Jeffrey Meuler • Robert W. Baird & Co. Incorporated

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CEO & Chairman Eugene Hall pointed to robust double-digit pipeline growth as evidence of strong demand and explained that longer sales cycles are due to process friction, not a lack of interest. EVP & CFO Craig Safian emphasized Gartner's value in complex, multi-year journeys that public AI cannot address. Regarding 'AskGartner,' it is being rolled out to all named licensed users, with a target completion by year-end.

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CFO Craig Safian and CEO Gene Hall clarified that the U.S. federal government is the main impacted area. They are controlling headcount there by not backfilling positions but are reassigning strong salespeople where possible. Safian explained that approximately $30 million in termination notices are still included in contract value as revenue continues to be recognized on them.

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Executive Eugene Hall explained that while ending Contract Value (CV) is the primary driver of future revenue, the guidance also incorporates a prudent view on Net Contract Value Increase (NCVI) for Q1 and Q2, which are seasonally important. Regarding margins, Hall stated that while 2025 could be a new baseline if it's a 'normal year,' the dynamic environment makes it difficult to confirm. The guidance already factors in ~9% operating expense growth from 2024 and planned 2025 hiring.

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CEO Gene Hall confirmed the GTS enterprise leader pipeline is robust and on track with expectations, attributing quarterly variations to the mix of renewals. CFO Craig Safian described 2024 as a 'relatively good baseline' for expenses but noted that headcount growth was back-end loaded, with the full cost impact to be felt in 2025 as hiring continues.

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Chief Executive Officer Stephen Kramer confirmed the sales and marketing teams are actively educating prospects and clients via meetings and webinars. He noted the main challenge is the disconnect between HR (the buyer) and Finance (the tax beneficiary). Regarding summer usage, he stated that growth is driven by more users, not changes in program design like larger use banks, but clients have allowed earlier booking windows, which provides better visibility into summer demand.

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CEO Stephen Kramer responded that the slowdown is not concentrated in client-sponsored centers and is more broad-based. CFO Elizabeth Boland explained the decision to hold EPS guidance was due to lapping stronger U.K. performance from the prior year, meaning the rate of improvement will moderate. The hold also reflects a cautious stance given the seasonal ramp-up of the backup business and general macro uncertainty.

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CEO Stephen Kramer explained that intensified efforts include refining the prospective family experience with a more personal touch, improving center tours, and systematically converting backup care users into full-time enrollments. Regarding Backup Care, he reported positive renewal discussions where clients are focused on expanding the number of unique employees using the benefit, signaling continued investment and growth.

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CFO Elizabeth Boland noted the middle cohort's enrollment growth is in the mid-single digits and has remained relatively steady, with minor seasonal fluctuations. CEO Stephen Kramer addressed the other points, stating that the use of self-sourced backup care continues to decline, which is a positive shift to their network. He also confirmed the hurricanes had no discernible financial or enrollment impact.

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President & CEO Martina Cheung explained that while a precise 'hit rate' is difficult to calculate, the company is seeing broad-based adoption across its Ratings business, especially in structured finance, debt ratings, and infrastructure. Beyond ratings, she highlighted growing opportunities in related areas like valuations and new private market indices to serve the increasing 'democratization' of the asset class.

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President & CEO Martina Cheung stated it's difficult to provide a precise 'hit rate' but noted that adoption is broad across S&P Global Ratings, including transaction lines (structured finance, debt ratings) and non-transaction lines (surveillance, ICRs). Beyond ratings, she highlighted growing demand for related services like valuations and new index innovations, such as the recently launched Cambridge Associates index, indicating a multi-faceted investment and innovation strategy across the company.

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CEO Martina Cheung provided a detailed overview, highlighting the iBoxx fixed income franchise in Indices; private credit, maritime data, and enterprise solutions in Market Intelligence; and expanded capabilities in petrochemicals and renewables in Commodity Insights. She noted these acquisitions are key drivers of strategic growth areas like private markets and energy transition, and that the company is ~90% of the way to its revenue synergy target.

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Interim CFO Chris Craig clarified that the 6% headcount increase was in line with revenue growth and was significantly impacted by the acquisition of Visible Alpha, which brought over ~700 employees. President and CEO Martina Cheung affirmed that the company maintains its focus on working towards all its Investor Day targets.

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CEO Will Lansing explained that the next step is for the FHFA to decide to implement the already-approved score. He suggested that a staggered implementation of multiple scores would be complicated for the industry and that FICO is in conversation with the FHFA about making it happen sooner rather than later.

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CEO Lee Shavel highlighted AccuLinks' specialized focus on the roofing sector, estimating the total addressable market at approximately $2 billion, which provides significant room for growth from its current revenue base. President of Property Estimating Solutions, Aaron Brunko, added that industry consolidation and increasing technological needs in the roofing market support continued deep penetration.

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CFO Elizabeth Mann asserted that the goal for Core Lines Reimagined is to be a platform for continuous, long-term value delivery, including future innovations with Gen AI. CEO Lee Shavel emphasized that the deeper integration of Verisk's data into client workflows inherently creates long-term, sticky value.

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CFO Elizabeth Mann acknowledged the strong performance but pointed to several 'technical helps' in Q4 that boosted the exit rate. These included a 60-basis-point benefit from a specific contract conversion, ongoing portfolio conversions, and a slightly easier year-over-year comparison. She affirmed the underlying business dynamics remain strong.

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CFO Elizabeth Mann confirmed that bookings are trending well and that subscription growth reflects strength in new customer acquisition, cross-selling, and upselling. President and CEO Lee Shavel added that sales results have been strong relative to internal expectations, attributing this to an improved go-to-market strategy, including territory and incentive changes, and higher-level client engagement that is creating more value-driven sales opportunities.

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CEO Andy Florance confirmed the 750 headcount target has 'inched up' and is now the firm goal. He described the addressable market as massive, with 500,000 to 750,000 viable agent candidates. He emphasized that CoStar's 'your listing, your lead' model allows them to service a much larger portion of this market (60-80%) compared to competitors.

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Founder & CEO Andy Florance confirmed the sales force target has 'inched up' and is now set at 750. He defined the serviceable addressable market as 500,000 to 750,000 viable agents. He stressed that CoStar's 'your listing, your lead' model allows them to target a much larger portion of this market (60-80%) compared to competitors.

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CEO Andrew Florance did not provide specific cohort data but noted that the in-period cancellation rate has fallen dramatically to as low as 0.25%, a significant improvement from initial highs. He attributed this to agents now understanding the value proposition and a surge in the Net Promoter Score to 43. CFO Christian Lown added that since most contracts are for 12 months, renewal data will be more telling in the coming quarters.

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CFO Christian Lown provided context on the scale of Apartments.com, highlighting its $1.1 billion revenue base and $153 million in 2024 revenue growth, which is significantly larger than competitors. He acknowledged that the temporary distraction of the sales force in early 2024 will have a lingering impact in 2025 but expressed confidence in the massive TAM opportunity and the plan to expand the sales force to penetrate it more deeply.

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CEO Andy Florance explained that the recent uptick in CoStar sales is directly attributable to salespeople refocusing on their core products. He stated that pivoting the entire sales force to a new product effectively made them 'rookies,' which lowered overall productivity. He described this as a necessary, though painful, price for launching a major new product line with long-term potential.

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CEO Mark Begor explained that the state agency headwinds stem from ongoing challenges with changes in federal data reimbursement policies, which complicates state-level budgeting. He noted that while new mortgage solutions with the Twin Indicator are still ramping up, the innovation is helping Equifax win share in the pre-approval stage. CFO John Gamble added that USIS is seeing broader traction with multi-data solutions and advanced marketing analytics through its Ignite platform.

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CEO Mark Begor described the current administration's focus on improper payments as a significant tailwind, citing the SSA amendment as a proof point and highlighting growth opportunities at the state level. For the recession framework, Begor explained it's based on historical performance ('08-'09, COVID) and the current, more resilient business mix with higher subscription revenue. CFO John Gamble clarified the 'recession-impacted' business decline of 3-5% is a substantial reduction from its 7-10% long-term growth framework, not an absolute small decline.

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CEO Mark Begor and CFO John Gamble explained the margin pressure is due to lower high-margin revenue from the weak mortgage and hiring markets, a mix shift to lower-margin products, and higher one-time costs for onboarding a record number of new partners. Begor explicitly stated there has been "no change" in partner payout ratios.

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CEO Mark Begor and CFO John Gamble explicitly denied any sizable client loss. Gamble explained that the stronger mortgage outlook was mainly in credit inquiries (shopping), which doesn't fully translate to EWS revenue, making the net impact on guidance small. The primary drivers of the reduction were the EWS employer business and some weakness in talent. They confirmed their guidance methodology is unchanged, using the most current run-rates from mid-October and analyzing trends over the last one to four weeks.

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CEO Theresa Condor declined to provide a revenue breakdown by business line but noted all are important growth areas. CFO Ali Engel attributed the confident H2 outlook to revenue from recently launched satellites, upcoming launches for Space Services customers, and contributions from the Canadian wildfire contract. Engel confirmed margin expansion is a focus, driven by both revenue growth and cost reductions, but did not provide a specific intermediate-term framework.

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CFO Leo Basola attributed the Q4 weakness to delayed bookings, including a major Canadian Space Agency deal that slipped into Q1, and lower-than-expected revenue from a NOAA contract and a specific Space Services payload performance issue. Chairman Peter Platzer added that Q4 and Q1 will have significant 'noise' and that the company's prior multi-year trajectory is a better indicator of future performance. Platzer also noted the new administration's support for the private sector is expected to boost demand for satellite weather and RF geo-location services.

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CFO Leo Basola attributed the guidance change to the lingering effects of Q1 issues, such as delayed government orders and persistent data latency from solar cycle impacts. CEO Peter Platzer affirmed that long-term demand remains strong, evidenced by a nearly 30% YoY increase in ARR per customer. Both executives clarified that expense management involves slowing discretionary spending aligned with shifted growth timelines, not drastic cuts.

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Interim CFO Thomas Krywe attributed the revenue ramp to a temporary 'air pocket' in Space Services revenue recognition, which will resolve as 20 recently launched satellites begin generating revenue in the second half. CEO Theresa Condor described RO data as a very cost-effective solution for governments that contributes to the broader demand for commercial weather data. She also clarified that the 20% growth target for 2026 reflects normal business operations and does not depend on extraordinary new investments.

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CFO Tony Amandi clarified that the evidence for delayed enrollment is qualitative, based on seeing more communication touchpoints required to convert strong inquiry and tour volumes. He confirmed the guidance assumes a slight improvement in conversion rates, supported by strong family retention and positive trends expected in the second half of the year.

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CEO Paul Thompson responded that the flat occupancy guidance reflects current trends and allows for time for new operational tools to gain full adoption, while emphasizing that the company has multiple levers for growth. CFO Tony Amandi explicitly confirmed that the revenue guidance does include an assumption for future tuck-in acquisitions, consistent with the 1-2% contribution outlined in their long-term growth algorithm.

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President and CEO Christopher Cartwright confirmed that confidence is based on both strong new business sales and a more pro-growth stance from the Reserve Bank of India (RBI). He detailed that the RBI has cut rates and reauthorized lending for previously restricted non-bank finance companies, leading to observable improvements in market activity. He reiterated the full-year guidance of 10% growth for India, expecting to exit Q4 with high-teens growth.

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CEO Christopher Cartwright clarified that the guidance assumes a continuation of the muted but stable market conditions seen in Q4 2024 and early 2025, without factoring in potential improvements from interest rate cuts. He compared it to the conservative guidance at the start of 2024, which the company ultimately outperformed, suggesting a similar posture for 2025.

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President and CEO Christopher Cartwright characterized the RBI's actions as a prudent measure to ensure long-term market stability, not a reaction to a specific problem, as delinquencies remain low. He expressed confidence that TransUnion India can maintain outsized growth due to diversification into commercial credit, direct-to-consumer, fraud, and marketing solutions, despite a slowdown from low 30s to low 20s growth in the core business.

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CEO Robert Fauber directly addressed this, stating, 'we're not downgrading our growth assumption for Ratings' and reiterated confidence in medium-term drivers. CFO Noemie Heuland added that the updated guidance reflects observed growth rates in Moody's Analytics (MA) and a heightened focus on expanding MA's profitability, which is a key factor in the increased adjusted diluted EPS growth target.

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CFO Noemie Heuland explained that the deceleration was primarily due to a difficult comparison with the prior-year quarter, which included large transactions with the federal government. She noted that some of these contracts renewed at a lower value this year, causing the lower growth rate, and characterized the situation as an 'air pocket' rather than a new trend.

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