Q1 2023 S&P Global Inc Earnings Call

Being recorded for broadcast all participants are in a listen only mode. We will open the conference to questions and answers after the presentation and instructions will follow at that time to access the webcast and slides go to Investor Dot SP Global Dot Com, if you need any additional technical assistance. Please press star zero and.

I will assist you momentarily I would now like to introduce Mr. Mark Grant Senior Vice President of Investor Relations for S&P Global Sir you may begin.

Good morning, and thank you for joining today's S&P global first quarter 2023 earnings call.

Presenting on today's call are Doug Peterson, President and Chief Executive Officer, and <unk>, Steenbergen Executive Vice President and Chief Financial Officer for.

<unk> for the Q&A portion of today's call. We will also be joined by <unk> President of S&P global commodity insights and Dan Draper CEO of S&P Dow Jones indices.

Good morning, and welcome to S. M. P. Globals first quarter of 2023 earnings conference call I'd like to inform you that this call is being recorded for broadcast all participants are in a listen only mode. We will open the conference to questions and answers after the presentation and instructions will follow at that time.

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 for the supplemental deck that can be downloaded at investor Dot SP Global Dot 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 1095, including projections estimates and descriptions of future events.

To access the webcast and slides go to Investor Dot S. P. Global Dot Com, if you need any additional technical assistance. Please press star zero and I will assist you momentarily.

I would now like to introduce Mister Mark Grant Senior Vice President of Investor Relations for S. M. P. Global Sir you may begin.

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.

Good morning, and thank you for joining today's SMP global first quarter of 2023 earnings call <unk>.

Additional information concerning these risks and uncertainties can be found in our most recent Form 10-K filed with the U S Securities and Exchange Commission.

Presenting on today's call or Doug Peterson, President and Chief Executive Officer, and Eva Steenburgen, Executive Vice President and Chief Financial Officer for.

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 companys operating performance between periods and to view the companys business from the same perspective as management.

For the Q and a portion of today's call. We will also be joined by so I've got a saw president divestment P global commodity insights and Dan Draper C E O of SMP Dow Jones indices.

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 for the supplemental deck that can be downloaded at investor Dot S. P Global Dot com.

The earnings release contains financial measures calculated in accordance with GAAP that corresponds to the non-GAAP measures, we are providing and the earnings release and the supplemental deck contain reconciliations of such GAAP and non-GAAP measures I would also like to call your attention to a specific European regulation, any investor who has or expects to obtain ownership.

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.

A 5% or more of S&P global should contact Investor relations to better understand the potential impact of this legislation on the investor in the company.

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.

We're 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.

Additional information concerning these risks and uncertainties can be found at our most recent Form 10-K filed with the U S Securities and Exchange Commission.

At this time I would like to turn the call over to Doug Peterson Doug.

Thank you Mark as we look at this quarter's highlights I want to remind you that the financial metrics will be discussing today refer to the non-GAAP adjusted metrics for the current period and for 2023 adjusted guidance and non-GAAP pro forma adjusted metrics in the year ago period, unless explicitly called out as GAAP.

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 companies operating performance between periods and to view the company's business from the same perspective is management.

The earnings release contains financial measures calculated in accordance with gap that corresponds to the non-GAAP measures were providing and the earnings release and the supplemental deck contained reconciliations of such gap and non-GAAP measures I would also like to call your attention to a specific European regulation, any investor who has or expects to obtain ownership.

We're pleased to report, 3% revenue growth in the first quarter compared to pro forma results in the year ago period, we continue to generate substantial synergies and manage our other expenses with discipline as demonstrated by the 1% growth in total adjusted expenses in the first quarter.

Our focus on top line growth and expense management resulted in an expansion of more than 100 basis points and the adjusted margin and a 9% year over year growth in adjusted EPS.

A 5% or more of SMP global should contact Investor relations to better understand the potential impact of this legislation on the investor and the company.

In addition to our strong financial results. We also made progress on many of the strategic initiatives. We laid out for you at Investor Day, We continue to prioritize innovation and our technology budgets and reached important milestones in our cloud migration. We also hosted a record breaking Cerro week in the first quarter and.

We're 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 Doug Peterson Doug.

And we also extended our lead in AI with Ken show, releasing two more commercially available products built on our proprietary AI and machine learning platforms will discuss these important highlights in more detail in a moment.

Thank you Mark as we look at this quarter's highlights I want to remind you that the financial metrics will be discussing today refer to the non-GAAP adjusted metrics for the current period and 420 twenty-three adjusted guidance and non-GAAP pro forma adjusted metrics in the year ago period, unless explicitly called out as gap.

One of the key messages from our Investor Day last December was the introduction of the five pillars that drive our strategy of powering global markets. Beginning this quarter, we will be discussing our results using that same framework. We use. These pillars is the lens to inform our decisions on capital allocation in organic investment that impact our people our customers and the communities.

We're pleased to report, 3% revenue growth in the first quarter compared to pro forma results in the year ago period, we continue to generate substantial synergies and manage our other expenses with discipline is demonstrated by the 1% growth in total adjusted expenses in the first quarter.

In which we live and work.

First I want to start with our customers delivering value to our customers drives every decision we make at S&P global we constantly hear from our customers that they're focused on the same things. We are during the first quarter and almost every customer conversation I had we discussed energy transition and sustainability as well as our products.

Our focus on top line growth and expense management resulted in an expansion more than 100 basis points in the adjusted margin and and 9% year over year growth and adjusted EPS.

In addition to our strong financial results. We also made progress on many of the strategic initiatives. We laid out for you. It Investor day, we continued to prioritize innovation in our technology budgets and reached important milestones at our cloud migration. We also hosted a record breaking Sarah weak in the first quarter and.

Serve private markets, we continue to see evidence of the value we create for our customers. We saw strong and stable retention rates in the first quarter with year over year improvements in commodity insights and several products in other divisions as expected and previously discussed retention rates and mobility have declined modestly as automotive.

And we also expanded our lead in a I with 10 show releasing two more commercially available products built on our proprietary AI and machine learning platforms will discuss these important highlights in more detail in a moment.

Inventory levels and volumes start to normalize. We also saw some modest lengthening of the sales cycle in certain parts of the business in the first quarter as some enterprise customers, particularly in financial services are understandably focused on margin protection and managing their own expenses. This is a continuation of what we saw in the back half of last year.

One of the key messages from our Investor Day less December was the introduction of the five pillars and drive our strategy of power in global markets. Beginning this quarter will be discussing our results using that same framework. We use these pillars as a lens to inform our decisions on capital allocation and organic investments that impact our people our customers and the communities.

As I've met with customers over the last few months, including large automotive Oems retail companies asset managers banks and others. The recurring theme is that they want to do more with us theres, a large opportunity to raise awareness of the breadth of our product offerings and customers have been consistently impressed by the products we have.

In which we live and work.

First I want to start with our customers delivering value to our customers drives every decision we make it SMP global we constantly hear from our customers that they're focused on the same things. We are during the first quarter in almost every customer conversation I had we discussed energy transition and sustainability as well as our products.

Introduce to them that should ultimately improve customer value and our results. We also look to create quality of life improvements in those customer relationships and our teams have done an excellent job of helping customers migrate to enterprise contracts.

Serve private markets, we continued to see evidence of the value we create for our customers. We saw strong and stable retention rates in the first quarter with year over year improvements in commodity insights and silver products and other divisions as expected and previously discussed retention rates and mobility have declined modestly as automotive.

Migration reduces contract complexity for our customers and enhances the overall customer experience in a meaningful way.

Turning to our ratings customers during the first quarter global build issuance in aggregate decreased 7% year over year, while we saw strong sequential improvement from issuance levels last quarter. The uncertainty in the banking sector that emerged in March muted the impact to build issuance for the whole quarter.

Inventory levels in volume start to normalize. We also saw some modest linked any of the sales cycle in certain parts of the business in the first quarter as some enterprise customers, particularly in financial services are understandably focused on margin protection and managing their own expenses. This is a continuation of what we saw in the back half of last year.

We financed activity was strong in the first quarter, particularly in high yield and bank loans. The opportunistic issuance remained muted we're pleased to build issuance for investment grade increased in the first quarter, though this was largely due to a few very large deals.

As I've met with customers over the last few months, including large automotive oem's retail companies asset managers banks and others. The recurring theme is that they want to do more with us there's a large opportunity to raise awareness of the breath of our product offerings and customers had been consistently impressed by the products we've.

We're also pleased with the strength we saw in <unk> in the first quarter. The decision we made last year to preserve capacity and maintain the strength of our analytical organization is already proving to be the right call as our growth in <unk> was particularly strong.

Introduced to them that should ultimately improve customer value and our results. We also look to create quality of life improvements in those customer relationships and our C. I teams have done an excellent job of helping customers migrate to enterprise contracts that migration reduces contract complexity for our customers and enhances the overall customer <unk>.

Next I'd like to focus on our strategic priority to grow and innovate. So far this year, we've launched several new products and an example of our product synergies teams from platts in IHS Markit work together to integrate the <unk> forward curve into a real time analytics platform energy studio impact we previewed this innovate.

Periods in a meaningful way.

Turning to our ratings customers during the first quarter global build issuance in aggregate decreased 7% year over year, while we saw strong sequential improvement from issuance levels last quarter. The uncertainty in the banking sector that emerged demarche muted the impact to build issuance for the whole quarter.

<unk> at our Investor day, which provides clients with the most comprehensive and valuable data and insights in the industry, while strengthening our customer value proposition and competitive differentiation.

So far this year, we've also introduced new price assessments for black mess in Europe , and Asia and for our PBT in India to improve transparency and pricing of battery raw materials and recycled plastics.

Refinancing activity was strong in the first quarter, particularly in high yield and bank loans. So opportunistic issuance remains muted we're pleased to build issuance for investment grade increased in the first quarter, though this was largely due to a few very large deals.

We remain focused and disciplined in our M&A completing the acquisitions of true site and charter Q within market intelligence and market skin within mobility. These tuck in acquisitions strengthen our current offerings that we expect even this type of M&A activity to be rare for the rest of the year.

We're also pleased with the strength we saw on C. L O as in the first quarter. The decision we made last year to preserve capacity and maintain the strength of our analytical organization is already proving to be the right call is our growth and Clo's was particularly strong.

As discussed at Investor Day, we're introducing our vitality revenue metric, which consists of revenue derived from new or substantially enhanced products. We're pleased that in the first quarter vitality revenue constituted 11% of total revenue consistent with our goal of maintaining a vitality index at or above 10%.

Next I'd like to focus on a strategic priority to grow and innovate. So far this year, we've launched several new products and an example of our product synergies teams from plants in Hs market work together to integrate the plots forward curve into a real time analytics platform energy studio impact we previewed this innovation.

Much of this growth will be enabled by enhancements to our own data and technology capabilities as we optimize our technology spend to accelerate the pace of innovation, we're thrilled with the progress made in the first quarter.

<unk> at our Investor day, which provides clients with the most comprehensive and valuable data and insights in the industry will strengthen your customer value proposition and competitive differentiation.

As we disclosed in February we announced a strategic partnership with Amazon AWS to collaborate in product development and joint go to market initiatives.

So far this year, we've also introduce new price assessments for black mess in Europe , and Asia and for our P. E T in India to improve transparency and pricing of battery raw materials and recycled plastics.

That partnership allows us to further transition workloads to the cloud and decommission our own data centers three of which we closed just in the first quarter.

We remain focused and disciplined in our M&A completing the acquisitions of true site and charter Q as in market intelligence and market skin within mobility. These tuck in acquisitions strengthen our current offerings that we expect even this type of them any activity to be rare for the rest of the year.

Cross organization teams also worked diligently to complete two software systems integrations to ensure that the combined company is operating on unified platforms in the most efficient way possible initiatives like these allow us to put more resources behind revenue generating innovation as well like the AI powered products that cancer.

As disgusted Investor day, we're introducing our vitality revenue metric, which consists of revenue derived from new or substantially enhanced products. We're pleased that in the first quarter vitality revenue constituted 11% of total revenue consistent with our goal of maintaining a vitality and texts at or above 10%.

Has been developing for five years.

There is excitement in the field of artificial intelligence and we're extending our leadership in focusing on innovation that will benefit our customers and increase the value of our products.

Much of this growth will be enabled by enhancements to our own data and technology capabilities as we optimize our technology spin to accelerate the pace of innovation, we're thrilled with the progress made in the first quarter as.

With the commercial launch of two new products in the first quarter. There were five <unk> branded AI powered products commercially available today on the S&P global marketplace. We're very excited about the developments in this field and we will discuss our own launches in more detail in the coming months.

As we disclosed in February we announced a strategic partnership with Amazon AWS to collaborate in product development and joint go to market initiatives.

Shifting now to how we lead and inspire our people customers and communities.

In the first quarter, we launched the ninth iteration of our people first initiative and made investments to expand resources for continuous learning leadership development and Upskilling through our central Tech programs. These investments in our people help us attract retain and develop incredibly talented people, which ultimately leads to better finance.

That partnership allows us to further transition work close to the cloud and decommission our own data centers [noise] three of which we closed just in the first quarter <unk>.

Crossed organization teams also worked diligently to complete two software systems integrations to ensure that the combined company is operating on unified platforms and the most efficient way possible initiatives like these allow us to put more resources behind revenue generating innovation as well like the AI powered products that can show has been.

Results for our shareholders too.

We also continue to lead and inspire the industries, we serve as we power global markets in the first quarter. We published the inaugural look forward report, which outlines the expectations of our economist analysts researchers and data experts. This report is a product of our research Council at S&P Global which was formed last year to help.

Developing for five years.

There is excitement in the field of artificial intelligence, and we're extending our leadership and focusing on innovation they'll benefit our customers and increase the value of our products with.

Look beyond the near term and explore the trends that will shape our collective future.

With the commercial launch of two new products in the first quarter. There are five can show branded a I powered products commercially available today on the S and P. Global marketplace. We're very excited about the developments in this field and will discuss our own lunches in more detail in the coming months.

Lastly, as I mentioned earlier, we hosted Cera week in Houston, Texas in March This conference brought together over 8000 leaders in the energy industry, who participated in over 650 events to help tackle global issues like energy security energy transition and sustainability as well as how to navigate the turbulent times in the <unk>.

[noise] shifting now to how we lead and inspire our people customers in communities.

In the first quarter, we launched the ninth iteration of our people first initiative and made investments to expand resources for continuous learning leadership development and Upskilling through our essential Tech programs. These investments that are people help us attract retain and develop incredibly talented people, which ultimately leads to better finish.

Modesty markets today.

Now looking across the company, we're pleased with the strong execution of all our divisions this quarter.

We continue to see the impact of the issuance environment in our ratings Division. We're also seeing signs of revenue stabilization as we begin to lap the challenging issuance conditions that began during the first quarter last year.

Entry salts for shareholders too.

We also continued to lead and inspire the industries, we serve as we power global markets in the first quarter. We publish the inaugural look forward report, which outlines the expectations of our economists analysts researchers and data experts. This report is a product of our research Council. It S&P global which is formed last year to help.

We saw positive revenue growth in all of our other divisions in the first quarter and continue to balance expense managed with strategic organic investment to make sure we're well positioned to accelerate our revenue growth over the next few years expenses can of course be seasonal. So we look at the margins on a trailing 12 month basis, and we expect these figures to <unk>.

US look beyond the near term and explore the trends that will shape our collective future.

Prove as we progressed through the year.

As we look through the remainder of the year I'd like to touch on some of the factors influencing our company's performance.

Lastly, as I mentioned earlier, we hosted Sarah week in Houston, Texas in March. This conference brought together over 8000 leaders in the energy industry, who participated in over 650 events to help tackle global issues like energy security energy transition and sustainability as well as how to navigate the turbulent times in the <unk>.

We continue to expect a mild recession. This year, though the timing is more likely a few months later relative to our initial expectations. We also expect to see volatility in various markets, including equities credit and commodities, we see no change to the secular trends shaping the future opportunities for us like the shift from active to <unk>.

Commodity markets today.

[noise] now looking across the company, we're pleased with the strong execution of all our divisions this quarter.

<unk> asset management and energy transition.

While these market expectations are mostly unchanged from February we wanted to highlight the potential impact in the banking market.

While we continue to see the impact of the issuance environment or ratings Division. We're also seeing signs of revenue stabilization as we begin to lap the challenging issuance conditions that began during the first quarter last year.

As we're all aware the events around regional banks in the U S and a major Swiss bank added uncertainty to the markets in March we.

We saw positive revenue growth in all of our other divisions in the first quarter and continued to balance expense manage with strategic organic investment to make sure we're well positioned to accelerate our revenue growth over the next few years expenses can of course be seasonal. So we look at the margins on a trailing 12 month basis, and we expect these figures too.

We do not have material direct exposure to the impacted regional banks and we do not expect the events in that end market to materially increase the risk to our financial guidance in 2023 or to the medium term targets, we laid out at Investor day.

We do see slightly elevated risk of default rates impacting the broader credit markets, particularly in high yield which will also inform our updated issuance outlook.

Improve as we progress through the year.

As we look through the remainder of the year I'd like to touch on some of the factors influencing our company's performance.

Our ratings financial results and guidance are closely tied to build issuance and for 2023, we now expect build issuance to be up approximately 3% to 7% for the full year.

We continue to expect a mild recession. This year, though the timing is more likely a few months later relative to our initial expectations. We also expect to see volatility in various markets, including equities credit and commodities, we see no change to the secular trends shaping the future opportunities for us like the shift from active to.

Our latest ratings research group forecast calls for a decline in global market issuance as a reminder, market issuance can differ materially from build issuance as we've described in recent quarters with much of the Delta This year driven by declines in unrated debt and sovereign and international public finance, which don't impact build issuance.

Passive asset management and energy transition.

While these market expectations are mostly unchanged from February we wanted to highlight the potential impact in the banking market.

And now I'd like to turn the call over to <unk> Steenbergen, who is going to provide additional insights into our financial performance and outlook <unk> out. Thanks.

As we're all aware the events around regional banks in the U S and a major Swiss bank added uncertainty to the markets in March.

Thank you Doug as a reminder, the financial metrics that we will be discussing today refer to non-GAAP adjusted metrics for the current period and for our 2023 adjusted guidance and non-GAAP pro forma adjusted metrics in the year ago period, unless explicitly called out as GAAP.

We do not have material direct exposure to the impacted regional banks and we do not expect the events in that and market to materially increase the risk to our financial guidance and 20 twenty-three or to the medium term targets, we laid out an investor day.

We do see slightly elevated risk of default rates impacting the broader credit markets, particularly in high yield, which will also and former updated issuance outlook.

For the first quarter of 2023 adjusted earnings per share increased 9% year over year. This growth was driven by a combination of 3% revenue growth 100 basis points of operating margin expansion and an 8% reduction in the fully diluted share count. This is an excellent example of strong execution and prudent capital.

Our ratings financial results and guidance are closely tied to build issuance and for 2023, we now expect build issuance to be up approximately 3% to 7% for the full year.

Our latest readings research group forecast calls for decline in global market issuance as a reminder, market issuance can differ materially from build issuance as we've described in recent quarters with much of the Delta This year driven by declines in unrated dead and sovereign an international public finance, which don't impact build issuance.

Management, combining to create long term shareholder value and we're pleased with the start to 2023.

Revenue growth in the quarter was driven by growth in market intelligence and strong performance in commodity insights and mobility. This was offset by a lower issuance environment compared to the first quarter of last year. The issuance improved sequentially from the fourth quarter, we will walk through the deficient in more detail in a moment.

And now I'd like to turn the call over to Eva Steenburgen, who's going to provide additional insights into our financial performance and outlook as out.

<unk> expenses were up only 1% year over year, driven by cost synergies and other operational efficiencies adjusted operating profit increased 5% year over year as margins expanded to 46, 2%.

Thank you Duck as a reminder to financial metrics that we will be discussing today [noise] refer to non-GAAP adjusted metrics for the current period and four hour 20, twenty-three adjusted guidance and non got pro forma adjusted metrics in the year ago period, unless explicitly cold out Scott.

I am pleased to report a sustainability and energy transition revenue increase of 27% to $69 million in the quarter driven by strong demand in sustainability products in this climate and physical risk products and <unk> energy transition products.

For the first quarter of 2023 adjusted earnings per share increased 9% year over year. This growth was driven by a combination of 3% revenue growth 100 basis points of operating margin expansion and an 8% reduction in the fully diluted share count. This is an excellent example of strong execution and prudent capital.

Private market solutions revenue remained at the $100 million level as growth in products from market intelligence were offset by declines in ratings due to the timing of private market issuance, we still expect growth in private markets. This year to be in line with the targets laid out at Investor day by.

Management, combining to create long term shareholder value and we're pleased with the starched 220 23.

Revenue growth and a quarter was strafing by growth in market intelligence and strong performance Incommodity insights and mobility. This was offset by a lower issuance environment compared to the first quarter of last year. The issuance improved sequentially from the fourth quarter will walk through the deficient in more detail in a moment adjust that expensive for.

<unk> revenue, which is revenue generated by innovation through new or enhanced products from across the organization was $326 million in the first quarter, representing a 17% increase compared to prior year.

Synergies are a key contributor to expense savings and margin expansion this quarter and the first quarter of 2023, we recognized $131 million of expense savings due to cost synergies and our annualized run rate exiting the quarter was $552 million and we continue to expect our year end.

Only 1% year over year, driven by cost synergies and other operational efficiencies adjusted operating profit increased 5% year over here is margins expand it to 46.2%.

I'm pleased to report a sustainability and energy transition revenue increase of 27% to $69 million in the quarter driven by strong demand in sustainability products and M ice climate in physical risk products and see ice energy transition products.

Run rates to be approximately $600 million.

We continue to make progress on our revenue synergies as well with $17 million in synergies achieved in the first quarter and an annualized run rate of $52 million.

Private market solutions revenue remained at the 100 million dollar level is growth and products from marched intelligence or offset by declines in ratings due to the timing of private market issuance, we still expect growth in private markets. This year [noise] to be in line with the targets laid out at Investor Day Bye.

Turning to strategic capital allocation, we remain committed to disciplined capital management, including investing for long term growth and returning excess capital to shareholders. We executed a $500 million accelerated share repurchase program or ASR in the first quarter and we plan to launch a new $1 billion ASR.

<unk> revenue, which is still revenue generated by innovation, so new or enhance products from across the organization was $326 million in the first quarter, representing a 17% increase compared to prior year.

In the coming weeks leveraging the proceeds of the engineering solutions divestiture and a cash on hand.

We have been able to take advantage of market dislocations over the last year to repurchase shares at attractive prices, which allowed us to reduce our fully diluted share count by 8% over that time period.

Synergies are a key contributor to expense savings and margin expansion discord or in the first quarter of 2023, we recognized $131 million of expense savings due to cost synergies and hour and your last run rate exiting the quarter was $552 million and we continue to expect our <unk>.

Since the close of the merger last year, we have been able to repurchase more than 31% of the shares issued to complete the merger with IHS Markit.

We continue to invest in organic growth as well and remain on track to invest $150 million and our 2023 strategic projects.

Year ends run rates to be approximately $600 million, who continue to make progress on our revenue synergies as well with $17 million in synergies achieved in the first quarter and your life's run rate of $52 million.

Now, let's turn to the deficient results market intelligence revenue increased 5% driven by strong growth in data and advisory solutions and credit and risk solutions and favorable commercial conditions overall.

Turning to strategic capital allocation, we remain committed to disciplines capital management, including investing for long term growth and returning excess capital to shareholders were executed a 500 million dollar accelerated share repurchase program or ASR in the first quarter and we plan to launch a new 1 billion dollar ASR.

Desktop grew three 5% in the first quarter driven in part by strong demand for new content and capabilities supported by the merger DAU growth was tempered somewhat by a continuation of the modest softness in financial surfaces that we called out last quarter renewal rates remained strong in the mid to high <unk>.

In the coming weeks leveraging the proceeds of the engineering solutions divestiture and cash on hand, we.

Data and advisory solutions and enterprise solutions, both benefited from solid growth and subscription based offerings.

We have been able to take advantage of market dislocations over the last year to repurchase shares yet attractive prices, which allows us to reduce our full it diluted sharp gunk by 8% over that time period.

Credit and risk solutions benefited from strong new sales for ratings express and ratings direct products.

Since the close of the merger last year, we have been able to repurchase more than 31% of the shares issued to complete the merger with IHS market.

Adjusted expenses were roughly flat year over year as increases in compensation expense cloud spend and <unk> were offset by cost synergies and lower occupancy cost.

We continue to invest in organic growth as well and remain on track to invest $150 million an hour 20 twenty-three strategic projects.

Operating profit increased 16% and operating margin increased 300 basis points to 32%.

Looking at the remainder of 2023, we know the comparisons will get easier as we progress through the year and we continue to expect improvements in dose products within enterprise solutions that depend on capital markets activity. We also expect revenue synergies to begin positively impacting results in the back half of the year, we continued to Rex.

Now, let's turn to the deficient results market intelligence revenue increased 5% driven by strong growth and data and advisory solutions and credit and wish solutions and favorable commercial conditions overall.

Best approved 3.5% in the first quarter driven in part by strong demand for new content and capabilities supported by them merger dull growth was tempered somewhat by a continuation of the Mulder softness and financial surfaces that we called out last quarter renewal rates remains strong in the midst too high nineties.

Nice significant cost synergies as well and we remain confident in our ability to deliver accelerating growth in full year margin expansion and market intelligence. While we are not changing the formal guidance ranges for revenue or adjusted operating margin, we do see increased uncertainty in the markets and within the banking sector specifically.

Data and advisory solutions and enterprise solutions, both benefited from solid growth and subscription based offerings.

As such we May come in closer to the low end of these ranges.

Credit and resolutions benefited from stroke, new sales for ratings express and ratings direct products.

Now turning to ratings, despite being down year over year. We're encouraged by the improvements we have seen in the issuance environment relative to last quarter revenue decreased 5% year over year. However, this is the second quarter in a row of sequential improvement in transaction revenue as investment grade and high yield show pockets of stress.

Adjust that expensive for roughly flat year over year is increasing compensation expense cloud spent in tea and eat or offset that cost synergies lower occupancy cost.

Parading profits increased 16%, an operating margin increased 300 basis points to 32%.

<unk> in the quarter, particularly in January and February non transaction revenue declined, 4% and 2% on a constant currency basis, primarily due to declines in initial issuer credit rating and rating evaluation service, partially offset by growth in crystal.

Looking at the remainder of 2023, we know the comparisons will get easier as we progress through the year and we continue to expect improvements in dos products with an enterprise solutions that depends on capital markets activity. We also expect revenue synergies to begin positively impacting results in the back half of the year, we continued to record.

Adjusted expenses decreased 3% driven by lower occupancy costs and outside services expenses, partially offset by higher compensation expense. This resulted in a 6% decrease in operating profit and an 80 basis points decrease in operating margin to 58, 3%.

Nice significant cost synergies as well [noise] and remain confident in our ability to deliver accelerating growth and full year margin expansion and market intelligence. While we are not changing to formal guidance ranges for revenue or adjusted operating margin, we do see increase uncertainty in the markets and within the banking sector specifically.

We raised our build issuance assumption for 2023 and expect issuance to increase in the range of 3% to 7%, reflecting the stronger issuance trends in the first quarter, we expect to see an improvement in full year transaction revenues compared to our initial expectations, though we expect upside to be offset by slightly.

<unk> Ah such we may come in closer to the low end of these ranges.

Now turning to ratings, despite being down year over year. We're encouraged by the improvements we have seen in the issuance environment relative to last quarter revenue decreased 5% year over year, However, dishes to second quarter in a row of sequential improvement in transaction revenue is investment grade and high yield shirt pockets of string.

Lower contribution from non transaction due to ICR and ARIA E S headwinds.

And now turning to commodity insights revenue growth accelerated to 9%. Despite a very high comparison last year, excluding the impact of the Cerro week conference revenue growth for commodity insights would have been approximately 6% year over year.

<unk> in the quarter [noise], particularly in January and February known transaction revenue declined, 4% and 2% on a constant currency basis, primarily due to declines in initial issue or credit rating and raping evaluation surface [noise], partially offset by growth in crystal.

Growth was partially offset by the loss of revenue related to Russia, which contributed $11 million into first quarter of 2022.

Adjusted expenses decreased three per cent duration by lower occupancy cost an outside surfaces expenses, partially offset by higher compensation expense. This resulted in a 6% decrease in operating profit and and 80 basis points decrease in operating margin to 58.3%.

Advisory and transactional surfaces increased 28% in the quarter, primarily due to Cerro week. If we saw record attendance coupled with strong sponsorship sales upstream data and insights declined approximately 1% year over year subscription growth was offset by reduced onetime sales relative to last year as we know.

We raced hour built issuance assumption for 2023 and expect issuance to increase in the range of 3% to 7%, reflecting the stronger issuance strengths in the first quarter, we expect to see an improvement in full year transaction revenues compared to our initial expectations do we expect the upside to be offset by slightly.

That last quarter, we continue to expect low single digit revenue growth in upstream for the full year.

Assessments in energy resources data and insights both grew 8% compared to prior year driven by strong performance in crude oil products and continued commercial momentum.

Lower contribution from known transaction [noise] due to ICR and R. E S headwinds.

Adjusted expenses increased 3%, primarily due to higher defense costs, driven by conferences, T&D and compensation, partially offset by realization of cost synergies and lower consulting spend excluding the impact of <unk> expense growth would have been only 1% operating profit for Ci increased.

And now turn into commodity insights revenue growth accelerated to 9%. Despite a very high comparison last year, excluding the impact of the Sarah week conference revenue growth for commodity insights would have been approximately 6% year over year.

Growth was partially offset by the loss of revenue related to Russia, which contributed $11 million in the first quarter of 2022.

A very strong 17% and operating margin improved 310 basis points to 46, 1% we.

Advisory and transactional surfaces increased 28% in the quarter [noise], primarily due to Sarah week official record attendance, coupled with strong sponsorship sales upstream data and insights declined approximately 1% year over year [noise], a subscription growth was offset by reduced one time sales relative to last year as we <unk>.

We expect commodity insights to continue to benefit from strong demand and price assessments and other subscription offerings as well as the continuation of secular trends around energy transition and sustainability as we saw from the incredible growth at Cera week, there remains a remarkable opportunity to further our leadership in the energy sector.

Note that last quarter, we continued to expect low single digit revenue growth and upstream for the full year.

And in commodities more broadly and we will continue to invest to capture that opportunity and drive multi year profitable growth.

Price assessments and energy resources data and insights both grew 8% compared to prior year driven by strong performance in crude oil products and continued commercial momentum.

In our mobility deficient revenue increased 10% year over year, driven by continued new business growth in car fix strong recall activity and growth within planning solutions products. The markets again acquisition contributed approximately one point of revenue growth in the quarter and is recognized in the dealer category dealer revenue.

Justin expenses increased 3% [noise], primarily due to hire a fence costs driven by conferences teenie and compensation, partially offset by realization of cost synergies and lower consulting spent excluding the impact of Sarah week expense growth would have been only 1%.

<unk>, 10% year over year, driven by price increases and new store growth, particularly in car fixed for life and used car subscription products.

Operating profit foresee I increased a very strong 17% an operating margin improved three on the 10 10 basis points to 46.1%.

Factoring grew 11% year over year, driven by our planning products and recall activity.

<unk> financials and other also increased 11% as the business line continues to benefit from strong underwriting volumes and a favorable pricing environment.

We expect a commodity insights to continue to benefit from strong demand and price assessments and other subscription offerings as well as the continuation of circle of trent's around energy transition and sustainability as we saw from the incredible growth at Sarah week, there remains and remarkable opportunity to further our leadership in the energy sector.

Adjusted expenses increased 8% due to a year over year increases in head count investments in software and additional cloud usage, partially offset by lower incentive compensation expense. This resulted in a 14% increase in adjusted operating profit and 130 basis points operating margin expansion.

[noise] any commodities more broadly and we will continue to invest to capture that opportunity and drive multi year profitable growth.

Year over year.

In our mobility deficient revenue increased 10% year over year, driven by continued to new business growth and car fixed strong recall activity and growth within planning solutions products that markets can acquisition contributed approximately one point of revenue growth in the quarter and is recognized in the dealer category dealer revenue incur.

As we expected we've seen expense growth rates moderate from fourth quarter, and we continue to expect margin expansion. This year, we expect a market scan acquisition to contribute approximately 150 basis points of revenue growth in the full year, though we expect it to be modestly dilutive to adjusted margins in 2023.

<unk>, 10% year over year, [noise], driven by price increases and new store growth, particularly in car fixed for life and used car subscription products manufacturing grew 11% year over year, [noise], driven by our planning products and recall activity.

All of this is reflected in our updated guidance.

Turning to S&P Dow Jones indices revenue increased 1%, primarily due to strong growth in exchange traded derivative volumes offset by declines in asset linked fees.

[noise] financials and other also increased 11% is to business line continues to benefit from strong underwriting volumes and a favorable pricing environment.

Asset linked fees were down 6%, primarily driven by lower AUM in Etfs, which decreased 4% from the year ago period as price depreciation more than offset slightly positive year over year net inflows extra.

Adjusted expenses increased 8% due to a year over year increases in headcount investment in software and additional clouds usage, partially offset by lower incentive compensation expense. This resulted in a 14% increase and adjusted operating profits and 130 basis points operating margin expansion.

Exchange traded derivatives revenue increased 30% on increased trading volumes across key contracts, including an approximately 59% increase in S&P 500 index options volume.

Data and custom subscriptions was flat on the quarter, excluding the impact of some minor reclassification of revenue as outlined on the slides growth would have been 5% year over year, driven by strong demand for end of day and real time data feeds.

Year over year.

As we expect it [noise], we've seen expense growth rates moderate from fourth quarter and we continue to expect margin expansion. This year, we expect a market skin acquisition to contribute approximately 150 basis points of revenue growth in the full year [noise], though we expect it to be modestly dilutive to adjusted margins in 2023.

During the quarter expenses decreased 7% year over year, driven by realization of cost synergies lower bad debt expense and timing of discretionary spend which was partially offset by continued strategic investments operating profit in indices increased 4% and operating margin improved 250 <unk>.

All of this is reflected in our updated guidance.

Turning to SLP Dow Jones indices revenue increased 1%, primarily due to strong growth in exchange traded to refer to <unk> offset by declines in essence link fees.

This points to 71, 8%.

I said link fees were down 6%, primarily driven by lower a U N N E T S, which decreased 4% from the year ago period, a surprise depreciation more than offsets slightly positive year over year net inflows X.

As reflected in today's results indices will continue to face headwinds in asset linked fees as the year over year, depreciation and underlying asset prices impacts to deficient on a lagged basis exchange traded derivative revenue was well above our earlier expectations dose these volumes can be volatile and difficult to predict.

Exchange traded Terefah tapes revenue increased 30% on increase trading folium across key contracts, including and approximately 59 per cent increase in S. M. P 500 index options for Ya.

We continue to invest to achieve the 2025 and 2026 targets for 10% plus growth in indices, and we expect those investments as well as the timing of certain expenses to drive margins for the full year back within the guidance range.

In engineering solutions, we saw 2% revenue growth and 4% adjusted expense growth as noted in our materials. We now expect to close the divestiture of engineering solutions next week, we're updating our guidance to reflect the accelerated timeline relative to our initial expectation for June 30 close.

During the corridor expenses decreased 7% year over year, driven by realization of cost synergies lower bed that expense and timing of discretionary spent which was partially offset by continued strategic investments.

Parading profit and indices increased 4% [noise], an operating margin improved 250 basis points to 71.8%.

I've had the pleasure of overseeing the engineering solutions division since the merger closed and I would like to thank them for the incredible dedication and professionalism that teams have consistently demonstrated we're confident that there will be a strong addition to KKR and wish them all the best.

Reflected in today's results in this this will continue to face headwinds in essence linked fees [noise] S. A year over year depreciation and underlying asset prices impacts to deficient on elect basis exchange traded survey furtive revenue was well above hour early expectations [noise] those dis volumes can be full of tell and difficult to predict.

Now, let's move to the latest views from our economists who are forecasting global GDP growth of two 7% in 2023, while GDP growth is expected to be positive our guidance still assumes a mild recession in the middle of the year and a modest recovery as we exit 2023, we continue to expect.

We continued to invest to achieve to 2025, and 2026 targets for 10% plus growth and indices and we expect dose investments as well as the timing of certain expenses to drive margins for the full year [noise] Beck within the guidance range.

Inflation above the target rates of central banks and energy prices like crude oil to remain above the historical effortless as well this creates favorable commercial conditions for many of our businesses, though it also contributes to volatility in the issuance environment as we have been discussing over the last year.

And engineering solutions, we shall 2% revenue growth at 4% adjusted expense growth as noted in our materials. We now expect to close the deficit you're of engineering solutions next week, we're updating our guidance to reflect the accelerated timeline relative to our initial expectation for June 30 close.

As we consider how all of this will ultimately impact our financial performance in 2023, let's turn to our guidance now that we have some certainty around the timing of the engineering solutions divestiture, we can introduce initial GAAP guidance.

I've had the pleasure of overseeing the engineering solutions division since the merger closed [noise] and it would like to thank them for the incredible dedication and professionalism that teams have consistently demonstrated we're confident that there will be a strong addition to caky R and wished him all the best.

Adjusted guidance for the company reflects the first quarter results as well as the updated view on the macroeconomic environment issuance trends equity valuations and other key drivers as previously outlined our full year guidance now assumes that strong revenue performance in the first quarter is offset by a lower revenue.

Now, let's move to the latest fused from our economists who are forecasting global G. D. P growth of 2.7% in 2023, [noise] well GDP growth is expected to be positive. Our guidance is still assumes a mild recession in the middle of the year and a modest recovery as we exit 2023, we continue to expect.

Contributing from engineering solutions due to the accelerated timing of the divestiture.

The only change to our consolidated full year adjusted guidance is an adjusted free cash flow, which has been reduced by approximately $100 million, primarily driven up by updated assumptions around cash taxes related to the R&D tax credit.

Inflation above the target rates of central banks and energy prices like crude oil to remain a ball state historical effortless as well [noise]. This creates favorable commercial conditions for many of our businesses, though it also contributes to fall until at T. In the issuance environments as we have been discussing over the last year.

We have provided granular guidance on corporate unallocated expense deal related amortization interest income and tax rates in the supplemental deck posted to our IR site. These are unchanged from prior guidance.

As we consider how all of this will ultimately impact our financial performance in 2000 twenty-three, let's turn to our guidance now that we have some certainty around to the timing of the engineering solutions divestiture [noise], we can introduce initial gap guidance.

The final slides in this deck illustrate our revenue and margin guidance by deficient, reflecting the drivers that I mentioned previously.

In conclusion, despite the continued uncertainty in the macro environment. We have had a solid start to 2023 and we remain confident about the outlook for the rest of the year before we open up for Q&A I want to reiterate how excited we are as a management team when we consider the incredible opportunities we have to drive growth in <unk>.

But just that guidance for the company reflects to first quarter results as well as the updated view on the macro economic environment issuance trends equity valuations and other key drivers as previously outlined a full year guidance now assumed that strong revenue performance in the first quarter is offset by a lower revenue <unk>.

Innovation and the secular trends that continue to benefit our business from key investments areas like energy transition in private markets due to inspiring breakthroughs that our commercial team has driven in artificial intelligence and large language models. It's a privilege to discuss the many ways we plan to create long term shareholder value in the.

Interview Shin from Engineering solutions [noise] due to the accelerated timing of the divestiture.

The only change to our consolidated full year adjusted guidance is in adjusted free cash flow, which has been reduced by approximately $100 million [noise], primarily driven up by updated assumptions around cash, Texas related to the R&D tax credits.

Coming years, it's also a privilege to share at this stage with leaders like <unk> got the precedent of commodity insights and Denver Raper CEO of S&P, Dow Jones indices, both of whom we'd like to invite to join us for Q&A.

We have provided granular guidance of corporate and allocated expense do related amortization interest income and tax rates in the supplemental deck bullshit to our I R site [noise] don't dis are unchanged from prior guidance.

And with that we'll turn the call back over to Mark for your questions.

The final slides in this deck illustrate our revenue in margin guidance by deficient reflecting to try first that I mentioned previously.

In conclusion, despite the contingent uncertainty and the macro environment. We have had a solar star to 20 twenty-three Ah remain confident about the outlook for the rest of the year before we open up for Q&A I want to reiterate how excited we are as a management team when we consider the incredible opportunity we have to drive growth in it.

Our first question comes from Manav Patnaik with Barclays. Your line is open.

Good morning, Doug upfront, you mentioned retention rates and the ability were declining modestly I was just hoping you could provide a little bit more color there, perhaps with some numbers but is that.

Innovation and the secular trends that continued to benefit our business from key investments areas like energy transition in private markets duty inspiring breakthroughs that are catch your team has driven in artificial intelligence and large language models [noise], it's a privilege to discuss the many ways we plan to create long term shareholder value in there.

<unk> seen across your segments, just given the uncertain macros out there.

Good morning, Thank you Manav for joining the call. The mobility question you have relates to some of the changes that are happening at a structural level in the mobility and transportation business. If you recall the last couple of years, we saw all of the used cars became a very large sales.

Coming years [noise]. It's also a privilege to share this stage with leaders like she'll got the Asahi precedent of commodity insights in Denver Raper C. O a S. A P. Dow Jones indices, both of whom would like to invite to join us for Q&A.

Sales aspect for the dealers and the automotive manufacturers the Oems were struggling to actually meet demand. So we're seeing a shift away from used cars to new cars, and we actually expect that theres going to be a lot of growth in the sales of automotive our products around the globe this year and where we're seeing some of the slowdown in subscription relates to dealers.

And with that we'll turn the call back over to Mark for your questions.

As dealers don't have necessarily the same margin it might be changing some of their approach to how they are working with.

Our first question comes from.

That night with Barclays. Your line is open.

Sales.

They have so we're seeing that that's one of the areas, where we see some disruption and some retention rates that have started to drop other than that across the board and the rest of the company, we do not see any changes whatsoever to retention rates.

Good morning done upfront you mentioned, you know retention rates and the ability of a declining modestly I was just hoping you could provide a little bit more color there, perhaps a set of numbers but is that.

Got it thank you and just on the meeting guidance.

<unk> across your second is just given you know the uncertain macros okay.

D.

I think you said more transactional revenue, but offset by two items I was just hoping you can elaborate what those offsets.

Good morning, Thank you <unk> for joining the call. The mobility question you have relates to some of the changes that are happening to get a structural level is the ability and transportation business. If you recall the last couple of years. We saw all of the used cars became a very large sales.

Sure Manav good morning, if you look at the.

Mentions with respect to market issuance and build issuance actually we're seeing exactly the opposite of the pattern of 2022. So there are two large categories and market issuance that are down more that are not included in built issue and so this just unrated debt as well as frequent issuer. So frequent issuers we don't.

Sales aspect for the dealers and the automotive manufacturers. The Oem's, we're struggling to actually meet demand. So we're seeing a shift away from used cars to new cars and we actually expect that there's gonna be a lot of growth and the sales of automotive products around the globe. This year and we're we're seeing some of the slowdown in subscription relates to dealers.

Have inbuilt issuance because as you know they are on the fixed.

Fixed fee construction up to a certain level of volume. So therefore, we expect build issuance to be significantly higher than market market issuance for the full year 2023.

[noise] as dealers don't have necessarily the same margin they might be changing some of their approach to how their working with with the sales force. They have so we're seeing that that's one of the areas, where we see some disruption in some retention rates that have started to drop other than that across the board and the rest of the company, we do not see any changes.

Thank you. Our next question comes from Ashish <unk>.

<unk> with RBC capital markets. Your line is open.

Whoever to retention rates.

Got it thank you and <unk> <unk> <unk> <unk>, you know I think he said more transactions revenue, but after that by two items I was just hoping you elaborate pull up those off that's alright.

Thanks for taking my question I just wanted to focus on the individual segment guidance you raised the guidance for commodity insights mobility and indices I understand <unk> is more towards the lower end, but even on the ratings front looks like the build issuance guidance was raised by almost a point <unk> three to seven so.

Sure My not good morning, if you look at the dimensions with respect to market issuance of built issuance actually where she can exactly the opposite of the <unk> 2022. So there are two large categories and market issue. Instead are down more that are not included and built issue and so this is unrelated deaths.

But you reiterated the full year guidance. So I was just wondering within the full year guidance you have increased confidence towards.

On the range any color on that front will be helpful. Thanks.

Yes. Thank you good morning Ashish.

Our overall really confidence around your outlook for the full year. We're very pleased of course with the results in the first quarter and then also the confidence around what we're going to achieve for the full year and you'll see that reflected in the overall guidance that as you have noted is unchanged, but you have to realize that we're taking out two months.

It's spelled as frequent issue are so if we could issue or we don't have in bill to issue and she because she no they're all in the fixed it fixed.

Fixed fee construction up to a certain level of <unk>. So therefore, we actually I built the issuance to be significantly higher than market market issue and for the full year 2023.

Of engineering solutions revenues and earnings So you could say implicitly with slightly raised our full year guidance and then by division as you were asking for the changes are due to the following if you look at commodity insights that is driven really by the outperformance of revenue growth in the first quarter. If you look at mobility.

Thank you. Our next question comes from the <unk>.

<unk> with RBC capital markets. Your line is open.

Thanks for taking my question I just wanted to focus on the individual segment guidance you read the guidance for commodity insights mobility, and and disease I understand M. I is more towards the lower end, but even on the ratings French looks like the bill issuance guidance was at ease by almost a point earlier, let's do the 6327 so.

Loan growth in the first quarter, but also the acquisition of markets. Ken is helping there from a revenue perspective and indices as well what we're seeing there is also a very strong first quarter and that is therefore also reflected in the full year revenue growth outlook in terms of ratings. There is a shift that we have.

But he treated the full your guide and so I was just wondering within the full year guidance do you have increased confidence towards on the range any color on that friends will be helpful. Thanks.

Got you a little bit higher transactional revenue, but a little bit lower non transactional revenue. So net net is still the same but there is a shift in the underlying categories and then with respect to margins mobility has been <unk> down a bit that is the dilutive effect of the acquisition, but on the flip side for the <unk> business, we see it.

Yeah. Thank you good morning Ashish.

We are overall really confident amount your outlook for the full year, we're very police of course with the results of the first quarter and then also the confidence around what we are going to achieve for the full year and you'll see that reflected in the overall guidance that issue have noted is unchanged, but you have to realize that we're taking out two months.

The margins are actually up given the strong performance in the first quarter again with respect to market intelligence. We have set that will come in more at the lower end of the range both for revenues and margins and that has to do more with the macro environment a bit of the uncertainty the effect that we expect some of the capital markets products.

All engineering solutions revenues and burning show you could say implicitly slightly erased our full year guidance and then by division issue are asking for the changes are due to the following if you look at the <unk> insights that destroy some really by the outperformance revenue growth in the first quarter. If you look at mobility.

More to come back later in the year, because now we assume the recession somewhere mid of this year as well as some of the impact of the banking crisis, Although we think that impact will be really minimal for market intelligence.

Strong growth in the first quarter, but also the acquisition of markets can is helping them from a revenue perspective, and <unk> as well what we are seeing there is also a very strong first quarter and it is therefore also reflected in the full year revenue growth outlook in terms of <unk>. There is a shift that we have.

That was very helpful color and maybe as a follow up if I can follow up on the mobility front manufacturing in particular was very strong overall growth in mobility was very strong but manufacturing historically it has been which has been more in the 2% to 4% range was up 11%. This quarter. So I was wondering as any.

Told you a little bit higher transactional revenue, but a little bit lower non transactional revenue. So net net still the same but they're shifting talks to underline categories and then with respect to margins mobility has been tune down a bit that just a dilutive effect of the acquisition, but on the flip side for the industry business wished.

Key desk structure leave it is driving significantly stronger growth in that segment. Thanks.

Thank you Ashish whats driving growth in that segment. If you recall over the last couple of years. There was the supply chains have been disrupted there were no access to different types of chips, which are used in the automotive sector, including even things like key fobs and you also saw a lot of disruption demand from the market as people are looking for cars, but they couldnt get them.

That the margins are actually up given the strong performance in the first quarter again with respect to market intelligence. We upset that we call me more at the lower end of the range of spoke for revenues and margins and that has to do with the macro environment <unk> insurance and T. The fact that we expect some off the capital markets products.

So we're seeing that manufacturing is up in fact, our total vehicle sales globally, we're seeing very strong sales coming up in the U S over about seven.

More to come back later in the year, because now we assume the recession show more myth of this year as well as some of the impact of the banking crisis, Although we think that in fact there'll be really minimal for market intelligence.

5% growth in China of about 6% growth in Asia, including Japan, and South Korea about six 5% growth in in Europe about seven 5% growth so across the board, we see a lot of growth in production as well as <unk>.

That was very helpful color and maybe as a follow up like that can follow up on the mobile a different manufacturing in particular was very strong growth and mobility was very strong, but uhm manufacturing historic leave it should be because being more than the three to four per cent range was up 11%. This quarter. So I was wondering as anything <unk>.

<unk> from a very very depressed base and but at the same time. It puts some pressure because of the demand is starting to decrease as well given the inflation given interest rates are going up. So we see that right. Now there is a lot of demand for information from our mobility team because we provide the forecasting we provide the information about the changes going on in the industry.

<unk> driving significantly stronger growth in that segment. Thanks.

As well as the day to day dynamics, but we're shifting the dynamics from what had been a supply constrained market to a richer approach to more supply in the market and shifts in customer demand, but all of this benefits our mobility business because they provide the data and analytics that dealers and Oems and suppliers need to make decisions.

Yeah. Thank you Ashish, what's driving growth in that segment. If you recall over the last couple of years. There was the supply chains had been disrupted there were no access to different types of chips, which are used in the autumn of automotive sector, including even things like key fobs and you also saw a lot of disruption demand from the market as people were looking for cars, but they couldn't get them.

Thanks, Doug that was really helpful color and congrats on such a strong momentum in the business. Thank you. Thank you.

So we're seeing that manufacturing is up in fact, our total vehicle sales globally, we're seeing very strong sales coming up in the U S. Over about 7.5 per cent growth in China about six per cent growth in Asia, including Japan, and South Korea about 6.5 per cent growth in in Europe about 7.5 per cent growth.

So across the board, we see a lot of growth in production as well as coming from a very very depressed space and but at the same time. It put some pressure because the demand is starting to decrease as well given the inflation given interest rates are going up so we see that right now there's a lot of demand for information for more mobility team because we.

George Tong with Goldman Sachs. Your line is.

Open.

Hi, Thanks, good morning.

I wanted to focus on the rating side of the business. The revenues there declined mid single digits year over year and that came in much better than your main competitor, which saw an 11% decline what are some of the factors that you believe drove this outperformance and delta in the quarter and can these factors persist over the <unk>.

Provide the forecasting we provide the information about the changes going on in the industry as well as the day to day dynamics, but we're shifting the dynamics from what had been a supply constrained market to a richer approach to more supply in the market and and shifts in customer demand, but all of this benefits or mobility business, because they provide the data and analytics.

<unk> of this year.

Thank you George well first of all this was a very lumpy quarter. When you look at the issuance. It started out quite strong of issuance of investment grade has started off strong but through the quarter in the U S declined 14% in Europe . It was increased 3% high yield increased in the U S, 20%, but a decrease.

<unk> that dealers and O M. Since the players need to make decisions.

Thanks, Doug that it was very helpful color and congrats on such a strong momentum into business. Thank you. Thank you.

In Europe , 2% and structured finance.

In the U S decreased 48% and in Europe . It increased 7%. So this was incredibly lumpy quarter for us, but we've been very adamant about having our salespeople and our commercial people out in the markets, we keep our finger to the pulse of what's happening across the markets we've been in.

George tongue with Goldman Sachs yelling.

Okay.

Evolved in supplying information for the structured credit an area in particular CLO, we've been strong in the CLO market in the last quarter, we see going forward, we think that for the rest of the year that it's going to be mostly refinancing thats going to drive what we see as the issuance. If you take a step back in last quarter.

Alright, thanks, good morning.

I wanted to focus on the reading side of the business. The revenues their declined mid single digits year over year and and that came in much better than your main competitor, which saw an 11% decline what are some other factors that you believe drove this outperformance in belt in the quarter and can these factors <unk> over there.

We showed a slide which we show once a year, which is the pipeline of refinancing which is on the balance sheet of of companies financial institutions and other organizations over the next five to 10 years and you can see there was a lot of financing that took place over the last 10 years with typically five seven sometimes up to 10 year maturity that's starting to.

Remainder of this year.

Thank you George well first of all this was a very lumpy quarter. When you look at the issuance. It started out quite strong of issuance investment grade had started off strong, but ah through the quarter in the U S. A declined 14% in Europe increased 3% a high yield increase in the U S 20 per cent, but a.

Mature now and we're starting to see some of that pull forward and the question is what are the right conditions for people to come back to the market and that's something we're watching very closely because there is a very very large pipeline of refinancing thats going to be coming over the next three to five years, and we're going to watch that carefully including what's going to be coming this year.

Eastern Europe , two per cent and structured finance in the U S decreased 48% and in Europe . It increased seven per cent. So this was an incredibly lumpy quarter for us, but we've been very adamant about having our salespeople in our commercial people out in the markets, we keep our fingers to the pulse of what's happening across the markets.

Got it that's helpful. And then wanted to ask about your synergy realization.

We've been <unk>.

Vault in supplying information for the structured credit an area in particular <unk>, we've been strong in the CLO market in the last quarter, we see going forward, we think that for the rest of the year that it's gonna be mostly refinancing that's gonna drive what we see is the issuance if you take a step back and and last quarter.

Realized run rate synergies on the cost side, a little over $550 million and then 50 million parts on the revenue side can you dive into where you're seeing most traction with revenue and cost synergy realization and how you expect the progression to continue over the course of this year.

Of course, George Thank you so much and good morning.

We should've slide, which we show once a year, which is the pipeline of refinancing which is on the balance sheet of a company's financial institutions and other organizations over the next five to 10 years and you can see there was a lot of financing that took place over the last 10 years would typically five seven and sometimes up to 10 year maturity that's starting to.

Of course, very pleased with the progress we're making with synergies. This is really a statement of execution of the whole team of the whole company and the speed of implementation of all of our programs is really impressive from my perspective. So we are at $550 million run rate cost synergies at this moment. These are cost synergies we're doing.

Mature now and we're starting to see some of that pull forward and the question is what are the right conditions for people to come back to the market and that's something we're watching very closely because there was a very very large pipeline Ah refinancing that's gonna be coming over the next three to five years, and we're gonna watch that carefully including what's gonna be coming this year.

And all the categories that we have outlined before theres of course organizational and.

Implication of roles that were taking care off then theres real estate consolidation vendor consolidation and several other categories. This is all linked to integration. So we like to get the integration behind us as quickly as possible and that we can fully operate as a combined company going forward and we're very close to that point now.

[laughter].

Got it that's helpful. And then wanted to ask about your cinergy realisation realized run rate synergies on the cough at a little over 550 million and then 50 million plus on the revenue side can you dive into where you're seeing most traction with revenue o'clock for energy realisation and how you expect the.

And that is expressed by the progress we have made with cost synergies and getting really now not too far away anymore from the 600 million cost synergy Mark. So this is all across the company with respect to revenue synergies, we see very nice progress in the divisions the largest growth there we see in market intelligence and commodity insights, but contra.

Progression to continue over the course of this year.

Alright of course, George Thank you so much and good. Good morning, we are of course very pleased with the progress, we're making with synergies dishes really a statement of execution of the whole team of the whole company and the speed of the implementation of all of our programs is really impressive from my perspective. So we are it's 500.

<unk> by all of the divisions, we have always said from the beginning that revenue synergies will take more time at this moment. The focus is mostly on cross sell and then later this year in the next few years, we will shift to new product development, but obviously the lead time to develop new products into the system enhancements that will take a bit.

And 50 million run rate <unk> at this moment. These are cost synergies we're doing in all the categories definitely if the outline before there's of course organizational and duplication of roles that were taken care of then there's real estate consolidation Fender consolidation and several other categories. This is all linked to.

It won't take longer both both on cost and revenue synergies. We're very pleased where we are at this moment.

Thanks, George Thank you.

Thank you. Our next question comes from Toni Kaplan with Morgan Stanley . Your line is open.

Thanks, So much I wanted to talk about ESG first thanks for the quarterly disclosure.

Integration, so we'd like to get the integration behind us as quickly as possible and that we can fully operate as a combined company going forward and we are very close to that point now and that is expressed by the progress we have made with <unk> and getting really now not too far away any more from the 600 million also energy Mark.

We have seen some slowdown in new sales from a competitor of yours.

Talking about the political and regulatory landscape have you also noticed any change in investor behavior.

This is all across the company with respect to revenue synergies Rishi very nice progress into Deficience. The largest growth. They are we see in market intelligence and come up with the insights bit contributions by all of the decisions. We have always said from the beginning that revenue synergies will take more time at this moment to focus is mostly on the <unk>.

And ESG, particularly in the new sales any areas that are slower versus more resilient because I know, it's sort of a topic that spans your whole business. So maybe there are some areas that are doing fine and resilient versus others that may be you are noticing a new sales change.

<unk> and then later this year in the next few years, who will shift to a new product development, but obviously the lead time to develop new products into the system and it has been for that will take a bit longer both both on cost and revenue <unk> very pleased wherever you are at this moment.

Thank you Tony I'm going to start and then hand, it over to Eva out if you take a step back and you think about something like the ESG sustainability climate markets.

They go back the last 567 years and if you look at our company. We have products that go back $50 65 to 100 years and the experience of a market like this it's really changing rapidly and fortunately because of our sustainable one organization and the way that we've been investing in sustainability products energy.

Thanks, George Thank you.

Thank you. Our next question comes from Tony Caplin with Morgan Stanley . Your line is open.

Thanks, So much I wanted to talk about E. S. T. First thanks for that quarterly disclosure, we have seen some slowdown in new sales from a competitor of yours talking about the political and regulatory landscape have you also noticed any change.

<unk> climate ESG across our entire company and coordinating it through S. One we're seeing strength across pretty much the entire portfolio and in particular, we're seeing a shift away from ESG to climate in the U S. In the around the rest of the globe one of the things that I always say is that the train has left the station on this this is an area that is going.

An investor behavior, an E S T, particularly in the new sales you know any areas that are slow or a R says more resilient because I know, it's sort of a topic that spans your whole business. So maybe there are some areas that are doing fine and resilient versus others that maybe you are noticing a.

Be growing very quickly its high demand is coming from corporates as coming from governments from regulators from financial institutions every part of the financial institution area and we have products from true cost our ESG data suite, we've got bond referencing prices physical risks we're in the middle of what I would say is one of the most important dialogue.

A new sales change thanks.

Thank you Tony I'm Gonna starting in hand, it over to <unk>. If you take a step back and you think about something like the E. S. G sustainability climate markets. They go back to last 567 years and if you look at our company. We have products that go back 50, 65, 100 years and the experience of the market like this it's it's really changing rap.

Taking place with regulators around the globe about disclosure, but let me hand, it over to Eva to talk a little bit more about the numbers.

Tony when we look at the first quarter revenues for sustainability and energy transition transmission. We actually think that this is really strong for the company and we're still confident that for the full year outlook. The growth will be in line with our medium term expectations and the reason for that is.

Fiddly and Fortunately because of our sustainable one organization and the way that we've been investing in sustainability products energy transition climate E. S. G across our entire company in coordinating it through S. One we're seeing strength across pretty much the entire portfolio and in particular are we seeing a shift away.

As Doug outlined that we have very diverse revenue streams underneath sustainability and energy transition and all of our deficient contribute to the progress and through the growth think about for example in mobility what is happening the huge transformation of the industry around electrification marketing fees.

<unk> E S G to climate in the U S is it around the rest of the globe what are the things that I always say is that the train has left the station on this this is an area that's going to be growing very quickly. It's high demand, it's coming from corporates, it's coming from governments from regulators from financial institutions every part of the financial institution area and we have products.

And what that means for the Oems with respect to thinking about supply change and new manufacturing and worthy source to batteries.

In the commodity space with energy transition, what is happening with new price assessments around hydrogen and carbon and biofuels and recycled plastics.

From true cost R. E. S. G data suite, we've got blonde referencing prices physical risks we're in the middle of what I'd say is one of the most important dialogues taking place with regulators around the globe about disclosure, but let me hand, it over to Eva to talk a little bit more about the numbers.

Happening in the ratings space with second party opinions and then Doug already mentioned declined it really there is so much focus now about climate climate analytics climates credit analytics climate data just to give you one data point through cost actually grew more than 50% in the quarter. So overall, if we added up I think we have very strong.

It's only when we look at the first quarter revenues for sustainability and energy transaction transmission. We actually think that this is really strong for the company and we are still confident that for the food your outlook for growth will be in line with our medium term expectations and the reason for that is as.

Revenue streams and therefore, we are confident about our future growth in this industry and this particular growth area.

<unk> outlined that we have very diverse revenue streams underneath sustainability and energy transition and all of our deficient contribute to the progress into the growth. So think about for example, mobility what is happening this huge transformation of the industry around electric vacation.

Perfect and hoping you could on another topic, just give us an update on how you're utilizing AI or any of your other advancements in technology, whether it be through <unk> or other areas as well.

Tony the way how we look at it is we really believe we're ahead of the game here. We did the acquisition of central five years ago. When just very few people were thinking about artificial intelligence, we have already embedded a lot of essential products and tools within our businesses over the last few years.

E fish and what that means for the <unk> with respect to thinking about supply change a new manufacturing and worthy source. The batteries what is happening in the commodity space with energy transition what is happening with new price assessments around hydrogen and carbon in bio fuels have recycled plastics what is happening in <unk>.

And our intention is really to stay ahead and to really make sure that we continue to implement this and be one of the winners in this in this market. We told you. This morning, we have now five <unk> products that are in the markets that just for external customers, but internally there are many more products and actually the efficiency opportunities that have.

<unk> space with second party opinions and then duck already mentioned climate really there is so much focus now about climate climate analytics climates credit analytics climate data. Just gives you one data point Trucost actually grew more than 50 per cent in the corridor. So overall, if we ended up I think we have very strong revenue stream.

<unk> has created.

<unk> is very large maybe if I may expand on this in one particular area. If you think about large language models and generative AI actually three areas are really critical it is compute which is really expensive. Then there are the algorithms, which are more open source and generic.

<unk> and therefore, we're confident about our future growth in this industry at this particular growth area.

Perfect and hoping you could on another topic, just give us an update on how you're utilizing a I or any of your other advancements in technology, whether it be through <unk> or other areas as well.

And then it is about training data and training data is really differentiating and if you have a really good training data you can improve the algorithms and you can drive down the compute cost we have S&P global the largest training trading datasets for financial markets plus the best team of essential that we already outlined.

Tony the way how we look at it is we we really believe we're ahead of the game here. We did the acquisition of <unk> five years ago. When just very few people were thinking about artificial intelligence, we have already embedded <unk> products and tools within our businesses over the last few years.

We have no need to export our data through someone's else models or generic large language models. We can do this in house and you may expect that we will have more announcements around this later this year.

<unk> and our intention is really to stay a hat and to really make sure that we continue to implement ish and be one of the winners in the <unk> in this market. We told you. This morning, we have enough five can she'll products that are in the markets that just for external customers, but internally there are many more products and actually need the efficiency opportunities.

Thank you Tony Thank you.

Thank you. Our next question comes from Alex Kramm with UBS. Your line is open.

Hey, Hello, everyone. Just just wanted to come back to the market intelligence commentary.

<unk> <unk> has created for competitions is very large maybe if I may extend on dish in one particular area.

The outlook there clearly you saw a little bit more cautious although it's Doug I think initially you said.

Think about the large language models in January 5th AI actually three <unk> Ah really critical it is to compute which is really expensive. Then there are the algorithms, which are more open source and give me your rich and then it is about training data and training data is really differentiating and if you have a really good training.

It should be fine, but I think <unk> comments are clearly pointing towards the low end. So I guess the question is.

What specifically is it that makes you think lower end I mean is it just an expectation of a slowdown or is it actually something that you're already seeing in new sales, but just curious about if this is more an expectation or or something you're already seeing in the pipeline I guess.

Data you can improve the algorithms and you can drive down to compute cost we have as a global the largest training training data sets for financial markets plus the best theme of can show that we already outlined so we have no need to export our data through someone else models or junior Rick large language models we.

Because obviously the uncertain environment and then specifically you mentioned the Swiss Bank merger, which obviously is something I am paying attention to as well I was just wondering you said it wouldn't have an impact but is it is it a question about maybe this year not an impact because it may take some time or is it just the exposures are very small just maybe you could dimensionalize it.

Can do this in house and you May expect that we would have more announcements around this later this year.

Little bit since it is the first time, we've had something like this for the next 15 years.

Thank you Tony Thank you.

Yes, Alex Good morning. This is Dave out I will start and then hand it over to Doug generally we are confident about the outlook of market intelligence for the remainder of the year due to a couple of reasons. The first is growth of the subscription book of business, we see some healthy growth.

Thank you. Our next question comes from Alex Kramlich UPN. Your line is open.

Yeah, Hey, Hello, everyone. Just just wanted to come back to the market intelligence commentary and the outlook. They are clearly you sound a little bit more more cautious although dark I think initially you said it should be fine, but I think <unk> comments, I, clearly I'm pointing towards the low and so I guess the question is what specifically is it <unk>.

Then we have good revenue synergies that will come in over the next period of time rule expecting a capital market's recovery at the end of the year. So that should help enterprise solutions and then also the comps will become easier and FX headwinds will become easier during the course of this year. So those are the elements that will.

Makes me think of lower and I mean is it just an expectation of a slowdown or is it actually something that you're already seeing in in new sales with just curious about if this is more an expectation or or something you're already seeing in the pipeline I guess, it's it cause cause obviously didn't uncertain environment. Then specifically you mentioned the Swiss bank merger, which obviously.

Help us to remain confident with your outlook with respect to the specifics of the banking impact. We think this is overall manageable and not material for market intelligence and the reason for that is the following markets intelligence actually has a very diverse customer base only 10% of the customer revenue is.

Something I'm paying attention to as well or just wondering since you said it wouldn't have an impact but is it is it a question about maybe this year of the impact because it may take some time or is it just the exposure is a very small just just maybe you can dimensionalize it a little bit since it is the first time, we've had something like this in like 15 years.

Coming from commercial banks and these are global commercial banks were not specifically U S or Europe , and so thats actually a relatively low percentage and then we have multiyear subscription contracts with those customers.

Yeah <unk>. Good morning. This is <unk> I will start and then headed over to to Duck generally we are confident about the outlook of market intelligence for the remainder of the year due to a couple of reasons. The first is growth of the subscription book of business. We see some healthy growth. Then we have good revenue synergies that will come in over there.

We have tuned it down in the guidance range to the lower end of the range given the uncertainty given the fact that we are still expecting a shallow and short recession in the midst of this year and we want to be cautious, but overall, that's why we still believe we should be able to come in within the range from market intelligence for the full year.

Experience of time will expecting a capital markets recovery at the end of the year. So that should help enterprise solutions and then also the columns will become easier <unk> headwinds will become easier during the course of this year. So those are the elements that will help us to remain confident with your outlook with respect to the.

Alex what I wanted to add is that I have been on the road.

Almost non stop this year and seeing clients and it's been an incredible what kind of feedback we're getting about the value that the market intelligence team is bringing with the data that's getting built into different platforms and what Eva just highlighted that market intelligence customer base is very diversified we don't just have a financial institution client base.

Of the banking impact we think this is overall manageable and no material for market intelligence and the reason for that is the following markets intelligence actually has a very desperate customer base only 10% off the customer of revenue is coming from commercial banks and these are global commercial bank.

Within financial institutions were not just focused on only one single segment. So I've had really interesting conversations with corporates about the data that we have in market intelligence. The while we can provide in investor relations core data, which is used by different traders by supply chain, we have a new product, which is the supply chain console that corporate.

So I'm, not specifically U S or Europe , and so that's actually a relatively low percentage and then we have multi year subscription contracts with those customers. We have tuned it down in the guidance range to the low end of the range given the uncertainty given the fact that we are.

They are finding incredibly useful for them to understand what would be their needs for managing shipping supply chain risks et cetera. So I'm really encouraged by what we're seeing the client dialogue is water.

Still expecting a shallow and short recession in the myth of this year and we want to be cautious, but overall, that's why we still believe we should be able to come in within the range market intelligence for the full year.

I wanted to highlight.

Alright, Thanks for that and then just a very quick one on the rating side and I asked your primary competitors has also but that maybe have a different view, which is really whats going to happen with with lending by regional banks right.

Alex what I wanted to add is that I've been on the road [laughter] almost non-stop this year and seeing clients and it's been an incredible the kind of feedback we're getting about the value that the market intelligence team is bringing with the data that's getting built into different platforms and what email just highlighted the market intelligence customer base is very diversified.

I know theyre more focused on middle markets and Thats, not really where you play, but if we make the assumption that these companies are going to be more constrained because of regulation or capital requirements.

They are an opportunity for you are you thinking about an opportunity that that could lead to more disintermediation, but did you actually have a role as that's remaining lending in the U S. Mi more go to capital markets or is it just too small for you and it will go to other other channels like private credit for example.

We don't just have a financial institutions client base and within financial institutions were not just focused on only one single segment. So I've had really interesting conversations with corporates about the data that we have in market intelligence. The well we can provide an investor relations core data, which is used by different traders by supply chain.

Yes, thanks for that Alex will first of all we have much much lower exposure to that sector than some of the other competitors in our space. We do watch it very closely because it does help with some of the understanding some of the credit dynamics in the country. Overall, we do see in the U S that there could be some slowdown in credit and that's one of the reasons that we've been cautious.

We have a new product, which is a supply chain console that corporate so funny incredibly useful for them to understand what would be their needs for managing shipping supply chain risk et cetera. So I I'm really encouraged by what we're seeing the client dialogue is what I wanted to highlight.

About our own economic forecast for the rest of the year you heard as Eva said that we expect that there would be a mild recession, a mild slowdown as we see a dip in the second or third quarter, and we think part of that could be caused by the slowdown in credit, but overall, we have very low exposure to this area and it's likely that some of the areas that we see.

Alright, Thanks for that and then just a quick one on the writing side and I asked your your primary competitors is also but maybe you have a different view, which is really you know what's gonna happen with with lending by regional banks right Uhm I mean, I know, they're more focused on middle markets and that's not really what you play, but if if we make the assumption.

That the credit will get picked up by the private markets or securitization and some of those we might actually benefit from some of the activity on those.

That.

These these companies are going to be more constrained because of regulation. All capital requirements is there an opportunity for you are you thinking about an opportunity that that could lead to more disintermediation. So did you actually have a role as that's remaining lending in the U S. Maybe maybe we'll go to capital markets or is it just too small for you and it will go to other other.

Okay. Thank you very much.

Thanks, Alex.

Thank you. Our next question comes from Craig Huber with Huber Research Partners. Your line is open.

Great. Thank you can you touch on if you would your outlook for bank loan issuance. This year in high yield issuance and just given the huge uncertainties and.

Channels like private credit for example.

Yeah, Thanks for that Alex well first of all we have much much lower exposure to that sector than some of the other competitors in our space. We do watch it very closely because it does help with some of the understanding some of the credit dynamics in the country. Overall, we do see in the U S that there could be some slow down and credit and that's one of the reasons that we've been cautious about.

The macro side please.

Thanks, Greg well, let me give you a broader sense of issuance and just reconcile a little bit what we what we talked about earlier on the call. As you know we have our credit research team issued a report on what they see as the full forecast for the year and right now they are expecting that the range across all of the different areas would be down.

About three 5% and then we've said that we think that our what the range of build issuance will be up about 3% to 7%. We don't break it out between what would be leveraged loans and high yield.

Part of that but in the first quarter high yield issuance was up about 6% of build issuance and bank loans was down about 33% in many cases those are substitutes for each other sometimes you can see somebody says well I'm not going to issue a floating rate or fixed rate what are the market conditions are and when we go to the private markets, which had been.

Credit will get picked up by the private markets are securitization and some of those we might actually benefit from some of the activity on those.

Okay. Thank you very much.

Thanks, Alex.

Thank you. Our next question comes from that Craig you Bear with Huber Research partner Your line is open.

Quite quick they're fast, but they also have some cases higher higher.

Great. Thank you can you touch on if you would your outlook for bank loan issuance. This year in high yield issuance, just given the huge uncertainties and.

Spreads on them as well as maybe more covenants, but we think that theres going to be a very dynamic market. Overall I think you should focus on the 3% to 7% build issuance up and look at the different components of where we see that's happening just as an FYI in our credit research team's forecast.

Macro side please.

Okay, Great well, let me give you a broader sense of issuance and just reconcile a little bit what we what we talked about earlier on the call. As you know we have our credit research team issues a report on what they see as the full forecast for the ear and right now they're expecting that the the range across all of the different areas would be.

Corporates will be up about eight 5% for the year. So think of that as kind of an anchor and also remember what I said earlier to one of the earlier questions about the amount of refinancing that is already taking place maybe the last point I'd make is that we see that in this market.

Down about 3.5 per cent and then we said that we think that our what the range of build issuance will be up about 3% to 7%. We don't break it out between what would be a leveraged loans in high yield those are part of that but in the first quarter high yield issuance was up about 6% of build issuance and bank loans with <unk>.

With these conditions with some uncertainty about rates and inflation, etc. Issuance is very very opportunistic you can see a flood of issuance over a week or two weeks and then sometimes a market. So pulling back for instance, the last couple of weeks have been very encouraging, but we said the same thing about the first two months of the year. So we watch it closely we're forecasting but go back to.

Down about 33 per cent in many cases those are substitutes for each other sometimes you can see somebody get says well am I going to issue a floating rate or fixed rate what are the market conditions, where I'm going to go to the private markets, which had been quite quick there fast, but they also have some cases higher higher spreads on them as well as maybe more.

What the long term issue is M&A is going to come back rates will eventually stabilize conditions will be positive for people to invest and grow we have these massive programs in the U S that are.

Just starting to get launched for the infrastructure Bill for the chips Act for the IRI the capital, it's going to be going into energy transition all of that is going to attract investment its going to attractive M&A, it's going to attract that investment. This isn't just going to be done using capital from the government. There is going to be public private partnership public private capital going into these areas.

Covenants, but we think that there's gonna be a very dynamic market. Overall I think you should focus on the 3% to 7% built issuance up and and look at the different components of where we see that's happening just as an F Y I N R credit research teams forecast they they see that corporate will be up about 8.5 per cent for the year.

And I, just see a huge amount of capital that's going to be deployed here when I say they see the same thing in Europe same thing in Asia. So I just believe that this energy transition what we're going to see with the chips Act et cetera is going to create a lot of investment globally, and we should be benefiting from all of that over the long run.

So think of that is kind of an anchor and also remember what I said earlier to one of the earlier questions about the amount of refinancing that is already taking place maybe the last point I'd make is that we see that in this market with.

Thanks for that my other question. Please mobility, and obviously had a very strong start to the year solid outlook for the rest of the year could you just touch upon any of the businesses within that division that you think will help drive it for the rest of the year and any significant changes from the trends you saw in the first quarter, you think might go better or worse as the year goes on sub business. Thank you.

Good morning, Greg, we're actually really looking positively for all the underlying revenue drivers within mobility.

First when you look at dealers, you'll see a little bit two effects going in opposite directions as Doug explained earlier, so maybe their margins are coming down a bit inventory levels are going up. So therefore retention is a little bit lower but on the flip side is that there is more demand for sales and marketing products because they need to be.

More proactively reaching out to potential customers in the future. So that is actually driving the growth in the dealership.

Moreover, I think <unk> is super entrepreneurialism innovative launching a lot of new products and that is helping with the growth there as well manufacturing. The same thing also they are they are exposed to more.

More needs to really reach out to customers through our marketing and sales product. So that is going to be helpful. There as well plus all the changes that are happening with the transformation two <unk> and our planning products. They are helping our OEM customers and then our data is flowing through insurance companies to bank.

And other loan entities that need the data for the pricing of their products. So that we expect that to continue to grow as well at healthy levels. During the course of this year. So overall I would say positive momentum for mobility and I have no reason to believe that that would not would not continue in the future.

Great. Thank you. Thanks.

Thanks, Craig.

Thank you. Our next question comes from Jeff Silber with BMO capital markets. Your line is open.

Thanks, So much I know, it's late I'll just ask one nobody has asked about the pricing environment and I know it varies by the different segments. Your antibody can you just give us some general comments in terms of the ability to pass through pricing we'd appreciate it.

Okay.

Absolutely Jeff So the way we look at this is most of our products are must have products.

Our customers and we are deeply embedded in their workflows in their day to day activities. Therefore, we add a lot of value to our customers and that should give us an opportunity to pass on any cost price increases as a result of the inflationary environment in terms of pricing and fees, but obviously, we're doing that in a very responsible.

We're doing that in a very balanced way that glaucoma and gradually over time at the moments of contract renewals, but overall, we think that is a reasonable to pass on cost price increases to customers and therefore, we still expect to expand margins in this current environment.

I'm looking at maybe one of my colleagues then or so got that if you would like to give any particular color for for your businesses.

Yes.

Sorry, Hi, Jeff It's Dan. Thank you very much for the question.

To Echo <unk> comments, we align pricing with the value we create for our customers and if you look at something specifically for embassy.

Massive.

<unk> growth trends, which from active to passive management, that's something that we want to be aligned with our clients and ensure that again, we're representing the value and really working closely and I think if you look at the outcome. We estimate over the last 26 years from our three core indices. The S&P 500, 400, 600, and we saved investors over.

$401 billion in management fees, so thats benefiting directly as favors retirees people.

Savings for college educations things like that so I think youre pricing as a strategic tool that we look through and really use again to align growth and interest with clients.

Alright, thanks, so much for the color.

Thanks, Jeff.

Thank you. Our next question comes from Owen Lau with Oppenheimer. Your line is open.

Good morning, and thank you for taking my question, so going back to Ken So Doug any value mentioned five products are commercially available could you. Please talk about the early traction there and your expectation about these products.

Who are your major clients would that be banks or you cannot you can expand to other vertical and also please.

Remind us does that revenue model is it mainly subscription based model.

Thanks, Owen I won't give you a more broader perspective, and then hand it over to Scott for some specific potential implementations in commodity insights. So overall can show for the last few years has been very much focused on product development speed to market new product design, new design of delivery.

Customer experience within S&P global but slowly is now also turning more externally again, because many of those products that have been developed are also attractive for external customers. Overall, if you look at the value that is generated is both value internally and externally in terms of external cost.

We have no more than 50 external customers in areas like asset managers large banks hedge funds and corporates and this is all the products that we have highlighted before link mirrored scribe extract and classify so many good products, but let me hand, it over to Scott to give you more details about.

<unk> come up with the insight thanks, Dave.

And thanks for the question.

Describe the work that we do with centura and more broadly.

The concept of AI across commodity insights.

A foundational piece of everything that we're doing that future looking on growth driving potential for example, built a tool that we use in our what we call the price assessment process, specifically the market on close process, we're going to be kind of at the end of the day, but altogether everything we've heard during the closing out of the trading markets to understand what what's the outlook.

Our price and catch up with the tool that compressed the workflow time by about 70% that frees up time for our researchers from a price reporters to other productive thing for our customers and also helps us get information out to the market faster in addition.

<unk> been doing a lot of work and Eni and draw your attention to some of our newer products like energy studio impact which is essentially.

6 million North America roads.

Of which brought about a million wells, we do real time live forecast and you can imagine that something like that involve more than a trillion rows of data and computing that without leveraging AI and machine learning models and we have about 4200 of them in that one product launch would be nearly impossible and that's just one example.

We are using just I would say two examples where youre using can show in machine learning and artificial intelligence concept more broadly to develop and demonstrate additional customer value.

Got it that's very helpful. Thanks, a lot and then on indices on the expand I think it was slower than our expectation, but the margin was higher was mainly driven by lower calm because youre right the new line.

Lower and also could you please give us an update on your key maybe market and also the investment or expense assumption for the rest of this year on indices.

Yeah, hi, thanks. Thanks.

Thanks again for the question I think in terms of the performance <unk> had.

Mentioned, we had the difficult comps, but also the asset prices in our asset linked if you think back you kind of build out in arrears.

<unk> quarter was coming off of.

Market highs at the end of 2021, so comparing that.

Also there was some seasonality in products like the S&P 500, you do see the liquidity benefits of that product are really seeing inflows late late in the year.

That can come out early through the year on that where we saw the outperformance was in exchange traded derivatives. Obviously, we've seen a very fast increase in nominal interest rates and thats really caused some dislocation in the way that.

Risk premiums across asset classes and so that's obviously increased volatility. So we're so well positioned in this ecosystem. We built what we discussed back in the Investor day in December our being able to align and provide price discovery liquidity and crucially for the exchange traded derivative market being able to manage risks.

And so what we're seeing is a combination of secular growth trends there extended trading hours shorting down to intra day or even single day type types of access to derivative products, but theres also cyclicality, we do know that over time volte.

Volatility will particularly normalize potentially mean revert to some degree so in terms of our outlook, we want to make sure that we manage that appropriately. So if you think about the margin just kind of looking for the rest of the year.

We do like exchange traded derivatives, they do have a higher gross margin than our asset linked but we do expect that mix to change we do expect hopefully the flows to change that so it's going to be reflected in the revenue mix. We have also we had some one time expenses.

<unk>.

That were nonrecurring and we also had some lapping incentive comp expense reductions last year, but what we really wanted to do ultimately is to reinvest back into the business and I think that reflects again the way we're thinking about the margin for the rest of the year and really leaning into again the secular growth trends we have.

Yes.

Okay sounds great. Thanks, a lot. Thanks.

Alan.

Thank you. Our next question comes from Andrew Steinman with Jpmorgan. Your line is open.

Hi, about I know, there's a small item, but it would help our model.

Could you just give us what the total acquired.

M&A revenues were in the first quarter I definitely heard you call out the one point of M&A revenues in mobility from market scan, but as you know theres been some other kind of tuck ins are already completed and if you could also on the same same basis with the acquisitions already completed could you give us what the M&A revenue assumption is for the 23 guide.

Andrew We said that four markets again during the quarter. The impact is around one point, so it's around $3 million to $4 million. It's overall immaterial for the company as a whole as you understand.

Other two true sites in chart IQ.

Immaterial for market intelligence, so from a modeling perspective, I wouldn't put any any number into your model, but then I would like to point out that the revenues into earnings we will lose in our models and our plan for the full year by divesting Engineering solutions. Two months earlier is actually net net going to reduce.

The overall impact on our plant and so the net of divestiture of engineered solutions and the new acquisitions is actually a negative hence my comments earlier during this call that implicitly we are raising the guidance for the full year by holding the range. The same for the company as a whole.

But you do account for all of the M&A right yes.

Yes, yes, that's correct. Okay. Thank you very much.

Thanks, Andrew.

Yes.

Thank you. Our next question comes from Jeff Mueller with Baird. Your line is open.

Thanks, Doug gave out good to hear from you, but I'll try to continue to incorporate that because other voices within indices.

Maybe if you could talk about I guess like your vitality.

Or what new products are really resonating or you think have the highest potential.

Yes, Hi, Jeff. Thanks for the question in terms of a vitality, we think about sustainability with a theme I think Doug and Dave are both kind of emphasize that's a huge opportunity for us, particularly as we expand to other regions Europe Asia Thats always top of mind for US I'd also say factors thematic and specifically if you think about.

The need for income globally, so for us, having the leading dividend equity dividend franchise. Our aristocrat, we're seeing a lot of demand. There. If you think about in developed markets. Our aging population the need for retirement income, but hey, now theres inflation. So all of a sudden I need to protect capital and standards of living so that's where the combination of.

Using fair S&P 500 equity franchise to supplement fixed income that's clearly a big synergy from the IHS market and specifically our <unk> franchise, So where we're seeing now is combining like around the world kind of that dividend franchise, we have with credit and being able to offer in our multi asset solutions and particularly <unk>.

It's like Japan.

One of our largest asset management clients just launched the first multi asset ETF in that marketplace. So again really bringing synergy capabilities, but I think income leading into that also in sustainability looking to combine really the partnership within S&P global even forgot his business and commodity inside.

We've been able to use unique proprietary datasets around electric vehicles, but I can give you Bob had mentioned, we came out and partnership again with commodity insights with our GSI franchise to come out with an electric vehicles metal index.

Again, other datasets with true cost and sustainability. So I guess it was really as we go back to that 2025 2026 outlook. We gave at Investor Day. This is really looking through increasingly be proprietary datasets being part of S&P global to really look at some of these mega trends around the world.

Thank you and then on commodity insights there was a comment about an opportunity to further sector leadership maybe.

Maybe just a high level comment like how his cera week difference with IHS CRB part of S&P now and then should we look to the event as a meaningful cross selling catalyst. If you can just talk about the pipeline build coming out of there, but thank you.

I'm Geoff Thanks for the question. So just as a reminder, the therapy because the marquee energy event that we haul and it's increasingly broadly more than energy event that we hold in Houston in March every year. It is the premium as you pointed out it is the premier venue talk leadership of commodities and everything future looking for the commodities business.

Had over 8000 attendees there are lot of C suite executives important policymakers across the world and I'd say, if you think about <unk>, we obviously want to grow the franchise in a meaningful way that is accretive to the overall business and the business plan that we have laid out we do get a lot of it's not a <unk>.

Already sell it's not designed to be a venue, where we sell but it is a venue where we.

Showcase our thought leadership showcase our talents and showcase all of the great work that we're doing in kind of driving answers to some of the most complicated questions out there and the 14th that came out this year, which also helps us shape. The research that we do because we have this audience, where we connect with the community that we've built where we can.

Connect with them and that has the guide research that we wanted to do product that we wanted to do and I would say the four things that we took away and thats going to help us shape auto and strategy number one is energy transition is here to stay it is not going away number two energy transition is complicated because customers are trying to balance energy transition energy security and energy affordability.

Todd I save customers are upbeat theyre looking for solutions to complex problems, which only data and analytics of the thought that we can provide.

Has been solid in the fourth I would say, we walked away with targeted opportunities that we want to walk walk walk on and.

Bill the opportunity to serve clients. So I'd say in summary, Jeff it's less about the cross sell opportunity, but more about the sense of community. We build the direct revenues that we generate and of course, what we showcase and what be walk away from the conference in terms of the knowledge that we build and how to shape our business and the last thing I would add.

But of course, there will be because our marquee event, but we also have other leading events like the world Petrochemical conference Theres nothing like.

The thought for the petrochemicals business or the London energy for a modern newly acquired Fujayrah Conference, which we call <unk> gone on all of them in combination with especially the <unk>.

Interact with customers in a way that would not otherwise be possible.

Got it thank you.

Thanks, Jeff.

Thank you. Our next question comes from Russell clubs with Redburn. Your line is open.

Yes. Good morning, Thanks for having me on.

Following on from the previous question.

If I'm wrong.

Any new products.

Benchmark index space from S&P, yet, obviously acquisition of IHS.

John's comments.

Could you be more specific about the time to market.

Product leveraging the brand restage.

So on the corporate side, particularly.

Do you have sort of aspiration to challenge Joseph.

Market.

Any sort of further comments you can get there and I guess.

How much does your product growth drives the 10% medium term target.

At this stage.

Hi, Russell. Thanks. Thanks for the question, Yes, no we actually have hit I think probably one of the most notable products.

When Europe was our Paris aligned climate climate transition launch in fixed income and so that aligns we're already what we've done in equity. So that was something we got some market and now theres now demand as we call. It the pact industries to do those in other parts of the world and other kind of regional exposures, whether it would be emerging markets global what have you. So that was really important.

<unk>.

An index that we got some market as I mentioned as well multi asset is really really important for us to align again. The <unk> range for example investment grade high yield but to put that more intentionally alongside our leading equity franchises, so being able to do that on a channel basis.

Areas like insurance, if you think about the annuity space being able to go specifically there our multi asset demand. It's also a channel historically that's had a lot of active management. So this bigger trend of shifting from active to passive we are a leader in that space, but it's early days can we expand kind of our first mover advantage to again bring.

Hi box capabilities and again, we've already launched products I mentioned in Japan on multi asset we have development moving forward really across the globe, but I would say insurance is interesting our retirement I had mentioned as well another area that in some areas historically have been very actively oriented combining fixed income our equity as we're <unk>.

We want to be able to move forward as a competitive place.

And then looking at one part and that is with respect to the last part of the question around the total contribution of new products to the top line growth of the company. We said at Investor Day, as you might recall about 80 basis points of contribution to overall growth for the company from the new initiatives and obviously our focus is.

To continue to see that developing further in the future. Therefore vitality is such an important metric for us because it is an indicator of a healthy innovation within S&P global but I just would like to point out that products will rotate off from the vitality index. After three to five years because at some point they are not the new product anymore.

They will become business as usual, but the last piece of information I want to give in terms of the health of innovation around fidelity is we have seen double digit vitality levels within our businesses this quarter for market intelligence for mobility from commodity insights and from indices. So very positive all across the board.

Great stuff. Thanks.

And maybe just as a follow up I heard all the.

The comments around divestments, particularly dan's comments around divestments. So I'm just wondering if you can speak to.

Are you expecting the cost of audit 2020.

Three is that likely to be the same as historical average or slightly different to previous years.

Russell those two kind of investments in new initiatives. There is investments in our strategic programs, our strategic investment program of $150 million you should assume that that comes in gradually overtime. So no particular seasonality and then we're making investments what we called cost to achieve.

<unk>, which are related to revenue synergies and realization of revenue synergies those will come in also overtime.

<unk> are pulled out from a performance perspective, so don't you won't see any actual performance results to non-GAAP results that we will be reporting now and in the future.

Thank you.

Thanks Russell.

Thank you. Our next question comes from Simon <unk> with Atlantic Equities. Your line is open.

Sure.

Hi, Doug Hi, Thanks for taking my question I wanted to ask a question really about the competitive environment and just your comments about.

Youre lengthening sales cycles and the stresses that are.

Facing the financial services customers I was wondering are you seeing any sort of competitive response or would you expect to see any responses on pricing from the industry overall.

And how would you.

Thanks Darren.

Hum.

Thank you Simon this is Doug well first of all as you know we've always been in a competitive environment and we also respect our competitors very very much. This is an environment where for us it's up to bringing the most relevant the newest the fastest the highest quality information being responsive as you've heard us talk about Ken show.

Artificial intelligence machine learning all of these types of things allow us to bring information and data and analytics and benchmarks to our customers even faster. So it's a very competitive environment. This also puts us on the keeps us on our toes. It makes us better because we have to always respond to the demands of the markets as well as ensuring.

We're faster and ahead of all of our competitors.

Yeah.

Okay, Thanks, and just as a follow up.

When we think about the revenue synergies and revenue synergies target I was just wondering in terms of.

Should we expect there to be any sort of cyclical.

Puts or takes to those targets over time, if we were to endure a long downturn does that impact the timing of the recognition of those revenue synergies and maybe just some flavor around that would be useful. Thank you.

Yes, we have said revenue synergies assignment are coming in over a period of three to five years.

About 45% cross sell which is more of the first two years, and then 55% coming from new products, which is more year three to five so you should see this actually see that ramping up over the and experienced during the course of this year and you saw actually quite a nice jump from the fourth quarter through the first quarter and we're now at that $52 million run rate.

Level, but you'll see that going up in quite a nice way over the next couple of quarters, but obviously the revenue synergies take more time to accomplish compared to cost synergies.

Alright. Thanks.

Simon.

Thank you our final question will come from Stephanie Miller with Jefferies. Your line is open.

Hi, good morning, Thank you.

Maybe taking a high level view of just this year and your expectations embedded in your guidance I think you called out that it does it does call for a bit of improvement are somewhat of a macro recovery in the back half just trying to think of the levers or opportunities you have to pull let's say, maybe the macro ends up being a bit weaker if you could talk about some of those levers.

Some of the counter counter cyclicality of your business in the various segments that would be helpful. Thank you.

Yes, Thanks Stephanie.

Our expectation now in terms of assumptions for the years to following obviously strong performance in the first quarter. As you have seen then more a short and shallow recession in second quarter third quarter. Obviously, we're still very careful of what to expect for the year that there is not some unexpected volatility happening in the market. So.

We are actually running a very tight ship very careful from expenses and investments headcounts very careful but then we are ready to invest because the most important is that we are investing in future growth and hopefully we will see somewhere at the end of the third quarter into fourth quarter really markets coming back in a very strong way and we're ready to take advantage.

Of that in terms of downturn levers that we have it's the usual list that we have always been outlining and you know that we're on top of our game and we will pull those levers if needed but already today as you have seen the cost controls are really very strong and the cost growth. We've really low certainly ill show if you take it into account of that.

Last year, we had actually flat expenses and are only really minimal expense growth in the first quarter, but the downturn levers are the usual one around variable spend discretionary spend hiring investment spend in other areas. So we're ready to take action if that's needed, but hopefully we are more in a position.

We can invest in future growth because that's the real fun part and the part how we really can deliver shareholder value from our medium and long term perspective.

Yeah.

Great. Thank you so much appreciate the color.

Yes.

Thank you Stephanie I'd like to make a quick closing remark and I want to thank everybody for being on the call today and your excellent questions. I also want to thank Dan and so Garda for joining us in the room are great answers. It's nice to have you here and we're also very pleased with how our year has started as you recall in December we had an investor day, where we launched a new strategy.

<unk> called powering global markets and it's fantastic to be off such a strong start in a lot of that has to do with our engagement with our customers.

I've been out talking to our customers listening to them understanding how they see the combined value of the company and I personally have been very busy travelling around the world speaking with our key customers from every industry from all of our businesses and I'm more confident than ever about our strategy and their comments provide us further information.

To validate our priorities are investing in technology, our investment in AI the quality of our people how we see the products that we're developing in the future than I am.

So confident about what we're seeing out there I also want to thank all of our people for helping US launch 2023 as always they are phenomenal and it's why we're off to such a strong start and so I'm really excited about everything was achieved this year I look forward to sharing more on our next earnings call and again. Thank you everyone for joining us today. Thank you very.

Much.

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