S&P Global Inc.

Good morning and welcome to S&P Global's second quarter 2026 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 and Treasurer for S&P Global. Sir, you may begin.

Good morning, and thank you for joining today's S&P Global second quarter 2026 earnings call. Presenting on today's call are Martina Cheung, President and Chief Executive Officer, and Eric Aboaf, Chief Financial Officer. 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 are providing, and the press release and the supplemental deck contain reconciliations of such GAAP and non-GAAP measures. For today's discussion, References to revenue are to GAAP pro forma revenue on a consolidated basis, GAAP revenue for our ratings and indices segments, and adjusted as recast revenue for our energy and market intelligence segments. Other financial metrics discussed on today's call are presented on an adjusted basis and refer to pro forma non-GAAP adjusted measures. In a press release dated July 6, 2026, the company provided recast financial information Excluding Contributions from Mobility for the Four Quarters of 2025, Full Year 2025, and the First Quarter of 2026. That release can also be found at investor.spglobal.com. At this time, I would like to turn the call over to Martina Cheung. Martina?

Thank you, Mark, and thank you to everyone joining the call this morning. I'm excited to host our first earnings call since completing the mobility spend, and I'm excited to be able to discuss the progress and the vision of our four divisions. We had very strong performance in the second quarter with 11% total revenue growth outperforming our expectations on both a reported and an organic constant currency basis. Recurring revenue was up 8% year over year as well. The strength of our benchmark business has really shunned through in the second quarter as well. with revenue increasing 15% year over year. With high incremental margins in our benchmark products and disciplined expense management across the business, we were able to deliver 200 basis points of margin expansion leading to EPS growth of 23%. On capital return, we have decided to increase our target share repurchase for 2026 by nearly $3 billion to more than $7 billion for the full year. As Eric will walk through shortly, our strong cash flow and healthy balance sheet will allow us to repurchase the equivalent of more than 5% of our current market capitalization. In the last few months, we've seen the end result of a great deal of exceptional work from teams across the entire organization. On July 1st, we finalized the spin of our former mobility division into an independent publicly traded company, which immediately created meaningful shareholder value. We announced the consolidation of our supply chain efforts into our energy division, as well as new leadership and a new operating model for market intelligence. We'll provide some additional insights on those points in a moment. We've also seen continued rapid adoption of our AI solutions, including our Kensho LLM Ready APIs, and we've continued to explore different monetization methods with our large, sophisticated customers. We also announced an agreement to purchase data center hall, and a majority stake in Augusto & Company. Data Center Hawk will combine with our 451 research and energy forecasting assets to extend our leadership in the data center space. Augusto & Company is a leading credit rating agency with operations in Nigeria, Kenya, Rwanda and Ghana. All of these milestones are evidence of the progress we are making in executing the strategy we announced at our investor day last year. With the completion of the mobility spin and the division realignment, we are well positioned to deliver on the strategic objectives we have laid out. We will continue to invest to advance our market leadership and benchmarks across the debt, equity, and commodity markets. In market intelligence, we will make focused investments in the fastest growth areas while improving the profitability of more mature platforms. That will help us optimize the market intelligence business to meet the evolving data and AI needs of our customers. We are also integrating our data to create new opportunities and expand our addressable market through Kensho data. Now that we have simplified the business down to four core divisions, it's more clear than ever how these divisions can create a powerful platform to help our customers navigate volatile markets and turbulent macroeconomic conditions. As I've shared with you before, we are primarily a benchmarks business, Benchmarks include our ratings division, our indices division, the PLATS business within our energy division, and the distribution of our ratings content through market intelligence. These benchmark businesses account for nearly two-thirds of our revenue and now comprise more than 80% of our operating profits. Given this is the first earnings call since we completed the mobility spin and realigned two of our four divisions, I wanted to discuss each division's growth drivers and strategic priorities before handing off to Eric to discuss financials and guidance. Beginning with ratings, which is now our largest division by revenue, the market appears to be pricing in slightly higher rates than were expected at this point last year, though credit spreads remain very tight. Build issuance increased 25% year-over-year in the second quarter, with strength across the risk spectrum. Investment-grade issuance was again bolstered by large issuance associated with AI infrastructure and data center CapEx, as well as M&A. We also continue to drive innovation in fast-growing areas of credit, like DeFi. Issuance from the hyperscaler infrastructure companies slowed in the second quarter, as we expected, but remains quite strong and is pacing well ahead of our initial expectations for the year. In the first half, we saw approximately $169 billion in build issuance from the hyperscalers, while our initial outlook for the year assumed approximately $200 billion for the full year. Our updated financial guidance assumes build issuance growth in the mid to high single-digit range. We are now assuming $250 to $300 billion in hyperscaler issuance for the full year and double-digit growth in M&A-related issuance. As we look at our mid-year refinancing study, we continue to see robust maturity walls for several years, reinforcing our expectation for strong average annual growth. Over the last 12 months, we have seen build issuance grow at an average of roughly 20%. Despite that very strong issuance and our outperformance in the first half of 2026, the near-term and multi-year maturity walls remain quite strong. This is a powerful indicator that the strength we are seeing this year in ratings is not coming at the expense of future refinancing activity. In the next four and a half years, we expect to see approximately $11 trillion in rated debt come up for refinancing, which bodes well for the multi-year growth opportunities in ratings. Now turning to indices, we continue to extend our leadership as the world's largest provider of indices by AUM. ETF AUM for S&P Dow Jones indices ended the quarter at $6.35 trillion. We continue to see an even greater amount of AUM tied to our indices when we include mutual funds, OTC derivatives and insurance products. We have built an incredible index franchise founded on trust, transparency and disciplined methodology, while still being responsive to an ever-evolving market environment. Our results demonstrate the strength of that franchise, as S&P Dow Jones Indices was the number one index provider yet again in terms of flow capture. Year over year, we have seen more than $600 billion in net inflows. June marked a significant milestone for the global markets as well, as we saw the first-ever ETF surpass $1 trillion in AUM. We're incredibly proud to be part of that story, as that ETF was based on the storied S&P 500. We also continue to invest to drive new, innovative solutions in DeFi. Just last week, we launched the S&P Pantera Digital Asset Index, which uses a rules-based approach that focuses heavily on fundamentals versus focusing strictly on price momentum or market cap. That innovation is driving real economic value and competitive wins as well. In the second quarter, we saw multiple asset managers switch to S&P, bringing tens of billions of dollars in additional AUM, now benchmarked against S&P Dow Jones indices. Now turning to our energy franchise. As we outlined back at Investor Day, we will be reporting energy in two business lines going forward. The Platts benchmark business includes our price assessments, global trading services, and other offerings associated with our energy and commodity benchmarks. The CIRA business line includes the proprietary data, content, research, and events, including the holistic supply chain suite that previously was spread across energy and market intelligence. When we think about the performance of the energy business, not just in the quarter but longer term, there are a number of factors impacting growth, with long-term positive factors offset somewhat by near-term headwinds. We are confident that the secular tailwinds in this business remain intact. Energy expansion continues to be one of those tailwinds and informs much of our strategic focus. Our price benchmarks remain the gold standard across energy and commodities markets, and we will continue to invest to launch and scale new benchmarks. As supply chains diversify and evolve, we continue to make investments in regions of the world like North Africa that are poised to play a more important role in global energy and commodity markets. We expect to see strong economic growth in these regions and look to work together with local partners to help deliver that growth. Global supply chains aren't just raw materials and manufacturing. They include technology supply chains involving data centers and power and represent a meaningful opportunity for our energy business. That opportunity is exactly why you saw us acquire Data Center Hawk. We're confident that as the demand for AI increases, the need for our data and insights will increase as well. We've also made great progress with Seratitan and remain on track to officially launch our new AI-native platform for upstream data later this year. Despite the many long-term tailwinds in energy, there are some factors that pressured results in the quarter, though not unexpectedly. Importantly, the Iran conflict has complicated contract renewals among some very large customers. and we have intentionally chosen to be flexible on price increases and other terms for effective customers during such a challenging time. Eric will walk through what that means for 2026 in a moment, but we remain confident that the headwinds are cyclical while the tailwinds are secular. Now turning to market intelligence. As we announced on July 6th, we have created a new business structure for market intelligence with new leadership already on the ground running. We continue to see rapid changes in the technology landscape and in the ways our customers want to interact with our data. So we are refining our strategy and go-to-market motion to make sure we're best positioned for the future. Within Market Intelligence, we'll be reporting two business lines, Kensho Data and Platforms and Enterprise Solutions. Kensho Data consists of our data feeds, Kensho LLM Rating APIs, Ratings Express, and our vast estate of proprietary data. The Kensha Data Component is roughly half the size of Platforms by Revenue, but is growing in the high single digit to low double digit range on an organic basis. The Platforms component includes CapIQ, Consulting, Issuer Solutions, Ratings Direct, Visible Alpha, and With Intelligence. Platforms is the larger component of the business line, and in aggregate is growing low single digits on an organic basis. Our strategic focus in Kensho Data will be to deliver our differentiated and proprietary data in a channel agnostic way, accelerating revenue growth at strong incremental margins. Our focus in platforms will be to consolidate redundant platforms, leverage a more unified technology infrastructure across products, and simplify operations while still growing revenue. We will maintain a high standard for innovation and customer value, will increase our efforts to leverage AI and traditional productivity measures to improve profitability. The other business line in market intelligence is Enterprise Solutions. Enterprise Solutions includes our entire lending solution suite, ClearPAR, debt domain, pricing and reference data, notice manager, and WSO. The lending solution suite benefits from deeply connected data flows as well as strong network effects. Enterprise Solutions also includes iLevel, Bookbuilding Software for Fixed Income and Equity Origination, and Valuation Services. These are important market-leading franchises that the markets depend on in order to function. In market intelligence, we have an incredible library of proprietary data and powerful workflow tools. We will emphasize those areas where S&P Global has a clear right to win. We are seeing customer buying behavior mature and evolve. Vendor consolidation continues to be a tailwind for our business, and we are beginning to see customers more rigorously evaluating AI budgets to prioritize those solutions that truly create positive ROI. Across the board, we want to align our priorities with those of our customers. We will be focused on the highest quality assets in MI and on the highest growth opportunities. We will make more and more of our global data estate AI ready by scaling our enterprise data fabric. We will look to fund these investments primarily out of productivity and AI-driven cost savings to ensure meaningful margin expansion. From a capital standpoint, small carve-outs are possible in the near term, but there remains no real appetite for transformational M&A. The simplified structure and clear objectives we've discussed today will better position market intelligence to serve customers in the future and drive long-term profitable growth. Now let me turn to the exciting progress we're making in artificial intelligence. As we shared with you last quarter, our customers leveraging our AI solutions are growing much faster than average. That gap widened in the second quarter for both market intelligence and energy. ACV growth in MI is now 60% faster in MI for AI customers and is approximately 3x in energy. The demand signal from customers is incredibly strong. We continue to rapidly add customers to our LLM Ready APIs and MCP connected solutions, with that number now sitting above 500 and increasing more than 70% quarter over quarter. API call volume continues to grow rapidly as well, showing that our customers are finding real value in these powerful solutions. Call volume for our LLM Ready API in the second quarter was more than five times the volume we saw in the first quarter, Internally, the EDO has achieved nearly 60% of its targeted $100 million in annualized cost savings through a combination of AI-driven efficiencies and traditional productivity initiatives. We are on track to deliver the full $100 million, or roughly 20%, of the EDO cost base before the end of 2027. Even as our AI solutions are seeing great demand, we are hearing more and more from customers that they are paying more attention to token costs and the overall expense of their own AI investments. Customers are looking for ways to minimize or manage token expenses, including building solutions in-house. Those customers want to build with S&P Global and with Kensho Labs. Over time, we believe that our AI offerings will create meaningful value for our customers without creating exorbitant costs. Overall, we are pleased with the performance of the business in the second quarter, We once again demonstrated the power and resilience of our benchmarks businesses while making meaningful progress on strategic growth initiatives across the board. We are energized by the opportunities and new leadership in market intelligence and look forward to delivering a strong second half. With that, I'll hand it over to Eric to walk through the quarter's financial results and the guidance.