Strategic execution amid macroeconomic volatility
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The 10% revenue growth was driven by notable resilience in ratings and indices, despite a volatile operating environment marked by the conflict in Iran.
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The ratings outperformance was driven by a 14% increase in billed issuance, specifically benefiting from large-scale investments in AI infrastructure and large M&A transactions.
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Management attributed the margin expansion to disciplined expense management and early productivity gains from AI-driven data operations and software development.
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The Energy division faced headwinds due to supply chain disruptions and sanctions in the Middle East, while the company continued to rationalize its Upstream business by refocusing on proprietary data and information and realigning sales teams.
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Strategic positioning in private markets remains a priority, with Ratings’ private credit revenue growing 25% as clients seek greater transparency and benchmarks.
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The company is successfully transitioning from position-based licensing to an enterprise value model, earning higher premiums for delivering AI-ready data.
Perspectives and guiding assumptions
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Full-year organic revenue guidance of 6% to 8% is maintained, assuming the Iran conflict stabilizes by the end of the second quarter of 2026.
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The energy division’s guidance was lowered by 1 percentage point to 4.5%-6.0% due to persistent disruption in the Middle East affecting near-term sales pipelines.
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Ratings revenue growth is expected to moderate in the third quarter and turn negative in the fourth quarter as the company posts exceptionally high year-over-year comparisons.
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The Mobility spinoff remains on track for mid-2026, and the company plans to launch a $2 billion public debt offering for Mobility this quarter, using the proceeds for incremental share buybacks and debt reduction.
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Management expects to increase returns on equity for shareholders, with the goal of having at least 100% of adjusted free cash flow going toward share buybacks in 2026.
Structural changes and risk factors
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The divestment of the Upstream software portfolio aims to accelerate the return to positive growth by focusing on proprietary data and insights within the division.
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The conflict in Iran is identified as the largest energy shock since the 1970s, posing a risk of prolonged supply chain instability if it extends beyond the second quarter.
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Private credit markets face greater scrutiny and wider spreads, although management sees this as a medium-term opportunity for its transparency-focused tools.
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There was a drop of up to 10% in bank lending volumes as the division overcame a tough comparison with the first quarter of 2025.