Q4 2025 Earnings Call Transcript

Good morning, and welcome to S&P Global's Fourth Quarter and Full Year 2025 Earnings Conference Call. I'd like to inform you that this call is being recorded for broadcast. [Operator Instructions] To access the webcast and slides, go to investor.spglobal.com. [Operator Instructions] I would now like to introduce Mr. Mark Grant, Senior Vice President of Investor Relations and Treasurer for S&P Global. Sir, you may begin.

Good morning, and thank you for joining today's S&P Global Fourth Quarter and Full Year 2025 Earnings Call. Presenting on today's call are Martina Cheung, President and Chief Executive Officer; and Eric Aboaf, Chief Financial Officer. We issued a press release with our results earlier today, in addition, we have posted a supplemental slide deck with additional information on our results and guidance. If you need a copy of the release and financial schedules or the supplemental deck, they can be downloaded at investor.spglobal.com.

The matters discussed in today's conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including projections, estimates and descriptions of future events. Any such statements are based on current expectations and current economic conditions and are subject to risks and uncertainties that may cause actual results to differ materially from results anticipated in these forward-looking statements. Additional information concerning these risks and uncertainties can be found in our Forms 10-K and 10-Q filed with the U.S. Securities and Exchange Commission.

In today's earnings release and during the conference call, we're providing non-GAAP adjusted financial information. This information is provided to enable investors to make meaningful comparisons of the company's operating performance between periods and to view the company's business from the same perspective as management. The earnings release contains financial measures calculated in accordance with GAAP that corresponds to the non-GAAP measures we are providing, and the press release and the supplemental deck contain reconciliations of such GAAP and non-GAAP measures. The financial metrics we'll be discussing today refer to non-GAAP adjusted metrics unless explicitly noted otherwise.

As noted in the press release and slides, financial guidance provided today assumes contributions from Mobility for the full year and excludes any impact from anticipated stranded costs. The company expects to update adjusted guidance to exclude Mobility and institute GAAP guidance upon completion of the spin. I would also like to call your attention to certain European regulations. Any investor who has or expects to obtain ownership of 5% or more of S&P Global should contact Investor Relations to better understand the potential impact of this legislation on the investor and the company.

We are aware that we have some media representatives with us on the call. However, this call is intended for investors, and we would ask that questions from the media be directed to our media relations team whose contact information can be found in the press release. At this time, I would like to turn the call over to Martina Cheung. Martina?

Thank you, Mark. We had an excellent year in 2025, and we're very pleased with the results we delivered. We saw strong revenue growth, meaningful expansion of our operating margins and 14% growth in EPS. We exceeded our initial guidance from last February on revenue growth, operating margin and EPS, while returning 113% of adjusted free cash flow to shareholders.

We just announced the 53rd consecutive year of dividend increases, and we repurchased more than $5 billion in stock in 2025. Financial results like this are the evidence of a committed, tightly aligned and disciplined executive team and underscore the talent and dedication of our people. I'm exceptionally proud of what our people accomplished in my first full year as CEO. We launched our new strategic vision at our Investor Day in November, and we're delivering against that vision of advancing essential intelligence. As we'll discuss today, we continue to see real momentum in our strategic initiatives and across our enterprise capabilities.

While a very dynamic macroeconomic and geopolitical backdrop persists, we believe we are entering 2026 with more tailwinds than headwinds and the strength to seize the opportunities ahead of us. Our financial guidance, which Eric will outline in a moment, calls for strong organic constant currency revenue growth, continued margin expansion and EPS growth. Our confidence in that outlook is bolstered by strong performance indicators for our subscription businesses. While we're taking a prudent approach to our outlook for the market-driven components of the business, we see encouraging leading indicators that could provide incremental tailwinds to the business.

As always, we carefully monitor and assess the macroeconomic environment, geoeconomic and geopolitical dynamics and the health of our customer end markets. While it's difficult to predict many of the factors that could impact our business this early in the year, we believe there are more tailwinds and headwinds and expect to deliver real value to our customers and profitable growth for our shareholders. Now turning to our enterprise financial results. As I mentioned previously, the financial results show the strength of the business and demonstrate the discipline and execution of our people.

When we compare the full year results to the original guidance that we had given for 2025 back in February, we are pleased to see that every division delivered revenue growth within or above those original guidance ranges, and every division delivered operating margins at or above the high end of those original guidance ranges. We also see the strength that comes from the diversification of our revenue in 2025. Through the year, we saw a disruption in the issuance markets impacting our Ratings business following Liberation Day in April. We saw incremental sanctions impacting our energy business midway through the year.

And we saw volatility in the volume-driven products emerge in Market Intelligence. Despite these various challenges in 2025, we raised our enterprise guidance through the second half of the year, and we still delivered revenue growth at the high end with margins and EPS very near the high end of that elevated guidance. We were able to do this while still making incremental strategic investments to drive future growth. Now as we outlined for you back in November, our strategic vision for S&P Global is to advance essential intelligence.

We've been providing essential intelligence to our customers for over 150 years. Over 95% of our revenue is tied to proprietary benchmarks, differentiated data and critical workflow tools, and we expect that percentage to increase over time. We have been a trusted partner for our customers for a very long time. And every day, our customers are telling us that they need our differentiated and proprietary data.

They need transparency at opaque markets. They need trusted benchmarks and measures of risk and performance. The message from our customers is consistent and simple. What they need most is what we uniquely provide.

Our mission is to advance essential intelligence and deliver that at scale better than anyone in the world. As I shared with you in November, we're going to achieve this through three strategic objectives. The first is advancing market leadership. We have some of the most trusted brands in our markets.

We start from a position of great strength to continue to grow in our existing markets, identifying new use cases for our existing products and constantly innovating to develop new products in these foundational areas. The second is expanding into high-growth adjacencies. These are the initiatives you hear us talk about frequently, private markets, energy expansion, supply chain, decentralized finance, and other rapidly evolving areas of the market. The third objective is amplifying our enterprise capabilities.

We've made great progress with our enterprise data office and our Chief Client Office in 2025. And we're scaling out additional enterprise capabilities through process engineering, upskilling and training our people on new technologies and leveraging leading AI solutions, including those we built ourselves. These advancements generate value for our customers and our people at scale. In 2025, we made great strides in several of our key strategic focus areas. We delivered exceptional results in private markets.

We expanded in private credit ratings, we significantly enhanced our private market tools like iLEVEL with new AI functionality and launched private equity benchmarks and indices. We announced and completed the acquisition of With Intelligence and our partnership with Cambridge Associates at Mercer. We are well on our way to building the most comprehensive solution set in the world for the private markets. In energy expansion, we launched AI capabilities, making much of our research and insights available through Microsoft Copilot.

We launched enhanced gas, power and commodity flow intelligence and introduce new integrated energy scenarios to help market participants make sense of a challenging global energy environment. And we integrated the 451 team with our Power team to connect the most sought-after themes from our customers and unlock new insights on data centers and power. We also continue to see capital flowing into the energy ecosystem, which benefits multiple divisions, including Ratings. 2025 was truly a leap forward for S&P Global in AI. We launched new AI products and features in every division, many of which were on display at our Investor Day.

Using a platform-agnostic approach to GenAI solutions, we have announced collaborations with several major technology partners. We are also moving quickly in decentralized finance. We'll have more to share in this exciting area in the quarters to come, but we were thrilled to launch the world's most well-known index, the S&P 500 on chain in collaboration with Centrifuge in 2025, in addition to other exciting innovations. Now turning to our enterprise capabilities.

Two of the most impactful accomplishments of 2025 are the establishment and development of our Chief Client Office and our enterprise data office. As you know, the Chief Client Office was established to deepen engagement with our large strategic customers at the most senior levels. In 2025, the CCO enabled S&P Global to bring the full enterprise value proposition to our clients. We have elevated engagement not just with our clients' business leaders, but also with their heads of technology, AI and data science.

Not only does that give us commercial advantages but also gives us early insight into our customers' needs and challenges. In addition to the strategic meetings with the C-Suite, our technologists are meeting with data scientists, AI experts and developers that work in customer organizations to co-develop solutions that we can leverage across our customer base. We are finding time and time again that the challenges impacting our largest customers are mirrored in many ways among our other customers, and the solutions that we bring to CCO clients can be sold at scale. While still very early, we believe that the CCO in collaboration with division teams and with Kensho Labs will be a meaningful driver of both revenue growth and product innovation going forward.

Our enterprise data office also made meaningful headway in 2025. We are finding more ways to bring our data together faster methods to ingest, integrate and distribute data and are communicating more effectively across the technology teams to drive efficiencies. One of our goals with the EDO is to reduce run rate expenses by more than 20% by the end of 2027. And we are well ahead of pace to achieve that goal. In 2025 alone, we reduced manual data processing meaningfully with more than half of our total data workflows now processed via automation tools. We also eliminated more than 10% of applications in use and simplified the EDO technology stack to standardize on the best applications and reduce costs.

One of the areas where we quickly saw the impact of our enterprise progress is in the integration of With Intelligence. Through our collaboration across teams, including strategy, corporate development, finance, technology, legal and others, we were able to shorten the close process to less than 6 weeks. That was an incredible accomplishment for an acquisition of this size and was much faster than our original assumed time line. What our data and technology teams were able to accomplish after the close was no less impressive.

We linked more than 75% of the fund manager and investor data sets in less than a month through the application of Kensho Link. We enabled single sign-on or SSO, through Capital IQ Pro in January, which immediately helped us identify cross-sell opportunities. In collaboration with our Chief Client Office and Market Intelligence, we held 20 regional training sessions for commercial teams and generated more than 200 new sales leads and cross-sell opportunities within the first 60 days. We've also already realized millions in cost synergies since the deal closed at the end of November.

It's been truly exciting to see our people embrace the enterprise mindset and come together to create value. 2025 was an incredible year of progress and results. Now I'd like to turn to 2026. We're entering 2026 with a strong backdrop for Billed Issuance, but we're lapping another record year. In 2025, Billed Issuance increased 11% and and surpassed $4.3 trillion. This creates a challenging compare for 2026, but there are several drivers that give us confidence in the potential for continued positive growth.

Our base case assumption, therefore, starts with Billed Issuance up low to mid-single digits in 2026. We continue to see favorable market conditions with spreads remaining low and our expectation for 2 rate cuts from the U.S. Fed in the back half of the year. We also see encouraging maturity walls as I'll discuss in a moment. M&A tends to be more challenging to predict, but we saw a strong pipeline of deals announced in the back half of 2025 and continue to see pent-up demand given the dry powder in the markets.

We also saw significant debt issuance from hyperscaler investments in AI infrastructure in the second half of 2025, and we expect that to continue in 2026, albeit spread more throughout the year. Given the phasing of issuance in 2025 and the expectations for 2026, we would expect growth rates to fluctuate from quarter-to-quarter. We expect Billed Issuance growth year-over-year in the first quarter with acceleration in the second quarter as we lapped the disruption from last April. Given the difficult compare, we would then expect deceleration in the third quarter before Billed Issuance growth turns negative in the fourth quarter.

In the event of macroeconomic distress, elevated market volatility or uncertainty or a slowdown in economic growth, we would expect Billed Issuance to be lower than our forecast. We could see potential upside if we see elevated M&A, additional pull forward from out year maturity walls or greater-than-expected debt for technology and infrastructure projects. Given that refinancing activity tends to be the most predictable issuance in a given year, I wanted to spend an extra moment to discuss what we're seeing for 2026. When comparing the 2026 maturity wall now to the 2025 maturity wall a year ago, we see 12% higher maturities and a stable mix of high yield versus investment grade.

The 2-year and 3-year cumulative maturity walls are also up from last year. While our base case assumption is that we do not see dramatic pull forward from the '27 and '28 walls into 2026, we note that if credit conditions remain highly favorable and we see additional reductions in interest rates, we may start to see more of that debt coming to market early. Now let me turn to the market factors and commercial conditions we're focused on in 2026. The list of factors on the slide illustrates the market dynamics that could influence our business either positively or negatively in 2026. Importantly, some of these factors can impact different parts of our business in different ways.

Market volatility, for example, made temper issuance volumes and create temporary headwinds for Ratings, while at the same time driving revenue in the exchange-traded derivatives of our indices business. Generally speaking, S&P Global and our customers tend to do better in relatively stable market conditions with strong economic growth. As we look to our customer end markets, we see a reasonably healthy environment for financial services customers and our commercial engagements have been strong. The energy space continues to evolve in the changing geopolitical landscape.

We expect oil prices to remain fairly stable, but lower in 2026 than we saw on average over the last few years. We continue to see great engagement from our customers, strong demand for our differentiated offerings and excitement as we push forward on product innovation and growth. Before I turn it over to Eric, I want to pause and reflect on everything we accomplished in 2025 and what gives me so much confidence in the long-term success of S&P Global. We have a clearly defined and well-articulated strategy.

We have assembled an incredible team of leaders, and we are all aligned behind the mission of advancing essential intelligence. When I speak to our large strategic customers, I routinely get the sense that we have deeper and more constructive relationships there than we have ever had before. We see both cyclical and secular tailwinds driving our business in the coming years. We've executed very well in our subscription business to create great momentum into 2026, and we continue to find new avenues to leverage processes and technologies to improve our productivity and free up capital to invest in future growth and steadily improve margins.

I'm very proud of what we've delivered in 2025, and we're excited about our opportunity to drive value in 2026. Eric, over to you.

Thank you, Martina, and good morning, everyone. Starting with Slide 16. Our financial results underscore our market leadership and the strength of our execution in the fourth quarter. We finished 2025 with strong momentum in our subscription businesses and encouraging signs in the market backdrop for 2026. All of this reinforces our confidence in the medium-term financial targets we laid out at our recent Investor Day. Ratings and Indices each posted double-digit growth during the quarter, driven by robust debt issuance and equity market appreciation inflows enabling us to make strategic incremental investments in key growth areas across the enterprise.

We're also pleased with our strong subscription growth in both Market Intelligence and Energy. Reported revenue grew 9% and our organic constant currency revenue rose 8%. Continued expense discipline allowed us to make important strategic investments in the fourth quarter while still expanding margins. Adjusted expenses increased 8% resulting in 60 basis points of year-on-year margin expansion to 47.3%.

As you'll recall, we divested the OSTTRA joint venture in early October. And if we exclude the contribution from OSTTRA in 2024 as well, margin expansion would have been 130 basis points year-over-year. We delivered 14% growth in adjusted diluted EPS in the quarter, resulting in full year EPS at the higher end of our most recent guidance range and well above the initial guidance range we provided last February. While our tax rate for the full year was within our guidance range, it did come in a bit above our internal expectations and near the high end of guidance.

Had our tax rate come in at the midpoint of guidance, EPS would have been approximately $0.08 higher. Now turning to our key strategic investment areas on Slide 17. Private Markets revenue grew 16% year-over-year driven primarily by the Ratings and Market Intelligence divisions. Ratings was the largest contributor to that growth, underscoring continued strong demand for debt Ratings, private credit analysis and credit estimates in the private credit market. Energy Transition and Sustainability revenue decreased 3% to $101 million in the quarter.

This decline was not entirely unexpected and reflects the ongoing uncertainties that have led many customers to slow spending in this area, particularly in consulting engagements and onetime transaction spend in certain geographies. While we remain confident in the long-term growth of this important initiative, our outlook for 2026 does not depend on a meaningful recovery in the near term. Turning to Vitality. As we build on the new products, features and enhancements that were highlighted earlier, I'm pleased to report we generated $470 million in Vitality revenue in the fourth quarter and continue to deliver a Vitality Index of 12%.

Going forward, while we do not intend to provide explicit disclosures on these metrics in this particular format. We will continue to provide investors with timely updates on the progress we make both qualitatively and quantitatively. Turning to our divisions on Slide 18. Market Intelligence reported revenue grew 7%, and organic constant currency revenue grew 5% in the fourth quarter. Subscription revenue, which constitutes roughly 85% of Market Intelligence grew approximately 7%, both organically and as reported.

Onetime revenue and volume-driven revenue were flattish in aggregate in the quarter. Subscription revenue growth remains the single most important indicator of the health and execution of Market Intelligence, and we are very pleased with the results the team delivered. Data Analytics and Insights reported revenue growth of 7%, which included a $9 million revenue contribution from the With Intelligence acquisition. The performance was anchored by robust subscription sales of Capital IQ Pro and Visible Alpha.

Credit & Risk Solutions revenue growth was 10%, driven by strong subscription sales of Ratings Express. We also benefited from some upfront revenue recognition tied to a major renewal in the Financial Risk Analytics product group, which lifted growth above what we had seen in the first 3 quarters. Enterprise Solutions posted 4% revenue growth, which includes a 2 percentage point headwind from EDM and thinkFolio, both of which saw declines year-over-year in the fourth quarter. Wall Street Office, its manager and corporate actions all supported the underlying revenue growth across this part of our MI franchise.

However, we did see a slowdown in our volume-driven products in the quarter that are tied to capital markets activity. This activity provided a tailwind to recurring variable revenue growth in the first 3 quarters of the year, but in this quarter. Adjusted expenses increased 7% year-over-year driven by higher compensation expense, additional long-term strategic investments and higher-than-expected expenses from With Intelligence given the accelerated close, partially offset by ongoing productivity initiatives. This resulted in a 32.2% operating margins in Market Intelligence for the quarter.

Given the sales outperformance we experienced in our market-driven businesses, both Ratings and Indices, we chose to pull forward some of our 2026 investments in Market Intelligence beyond what was contemplated in our latest 2025 guidance. Without the incremental investments in the quarter and earlier than expected close of the With Intelligence acquisition, MI's margin would have been approximately 80 basis points higher in the fourth quarter and 20 basis points higher for the full year. Now turning to Ratings on Slide 19. We Ratings revenue increased 12% year-over-year or 10% on an organic constant currency basis.

The increase was balanced across both transaction and non-transaction revenue streams, underscoring the breadth of our market coverage. Transaction revenue grew 12% in the fourth quarter, driven primarily by strong issuance volumes and investment grade. While we also saw a healthy growth across high yield, structured finance and governance, we did see a low double-digit decline in Billed Issuance from bank loans. That mix shift out of high-yield and bank loans and into investment grade created an unusually large gap between Billed Issuance growth of 28% and transaction revenue growth of 12%.

Nontransaction revenue increased 11%, driven primarily by higher annual fee revenue from Surveillance. We also saw a very strong growth in CRISIL, and we nearly tied last quarter's record in Ratings Evaluation Services revenue. Adjusted expenses increased 6% reflecting higher compensation costs and continued strategic investments in our people, technology and product development. This contributed to the division's 210 basis points of margin expansion to 61.8%.

Now turning to S&P Global Energy on Slide 20. Energy revenue grew 6% in the fourth quarter, driven by continued strength in energy resources, data and insights and price assessments. We continue to see very strong demand for our subscription offerings, including Platts benchmarks and our differentiated data, research and thought leadership. Sanctions announced in the second half created a $3 million headwind on fourth quarter revenue, which negatively impacted Energy Resources Data and Insights and Upstream Data and Insights revenue. We expect to lap those sanctions by the end of Q3 2026. Energy Resources Data & Insights and Price Assessments grew 9% and 8%, respectively, driven by strength in petroleum gas, power and renewables.

Advisory and transactional services revenue decreased by 5% as we continue to see some softness in consulting and events revenue. This was partially offset by double-digit growth in Global Trading Services or higher trading volumes in petroleum, gas and LNG offset the declines in onetime revenues. Upstream Data and Insights revenue increased slightly in the quarter, driven by upfront revenue recognition of certain software renewals. We're continuing to lay the groundwork for our Upstream transformation strategy and see a path towards stabilization in 2026 through a combination of client platform upgrades, expanded distribution partnerships and dedicated specialists in our go-to-market team.

However, given the backdrop of lower oil prices and ongoing market uncertainty, it will take several quarters before these management actions will drive growth in Upstream. Adjusted expenses rose 5%, driven by higher compensation costs and ongoing investments in growth initiatives, partially offset by productivity initiatives. Operating profit for the Energy division increased 7% and operating margin expanded by 50 basis points to 45.5%. Now turning to S&P Dow Jones Indices on Slide 21. Revenue grew by 14%, with double-digit growth across all business lines, including asset-linked fees, which benefited from both higher AUM and net inflows.

Revenue associated with asset-linked fees grew 13% in the fourth quarter. This was driven by equity market appreciation and strong net inflows into products based on S&P Dow Jones Indices. Exchange-traded derivative revenue was up 20%, driven by strength in SPX ETD volumes. Data and custom subscriptions increased 13% year-over-year, driven by new business growth in contracts and included a roughly 2 percentage point contribution from revenue related to the ARC Research acquisition.

Adjusted expenses were up 11% year-over-year, driven by higher compensation costs and investments in growth initiatives. Indices operating profit grew 16% and operating margin expanded 90 basis points to 68.8%. Now turning to Mobility on Slide 22. Revenue grew 8% year-over-year with double-digit growth in dealer and financials and other. Customers continue to rely on the unique data and solutions from CARFAX, driving strong subscription growth despite a complicated environment for automotive OEMs.

Dealer revenue increased 10% year-over-year owing to the healthy new customer growth in both CARFAX and automotiveMastermind. Manufacturing revenue grew 1% year-over-year as tariffs and regulatory uncertainty weighed on demand for consulting and lower recalls. Financials and other increased 11% as the business line continues to benefit from strong underwriting volumes and commercial momentum. Adjusted expenses grew 7%, driven by continued advertising and promotional investment, partially offset by the lapping of elevated incentive compensation last year.

Mobility's operating margin expanded 70 basis points year-over-year to 35.4%. Before I move on to our guidance for 2026, I'd like to provide you with an update on our planned spin of the Mobility business on Slide 23. We have made significant progress against our separation plan, and we are excited to announce at the NADA conference last week that we've chosen Mobility Global as the name of the new soon-to-be independent company. Since our last earnings call, we have also confidentially filed the Form 10 with the SEC completed the senior leadership appointments, including naming Matt Calderone as CFO designate.

Looking ahead, our next major milestones are well defined. We will continue to make progress in the separation process for the first quarter. In the second quarter, we expect to file our Form 10 publicly and the Mobility global team expects to host an Investor Day and launch its equity roadshow. We also expect to launch a public debt offering for Mobility at some point in the second quarter, targeting an investment-grade rating.

From a financial reporting and guidance perspective, S&P Global will continue to fully consolidate Mobility Global in our financial statements and 2026 guidance until the separation is complete. We also want to ensure investors have clear comparability in a transparent view of S&P Global's post-separation financial profile. Upon completion of the spin, we intend to provide recast financials for the 4 quarters of 2025 and any 2026 periods reported, adjusted to exclude Mobility's contribution along with other relevant adjustments as outlined at our Investor Day. We also expect to issue updated 2026 financial guidance at that time, excluding Mobility.

Now turning to guidance on Slide 24. I'd like to start by framing the key assumptions that underpin our guidance so that you can see what's driving the outlook, particularly around margin expansion and certain inputs for our market-driven businesses. Our guidance rests on a simple premise. We plan to operate more efficiently while continuing to reinvest to drive organic growth. On investment priorities, we're focused on a few clear themes. First is product innovation and continuing to enhance our benchmarks proprietary data and workflow tools to support organic growth.

Second is investment in strategic growth areas like private markets and energy expansion where we see durable long-term demand and opportunities to leverage synergies across multiple divisions. Third is our investment in AI for both our products and for our internal productivity. And finally, we're extending our geographic reach and client segment coverage so that we can bring our strongest offerings to more customers and capture new opportunities over time. On productivity initiatives, we're driving efficiencies through several work streams, including enhancements and data operations, software engineering and research.

We'll also continue scaling internal GenAI initiatives, which are improving throughput and speed in a meaningful way. And we're pairing these tools with end-to-end process reengineering, so the productivity gains are sustainable, long-term value generators that scale, not just isolated use cases. Turning to our market assumptions. In Ratings, our outlook assumes Billed Issuance will be up low to mid-single digits in 2026, reflecting what we can see today in the maturity wall and underlying market conditions while recognizing that M&A, infrastructure and other opportunistic issuance remains unpredictable.

In Indices, we assume market appreciation of 5% to 7% from January 1 to December 31, consistent of the assumptions underpinning the medium-term targets from our Investor Day. Our exchange-traded derivatives business remains an important driver for indices and our guidance assumes low single-digit growth in ETD volumes. In Market Intelligence, we expect continued momentum and healthy growth from our subscription-based offerings. We are taking a prudent approach to 2026 guidance for Market Intelligence reflecting the unpredictability of some of our volume-driven products.

Our guidance today assumes fairly modest growth in one-time sales as well as those volume-driven products. Our outlook for energy reflects the market environment and sanctions as discussed previously. This sanctions assumption remains unchanged based on the current environment and the expectation that the duration and scope of the sanctions will not materially change. This leads us to our guidance for the enterprise on Slide 25. On an organic constant currency basis, we expect revenue growth of 6% to 8%.

On a reported basis, growth is expected to be approximately 60 basis points higher, reflecting the impact from acquisitions, divestitures and currency movements. Excluding the contributions from OSTTRA in 2025, we expect to expand margins in 2026 by 50 to 75 basis points. Including the impact of OSTTRA, we would expect adjusted operating margins to expand by 10 to 35 basis points. Finally, adjusted diluted EPS is expected to be in the range of $19.40 to $19.65, representing growth of 9% to 10% year-over-year driven by operating income growth and share count reduction, partially offset by a higher tax rate.

We're not providing 2026 GAAP guidance at this time other than for reported revenue and capital expenditures. Because the timing of the Mobility spin remains uncertain, we cannot reliably predict all the GAAP components. Upon completion of the spin, our plan is to initiate GAAP guidance for 2026. Let us now turn to our division revenue outlook for 2026 on Slide 26. For Market Intelligence, we expect to sustain solid organic constant currency growth in 2026 in the range of 5.5% to 7%, supported by continued strength in subscription revenue which we would expect to grow closer to the top half of the range, partially offset by the assumption of slower growth and onetime sales and volume-driven products.

In Ratings, we expect to see organic constant currency growth in the range of 4% to 7% in 2026. That outlook assumes Billed Issuance growth in the low to mid-single-digit range, as highlighted earlier. Our guidance assumes transaction revenue and nontransaction revenue grow at similar rates in 2026. While we expect strong refinancing activity, M&A activity is inherently difficult to predict as is the potential spend on technology infrastructure. We have also seen softness in bank loan volumes in January and we are reflecting modest expectations for those volumes in our guidance as a result. As always, we expect to refine our issuance forecast as we progress through the year.

For energy, we expect organic constant currency revenue growth of 5.5% to 7% in 2026. We'll continue to manage through known headwinds, including sanctions-related impacts and the work we're doing to stabilize and reposition parts of the Upstream portfolio. Our guidance assumes approximately 60 basis points of headwind from the customer sanctions I discussed previously. For Mobility, we expect organic constant currency growth of 7.5% to 9%, reflecting continued strength in the subscription base and the mission-critical nature of the products. We remain confident in the long-term growth for manufacturing, our guidance for 2026 assumes only modest growth until we see more concrete signs of acceleration.

And for Indices, we expect organic constant currency revenue growth of 10% to 12%. After two consecutive years of strong equity market performance, we're assuming a more normalized equity backdrop. Our exchange-traded derivatives remain an important contributor, particularly in volatile periods, and we continue to invest in innovation across new products, asset classes and distribution channels to support growth. With that, let me turn the call back over to Mark for your questions.

Thank you, Eric. [Operator Instructions] Operator, we will now take the first question.

Our first question will come from the line of Ashish Sabadra with RBC Capital Markets.

I just wanted to drill down on Market Intelligence, some of the softness that we saw on the volume-driven products. I was wondering if you could provide any incremental color. And as we think about 2026, some of the unpredictability that you mentioned on the volume driven, if you could also provide some color on that front? .

Ashish, it's Eric. Thanks very much for the question. As you know, Market Intelligence is comprised of a number of different revenue areas, subscription revenue growth, about 85% of the revenues. And it was up nicely in the quarter at 6.6%.

So a nice step off as we go into 2026 as well and built up nicely from the first half of the year. At the same time, we do have volume-driven revenue growth in Market Intelligence. And that's really driven by a series of different products. And what we find is that in some quarters, it's higher and some quarters a little lower.

It's been running a little higher for the first 3 quarters of the year, a little lower in the fourth quarter, and we expect it to bounce around from time to time. On the positive side, we've had some really nice volumetric revenue growth in WSO, Notice Manager, some of the corporate actions and then some of the primary book building, in particular, munis, where we saw some nice underlying muni issuances in the marketplace, and that reverberated back into us as revenue growth. At the same time, we've had other products that have gone the other way, which will happen from time to time. So in primary market book building, some of the investment-grade in fixed income products came in a little lighter, equity issuances came in a little lighter.

And that's a mix of what's happening in the marketplace, which clients our lead book runners versus co-book runners and so forth and has -- and also has an effect. We also have a very attractive product in ClearPar which continues to do very well. It's driven by other factors like the number of loans traded. And that, as you know, was lower this quarter, and you saw that in the Ratings business.

You saw that in this business. And so also had some lower volume driven revenues. So it's a mix. We operate probably -- I've given you examples of 6 or 7 products or 20 to 25 products that have volume-driven drivers.

And these will just move around with market dynamics that are generally things that we can monitor and measure and so forth. Going forward, as you asked, we're optimistic about the market environment. Capital markets activity has been steady issuances and so forth. But we need to see how that plays out.

And that's why as part of our 2026 guidance, we guided to Market Intelligence in the 5.5% to 7%. We guided to Subscription revenue growth in the top half of that range. And we said we'll be a little conservative or careful I'd say, on the volumetric revenue growth because we think it will bounce back, but it's just hard to tell exactly when and how and when, and we just want to work through quarter-by-quarter.

Our next question comes from George Tong with Goldman Sachs. .

Anthropic recently announced a suite of 11 open source plug-ins for Claude cohort. Can you talk a bit about how you expect this competitive development to impact S&P's business? .

George, it's Martina. Thanks so much for the question. Look, we think these kinds of announcements are really exciting. And we're actively involved in advancing this technology and actually helping to establish these ecosystem ourselves.

As you know, we've worked with pretty much every major player in the AI space for some time. And we see AI really is a net tailwind for the business. You'll remember that last year, Claude for financial services launched and S&P Global is now one of the leading providers of financial data to our customers through Claude for financial services. And we have a very good relationship with Anthropic.

You've also seen in December, we announced a partnership with Google that gives us access to Gemini Enterprise. And of course, yesterday, we also announced our MCP connector for OpenAI. And if I go back to Investor Day, it's important to remember what we laid out for you. So first, we're embedding leading AI tech in our products, and that's really to make sure our customers have access to that great AI functionality without needing to leave our platforms.

And of course, for customers who want to use third-party platforms with our flexible distribution philosophy, they can get access to the data they're licensing wherever they want to use it. And we've been doing this for years. We have hundreds of distribution partners and adding the LLM players to this as another group of distribution partners. And with that, of course, we maintain control of the commercial relationship directly with those customers and we don't allow the LLM providers to train on S&P Global data.

And then secondly, we have accelerated the deployment of AI internally, and that's really enabling us to accelerate our time to market for product innovation. We've scaled our productivity initiatives, and we're improving the timings and quality of our benchmarks as a result. I'd say ultimately, the best barometer for the long-term potential of our business is what we hear from our customers. And they are consistently telling us that they want more from us, more data, like more AI functionality, more features and integrations.

And we're going to continue to solve for that. We'll continue to deliver strong growth and profitability. We saw that in 2025, and we've guided to that in 2026. Thanks for the question.

Our next question comes from Toni Kaplan with Morgan Stanley. .

I wanted to ask about Ratings. I know your guide is below the long-term framework despite there being some positive tailwinds from the factors you spoke about, the refi wall, M&A, having closed a lot of it in the second half of last -- or announced in the second half of last year that will close this year, AI infrastructure financing. I guess, why should this be a below normal year for Ratings?

Toni, thanks for the question. So with Ratings and the Billed Issuance guide of low to mid-single digits, let me talk to you a little bit about some of the underlying assumptions there. So in the first case, I would say that we obviously have the maturity wall, an important assumption here for us starting the year is that we would see the majority of the '26 refinancing coming to market this year and not massive amounts of pull forward from 2027 and 2028. And some of that just has to do with the timing of when those issuances were done, they were done, for instance, many of them were done at very low interest rates.

And so that's one key assumption. The second one would be modest M&A growth year-over-year. Yes, we certainly have seen all the announcements in the back half of 2025, the timing of those, the materialization of those is important, and I think we'll be able to gauge more of that as we go throughout the year. And maybe a third point that I would make here is that we saw quite a bit of issuance in the back half of the year from the hyperscale players.

We know that creates a very difficult compare in the back half of the year, this year. And on the hyperscale players, we've assumed continued growth, but modest growth. Now look, there are lots of big numbers being thrown around out there. A total of about $650 billion in announced CapEx from the hyperscale players.

I would say the way to think about how we've looked at that is, first, we need to see how much of that actually materializes within the current year. And secondly, how much of that would be debt funded. And so we take one haircut on our assumption for how much we think will materialize and then another haircut on how we think -- how much we think would be debt funded. Now with all of that, it's early in the year.

You know we'll update you as we go throughout the year. If we saw, for example, higher levels of hyperscale issuance throughout the course of the year than we saw in 2025, we think that could possibly add a few percentage points to Billed Issuance. But it's too early to really make aggressive assumptions around this. And so we're guiding to prudent levels, and we'll keep you up-to-date throughout the course of the year.

Thanks so much, Toni.

Our next question comes from Faiza Alwy with Deutsche Bank.

So I wanted to follow up on George's question, just given the panic and confusion that the market is experiencing as it relates to AI. I know you've talked previously about revenues driven by benchmarks and proprietary data. And I think you've said you're fairly agnostic around the channel that data consumption occurs in. So I was hoping you could put a finer point on that and talk specifically about your workflow products and the mood there.

And to the extent there is a shift in channel, sort of how do you overcome that? Is it potentially like higher pricing on the same data? Or just any more clarity you can provide on that, I think, would be helpful.

Thanks so much for the question. So of course, as you pointed out, we did illustrate during Investor Day that the vast majority of our revenues come from our unique and differentiated benchmark data and insights as well as our critical workflows. Now I know that with everything that's happened in the last week or so that there is a lot of attention and a number of questions around workflows. And so let me talk about that for a little bit.

But the workflow tools that S&P Global has developed are critical systems of record for our customers. So products like iLEVEL, ClearPar Cap IQ Pro, Platts Connect and others, they're not simple apps that were developed rapidly. And in fact, they get smarter as we embed AI technology in them. So we think of these as enterprise-grade solutions that involve sophisticated integration.

So many of them, for example, provide connectivity across industry networks of clients, and they enable capital flows, trading, reporting and other mission-critical functions. And think about the regulated environment in which we operate. So we and many of our customers and the workflow tools we provide need to actually operate in very sophisticated ecosystems. And so our workflow tools embed functionality for compliance, risk management, data integration and segregation and integrations with other tools that our customers use daily.

And for our financial services clients, we need to, as a provider to them comply with and attest to our compliance with complex digital regulations like Dora, for example. So our solutions have been developed and refined over many years to enable these mission-critical workflows, and we deploy them globally at scale. Another point I'd make here really is that our workflow tools have S&P Global data embedded in them to drive functionality. So the true value of many of our solutions like WSO can't be realized without S&P Global's world-class data sets like loan reference data.

And our customers are consistently telling us they don't want to have to expand their list of vendors to get access to leading-edge technology. They want us to embed that technology in our products, and we've been rapidly doing that now for several years. And the message is consistent to what we've been saying to you over the last year, our customers want fewer vendors and more strategic partnerships with comprehensive partners like ourselves. They see the expertise we have with Kensho and they recognize that we have very unique and massively scaled data that we bring to the table.

So we're confident that our unique position as the world's leading provider of benchmarks and our combination of AI expertise, our differentiated data and our enterprise-grade workflow tools enable us to continue advancing that essential intelligence for our customers around the world. Thanks for the question.

Our next question comes from Surinder Thind with Jefferies.

Martina just following up on some of the earlier questions. At a high level, can you maybe talk about your assessment and experience with the AI technology in your attempts to deploy it internally versus maybe the hype that's coming out of Silicon Valley? And maybe what does this mean structurally for S&P in the sense that when we look at some of the newer firms that are coming out. They're coming up with a much smaller employee footprint, these AI native companies versus maybe some of the prior generation.

Yes. Surinder, thanks for the question. And as you rightly said, we've been investing in this area for many years since we acquired Kensho in 2018. We've deployed about $1 billion against this, and that's really put us in a great position as we think about deploying these capabilities, both within our products and in our internal processes. And so I would say early days, but we are seeing traction in the momentum that we see with our customers, for instance, on the product side of this.

So I'll give you some examples. We deployed the automated data ingestion tool on iLEVEL in 2025. And with the 6 months, we had nearly 20% of the iLEVEL customers opting for that add in, which is not part of the standard subscription. We also have seen very good demand in our energy clients for adding on the ability to pull energy research into Copilot and Copilot Studio that's seen quite a robust pipeline over the course of last year, and we'd expect more of that in 2026. And so earlier opportunities here that we've seen lots of good momentum. And again, it comes back to what are our clients saying to us.

We have one CCO client that was working with the CCO team recently and essentially said, look, we've seen some of the bigger tech firms. We're also looking at some of these niche providers that have AI native shells, if you like, without the data. And frankly, we prefer to work with you guys, you want to see you guys put the functionality into your tools, and we want to use single pipe to get our data through. And so as I said earlier, the best barometer really of our long-term success here is what our customers are telling us, and we're moving faster and doing more with our customers.

Maybe the other point that I would make, and then I do want to hand over to Eric on the productivity side of this and to your points around smaller teams, et cetera. We would certainly expect over the next several years that revenue growth will outstrip headcount growth. And in many ways, we're seeing places where we've reached peak headcount growth, and we'll see that continue to decline in certain areas over time where we've accelerated the application of these functions. Maybe Eric, over to you.

Thanks, Martina. Surinder, let me add that on the internal usage of AI, we're really accelerating a number of use cases and not just I'd call proof of concept, but actually changing the way we do work, changing the way our processes are developed and simplifying. I think if you remember back to Investor Day, we talked about some of the deep pools of opportunity we named for the enterprise data office, the software development process, the researcher activity that we have and then the analysts. And we described those as pools of human resources that comprise about 1/3 of our total 40,000-plus headcount.

And each one of those has an industrious effort now underway to actually bring in and leverage a number of the new tools, some of them that we've developed internally, a number of which are available externally. You're all well familiar with some of the software development tools that are having a very significant productivity impact for the developers and in those environments, researchers in an area where we've already been able to simplify, streamline and save $10 million plus over the last year as we provide them the tools and the functionality and the capabilities that they need to provide more research faster and more efficiently than before.

And then the effort that's probably the furthest ahead is the enterprise data office where over time, over the next 2 years, we see about a 20% reduction in that cost base in that area. It's nearly a $0.5 billion expense base out of $7.5 billion. And it's the kind of change that we see coming now because we have these AI tools, we know how to implement them, we know how to simplify what we have. We know how to lighten the set of internal processes streamlined. And I think over time, it's going to transform how we operate this company and create the productivity and our ability to reinvest in the top line as we've been doing over the last few years, but also deliver margin year after year after year in a way that will drive both margin expansion, top line growth and EPS growth for our shareholders.

Our next question comes from Manav Patnaik with Barclays.

Martina, you talked about how you thought AI was net tailwind for your business. And I was hoping you could just elaborate on that more on the top line basis. So do you think all these enhancements that you're talking about will help you accelerate revenue growth? And also, how do you think that changes your pricing strategy going forward?

Manav, thanks for the question. We do think this is a great opportunity, and we're excited by the announcements. A number of these we've been anticipating because we've been engaging very closely with the various players in the markets. Maybe let me start with how we see this delivering additional value for our customers as we accelerate not just the integration of AI into our own tools, but also leaning into partnerships with a number of these players.

First, I'd say that our clients are getting additional value by being able to use the data, our data in more ways. And the more ways to use it, the more value it creates and the better opportunity for value-based conversation at renewal when we talk to those customers. We've also seen really nice uptick in demand for add-ons. And that's helped us obviously with net new revenue.

Examples of that, that we mentioned were the automated data ingestion as well as in iLEVEL as well as Microsoft Copilot add-on for our energy customers. And then I would say that we also have seen our clients just this really, really steep increase in interest in new data. And so this is quite interesting. And we're seeing a lot of that in the conversations that the CCO and the Kensho Labs teams are having with our CCO clients.

So we'd expect to see maybe new data set sales opportunities there as we're having those conversations as well. And ultimately, the way that we're tracking this, and Eric and team are really doing quite a bit around this to make sure that we can see that adoption and track it. We're looking at retention. We're looking at renewal -- net renewal rates which would be inclusive of price increases.

We're looking at add-ons, net new revenues, new product sales. And importantly, this is also helping with competitive wins. So we think a good opportunity there overall. We wouldn't change the pricing strategy around our enterprise opportunities, but maybe the way to think about it, Manav, would be that we see both opportunities around the renewal discussions as well as the opportunity to sell net new, whether it's add-ons or net new data sets. .

Our next question comes from Scott Wurtzel with Wolfe Research.

Eric, just wondering if you can elaborate more on the pull forward of investments that you brought into the Market Intelligence business into 4Q? And I know you guys aren't guiding to segment level margins anymore, but any qualitative color you can give us on sort of the expected growth in expenses within MI for 2026 relative 2025?

Scott, it's Eric. Thanks for the question. On some of the fourth quarter expenses in MI, remember, there were two factors. There was the early integration of With Intelligence, so that came on and then which we're very excited about, followed by some pull forward on investments.

Those are really in the technology, I'll call it, feature functionality area of several product lines, and it's the kind of reinvestment that we're making as we deliver productivity to also drive top line growth. Some of them are actually AI investments and the infrastructure that helps support that where we're finding that we've already seen a quick adoption by clients. What we're trying to do is invest behind that very quickly to expand that AI feature functionality in particular and some of the other features that will drive future growth. In terms of margin expansion, we're quite comfortable with the guide that we've provided in aggregate, the 50 to 75 basis points across the various divisions.

I think as we get a little further during the year, we'll see how each of them perform, and we're being prudent in our guidance. Some of the -- in MI is the volumetric revenues, which we've seen bounce up around from time to time. So this isn't anything particularly new. But if you go back over the last 8 to 12 quarters, you'll see some of that.

And so we're just being a little bit careful. In terms of margin expansion, we had said at Investor Day that MI has, I think, we said clearly, the largest surface area for margin expansion. We think that over time, it will be at the upper end of the 50 to 75 basis point margin guide. I think for this year, we think it's solidly in the middle of our guide.

And we're here to meet that and to deliver on that and to do even better. And I think if some of the volumetric revenue growth comes in more like it did in '25, then we're prudently guiding for in '26, right? So if we see that same total year revenue growth as we'd like it to see, it will come in at the high end of the range. But it's a little early to make that prediction given that the volumetric growth is driven by a number of external factors.

And so we start MI in the middle of the range, and we're looking to take it up during the year as we deliver.

Our next question comes from Jeff Silber with BMO Capital Markets.

Eric, I wanted to continue the margin guidance. Again, I know you're not getting specific guidance by the different segments. But any qualitative color, if you can talk about the other segments like you just gave us for MI, we'd really appreciate it.

Sure. Jeff. Let me -- maybe we'll just take through MI, we covered at a high level, and I think you've got a good sense there. If we go to Ratings, one of our market-sensitive businesses, it's clear that it will depend upon the issuance environment, the rated issuance expansion during this year.

And that's all driven by the M&A activity, the potential hyperscale investment-grade issuances, structured finance and so forth. So I think that one we've historically been careful at the beginning of the year and are doing so again. I think similarly in Indices, there, we've delivered really nice margin expansion performance. We expect to continue to do that.

Here, we're being a little careful as well with the guidance on equity market appreciation. There's a good tailwind because of the averages and where they've come out relative to the average of '25 and where we are today. But if markets continue to trend upwards, there'll be opportunity towards the upper end of the range, but it's a little early to predict that. Energy, I think, will also deliver well.

There, we've got some headwinds as we described, some of the sanctions, the turnaround in Upstream is underway. And I think what we'll see is margins and revenue accelerate from the first half to the second half of the year. And there we're also confident we can meet the middle of the range. But in each one of these, it takes a series of actions, a number of which we control and some of which we don't control to -- for us to get to the upper end, which is where we'd always like to deliver.

I mean that's our intentionality. That's where management and the executive team is focused on. What we are committing to is that every division will expand margin, every divisional extent margin in this range. And there are certainly opportunities, I think, across every division, starting with the market-sensitive divisions, but also in MI and in Energy to deliver even more than the middle of the range depending on execution, depending on the market environment.

Our next question comes from Andrew Steinerman with JPMorgan.

This is Alex Hess on for Andrew Steinerman. I just wanted to get a few points of clarification, if you don't mind. Could you elaborate as to what organic ACV growth was in the fourth quarter in MI? I know that's been a point that you guys have been highlighting, certainly, when it's been running ahead of pace.

And then maybe on the balance sheet, just walking through sort of sources and uses of capital as you enter '26? Any call-outs there, especially at the debt buildup in the year. So I know it's two parter.

Let me take those in sequence. ACV growth continues to come in very nicely in MI. It was solidly in the 6.5% to 7% range this quarter, which gives us 2 quarters in a row of 6.5% to 7%. And if I remind you, the first half of the year was sitting at 6% to 6.5%.

So I think we're starting to see the acceleration or maybe I'll say, continuing to see the acceleration that we had seen from the first half into the third quarter. We're now seeing it first half to second half. And that's what gives us confidence in the step off into next year. It's also related to where the subscription growth is coming in really nicely.

And we think that subscription growth will be at the top half of our revenue guide. We think ACV will be at the top half of our organic constant currency revenue guide as well and will help propel revenue to levels that we'd like to see this coming year. In terms of balance sheet and capital management, I think maybe a couple of points that I'd highlight. A lot of the balance sheet management continues.

As we've previously discussed, we did go ahead with a buyback and expanded buyback in the fourth quarter. We funded some of that with some debt in commercial paper. So you see that come through in the balance sheet, and that resulted in $5 billion of buybacks for the year for 2025. As you recall, our buybacks typically are lighter in the first quarter, and then build during the course of the year. Just given the market environment, the strength of our balance sheet, but also the stock price levels that we're seeing, we're likely to do a higher buyback this first quarter in 2026. I think last year was in the $650 million range.

This year, we're targeting about $1 billion of buyback and see that as a way to expand EPS in these volatile markets.

Our next question comes from Craig Huber with Huber Research Partners.

Martina, you gave several examples of initiatives on revenue front that AI is helping your revenues. But can you just simply if you would, please give me your 4 to 5 revenue AI contribution you think is going to help you the most for revenues this year, your products, your add-ons, but what's your 4 to 5 you're most excited about? And then as you roll it all up, your AI enhancements to your products, how much do you think that's actually going to help your revenue growth this year, your midpoint growth, 7.5% of revenue growth? Is it going to help by roughly 1 percentage point.

Do you have a sense on that, please?

Craig, thanks for the question. Well, look, we're not providing guidance around the contribution of AI or calling that out specifically. Let me maybe take a step back and characterize some of the groupings of how we benefit from AI as part of our products. And so as you know, we have been working really closely with our customers on this and they're really pointing the way in many cases around the types of functionality they want to see.

And so that demand is really coming from the customers themselves. And what we're doing essentially is making our products smarter on their behalf and at their request. And so some of the examples I called out earlier, maybe just again, put them in buckets. So one would be how we're actually bringing really advanced capabilities into our products.

We showed you document intelligence, for example, at the Investor Day and that has seen a really good uptick and gotten very positive reception from our customers. A second category would be where we launched an add-on, which is charged for separately and I mentioned automated data ingestion for iLEVEL, there are a number of others there across the divisions and within MI as well. The third would be just the overall conversation, oftentimes with the CCO clients and Kensho is resulting in increased demand for new data as a result of clients being able to use these technologies to do lots more interesting things with data.

And so we may expect to see new product sales, new data sales as part of this as well. And remember, we're doing all of this with our philosophy of flexible delivery. So we will, as we have done for many, many years, lean into our distribution partners, including the model developers and hyperscale partners to create as much value for our customers as possible. And then what's the results or the contribution it's in a number of areas.

It can be in revenues. It can be in retention. It can be in new data sales or new add-on sales. It can be in competitive wins.

And we're seeing quite a bit of this across the businesses, whether it's an MI or in Energy, for example, we're seeing AI-enabled capabilities as we talked about last year in index as well. And so this this is quite exciting for us. We continue to lean in here. And we're seeing the momentum and some of the early traction.

And we look forward to sharing more about that as we go throughout the course of the year. Thanks, Craig.

Our next question comes from Shlomo Rosenbaum with Stifel.

I want to jump back to the volume base sales that were later in the quarter. Can you just go over your view on that in terms of those sales being kind of market-driven or why else they would have been lower. I just wanted to ask, I mean, straight out, is any of the wallet share going to clients investing in AI and other areas that just might not be with S&P? And then also just in terms of like the margin expansion, if you account for some of the pull forward of the investments, it sounds like the margin growth year-over-year would have been 80 basis points.

We're just seeing a better trajectory in the last few quarters. And maybe you can kind of comment on that as well. I know it's two parter, but please indulge me.

Shlomo, it's Eric. Let me start with the margin impact. There -- this -- and maybe quantify it in a couple of ways. As we described, With Intelligence comes on in the fourth quarter.

And that obviously starts with a lower margin, just given where it is in its growth trajectory, but one with significant margin expansion plans and forecast. There's the pull forward on some of the investment spend as well, which we're pleased to have done, and that's really offset in a way in other divisions where we saw higher-than-expected growth in particular in Indices. And so purposely, planned on some investments in MI where it made sense in effectively funded by another area. And together, those worth about 80 basis points for the quarter.

And then there's another of 50 basis points or so that just comes from that lower variable revenues. If you factor that in, that between those three areas, I think margins for MI would have been in the 33.5% level, which is pretty close to the full year 34% margin. So we're sort of consciously navigating and managing, I think, actively, and that's some of what you saw this quarter. In terms of the variable revenue, this is really driven by sort of external factors. It's -- there are no cancellations.

There are no questions around pricing. It's all been the variability in some of those external market factors. And so for example, we talked about the bank loan syndications and and the loan markets being slower in transactional activity. That just comes back to us directly in ClearPar as a set of lower revenues in that particular quarter.

And we'll be exposed to that kind of volatility. Conveniently, in Market Intelligence subscription revenues is 85% of total revenues. But we'll have a little variability around that. And that's, I think, just part of the business model.

Clients want to have a pricing schedule that's tied to how they make money, which is partly on the the amount of activity. And so we have a system that supports that. But we're pleased with the overall performance and just calling out what will some of the volatility that we'll see from time to time. I think we saw some real positives in some quarters this year.

You'll see some slower growth, but it was still in the -- it was still positive. And so it's just a matter of seeing that it evolves over time.

And Shlomo, maybe I could add a couple of additional examples here. So Eric mentioned earlier, investments that will help with revenue growth. Maybe two examples of that to make this tangible. One is that we invested more in cloud to accelerate the -- bringing together of our Data Fabric and the EDO and that's really creating the opportunity to do more with our content, connecting it together, produce more products, et cetera.

And then the second area was we pulled forward some expense around sales enablement tools within Market Intelligence into Q4 as well. So just a couple of examples there. Thanks for the question.

Our next question comes from David Motemaden with Evercore.

Just had a question on sales cycles within MI. Martina, have you seen any changes in MI sales cycles? And just given the announcements of some of the GenAI enhancements at the LLMs over the last 6 months or so. Has that impacted sales cycles at all? Are you seeing any changes to the pipeline? I'd be interested in what you are seeing.

David, thanks so much for the question. I mean I think the only time generally that we might see a sales cycle being longer and this wouldn't be specific necessarily to AI or LLMs, but generally speaking, the only time you might say that happen is if you have a very large deal that might have multiple products in there. And so maybe some of the CCO deals where we're dealing with large enterprise opportunities could be some examples of that. But I wouldn't necessarily say that, that has differed from what we've seen in the past.

What I will say is that the volume of meetings has increased dramatically with our clients, in particular with the CCO accounts, not just because we are bringing the whole enterprise together for a discussion with them, but also because they're looking at what more they can do with us. And so that's an area where, of course, we see opportunity as well. Thanks for the question.

Our next question comes from Owen Lau with Clear Street.

Could you please add more color on the priorities of your private market solutions in 2026? What are some of the initiatives that can drive or even accelerate the growth in this area this year?

Owen, it's Martina. Thanks so much for the question. While we're very excited about our private markets opportunities in 2026. Maybe just to kind of point to the different divisions around this. In Ratings, we've seen really strong performance around Private Market Ratings certainly in 2025. And the work that we've done really there to make sure that the issuers in the market understand our methodologies and that we have very established clear relationships in the broader business.

That's all helpful for us, and we don't see a reduction in appetite for private market from investors. And so we'd expect that to continue to progress nicely in 2026. Look, it's possible that some of these hyperscale issuance could go through rated in our private markets teams. If that's the case, we might see a little bit of that potential for increased come through that channel, but generally very well positioned there. In index, we've seen a number of launches around private markets in 2025, and we are getting a lot of interest speaking with our clients about new index opportunities.

And the team is also working with Market Intelligence team to see how they can accelerate innovation using the data from both With Intelligence and from the Cambridge Mercer agreement that we've struck. And then in MI, look, we're so excited about the closure of the With Intelligence deal early. And just the spectacular capabilities of the EDO team, enabling us to link that data through Kensho Link and get it out to market faster. We've already seen really early momentum around cross-sells that we talked about in the prepared remarks.

And that With Intelligence team is phenomenal. We're super excited to have them on board. And I would say maybe just a last quick point. We launched the beta for Cambridge Mercer in Q4, as we had discussed, got very positive feedback.

The taxonomy for private markets that we discussed as well around standardizing and reporting is also getting very, very good feedback from the market. And we're continuing to work with customers on that, and you can expect us to keep you updated on that as we go throughout the year. So I'd say, Owen, we're excited. There's always good opportunities here, and we'll keep you updated as we go throughout the year.

Thanks for the question.

Our next question comes from Jason Haas with Wells Fargo.

I'm curious if you could talk about your outlook for bank loan issuance in 2026. I'm curious why that's been soft over the past few months and why you expect it to be softer? It sounds like that's correct me if I'm wrong, but it sounds like that's maybe one of the key factors in terms of the softer market intelligence and Ratings outlook than what you had for the Investor Day?

Yes. Jason, thanks for the question. So I think for bank loans, if you take a step back, it's it's more of the mix, the overall mix that we expect, right? So in Q4, we saw a 50% increase in investment-grade issuance in Ratings.

And so that weighed on the overall mix, which monetized -- made the sort of like effective monetization a little bit lower than we would have seen had it been more skewed towards high yield and bank loans, for example. And so think of it as more of the mix. I think if you look into 2026, the near-term maturity walls are reasonably evenly mixed between high yield and investment grade. There is that opportunity there for more investment grade if the issuance of hyperscalers were to increase.

And so all of this we take into consideration not just as part of course of the Billed Issuance, but also as part of the the revenue guide. And so ultimately, I think we continue to expect to see a little bit of softness in bank loans as we think about the initial -- the overall guide here for Billed Issuance for 2026. And as always, the timing of rate cuts, the spread environment and things like that could impact us to the upside or downside. But generally, we're being prudent on the guide here, including a little bit more softness in bank loans continuing into 2026. Thanks for the question.

Our next question comes from Jeff Meuler with Baird.

Can you just comment on how strategically important you think CapIQ is within Market Intelligence, obviously, vendor consolidation and CCR2 themes. But just like where are there meaningful product integrations with other MI products or how you think it impacts cross-sales, just how we should think about CapIQ potentially impacting MI more broadly beyond the traditionally reported desktop?

Jeff, it's Martina. Thanks so much for the question. I think -- biggest picture view of desktop is that it's about 6% of our enterprise revenue. And as we think about the desktop going forward, firstly, I would say, we have been really leaning into investing and accelerating the deployment and release of AI-enabled capabilities across the desktop.

This is very valuable to our customers, the combination of unique content that we are adding is also very valuable. And so the single sign-on between Visible Alpha and the Desktop, the single sign-on between the With Intelligence products and desktop. These are all things that create important interconnectedness of this platform. And as I said earlier, this is a sort of product that really benefits and works at its highest level of value when it is used in conjunction with the unique data that we provide to our customers.

I will say one of the examples of the launches that we did in Q4, for example, is the integration of Doc Intelligence with Salesforce. Now that's something that our users who have really adopted document intelligence or asking us for. And so we're seeing a good reception from our users around all the ways in which we're enhancing desktop and that's coming through not just through the CCO conversations, but our broader usage base as well. And maybe, look, I'd add just one last point on this.

Unsolicited, I've had two Ratings analysts come to me in the last several weeks and tell that ChatIQ has been life-changing for them. And a fun fact is that the Ratings analysts are actually the largest power user group of CapIQ Pro. So it was nice to hear that on an unsolicited basis from our own internal customers as well. So thanks for the question, Jeff.

Our next question comes from Andrew Nicholas with William Blair.

I wanted to double back on capital allocation. And more specifically, kind of the preference between buybacks and M&A. Obviously, it sounds like With Intelligence has gone very well and quicker than expected. You talked countless times about how important proprietary data is to your moat in this new AI paradigm.

So I'm just understanding you want to be aggressive on the buybacks. Also in light of those factors, curious how you stack or rank the priorities and where you might be most interested to deploy capital on the M&A front going forward?

Andrew, it's Eric. Let me start and say that we're focused on all the opportunities in the marketplace. I think right now, we see a potential opportunity with buybacks, just given the stock market performance, accretion and so forth. And so it's a natural time for us to accelerate some of the buybacks from the back half of the year into the first half of the year and in a way, that is the active financial management that we're doing.

I think at the same time, we're not signaling that buybacks are more important than growth. In fact, growth is what dominates our thinking, our activity, our actions, how to fund the growth through productivity. I got into that earlier. But buybacks is just one of the many tools.

I think the other tools are continuing to invest through the P&L. We've done that actively this quarter and that we even did that with a view that margin might decline or not expand as quickly as we like in one business. But we did that very consciously and purposely and see good payback. And I think in M&A, you saw us do the kind of acquisition that we'd like to do, which is a bolt-on or tuck-in or complementary consolidating acquisition that's going to fuel future growth.

And so pretty consistent, but maybe turn it over to Martina, as well.

Yes. Thanks, Eric. Andrew, maybe the only other point I would add is -- and you hear me saying this all the time. We don't have any upside for transformational M&A. We're going to be -- always going to be very disciplined. And ultimately, we're solving for long-term shareholder value as part of this. Thanks for the question.

Our next question comes from Peter Christiansen with Citi.

Martina, you continue to call out to centralized finance as a strategic focus. The thinking is as D5 protocols increasingly embed real-world assets, credit exposure, do you see a role for S&P on on-chain credit assessment or Oracle style type of verification? Or is the strategy more to be a layer removed from direct protocol integration? And I'm just curious if we see market structure legislation get past this year, does that equate to a stepped-up investment in D5?

Peter, thanks for the question. And I'd maybe answer this in the context of Ratings and Index where we see some of the earlier opportunities here. So we're excited about this. We've been calling it out because we see a really good opportunity and we've been leaning into it.

So our Stable Coin stability assessments, for example, are frequently featured as part of describing the overall health of some of the Stable Coin issuers. And so you'll see us mentioned quite frequently in terms of helping the market to understand the risk associated with various different Stable Coins. And we cover the vast majority of Stable Coin market cap. I'd also say that we have been leaning into our methodologies for thinking about rating some of these things.

So we did the first rating of a protocol, for example, in Q3, we mentioned that in 1 of our prior calls. And that was a way for us to signal to the market that we are leaning into assessing the risk of these new types of infrastructure providers and protocols. So I'd say, definitely leaning in. And then for on-chain presence, we have some partnerships.

We've actually had those partnerships for years now. and we're excited about the potential opportunity there for Onchain credit assessment. In Index, I would say that we've been innovating very, very quickly here. You've seen us announce the opportunity to tokenize the 500 million Onchain. We've done some really innovative launches off the back of that tokenization.

So I'd say tokenization there is a good opportunity for that business. And we're going to talk to you a lot more about this over the course of the year, but I appreciate the question, and we see it as an opportunity, and we're leaning in. Thanks, Peter.

Our final question will come from Sean Kennedy with Mizuho.

So I know there was some pull forward this quarter, but I was wondering if the expected investment in AI capabilities and products is greater than what you were thinking 6 months or even 3 months ago with everything that's happening in the AI and software markets? And how Kensho provides a significant advantage here versus the competition?

Sean, it's Eric. Let me start. No, this is not a higher level of investments in aggregate for the year. We don't expect that to be higher than expected next year from relative to 6 months ago.

I mean, we routinely invest through the P&L, 3%, 4% of our expense base. And we're just continuing to do that. We're just shifting in some cases how we invest, where we invest and the particle feature functionalities that are important to customers changes over time. But we see it as quite sustainable and just part of our continued pattern.

And maybe I'd just add in there, Sean. Just by having the Kensho team and our choice in how to allocate those as a really valuable scarce resource. That also gives us a lot of leverage around how we can actually making this happen more quickly across the organization as well as how we can actually generate growth opportunities through Kensho Labs. So well, thank you so much for all your time today.

I'd like to reiterate how proud I am of what we've accomplished in 2025. We have a clearly defined strategy, an incredible leadership team, the best people and deep relationships with our customers and partners, all aligned on our mission of advancing essential intelligence. Thank you to our customers, our people and our shareholders who continue to support us in this mission. We are exceptionally well positioned and excited about the opportunity to drive value in 2026. Thanks for joining the call today.

Thank you all again for joining the call today. You may now disconnect.