• S&P Global Demonstrated Resilience in both the 4th Quarter, and the Full-Year 2022
  • Completed Merger with IHS Markit
  • Achieved 2022 Merger-Related Synergy Targets Ahead of Schedule
  • Announced Divestiture of Engineering Solutions
  • Completed $12 Billion Accelerated Share Repurchase
  • Introduced New Strategic Vision and Multi-Year Financial Target Model at the 2022 Investor Day

The Company reported fourth quarter 2022 reported revenue of $2.94 billion, an increase of 41% compared to the same period in 2021.

Fourth quarter GAAP net income decreased 36% to $433 million and GAAP diluted earnings per share decreased 52% to $1.33 driven by continued declines in Ratings revenue and amortization of acquired intangibles.

Adjusted revenue decreased 6% compared to non-GAAP pro forma adjusted revenue from the fourth quarter of 2021, or 5% on a constant-currency basis. Adjusted net income for the fourth quarter decreased 13% to $827 million compared to non-GAAP pro forma adjusted net income and adjusted diluted earnings per share decreased 5% to $2.54 compared to non-GAAP pro forma adjusted diluted earnings per share primarily due to a challenging issuance environment continuing to weigh on Ratings revenue, partially offset by growth across the Company’s other core businesses, and prudent expense management.

For the full year, reported revenue increased 35% to $11.18 billion. 2022 GAAP net income increased 7% to $3.25 billion and GAAP diluted earnings per share decreased 18% to $10.20. Non-GAAP pro forma adjusted revenue decreased 4% compared to non-GAAP pro forma adjusted revenue from 2021, or 3% on a constant-currency basis. 2022 non-GAAP pro forma adjusted net income decreased 9% to $3.76 billion compared to non-GAAP pro forma adjusted net income and non-GAAP pro forma adjusted diluted earnings per share decreased 4% to $11.19 compared to non-GAAP pro forma adjusted earnings per share.

“During 2022 we began a new transformation of S&P Global through the merger with IHS Markit and our continued investment in growth and innovation,” said Douglas L. Peterson, President and Chief Executive Officer of S&P Global. He added, “Our people came together in every sense of the word, integrating through a historic merger, navigating through complex macroeconomic and geopolitical conditions, and positioning S&P Global to power global markets in a sustainable way for years to come.”

[For further details concerning profitability comparisons please go to full version of the press release]

Market Intelligence:

4th Quarter, 2022:  Reported revenue increased 83% to $1,037 million in the fourth quarter primarily driven by the inclusion of IHS Markit revenue and increased 3% compared to pro forma revenue. Adjusted revenue increased 3% to $1,037 million in the fourth quarter of 2022 compared to non-GAAP pro forma adjusted revenue driven by Data & Advisory Solutions, partially offset by slower growth in Desktop and declines in Enterprise Solutions. Reported operating profit decreased 24% to $122 million from the prior year and by $520 million compared to the fourth quarter 2021 on a pro forma basis with operating profit margin decreasing 1,660 basis points to 11.8% due to the inclusion of IHS Markit. Adjusted operating profit increased 16% to $326 million compared to non-GAAP pro forma adjusted operating profit and adjusted operating profit margin improved 360 basis points to 31.4% compared to non-GAAP pro forma adjusted operating profit margin driven by the achievement of merger-related cost synergies.

Ratings:

4th Quarter, 2022:  Reported revenue decreased 29% to $705 million. Transaction revenue decreased 51% to $249 million in the fourth quarter primarily due to decreases in issuance volumes. Non-transaction revenue decreased 6% to $456 million during the quarter primarily due to fees associated with Rating Evaluation Services and new-entity credit ratings, partially offset by growth in CRISIL.

Reported operating profit decreased 44% to $320 million from prior year and decreased 44% compared to pro forma operating profit. Operating profit margin decreased 1,270 basis points to 45.4%. Adjusted operating profit decreased 40% to $338 million compared to non-GAAP pro forma adjusted operating profit, and adjusted operating profit margin decreased 910 basis points to 48.0% in the quarter compared to non-GAAP pro forma adjusted operating profit margin, due primarily to declines in transaction revenue.

Commodity Insights:

4th Quarter, 2022:  Reported revenue increased 70% to $451 million compared to prior year and increased 5% compared to pro forma revenue with growth in the core subscription business and increased Global Trading Services activity. Adjusted revenue increased 4% to $451 million in the fourth quarter of 2022 compared to non-GAAP pro forma adjusted revenue with positive growth in all categories, primarily Price Assessments and Energy & Resources Data & Insights, tempered by the impact of the Company’s suspension of commercial operations in Russia. Reported operating profit increased 13% to $150 million compared to prior year and decreased 2% to $150 million compared to pro forma operating profit, and operating profit margin decreased 1,670 basis points to 33.3% compared to prior year primarily due to the inclusion of IHS Markit. Adjusted operating profit increased 10% to $201 million compared to non-GAAP pro forma adjusted operating profit and adjusted operating profit margin increased 230 basis points to 44.6% compared to non-GAAP pro forma adjusted operating profit margin as adjusted expenses were held approximately flat year-over-year due to merger-related synergies, lower outside services spend, and lower advertising and promotion expense.

Mobility:

4th Quarter, 2022:  Reported revenue was $345 million in the fourth quarter of 2022 and increased 10% compared to pro forma revenue. Adjusted revenue increased 9% to $345 million in the fourth quarter of 2022 compared to non-GAAP pro forma adjusted revenue with growth driven by strong and broad-based performance across Dealer, Manufacturing and Financials. Reported operating profit in the fourth quarter was $48 million and operating profit margin was 13.8%, and increased 14% compared to pro forma operating profit. Adjusted operating profit decreased 2% to $117 million compared to non-GAAP pro forma adjusted operating profit, and adjusted operating profit margin decreased 380 basis points to 34.0% compared to non-GAAP pro forma adjusted operating profit margin, driven by a year-over-year increase in expenses due to increased headcount, advertising spend, and cloud expenses.

S&P Dow Jones Indices:

S&P Dow Jones Indices LLC is a majority-owned subsidiary. The consolidated results are included in S&P Global’s income statement and the portion related to the 27% non-controlling interest is removed in net income attributable to non-controlling interests.

Year-end 2022 ETF AUM based on our indices decreased 12% from year-end 2021 to $2.6 trillion as a result of price depreciation, partially offset by continued positive fund inflows. Increased market volatility in 2022 led to higher revenue associated with exchange-traded derivatives compared to 2021.

4th Quarter, 2022:  Reported revenue increased 14% to $344 million in the fourth quarter of 2022 and increased 4% compared to pro forma revenue. Adjusted revenue increased 4% to $344 million in the fourth quarter of 2022 compared to non-GAAP pro forma adjusted revenue driven primarily by Exchange-Traded Derivatives revenue, partially offset by a decline in Asset-Linked Fees.

Reported operating profit decreased 2% to $195 million and decreased 3% compared to pro forma operating profit. Operating profit margin decreased 900 basis points to 56.6% primarily due to one-time consulting spend. Operating profit attributable to the Company decreased 3% to $141 million. Adjusted operating profit increased 2% to $214 million compared to non-GAAP pro forma adjusted operating profit and adjusted operating profit margin decreased 140 basis points to 62.2% compared to non-GAAP pro forma adjusted operating profit margin due to high one-time outside services expenses and continued strategic investment during the quarter, partially offset by management actions and lower incentive compensation. Adjusted pro forma operating profit attributable to the Company increased 2% to $159 million.

Engineering Solutions:

4th Quarter, 2022:  Reported revenue was $99 million in the fourth quarter of 2022 and decreased 3% compared to pro forma revenue. Adjusted revenue decreased 4% to $99 million in the fourth quarter of 2022 compared to non-GAAP pro forma adjusted revenue primarily due to the timing of the Boiler Pressure Vessel Code (BPVC) in Q3 2021. Reported operating profit in the fourth quarter of 2022 was $13 million and operating profit margin was 12.6%, and decreased 75% compared to pro forma operating profit. Adjusted operating profit decreased 34% to $15 million compared to non-GAAP pro forma adjusted operating profit, and adjusted operating profit margin decreased 700 basis points to 15.2% compared to non-GAAP pro forma adjusted operating profit margin due to planned investment spend, partially offset by favorable FX.

On November 30, 2022, S&P Global announced its intention to divest the Engineering Solutions business. On January 17, 2023, S&P Global announced it had entered into an agreement with KKR to sell the division for approximately $975 million (approximately $750 million in net, after-tax proceeds). The divestiture is expected to close by the end of the second quarter of 2023. Engineering Solutions is classified as “Held for Sale”, and its financial results will continue to be included in the Company’s consolidated results until the sale is complete.

Corporate Unallocated Expense: see full press release

Outlook:  We are not providing 2023 GAAP guidance because, given the inherent uncertainty around the timing of the divestiture of Engineering Solutions, management cannot reliably predict all of the necessary components of GAAP measures. The Company expects non-GAAP adjusted diluted EPS in the range of $12.35 to $12.55.

Source:  S&P Global Earnings Release