S&P Global Inc at JPMorgan Ultimate Services Investor Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andrew Steinerman - JPMorgan Chase & Co - Analyst : So one of the big milestones for you is the Enterprise Data Office and the Chief Client Office. And my question to you is, is the team as excited about these things as you are? Like is this something that's sort of been mandated top-down? Or is this something that you really see a lot of followership excitement inside the organization about?

Question: Andrew Steinerman - JPMorgan Chase & Co - Analyst : With the client (multiple speakers) --

Question: Andrew Steinerman - JPMorgan Chase & Co - Analyst : So you're saying morale around this internally is very good, right?

Question: Andrew Steinerman - JPMorgan Chase & Co - Analyst : Okay. Got you. Could you just talk about why you're so confident, particularly in MI, where AI is only going to be a source for positive benefits at S&P and there's not really risk because you're mitigating those risks.

Question: Andrew Steinerman - JPMorgan Chase & Co - Analyst : Okay. Great. You mentioned that LLMs like Claude for Financial Services is a place for additional revenue. Surely, that could be a place where clients that don't use Cap IQ, discover Cap IQ. But I could just see it like a client that might be on Claude for Financial Services, they might not need all of what Cap IQ offers. How are you going to look at price for somebody who is not a customer of Cap IQ, discovers Cap IQ for a very, let's say, particular purpose, but isn't interested in all of what Cap IQ offers, are they going to get a lower price if it's discovered on a third-party LLM?

Question: Andrew Steinerman - JPMorgan Chase & Co - Analyst : I was just asking about that. So it's just -- it's sort of like the same exactly you're hitting on. Have you been able to track your clients that embrace your AI tools the most? And my question is, for that cohort that use your AI tools the most, are they consuming more data from S&P?

Question: Andrew Steinerman - JPMorgan Chase & Co - Analyst : Maybe we'll switch over to MI. In last week's Analyst Day, Saugata gave an MI outlook of 6% to 8% organic revenue growth for the space. I think financial desktops and data feeds broadly defined, it's got to grow more like mid- to low-single digit. And Saugata says, we assume we're taking share in 6% to 8%. So my question is, what gives MI the positioning to gain share, which in a place for financial desktops and data feeds, it feels like a multi-provider market.

Question: Andrew Steinerman - JPMorgan Chase & Co - Analyst : Still being disciplined on price, right?

Question: Andrew Steinerman - JPMorgan Chase & Co - Analyst : Makes sense to me. When you're looking at the medium-term algo EPS growth, which is low-double digits, which is a little bit lower EPS growth than, lets the last three years. I think the simple answer to it is you're just starting at a higher margin now. I think that's really kind of the answer. So my question is, if you look at S&P and your margin is now higher than three years ago, you're probably closer to your incremental margin, and that's why we're really talking about low-double digits instead of teens EPS growth over the next few years in the algo. My question to you is, what are you doing to raise the incremental margin of S&P?

Question: Andrew Steinerman - JPMorgan Chase & Co - Analyst : And maybe you can say, I just answered this question, but let's jump into efficiencies at Ratings. When you look at current margins, '25 margins, they've surpassed back the '21 margins. And back in '21, the company said, oh, margins are really high because issuance is high. But now it seems like it's really kind of more normal course and rising from here. What's happening in Ratings margins where they're rising in a year where it's good, but it's not driving the whole margin story this year?

Question: Andrew Steinerman - JPMorgan Chase & Co - Analyst : Let's touch on private credit, which is a huge asset class, and I surely know that S&P is well positioned to capitalize within both Ratings and MI in serving those end markets for private credit. At this point, and I know it's been a fast growth area for you. Given the size of the private credit market as it is today, wouldn't you think that you would have even more Ratings and MI revenues from this kind of mega trend towards private credit?

Question: Andrew Steinerman - JPMorgan Chase & Co - Analyst : And so as much as you've been successful, I assume to say there's no question this is a large opportunity ahead.

Question: Andrew Steinerman - JPMorgan Chase & Co - Analyst : Right. And you mean that both in MI and in Ratings. And my question is, is that embedded into the algos that you gave at Analyst Day last week?

Question: Andrew Steinerman - JPMorgan Chase & Co - Analyst : Questions from the audience? Come on. My team is right in front of you. Someone has a question. Go ahead. Speaking, first year as CEO. Unidentified Participant_1 Can you speak to your first year as CEO? And I'm curious where you feel you are in terms of having the talent around you to execute because it's -- the business is changing, the go-to-markets are changing. And I'm just curious how is the organization changing with that?

Question: Andrew Steinerman - JPMorgan Chase & Co - Analyst : Okay. I think we should conclude. Martina, thank you. Thank you. Appreciate it.