Beta Finch - S&P Global - SPGI - EN

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ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown, where we take the long, jargon-heavy earnings calls and turn them into something you can actually enjoy with your coffee. I'm Alex.

JORDAN: And I'm Jordan. And Alex, today we've got a big one.

ALEX: We really do. Before we dive in, the standard disclaimer: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: Okay, with that out of the way—S&P Global, ticker SPGI, Q3 2026. And the headline isn't even really the numbers, though the numbers were good. It's that they just announced a strategic review of Capital IQ and its associated Kensho data businesses, including a potential separation.

ALEX: Right, this is the big one. Basically, S&P Global is saying, "we want to double down on where we're the undisputed leader—credit, equities, and commodities—and we're exploring spinning off or selling Capital IQ and the Kensho data platforms that sit inside Market Intelligence."

JORDAN: Which is wild, because Kensho was actually the standout performer this quarter. CEO Martina Cheung called it Market Intelligence's fastest-growing business.

ALEX: Exactly, and that's the paradox here—they're not cutting this because it's underperforming. They're saying it could grow even faster with dedicated ownership and focus, while S&P proper gets to concentrate capital on ratings, indices, and energy.

JORDAN: Let's talk numbers before we get too deep into the strategic stuff. Revenue grew 7% organically, consistent with reported growth since currency and M&A were basically a wash. Adjusted EPS grew 9%, operating profit up 8%, and margins expanded 60 basis points to 53.5%—or 120 basis points if you strip out a divested business called Astra.

ALEX: And they raised guidance across the board. Full-year organic growth guide moved up to 7.5% to 8.5%. Margin expansion guidance bumped up to 75-100 basis points. And adjusted EPS guidance now sits at $17.70 to $17.95.

JORDAN: Let's go division by division quickly because there's a lot of divergence here. Ratings—their bread and butter—grew revenue just 2%, which sounds soft, but context matters. Bond issuance was up 8%, and year-to-date they're having their three strongest quarters for bond issuance on record. They're just lapping really tough comparisons from earlier in the year.

ALEX: And hyperscaler debt issuance—meaning the big tech companies borrowing money to fund AI infrastructure—was a massive driver. Year-to-date around $240 billion, and they expect $250 to $300 billion for the full year.

JORDAN: That's a number worth sitting with. These companies are forecasting almost $900 billion in capex this year just from the six largest hyperscalers—nearly double 2025. That's rippling through every single S&P Global division.

ALEX: Indices was the real star though. Revenue up 20%, their 14th straight quarter of record revenue. ETF assets under management hit $6.5 trillion. And they extended their exclusive options licensing deal with Cboe through 2051—so another 25 years locked in on SPX and VIX products.

JORDAN: That Cboe deal won't move the needle in 2026, but management said expect a couple points of incremental growth starting in 2027.

ALEX: Energy rebounded nicely too—6% growth, helped by stabilizing conditions in the Middle East. Remember, the Iran conflict had been weighing on their Global Trading Services business, and now renewals are basically back to pre-war levels.

JORDAN: And Market Intelligence—where Capital IQ and Kensho actually live—grew 7%, an acceleration. Kensho Data specifically was growing in the double digits.

ALEX: Let's talk AI for a second, because the numbers here are honestly kind of staggering. API call volume was up over 4,000% year-over-year.

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ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown of the companies moving the markets. I'm Alex, joined as always by Jordan. Today we're digging into S&P Global's second quarter 2026 results.

JORDAN: Big one — first call since the Mobility spin closed.

ALEX: Exactly, but before we get into it — this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: Good context to keep in mind, especially with a report this dense.

ALEX: So let's start with the headline numbers. Revenue grew 11% year-over-year, adjusted EPS jumped 23%, and margins expanded 200 basis points to 54.3%. CEO Martina Cheung called this her first call since completing the Mobility spin-off on July 1st, and she framed the quarter around four core divisions now: Ratings, Indices, Energy, and Market Intelligence.

JORDAN: And the star of the show was really the "benchmarks" businesses — Ratings, Indices, and the Platts side of Energy. Those grew 15% collectively and now make up more than 80% of operating profit, even though they're "only" two-thirds of revenue. That's a really profitable core.

ALEX: Let's talk Ratings first, because it had a record quarter — revenue up 17%. Bond issuance was up 25%, driven by AI infrastructure and data center buildout, plus M&A activity.

JORDAN: That hyperscaler number really stood out to me. They initially guided for about $200 billion in hyperscaler-related issuance this year. In just the first half, they already saw $169 billion. They've now bumped full-year guidance up to $250-300 billion.

ALEX: That's a massive raise. And CFO Eric Aboaf made a point of saying this outperformance isn't cannibalizing future refinancing — they're still looking at roughly $11 trillion of rated debt coming due for refinancing over the next four and a half years.

JORDAN: Indices was arguably even stronger — 20% revenue growth, 13 straight record quarters. ETF assets tied to S&P Dow Jones hit $6.35 trillion, and one S&P 500-linked ETF became the first ever to cross $1 trillion in AUM.

ALEX: Now, not everything was rosy. Energy only grew 3%, and management was upfront that the Iran conflict has been messing with contract renewals and trading volumes. They're calling it transitory, expecting growth to normalize back to that 6-8% range next year.

JORDAN: And Market Intelligence — the segment everyone's watching for a turnaround story — grew a more modest 6%. They just restructured it into two lines: Kensho Data, which is the high-growth AI and proprietary data piece, and Platforms, the more mature legacy tools like CapIQ. There was also mention of some "subscale" products in consulting and sustainability dragging on growth, and Cheung didn't rule out shedding those down the road.

ALEX: The AI angle was everywhere on this call, honestly. Their Kensho LLM-ready API client base is now over 500 and grew 70% quarter-over-quarter, with API call volume up 5x sequentially.

JORDAN: What I found interesting in the Q&A was how they're thinking about monetizing that. Eric Aboaf described it as a mix of consumption-based pricing and additional dataset fees, basically capturing value as clients pull more data through AI tools rather than just charging flat subscription fees.

ALEX: There was also a question about elongated sales cycles with big clients, and Martina actually framed that as a positive — she said the conversations are getting more complex because clients want to do more with their data and AI, and S&P is being deliberate about protecting its IP in those negotiations.

JORDAN: On the capital return side, this is a big deal for shareholders — they raised the 2026 buyback target by nearly $3 billion, to more than $7 billion for the full year. That's over 5% of their current ma

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**BETA FINCH PODCAST SCRIPT**

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**ALEX**: Welcome to Beta Finch, your AI-powered earnings breakdown! I'm Alex, and I'm here with my co-host Jordan to dive into S&P Global's first quarter 2026 results. This one's particularly interesting given the backdrop of geopolitical tensions and the company's aggressive AI push.

Before we get started, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

Jordan, S&P Global just reported some pretty solid numbers despite what CEO Martina Cheung called an "incredibly volatile and dynamic operating environment." Walk us through the headline numbers.

**JORDAN**: Absolutely, Alex. These results really showcase the resilience of S&P Global's business model. They posted 10% revenue growth year-over-year, with 9% organic constant currency growth. What really caught my eye was the 14% jump in adjusted diluted EPS and 140 basis points of margin expansion on a trailing twelve-month basis. That's impressive operating leverage.

**ALEX**: And they returned a billion dollars to shareholders through share repurchases alone, on top of dividends. But let's talk about the elephant in the room - this Iranian conflict that's been disrupting energy markets. How did that impact their different divisions?

**JORDAN**: Great question. The conflict created this interesting tale of two cities within S&P Global. On one hand, their Energy division faced direct headwinds - they actually lowered their full-year guidance for that segment by a full percentage point to 4.5% to 6% organic growth. CEO Cheung mentioned that some Middle Eastern energy customers had facilities directly impacted, and supply chain disruptions are expected to persist through the second quarter.

But here's what's fascinating - this volatility actually benefited other parts of the business. Their Ratings division saw 13% revenue growth, partly driven by what they called "hyperscaler" issuance - basically big tech companies issuing debt for AI infrastructure investments.

**ALEX**: That's a perfect segue into what I think is the real story here - S&P Global's AI transformation. Jordan, they're not just talking about using AI internally; they're fundamentally changing how customers access their data. Can you break down this strategy?

**JORDAN**: This is where it gets really interesting, Alex. S&P Global is essentially becoming an AI-native data company. They're making their data accessible through what they call "model context protocol" - basically allowing customers to use S&P data directly within AI platforms like Claude and ChatGPT.

The numbers they shared are eye-popping. API call volumes were 5x higher in Q1 versus just one quarter earlier, and doubled month-over-month from February to March alone. They now have over 300 customers either contracted or in trial periods for their AI-ready APIs.

**ALEX**: And they're seeing real pricing power from this AI integration, right?

**JORDAN**: Exactly. This is where the monetization story gets compelling. During the quarter, two financial clients opted to pay 35% to 45% premium increases just to get their data in AI-ready formats. CFO Eric Aboaf mentioned that customers using their AI solutions are showing much higher growth rates - 30% higher in Market Intelligence and double the growth rate in Energy compared to non-AI customers.

One example really stood out to me: they had a buy-side client working with their Kensho AI team who liked their AI plugin so much that they canceled their existing provider and switched to S&P Global, even though it was 20% more expensive.

**ALEX**: Let's talk about the guidance. They maintained most of their full-year outlook despite the geopolitical headwinds. What should investors expect for the rest of 2026?

**JORDAN**: S&P Global is sti

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**Beta Finch Podcast Script: S&P Global Q4 2025 Earnings**

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**ALEX**: Welcome to Beta Finch, your AI-powered earnings breakdown. I'm Alex.

**JORDAN**: And I'm Jordan. Today we're diving into S&P Global's Q4 2025 earnings call - and wow, what a year it's been for this financial data giant.

**ALEX**: Before we jump in, I need to share our standard disclaimer: This podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN**: Absolutely. Now Alex, S&P Global really delivered some impressive numbers here. Let's start with the headline figures.

**ALEX**: They certainly did. Revenue grew 9% reported, 8% organic constant currency for Q4. For the full year, they hit the high end of their original guidance on revenue growth, margins, AND earnings per share. EPS grew 14% for the year, and get this - they returned 113% of adjusted free cash flow to shareholders.

**JORDAN**: That's a massive cash return. And speaking of returns, they just announced their 53rd consecutive year of dividend increases. Plus they repurchased over $5 billion in stock during 2025. But what really caught my attention was how CEO Martina Cheung framed their strategic vision.

**ALEX**: Right, she kept coming back to this concept of "advancing essential intelligence." Over 95% of their revenue is tied to proprietary benchmarks, differentiated data, and critical workflow tools. And Jordan, they expect that percentage to increase over time.

**JORDAN**: That's a key point because it speaks to their competitive moat, especially with all the AI disruption happening. Speaking of which, they made some fascinating comments about AI being a "net tailwind" for their business. They've launched AI products in every division and are seeing real customer adoption.

**ALEX**: The AI discussion was particularly interesting during the Q&A. With all the recent announcements from companies like Anthropic about financial services plugins, investors were clearly concerned about potential disruption to S&P's workflow products.

**JORDAN**: Martina's response was pretty compelling though. She emphasized that their workflow tools aren't just simple apps - they're enterprise-grade solutions that have been refined over years. Products like iLEVEL and Capital IQ Pro integrate deeply into regulated environments and provide mission-critical functionality that can't easily be replicated.

**ALEX**: And she mentioned something that I found particularly telling - customers are telling them they want fewer vendors, not more. They want S&P to embed the latest AI technology directly into their existing platforms rather than having to work with multiple providers.

**JORDAN**: Exactly. And they're seeing tangible results from their AI investments. For example, they deployed an automated data ingestion tool on iLEVEL, and within six months, nearly 20% of customers opted for that add-on feature. That's real revenue generation from AI enhancements.

**ALEX**: Now let's talk about their 2026 outlook because this is where things get really interesting for investors. They're guiding for 6% to 8% organic constant currency revenue growth, continued margin expansion, and 9% to 10% EPS growth.

**JORDAN**: But here's what's fascinating - they're being quite prudent about their market-driven businesses. For their Ratings division, they're expecting "Billed Issuance" - basically the debt they rate - to grow only low to mid-single digits. That's despite some pretty favorable conditions.

**ALEX**: Right, and CFO Eric Aboaf walked through their assumptions. They're expecting most 2026 debt refinancing to happen this year, but they're not counting on massive pull-forward from 2027 and 2028. They're also being conservative about M&A activity and hyperscale infrastructure spending, even though there's a lot of

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