S&P Global Inc Earnings - Q2 2026 Analysis & Highlights
S&P Global reported strong Q2 2026 results driven by benchmark business outperformance, successful completion of the Mobility spin-off, and accelerating AI adoption across divisions, with management emphasizing margin expansion, strategic reorganization of Market Intelligence and Energy divisions, and increased capital returns to shareholders.
Key Financial Results
Total revenue grew 11% year-over-year on both reported and organic constant-currency basis.
Adjusted diluted EPS grew 23% year-over-year.
Recurring revenue increased 8% year-over-year.
Benchmark businesses revenue increased 15% year-over-year.
Operating margin expanded 200 basis points to 54.3% on an adjusted basis.
Adjusted operating profit grew 15% excluding OSTTRA from the prior year period.
Business Segment Results
Ratings division revenue increased 17% year-over-year, representing a record quarter by revenue. Transaction revenue increased 25%, with investment grade supported by tech infrastructure and hyperscaler issuance growing in the high 20% range. Private markets ratings revenue increased 60% year-over-year. Non-transaction revenue grew 8%, driven by higher annual fee revenue and strong growth in Ratings Evaluation Services. Adjusted expenses increased 6%, and operating margin expanded 310 basis points to 68.5%.
S&P Dow Jones Indices reported its 13th consecutive record quarter for revenue and surpassed $2 billion of revenue on a trailing 12-month basis. Revenue grew 20% with excellent growth in both asset-linked fees and exchange-traded derivatives. Asset-linked fees grew 22% year-over-year driven by equity market appreciation and net inflows. Exchange-traded derivatives revenue grew 22% driven by strong volumes, particularly in SPX. ETF AUM for S&P Dow Jones Indices ended the quarter at $6.35 trillion. The division had its best quarter of net inflows on record with more than $600 billion in net inflows year-over-year. Operating profit grew 21% and operating margin expanded 90 basis points to 71.5%.
Energy revenue grew 3% amid pressure from the challenging environment and sanctions. Platts revenue grew 4% driven by strong growth in price assessments. CERA grew 1% due to strong growth in market insights and analytics, largely offset by declines in upstream and conference and training revenue. Sanctions had a 120 basis point negative impact on Platts and a 30 basis point negative impact on CERA growth in the second quarter. Adjusted expenses grew by only 1%, and margins expanded by 70 basis points to 47.5%.
Market Intelligence revenue grew 6% on both reported and organic constant-currency basis. Subscription revenue increased 6% on both reported and organic basis. Volume-driven revenue increased 9% with growth in market-linked revenue and usage-based revenue. Kensho Data and Platforms revenue increased 8%. Enterprise Solutions revenue grew 3%, reflecting the divestiture of EDM and ThinkFolio, with 10% organic growth. Operating margin expanded 120 basis points to 36%.
Capital Allocation
Share repurchase target increased by nearly $3 billion to more than $7 billion for the full year 2026. The company expects to repurchase over $7 billion in shares representing more than 5% of total market capitalization at the current share price.
Approximately $2 billion dividend received from Mobility Global upon completion of the spin, to be used primarily for share repurchases with about $500 million for debt retirement.
Approximately $2 billion in additional debt expected to be issued in the second half to fund further buybacks, with timing dependent on market conditions.
Gross leverage expected to end 2026 at approximately 2.7x to 2.8x EBITDA, modestly above the target leverage range of 2.0x to 2.5x, with natural deleveraging expected over 2027.
Industry Trends and Dynamics
Benchmark businesses account for nearly two-thirds of revenue and comprise more than 80% of operating profits.
Billed issuance increased 25% year-over-year in the second quarter with strength across the risk spectrum.
Investment grade issuance bolstered by large issuance associated with AI infrastructure and datacenter CapEx as well as M&A.
Hyperscaler infrastructure companies issuance of approximately $169 billion in the first half, with updated guidance assuming $250 billion to $300 billion for the full year.
Robust maturity walls with approximately $11 trillion in rated debt expected to come up for refinancing in the next 4.5 years.
Vendor consolidation continues to be a tailwind for the Market Intelligence business.
Private markets AUM inflows continue to demonstrate appetite from investors for exposure to the asset class.
Competitive Landscape
S&P Dow Jones Indices was the number one index provider in terms of flow capture.
Four of the five ETFs selected by the US Treasury for inclusion in Trump accounts were linked to S&P Dow Jones Indices.
Multiple asset managers switched to S&P bringing tens of billions of dollars in additional AUM benchmarked against S&P Dow Jones Indices.
S&P Global maintains direct relationships with customers with contracts directly with customers, and will continue to distribute content through own platforms, third parties, and traditional distribution channels.
Macroeconomic Environment
Market pricing in slightly higher rates than expected at this point last year, though credit spreads remain very tight.
Iran conflict complicated contract renewals among some very large customers, with the company choosing to be flexible on price increases and other terms for affected customers.
Middle East conflict led to continued volatility and uncertainty, with tariffs and extreme volatility putting strain on Energy subscriptions renewals, one-time sales, and global trading services.
Extreme energy volatility can have a dampening effect on the market, as seen in the second quarter with global transaction services revenue.
Customers paying more attention to token costs and overall expense of their own AI investments.
Growth Opportunities and Strategies
Mobility spin completed on July 1, immediately creating meaningful shareholder value.
Consolidation of supply-chain efforts into Energy division with new leadership and operating model for Market Intelligence.
Acquisition of datacenterHawk to combine with 451 Research and Energy forecasting assets to extend leadership in the datacenter space.
Acquisition of majority stake in Agusto & Company, a leading credit rating agency with operations in Nigeria, Kenya, Rwanda and Ghana.
Continued rapid adoption of AI solutions, including Kensho LLM Ready APIs with customers leveraging AI solutions growing much faster than average.
ACV growth in Market Intelligence 60% faster for AI customers and approximately 3x in Energy.
LLM Ready APIs and MCP connected solutions now sitting above 500 customers and increasing more than 70% quarter-over-quarter.
Call volume for LLM Ready API in the second quarter was more than 5x the volume seen in the first quarter.
Enterprise Data Office achieved nearly 60% of its targeted $100 million in annualized cost savings through AI-driven efficiencies and traditional productivity initiatives.
Market Intelligence reorganization with two business lines: Kensho Data & Platforms and Enterprise Solutions, focusing on delivering differentiated proprietary data in a channel-agnostic way.
Energy reorganization with two business lines: Platts Benchmark business and CERA business line, consolidating supply-chain assets.
Investments in regions like North Africa poised to play a more important role in global energy and commodity markets.
CERA Titan progress with AI-native platform for upstream data expected to launch later in 2026.
S&P Pantera Digital Asset Index launched using rules-based approach focusing on fundamentals versus price momentum or market cap.
Private markets product launches including private credit indices and broader private markets indices covering S&P top 50 private stocks.
Partnership with Cambridge Associates and Mercer launching several data sets with new taxonomy mapped to market-leading LoanX IDs.
Financial Guidance and Outlook
Organic constant-currency revenue growth expected in the range of 6% to 8% for the full year.
Consolidated margin ex-OSTTRA expected to expand 75 basis points to 100 basis points this year.
Adjusted EPS expected in the range of $17.50-$17.75, representing double-digit growth across the entire guidance range.
Adjusted free cash flow in the second half expected in the range of $2.9 billion to $3.1 billion, excluding Mobility.
Ratings revenue growth expected in the range of 5% to 8%, up 1 percentage point from prior guidance.
Indices revenue growth expected in the range of 12% to 14%, up 2 percentage points from prior guidance.
Market Intelligence revenue growth expected in the range of 5.5% to 7%, unchanged from prior guidance.
Energy revenue growth expected in the range of 4.5% to 6%, unchanged from prior guidance.
Energy growth expected to normalize after 2026 back to the 6% to 8% average range outlined at Investor Day.
Headwinds in Energy are transitory, with secular tailwinds remaining intact.
Artificial Intelligence and Technology
Customers leveraging AI solutions growing much faster than average, with that gap widening in the second quarter for both Market Intelligence and Energy.
Kensho Labs achieved tremendous momentum and traction as a true differentiator in AI use case conversations.
Adaptive retrieval product launched allowing customers to ask complex questions and set multi-step tasks with grounding agent across multiple data sets.
MCP applications decompose parts of desktop allowing clients to render capabilities within their own systems or third-party systems.
About 15% of LLM Ready API clients are net new clients or clients returning to S&P that had previously been clients.
Data usage up 5x relative to prior quarter, with prior quarter also up 5x relative to the quarter before.
Monetization approach multifaceted including consumption pricing, additional data set pricing, higher retention, and higher sales.
