10-QPeriod: Q2 FY2021

S&P Global Inc. Quarterly Report for Q2 Ended Jun 30, 2021

Filed July 29, 2021For Securities:SPGI

Summary

S&P Global Inc. (SPGI) reported solid financial results for the second quarter and first half of 2021, demonstrating continued revenue and operating profit growth across its key segments. Revenue increased by 8% for the quarter and 11% for the first half, driven by strong performance in Ratings, Market Intelligence, Platts, and Indices. Profitability also showed positive momentum, with operating profit up 4% for the quarter and 11% for the first half. Diluted EPS saw a modest increase of 1% for the quarter and 9% for the first half. The company highlighted ongoing strategic initiatives, including the impending merger with IHS Markit, which is expected to close in Q4 2021. Despite increased merger-related costs, S&P Global maintained a strong financial position with healthy cash flow generation and a robust credit facility, positioning it well for future growth.

Financial Highlights

52 data points
Beta

Revenue

$2.11B

74.7% Gross Margin

Net Income

$798.00M

37.9% Net Margin

EPS (Diluted)

$3.30

Total Assets

$13.40B

Cash & Equivalents

$5.22B

Free Cash Flow

$923.00M

Financial Statements
Beta
Revenue$2.11B
Cost of Revenue$533.00M
Gross Profit$1.57B
SG&A Expenses$374.00M
Operating Expenses$952.00M
Operating Income$1.15B
Net Income$798.00M
EPS (Basic)$3.31
EPS (Diluted)$3.30
Shares Outstanding (Basic)240.80M
Shares Outstanding (Diluted)241.80M

Key Highlights

  • 1Revenue grew by 8% in Q2 2021 and 11% in the first half of 2021, indicating broad-based strength across all reportable segments.
  • 2Operating profit increased by 4% in Q2 2021 and 11% in the first half of 2021, demonstrating effective cost management alongside revenue growth.
  • 3Diluted EPS grew by 1% in Q2 2021 to $3.30 and by 9% in the first half of 2021 to $6.42, showing steady earnings per share expansion.
  • 4The proposed merger with IHS Markit is progressing, with shareholder approval obtained and completion expected in Q4 2021, signaling a significant strategic move for S&P Global.
  • 5Cash provided by operating activities increased to $1.69 billion in the first six months of 2021, up from $1.62 billion in the prior year, underscoring strong operational cash generation.
  • 6The company strengthened its liquidity with a new $1.5 billion revolving credit facility, replacing a previous $1.2 billion facility.
  • 7Despite increased operating expenses, particularly due to IHS Markit merger costs, S&P Global managed to maintain healthy operating margins, reflecting resilient business operations.

Frequently Asked Questions

Revenue growth in Q2 2021 was driven by increases across all segments. Ratings saw growth from non-transaction revenue, Market Intelligence from subscription revenue, Indices from higher AUM and data subscriptions, and Platts from strong demand for market data and insights.

The merger agreement was approved by both S&P Global and IHS Markit shareholders. The transaction is expected to be completed in the fourth quarter of 2021, subject to customary closing conditions.

S&P Global maintains a strong financial position with healthy cash flow from operations. The company recently entered into a $1.5 billion credit facility, indicating a solid liquidity position to meet ongoing operational needs and strategic initiatives, including the IHS Markit merger.

Yes, the company incurred $50 million in IHS Markit merger costs in Q2 2021, which impacted operating profit. Despite this, overall operating profit saw an increase due to strong revenue performance and effective cost management in other areas.