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S&P Global Q2 Earnings Beat on Ratings & Indices Strength
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Key Takeaways
S&P Global's adjusted EPS rose 23% y/y to $4.83, while pro-forma revenues increased 11% to $3.68B.
Ratings revenues climbed 17% as rated issuance surged across the United States, Europe and Asia.
Indices revenues jumped 20%, while the adjusted operating margin expanded 90 bps to 71.5%.
S&P Global Inc. (SPGI - Free Report) reported second-quarter 2026 adjusted earnings of $4.83 per share, rising 23% year over year and beating the Zacks Consensus Estimate of $4.49 by 7.6%. Pro-forma revenues of $3.68 billion increased 11% and surpassed the consensus mark of $3.64 billion by 0.8%.
The performance was led by record results in Ratings and Indices. Global rated issuance strengthened sharply, with volumes rising 26% in the United States, 12% in Europe and 49% in Asia.
Ratings revenues increased 17% year over year to $1.34 billion. Transaction revenues climbed 25% to $746 million, driven by higher debt-rating activity, while non-transaction revenues rose 8% to $593 million.
Adjusted operating profit advanced 22% to $917 million. The adjusted operating margin expanded 310 basis points to 68.5%, as revenue growth outpaced a 6% increase in adjusted expenses. Higher compensation and continued investments in strategic initiatives contributed to the expense increase.
S&P Global's Indices Extend Strong Growth
Indices revenues jumped 20% year over year to $534 million. Growth reflected higher asset-linked fees, supported by increased assets under management and strong trading volumes in exchange-traded derivatives.
Asset-linked fees rose 22% to $348 million, while sales usage-based royalties also increased 22% to $99 million. Adjusted operating profit grew 21% to $382 million, and the adjusted operating margin improved 90 basis points to 71.5%.
Recurring revenues represented 81.5% of segment revenues compared with 81.9% a year earlier. Adjusted expenses increased 16% due primarily to strategic growth investments and higher compensation costs.
SPGI's Energy Growth Remains Measured
Adjusted Energy revenues were $623 million, up 3% year over year. Mid-single-digit growth in Platts, supported by demand for price assessments, was partly offset by muted Global Trading Services volumes and comparatively slower growth in CERA.
Recurring revenues accounted for 91.2% of the division’s total, increasing 90 basis points from the prior-year quarter. Adjusted operating profit rose 4% to $296 million, while the adjusted operating margin expanded 70 basis points to 47.5%.
Adjusted expenses increased 1%. Higher compensation and investments in growth initiatives were partly offset by productivity measures, helping profit growth remain ahead of the segment’s top-line increase.
S&P Global's Market Intelligence Margin Rises
Adjusted Market Intelligence revenues increased 6% to $1.24 billion. High-single-digit growth in Kensho Data & Platforms, including contributions from With Intelligence, supported the results. Enterprise Solutions delivered low-single-digit growth, including the impacts of the Enterprise Data Management and thinkFolio divestitures.
Recurring revenues represented 97% of the segment’s total, up 20 basis points. Adjusted operating profit climbed 10% to $445 million, and the adjusted operating margin expanded 120 basis points to 36%.
Adjusted expenses increased 4%, reflecting With Intelligence costs and higher compensation. The divestitures and productivity savings partly offset those pressures.
SPGI's Profitability & Cash Flow Strengthen
Pro-forma non-GAAP adjusted operating profit increased 15% year over year to $2 billion. Adjusted expenses rose 6% to $1.68 billion, allowing the adjusted operating margin to expand 200 basis points to 54.3%.
Adjusted net income increased 19% to $1.43 billion. The adjusted effective tax rate declined to 19.8% from 23.3%, while a 3% reduction in diluted shares outstanding also supported per-share growth. Currency added 3 cents to adjusted earnings.
Cash provided by operating activities was $1.44 billion. The adjusted free cash flow, excluding certain items, totaled $1.37 billion, up 1%. The company paid out $287 million in dividends during the quarter.
S&P Global's Capital Returns Remain Active
SPGI repurchased $500 million in shares in the second quarter, bringing year-to-date repurchases to $1.5 billion. Management expects total 2026 share repurchases to exceed $7 billion following the Mobility separation.
Cash, cash equivalents and restricted cash stood at $4.14 billion at the quarter-end. Short- and long-term debt, excluding $2 billion in bonds transferred to Mobility Global, was $13.17 billion. Adjusted net debt was 1.9 times adjusted EBITDA.
SPGI's Outlook Reflects Post-Spin Business Mix
S&P Global expects 2026 year-over-year reported revenue growth of 5.9-7.9%, lower than the preceding quarter’s 6.3-8.3%, excluding Mobility. Organic constant-currency revenue growth is projected at 6-8%, with adjusted operating margin expansion of 35-60 basis points (bps), a surge from the first quarter 2026 view of 10-35 bps.
Adjusted diluted earnings are expected to plummet between $17.5 and $17.75 compared with the preceding quarter’s view of $19.4-$19.65. The company projects adjusted corporate unallocated expenses to dip to $185-$195 million from the preceding quarter’s view of $220-$230 million.
Management reduced net interest expense expectations to $390-$410 million from the $405-$415 million reported in the preceding quarter. Capital expenditure of $190-$210 million is lowered from the preceding quarter’s $215-$225 million.
SPGI carries a Zacks Rank #5 (Strong Sell) at present.
FactSet Research Systems Inc. (FDS - Free Report) reported third-quarter fiscal 2026 adjusted earnings of $4.53 per share, beating the Zacks Consensus Estimate of $4.44 by 2%. The figure increased 6.1% from the year-ago quarter.
Revenues of $622.9 million surpassed the consensus mark of $617.2 million by 0.9% and rose 6.4% year over year.
Paychex, Inc. (PAYX - Free Report) posted solid fourth-quarter fiscal 2026 results. Adjusted earnings of $1.32 per share surpassed the consensus estimate of $1.31 by a slight margin and increased 11% from the year-ago quarter.
Total revenues of $1.61 billion rose 12% year over year and beat the consensus estimate by a slight margin.
View the Zacks #1 Rank List
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S&P Global Q2 Earnings Beat on Ratings & Indices Strength
Key Takeaways
S&P Global Inc. (SPGI - Free Report) reported second-quarter 2026 adjusted earnings of $4.83 per share, rising 23% year over year and beating the Zacks Consensus Estimate of $4.49 by 7.6%. Pro-forma revenues of $3.68 billion increased 11% and surpassed the consensus mark of $3.64 billion by 0.8%.
The performance was led by record results in Ratings and Indices. Global rated issuance strengthened sharply, with volumes rising 26% in the United States, 12% in Europe and 49% in Asia.
S&P Global Inc. Price, Consensus and EPS Surprise
S&P Global Inc. price-consensus-eps-surprise-chart | S&P Global Inc. Quote
SPGI's Ratings Business Sets the Pace
Ratings revenues increased 17% year over year to $1.34 billion. Transaction revenues climbed 25% to $746 million, driven by higher debt-rating activity, while non-transaction revenues rose 8% to $593 million.
Adjusted operating profit advanced 22% to $917 million. The adjusted operating margin expanded 310 basis points to 68.5%, as revenue growth outpaced a 6% increase in adjusted expenses. Higher compensation and continued investments in strategic initiatives contributed to the expense increase.
S&P Global's Indices Extend Strong Growth
Indices revenues jumped 20% year over year to $534 million. Growth reflected higher asset-linked fees, supported by increased assets under management and strong trading volumes in exchange-traded derivatives.
Asset-linked fees rose 22% to $348 million, while sales usage-based royalties also increased 22% to $99 million. Adjusted operating profit grew 21% to $382 million, and the adjusted operating margin improved 90 basis points to 71.5%.
Recurring revenues represented 81.5% of segment revenues compared with 81.9% a year earlier. Adjusted expenses increased 16% due primarily to strategic growth investments and higher compensation costs.
SPGI's Energy Growth Remains Measured
Adjusted Energy revenues were $623 million, up 3% year over year. Mid-single-digit growth in Platts, supported by demand for price assessments, was partly offset by muted Global Trading Services volumes and comparatively slower growth in CERA.
Recurring revenues accounted for 91.2% of the division’s total, increasing 90 basis points from the prior-year quarter. Adjusted operating profit rose 4% to $296 million, while the adjusted operating margin expanded 70 basis points to 47.5%.
Adjusted expenses increased 1%. Higher compensation and investments in growth initiatives were partly offset by productivity measures, helping profit growth remain ahead of the segment’s top-line increase.
S&P Global's Market Intelligence Margin Rises
Adjusted Market Intelligence revenues increased 6% to $1.24 billion. High-single-digit growth in Kensho Data & Platforms, including contributions from With Intelligence, supported the results. Enterprise Solutions delivered low-single-digit growth, including the impacts of the Enterprise Data Management and thinkFolio divestitures.
Recurring revenues represented 97% of the segment’s total, up 20 basis points. Adjusted operating profit climbed 10% to $445 million, and the adjusted operating margin expanded 120 basis points to 36%.
Adjusted expenses increased 4%, reflecting With Intelligence costs and higher compensation. The divestitures and productivity savings partly offset those pressures.
SPGI's Profitability & Cash Flow Strengthen
Pro-forma non-GAAP adjusted operating profit increased 15% year over year to $2 billion. Adjusted expenses rose 6% to $1.68 billion, allowing the adjusted operating margin to expand 200 basis points to 54.3%.
Adjusted net income increased 19% to $1.43 billion. The adjusted effective tax rate declined to 19.8% from 23.3%, while a 3% reduction in diluted shares outstanding also supported per-share growth. Currency added 3 cents to adjusted earnings.
Cash provided by operating activities was $1.44 billion. The adjusted free cash flow, excluding certain items, totaled $1.37 billion, up 1%. The company paid out $287 million in dividends during the quarter.
S&P Global's Capital Returns Remain Active
SPGI repurchased $500 million in shares in the second quarter, bringing year-to-date repurchases to $1.5 billion. Management expects total 2026 share repurchases to exceed $7 billion following the Mobility separation.
Cash, cash equivalents and restricted cash stood at $4.14 billion at the quarter-end. Short- and long-term debt, excluding $2 billion in bonds transferred to Mobility Global, was $13.17 billion. Adjusted net debt was 1.9 times adjusted EBITDA.
SPGI's Outlook Reflects Post-Spin Business Mix
S&P Global expects 2026 year-over-year reported revenue growth of 5.9-7.9%, lower than the preceding quarter’s 6.3-8.3%, excluding Mobility. Organic constant-currency revenue growth is projected at 6-8%, with adjusted operating margin expansion of 35-60 basis points (bps), a surge from the first quarter 2026 view of 10-35 bps.
Adjusted diluted earnings are expected to plummet between $17.5 and $17.75 compared with the preceding quarter’s view of $19.4-$19.65. The company projects adjusted corporate unallocated expenses to dip to $185-$195 million from the preceding quarter’s view of $220-$230 million.
Management reduced net interest expense expectations to $390-$410 million from the $405-$415 million reported in the preceding quarter. Capital expenditure of $190-$210 million is lowered from the preceding quarter’s $215-$225 million.
SPGI carries a Zacks Rank #5 (Strong Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
FactSet Research Systems Inc. (FDS - Free Report) reported third-quarter fiscal 2026 adjusted earnings of $4.53 per share, beating the Zacks Consensus Estimate of $4.44 by 2%. The figure increased 6.1% from the year-ago quarter.
Revenues of $622.9 million surpassed the consensus mark of $617.2 million by 0.9% and rose 6.4% year over year.
Paychex, Inc. (PAYX - Free Report) posted solid fourth-quarter fiscal 2026 results. Adjusted earnings of $1.32 per share surpassed the consensus estimate of $1.31 by a slight margin and increased 11% from the year-ago quarter.
Total revenues of $1.61 billion rose 12% year over year and beat the consensus estimate by a slight margin.