S&P Global Inc.

Good morning and welcome to S&P Global's first quarter 2023 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 for S&P Global. Sir, you may begin.

Good morning, and thank you for joining today's S&P Global first quarter 2023 earnings call. Presenting on today's call are Doug Peterson, President and Chief Executive Officer, and Avout Steenbergen, Executive Vice President and Chief Financial Officer. For the Q&A portion of today's call, we will also be joined by Saugat Asaha, President of S&P Global Commodity Insights, and Dan Draper, CEO of S&P Dow Jones Indices. 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 most recent form 10 K filed with the US Securities and Exchange Commission. In today's earnings release and during the conference call we're providing non gap 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 correspond to the non-GAAP measures we're providing, and the earnings release and the supplemental deck contain reconciliations of such GAAP and non-GAAP measures. I would also like to call your attention to a specific European regulation. Any investor who has or expects to obtain ownership of 5% or more of S&P Global should contact Investor Relations to better understand the potential impact of this legislation on the investor and the company. We're aware that we have some media representatives with us on the call. However, this call is intended for investors, and we would ask that questions from the media be directed to our media relations team, whose contact information can be found in the press release. At this time, I would like to turn the call over to Doug Peterson. Doug?

Thank you, Mark. As we look at this quarter's highlights, I want to remind you that the financial metrics we'll be discussing today refer to the non-GAAP adjusted metrics for the current period and for 2023 adjusted guidance. and non-GAAP pro forma adjusted metrics in the year-ago period unless explicitly called out as GAAP. We're pleased to report 3% revenue growth in the first quarter compared to pro forma results in the year-ago period. We continue to generate substantial synergies and manage our other expenses with discipline as demonstrated by the 1% growth in total adjusted expenses in the first quarter. Our focus on top line growth and expense management resulted in an expansion more than 100 basis points in the adjusted margin, and a 9% year-over-year growth in adjusted EPS. In addition to our strong financial results, we also made progress on many of the strategic initiatives we laid out for you at Investor Day. We continued to prioritize innovation in our technology budgets and reached important milestones in our cloud migration. We also hosted a record-breaking Sarah Week in the first quarter. And we also expanded our lead in AI, with Kensho releasing two more commercially available products, built on our proprietary AI and machine learning platforms. We'll discuss these important highlights in more detail in a moment. One of the key messages from our investor day last December was the introduction of the five pillars that drive our strategy of powering global markets. Beginning this quarter, we'll be discussing our results using that same framework. We use these pillars as a lens to inform our decisions on capital allocation and organic investment that impact our people, our customers, and the communities in which we live and work. First, I want to start with our customers. Delivering value to our customers drives every decision we make at S&P Global. We constantly hear from our customers that they're focused on the same things we are. During the first quarter, in almost every customer conversation I had, we discussed energy transition and sustainability, as well as our products that serve private markets. We continued to see evidence of the value we create for our customers. We saw strong and stable retention rates in the first quarter, with year-over-year improvements in commodity insights and several products in other divisions. As expected and previously discussed, retention rates and mobility have declined modestly as automotive inventory levels and volumes start to normalize. We also saw some modest lengthening of the sales cycle in certain parts of the business in the first quarter, as some enterprise customers, particularly in financial services, are understandably focused on margin protection and managing their own expenses. This is a continuation of what we saw in the back half of last year. As I've met with customers over the last few months, including large automotive OEMs, retail companies, asset managers, banks, and others, the recurring theme is that they want to do more with us. There's a large opportunity to raise awareness of the breadth of our product offerings, and customers have been consistently impressed by the products we've introduced to them. That should ultimately improve customer value and our results. We also look to create quality of life improvements in those customer relationships, and our CI teams have done an excellent job of helping customers migrate to enterprise contracts. That migration reduces contract complexity for our customers and enhances the overall customer experience in a meaningful way. Turning to our ratings customers, during the first quarter, global billed issuance in aggregate decreased 7% year over year. While we saw strong sequential improvement from issuance levels last quarter, The uncertainty in the banking sector that emerged in March muted the impact to build issuance for the whole quarter. Refinancing activity was strong in the first quarter, particularly in high yield and bank loans, though opportunistic issuance remained muted. We're pleased to build issuance for investment grade increased in the first quarter, though this was largely due to a few very large deals. We're also pleased with the strength we saw in CLOs in the first quarter. The decision we made last year to preserve capacity and maintain the strength of our analytical organization is already proving to be the right call, as our growth in CLOs was particularly strong. Next, I'd like to focus on our strategic priority to grow and innovate. So far this year, we've launched several new products. An example of our product synergies Teams from Platts and IHS Market worked together to integrate the Platts Forward Curve into our real-time analytics platform, Energy Studio Impact. We previewed this innovation at our Investor Day, which provides clients with the most comprehensive and valuable data and insights in the industry, while strengthening our customer value proposition and competitive differentiation. So far this year, we've also introduced new price assessments for black mass in Europe and Asia and for RPET in India to improve transparency in pricing of battery raw materials and recycled plastics. We remain focused and disciplined in our M&A, completing the acquisitions of TruSight and ChartIQ within market intelligence and MarketScan within mobility. These tuck-in acquisitions strengthen our current offerings, though we expect even this type of M&A activity to be rare for the rest of the year. As discussed at Investor Day, we're introducing our vitality revenue metric, which consists of revenue derived from new or substantially enhanced products. We're pleased that in the first quarter, vitality revenue constituted 11% of total revenue, consistent with our goal of maintaining a vitality index at or above 10%. Much of this growth will be enabled by enhancements to our own data and technology capabilities. As we optimize our technology spend to accelerate the pace of innovation, we're thrilled with the progress made in the first quarter. As we disclosed in February, we announced a strategic partnership with Amazon AWS to collaborate in product development and joint go-to-market initiatives. That partnership allows us to further transition workloads to the cloud and decommission our own data centers. three of which we closed just in the first quarter. Cross-organization teams also worked diligently to complete two software systems integrations to ensure that the combined company is operating on unified platforms in the most efficient way possible. Initiatives like these allow us to put more resources behind revenue-generating innovation as well, like the AI-powered products that Kensho has been developing for five years. There is excitement in the field of artificial intelligence, and we're extending our leadership and focusing on innovation that will benefit our customers and increase the value of our products. With the commercial launch of two new products in the first quarter, there are five Kensho-branded AI-powered products commercially available today on the S&P Global Marketplace. We're very excited about the developments in this field and we'll discuss our own launches in more detail in the coming months. Shifting now to how we lead and inspire our people, customers, and communities. In the first quarter, we launched the ninth iteration of our People First initiative and made investments to expand resources for continuous learning, leadership development, and upskilling through our essential tech programs. These investments in our people help us attract, retain, and develop incredibly talented people, which ultimately leads to better financial results for our shareholders too. We also continue to lead and inspire the industries we serve as we power global markets. In the first quarter, we published the inaugural Look Forward report, which outlines the expectations of our economists, analysts, researchers, and data experts. This report is a product of our research council at S&P Global, which was formed last year to help us look beyond the near term and explore the trends that will shape our collective future. Lastly, as I mentioned earlier, we hosted SARA Week in Houston, Texas in March. This conference brought together over 8,000 leaders in the energy industry who participated in over 650 events to help tackle global issues like energy security, energy transition and sustainability, as well as how to navigate the turbulent times in the commodity markets today. Now, looking across the company, we're pleased with the strong execution of all our divisions this quarter. While we continue to see the impact of the issuance environment in our ratings division, we're also seeing signs of revenue stabilization as we begin to lap the challenging issuance conditions that began during the first quarter last year. We saw positive revenue growth in all of our other divisions in the first quarter and continue to balance expense management with strategic organic investment to make sure we're well positioned to accelerate our revenue growth over the next few years. Expenses can, of course, be seasonal. so we look at the margins on a trailing 12-month basis, and we expect these figures to improve as we progress through the year. As we look through the remainder of the year, I'd like to touch on some of the factors influencing our company's performance. We continue to expect a mild recession this year, though the timing is more likely a few months later relative to our initial expectations. We also expect to see volatility in various markets, including equities, credit, and commodities. We see no change to the secular trend shaping the future opportunities for us, like the shift from active to passive asset management and energy transition. While these market expectations are mostly unchanged from February, we wanted to highlight the potential impact in the banking market. As we're all aware, the events around regional banks in the U.S. and a major Swiss bank added uncertainty to the markets in March. We do not have material direct exposure to the impacted regional banks, and we do not expect the events in that end market to materially increase the risk to our financial guidance in 2023 or to the medium-term targets we laid out in Investor Day. We do see slightly elevated risk of default rates impacting the broader credit markets, particularly in high yield, which will also inform our updated issuance outlook. Our ratings financial results and guidance are closely tied to build issuance, And for 2023, we now expect build issuance to be up approximately 3% to 7% for the full year. Our latest ratings research group forecast calls for a decline in global market issuance. As a reminder, market issuance can differ materially from build issuance, as we've described in recent quarters, with much of the delta this year driven by declines in unrated debt and sovereign and international public finance, which don't impact build issuance. And now I'd like to turn the call over to Evald Steenbergen, who's going to provide additional insights into our financial performance and outlook.