S&P Global (SPGI) Q1 FY26 earnings call: guidance and Q&A

How is S&P Global thinking about partnership strategy with large AI players (building apps vs. providing data via APIs)? What is the monetization model and economics across distribution channels?

Martina Cheung confirmed the intent to build MCP apps, focusing on data, standards, business logic, and tools. She cited the S&P Global plug-in for Claude for Financial Services as an example, where a client switched from an existing provider to S&P Global's data and plug-in, paying 20% more. Monetization is based on enterprise value, tracking usage, channels, and value created. She noted two financial clients paid a 35-45% renewal increase for AI-ready data access.

“The first step to doing that has actually been the announcement of the S&P Global plug-in, which was announced in line with the Claude for Financial Services announcement in the first quarter.”

asked by Toni Kaplan · answered by Martina Cheung

In Market Intelligence workflow solutions, how do you attribute value between proprietary data and the software component?

Martina Cheung explained that workflow products, especially in Enterprise Solutions, are mission-critical, scaled, and require robust controls and managed services. Many function as industry networks (e.g., Wall Street Office, ClearPar). The value clients derive often comes from proprietary content embedded in these tools, such as loan reference data in Wall Street Office, emphasizing the importance and criticality of these systems to client processes.

“we think of it more as the value that we are bringing to the clients through the workflow tools and the importance and criticality of those systems to clients very, very critical processes.”

asked by Faiza Alwy · answered by Martina Cheung

What is driving the expected acceleration in MI subscription growth in Q2? How much is from AI products, key client office, etc.?

Eric Aboaf stated that strong Q1 performance is expected to continue, with subscription revenue growth around 6%. He noted that net renewal rates are up approximately 100 basis points, the pipeline has been building, average deal size is up, and net sales are up, indicating good underlying drivers across the franchise that will build momentum through the year.

“Subscription revenue growth was in the 6% range. We feel good that, that will continue to build. But we had very good performance that augurs well for the coming couple of quarters.”

asked by Ashish Sabadra · answered by Eric Aboaf

How much of Market Intelligence margin expansion is driven by AI efficiency gains?

Eric Aboaf explained that Q1 margin expansion was partly due to careful discretionary spending given the external environment. More broadly, AI is beginning to have a positive impact, particularly in data operations and software development. He clarified that the full upside from broad LLM adoption will likely manifest in '27, '28, and future years as these tools are expanded into strategic processes.

“AI is just beginning to have some positive impact on margin. I'd say beginning because, remember, AI is just a continuation of machine learning tools and a wide range of capabilities that we've used and leveraged across our processes.”

asked by Scott Wurtzel · answered by Eric Aboaf

Why sell workflow businesses in Energy while focusing on data? How do these workflows differ from MI? What is the size of the divested software portfolio?

Martina Cheung stated the divested software portfolio is about 25% of Upstream revenues. The decision was informed by SLB being a good partner, with whom they also have a new distribution partnership. The remaining 75% is highly differentiated proprietary content (subsurface, geoscience, asset valuation, benchmarking data). The new Titan platform sits atop this data, providing seamless workflow, which clients have been requesting.

“the size of that is about 25% of Upstream revenues. And that software portfolio, as you mentioned, is actually quite varied and quite distinct.”

asked by Manav Patnaik · answered by Martina Cheung

Are there meaningful differences in usage patterns between S&P Global's own AI solutions (ChatIQ) and third-party LLMs? Where will the balance settle?

Martina Cheung described a spectrum of customer behavior, with some preferring integrated desktop solutions, others using both (e.g., a large global bank expanding CapIQ Pro and making S&P Global data standard on their internal LLM). She noted that if clients only use in-house LLMs, S&P Global's data becomes even more valuable. Eric Aboaf added that both direct usage (e.g., AI queries up 2x in Energy, automated data ingestion up 2x in iLEVEL) and LLM channel usage (API calls up 5x Q-o-Q) are growing significantly, leading to higher retention rates (couple hundred bps higher in MI, over 500 bps in Energy for AI users).

“In the clients that have been using our AI tools and availing themselves of those in MI, we're seeing a couple of hundred basis points higher retention rates. In Energy, over 500 basis points of higher retention rates because, again, usage is value for clients.”

asked by David Motemaden · answered by Martina Cheung

How is the geopolitical environment impacting Ratings revenue outlook for the year? Can you quantify the growth of Ratings Evaluation Services (RES)?

Martina Cheung reiterated unchanged full-year guidance for Ratings, noting no direct impact yet but watching for broader GDP/sector shocks if the conflict protracts. She stated that RES had a "good quarter," driven by M&A assessments from issuers, but did not quantify the growth rate.

“ultimately, as you know, obviously, we didn't change our guidance for the full year for billed issuance and for Ratings.”

asked by Shlomo Rosenbaum · answered by Martina Cheung