Q4 2024 Earnings Summary
- Strong Competitive Positioning in Market Intelligence Division: S&P Global reported significant competitive wins in their Market Intelligence (MI) division with no significant competitive losses in the fourth quarter of 2024, indicating a strengthening position in the market and setting a positive tone for 2025.
- Disciplined Expense Management Leading to Margin Expansion: The company achieved higher margins by maintaining a disciplined approach to expense management and is integrating AI across the organization to improve productivity, contributing to achieving the high end of their margin guidance range.
- Anticipated Improvement in Market Intelligence Growth: S&P Global expects gradual improvement in MI growth over the course of 2025, due to lapping higher cancellations from 2024 and an improving external environment, which could drive accelerating growth.
- S&P Global's Market Intelligence division expects a softer first half of 2025 due to higher cancellations from 2024, indicating ongoing headwinds and potentially slower revenue growth in this segment.
- The Ratings division may face challenges in achieving revenue growth in 2025 due to a difficult comparable after a record 2024, with management expressing modest expectations for M&A volumes and acknowledging the inherent difficulty in predicting issuance volumes.
- Macroeconomic uncertainties and geopolitical tensions, such as increased tariffs in China, may negatively impact S&P Global's business across divisions, as acknowledged by management in their 2025 guidance.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue Growth | FY 2025 | no prior guidance | 5% to 7% | no prior guidance |
Adjusted Operating Margin | FY 2025 | no prior guidance | 49% to 50% | no prior guidance |
Adjusted Diluted EPS | FY 2025 | no prior guidance | $17 to $17.25 | no prior guidance |
Adjusted Free Cash Flow | FY 2025 | no prior guidance | $6 billion | no prior guidance |
Billed Issuance Growth | FY 2025 | no prior guidance | Low single-digit | no prior guidance |
Market Intelligence – Revenue | FY 2025 | no prior guidance | 5% to 6.5% | no prior guidance |
Market Intelligence – Margin | FY 2025 | no prior guidance | 33% to 34% | no prior guidance |
Ratings – Revenue | FY 2025 | no prior guidance | 3% to 5% | no prior guidance |
Ratings – Margin | FY 2025 | no prior guidance | 63% to 64% | no prior guidance |
Commodity Insights – Revenue | FY 2025 | no prior guidance | 7% to 8.5% | no prior guidance |
Commodity Insights – Margin | FY 2025 | no prior guidance | 47% to 48% | no prior guidance |
Mobility – Revenue | FY 2025 | no prior guidance | 7% to 8.5% | no prior guidance |
Mobility – Margin | FY 2025 | no prior guidance | 39% to 40% | no prior guidance |
Indices – Revenue | FY 2025 | no prior guidance | 8% to 10% | no prior guidance |
Indices – Margin | FY 2025 | no prior guidance | 69.5% to 70.5% | no prior guidance |
Global GDP Growth | FY 2025 | no prior guidance | 3% | no prior guidance |
U.S. Inflation | FY 2025 | no prior guidance | 2.3% | no prior guidance |
Brent Crude Oil Price | FY 2025 | no prior guidance | $72 per barrel | no prior guidance |
At Least One U.S. Rate Cut | FY 2025 | no prior guidance | Assumes at least one | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Total Revenue Growth (Enterprise) | Q4 2024 YoY | 11.5% to 12.5% | 14% growth (3,152→ 3,593) | Beat |
Market Intelligence Revenue Growth | Q4 2024 YoY | 6% to 6.5% | 5.2% growth (1,127→ 1,186) | Missed |
Ratings Revenue Growth | Q4 2024 YoY | 26% to 28% | 26.9% growth (838→ 1,063) | Met |
Commodity Insights Revenue Growth | Q4 2024 YoY | 9% to 9.5% | 9.66% growth (497→ 545) | Beat |
Mobility Revenue Growth | Q4 2024 YoY | 8% to 8.5% | 8.73% growth (378→ 411) | Beat |
Indices Revenue Growth | Q4 2024 YoY | 13% to 15% | 1,111% growth (36→ 436) | Beat |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Market Intelligence Performance & Cancellations | Q1-Q3 2024: Experienced mid- to high single-digit growth, with earlier concerns about elevated cancellations due to pricing pressure and budget tightening. | Highest retention rate in the last six quarters, with lower cancellations. Positive revenue growth of 5% (6% ex-acquisitions) and no competitive losses. | Improved sentiment: Earlier challenges turning more positive, citing stronger retention and competitive wins. |
Ratings Division & Issuance Outlook | Q1-Q3 2024: Strong double-digit revenue growth, driven by high issuance and refinancing activity. Billed issuance guidance was raised multiple times. | Revenue up 27%; transaction revenue up 54% in Q4. Expect low single-digit growth in 2025 issuance from a high base. | Stable to cautious: Growth remains robust, but issuance expected to moderate in 2025. |
Disciplined Expense Management & Margin | Q1-Q3 2024: Consistent margin expansion across divisions, aided by controlled expenses, efficiency gains, and strategic spending on growth. | Over 300 bps of margin expansion in 2024, targeting 49%-50% adjusted operating margin for 2025. Emphasis on location strategy, AI tools, and productivity. | Continued positive: Ongoing discipline and efficiency highlight margin improvements; guidance points to further expansion in 2025. |
AI Adoption & Integration | Q1-Q3 2024: Increasing investment in generative AI via Kensho and internal tools (Spark Assist). Launch of AI-driven products like ChatAI for Platts, Cap IQ Pro enhancements. | Introduced Kensho-LLM-ready API, expanded Spark Assist to 30k users, and integrated generative AI (ChatIQ, Document Intelligence) across major platforms. | Accelerating: AI remains a key driver of innovation, enhancing product offerings and internal productivity. |
Commodity Insights Growth & Product Launches | Q1-Q3 2024: Achieved mid- to high single-digit growth; launched new benchmarks (energy, agri, renewables) and AI-powered tools (ChatAI). | 10% revenue growth in Q4, with 27% (or 18% ex-acquisition) in Advisory. Launched stablecoin assessments and new price assessments (chemicals, proteins). | Consistent uptrend: Demand remains strong, with new launches tapping into emerging markets and energy transition themes. |
Mobility Subscription & Recall | Q1-Q3 2024: Solid subscription growth (low double digits), but recall activity varied, affecting high-margin transactional revenue. | 9% revenue growth, offset by lower recall transaction revenue; expect to lap recall headwinds by mid-2025. | Stable subscription: Recalls remain a smaller headwind; subscription-based revenue continues to drive performance. |
Leadership Transitions & Strategic Roles | Q1-Q2 2024: Douglas Peterson announced retirement; Martina Cheung named as succeeding CEO, with no major mention of Chief Client Officer in Q1. | Martina Cheung is now CEO; Chief Client Office established to deepen strategic customer relationships. Eric Aboaf named CFO (effective Feb 2025). | New leadership: Greater focus on executive-level customer engagement and portfolio-wide strategy. |
Macroeconomic & Geopolitical Uncertainties | Q1-Q2 2024: Guidance factored in GDP, inflation, and rates assumptions; acknowledged volatility in issuance due to potential rate moves. | Cautious base case for 2025: 3% global GDP, 2.3% U.S. inflation, stable issuance environment but with awareness of residual uncertainties. | Still cautious: Company acknowledges range of outcomes, builds in prudent assumptions for issuance and growth. |
Portfolio Optimization & Divestitures | Q1-Q3 2024: Evaluations led to Visible Alpha acquisition, divestitures like Fincentric and pending sale of PrimeOne. | Ongoing review, with Centriq and Prime One divested in 2024. Focus on owning strategic high-growth assets. | Continual refocus: S&P Global actively prunes non-core operations while strengthening strategic areas. |
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Ratings Outlook
Q: How much visibility do you have on Ratings and M&A contribution?
A: Martina explained they expect low single-digit growth in billed issuance for 2025, with modest expectations for M&A recovery. Despite reduced maturities due to Q4 outperformance, in-year maturities are still about 4% higher than last year. Non-transaction revenue is expected to grow at the same level as transaction revenue, driven by surveillance fees. -
Market Intelligence Competition
Q: Can you elaborate on competition and price sensitivity in MI?
A: Martina noted increased competition and elevated price sensitivity in the financial end markets of MI. Despite this, they had no competitive losses in Q4 and saw good competitive wins. They are focusing on strengthening customer relationships and aligning pricing with the value provided. -
Market Intelligence Growth
Q: What's driving accelerating MI growth over the year?
A: Martina stated they will be lapping higher cancellations from 2024 in the first half, leading to a softer start but expect gradual improvement throughout the year. Improvement will come from stronger retention, recovering financial end markets, and successful go-to-market strategies leading to competitive wins. -
Margins and Expense Management
Q: How should we think about incremental margins going forward?
A: Martina highlighted they are extremely disciplined on expense management, integrating AI across the organization to drive productivity gains, and focusing investments where they see the greatest return. This approach contributes to margin expansion, with 2025 margins at the high end of guidance. -
AI Applications
Q: How are you leveraging AI, and is it more an efficiency gain in 2025?
A: Martina emphasized that AI is a transformational technology for them. In 2025, AI serves more as an efficiency driver, integrating into internal operations and products like Document Intelligence and ChatIQ. They have a healthy pipeline to generate value on both efficiency and revenue fronts. -
Investment in Index Business
Q: Can you elaborate on investments in the Index business?
A: Martina mentioned opportunities across asset classes, including multi-asset class indices, factors, thematics, and sustainability indices. They plan to invest over the next several years in ETDs and the liquid ecosystem, prioritizing investments and expecting modest margin expansion in 2025. -
Synergy Realization
Q: Can you discuss synergy realization and contributions from AI products?
A: Martina reported being ahead of target on both cross-sell and new product synergies, expecting to continue this pace. AI contributes to innovation in products like Document Intelligence and ChatIQ, with 60,000 users, and new offerings like Kensho LLM-ready APIs are generating client interest. -
Mobility Segment Guidance
Q: What factors underpin Mobility's 7%–8.5% growth guidance?
A: Martina explained they expect strong growth across all Mobility products. The recall business impact was small last year. They see great opportunities with CARFAX and benefits from integrating MarketScan. Vehicle affordability pressures are considered in the guidance. -
Private Credit Opportunity
Q: Update on private credit as a TAM opportunity in Ratings?
A: Martina confirmed private credit is a strong opportunity. They've focused on engaging with private market issuers, reflected in strong growth in credit revenues. While not breaking out specific numbers, it's a top area of focus for them. -
Customer Sentiment
Q: What are customers saying about optimism and policy impacts?
A: Martina observed that sentiment varies by region. In the U.S., there's optimism in private markets and M&A deal flow. They use customer engagements to help clients, provide research support, and better understand customer needs to drive innovation.