The paragraph introduces the S&P Global Fourth Quarter 2024 Earnings Conference Call, noting its recording for broadcast. Mark Grant, Senior VP of Investor Relations, begins the call, with presentations from CEO Martina Cheung and Interim CFO Chris Craig. They released earnings results and supplemental slides on their investor website, highlighting the inclusion of forward-looking statements subject to risks as outlined in their SEC filings. The call presents non-GAAP financial information to help investors compare the company's performance from management's perspective.

The paragraph is from a press release call featuring Martina Cheung, who reports on S&P Global's financial performance in 2024. Excluding its divested Engineering Solutions, the company saw a 15% revenue increase and a 7% increase in subscription product revenue, driven by strong market trends like record debt issuance and strong equity valuations. Despite some challenges in market intelligence and mobility, the company achieved accelerated growth in commodity insights and maintained operational excellence. This balanced approach allowed for significant investments in technology and AI while expanding profit margins and achieving a 25% growth in adjusted EPS for the year. The call also highlights regulatory considerations for investors and directs media inquiries to the Media Relations team.

The paragraph discusses the company's financial performance and strategic initiatives. It highlights that their disciplined capital allocation allowed for significant shareholder returns in 2024, with expectations for continued strong returns in 2025. The establishment of new offices focused on client and data services is mentioned, alongside leadership changes with Eric Aboaf becoming the new CFO. The company is also advancing in product innovation and AI, and continues to optimize its business portfolio through acquisitions and divestitures aimed at long-term growth. The CEO has prioritized strengthening relationships with key strategic customers during the leadership transition.

The paragraph highlights S&P Global's focus on strengthening customer relationships by engaging directly with strategic customers and partners. The company's leadership, including the new Chief Client Officer, has prioritized customer engagement as a key aspect of their strategy. S&P Global aims to leverage these relationships for collaboration and co-investment opportunities, as exemplified by their partnership with the UBS Leveraged Loan Index. The discussions emphasize the importance of generative AI, with customers seeking to scale its use for financial benefit, and turning to S&P Global for expertise in AI technology and insights into global trade challenges.

The paragraph highlights the impact of innovation in financial markets on customers, particularly with the shift of capital to passive funds, private markets, and digital assets. It emphasizes the company's leadership in benchmarks, private credit, private equity workflow tools, and stable coin assessments. The company is seen as a crucial partner in navigating changes and leading the energy transition, which includes energy security, technological innovation, and financing necessary investments. There's notable growth in their energy transition and sustainability products revenue. While there's optimism for macroeconomic improvements by 2025, caution remains regarding Europe and Asia. The company sees strong demand and benefits from vendor consolidation, allowing them to meet customer needs cost-effectively. Despite challenges in the financial services market and competitive pressures affecting Market Intelligence, gradual improvement is expected throughout the year. The paragraph concludes by mentioning the 2024 issuance environment.

In 2024, $4 trillion in billed issuance was recorded, surpassing expectations due to favorable market conditions. Many issuers refinanced debt, leading to strong CLO activity. Despite a challenging 2025 comparison, modest growth is anticipated due to refinancing walls and recovering M&A. The Vitality Index, introduced in 2022, aims to prioritize financially impactful new products. In 2024, several matured products contributed significantly, but these were successfully replaced, ending the year with the index at $1.5 billion, 11% of total revenue. Continuous innovation, especially in benchmarks, supports maintaining the index at or above 10%.

In 2024, S&P Dow Jones Indices expanded its indices offerings, including launching leveraged loan indices with UBS and introducing new Platts price assessments for chemicals, beef, and poultry. They introduced a new product for stable coin assessment in the digital asset space and enhanced their data capabilities with market fixed income securities data in Capital IQ Pro. The company is heavily investing in technology, particularly in AI, to empower its workforce and improve productivity. They launched an internal AI tool, S&P Spark Assist, which led to over 1,300 innovative use cases. S&P is focused on embracing AI to enhance internal efficiency and drive product innovation, benefiting both their operations and their customers.

S&P Global is enhancing data access for customers by launching the Kensho-LLM-ready API, which seamlessly integrates its data sets into generative AI models, allowing natural language queries. They've embedded generative AI functionalities into their applications to enhance user insights and have acquired companies like Visible Alpha and ProntoNLP to strengthen their market position. This focus on generative AI innovation aims to boost efficiency, develop new products, and drive long-term profitable growth through strategic partnerships and acquisitions.

The paragraph discusses S&P Global's focus on leveraging generative AI to innovate and provide value to customers. This involves developing advanced AI experiences, enhancing workflows, and investing in foundational AI capabilities for improved insights from data. The company plans to prioritize AI applications that boost revenue growth, operational efficiency, employee skills, and data security while strategically allocating investments for maximum value. Past innovations like Spark Assist and ChatIQ are highlighted as examples of progress, and the company expresses satisfaction with its 2024 financial results, noting strong growth in both market-driven and subscription businesses, a 14% revenue increase, and significant margin expansion.

In 2024, the company experienced strong financial performance, with a 14% increase in fourth-quarter revenue and notable growth in its Ratings and Indices divisions, each over 20%, driven by favorable market conditions. Adjusted diluted earnings per share rose 20% to $3.77, aided by revenue growth, margin expansion, and a decrease in share count. Key strategic areas also showed positive momentum, with energy transition and sustainability revenue growing 23%, and Private Markets Solutions revenue increasing 29%. The company achieved 81% of its target revenue synergies for 2026, generating $74 million in synergies in the fourth quarter. Elevated expenses related to incentive compensation impacted overall margin expansion.

In the fourth quarter, the company generated $409 million in Vitality revenue with an 11% Vitality Index and anticipates ongoing innovation to maintain product momentum. Expenses rose by 9% due to core business investments and increased incentives and compensation, driven by the strong performance of the Ratings and Indices divisions. Market Intelligence revenue grew 5%, or 6% excluding acquisitions and divestitures, despite early 2024 cancellations affecting growth. Retention rates improved to the highest since 2023, and the company saw significant competitive wins and no major losses. Capital IQ Pro experienced strong net new sales, while annualized contract value growth outpaced revenue growth. The Desktop division grew 8%, mainly due to Visible Alpha, and Data & Advisory Solutions grew 4%, or 5% excluding the Prime One divestiture, driven by demand for pricing and reference data. The company expects improved revenue growth rates by 2025.

In the paragraph, Enterprise Solutions reported a 6% growth, or 16% excluding the Fincentriq divestiture, driven by strong demand for lending solutions and data management software. Credit and Risk Solutions grew 2%, or 7% excluding a one-time retroactive revenue benefit from a contract renewal. Adjusted expenses increased 8% due to higher compensation and cloud costs, resulting in positive operating profit growth but a decrease in operating margin. For 2024, incentive compensation affected margins, which would have otherwise expanded. In 2025, Market Intelligence will report results in three business lines, with Data, Analytics, and Insights combining Desktop and Data & Advisory solutions for better comparability. In the fourth quarter, Ratings revenue rose 27%, driven by refinancing activity, narrow spreads, and strong CLO volumes, leading to a 54% growth in transaction revenue.

The paragraph discusses financial growth across various sectors during a seasonally low issuance period. Nontransaction revenue saw an 8% increase, primarily due to higher program fees and new rating mandates, leading to a significant rise in operating profit and margin. Commodity Insights revenue grew by 10%, driven by double-digit growth in Energy & Resources Data & Insights, and Advisory & Transactional services. There was strong demand for Energy and Transition products, subscription-based software, and analytics, which boosted operating profit and margin. Meanwhile, the Mobility sector saw a 9% revenue increase in the fourth quarter, fueled by demand for the CARFAX product suite and insurance-related products, with dealer revenue growing 10% year-over-year.

The paragraph reports on financial performance, highlighting a 1% increase in manufacturing revenue due to subscription growth, despite declines in transaction revenue from the recall business. Adjusted expenses rose by 7%, boosting operating profit by 12% and expanding margins. S&P Dow Jones Indices revenue grew 21% due to asset-linked fees and data subscriptions, with notable increases in AUM and ETF inflows. Exchange-traded derivatives revenue increased by 4%, though contract volumes were lower. Excluding a retrospective revenue adjustment, data subscriptions grew 10%. Indices operating profit rose by 24%, with a margin expansion to 67.9% for the quarter and 70.3% for the year. Adjusted expenses went up 15% due to higher incentive compensation and strategic investments.

The paragraph discusses the financial outlook for 2025, highlighting expected global economic conditions, including a 3% GDP growth and 2.3% U.S. inflation, alongside a Brent crude price of $72 per barrel. These assumptions suggest a stable issuance environment beneficial to financial services customers, though macro and geopolitical uncertainties remain. The company anticipates at least one more U.S. rate cut and expects low single-digit growth in billed issuance from 2024's record levels, taking into account refinancing trends. Maturities in 2025 are projected to be 4% higher than the previous year, while those over the next three years are expected to be 1% lower.

The paragraph discusses factors influencing the outlook for billed issuance, highlighting a pull forward of the 2025 maturity wall which led to stronger-than-expected issuance in late 2024 and less refinancing opportunity in 2025. Despite this, the expectation is positive growth in issuance due to stable rates, favorable credit spreads, and robust maturity walls. The Ratings division anticipates refinancing 2025 maturities and a slight pull forward from 2026. Improved M&A conditions should enhance issuance, with a shift toward investment-grade issuance relative to 2024. Financial guidance for 2025 projects a revenue growth of 5% to 7% and an adjusted operating margin expansion to 49% to 50%.

The paragraph outlines the company's financial projections and goals for its various divisions. Overall, they anticipate adjusted diluted earnings per share between $17 and $17.25, indicating double-digit growth. For Market Intelligence, the expected revenue growth is between 5% to 6.5%, with margins aiming to increase to 33% to 34% following the first quarter challenges. In Ratings, revenue growth is projected to be 3% to 5%, with margins between 63% to 64%, focusing on expense management despite slower growth in 2025. Commodity Insights is expected to achieve 7% to 8.5% revenue growth, driven by strong demand for energy transition products, with margins targeting 47% to 48%. Across all divisions, disciplined expense management and strategic investments are emphasized.

The paragraph discusses S&P Global's financial expectations for 2025. In the CI segment, margin expansion is expected to be 20 to 120 basis points, with a margin range of 47% to 48%. Mobility is projected to grow 7% to 8.5%, with margins expanding by about 50 basis points to 39% to 40%. In Indices, revenue growth is anticipated at 8% to 10%, with margins staying flat at 69.5% to 70.5% due to reinvestment. Despite a high free cash flow conversion rate in 2024, the company aims to maintain a rate at or above 100% in 2025. The paragraph closes by noting the author's extensive experience within the company.

The paragraph details a conversation during an earnings call or investor meeting for S&P Global. Martina Cheung, a company executive, emphasizes the firm's strategic position amidst key industry trends like data, AI, and energy transition, as well as its involvement in various global markets. She also notes the company's proactive management style, stating the firm frequently reviews its portfolio to ensure optimal product ownership for value creation. In response to a question from Manav Patnaik of Barclays about the Market Intelligence segment and recent asset divestitures, Cheung mentions the ongoing evaluation of their products and discusses some positive indications of growth in annual contract value despite existing competition and pricing pressures.

The paragraph discusses the performance of Market Intelligence leading into 2025, highlighting strong retention in Q4 with minimal cancellations due to effective customer engagement and differentiated products. There were competitive wins and no losses, achieved without relying on future resources like those from Q1. The new leadership team is focusing on aligning go-to-market efforts with customer needs and overall business growth. The paragraph acknowledges previous elevated cancellations and end market softness, indicating a softer start and gradual improvement expected throughout the year, with early signs of recovery in financial markets. Alex Kramm from UBS is the next person to ask a question.

The paragraph discusses the company's strategy for achieving revenue growth through annual contract value (ACV) increases, which contributed to faster revenue growth. Q4 was highlighted as a critical renewal period that positions the company well for 2025. Management changes include a new leadership team focused on simplifying operations, eliminating silos, and enhancing collaboration among business lines to deliver maximum value to customers. They are accelerating go-to-market strategies for new products, such as Desktop enhancements, Document Intelligence, ChatIQ, fixed income data, and Kensho LLM-ready APIs. The focus is on innovation, execution efficiency, and integrating generative AI where possible.

The paragraph discusses the financial performance and outlook for Market Intelligence and Ratings segments of a company. It clarifies that Annual Contract Value (ACV) growth in Market Intelligence was slightly faster than revenue growth. Subscription revenue grew by 6%, meeting the lower end of guidance, with notable contributions from Enterprise Solutions and other products. During a Q&A, Faiza Alwy from Deutsche Bank inquired about the Ratings outlook, prompting Martina Cheung to explain that while they don't provide quarterly guidance, their base case includes modest rate cut expectations and assumes no major economic disruptions. Additionally, she notes favorable conditions with tight spreads for 2025, referencing developments in Q4.

The paragraph discusses the company's financial performance and outlook. It mentions that the anticipated slowdown in the latter half of the previous year didn't occur as expected, with Q4 outperforming forecasts, positively impacting expected maturities due in 2025. They highlight that even with this performance, maturities are about 4% higher compared to the previous year. The company expects modest growth in new issuances with a slight focus on investment-grade securities, and emphasizes moderation in expectations for M&A recovery. It mentions surveillance fees driving non-transaction growth in line with transaction growth. Ashish Sabadra from RBC Capital Markets then asks about margins, noting they are at the higher end of expectations due to disciplined expense management and balanced investment strategies, particularly in MI and Ratings.

In the paragraph, Martina Cheung discusses the outlook for incremental margins, emphasizing discipline in expense management and strategic allocation of resources for customer and shareholder value. The company is maximizing efficiency by optimizing location strategy, infrastructure, and cloud spend. They are integrating AI across the organization, notably through Spark Assist, which helps 30,000 users focus on value-added tasks by automating mundane ones. Christopher Craig adds that the company’s market-driven nature results in high double-digit incremental margins. The conversation then shifts with Toni Kaplan's question about the competitive environment and pricing sensitivity in Market Intelligence (MI).

The paragraph discusses the competitive landscape in the financial end markets, highlighting increased competition and price sensitivity. Martina Cheung emphasizes the importance of leveraging the broad range of products within Market Intelligence and connecting with other products like Commodity Insights to capitalize on vendor consolidation opportunities. Strengthening client relationships and ensuring clients are aware of the full value of their products and services are key strategies for demonstrating value and maintaining competitiveness.

The paragraph discusses the company's business strategy regarding pricing and value for clients, while avoiding specific future forecasts. It addresses questions from Jeff Silber of BMO Capital Markets about the company's exposure to the U.S. federal government and potential impacts from U.S. political developments, such as tariffs on China. Christopher Craig notes that government contracts represent less than 1% of the company's revenue and mentions a strategy to manage foreign exchange risk. Martina Cheung adds that the company has examined the potential impact of tariffs and, while not anticipating a prolonged trade war, acknowledges a small potential impact on various divisions, which is accounted for in their guidance.

In the paragraph, Martina Cheung addresses a question from George Tong about the prospects for MI growth throughout the year. She explains that initial growth might be slower due to higher cancellations expected in the earlier part of the year, with improvement anticipated in the second half as the business adjusts and external financial services environment stabilizes. Cheung highlights competitive wins and no competitive losses in Q4 as positive indicators, while emphasizing ongoing collaboration within the organization to drive growth. The paragraph concludes with the transition to another question from Andrew Steinerman regarding the stability of Ratings revenue growth.

In the paragraph, Toni Kaplan discusses expectations regarding M&A volumes and billed issuance guidance for 2025. She notes that the market has exceeded pre-pandemic levels and 2021, a high-watermark year, but 2025 presents challenges due to these comparables. Kaplan expresses cautious optimism, expecting modest growth in M&A volumes and opportunistic issuance, emphasizing the unpredictable nature of issuance forecasting. Andrew Nicholas then questions Martina about the role of generative AI in future strategies. Martina's remarks suggest a growing focus on AI applications, particularly for efficiency gains, rather than direct revenue growth for 2025.

In the paragraph, Martina Cheung discusses the company's two-year journey with integrating generative AI into their operations and products. Despite the expected decrease in costs typical of technological advancements, the company has continued to innovate with generative AI using their business-as-usual (BAU) investments. With a strong innovation drive supported by Kensho, the company is focusing on efficiency in 2024 while planning to generate value both in terms of efficiency and revenue. They are committed to prioritizing further investments in generative AI to enhance value creation. After her remarks, the operator introduces Peter Christiansen from Citi, who asks about the company's success in synergy realization and its progress towards 2025.

In the paragraph, Martina Cheung discusses the synergy realization progress and prospects. She highlights that they are ahead of target in both cross-selling and new product synergies and plan to maintain this momentum. Cheung distinguishes between the Vitality Index and AI products. The Vitality Index measures product maturity, with an aim of reaching 10% vitality revenues by 2025, indicating successful innovative product launches. Regarding AI, Cheung expects ongoing innovation through enhancements to existing products and new launches, citing recent successes like Document Intelligence, ChatIQ capabilities, and the Kensho-LLM-ready API, which have garnered significant user interest and client discussions.

In the article, Martina Cheung addresses questions about the company's market intelligence and customer engagement strategies. She notes that despite no losses and good competitive wins during the quarter, their performance did not require pulling resources from the first quarter pipeline. Cheung observes a gradual improvement in the external environment, positively impacting their pipeline for 2025. Additionally, she highlights the value of engaging with customers and partners, stating that they've learned ways to potentially enhance their product offerings from these interactions, categorizing insights into three areas based on customer and partner feedback.

The paragraph discusses the importance of building strong relationships and the growing enthusiasm for the Chief Client Office, which offers a single point of contact for strategic accounts. This concept has been well received and has led to numerous meetings, showcasing the value the organization is creating and exploring future opportunities. The focus is on understanding customers better at senior levels to innovate and respond effectively. The enthusiasm and proactive involvement of all division teams is noted, with plans to continue these efforts. Following this, Shlomo Rosenbaum from Stifel asks Martina about the ratings issuance environment and their visibility into it, considering factors like the change in U.S. administration and geopolitical conditions, and inquires about factors that might impact debt issuance expectations.

Martina Cheung discusses the challenges in predicting market trends for Ratings and Index businesses due to market volatility. She emphasizes the importance of customer feedback in informing their guidance. The company is also considering factors like interest rates, spreads, and opportunistic activities to create issuance guidance. Cheung highlights the correlation between GDP rates and issuance over time. She notes ongoing momentum in specific sectors such as infrastructure, data centers, ABS issuance, and private credit as areas to watch moving into 2025.

In this section of the article, Jason Haas from Wells Fargo asks about the expectations for refinancing (refi) walls over the next three years and the growth expectations for the Mobility segment. Martina Cheung responds by clarifying that the anticipated 1% decrease in refi walls is due to a pull-forward effect seen in 2024, particularly in Q4, and doesn't affect the 2025 guidance. Regarding Mobility, the 7% to 8.5% growth forecast is impacted by various factors, including isolated effects from the recall business in manufacturing last year, and opportunities in their CARFAX business. Other considerations include vehicle affordability and higher prices in the U.S.

The paragraph discusses how recent developments, such as increased headcount and strategic acquisitions, are aligned with revenue growth expectations despite potential pressures in the Mobility sector. Jeffrey Meuler from Baird raises questions about the company's employee headcount growth amidst market conditions, and whether investments are being made ahead of revenue. Christopher Craig responds that the Market Intelligence (MI) headcount growth of about 6% aligns with revenue growth expectations, especially following the acquisition of Visible Alpha, which added around 700 employees. Martina Cheung reaffirms their commitment to meeting Investor Relations Day targets for 2024 and 2025 at the enterprise level. The discussion transitions as Craig Huber from Huber Research Partners is invited to ask the next question.

The paragraph features a conversation between Craig and Martina Cheung, in which she discusses varying levels of optimism in private markets depending on the region. In the U.S., there's considerable optimism in private markets, particularly regarding M&A deal flow and the financial sector. In contrast, Europe and Asia exhibit more nuanced, neutral feedback. Cheung emphasizes that every engagement presents an opportunity to support clients, highlighting the value of providing research and information. She reassures clients that her organization is there to assist them in both prosperous and challenging times. The discussion then moves on to a question from Scott Worzel of Wolfe Research regarding reinvestment priorities in their Index business, to which Cheung responds enthusiastically.

The paragraph discusses the growth opportunities within the Index division and the strong potential seen across various asset classes, such as multi-asset class indices, factors, thematics, and sustainability indices. It highlights the strategic focus on investing in Exchange-Traded Derivatives (ETDs) and the liquid ecosystem, aiming for significant market capture and modest margin expansion by 2025. In response to a question from Russell Quelch regarding private credit and its impact on Ratings, Martina Cheung emphasizes the strong growth opportunity in Ratings due to private credit. She notes the company's commitment to rating deals in both public and private markets and highlights the company's strategic engagement with private market issuers, contributing to the overall growth in S&P Global's credit revenues.

The paragraph highlights the company's extensive range of solutions in private markets, including private credit, valuation solutions, private indices, and credit ratings. The company is committed to innovation and teamwork across divisions. While revenue by division is not disclosed, there is a strong focus on these areas. The speaker acknowledges the performance of colleagues in 2024, emphasizing customer engagement and innovation. They express gratitude to Chris Craig for his role as Interim CFO and emphasize a continued focus on customer value and disciplined execution. The company has solid guidance for 2025, aiming for long-term profitable growth and shareholder value.

The paragraph concludes a call by highlighting S&P Global's commitment to utilizing their data, technology, benchmarks, and personnel to unlock potential, with more updates to follow. It notes that a PDF of the presenter slides is available on their investor website, and replays of the call will be accessible online for a year and via audio-only replay for a month. The call ends with thanks and well wishes from S&P Global.

This summary was generated with AI and may contain some inaccuracies.