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Years on list

U.S. employees

U.S. job openings

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Mental health coverage

Free mental health sessions (per year)

Free backup childcare time off (days)

Maximum $ amount covered for fertility services

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S&amp;P Global is a leading provider of transparent and independent ratings, benchmarks, analytics, and data to the capital and commodity markets worldwide. The company delivers markets intelligence through its divisions, including S&amp;P Global Ratings, S&amp;P Global Market Intelligence, S&amp;P Dow Jones Indices, S&amp;P Global Commodity Insights, S&amp;P Global Mobility, and Sustainable1. These services support decision-making across various sectors, from finance and commodities to sustainability and mobility. With a history dating back to 1860, S&amp;P Global continues to empower customers with the data and insights needed to navigate complex global markets.

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S&P Global (SPGI): Company Profile, Stock Price, News, Rankings

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S&P Global

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 Good morning, and welcome to S&P Global's second quarter 2026 earnings conference call. I'd like to inform you that this call is being recorded for broadcast. All participants are in a listen-only mode. We will open the conference to questions and answers after the presentation, and instructions will follow at that time. To access the webcast and slides, go to investor.spglobal.com. If you need any additional technical assistance, please press star zero and I will assist you momentarily. I would now like to introduce Mr. Mark Grant, Senior Vice President of Investor Relations and Treasurer for S&P Global. Sir, you may begin.

Good morning and thank you for joining today's S&P Global second quarter 2026 earnings call. Presenting on today's call are Martina Cheung, President and Chief Executive Officer, and Eric Aboaf, Chief Financial Officer. We issued a press release with our results earlier today. In addition, we have posted a supplemental slide deck with additional information on our results and guidance. If you need a copy of the release and financial schedules or the supplemental deck, they can be downloaded at investor.spglobal.com. The matters discussed in today's conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including projections, estimates, and descriptions of future events. Any such statements are based on current expectations and current economic conditions and are subject to risks and uncertainties that may cause actual results to differ materially from results anticipated in these forward-looking statements.

Additional information concerning these risks and uncertainties can be found in our Forms 10-K and 10-Q filed with the U.S. Securities and Exchange Commission. In today's earnings release and during the conference call, we're providing non-GAAP adjusted financial information. This information is provided to enable investors to make meaningful comparisons of the company's operating performance between periods and to view the company's business from the same perspective as management.

The earnings release contains financial measures calculated in accordance with GAAP that corresponds to the non-GAAP measures we are providing, and the press release and the supplemental deck contain reconciliations of such GAAP and non-GAAP measures. For today's discussion, references to revenue are to GAAP pro forma revenue on a consolidated basis, GAAP revenue for our ratings and indices segments, and adjusted as recast revenue for our energy and Market Intelligence segments. Other financial metrics discussed on today's call are presented on an adjusted basis and refer to pro forma non-GAAP adjusted measures.

In a press release dated July 6th, 2026, the company provided recast financial information excluding contributions from mobility for the four quarters of 2025, full year 2025, and the first quarter of 2026. That release can also be found at investor.spglobal.com. At this time, I would like to turn the call over to Martina Cheung. Martina?

Thank you, Mark, and thank you to everyone joining the call this morning. I'm excited to host our first earnings call since completing the Mobility spin, and I'm excited to be able to discuss the progress and the vision of our four divisions. We had very strong performance in the second quarter with 11% total revenue growth outperforming our expectations on both a reported and an organic constant currency basis. Recurring revenue is up 8% year-over-year as well. The strength of our benchmark business has really shone through in the second quarter as well, with revenue increasing 15% year-over-year. With high incremental margins in our benchmark products and disciplined expense management across the business, we were able to deliver 200 basis points of margin expansion, leading to EPS growth of 23%.

On capital return, we have decided to increase our target share repurchase for 2026 by nearly $3 billion to more than $7 billion for the full year. As Eric will walk through shortly, our strong cash flow and healthy balance sheet will allow us to repurchase the equivalent of more than 5% of our current market capitalization. In the last few months, we've seen the end result of a great deal of exceptional work from teams across the entire organization. On July 1st, we finalized the spin of our former Mobility division into an independent, publicly traded company, which immediately created meaningful shareholder value. We announced the consolidation of our supply chain efforts into our energy division, as well as new leadership and a new operating model for Market Intelligence. We'll provide some additional insights on those points in a moment.

We've also seen continued rapid adoption of our AI solutions, including our Kensho LLM-ready APIs, and we've continued to explore different monetization methods with our large, sophisticated customers. We also announced an agreement to purchase datacenterHawk and a majority stake in Agusto & Co. datacenterHawk will combine with our 451 Research and energy forecasting assets to extend our leadership in the data center space. Agusto & Co. is a leading credit rating agency with operations in Nigeria, Kenya, Rwanda, and Ghana. All of these milestones are evidence of the progress we are making in executing the strategy we announced at our investor day last year. With the completion of the Mobility spin and the division realignment, we are well-positioned to deliver on the strategic objectives we have laid out.

We will continue to invest to advance our market leadership and benchmarks across the debt, equity, and commodity markets. In Market Intelligence, we will make focused investments in the fastest growth areas while improving the profitability of more mature platforms. That will help us optimize the Market Intelligence business to meet the evolving data and AI needs of our customers. We are also integrating our data to create new opportunities and expand our addressable market through Kensho Data. Now that we have simplified the business down to four core divisions, it's more clear than ever how these divisions can create a powerful platform to help our customers navigate volatile markets and turbulent macroeconomic conditions. As I've shared with you before, we are primarily a benchmarks business.

Benchmarks include our Ratings division, our Indices division, the Platts business within our Energy division, and the distribution of our Ratings content through Market Intelligence. These benchmark businesses account for nearly two-thirds of our revenue and now comprise more than 80% of our operating profits. Given this is the first earnings call since we completed the mobility spin and realigned two of our four divisions, I wanted to discuss each division's growth drivers and strategic priorities before handing off to Eric to discuss financials and guidance. Beginning with Ratings, which is now our largest division by revenue, the market appears to be pricing in slightly higher rates than were expected at this point last year, though credit spreads remain very tight. billed issuance increased to 25% year-over-year in the second quarter, with strength across the risk spectrum.

Investment-grade issuance was again bolstered by large issuance associated with AI infrastructure and data center CapEx, as well as M&A. We also continue to drive innovation in fast-growing areas of credit, like DeFi. Issuance from the hyperscaler infrastructure companies slowed in the second quarter, as we expected, but remains quite strong and is pacing well ahead of our initial expectations for the year. In the first half, we saw approximately $169 billion in billed issuance from the hyperscalers, while our initial outlook for the year assumed approximately $200 billion for the full year. Our updated financial guidance assumes billed issuance growth in the mid to high single-digit range. We are now assuming $250 billion-$300 billion in hyperscaler issuance for the full year and double-digit growth in M&A-related issuance.

As we look at our mid-year refinancing study, we continue to see robust maturity walls for several years, reinforcing our expectation for strong average annual growth. Over the last 12 months, we have seen billed issuance grow at an average of roughly 20%. Despite that very strong issuance and our outperformance in the first half of 2026, the near term and multi-year maturity goals remain quite strong. This is a powerful indicator that the strength we are seeing this year in Ratings is not coming at the expense of future refinancing activity. In the next four and a half years, we expect to see approximately $11 trillion in rated debt come up for refinancing, which bodes well for the multi-year growth opportunities and Ratings. Now turning to Indices. We continue to extend our leadership as the world's largest provider of indices by AUM.

ETF AUM for S&P Dow Jones Indices ended the quarter at $6.35 trillion. We continue to see an even greater amount of AUM tied to our indices when we include mutual funds, OTC derivatives, and insurance products. We have built an incredible index franchise founded on trust, transparency, and disciplined methodology while still being responsive to an ever-evolving market environment. Our results demonstrate the strength of that franchise, as S&P Dow Jones Indices was the number one index provider yet again in terms of flow capture. Year-over-year, we have seen more than $600 billion in net inflows. June marked a significant milestone for the global markets as well, as we saw the first-ever ETF surpass $1 trillion in AUM. We're incredibly proud to be part of that story, as that ETF was based on the storied S&P 500.

We also continue to invest to drive new innovative solutions in DeFi. Just last week, we launched the S&P Pantera Digital Asset Index, which uses a rules-based approach that focuses heavily on fundamentals versus focusing strictly on price momentum or market cap. That innovation is driving real economic value and competitive wins as well. In the second quarter, we saw multiple asset managers switch to S&P, bringing tens of billions of dollars in additional AUM, now benchmarked against S&P Dow Jones Indices. Turning to our Energy franchise. As we outlined back at Investor Day, we will be reporting Energy in two business lines going forward. The Platts benchmark business includes our price assessments, global trading services, and other offerings associated with our energy and commodity benchmarks.

The CERA business line includes the proprietary data, content, research, and events, including the holistic supply chain suite that previously was spread across Energy and Market Intelligence. We think about the performance of the Energy business, not just in the quarter but longer term, there are a number of factors impacting growth, with long-term positive factors offset somewhat by near-term headwinds. We are confident that the secular tailwinds in this business remain intact. Energy expansion continues to be one of those tailwinds and informs much of our strategic focus. Our price benchmarks remain the gold standard across energy and commodities markets, and we will continue to invest to launch and scale new benchmarks. As supply chains diversify and evolve, we continue to make investments in regions of the world, like North Africa, that are poised to play a more important role in global energy and commodity markets.

We expect to see strong economic growth in these regions and look to work together with local partners to help deliver that growth. Global supply chains aren't just raw materials and manufacturing. They include technology supply chains involving data centers and power and represent a meaningful opportunity for our energy business. That opportunity is exactly why you saw us acquire datacenterHawk. We're confident that as the demand for AI increases, the need for our data and insights will increase as well. We've also made great progress with CERA Titan and remain on track to officially launch our new AI-native platform for upstream data later this year. Despite the many long-term tailwinds in energy, there are some factors that pressured results in the quarter, though not unexpectedly.

Importantly, the Iran conflict has complicated contract renewals among some very large customers, and we have intentionally chosen to be flexible on price increases and other terms for affected customers during such a challenging time. Eric will walk through what that means for 2026 in a moment, but we remain confident that the headwinds are cyclical while the tailwinds are secular. Turning to Market Intelligence. We announced on July 6th, we have created a new business structure for Market Intelligence, with new leadership already on the ground running. We continue to see rapid changes in the technology landscape and in the ways our customers want to interact with our data. We are refining our strategy and go-to-market motion to make sure we're best positioned for the future. Within Market Intelligence, we'll be reporting two business lines, Kensho Data and Platforms, and Enterprise Solutions.

Kensho Data consists of our data feeds, Kensho LLM-ready APIs, RatingsXpress, and our vast estate of proprietary data. The Kensho Data component is roughly half the size of Platforms by revenue but is growing in the high single digit to low double-digit range on an organic basis. The Platforms component includes CapIQ, Consulting, Issuer Solutions, RatingsDirect, Visible Alpha, and With Intelligence. Platforms is the larger component of the business line and in aggregate is growing low single digits on an organic basis. Our strategic focus in Kensho Data will be to deliver our differentiated and proprietary data in a channel-agnostic way, accelerating revenue growth at strong incremental margins. Our focus in Platforms will be to consolidate redundant platforms, leverage a more unified technology infrastructure across products, and simplify operations while still growing revenue.

We will maintain a high standard for innovation and customer value, increase our efforts to leverage AI and traditional productivity measures to improve profitability. The other business line in Market Intelligence is Enterprise Solutions. Enterprise Solutions includes our entire lending solution suite, ClearPar, Debtdomain, Pricing and Reference Data, Notice Manager, and WSO. The lending solution suite benefits from deeply connected data flows as well as strong network effects. Enterprise Solutions also includes iLEVEL, book building software for fixed income and equity origination, and valuation services. These are important market-leading franchises that the markets depend on in order to function. In Market Intelligence, we have an incredible library of proprietary data and powerful workflow tools. We will emphasize those areas where S&P Global has a clear right to win. We are seeing customer buying behavior mature and evolve.

Vendor consolidation continues to be a tailwind for our business, we are beginning to see customers more rigorously evaluating AI budgets to prioritize those solutions that truly create positive ROI. Across the board, we want to align our priorities with those of our customers. We will be focused on the highest quality assets in MI and on the highest growth opportunities. We will make more and more of our global data estate AI-ready by scaling our enterprise data fabric. We will look to fund these investments primarily out of productivity and AI-driven cost savings to ensure meaningful margin expansion. From a capital standpoint, small carve-outs are possible in the near term, there remains no real appetite for transformational M&A. The simplified structure and clear objectives we've discussed today will better position Market Intelligence to serve customers in the future and drive long-term profitable growth.

Now let me turn to the exciting progress we're making in artificial intelligence. As we shared with you last quarter, our customers leveraging our AI solutions are growing much faster than average. That gap widened in the second quarter for both Market Intelligence and Energy. ACV growth in MI is now 60% faster in MI for AI customers and is approximately 3x in Energy. The demand signal from customers is incredibly strong. We continue to rapidly add customers to our Kensho LLM-ready APIs and MCP connected solutions, with that number now sitting above 500 and increasing more than 70% quarter-over-quarter. API call volume continues to grow rapidly as well, showing that our customers are finding real value in these powerful solutions. Call volume for our Kensho LLM-ready API in the second quarter was more than five times the volume we saw in the first quarter.

Internally, the EDO has achieved nearly 60% of its targeted $100 million in annualized cost savings through a combination of AI-driven efficiencies and traditional productivity initiatives. We are on track to deliver the full $100 million, or roughly 20% of the EDO cost base, before the end of 2027. Even as our AI solutions are seeing great demand, we are hearing more and more from customers that they are paying more attention to token costs and the overall expense of their own AI investments. Customers are looking for ways to minimize or manage token expenses, including building solutions in-house. Those customers want to build with S&P Global and with Kensho Labs. Over time, we believe that our AI offerings will create meaningful value for our customers without creating exorbitant costs. Overall, we are pleased with the performance of the business in the second quarter.

We once again demonstrated the power and resilience of our benchmarks businesses while making meaningful progress on strategic growth initiatives across the board. We are energized by the opportunities and new leadership in market intelligence and look forward to delivering a strong second half. With that, I'll hand it over to Eric to walk through the quarter's financial results and the guidance.

Thank you, Martina, and good morning, everyone. Starting with Slide 15, we delivered another quarter of strong financial results, including 11% revenue growth and 23% growth in adjusted diluted EPS. Our second quarter performance underscores the power of our benchmark businesses, which grew revenues 15% year over year on the back of excellent performance in Ratings and Indices. Revenue grew 11% on both an organic, constant currency, and all-in basis as M&A and FX had only modest net impacts. Adjusted expenses increased 6%. We tightened our spending with the start of the Iran conflict amid heightened volatility and macroeconomic risks. This discipline, along with our ongoing productivity savings, carried through into the second quarter and enabled us to deliver 200 basis points of year-on-year margin expansion to 54.3% and a 15% growth in adjusted operating profit.

Excluding OSTTRA from the prior year period, our second quarter of 2026 margin expansion would have been 270 basis points. Finally, adjusted operating profit was up 15%, and our robust return of capital to shareholders through buybacks helped drive EPS further, up 23%. Turning to our divisions with Slide 16. This quarter, Ratings reported a record quarter by revenue, which increased 17% year over year. We exceeded our internal expectations for both the quarter and for the first half of the year. Issuance in the quarter benefited from tighter spreads and favorable market conditions, though growth was also elevated due to a fairly soft compare in the year-ago period, driven by last year's tariff uncertainty. Transaction revenue increased 25%, partly driven by high 20% growth in investment grade, supported by tech infrastructure and hyperscaler issuance and M&A transactions in the second quarter.

We also benefited from double-digit revenue growth in bank loans, high yield, and structured finance. Private markets Ratings revenue increased 60% year-over-year. Non-transaction revenue grew 8%, driven primarily by higher annual fee revenue, very strong growth in Ratings Evaluation Services, or RES, and CRISIL revenue. Adjusted expenses increased by 6%, reflecting higher compensation costs and continued strategic investments in our people, technology, and product development, partially offset by productivity. With the high fixed cost, low variable cost model that we have in Ratings, top-line outperformance continues to benefit margins, evidenced by the division's 310 basis points of expansion to 68.5%. Turning to S&P Dow Jones Indices on Slide 17. Indices reported its 13th consecutive record quarter for revenue, and the division surpassed $2 billion of revenue on a trailing 12-month basis.

Revenue in the quarter grew 20%, with excellent growth in both asset link fees and exchange traded derivatives. Revenues associated with asset link fees had their fourth consecutive record quarter. We delivered 22% growth year-over-year, driven by equity market appreciation and net inflows into product space on S&P Dow Jones Indices. Notably, we had our best quarter of net inflows on record. S&P Dow Jones Indices operates the world's largest index business by AUM, and as Martina mentioned, we have built a franchise on trust and discipline. That reputation was recognized again this quarter, and we are pleased to see that four of the five ETFs selected by the U.S. Treasury for inclusion in Thrift accounts were linked to S&P Dow Jones Indices. Exchange traded derivatives revenue grew 22%, driven by strong volumes, particularly in SPX.

Data and custom subscriptions increased 9%, primarily driven by new business growth in end-of-day contracts. Adjusted expenses were up 16% year-over-year, driven by investments in growth initiatives and higher compensation costs. Indices operating profit grew 21%, and operating margin expanded 90 basis points to 71.5%. Turning to S&P Global Energy on Slide 18. Energy revenue grew 3% amid pressure from the challenging environment as well as the sanctions we have called out in recent quarters. The conflict in the Middle East led to continued volatility and uncertainty in the quarter. While the business remains resilient, the Iran conflict, tariffs, and extreme volatility have put some strain on energy subscriptions renewals, one-time sales, and Global Trading Services, or GTS, as Martina mentioned.

We believe these headwinds are transitory, however. We expect growth to normalize after this year back to the 6%-8% average range we outlined at our Investor Day. As we discussed last quarter, we continue to see our customers turn to S&P Global for the data and insights that only we can provide. With our best-in-class data and the recent consolidation of our supply chain assets into energy, we are in an excellent position to equip our customers with the data and intelligence they need to adjust and remap their supply chains. CERA grew 1% due to strong growth in Market Insights and Analytics, largely offset by declines in upstream and conference and training revenue. Conference revenue was pressured by headwinds from the lower event attendance due to the Middle East conflict. We are pleased by continued progress on the various aspects of our upstream data transformation.

Platts revenue grew 4% in the quarter, driven by strong growth in price assessments as demand for our benchmarks remained resilient. This was partially offset by declines in GTS. While higher volatility is usually a positive for GTS revenue growth, extreme energy volatility like we saw in the second quarter can actually have a dampening effect on the market. We saw this dynamic in the second quarter. The sanctions we discussed last year had 120 basis points negative impact to Platts and a 30 basis point negative impact to CERA growth in the second quarter. Adjusted expenses grew by only 1%. Our teams remained disciplined through the quarter to support profitable growth during a volatile time period. The 1% expense growth we realized was driven by higher compensation costs and ongoing investments in growth initiatives almost fully offset by productivity programs and careful expense management.

Second quarter margins still expanded by 70 basis points to 47.5% even in this environment. Turning to Market Intelligence on Slide 19. On both a reported and organic constant currency basis, revenue grew 6% in the second quarter. We continue to deliver solid growth in Market Intelligence, supported by the ongoing vendor consolidation trend, momentum in key strategic areas, particularly our AI solutions and Kensho LLM-ready APIs, and improving capital markets activity. As Martina noted, this has been partially offset by some softness in pockets of Market Intelligence, as well as longer renewal cycles with some of our larger, more sophisticated clients. In Market Intelligence, we have some mature platforms that have a strong customer base with stable growth and potential for meaningful margin expansion.

We also have high growth products like Visible Alpha and our data feeds business that continue to benefit from favorable market positions and their proprietary nature. We've also identified a few smaller products that are facing headwinds and negatively impacting the growth of the division. As Martina mentioned, we will be prioritizing our investments going forward in favor of our highest growth opportunities, ultimately striving to maximize long-term shareholder value. In the second quarter, subscription revenue increased a solid 6% on both a reported and organic basis, benefiting from growth across the subscription franchises and benefiting from some upfront revenue from a 10-year renewal in the quarter. Volume-driven revenue increased by 9%, with growth in Market Length Revenue in Corporate Actions and the Primary Markets Group, as well as usage-based revenue in ClearPar. One-time revenue declined 2% in the quarter, primarily due to declines in consulting and Sustainable1 revenue.

Kensho Data and Platform revenue increased by 8%, driven by Kensho Data and the With Intelligence acquisition, as well as 4% organic growth driven by data management solutions, RatingsXpress, Capital IQ Pro, and Visible Alpha. Enterprise Solutions revenue grew 3%, reflecting the divestiture of EDM and thinkFolio. The business grew 10% organically, driven by data valuations and risk analytics, including financial risk analytics, lending solutions, and the Primary Markets Group. Market Intelligence's adjusted expenses increased 4% year-over-year, driven by expenses from the With Intelligence acquisition, as well as compensation expense and long-term strategic investments, partially offset by the impact from recent divestitures and productivity programs. Market Intelligence delivered 120 basis points of operating margin expansion to 36% in the quarter. Shifting to our outlook, starting with Slide 20. With our spin of Mobility Global completed on July 1st, we are introducing our guidance for GAAP results.

As a reminder, when we report the third quarter as well as the fourth quarter and full year, Mobility will have moved to discontinued operations. As such, our full-year guidance on both a GAAP and adjusted basis now exclude the contributions from Mobility for the whole year. Slide 20 outlines our GAAP guidance. Slide 21 shows our adjusted guidance. For the reasons I just mentioned, the consolidated guidance we are giving today is not directly comparable to the adjusted guidance we had issued previously, which assumed a full-year contribution from Mobility. For all material purposes, however, our division guidance is still comparable to prior guidance. On a consolidated basis, we expect organic constant currency revenue growth in the range of 6%-8%. Our prior guidance, including Mobility, also called for 6%-8% growth, but we have offsetting items.

As you will recall, our Mobility business has historically had a higher revenue growth than the business overall, but with modestly lower margins. As such, excluding that revenue causes the overall revenue growth of the business to come down slightly, all else equal, but margins to improve. The outperformance of Ratings and Indices this year is enough to offset that impact, so we expect our overall growth to be in the same range. Ratings and Indices also have the highest incremental margin across our four divisions. We are reinvesting some of that upside in the second half, but we do expect margins to expand more than we had originally anticipated this year. We now expect consolidated margin ex OSTTRA to expand 75-100 basis points this year.

Strong revenue growth, additional margin expansion, and the additional buybacks I'll discuss in a moment allow us to deliver faster EPS growth as well. We expect adjusted EPS in the range of $17.50-$17.75, representing double-digit growth across the entire guidance range. For adjusted free cash flow, the Mobility spin creates some nuance. In the first half of the year, including Mobility, the company generated $2.4 billion in adjusted free cash flow. In the second half of the year, excluding Mobility, we expect to generate adjusted free cash flow in the range of $2.9 billion-$3.1 billion. Seasonality typically drives higher free cash flow in the second half of the year. Now turning to our division guidance on Slide 22. Guidance is based on recast financials, which reflect the movement of 451 Research in maritime and trade from Market Intelligence to Energy in all periods.

These products are fairly small in aggregate, so our division revenue growth guidance is comparable to prior guidance for all material purposes. For Ratings, we now expect revenue growth in the range of 5%-8%, up one percentage point from the prior guide. Indices is expected to grow revenue in the range of 12%-14%, up two percentage points from the prior guide. Our guidance for Market Intelligence and Energy is unchanged from the prior guidance, with Market Intelligence expected to grow in the range of 5.5%-7% and Energy in the range of 4.5%-6%. Lastly, as Martina mentioned, we are once again increasing the expected share repurchase for the year. As you may have seen, we received approximately $2 billion in a dividend from Mobility Global upon the completion of the spin.

These proceeds will be used primarily for the repurchase of shares with $500 million for some debt retirement. In the second half, we expect to issue $2 billion in additional debt to fund further buybacks, with timing dependent on market conditions. We expect to end 2026 with gross leverage of 2.7x-2.8x EBITDA, modestly above our target leverage range of 2.0x-2.5x. We expect natural deleveraging over the course of 2027 as our EBITDA continues to grow and would expect to be back in the target leverage range by the end of next year. In aggregate, this means we expect to repurchase $7 billion in shares this year, representing more than 5% of our total market capitalization at the current share price. With that, let me turn the call back over to Mark for your questions.

Thank you, Eric. For those on the line, if you would like to ask a question, please press star one and record your name. To cancel or withdraw your question, simply press star two. For those joining via telephone, please turn off speakerphone in order to optimize sound quality. Participants will be limited to one question in order to allow time for others during today's Q&A session. Operator, we will now take the first question.

Thank you. Our first question comes from Faiza Alwy with Deutsche Bank. Your line is open.

Yes. Hi, thanks. Good morning. I wanted to ask about the Kensho Data and platforms business. I guess as you focus more on the Kensho Data side of the business and maybe lose the distribution and interface layer in some cases, give us some context on how your thoughts have evolved around future pricing and AI monetization, especially if your clients are able to approach data acquisition in a more modular way and kind of limit some of the data sources. Thank you.

Hi, Faiza. It's Martina here. Thanks so much for the question. I would start with just one thing that didn't change about our organization announcement, that is that we maintain the direct relationships with the customers. Our contracts are directly with the customers. Then consistent with our flexible delivery strategy, we will continue to distribute our content, whether it is through our own platforms, through third parties, and through our traditional feeds distribution channels. One point I would make about the role of Kensho coming into Market Intelligence is that it is an acceleration and an amplification of what Kensho has been doing so brilliantly when it wasn't aligned with Market Intelligence. For example, the team will continue to work with the MI team even more closely on development of very innovative capabilities. We have great building blocks here.

We started with the Kensho LLM-ready API. We moved on to the adaptive retrieval that you saw us announce this week, and we are making great progress with MCP applications. We'll continue that. The team will work closely as well with the platform team to continue to implement those great capabilities on the desktop as well. I would say that the other thing that's really great about having the teams together is that Kensho Labs, which we launched last year, has really gotten tremendous momentum and traction and has been a true differentiator for us as we've been having these AI use case conversations. Bringing that really close together with the business, being very close to the MI commercial team, these are ways in which we think we can really scale the impact of Kensho Labs. Eric, do you want to talk about monetization?

Faiza, the monetization approach is multifaceted. First, what we've continued to see is just a dramatic uptick in data usage by our clients through their AI calls. The MCP connectors are up to 500 clients. Data usage is up 5x relative to the prior quarter, and the prior quarter was up 5x prior to that. There's a series of ongoing discussions that we have with clients to how do we economically share in that. They get enormous benefits. Really, it's a mix of some consumption pricing, some additional data set pricing, and we feel quite comfortable that

The revenues are beginning to come through, along with higher retention and higher sales and so forth, bode well for our businesses.

Thank you. Our next question comes from Manav Patnaik with Barclays. Your line is open.

Thank you. Good morning. Martina, thank you for rehashing the strategy upfront in the call. Clearly, it sounds like, especially in MI and Energy, you're still refining the strategy and how you want the segments to look. I'm just curious, usually in that situation, we get more disclosure by segment as opposed to consolidating some of the stuff that you did. Does that imply that you're still trying to reevaluate exactly how those businesses might look with all the different components? Or just curious on your thoughts there.

Hi, Manav. Thanks for the question. I would say that what we're aiming for here is simplification in MI and in Energy. The strategies for both divisions have not changed. How I think about it is basically wrapping ourselves more closely around our customers, as well as giving the teams who are operating very similar platforms, for example, in MI, an opportunity to move more quickly and grow more profitably by being able to develop a capability once and use it many times. This is really about stronger and more efficient execution against the strategy. In Energy, for example, look, we just see such a tremendous opportunity in Energy in the $ trillions that are being spent in AI infrastructure, in the power grids that are required to support that AI infrastructure.

We are executing the changes that we have to enable our clients to get more clarity on the supply chains they need to develop that infrastructure, as well as the forecasting models, whether it's supply chains or even with data centers that we'll be able to offer. No change in strategy, but I would say more closely wrapping ourselves around the clients as we move forward. Thanks for the question.

Thank you. Our next question comes from Surinder Thind with Jefferies. Your line is open.

Thank you. Eric, Martina, I guess when we think about the margin expansions that we're seeing at this point, how are you thinking about balancing that against the opportunity to maybe accelerate investment and the trade-off? Can you do a lot more, or are you at the level that you see reasonable for what you can, I guess, absorb or what clients can absorb in the current environment?

Surinder, it's Eric. We see quite a bit of opportunity with our clients. We have our core clients in the financial institutions area. We continue to expand across corporate clients. Part of the alignment of our supply chain businesses are for that effect, to kind of widen the base of clients that we serve, and continue to develop new and refreshed, and updated, and in some cases, leading-edge products for them. All that is consistently and relatively easily funded by productivity. You've seen us describe productivity in the EDO. We've got productivity programs that I referenced in MI, in Energy, in ratings and indices, and every one of those frees up resources, whether they're people or technology or otherwise, to reinvest and build those new products and services. It's quite a virtuous cycle and allows us to continue to grow as we'd like to do.

Thank you. Our next question comes from Toni Kaplan with Morgan Stanley. Your line is open.

Thanks so much. I wanted to go back to MI to talk a little more about the reorganization. Should we expect any disruption from the realignment? You talked about some parts of the portfolio facing headwinds. Are you able to cumulatively size them? Would we expect that you look to sell those or divest those, or are you going to try to fix those areas? Thank you.

Hi, Toni. It's Martina. Thanks for the question. From an MI perspective, I don't expect disruption. If anything, I expect greater simplicity and continuity in how we're doing things. I'll give you a couple of examples. We moved the pricing and reference data into enterprise solutions. That really simplifies our go-to-market around private markets. The pricing and reference data is very closely aligned with the lending suite that we have there, as is the valuations service that we offer. Another example would be the great progress that we've made with Kensho Labs that was really in partnership with the CCO. We see such an opportunity here to extend that to more of the clients. That's one major part of the rationale for bringing the Kensho team that we've selected into the Market Intelligence Division and having the Kensho Data vertical stood up, essentially.

That really brings that innovation from the Kensho team very close, in fact, much closer to the customers, also. I think I would look at this as coming from a position of strength and allowing ourselves to really unlock the full value of our product and our data. The other point to make here is with respect to the softer products. These are smaller products, subscale, some consulting services, for example, some of the sustainability products. We're not talking about our strategic products like WSO or ClearPar, for example. Where there are cases where we may see cyclical impacts and growth could come back in those products, we're going to watch that very closely. There may be opportunities otherwise, if we don't see growth coming back, and we may think that we have to invest a little bit more, we may make some strategic choices there.

But overall, this is coming from a position of strength and in a way that allows us to operate much more effectively around the customer. Thanks for the question.

Thank you. Our next question comes from Curt Nagle with Bank of America. Your line is open.

Great. Just one quick one from me. I think, Martina, you mentioned that you're seeing some elongated sales cycles with some of your larger clients. Maybe just unpack that. What's driving it? Maybe what changed? Is it budgeting environment, or just what's behind that comment?

Hi, Curt. Thanks so much for the question. Look, we view it actually as a positive because it means that our clients want to do more with us. As we've been going through these renewal cycles, we're having quite substantial conversations around use of AI and use of our IP and data for AI. The conversations are getting a little bit complex in some cases, and that's because we are absolutely intent and focused on protecting our IP over the long term. We've seen some elongation as a result of that. I look at it as more of a baselining with our customers around the terms and conditions that we're putting forward. This is something that's more of a near-term impact, not something that's going to impact us over the medium or long term. Thanks for the question.

Thank you. Our next question comes from Alex Kramm with UBS. Your line is open.

Yes. Hey, good morning, everyone. I actually want to ask about the index business. This may be a little bit in the weeds in detail, so bear with me. You have that licensing, it's a G relationship with Cboe, by my numbers, this is definitely more than $200 million a year. There's been more investor concerns around, more from their side, about that renewal that's coming up in a few years. Just wondering what your latest thoughts are on this. Again, if you look at that relationship, some people would suggest that you can probably double those fees. That could be nicely material and accretive to your business. Just wondering, how do you think about that relationship? Other exchanges have actually wondered about getting that license from you.

maybe talk about if you could give it to multiple exchanges or maybe shop it around, because again, it could actually be nicely accretive to your bottom line. Thank you.

Hi, Alex. It's Martina. Thanks for the question. We don't comment on our partners or the conversations that we would have with any of our partners, thank you for the question.

Thank you. Our next question comes from Scott Wurtzel with Wolfe Research. Your line is open.

Hi. Good morning, guys. Thank you for taking my question. Just wondering if you can talk about just the overall ACV bookings growth within Market Intelligence during the quarter, and then building off of that, how you feel about the trajectory of OTB 3 in terms of heading into the back half of the year. Thanks.

Scott, it's Eric. We feel like we delivered solid revenue growth in MI this quarter, 6% OCC revenue growth, 6% subscription revenue growth. The ACV was also in that 6% range. We continue to do well. We had a good first quarter, a good second quarter, and we have every intention of delivering on our guide for the full year and continue to build from there.

Thank you. Our next question comes from George Tong with Goldman Sachs. Your line is open.

Hi. Thanks. Good morning. Can you elaborate on trends that you're seeing in private markets across the company, and how much private markets contributed to revenue growth in both Ratings and Market Intelligence?

George, it's Eric. We've had quite a bit of success in private markets, as you've seen in the underlying numbers and our prepared remarks. In Ratings, we described it as 60% up, which is quite strong and continues an area of strength and something that we expect to continue in the coming quarters and coming years. In MI, we're particularly well-positioned. As we integrate With Intelligence, we've seen very strong growth across the board, both in the acquisition and in our core business, and expect that to continue. This is really an area that we've built around, and we expect to continue to grow organically and really lead the industry in.

George, I would just add two points to that. The first is that we still see really good momentum in AUM inflows into private market funds, and that demonstrates a continued appetite from investors for exposure to the asset class. Maybe the second point that I would make is that notwithstanding all of the noise that we've heard in the media and otherwise around private markets, our view and in fact, our experience and what we're seeing is that this actually increases the demand for transparency, whether it's through benchmarks or data and analytics. Thanks for the question.

Thank you. Our next question comes from Ashish Sabadra with RBC Capital Markets. Your line is open.

Thanks for taking my question. I was just wondering if you could talk about the % takes on issuances in the back half of the year. Any thoughts around how we think about issuance in Q2 versus Q4, and the same thing on the Ratings revenues. Thanks.

Ashish, it's Eric. It's really a continuation of some of what we've seen in the first half of the year. We've seen M&A activity pick up, and that's been a tailwind. We've seen hyperscaler issuance. You've seen us book a very significant billed issuance in the first half. We expect a good amount in the second half. We've seen some refinancings come through, notwithstanding the change in the rate environment, and we expect that to continue. All that said, we just see very strong refinancing walls in the coming years, and we see a strong trajectory in the business. The one thing I will note is that the year-on-year compares in the individual quarters in the second half of this year will be lower, just because last year started low and ended high.

You'll just have a patterning there, the sheer volume of issuances and revenues on a per-quarter basis continue to move along strongly during the year.

Thank you. Our next question comes from Jeffrey Silber with BMO Capital Markets. Your line is open.

Thanks so much. Just to continue this thought from the last question, let me just play devil's advocate here. The market seems to be pushing back on some of the hyperscalers in terms of the amount of cash spending that they might be doing. Are you expecting any potential slowdown from debt issuance because of that? Also, if we do see interest rates going up, would you be expecting the same thing? Thanks.

Hi, Jeff. It's Martina. Let me take that question. Maybe a couple of things. The first is, when we came to you earlier this year with the full-year assessment, we said, look, we look at the announced CapEx, we discount that for what we think will get debt-financed, then we make assumptions around that as well. We are already tracking well ahead of where we thought we would be for the full year through the first half. We've also said to you that our range is about $250 billion-$300 billion for the full year, which basically says not too much more hyperscale issuance relative to the first half and the back half of the year. That being said, we are always prudent and thoughtful about how we think about the issuance in areas like this.

From our perspective, we've seen that the market continues to absorb these types of deals, and we've also seen the hyperscalers do many different types of structures, including issuing outside of the U.S. as well, where there may be additional appetite. All in all, I would say we have taken a very prudent look at the rest of the year for hyperscale issuance.

Jeff, it's Eric. I'd just add that we obviously have a guidance range for the full year, and it's got some width to it, and that's because of some of the factors you mentioned. The global economy, the conflicts in the Middle East. Interest rate levels may move. Credit spreads may widen or stay where they are. There's a range there, and just want to, I think absolutely be conscious of that. Notwithstanding that, we continue to focus on execution and managing and working what we can control.

Thank you. Our next question comes from Craig Huber with Huber Research Partners. Your line is open.

Yes. Thank you. Just wanted to focus, if you could, please, on how AI is benefiting you on the efficiency side, the cost side of your business within Market Intelligence. Can you quantify a little bit further just within that division how much it might be helping you on an annualized basis and how that may help you long term to increase margins in that division? Thank you.

Craig, it's Eric. There's actually a wide range of positive productivity effects and programs that we've had in MI, but we've also had them across the various divisions. I think the earliest one was around our EDO, our Enterprise Data Organization, which is a primary provider of data through MI. There we're on track to deliver 20% productivity gains on a base of half a billion dollars. You can just see the kind of scale at which we operate. More recently, we've begun to roll out programs around software development life cycles, moving into product development life cycles. That we see as quite an opportunity. In energy, we've focused on researchers and the researching process, and we've actually found that that actually has parallel benefits in MI, and then actually in Ratings with the analytical groups.

There's quite a bit of areas and tooling that we've been able to put in place. That's why we see the margin guidance being as it is, why we expanded it, to be honest, this year, because we've accelerated some of those efforts. We expect that that productivity gain from AI and more broadly from our other programs will continue to build in the coming years, lead to more reinvestment, and thus deliver on the growth that we'd like to deliver on.

Thank you. Our next question comes from Andrew Steinerman with J.P. Morgan. Your line is open.

Hi, Eric. On GTS in energy, I feel like we don't hear that much about it, and you obviously mentioned it today because of end market volatility. Just tell us a little bit more about how GTS revenues

are impacted by volatility. This is a very small technical point. I thought I heard you say that, again, within energy, the upstream software business, the divestiture is now in your guide. Is that the case and is that new?

Andrew, it's Eric. Thanks for the questions. On GTS, the global transactions services business, is really one that monetizes revenues as energy prices and trading activity accelerates or decelerates. As we find what you typically see is as volatility increases, you get more trading. At some point, if there's heightened volatility, folks pull back and sit on the sidelines and tend to not trade as much. That's how that plays out. In terms of upstream, we can see the likely close of the upstream software division during the third quarter. At this point, we've updated the guide on an OCC basis with that in mind, just so that you could track our performance and allow us at the same time to focus on organic constant currency growth, which really is our focus. Thanks very much.

S&P Global (SPGI) Q2 2026 Earnings Call Transcript

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