S&P Global Inc.

Good morning and welcome to S&P Global's third 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 third 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 Martina Chung, President of S&P Global Ratings. 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 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 certain European regulations. 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 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 non-GAAP adjusted metrics unless explicitly noted otherwise. We're pleased to report 11% revenue growth in the third quarter, excluding the impact of engineering solutions. We saw acceleration in revenue growth in every division this quarter. As we discussed last quarter, we took decisive action to protect margins in the second and third quarters last year. And while lapping that impact contributed to our expense growth this quarter, we're pleased to see margins expand approximately 100 basis points despite that headwind. Adjusted EPS increased 10% year over year, and we're raising our adjusted EPS guidance by approximately 10 cents at the midpoint to reflect the better than expected results through the third quarter. Strong financial results like these come as a result of continued innovation and execution. and we're excited about the rapid pace of product launches coming from S&P Global this quarter. We'll be discussing a few of them on the call, but I encourage you to look through the releases available in our online press center to get a better sense of the sheer volume of new products and features we've introduced this quarter. We've seen acceleration in each of the strategic growth areas we've been reporting since our investor day. We also saw our vitality index reach 12% of total revenue in the quarter, as new products continue to generate value for both customers and shareholders. We also made progress on our AI initiatives, which I'll touch on briefly today, but we plan to provide a more holistic update on our progress next quarter. We continue to align our goals and operations against the five strategic pillars we introduced at Investor Day. I'm thrilled with what our team was able to deliver for our customers this quarter. As we lean into our customer conversations and continue to provide innovative solutions to the problems that most need solving, our customers are increasingly viewing S&P Global as a trusted strategic partner. In the third quarter, sales cycles were consistent with the longer cycle we've seen in the last few quarters, though we're encouraged that these conversations with customers are often leading to larger deals. In times of market volatility, uncertainty, or change, The global markets have learned to count on S&P Global for differentiated data, powerful workflow tools, important insights, and unrivaled benchmarks. We're seeing confirmation of our strategic emphasis on private markets, as well as sustainability and energy transition, as revenue growth accelerated meaningfully in both those areas this quarter. As we continue to engage with customers, we hear clear indications of long-term optimism, despite the near-term uncertainty and volatility in the markets. Our conversations with financial institutions, corporates, and others generally revolve around interest rates in the short term, with everyone interested in identifying peak interest rates. Large maturity walls, along with other factors, contribute to our optimism about the multi-year growth trajectory for S&P Global. Related to ratings, global build issuance saw a very strong third quarter with 21% growth year over year. With credit spreads tightening through the third quarter, issuers were more comfortable coming to the market, though refinancing activity continues to drive the majority of issuance. We also saw better than expected activity in bank loans, particularly around amend and extend transactions, which we expect to continue in the fourth quarter, though perhaps not to the same extent. We also saw our relative position CLOs improve again in the third quarter, marking a continuation of the trend we've seen all year. Vitality revenue is another area of accelerating growth for S&P Global this quarter. Our vitality revenue metric consists of revenue derived from new or enhanced products. These innovative products contributed 12% of revenue in the third quarter and grew a combined 22% year over year, a significant acceleration from the 14% growth last quarter. You'll notice that the largest contributors to our vitality revenue are unchanged from last quarter. While products can and will move out of the vitality index over time as they mature, it's encouraging to see growth from these products remain steady and resilient. We're also encouraged by the early signs of growth and traction among many of the smaller products that will likely scale to be the top contributors in the coming quarters and years, including the trends we see in private markets for more transparency in valuation and benchmark products. I'd like to turn to some of those new product launches now. We're seeing strong cross-divisional collaboration driving new ideas, with much of that innovation now turning into generally available products. In the third quarter, we introduced multiple data sets from our mobility division to our market intelligence marketplace, making crucial vehicle forecast and registration data available via both Express Feed and Snowflake. We also launched the new single unified platform that marks the product integration of both Platts and IHS Connect, The new platform is called Platts Connect and allows customers access to a comprehensive range of products, benchmarks, data, and insights from one easy to use interface on desktop and mobile. These two products, Mobility on Marketplace and Platts Connect, also highlight two of our early opportunities to integrate new AI capabilities. In the coming months and quarters, We'll be introducing Intelligent Search, another AI-powered functionality that we're currently developing and testing within Marketplace and Platts Connect. We'll have more details on that as we get closer to launching those new features. We also introduced Entity Insights in the third quarter, which brings data from Sustainable One to our network and regulatory solutions to power KYC, third-party risk management, and vendor management within a single workflow tool, leveraging data for 27 million global entities. I also want to provide an update on our development of ChatIQ. As we've shared with you, ChatIQ is a generative AI product developed jointly between Kensho and our market intelligence team. During the third quarter, we had a new beta release that we continued to test internally, but this is a step function improvement over our last internal release. Given our strategic focus, I wanted to provide a bit more detail on the acceleration of our sustainability and energy transition products as we expected in the third quarter. Customer needs have evolved away from ESG scores and moved towards climate and energy transition. We believe we are uniquely positioned to win in this market. When we talk to customers, we hear clear trends. Customers don't just need a set of opaque scores. They're building internal sustainability frameworks, and they need high-quality raw data. With true cost, We have what we believe to be the most robust and comprehensive climate data set in the world. We also offer detailed sustainability data on 17,000 companies, including approximately 3,500 that provide robust, granular data through our corporate sustainability assessment survey. Companies are seeking to operationalize their risk management around climate, and we have the largest set of real asset level data available, with emissions data and climate hazards mapped to 1.6 million physical assets. We also hear consistently from customers that they need help with energy transition, including developing and executing a viable energy transition strategy. We have solutions that cater to customers in different industries, including our automotive value chain carbon accounting solution and the power evaluator solution for energy transition strategies within the crucial power utility sector. We see this customer need across all industries, so this quarter we also launched the Sustainability Starter Pack. This is a comprehensive solution to help companies start from scratch or from wherever they may be as they develop sustainability strategies. We help them assess materiality, measure greenhouse gas emissions, and develop the reports necessary to comply with disclosure requirements and stakeholder demands. Customers need help generating things like a TCFD report and measuring things like greenhouse gas emissions. They need help benchmarking their own progress against peers, and they need help managing the transition to renewable energy sources. We're confident that S&P Global is unparalleled in its ability to provide both the breadth and the depth of offerings necessary to adequately cover all these areas. We're continually increasing the data that we make available through Express Feed, and we're pleased to be adding data sets around net zero commitments and biodiversity before year end. Clearly, we're meeting customers at their point of need, and that's showing up in our results. True cost revenue growth accelerated to 55% year over year. Energy transition continues to grow at nearly 40%, and our total sustainability and energy transition revenue growth accelerated to 36% year over year in the third quarter. While we're very encouraged by these results, we will not rest on our laurels. We remain committed to accelerating our product leadership in this vital area and look forward to many new exciting products to come in future quarters and years. Of course, our commitment to innovation and customer value also powers our ability to generate value for our shareholders. This is an incredible quarter of accelerating growth. We also continue to demonstrate discipline around expenses as margin expansion in the third quarter helped keep trailing 12 month margins relatively flat year over year. Trailing 12 month margins improve sequentially from the second quarter, and we expect margins for the full year to expand more than 100 basis points based on the midpoint of our guidance, as Avout will explain in more detail. The economic factors facing the company are largely unchanged as we look to the final few months of 2023. Secular trends continue to serve as strong tailwinds for the company. while cyclical trends can impact different parts of the business in different ways. Despite increased geopolitical uncertainty, an evolving regulatory landscape around things like sustainability, and continued uncertainty around the timing of a capital market's recovery, S&P Global remains committed to delivering value in all market conditions. Turning to the conditions of the debt markets. We're tightening the range of our expectations for billed issuance as we now expect growth of 5% to 7% compared to our prior expectations of 4% to 8%. As we've discussed previously, we introduced the billed issuance reporting metric this year. as well as a full-year forecast to provide context for the issuance assumptions embedded in our ratings revenue guidance. Billed issuance remains the issuance metric most tightly correlated with our transaction revenue and ratings. Our latest forecast from the ratings research group now calls for positive market issuance growth for the full year, up from last quarter's expectation for a full-year decline. As a reminder, market issuance can differ materially from billed issuance. with divergence this year driven by declines in unrated debt and sovereign and international public finance, which don't impact billed issuance. And now, I'd like to turn the call over to Ewout Steenburg to go through more details around our financial results and outlook. Ewout?