentum in the core engine, with many business lines already at the high end of the range, and progress in addressing underperforming areas like the credibility business. CFO Bryan Hipsher added that the large addressable markets for Third-Party Risk and MDM support this outlook. In response to the follow-up, Bryan Hipsher confirmed that roughly 90% of revenues are growing at or above the 6% level.

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