IHS Markit (INFO) 28 Sep 212021 Q3 Earnings call transcript

Good day. And thank you for standing by. Welcome to the IHS Markit Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. advised conference be being Please Instructions] that is today’s recorded. [Operator Relations. to I Eric conference Investor would Instructions] hand Boyer now of today, [Operator speaker like the your over Head to Please go ahead.

earnings joining Good and the QX Investor this earnings our thank Markit we for press posted website. conference morning to us release the Earlier call. IHS and you IHS for Markit issued QX morning, XXXX supplemental Relations materials

amortization which of based is GAAP intangibles on measures from exclude quarter stock-based IHS the and numbers, as compensation, order financial to items. results in substitute discussion other our enhance Our non-GAAP isolation understanding they or a but should supplement are acquired are performance, in or and to non-GAAP be believes not of for in adjusted Markit operating a information. on-going useful considered

be available over written to prohibited. outlook, your consent This discussion remarks, reminder, and webcast cause that results CEO; Jonathan SEC could prepared may future Markit’s Any contain pleasure whole expected As filings website. to Chief take and and to differ prior and Markit expectations materially of with without on from Lance Officer, recorded Gear, call our uncertainties. be that Factors are to actual the and Chairman will With IHS our After is of the a the and found Lance. to especially Uggla, events conference or can in IHS the IHS risks this a call about is IHS that, being Markit. EVP questions. the turn my of it property information Financial and conference subject in of statements part rebroadcast is call, Markit and forward-looking this in copyrighted is

$X.XX billion, margin XX.X% Markit calls. QX Thank on you, revenue puts million $X.XX with track X%. for of and IHS full up are we was had for year-to-date points over very strong adjusted expansion QX underlying prior year for and of basis the of the Eric. be us will full We quarter. of EPS we Adjusted guidance. organic Adjusted year earnings XX% our EBITDA with margin growth Overall, with revenue $XXX another thank XXX results, and EPS very you happy the raising joining of are QX And our excluding FX. us year.

pricing, terms with our Services growth segment, In equities trading performed of X% strong products me and included organic valuations, quarter in start had Within X% momentum information with services, verticals, our this and analytics regulatory which platforms and QX. reporting another issuers the industry solutions of IPO core growth organic initiatives. and main well ESG of contributors to first let markets with in strong the due financial Financial

solutions we similar by which portfolio. the saw as Solutions continued growth enhancements This with QX a activity offerings strong X% to and our broad organic quarter had and of strength across trends our rebound the also in solutions. and by investments customers being as market the well the new made based equities was due accelerated and in strong loans

as processing organically XX% derivates, and our Finally, strengths business performance expected. grew loans in with

For expect the X% the range. be still full X% organic to year, financial services we to growth in

to growth XX% organic on which of in move transportation, had Let’s revenue QX.

businesses. related at also the QX, performance quarter’s like the basis that concessions that You'll the significant granted transportation COVID third depressed we recall of XXXX, strong lock underlying pricing the for by growth But height downs. the quarter customers of comparison, across was reflected our this

the was strong board, demonstrating of products the nature performance across challenging must our environments. market have renewal in current Our the

new offsetting car solution and levels established driving service for of lane to is now has example, a loyalty lower as At For activity higher sales. service levels time key critical itself innovative dealers. CARFAX of for a life when the

the example shock chain solutions, it of performance ever has forecasting strong the experienced. Another grapples the industry is supply largest as our with

and dealer and another our But seen chain remain have slowdown past of the and begin a sales marketing. the of we services escalating in the cars and We are auto the sales, over our quarter in outlook a lots, importance as products supply months, levels support to demonstrates products, of we as recover. crisis the for seeing which on very for these lead production two dealer to sales businesses, result temporary However, that OEM shortage also marketing of overall, cuts. to confident And inventory industries. great further

momentum our investments continued over perform the solutions very driven compliance to years, sector. our the and and to risk financial growing Our well by see product our in several I'm off. past of pay pleased maritime business continuing innovative new trade to by and footprint

to full underlying XX% to year-over-year year, single the we transportation organic This to a in healthy high For be the growth XX% pandemic. due represents expect growth range. rate, excluding favorable the comparisons the digit

a demand resources was X% as services and Let's our expected, decline sequentially consulting revenue revenue non-recurring for software modest and from to on benefited QX our organic increased move and recurring where across improved in businesses, businesses.

experience ACV should positive we growth continued QX, in continue which in for strong XXXX QX, revenue. a believe recurring our expected our foundation providing As

expect in disruptions expect XXXX very supply into growth XXXX, downstream many was upstream customers our chain continuous. the Our strong continue to as single digits in in strong organic help to In revenue markets. to to quarter, QX we downstream the and results year-over-year down continue as this revenue we global and navigate within resources to in improves organic the growth compared be low we improve and

was Finally, X%, strong, due consulting result uncertainty and CMS BPVC very services as a at supply the global disruptions. was of ECR strong is chain benefiting and normalized for particularly, revenue increased from to XX% and growth organic

optimization we For quarter. CMEs organic businesses. the and the initiatives growth. strategic CMS full the expect of digit JV were completed to announced OSTTRA includes in which year, our mid-single MarkitSERV the deliver There We two formation still

Opus, And now call merger Global. S&P the for a turn to of signed Jonathan. I'll purchase commensurate of also the the over We the with divestiture close agreement with

Lance. growth net revenue of declined EBITDA EPS which to X%, while highlights year-over-year. GAAP BPVC. XX% income growth organic included EPS Adjusted thank Great, declined growth X% X%. X% adjusted had is QX normalized of of X%,

our X%, growth growth revenue the was revenue, with included XX% growth Normalized recurring organic services X% due our businesses. transportation Organic BPVC, of which as primarily organic driven This dealer as year-over-year company is and underlying was in $X.XX to continued of quarter by well billion, of was XX%. financial non-recurring in benefiting COVID transportation, non-recurring from in XX%. growth facing total Regarding comparisons total favorable is strong impact and of the QX growth for organic growth X% increase

by market to on our the including activities and in broke segment equities rebound loans X%, Moving strength investment financial and strong X% performance, recurring Overall segment of by customers. services of organic quarter. continued was anchored our the growth

delivering and strong processing grew X% organic performance information XX%. had growth grew X% Solutions

our delivered and and have segment Non-recurring in and XX% dealer core and within of strong the organic primarily our X% mastermind automotive accelerating transportation growth growth strong driven insights. included automotive within Our growth by growth quarter. of transactions QX continued CARFAX business. performance revenue consumer This by trade within in maritime and CARFAX XX% increased businesses to recurring as our

million a recurring organic by is ACB trailing comprised by in and quarter which down increase. of X%. organic ACB XX-month non-recurring our XX% resources decline the QX is Our segment X% X X%, and declined increased

our trends especially to strong to seeing in as are underlying we XXXX. in However, expect we pipeline, and begin CapEx America; rebound upstream North spend

market We continue energy support supply chains. downstream businesses, products and energy transition that in and to services strong see demand our our particularly in

the Our CMS segment including organic an had growth total includes non-recurring. organic X% XX% X% Normalized growth, recurring and is organic growth BPVC, of XX%. XX% of which CMS increase non-recurring

$XXX profits to margin $XX grew versus points Adjusted adjusted. of X% with now down basis basis and adjusted million, million down year. EBITDA EBITDA prior FX Moving and XX.X%, XXX up XXX margins, points was a

margin the because the were temporary percentages for significantly COVID actions. margins As costs segments XXXX a impacted full to and company due benefited related reminder,

of adjusted Moving of of XX.X% EBITDA EBITDA decrease adjusted, our basis FX basis adjusted basis financial transportations XXX EBITDA a points CMS points margin and XXX points down FX up margin services XXX FX XX.X%, EBITDA FX basis down to XX margin adjusted XX.X% Resources adjusted. points adjusted. adjusted segments, margin XX.X%, of adjusted of

EPS, now $XXX $X.XX. net EPS $X.XX of income increase Adjusted an XX% income and was was million EPS over to and GAAP was net Moving year. prior

tax Our adjusted GAAP our cash was QX $XXX million, rate XX% XX%. is free was was XX%. tax trailing our cash flow XX-month and flow free rate and conversion

a our and Turning times revolver balance to gross leverage was billion the was ending covenant our cash. a times approximately billion. quarter $X and of balance X.X with unbound represented bank $XXX and of on the approximately ratio closed million We net X.X balance sheet, of basis, $X.X cash QX QX debt

was count shares. share diluted Our QX weighted average million XXX.X

our As repurchase ability than merger restricts shares compensation. repurchase tax S&P shares our withholding and for we associated other based program of share therefore suspended Global share with the purchase with in mentioned our is for the QX, requirements agreement currently to

guidance, positioned the strong FY and providing Moving to are revenue are to results for following guidance. year, On based year XXXX. deliver the our we to first three providing to revenue, of on performance the we updates three our quarters on EPS and through full improvements guidance

core by raising First, are based at the our $XX operational performance revenue on review this million outlook the of for and strong we the business, midpoint.

there joint of the the for will we venture. MarkitSERV adjusting $XX no venture, consolidate This accounting Second, this be will either receive year we joint revenue. EPS. the our in will Under our revenue EBITDA thus from and XX:XX the million are remove our to impact structure JVs treatments longer It will due reported the that to noted should QX of earnings, be no guidance. earnings we of revenue XX% or

for increased EPS XXs I'll conversion S&P that, second with lowering primarily to MarkitSERV And to merger of the impact the $X.XX by adjusted organic deal to is one call to billion and over EBITDA is at basis is half. billion, $X.XX impact our joint net to with expect by due share. also being due turn range $X.XX related maintained $X.XX being of $X.XX $X.XX revenue Upper X% for of cost. growth time year in Lance. $X.XX venture rate. XXX adjusted expansion which Global per the adjusted the million X% billion billion represents EBITDA to a do new Adjusted the points we We with are of $XX approximately the FX to cash in adjustments to The back and FX, margin the these Finally,

had a improving quarter. today have execution And thanks by teams. our and very strong set strong our us up another to Okay, results to great due markets year Jonathan. We end

to Markit be thank excited value very I'm S&P over to to even lines IHS Markit, to for As may of open years our last create our years a say for ready call come. be the Global, I integrate want the Q&A. many Operator shareholder we're that and investors their as they this the earnings IHS greater in as to now support future

Our Kevin Thank you. from Suisse. Instructions] Credit first with McVeigh comes [Operator question

Your line is open

all to an congratulations you with and a last of you folks. pleasure you amazing it's this folks, been work Thank and management team, you've is if to been call, the

of you So just So to near there's business just a obviously just reshoring? in any as understand talked disruption of post lot reshoring hey, to structural term, How shock changes much kind there a COVID? system. between of maybe guess, supply And context thriving that the that. that lot. of that in Lance is shock? I is of Is just and supply the obviously about much trying the of is within But kind how chain opposed businesses structural nuances is

think supply chain our disruption most is short all related. term of I Yes,

them I consulting upward impacts us. well have services chain for economic saw in will a longer with pricing geopolitics very and We supply risk of it country businesses, our revenue that built respect chain term services well. into product and China of think in as chemicals, our some bode supply terms to positive our and

So, information pluses volatility always there in across And business think expecting. whole I bodes and automotive the an are is business minuses portfolio. well our as

that but revenue unprecedented, and next and the it's year at look the net a wane minuses year, guidance net our firm, supply available. of we the are look used at when and that sales the shortages we for coupled our expectations same we short year. as the term negative less the we whole have cars as impacts, beginning set can start pluses across provide temporary of expected through car Those with chain As

Next question?

Our Bisbee next Gary Securities. of comes Bank question with from America

open. is Your line

does I'll are other And just morning, full run. a Thank there QX venture. sense helpful. it good make guys, wanted I business things terrific Hey, quadruple of the revenue pulling congratulations other that any basis ask on effectively, have out guess, to the about we year MarkitSERV impacts the any about? you. business other my impact color On would that I for think it joint and to How be hit? should margins, a

And Gary. that, for pass they on and that. Thanks, the Adam to can he Okay. if well that thanks, over I so When to Appreciate the do add Kevin, wants Jonathan? impacts, OSTTRA compliments. Jonathan, as to

Sure, we'll results. just about I it. roughly that take Gary, from as we impact year full removing spoke I this a would times revenue do very take XX be for would reported our the math. the simple four would this QX, MarkitSERV of

them my an there earlier, so no EPS basis. will be earnings and comments still on we in absolute mentioned my report in I profit and As in EBITDA impact will through

Adam, will be that? want And anything lift Of course, out the add to a take percentage. you've revenues, you there when earnings to margin a on the you obtained

I commercially the excited while sorry, as then quite to have customers. our add, benefits nothing about JV obviously. our And So we're as as of the

Okay, next question.

Meuler comes Our next question from Baird. with Jeff

is line Your open.

hoping I'm on thanks. can provide Yes, some auto you comments. more the detail

the I OEM So you and impacts solutions said think support marketing. dealer and that sales it

think marketing mastermind, Because So maybe use listings? QX. in AMM I was digital strong CARFAX said and you is this automotive car

marketing trying softening automotive we Thanks, like expect is understand and what So bookings digital wishes from best saying extent mastermind, to in to cheers recurring are if Or impacting me. revenue. guys. and like coming non-recurring something you're in quarters and deceleration already should

on a that? do want Edouard, go you deeper to bit

for Yes, sure. the And Lance. thanks Jeff, Thank question. you,

of disruption create are business, the tailwinds. this, some some impacts all so multiple as are said our Lance across So headwinds

relationship the at actually, customers our upper we many And disruption, end supply with when supply of there's So the closer of with today. than business never more chain, suppliers. do had we've

and bit the softer softening couple we're right, right a On car than inventory marketing. of these temporary bookings they to name are usually seeing expect you new mastermind recover. And in starts to them, areas, sales a we digital a and now, of until your right be

car used the On side, not right. that, seeing we're

the the hard. think about and impact to market and you is combination service means If market, market our is positive the prices business. that high pretty inventory And in neutral car used of that low actually,

quite not it So do material all-in-all, change grand would I say to across is we not as QX downwards the these board, of forecast our revised recently but we the earnings. industry outlook want the suppliers the in coming few for our and the to in new referring and the does It impact car for flag see they and because things. forecasts scheme makers you'll a their weeks talk business about

Thanks, Edouard, next question.

Our with comes from Alex next UBS. question Kramm

is open. line Your

over, you in. just you contracts that everyone, year locked hoping just all is, comment multiyear this the side fiscal Hey, can give the you asking on that us the CapEx what of we now some have on reminder be is escalators, those you roles a do would up Yes. a those. is multiyear did I energy this expected just we contracts I'm guess made pricing the guess on of just where I it to reminder in stand if built of year. much to how those Thanks. But, and be great doesn't, get next because

and start I'll pass then more detail. for to I'll some Brian it Okay,

did and price continued So rolling recovery. unfold. may downstream we've products. the those resources as strength as how recovery said to numbers to energy We've, add some I that Brian? next stated Those exactly on think those we be, from mid-single through on earlier, expect, that we and want Brian our for color digits all coming cuts, will we year contracts for revenue in before

Yes.

price see when come multiyear strong those which And CapEx think to now business. upstream nice. So $XX going yes, coupled with We're we of [ph]. is with to CapEx. XX% pretty XX% cuts is on out you in starting the crude, year next did you agreements basically mentioned be We

definitely the, Preston, feeling around horizon the few the energy about, turned quarters. next So, good we're pretty

Brian. Thanks,

question? Next

Jefferies. Mazari from Hamzah comes Our next question with

open. is line Your

morning. gives is timing the work share done congrats merger integration work great can closing you. Thank wise, here. planning, highlighted. seems around you're maybe doing company on you if could just anything building on a S&P, Good again, synergies you've pre talk you the sort of My just Thank any you. but And all the revenue upcoming QX, confidence about on next that steps, you with question like, and

take through very both merger, the Well, close, you opportunity months that several pausing was launched here buybacks extra thank the which ourselves companies really, we've a out of has expected ready cost as approach building, rapidly I the set the that expectation set course, share in year for we've the much. Okay, fall, work the, merger to as on summer and both opportunity by to just October been calendar revenue S&P, said On and One. could originally of provided July our here teams organization, QX, had the on this we on the in forward. the look calendar, given in for we timing, of have at that, substantive the we be we're top

haven't or But into new the to said that. it when ask people my it wouldn't question, our on We I January, changed I surprise always, into me. me that year if team, rolled that forecasts

rapidly on year. schedule. to we're I doing job. approaching closed. end doing all we everything, later, needed information me hope can teams the the have it that hope work the surprise And I that get days I great XX we track complete but to wouldn't that's But share. if can in of are And was don't a the They're the deal we're, So, we're

Next question?

Our from Tong Goldman comes George Sachs. with next question

is open. line Your

partnership the for the congrats, to over morning. thanks. Good thanks Hi, I'd like also say and years.

full elaborate on the where for revenue million is your $XX You're for year. operating you the coming from? upside by raising Can outlook

the to George. from all say, coming across have really, It firm, it's I

digit to driving the bit team -- team been CMS a whole Honroth supply their and product of the these love done. Markit, new digital merger suite. chain geopolitics brag into grower. rebuilt good Since is world platforms -- the products, slow the out out built IHS has congratulations I'd pleased pleased, built really ex-BPVC to product about a work that has a their So and base. and mid-single to with the show was all single real Ken ECR that we've job. revenue, digit low demand They I

build forward accretive do dealers, for important that. major in our and accretive teams job be, know or shareholders they more automotive of to the component. high the underlying those Hats there easier. of talked to teams being the Acquisition we as continue. everybody's very out that out and digits and makes is and off really two on. products that used as new stuck, with The stuck mastermind rolled very, hold. of the see not CARFAX single growth enterprise come, been been be Dick, as core I life we've us many strong is the turned additive always net, and The right challenged net where to where taken wanted in team. That execution. it excellent acquisition of being on is expected So to Automotive have, of overall to mastermind to a changing. to have team early products, the, lots recovery out to we about really the terms don't

fruits again those the now. we’re you're services, X% who recovery; of top eye services. that acquisitions, are for got financial towards have And oil would turning into You substantively of provide. automotive, private solutions, investments look the the CapEx our coupled two you've organic resources equity XXX. last acquisition, And, heading we view recover. across at And energy, acquisitions well firm. $XX building in a, really, both And financial that's our midstream, get the is thought guidance the it real, of digit a excellent growth in mid that CMS, bodes next that term, showing long year, markets the recovered acquisition, with around strong It's then into world are Ipreo level, X% price strong really to we're end recovery real these

So revenue mixed strong very growth organically.

products points achieve basis to takeout expected new investing is the opportunity course, Looking XXX going sets. our in into of the normal and, with new rest

And Markit’s have to Markit job, last say focus been and expansion, the has in to best strategy, to steady sure merger, And the on incremental it's through great So did get investments that. we But I where organic probably look chance we organic our margin teams make through whether my teams. don't the I congratulate incremental or to the to out change. was it that growth, expect publicly excellent. post follow IHS of earnings

and S&P set I with share of new revenue of think whole substantive ahead. cost synergies course, and opportunities, Global, a there's buybacks

journey. it's But doesn't So and look lots excitement real the to forward to a been stop exciting here.

Next question?

from Stanley. comes question Morgan Kaplan last with Toni Our

Your line open. is

synergies was Terrific. has of with Thank bit always up about you're a of with talk most I generate the And or would relates a little Jonathan, within speaking excited asset and Lance helpful, and I'd you're ESG. there are what really you. imagine coming hoping if class as combined been multi the deal recently the to fixed has could thanks. the main income to in what be able that that will more on One creating combined But pleasure others, the been there's expand indices, with products if S&P. you. about a topic you investors any entity. areas you with area lot it areas products,

support. thanks our your for you're And And Okay. Toni. question. getting last Thanks,

start Adam. I'll and So hand it going to to then I'm

the not I indices with is think much so about product creation. but from income the most fixed Global, exciting S&P the combination thing

OTC you you But build create. in wanted S&P, partnership to think prices But, was S&P days, really really time. fixed the overlay sales to that's that early is to and a huge marketing in income today, I over the you a great oriented. etcetera, really, marketplaces. creation platform needed up the indices, income bank it And their both align are getting fixed years, both with Global innovative, build franchises. product going like the whether all shifted Global MSCI, for product because strong, they fixed groups over franchises, And FTSE, opportunity. is franchise underlying footprint across if be income and index of look both to really has needed terms about They're the combination to highly really they uplift and to the that the

The second Adam of thing, you'd of mentioned pass bit And that new to course, you is indices revenues what the for over expect combination. maybe opportunities Thank a let is about synergistic that of that we question, and I'll some Adam talk create little pass out we'll the to to now. we'll, Adam? get your

Yes, And that franchise highlighted, great, the indices. Lance know all what fixed this scale proud things indices that built thank combination. we will will you. ever give Very in S&P income with of will than had. that a broader reach excited We're give much I about bring it's

into but I ESG also in about arena. the bringing think asset classes multi to income markets in you indices private mentioned, the in key think and businesses, combined that fixed areas

combined indices, income that's whether the kinds we'll of for possibility globally. the data think area in will IHS think the I and Markit sets new and that think to together all see continue have the it's growth that ESG, world, carbon, of S&P I fixed I crypto new substantial across with products

for set opportunity us pretty robust. pretty, think is I the

that, With we'll turn and complete Adam. it we'll Eric. back the questions Thanks, to

or XXXXXXX October two XXX-XXX-XXXX Markit. in about accessed ID interest IHS Thanks, replay Lance. for XXXX. you X, beginning in XXXXXXXXXX via and conference call operator. hours be This running Thanks, can international through thank your We

archived you the will addition, one and your for In year webcast website. on interest we Thank our be and appreciate time.

Thank for participating. conference today's concludes This call. you

disconnect. now may You