- Revenue Growth S&P Global's revenue increased 6% year-over-year, with subscription revenue growing 7%.
- Margin Expansion The company delivered 150 basis points of trailing 12-month margin expansion.
- Market Intelligence Growth The division saw 7% organic constant currency revenue growth and over 200 basis points of margin expansion.
- Private Markets Strength Revenue in Private Markets increased 11% year-over-year to $148 million.
- AI Innovation The company introduced AI-ready data sets and partnered with hyperscale platforms to expand data distribution.
Segment Performance
The Market Intelligence division saw an acceleration to 7% organic constant currency revenue growth and over 200 basis points of margin expansion. The company also saw strong growth in private markets revenue, driven by its private credit strategy. Revenue in Private Markets increased 11% year-over-year to $148 million. Ratings revenue increased 1% year-over-year, exceeding internal expectations, while Commodity Insights revenue increased 8%, driven by growth in Energy & Resources Data & Insights.
Growth Drivers
The company has made significant investments in product innovation, including the launch of AI-ready data sets and partnerships with hyperscale platforms to expand distribution of its data and thought leadership content. The Chief Client Office initiative has made progress, with about 130 customers currently part of the program, strengthening relationships at the C-suite level and establishing efficient communication channels.
Valuation and Outlook
Analysts estimate next year's revenue growth at 7.1%. The stock trades at a P/E Ratio of 42.43, a P/B Ratio of 5.01, and an EV/EBITDA of 25.49. The Dividend Yield is 0.69%, and the Free Cash Flow Yield is 3.32%. With a ROIC of 8.06% and ROE of 11.8%, the company's profitability metrics are solid. As the company continues to invest in growth initiatives, its valuation multiples may be justified by its strong growth prospects.
Management's Guidance
The company expects total revenue growth of 5-7% and adjusted margins of 48.5-49.5%. Adjusted diluted EPS is expected to be $17-$17.25, representing 10% growth year-over-year. The company remains confident in its long-term growth prospects, with expectations of 1 to 2 rate cuts from the U.S. Fed in the second half of the year and a slow but positive GDP growth across major economic zones.