10-QPeriod: Q3 FY2022

S&P Global Inc. Quarterly Report for Q3 Ended Sep 30, 2022

Filed October 28, 2022For Securities:SPGI

Summary

S&P Global Inc. (SPGI) reported a significant increase in revenue for the nine months ended September 30, 2022, up 33% to $8.24 billion, largely driven by the successful integration of IHS Markit and continued growth across its segments. Despite the revenue surge, operating profit saw a slight decrease of 21% for the three months ended September 30, 2022, and a 27% increase for the nine-month period, largely due to increased expenses related to the IHS Markit merger, including higher amortization of intangibles and merger-related costs. Diluted earnings per share declined by 44% to $1.84 for the three-month period but remained strong at $8.91 for the nine-month period. The company's balance sheet shows substantial changes, with total assets increasing significantly to $61.8 billion as of September 30, 2022, from $15.0 billion at the end of 2021, primarily reflecting the acquisition of IHS Markit. This also led to a notable increase in total liabilities to $21.4 billion. The company actively returned capital to shareholders through share repurchases, utilizing $11.0 billion for buybacks in the first nine months of 2022, demonstrating a commitment to shareholder value alongside strategic growth initiatives.

Financial Highlights

54 data points
Beta

Revenue

$2.86B

65.4% Gross Margin

Net Income

$608.00M

21.3% Net Margin

EPS (Diluted)

$1.84

Total Assets

$61.81B

Cash & Equivalents

$1.39B

Free Cash Flow

$814.00M

Financial Statements
Beta
Revenue$2.86B
Cost of Revenue$989.00M
Gross Profit$1.87B
SG&A Expenses$725.00M
Operating Expenses$2.01B
Operating Income$853.00M
Interest Expense$71.00M
Net Income$608.00M
EPS (Basic)$1.84
EPS (Diluted)$1.84
Shares Outstanding (Basic)329.60M
Shares Outstanding (Diluted)330.90M

Key Highlights

  • 1Revenue for the nine months ended September 30, 2022, increased by 33% to $8.24 billion, primarily due to the acquisition of IHS Markit and organic growth in key segments.
  • 2Operating profit for the nine months ended September 30, 2022, increased by 27% to $4.23 billion, despite higher merger-related expenses.
  • 3Diluted EPS for the nine months ended September 30, 2022, was $8.91, a decrease from $9.72 in the prior year, reflecting increased expenses and share count.
  • 4Total assets significantly increased to $61.8 billion as of September 30, 2022, largely due to the IHS Markit acquisition, which added substantial intangible assets and goodwill.
  • 5The company executed substantial share repurchases, spending $11.0 billion in the first nine months of 2022, indicating a strong focus on returning capital to shareholders.
  • 6Divestitures of non-core assets, including CUSIP Global Services and LCD, were completed, contributing significantly to cash flow and strategic realignment.
  • 7The company incurred substantial merger-related costs and amortization of acquired intangible assets, impacting short-term profitability metrics.

Frequently Asked Questions

The primary driver is the completion of the merger with IHS Markit on February 28, 2022. This acquisition significantly boosted S&P Global's revenue base and expanded its asset portfolio, particularly with the addition of substantial goodwill and intangible assets.

The decrease in operating profit for the three months ended September 30, 2022, was primarily due to increased expenses associated with the integration of IHS Markit, including higher amortization of intangible assets, merger-related costs, and employee severance charges. These factors outweighed the revenue gains in the shorter term.

S&P Global has demonstrated a strong commitment to capital management. It utilized $11.0 billion for share repurchases in the first nine months of 2022, indicating a focus on returning value to shareholders. The company also manages its debt obligations, with a significant increase in total debt reflecting the financing for the IHS Markit merger.

The divestitures of businesses like CUSIP Global Services (CGS) and Leveraged Commentary and Data (LCD) were completed as part of regulatory approvals for the IHS Markit merger. These sales generated significant proceeds and resulted in substantial gains recognized in the 'Loss (gain) on dispositions' line item, contributing positively to the overall financial results for the period, particularly for the nine-month period.