# S&P Global (SPGI) Financial Model Free Excel 3-statement financial model and company analysis for S&P Global. - Canonical: https://finamodel.com/companies/s-p-global - Industry: Capital Markets - Downloadable model: Yes - Excel download: https://finamodel.com/company-models/SPGI.xlsx ## Model Purpose This model provides a comprehensive equity valuation and scenario planning tool for an analyst covering S&P Global to forecast recurring revenue growth, segment-level margin expansion, and capital return capacity following the integration of IHS Markit. ## Company Overview S&P Global is a leading provider of credit ratings, benchmarks, analytics, and workflow solutions in the global capital, commodity, and automotive markets. The company operates an asset-light, highly cash-generative business model that relies heavily on recurring subscription revenues and transaction-based fees. Business segments include: * Market Intelligence (approximately 30% of revenue) * Ratings (approximately 25% of revenue) * Commodity Insights (approximately 13% of revenue) * Mobility (approximately 10% of revenue) * S&P Dow Jones Indices (approximately 10% of revenue) The company operates globally with significant exposure to North America and Europe. S&P Global holds a dominant competitive position, operating in an oligopoly for credit ratings alongside Moody's and Fitch, and holding a premier position in index licensing. Recent major events include the transformational merger with IHS Markit in early 2022, the divestiture of the Engineering Solutions segment in May 2023, and the bolt-on acquisition of With Intelligence in late 2025. ## Revenue Deep Dive ### Market Intelligence * **Segment name:** Market Intelligence * **Revenue driver formula:** Desktop Users x Average Revenue Per User + Enterprise Data Subscriptions * **Historical growth rate:** 6% to 8% CAGR * **Key growth levers and headwinds:** Driven by financial sector headcount, demand for ESG data, and private market analytics. Headwinds include banking sector consolidation. * **Pricing dynamics:** Contractual annual price increases with high retention rates. * **Revenue recognition notes:** Subscription revenue recognised rateably over the contract term. * **Seasonality:** Q1 and Q4 are typically stronger for new bookings, but revenue recognition smooths the reported figures. ### Ratings * **Segment name:** Ratings * **Revenue driver formula:** (Global Debt Issuance Volume x Average Fee per Issue) + Surveillance Fees * **Historical growth rate:** Highly cyclical, ranging from negative 10% to positive 15% depending on debt markets. * **Key growth levers and headwinds:** Driven by interest rates, corporate refinancing needs, and M&A activity. * **Pricing dynamics:** Value-based pricing on new issuance and contractual surveillance fees. * **Revenue recognition notes:** Transaction revenue recognised at the time of debt issuance. Non-transaction (surveillance) recognised over time. * **Seasonality:** Q1 and Q2 are historically the most active quarters for debt issuance. ### Commodity Insights * **Segment name:** Commodity Insights * **Revenue driver formula:** Price Assessment Subscriptions + (Trading Volumes x Usage-Based Royalties) * **Historical growth rate:** 7% to 9% CAGR * **Key growth levers and headwinds:** Energy transition data demand and global commodity trading volumes. * **Pricing dynamics:** High pricing power for proprietary benchmark prices like Platts. * **Revenue recognition notes:** Mix of upfront usage royalties and deferred subscription revenue. * **Seasonality:** Relatively stable across the year. ### Mobility * **Segment name:** Mobility * **Revenue driver formula:** Dealer Subscriptions x Price + CARFAX Reports Sold x Price per Report * **Historical growth rate:** 8% to 10% CAGR * **Key growth levers and headwinds:** Used car transaction volumes and automotive marketing budgets. * **Pricing dynamics:** Spot pricing for individual CARFAX reports and contractual pricing for dealer software. * **Revenue recognition notes:** Transactional reports recognised immediately. * **Seasonality:** Spring and summer months often see higher used car sales volumes. ### S&P Dow Jones Indices * **Segment name:** S&P Dow Jones Indices * **Revenue driver formula:** (Assets Under Management in Linked ETFs x Basis Point Fee) + Exchange-Traded Derivative Fees * **Historical growth rate:** 10% to 15% CAGR * **Key growth levers and headwinds:** Equity market appreciation and the secular shift from active to passive investing. * **Pricing dynamics:** Regulated and contractual fee structures based on AUM tiers. * **Revenue recognition notes:** Billed in arrears based on average AUM during the period. * **Seasonality:** Highly dependent on point-in-time equity market valuations at quarter end. ## Cost Structure ### Variable Costs / COGS * **Line-by-line breakdown:** S&P Global reports "Operating expenses" which function as COGS. This includes data acquisition costs, cloud computing and hosting fees, and direct compensation for analysts and data scientists. * **Gross margin range:** The company does not report a traditional gross margin, but implied gross margins are exceptionally high, typically exceeding 70%. * **Key input costs and commodity exposures:** Cloud infrastructure costs and specialised financial data feeds. * **How COGS scales with revenue:** High operating leverage. Once a rating is issued or an index is created, the marginal cost of distributing that data to an additional client is near zero. ### Operating Expenses * **R&D:** Not explicitly broken out on the income statement. Technology development costs are either capitalised or included in operating expenses. * **SG&A:** Includes selling and general administrative expenses. Heavily driven by headcount, sales commissions, and corporate overhead. * **Depreciation & Amortisation:** Significant due to the IHS Markit merger. Amortisation of acquired intangibles runs at approximately $1.1 billion annually. * **Stock-Based Compensation:** Runs at approximately 2% to 3% of revenue, which is standard for human-capital intensive financial data firms. * **Restructuring / one-time charges:** Frequent adjustments for merger integration costs, severance, and real estate footprint reductions. ### Margin Profile * **Gross margin, EBITDA margin, operating margin, net margin:** Adjusted operating margins are typically 48% to 52%. GAAP operating margins are lower due to intangible amortisation. * **Margin trend:** Expanding. The company has a strong track record of achieving cost synergies post-merger and leveraging pricing power. * **Segment-level margins:** Indices operates at approximately 72%, Ratings at 55% to 60%, Commodity Insights at 48%, Mobility at 38%, and Market Intelligence at 30% to 35%. ## Balance Sheet Structure * **Total assets:** Approximately $60 billion. * **Key asset categories:** The balance sheet is dominated by intangible assets and goodwill. * **Goodwill & intangibles as % of total assets:** Exceeds 75% due to the historical acquisitions of SNL Financial, Platts, and the transformational IHS Markit merger. * **Working capital profile:** * **Days Sales Outstanding (DSO):** Typically 45 to 55 days. * **Days Inventory Outstanding (DIO):** Not applicable. * **Days Payable Outstanding (DPO):** Typically 30 to 40 days. * **Net working capital as % of revenue:** Consistently negative. * **Is working capital positive or negative?** Negative. The company collects cash upfront for annual subscriptions, creating a large deferred revenue liability that funds growth. * **PP&E:** Minimal. Consists primarily of leasehold improvements for office space and some proprietary data centre equipment. * **Right-of-use assets / operating leases:** Material but manageable, representing the global office footprint. ## Capital Expenditure & Investment * **Capex as % of revenue:** Very low, typically 1% to 2% of revenue. * **Maintenance capex vs. growth capex:** Almost entirely growth capex related to internal software development and technology platform migrations. * **Major capex programmes underway:** Cloud migration and integration of legacy IHS Markit data platforms into the S&P Global Capital IQ Pro ecosystem. * **Capitalised software / development costs:** Material. The company capitalises a portion of internal engineering time spent on new product development. * **M&A pattern:** A mix of transformational mega-deals and continuous bolt-on acquisitions to acquire niche data sets. * **Typical acquisition multiple paid:** High multiples, often 15x to 20x EBITDA, reflecting the premium nature of financial data assets. ## Debt & Capital Structure * **Total debt:** Approximately $11 billion to $12 billion. * **Debt/EBITDA ratio:** Typically managed around 2.0x to 2.5x gross leverage. * **Credit rating:** A- tier investment grade rating. * **Key debt instruments:** Primarily senior unsecured notes with staggered maturities. * **Maturity profile:** Well-laddered with manageable near-term maturities. * **Interest rate profile:** Predominantly fixed-rate bonds. * **Covenants:** Standard investment grade covenants with significant headroom. * **Share repurchase programme:** Highly active. The company repurchased $5.0 billion in shares during 2025. * **Dividend policy:** The company has increased its dividend for over 50 consecutive years. The payout ratio is relatively low, but the absolute dividend payment was $1.2 billion in 2025. ## Cash Flow Characteristics * **Operating cash flow conversion:** Excellent. OCF typically exceeds 100% of Net Income. * **Free cash flow margin:** Consistently in the 30% to 35% range. * **Major non-cash items:** Amortisation of acquired intangibles is the largest bridge item between GAAP net income and operating cash flow. * **Working capital cash flow impact:** Growth in deferred revenue provides a continuous positive source of operating cash flow. * **Capex intensity:** Extremely low, resulting in free cash flow that nearly mirrors operating cash flow. * **Cash tax rate vs. GAAP effective tax rate:** Cash taxes are generally aligned with the GAAP effective tax rate of approximately 21% to 23%. ## Sheet Structure 1. **Assumptions**: Contains all hardcoded drivers, segment growth rates, margin targets, and capital return inputs. 2. **Revenue & Segments**: Detailed build-up of revenue and operating profit for Market Intelligence, Ratings, Commodity Insights, Mobility, and Indices. 3. **Income Statement**: Consolidated view from Revenue down to GAAP and Adjusted EPS. 4. **Balance Sheet**: Assets, Liabilities, and Equity, highlighting the massive goodwill and deferred revenue balances. 5. **Cash Flow Statement**: Indirect method starting from Net Income, adding back D&A, and capturing working capital movements. 6. **Debt Schedule**: Tranches of senior notes, interest expense calculations, and debt paydown logic. 7. **Working Capital & Capex**: Schedules for accounts receivable, deferred revenue, and capitalised software additions. 8. **Shareholders Equity**: Tracks retained earnings, share repurchases, dividends, and the declining share count. 9. **DCF Valuation**: Unlevered free cash flow build, WACC calculation, and terminal value assumptions. ## Key Financial Relationships 1. Market Intelligence Revenue = Prior Year Market Intelligence Revenue x (1 + Market Intelligence Growth Rate) 2. Ratings Transaction Revenue = Projected Global Debt Issuance x Average Fee Capture Rate 3. Ratings Non-Transaction Revenue = Prior Year Non-Transaction Revenue x (1 + Contractual Price Increase) 4. Indices Revenue = Average S&P Linked AUM x Average Basis Point Fee + Derivative Trading Fees 5. Segment Operating Profit = Segment Revenue x Segment Adjusted Operating Margin 6. Consolidated Adjusted Operating Profit = Sum of Segment Operating Profits + Unallocated Corporate Expense 7. Amortisation of Intangibles = Historical IHS Markit Intangibles / Remaining Useful Life 8. Deferred Revenue Liability = Total Subscription Revenue x (Average Days Deferred / 365) 9. Interest Expense = Average Debt Balance x Weighted Average Interest Rate 10. Diluted Shares Outstanding = Prior Year Shares - (Share Repurchase Amount / Average Share Price) 11. Adjusted Net Income = GAAP Net Income + Amortisation of Intangibles + Deal Related Amortisation + Restructuring Costs 12. Free Cash Flow = Operating Cash Flow - Capital Expenditures - Capitalised Software Development Costs ## Cross-Sheet Dependencies The **Assumptions** sheet dictates the growth rates and margins in the **Revenue & Segments** sheet. The segment totals feed directly into the top line of the **Income Statement**. Net Income from the Income Statement flows to the top of the **Cash Flow Statement** and into Retained Earnings on the **Balance Sheet**. The Cash Flow Statement calculates the ending cash balance, which links to the Balance Sheet. The **Debt Schedule** uses cash flow available for debt service to determine if new borrowing is needed, creating a circular reference with interest expense on the Income Statement. The **Shareholders Equity** sheet relies on the share repurchase assumptions to calculate the new share count, which feeds back to the Income Statement for EPS calculations. ## Sign Convention * Revenue and asset balances are entered as positive numbers. * Expenses on the Income Statement are entered as negative numbers. * Contra-asset accounts like accumulated depreciation are entered as negative numbers. * On the Cash Flow Statement, cash inflows are positive and cash outflows are negative. * Capital expenditures and share repurchases are entered as negative numbers on the Cash Flow Statement. ## Things Most Likely to Go Wrong * The company reports both GAAP and Adjusted EPS. The model must clearly separate the $1.1 billion in annual intangible amortisation to bridge the gap between GAAP and Adjusted figures. * Engineering Solutions was divested in May 2023. Historical revenue figures prior to 2024 must be adjusted to remove this segment to calculate accurate organic growth rates. * Inter-segment eliminations are material. The model must include a negative revenue line item for inter-segment revenues to prevent double-counting consolidated revenue. * Ratings transaction revenue is highly volatile. Straight-lining historical growth rates will fail to capture the cyclicality of the debt capital markets. * Share repurchases drastically reduce the share count each year. Failing to dynamically calculate the declining share count will severely understate future EPS. * Deferred revenue is a massive liability. If the model does not link deferred revenue growth to subscription revenue growth, operating cash flow will be understated. * Foreign currency translation impacts reported revenue. The model should assume constant currency for future projections but acknowledge historical FX headwinds. * Unallocated corporate expenses must be subtracted from the sum of segment operating profits to reach consolidated operating profit. ## Validation Checks * Consolidated Adjusted Operating Margin must remain between 48% and 52%. Flag if the model projects margins outside this band. * Indices segment operating margin should remain near 72%. Flag if it drops below 70% or exceeds 75%. * Free Cash Flow conversion (FCF / Adjusted Net Income) should consistently exceed 100%. * Total Assets must equal Total Liabilities plus Shareholders Equity in every projected period. * Capex as a percentage of revenue should not exceed 3%. Flag if the model projects higher capital intensity. * The effective tax rate should remain between 21% and 23%. * Debt to EBITDA should remain below 3.0x to maintain the company's strong investment grade rating. * Dividend payout ratio should remain below 30% of Free Cash Flow, reflecting the company's preference for share repurchases over large dividend yields. ## Key Assumptions (Default Values) | Assumption | Default Value | Unit | Rationale | |---|---|---|---| | Market Intelligence Revenue Growth | 7.0 | % | Blended average of recent organic subscription growth and pricing power. | | Ratings Revenue Growth | 8.0 | % | Based on 2025 actual performance and normalised debt issuance expectations. | | Commodity Insights Revenue Growth | 7.0 | % | Reflects strong subscription and usage-based revenue growth. | | Mobility Revenue Growth | 9.0 | % | Driven by CARFAX and dealer software expansion. | | Indices Revenue Growth | 12.0 | % | Assumes continued AUM growth in passive ETFs and strong derivative volumes. | | Market Intelligence Operating Margin | 33.0 | % | Historical average for this segment. | | Ratings Operating Margin | 58.0 | % | Reflects high operating leverage on transaction revenues. | | Commodity Insights Operating Margin | 48.1 | % | Based on Q1 2025 actual reported margin. | | Mobility Operating Margin | 38.5 | % | Based on Q1 2025 actual reported margin. | | Indices Operating Margin | 72.9 | % | Based on Q1 2025 actual reported margin. | | Inter-segment Eliminations | -200 | $ Millions | Based on 2025 actual reported eliminations. | | Annual Intangible Amortisation | 1,100 | $ Millions | Run-rate amortisation from the IHS Markit merger. | | Effective Tax Rate | 22.0 | % | Standard corporate tax rate expectation for the consolidated entity. | | Annual Share Repurchases | 5,000 | $ Millions | Matches the actual 2025 share repurchase volume. | | Annual Dividend Payment | 1,200 | $ Millions | Matches the actual 2025 dividend distribution. | | Capex as % of Revenue | 1.5 | % | Historical average capital intensity. | | Weighted Average Cost of Capital | 8.5 | % | Standard discount rate for a stable, large-cap financial data provider. | | Terminal Growth Rate | 3.0 | % | Reflects long-term GDP growth plus structural pricing power. | ## Data Sources & Benchmarks * **SEC EDGAR:** Source for S&P Global's 10-K, 10-Q, and 8-K filings. * **Investor Relations:** S&P Global investor relations website for quarterly earnings presentations and supplemental data sheets. * **Key Peers:** Moody's Corporation (MCO), MSCI Inc. (MSCI), FactSet Research Systems (FDS), and Morningstar (MORN). * **Industry Data Sources:** SIFMA for global debt issuance volumes, ETFGI for passive asset under management trends. * **Consensus Estimates:** Visible Alpha or FactSet for sell-side consensus estimates on segment-level revenues and margins. ## Sources * S&P Global Q4 and Full-Year 2025 Earnings Release (February 10, 2026) * S&P Global 2024 Annual Report and 10-K * S&P Global Q1 2025 Earnings Call Transcript * S&P Global 2026 Proxy Statement Summary --- ## Frequently asked questions ### What does S&P Global do and what are its main business segments? S&P Global is a leading provider of credit ratings, benchmarks, analytics, and workflow solutions across global capital, commodity, and automotive markets. Its primary business segments include Market Intelligence, Ratings, Commodity Insights, Mobility, and S&P Dow Jones Indices. ### How does S&P Global generate its revenue? S&P Global operates an asset-light, highly cash-generative business model that relies heavily on recurring subscription revenues. The company also generates revenue through transaction-based fees across its various market solutions. ### What is S&P Global's capital expenditure profile? S&P Global maintains a very low capital expenditure profile, typically ranging from 1% to 2% of revenue. This capex is almost entirely growth-oriented, focused on internal software development and technology platform migrations, including cloud integration. ### How does S&P Global's working capital profile affect its cash flow? S&P Global consistently exhibits a negative net working capital profile, which positively contributes to its cash flow generation. This is primarily because the company collects cash upfront for annual subscriptions, creating a significant deferred revenue liability that helps fund growth. ### How do acquisitions impact S&P Global's financial structure? Acquisitions significantly shape S&P Global's financial structure, leading to a balance sheet dominated by intangible assets and goodwill, which exceed 75% of total assets. The company pursues both transformational mega-deals, like the IHS Markit merger, and continuous bolt-on acquisitions to expand its data sets. ### What is the primary purpose of an equity valuation model for S&P Global? An equity valuation model for S&P Global aims to provide a comprehensive tool for forecasting recurring revenue growth, segment-level margin expansion, and capital return capacity. It also helps analysts assess the financial impact of major events, such as the integration of IHS Markit. [Interactive forecast calculator](https://finamodel.com/companies/s-p-global/forecast)