INFO - Earnings call transcript Q4 2017

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Operator

Good day, ladies and gentlemen, and welcome to the Q4 2017 IHS Markit Earnings Conference Call. [Operator Instructions]. And as a reminder, today's conference call is being recorded. I'd now like to turn the conference over to Eric Boyer, Head of Investor Relations. Please go ahead.

Eric Boyer

you Earnings us Conference thank Markit the and XXXX QX Call. morning, for for joining IHS Good Earlier this Markit morning, release and we issued our supplemental to QX materials the IHS Investor website. posted Relations earnings press

on results numbers exclude and are adjusted other useful discussion measures acquired Markit IHS amortization which the on stock-based based Our non-GAAP are believes or items. of compensation, intangibles quarter that non-GAAP considered but in to in from information. should of they performance are understanding operating and financial a enhance a order not as ongoing be isolation or GAAP substitute to supplement our for

conference is As whole a discussion especially Markit uncertainties. in statements conference your could on CEO; is Factors call and can be Markit's SEC Any reminder, and EVP is the written forward-looking this cause IHS that from contain of copyrighted rebroadcast call Officer, or website. may Lance and our Hyatt, filings consent with prepared a in of outlook, expected expectations subject differ prohibited. the in and be and After remarks, found property materially future available IHS Lance. and Markit. of IHS that, that to about my events over Markit the With webcast and are IHS is results call, part, information, recorded to and without This this risk our being prior Financial the to to of Chief Chairman Uggla, pleasure Todd to the take questions. it will actual turn

Lance Uggla

Call. joining QX us Thank for you, the Earnings for Eric. Markit Thank you IHS

set today earnings what Jerre upmarket New We've for excellent fun Year a call for lot with and will say be an start, I joining also and Happy have final team Before to the want together. together of IHS had XXXX. our to thank for us I

growth margin upper the of as year $X.XX, and we end are, year. and beyond. for as and grew was revenue financial results XX.X%. IHS an our a future expansion of successful the up was to points. we the for quarter invest highlights adjusted up was at delivered XX%. basis Overall, Year-over-year, revenue X% by points X% on autoMastermind guidance. by Markit of XXXX expectations, outperformed and organic XXXX Now company $XXX X% acquisition; adjusted XXX merged a Financial we Margin QX in growth million; organic completed prior our $XXX expanded EBITDA EBITDA excluding of EPS the year our EPS adjusted quarter, margin first fiscal and million, continued adjusted the of within XX basis year-over-year of finally, over basis; and

forward-looking In terms I'll of QX highlights commentary. verticals, provide some core industry and

our of Growth in segment driven strength again Transportation quarter. very our by within continues strong once growth the revenue First, X% organic results, to business. with produce auto was

Going a forward, drivers by years, next a we expect mention here. diversified growth few I'll anchored high single-digit several of the segment. organic growth across over set the

to the car used new to emissions and offerings, due history of listing same digital services, we our include services. to auto recall between many which our have is vehicle spoken used supply diversified forecasting, report First, car-focused perform the well drivers is past. marketing to vehicle our the chain and growth expected continue in and These well business, analytics,

enterprise valuation and with solutions for start, defense autoMastermind, are strong services, within acquisition the to recent organic the will third, strength growth had a and pricing, of businesses X% & aerospace poised and businesses. maritime In within across And businesses. finally, our a Second, new in auto off good data which from us dynamics. produced improving quarter is market quarterly best both information, benefit with Financial our services dealer we trade In management driver our result our strong Services, to processing indices, years, space. be a and we particular, managed growth, loan several

growth We also our processing see continue to loan in business.

term. We see continue organic organic In turned we that to Resources, target mid over and long growth our strong. upstream downstream positive businesses our business the and to were to X% to pleased a growth energy X% as rate our improve remained continued

price spend We forecast XXs We're are to in to for our annual the low low the environment XXXX, and low in growth as expect expecting the customers code. in single-digit growth continue growth increasing XXXX. outlook X% organic we our an we throughout confident value for in to increased expect to improves deliver year. normalized the and of contract boiler an revenue in that -- we organic have quarter, single-digit was the average CMS CapEx for oil revenue XXXX,

on strategic Moving initiatives. and synergies to our

have laid Day. We and April out to We our year. plan with million at we areas progress program synergy additional cost initial Investor substantial surpass in synergies our made strategic X our this target that will $XXX invest incrementally

we in expanding people, and to remote development, regards structure. with intelligence streamlined investing are more a providing and First, training management

sites Second, improve around in product and investment data we both increased as cost development. to have accelerate efficiencies analytics technology our as well

invested systems to improve coming in internal Workday now all also -- online. which are have workplace We productivity,

incremental and Third, product have leveraged data team we new our investments science support to initiatives.

are account and account are engagement now by corporate customer fourth, to XX implementing we have number our our POCs, structure commercialized. investing of base we management now being and our increase And Salesforce.com. across finally, discussed, previously these expanding As a launched global

rate $XX revenue on to we for a our synergies. good achieving target, a and XXXX, to Moving million start in off surpassed we're XXXX. In million $XX run

our accounted are synergies cost guidance. XXXX and for within revenue Our

Finally, Browne of experience and end our company. Both directors we within of the the Giadrossi markets. of have new the Lord as extensive Nicoletta Madingley appointment announced

target XXX lot our our I'll value is our for margin achieved commitment move forward consistently invest Within least EBITDA at focused to and we call organic this the Markit, So mid-XXs delivering margin IHS points to X% earnings in revenue the manage to to year to with strong you, are as Todd. of growth. corporate double-digit including we'll basis business to framework, we return a to our shareholders. capital now over our our annual first close, And in the adjusted expansion on shareholders, This create as for X% commitments range, growth delivering fiscal governance. shareholders we growth, turn and to and

Todd Hyatt

Thank you, Lance.

for we reported XX year and Before year that QX IHS want full the end legacy include full you get results started market, Markit legacy results, to from I and include year XX. through remind with while prior our November IHS July the results XXXX

remainder have organic revenue revenue FX revenue Markit We and have growth included our as in acquisitive of revenue year-over-year the impact growth revenue growth. included rates Markit's and

increase the organic of Relative results. X%, for of increase throughout QX an strength revenue to Now pleased QX were revenue, of or of revenue EBITDA $XXX performance XX million, the the was autoMastermind X%. revenue for an of X%. up year. was XX.X%, $XXX million, basis EPS we margin Revenue normalized an X% was growth points with and with acquisition. increase $X.XX of and $X.XX, trends And adjusted the improving the Adjusted

X% was and and Looking FX. XX%, at segment X% of growth Transportation recurring X% comprised revenue performance. nonrecurring Organic growth which acquisitive included X% growth. XX% was growth organic,

drivers ability drive growth strong our in segment, in Lance We see Transportation organic growth in single-digit to the that high remain very our discussed led our business to earlier. continue growth confident and automotive by

negative revenue was of XX% including million organic of recurring X% We flat Resources. full X% Revenue year X% $X increase and Resources The increased the to and FX. X%, comprised on ACV essentially growth minus year nonrecurring. ACV, $X with Moving closed QX with organic and of million.

include OPIS year-end Our the with excluding and we OPIS ACV we expect our intend in a ACV total $XXX low mid-single-digit million. on to like-for-like When basis year. is report growth performance throughout to improving QX,

and year and X% performance mid-single-digit and Resources in from revenue sales XXXX nonrecurring of XX% software X%, revenue of We million. nonrecurring which also was X% was growth with X% expect CMS comprised growth nonrecurring, organic, business. X% which FX. included closed revenue strong $X BPVC recurring in Organic benefited Goldfire and revenue growth our acquisitive the

was part prior for QX. of including Services to organic in and favorable XX%, X% growth We versus from some deliver normalized was in to revenue revenue organic organic year and FX. expect single-digit CMS due XXXX, Financial revenue low Information BPVC. catch-up growth comparison XX% growth X%

double-digit organic and growth our revenue administration ETF as remain performed delivered robust, business AUMs business well. index indices Our

bond addition, our some pricing In business completed major wins.

volumes. by Derivatives Our largely processing delivered driven finance credit the business business to offset processing lower as was volumes, rate processing and revenue strong. the leveraged loans due were higher growth, organic X% loans by markets flat syndicated

year-over-year our processing comparison. be due business to range mid-single-digit expect down in the to to difficult a We low

by increased across services X% from portfolio, and the EDM businesses. growth by loan broad-based led revenue benefited Solutions our and

X% longer-term growth revenue we Financial to range XXXX. within Services high Overall, expect We to growth our deliver organic solutions business expect deliver X% for our in in to XXXX. organic single-digit

margins. and EBITDA Turning profits up now year. X% was million, versus Adjusted $XXX to prior

was basis XX Our points, XX.X%, Mastermind for adjusted up margin normalized acquisition. EBITDA the

Regarding to XX%, a basis versus royalty Transportation's margin a QX $XX to XX.X% Services part EBITDA XX segment points Financial EBITDA prior with share, diluted year. XXX adjusted a XXX XX.X%, EPS with over points from strong $X.XX flow-through XX.X%. year $XX was improvement versus increase flow with margin in $XXX year. X% basis with Mastermind, million. adjusted profitability, points due versus $XXX was per a margin adjusted last a million, was margin points. BPVC and EBITDA quarter or adjusted excluding Resources the basis XX.X%, in timing. revenue was due EBITDA $XXX sales EBITDA XX of Adjusted of of of was of million, Adjusted cash performance. free basis year CMS was million, an last lower-margin million, down was down margin the up last $X.XX

conversion and $XXX $XXX was Cash free by million. negatively costs XX%. represented impacted the million acquisition-related year Our rate and flow trailing cash restructuring a XX-month of flow of for was approximately

have been costs, XX%. approximately would these Excluding conversion

balance the to Turning sheet.

closed effective $XXX approximately and year-end. XX% Our balance undrawn targeting which at approximately due to covenant was of gross fixed of we close, minimum $XXX leverage with bank the X.Xx December, our At ratio a on X%. of basis, debt this debt offering XXXX represented year-end we an million. our a with structure level debt million of X/X completed cash. quarter fixed, $X.X offering, is a million rate Subsequent debt are interest capital March we and revolver $XXX In was balance quarter billion, early

shares, QX was million XXX.X average diluted XXX.X million year count share weighted weighted share diluted our full average Our was shares. and count

$X.X $XX.XX. $X.X were year of and full Our $XXX from option billion our buyback repurchases shares, commitment million an stock average million included or approximately price The repurchases against share XX.X share proceeds. billion

We billion buybacks $X.X are planning in of share XXXX. to execute

will back-end Our in be levels. leverage policy XXXX capital executed will our be share loaded with repurchases and line

acquisitive XX% and included full represented year the X% X% acquisitive. which organic segment X% growth growth year to and Transportation results. XX%, for full FX. X% declined financial Revenue organic X%, Revenue Moving Revenue minus which the XX%, X%, X% XX% and Total segment billion, CMS was minus $X.X of organic, acquisitive. for was X% FX. including for and X% Resources including including minus increased organic segment revenue the

growth Pro full Financial was FX. organic Financial X% including was and growth flat. Services organic forma BPVC, Excluding for processing. for Within for X% revenue X% X%, minus X% was Services, for growth pro for X% information, solutions the and year organic forma

XX% points. expansion EBITDA Markit Turning was EPS increase year business basis its $X.XX reported perform account forma initial target, $XXX we billion, from and ago. full Taking per million very adjusted XXXX points. or increasing versus basis autoMastermind an to Adjusted margin the with to million. expansion XXX margins. totaled purchase well, share, results, $XXX was it to margin Adjusted was profits XXXX XX.X% XXX expect acquisitions, margin pro a of up continues EBITDA $X.XX and achieve Relative January of now to of year And XX% of earn-out to $X.XX the price XX%. diluted of

record approximately will EBITDA years, of we estimated it founders remaining Mastermind time currently adjusted by performance $XXX is when These $XXX over is cost acquire be of of cash ultimately XX% business, Mastermind This the million recorded costs to separately to cost the are XXXX through in represents compensation expect XXXX. which the but our interests five a of next will initially in noncash the be million also acquisition reconciliation. and employees. ownership reported owned settled which the the at We acquisition-related the in

growth billion entry EBITDA lower to for, our revenue guidance, In on This $X.XX November call, we with EPS rate XXXX point our our This of margin and and the to XXX a guidance expansion, higher of $X.X of XX achieve order $X.X approximately basis terms which represents expansion. are effective points adjusted we at the billion to XX.X% but more U.S. margin we is $X.XXX to of tax In the revenue from a core Mastermind billion. to revenue points of business revising somewhat offset of midpoint new activity. synergies, margin of from adjusted XXX organic billion, expected incremental expansion X% margin than expected the tax reaffirming XXX points cost by reflect to adjusted produce revenue guidance provided dilution are guidance of basis and the and guidance, revenue provides acquisition and basis X%; upward law. investment from growth

of $X.XX. at growth EPS adjusted to the We represents $X.XX expect of This EPS X% adjusted midpoint.

of moderate working cash to target flow, XX% versus XXXX long-term improvement as X expected new tax conversion is capital guidance percentage guidance. capital restructuring begin and previous improves. our in which and to adjusted tax In mid-XXs cash rate U.S. revised is law, merger-related to costs terms of XX% our an our the points with includes improve This from a line spending of

repatriation negative liability. We at revaluation XX% by offset the a tax new tax our somewhat tax rate, rate expect deferred due our GAAP liability U.S. to of the

impact record both to that, our adjusted in will QX will from back to and of over cash plan Lance. the We tax these turn of with rate. will call these And exclude I Neither in items XXXX. these items

Lance Uggla

behalf Todd. Thanks, stellar has not year enter our position have XXXX. We finish a to be QX puts our over and we work done of and performance prouder the customers great that and I good us shareholders. Okay. could in been the on teams past had as XXXX, of

is executed floor before I we vision an truly we powerhouse. most have Q&A, the once an is global we shared a miss to thank Now been few a again thought developed yours to his combination. Jerre, has Together, wanted our start partnership really Jerre friendship, information exceptional and we I'll for met, importantly, creating his what I and Jerre presence. what in and, unparalleled and say words.

Jerre Stead

you, your to Thank highlight providing and things. great We me leading deliver colleagues of during to Markit our in were such people who've of Lance. career thank done all It's all the able for working customers us. many investment many, with create want change for I value shareholders focus CEO discipline. years thank to community testament for the our our and a the over around to want been all colleagues' a continue IHS of of pleasure my XX-year such great It's investors. also for to to I the our support. great you

Lance his thank the to his things also partnership greater you want come. Thank to most years you to I very and, lead IHS ever Markit to Finally, Lance, for friendship. importantly, going in much. are

Lance Uggla

to Thanks, open ready lines Q&A. the Jerre. Operator, for are we

Operator

Peter [Operator Jaffray. Appert Instructions]. first comes our from And of question Piper

Peter Appert

calling on X% been in XX the 'XX. congrats guidance And the last has quarters, of great X% for Jerre, retirement. the your for last growth run X% over revenue The Thanks X% the over each organic to three years. to

quarters, I'm year? into seen after conservative the momentum recent wondering, the the slightly more in why view going new just more -- So you've strong

Lance Uggla

Thanks, thanks And approach words conservative for had things truly that a is together, to -- kind I a advice -- Jerre well, It's have great Jerre as number share I possible. let's take year these his Okay. together. guess every we was and real and Peter. I put when -- first Lance. one and me your the of companies I X think hit really

concerted gave hit and growth, looking we we've more consistently the that X% well. to the X% felt, a and consistent. organic start long-term word could the guess to range moved an investments that now box we I X% X% focus think we objective over X%, our to was at with which with moving you, years. successfully our quite guidance X% and consistently to range. ticked We to hit need we gave years. with X% started And forward And is from coming coming X% And effort on the whole We so we over I that bunch to off that into

as set on X% and goals. point, confident into to X% Our year, those to X% initial we've our our we're the X%, step which delivering entry is move long-term to right next of

hitting making do. say we consistency, numbers we the So we sure what do and

Operator

next from of our question RBC. comes And Bisbee Gary

Gary Bisbee

here echo I'll and a to question investment congratulations guess the two-part on Jerre. I margins.

going quarter get the just that, of we've So talked about you've a Anything some at that at this row margin -- on on for Is update analytics as that focused that? are of quarters the is than in you've And bit should guided a the doing? had new two stuff part -- all less this and expansion effort? a you've in going this in particular with to Investor of -- than Lance, last there more call you'd can said what products a and products on? we an investment you've been less of in some bit wins some point. forward. delivered Day earlier be we quick we Or some Is been were in other there the you long-term out you've from things commercialization -- think

Lance Uggla

Okay. Perfect. Thanks.

to Todd. start, I'm I that one and to I'll going think then pass

So committed the confident off, XXX I are points. basis think first and in very we're

fact. So that's a

FX Second, impact. the into those and let And the had starting to part, place, dig Todd had we've quarter. -- within I'll investments first a some impact and take are

investments, are -- answer to question been the your before Todd, of to have Some I numerous. pass

Supramax sea That's valuation new doing our launch new a also moving to oil, created out ECR of together a a software team back. portfolio Baltic next-generation pathway & our rolling ECR in our using maritime sea. energy natural business. this about POCs, and optimization energy at Belarus maritime developed teams towards our We're of product trade and Minsk. model trade Commodities, carbon teams, techniques dynamics engine our sorry, working aerospace our back around transform event processing index in defense around for and in to for We've engine around language -- forecasting several with We our teams. with that's taking into Vantage together commodities moving commercialization. So working assets. index analytics some to and some new We've component and create XX energy expanded product for have to and products our

personally upper through and the to our ones to making we're for So towards leading involved. those I'm long-term is team. X% data you Todd, us are both of take second? of in. those end drive are active wins. investments And analytics science continue to that investments want and those the Yaacov X%, we'll the some we're and short-, make do mid- to our

Todd Hyatt

performed, certainly going and we have aware I a how but guidance in net direction. bit that's look when confident the Yes, to good to are be to take range And But little that. earlier we and are a positive, we other that at that revenue helpful we -- at we next And look happy just deliver the for are X%, go progression as you we've year. a the you'll question, margin. Peter's back processing, the do revenue think step see normalized said, the to we established, through X%, been has have I'll we revenue the the quarters four you X%, When I year, it's with to X%, progression, look year, to that think probably bit. we if can I so

be thing sales and you other with the growth. of, to past, between growth talked this about the aware reported to I've Resources, differentiate just and think I have is in

do we to the Resources revenue So through year. model, the see expect improving deferred

it mid-single-digit as through more the low that expect We comes single get that to think a digits. in level, the P&L, but into of growth

just revenue. quarters. several margin margin think we So of we're the look satisfied the with comments couple a on over delivery When the progression, at the I last

that think the we As call, of market, there. line, exposures an get FX And Lance as weaken, XXXX, on income out go about some numbers. but expense losses other that that expect I as where the a of we've and One, at have look done said, couple that we level call seen piece this We currency investment we is to we a of some nonfunctional mark have talked don't continue. I we would the things last in big has have dollar taken impact line. position and marked, to the to ourselves if we been in into

net hedge improvement to we negative a expect exposure, significant year. income, the in this you other have more fully that see which to has see We path expense a so for pretty been

The a in would other of of we say quarter turn this FX thing revenue FX standpoint, more up saw positive terms so the $XX of picked translation is we from I that million revenue.

million up more also $XX We of picked expense.

translation in said past, hedged the standpoint. a I've we're naturally from relatively As

So of $XX deliver of sequentially, million as we million Mastermind. was look, quarter. that in $XX we did more, revenue the

$XX million You million $XX through fell FX, adjusted sequentially, have to EBITDA. and that, from of about

think I in good So the performance margin.

as Importantly to XXXX, feel we that we good we go deliver positioned, we've about made. into laid are to think I that out. yes, we've And commitments the the guidance

Operator

of next Wells Bill Warmington from And question our Fargo. comes

William Warmington

So a on value. question contract the you energy for

price us whether -- business it for to keep up there's The well, and has pull would could to to from momentum year anything You for back talked before in I've of where is, that's the question is whether that what about finishing back, look going changed value that there is -- the and in a apples-to-apples give was $XXX -- that the back business back is structurally improving. an getting to oil if The levels. you back on first sense annual contract those point was structurally that's getting happened if previous you XXXX, basis been turned anything started million. you there that is about the

Todd Hyatt

Yes. and talked bit saw it QX. a said coming exactly the I going which down. contract by be QX first what year. of year, year, about declined we the we ended of downturn, handful -- And be part was the entered had $X in million we in doesn't laid And XXXX, going $XXX were the was we the out, by $X on would and to XX%. see was flat OPIS. into growth in deals X%. Last had a when we it of Jerre value, the to down pleased And we first be declined Bill, that year we the annual it the down include and what in million, We Asia. million said to

going forward, because in didn't number. So to want we'll to put put would to so performance. in the want quarter OPIS be you comparison understand the it this apples-to-apples we We it

So in we were during to looking lost customers number, The their big long at million. the at downturn an ACV that with $XXX that OPIS customers the talked making their putting it were into million another the We $XXX thing about strategic operations. U.S., call we of U.S. $XX business some the million companies that exiting to independent so exiting international of it about were was in geographies, tail more about changes activities. but talked the operational companies

that will and now things Middle we see activity levels look In some opportunities Latin, offshore. coming back, I do see the shut opportunity level there market in down. We we increasing, NOCs. we mean see East. opportunities believe really NOCs capital the we be see we at As from the of

an ability to the more we to the market, to but level years. that active going sales do deliver we're where environment to But and couple a we're in more XXXX. be stable in we were do see and think not mid-single-digit of So back we to predict it's growth a sit next much going

Operator

McVeigh of Bank. question Deutsche Kevin comes our from next And

Kevin McVeigh

as in would impact with of in XXs, that was guidance set, oil context sensitivity kind Lance, in downstream any in overall? of of the just growth and obviously versus energy thoughts of given growth it kind mid-XXs? low sense of up that organic organic kind ticking of the was how the when upstream kind the of the Any to business the

Lance Uggla

this said, and Mid Yes. it's as a are of out CapEx is additional called Well, upstream, time, downstream and we single-digit into Upstream, we're to drive We and and mid organic low confident at just said XX%. we be and that don't currently, following 'XX. mid-XXs; and look OPIS, to and see last a growth, the out business ago. the solid to We will as CapEx, a all some in Todd performance. we XX-XX continued of there, throughout have our we XX%; on in downstream, see year mid-XXs. spending. what said growth, Chemicals, we forward from that's what quarter, called terms upper changing moment low about

Operator

our question next Andrew And from SunTrust. comes of Jeffrey

Andrew Jeffrey

A question.

look we then little very can which automotiveMastermind, and strong, to in growth see forward? particular, to that As a revenue Transportation competitive going about the what the continues talk above-segment-average sustain aM-specific expect advantages at bit you business, environment sort in be and on digging you and auto you as organic of competitive

Lance Uggla

Okay.

car sales then forecasting, mentioned many across the used about new what used across diversification. and to that we and its diversification aspects So diversified across analytics, adding car sales now history of of both on call, love we and autoMastermind vehicle recall, CARPROOF the reporting, automotive business emission IHS Markit CARFAX, is

collectively has floor, their dealer fully several leading solid years new and in there an what diversification the of with we both and and come. digit, has a single have forward, like we the around very the to for autoMastermind growth -- we product for a on as it the that's So development rest performing product we -- over and in scope a our couple When we conquest. with marketplace. optimal years automotive also leading current penetration business, so assets scope of high expect parameters autoMastermind remain opportunity and a see of to so the penetration product size and to current and their

franchise, our customer. and So new use within dealer take retaining is to incentive the help is currently, spends the opportunity business dealers autoMastermind Together focused advertising and the spends on franchise. new the into revenue their actually

for are right. car more and their new science ahead sales, revenues. need floor analytics. to They dealers coming the dynamics challenging tools maintain So With on again, feel grow we data these need the markets the the and

Operator

Barclays. from Manav question Patnaik next our of And comes

Manav Patnaik

and side maybe, a I little Financial more piece. information wanted processing to even and bit the specifically, focus the Services on

had think It pluses sounds going comps, what a year of in was anecdotally. more testing focusing blockchain horizon? maybe some are those on question should minuses strong And You just next it thinking processing, and on in the and that there are that MiFID of other next obviously you of and my year, we that maybe some work forth, into And the maybe maybe of guys track both electronification of? of on and are world. positioning so like is cases. regulations year. the is But some And forth in is pretty your you guys keeping around you so how reverses curious then how

Lance Uggla

Okay. I the, question. Jerre's to And you're But don't one he start Clearly, a going kid be why to can new got pass and to I'm of add discipline going guess, I'm then me. to in have testing going keep town, there. choose I But to with to it Todd, to from from that. I perspective. financial one part

markets a look energy the of look products companies and really the IHS taking into market, information think one you is the things the and performance resources, our all, of First when consolidated like you in together Markit. at of at markets, big of part and of that's financial marriage we I and financial bringing diversification

thing good a that's So company. for our

you in had X% We're twice once so And historically about to them, that going pricing, so price and growth again, I've that have growth. high And at we're and we solid, valuations, investment before, very, we're we at characteristics said got We now, that, and expect new cetera, the now really business, you number to X% solutions, X% to that products X% above, we combination to that even -- you once X%, strong and the that are within take be X then X%. growth diversified some we've if the at we're which products performance just we're low running was times if keeps or market-leading growing, out have starting within on today, very growth overall. have of talk good again, to years, not forward. used very products, they're we X% information because we're your feel no we and models below mature pure to want all X% initiatives. looking of to maintain et just our of the We've single-digit the in always indices, some invest some we upside, said performance, X%, X markets, double-digit with to to we If part financial we have not X% markets is evaluated below. products where bragging way when of invested have that that we slightly upset financial upper those price across a growth. -- the to take which grow outperformed though you single-digit a X% feel

that financial that? to we to have is can footprint, add, diversified we continue where want and consistent and feel a maintain margins nice, going we markets forward. Todd, the So deliver some Do that growth can to we improving, you

Todd Hyatt

growth information X -- provide the sets likely is grower year the I low would a I look we the of. add the and But raised point of there. feel we that's this diversified the we're a in talked would the probably pretty it as we look the to about, about numbers a have to only say future thing likely a good single-digit materials, at the pretty processing continue I had good thing next point, decline at thing overall by by solutions, mean, I year, and and legacy product We that going in it So we when be solutions, be only segments. good we processing. would is, year aware to -- I add that and because X take portfolio, reporting Manav, I supplemental The as core well, the information versus the mid-single-digit we enter perform portfolio next very right? those would growth think the portfolio year, down this

Lance Uggla

point, going well regulatory perspective that positive been growth us tailwind. and is -- terms into positive in to we will for problems, us just close a on It's Thanks, Great. Todd. has close continued positioned implementation implementation, feel a 'XX. I MiFID, with of from which solutions the a solve of this on for year, to

Operator

of question Andrew next comes from our JPMorgan. Steinerman And

Andrew Steinerman

kind that up NOC CapEx? mid-single held geographies being up the and be gas of Oil XXXX. and kind double-digit to has back? in CapEx want to digit poised back ACV. of gas Why in I more it XXXX grow ACV are Todd, a only had to be Is in ACV oil environment? other there any into and Are constraints poised CapEx like get already and for Resources to rebound massive

Todd Hyatt

next there and about think out looking entering and I the we different and half levels. segment, we -- called of a as companies I an year Well, substantial that market by so market, And think being it at bit the certainly and I growers cautious but look net-net year different opportunities. see I market, we areas that investment improved the still are it's first are at mean,

talk low XX%. CapEx being I year-over-year, significant single about talking being double high capital, we about rebound the see when mean talking up XX%, about we're we're So in up mean, being digit, but not you do I up digit.

I going their think companies of and cost be still investment structure their are in terms levels. to careful

So get about this ACV single-digit could ACV. a were feels at into early just don't we to me like lot that ability feels a -- we the the the from too grower to grow it's move XXXX us. market call coming perspective, better good But high feel flat we the wrong, I to point. And our think level, to market confident a

Operator

next comes Anj Suisse. our Singh And of from Crédit question

Anjaneya Singh

Anything with out basically there? be drivers the margin that there's your should performance we improve know of I to CMS, how you'd in in that a of in segment, performance lot line 'XX thinking and On of business longer-term But call that view. to regard you're with to margin in opportunity about improvement growth the excited 'XX that's guiding about? you're

Lance Uggla

Right.

hand margin I talk Todd and question. to that. about the two business specific to the performance think on the teams leading to just then and it pieces there's I'll that, I'm going

us in all, which Workbench design. around hard at parts to us. Workbench business, X.X product we'll a the leadership his albeit So feel X.X this continue client improving this to -- full the responsibility business, strong by dynamics, XXX% revenue, led very was year, in strong to and a a not and expand RootMetrics. our in our this worked highest And place great of year for put first has and the existing includes but good, position Hawkinson taking Chad implemented Weightman, fully release Jonathan Gear we've margin both tech businesses, it Ian product services technology We he's is opportunity design which gives for as team. and takeup, to grow

market, mid-single then we're is line So pleased about in historically get a marketplace. start of the digits that this we the in a is is, our growth technology, rest towards back And with that. view and we've year and marching underperformed

and want business feel the about better good I So the growth you positioning dives, for the do deep the something in add XXXX. on margin? reorganization to Todd,

Todd Hyatt

We've in things one-off business Yes. we've in The margin, a -- significant TMT stickier two really on offering. of one moved subscription the larger, is the products. that consolidation, reduction so report to the specific the talked sale about, from product past, number

is talked proprietary with which bring specs upsell Workbench. to that having And other, the drive I Lance margin. Engineering we about enhance So And the ability benefit value to customers. that margin. the to ability and think standards then customers, providing It which we provides table do the the do about, functionality see and to the that

Operator

comes from with the line And our Kramm question UBS. of next Alex

Alex Kramm

you, this think I revenue the is one for on Todd, guidance.

the I remarks at this I a base numbers higher made you're my rate and included should pound think I you year at my prepared up just an incremental in in exited I be should that, there comment, therefore $XX where your had $XX therefore, If and, euro the and, bringing particular, think, -- million or million look right, million that math guidance. in in and You higher is $XX -- terms the FX running. If you be are of think your in the FX, guidance before.

So the flush upside a different would for if if number? maybe call high is out? anything Or you're FX? low and And using all by so end, FX. the guidance the end So it's there FX, just really the way, including $XX for $XX is million the just why components, million you out else

Todd Hyatt

don't haven't quarter update out but FX the revenue after flowing on we FX Yes. land, QX to the was update we FX in go level this We'll really numbers recognize the a in I the wend guidance quarter the update and quarter. accordingly, commentary exchange. call where We for see all through really, And I but and XXXX. for changed organic in as mean, positive QX. on rates after over-performance think through point, at year, we'll

go We will we the through year. monitor it as

Operator

comes question next Baird. our from of And Meuler Jeff

Jeffrey Meuler

what think Manav, his me up part question. of Let D help cleaning for I was

years Just, I ago, was guess, blockchain Lance, you were about talking several it before, cool.

how of are where of I Is this it So on can And at guess, Is any opportunity update it proof an point just concept? still for you? be? big you? it commercialized

Lance Uggla

important think I ledger been has in advance general, technology, new and, important is Well, a of blockchain an Right. an distributed assets. ownership in technology terms changes of

we technologies. informed new and be teams therefore, of need all active process we FX, to so well and derivatives, loans, process And our users

businesses, and And with processing Brad so proof industry Kansler of several Levy, executed under concepts. Adam we've in our

upsides the those so transference positioned called proof us those IHS a And so well processing our technologies then is Markit the new ago. great of around of to up desired have leveraged loan and concept out of changes. and of picked assets, new Seeking those If few our implementation have in participate ownership Alpha and technology We a or improve technologies participants in and can that to called shift position team and -- on see a we a has in that share the afford recently Stacks, well. market costs the to the week

Operator

BMO comes And Markets. Jeff our next of Silber from Capital question

Jeffrey Silber

granularily bit more up then conservative? maybe the follow excuse you year. -- for you me, to Are guidance? an about there caused little any guidance change? question your that Was this why to granularity, adjusted segment on And EBITDA wanted a specific also, increase didn't the in Just guidance earlier being just revenue

Todd Hyatt

we that same level. in nothing color I would color November. When at segment is The across, the the provided we materially look specific say

that it's the margin only As but to level right allows at we us of We not balance, continue effectively, line. at balance right that into we that future. look the this the the think is appropriate business to investing bottom business, XXXX an grow for we the at manage look ensuring to we're think and to the delivery

So that margin of made I Lance certainly to an guided and call the we've be robust acceptable and what ultimately level at. level to and we a that that a margin, was is think relative to

Operator

Tong from of comes And Sachs. George Goldman our question next

George Tong

cross-selling expectations Lance, how Can you you your XXXX. had your as indicated for synergy and in your revenue $XX pipeline million the are progressing update provide an well rates revenue close fiscal including of on as latest synergy run-rate initiatives, of progress expectations XXXX?

Lance Uggla

Right.

George. Okay. Thanks,

time out when started merger. So at we guess out we -- I the the numbers of a put few

the the than the -- quarter nice of $XX One merger, actually did to what see achieve sets $XX very the million revenue key of team pace year. actual within numbers start think the the slower a bit million a pipeline, every closes. was little single for but and great the run and a We so to achieve million the job. I opportunity pace was $XX to growing year ended Probably XXXX the at at the buildup of was rate,

So no been quarter than quarter. had less the previous

good, very So the and excellent. momentum were I synergies think revenue dynamics the around is the

number, at We that emphasized that times run -- the it. good is end that, a several we of to the work reaffirmed we've $XXX exit rate, XXXX million and felt also continue towards we

about on track I up And we revenue the And that cost management account longer. have originally global been we're driving across takes but most the is corporates, think, equally, supports the that exiting 'XX this little pace the corporate 'XX. structure. us rate side said the the is getting that a XXXX, But but bit rate the well. is now on And in team and of managers and very hundreds the we with of opportunities opportunities, it's run that that have the we longer for year, one executed say of the the been we and today, of number leading end million pipeline run synergies number opportunities. new closing It for across flow-through our poised what to I our $XX growing of account large of merger, the that parts set the have took opportunities, revenue we you the So pipeline management XXXX. Mark we're We've from that it's feel Everything $XX and markets. good to we've and financial at of newly rate pipeline we're account management we side. markets in been exit brings current And really strategy $XXX account now place. about the Rose million revenue said financial which $XX is pleasing of a corporates. been invested million that than the million opportunities had hundreds felt be deliver would run

Operator

from Fitzgerald. And Joseph question next Foresi Cantor of comes our

Michael Reid

Reid This is for Joe. on Mike

the So cost think is if $XXX come that so, already, any you from? synergies upside that do with And how there up And to million? much? where tied would

Lance Uggla

had it we'll that synergies and take cost to What hand that remaining have cetera. the from and is merger, exceeded offices, continue million we said et remaining in we today $XXX the consolidation of

mid- short-, growth. use initiatives to we're and in the our to drive so And and revenue synergies going have we also some cost more, to invest continue to long-term

Operator

And comes from Ridley-Lane of our Bank next America. of question David

David Ridley-Lane

contracts already from already? really And you signed bookings Or then contribution still those have slowed what's are the signing in on MiFID-related revenue those expected today? Based and contracts products have, the fiscal you solutions Sure. 'XX?

Lance Uggla

job, a extra with our see done in get The we actually, as Well, months information to our fully regulations, a within the be place has XXXX team these No. ourselves group. got We've MiFID, revenue put regulation and and terms implementation this in and additive revenue good we given of to where and have was good We marketplace position few new we out around individual it for our a a in and positive break in MiFID is product but disclose offerings. year, the regulations. around in don't to II GDPR business.

Operator

Rosenbaum Shlomo our next Stifel. comes of from question And

Shlomo Rosenbaum

retirement. locks has I to keeping because to Jerre change my better tell want he coming And Lance, just the to of a way on his on congratulations also wanted back. add you

Lance Uggla

We'll that. welcome

Shlomo Rosenbaum

I like expenses the already us box, -- the revenue? about was want the automotiveMastermind. to And like, what and that seems just the Can overall? out you in when the million contributor dollar to you're incremental on to you're one little seems EBITDA payments. EBITDA showing on the outperformance $X.X seeing. quarter like about talk frankly, of outperformance -- million. focus It the bit to for, start Just there's also, a more give what of a the when on $X.X be it And you a from do then drag does expect quarter

Todd Hyatt

holdback dealer a the to revenue, Yes. performed January that count, The original and for tied well. was agreement business December provided

the in And that negotiating so was of the is single-digit were don't there like the this, agreement, revenue acquisitive the was that slight then that a know getting business we terms November deliver the at was I delivered I what percent. AMM the we million look October, the million. part in acquired said but in $XX the our And basically, as of revenue. agreed high and performance. will to And estimate tied earn-out. Think basically, the where original when the -- to is $X the of That business we EBITDA of agreement. business of we always an in plan I adjusted you're think, we a business. holdback mean, negative a as delivery growth amount,

of rolling a EBITDA million through. negative there's $X So

revenue and For as into million the next year, -- we've a and moving low a XXXX. into XX% we go of $XX target mid-XXs then that talked EBITDA percent, we about adjusted single-digit see

Operator

Hamzah And comes Macquarie of from question our Capital. Mazari next

Hamzah Mazari

various reform. you is an then impact across verticals? in you on tax know that, lead on customers I your could question from And side. reform impact. touch any whether My the any tax I book cash conversations also could you you with about early to uptick talked tax look was as with on spending hoping the savings your linked to

Todd Hyatt

there Well, ETR or will several going -- to One tax through really is to a be flow perspective, to from are things. lower a cash. cash

said we by is going our to So from an ETR benefit X% adjusted perspective.

cash the the impact And make that a as report being which end tax, significant over years. would in payable other a impact see we'll of payment. is well the repatriation We first -- will the not then where that, The at tax revaluation negative XXXX cash QX. liability of impact versus It's that to on a sort but be will the we see eight and benefit theoretical be deferred tax. years, future the into that of prior

Lance Uggla

be And tailwinds general, for say us. there'll in positive be that I of customers, many outcomes And Todd. we the are on on in some corporates losers financial they depending of Thanks, how course, to press, read of there's and and our today. would some think look environment we side, situated how take that as we'll and some positive groups the for institutions, headquartered positive Good. winners, they're to customer

Operator

Toni from next Kaplan Stanley. And comes Morgan of question our

Toni Kaplan

hoping was info bit you just I growth. little Lance, that, could a organic XX% further elaborate on

and in You bond mentioned the pricing. strength ETFs

indices the you why higher XXXX. or look given than And not asset I in sort value think doesn't bond X% to typical X% net totally info as of it just reset. of sure when pretty the just recurring it of trying think like more pricing, is I'm if to transactional at But up, be recurring. I'm wouldn't that

Lance Uggla

Yes. Thanks, Toni.

Markit. the that set solutions that premerger of of right kind the very through since to And at we've having I -- performance mantra eight defensible, processing X%. to So has X%. within really number I taken that diversified and information the drive looked original the as guess X% been services a information the running, And group as X% company years said, can we've divisional it's IHS with ourselves

very supported confirm think we a I going in and and way X% the that us look stability that So to the at feel X% that's good delivery well we is of supported to historically, forward.

and strong really you add a great of -- of products, their and in are outcome, one have those but do that a deliver great some And underlying was matured well have the we products why businesses, And we marketplaces. still QX up have quarter? course, we -- sometimes, such positive outcomes. that when to parts really, all So

comes So main from products with your price. those growth

product, that's your and entrants got part substantive and low price three-year business people low that product, growth. is You've market applied the isn't therefore, that to expect a there product, price. pick market-leading want our is in growth to digits therefore, single new single-digit a the up on And contract, of

good news growth. that type So that's we've position that that, that you part. single-digit That's the first doesn't bad position, of deliver high got news

second have the and base, we're great The the growth. dynamics great where of momentums. is adding and into pricing, example have high growing that; where of perfect example double-digit low is new customer key Indices that, we single-digit a bit delivering a a to big perfect addressable we where lead positions products markets market product or bond

they generated, and been We billion that a for now, drag that this by XX course, It's growth. products them, Services, costs, billion, To It old. done and you revenue $X is financial -- when over the that cap a is they whatever of innovators. market of then have you implementing launch of think years overall period XXXX. $X are only being company Financial that designing, time. started about markets have always innovative, solutions It's developing when new on it

mature. time, online, they come double-digit strong they growth, they move over As and into then

the revenue company the revenue to expansion question, we'll have and And we holds do I one think. is is a in think managing that continue that and margin and the stead, shareholders, I very conservative, our expense I for that, approach So that that good last and shareholders. to our good do to to really to This describing that company committed think approach that.

Operator

our concludes today. session That question-and-answer for

Lance Uggla

Eric? Good. Okay. much. very Thank you

Eric Boyer

Markit. IHS XX, XXXX. about your call and can conference ID This be We beginning via thank dial-in accessed hours XXX-XXX-XXXX XXX-XXX-XXXX, international replay X you XXXXXXX for through running or in January in at interest

for webcast interest and addition, your and at www.ihsmarkit.com. our appreciate you, In be website the on archived Thank year will time. X we

Operator

today's all conference. participating conclude for Ladies you and have may day. you and does Everyone, gentlemen, thank This in a disconnect. the program, great

IHS Markit (INFO) 16 Jan 182017 Q4 Earnings call transcript