INFO - Earnings call transcript Q1 2018

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Operator

Good day, ladies and gentlemen, and welcome to the First Quarter 2018 IHS Markit Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Mr. Eric Boyer, Head of Investor Relations. Please go ahead, sir.

Eric Boyer

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

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

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

Lance Uggla

IHS for Markit you Thank QX earnings us Eric. Thanks, call. joining the for

growth financial people, year-over-year points, XXX outperformed an across in automotiveMastermind. EPS of our experienced the the our and for the of revenue of XX.X%. XX% with was expectations and of impact we quarter, organic $XXX of range. the million $XXX of products, firm. growth. for upper and of the margin up and basis quarter: QX We at customers our EBITDA excluding technology X% longer-term year. continue adjusted $X.XX, Key the up basis prior profitable expansion our long-term and XX% to over are million, as highlights Adjusted and broad-based results we And invest We our FX end pleased margin Normalized on

Let and continues provide businesses. revenue me organic produce and in our strong growth the across trade with business auto now within highlights. quarter. strength of maritime XX% some driven & was segment Transportation improving to Growth with performance & defense results continued our aerospace broadly very

be downstream organic businesses. performing acquisition managed businesses data recent services, management of pleased with business for revenue our and organic a automotiveMastermind and And Our markets X%, mid also we information remain In strong our years valuation and were X% for operational as a well particular, growth and pricing, we driver solutions us from across and businesses. indices, quarter growth continues end reported services, and finally, Financial enterprise ahead. since our upstream Services as improve in X% CMS Resources, was is will the improving growth strength to are energy changes loan organic merging. strong. with strong benefiting in growth

from participation attendance the and annual value us March, achieving the together confidence in from And team to XXXX. entire the which to and great energy of exemplifies gives the combined XXXX held growing by CERAWeek over our beginning we turn as the and This to view and global are across an X,XXX our and Services, the for value. revenue Markit in outlook leaders contract for our and for another increasing powerful in Financial customers target brought The organic record our with the and the XX proposition conference, optimism with event value energy IHS our in We forecast including price CERAWeek growth we of growth industry supported my environment We managed single-digit industry it In sense firm, spend chain. oil segment XXs dynamics. revenues. policymakers leaders, underlying which in confident increasing Todd. revenue rate annual year. synergy CapEx confidence low for over average that, market call From conversations in customers organic our of is mid-single-digit I'll the was over had part countries great with

Todd Hyatt

of organic EBITDA increase Thank XX%, you, adjusted growth XX.X%, an revenue, Lance. $XXX Relative margin Adjusted XX%, with of year. an basis an was increase to back and revenue trends million, $XXX and pleased of And the XX%. of of the we million, up $X.XX positive last of was with half EPS was QX QX to revenue Relative $X.XX, continuation or of from X%. revenue revenue XX financial were points. results, increase

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

businesses was in our in see Resources revenue and segment. organic continue growth X%, our strong Transportation X% We very our and single-digit ability including in confident to X% organic to remain was recurring FX. Upstream automotive growth drive growth X% growth high was our significantly downstream improved nonrecurring. revenue was Organic versus which year. strong X% chemicals, flat, was and Recurring and by in growth prior revenue driven growth comprised PGCR businesses. pricing of organic

X%, OPIS, acquisitive Our growth to growth Organic organic which $XXX FX. organic, X% of comparable segment, CMS across revenue ACV. by and including sales. beginning-of-year X% entire nonrecurring. Resources X% was strong comprised QX Nonrecurring was growth recurring energy million, software driven and flat XX% primarily was X% ACV was the was including revenue

posted X%. that was growth revenue and X% to XXXX. organic including performance our All Financial design, and Services growth QX. remain improved single-digit product in deliver X%, lines, CMS revenue business TMT ECR, Information target of will confident X% its low was in We FX. CMS growth organic

strong growth revenue organic in our volumes in declined derivatives business. revenue lower and continued businesses organic double-digit valuation growth. services deliver to Processing pricing bond X% due to continued to the business indices credit and Our quarter our deliver also

continued our loan expect Services by management organic to deliver growth for XXXX. and X% growth X% Financial Solutions was growth to we and WSO longer-term solutions regulatory compliance led in range within Overall, business. our our organic X%, in revenue

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

as impacted was Our margin points. dollar AMM adjusted basis up offsetting Core weaker XX EBITDA and currencies. FX expansion percent percent XX basis for margin dollar points. basis basis and XX.X%, AMM resulted higher by points. margin in XXX in XX points normalized U.S. non-U.S. was impacted revenue a margin expense higher FX by

a EBITDA basis margin over EBITDA margin points adjusted Transportation's a year. CMS XX.X%, up XX of And XX.X%. was of was AMM, share, margin versus over Adjusted prior $XX XX.X%, XXX adjusted the Services Adjusted with XX.X%, with or $X.XX a margin an year. prior XX% with excluding XX points prior up points was million an million of year. with margin $XX versus diluted $X.XX of prior Financial year. profitability. improvement basis of basis year. $XXX XX.X%, EBITDA was up million adjusted EBITDA was EPS XXX segment Resources EBITDA points adjusted million versus prior versus a $XXX was per Regarding increase basis

to XX%, rate of line adjusted XX%. an with year includes tax rate full our in adjusted of tax EPS adjusted XX% Our guidance

$XXX with rate Our minus onetime to an XXX%, associated from tax benefit items million reform. estimated due primarily U.S. net was GAAP tax

was conversion, Specifically, of flow million, our repatriation XX-month cash costs, offset of cash revaluation estimate represented $XXX free conversion trailing of XX%. rate liability acquisition-related deferred flow XX%. excluding free a was $XXX million, Normalized somewhat million. tax a and $XXX our tax by of QX liability $XX was million

We target the cash conversion be expect an the in year remainder to of improvement and our within year. throughout mid-XXs for the

debt X.Xx represented leverage on quarter million a which ratio bank-covenant cash. billion, $XXX quarter-end balance a And approximately $X.X we gross with closed was Our basis. the of

million was count in weighted XXX share repurchases diluted QX of $XXX Our average We executed shares. QX. million share

In executed shares. value initial or XX% million on a ASR million of approximately of delivery resulted X.X addition, X, ASR March in we which $XXX

in the upon of We will of ASR receive delivery the shares remaining QX. completion

XXXX our In XX from reflect guidance reaffirming by from to we earnings million January call, terms guidance, $XX favorable impact increasing further FX. of our revenue are

The million to $X.XXX with from of X% now X%. we expect FX. revenue for year, of provides the to growth organic billion For $XX $X.XXX guidance billion revenue benefit

but year due the solid continued throughout revenue expect delivery year-over-year to the of expect We year, growth the also more comparisons. to revenue half challenging moderate back in

higher expect revenue expense FX. EBITDA our points and also do We to report normalized higher be billion. as XX expect approximately target expansion Margin will adjusted of deliver $X.XXX by offsetting $X.X But negatively points will to we XXX-basis margin for from we FX. from FX, billion basis impacted

year the at of forward shareholder made X% to represents We and business year, updates EPS We delivering will with EPS invest look had in on to a providing long-term back continuing $X.XX I And We while $X.XX. over call focused the year of turn further expect the to that, start adjusted commitments This good as to progresses. adjusted beginning the of the midpoint. are we the Lance. to the growth. at the drive to growth

Lance Uggla

pleased year commitments and least of and continue incremental that of customers to XXXX margin and our lines at our combined I'm our to to as consistently help a investments delivering our to for confident to in Todd. move we advantage basis financial X% mid-XXs and due feel merger ready achieve we're us serve up Operator, expansion with X% Thanks, start organic to of We'll for longer-term earnings to in scale target to and to stable XXX double-digit guidance markets. Q&A. the growth, improving annual growth. execution end the open our points better adjusted to EBITDA financial synergies revenue aid our the our ability take make will our

Operator

first Our Appert Thank you. [Operator Piper from Jaffray. Instructions] is Peter question of

is open. line Your

Peter Appert

good and seeing growth be the momentum X% you're portfolio, us conservative. to growth the Lance, very to organic Can the your feels X% on across the for morning. the you, might given in year year strong the give thoughts like rate start organic it that? you Thank positive

Lance Uggla

view where if the our one the But expected. into another to year full we peaked just quarter at did X%, our ahead We X%. Peter, think reassess on the a good, in it us. X% But we a the we is, strong that, year, quarter. X%. and got you. quarter I Thank we as that's Sure, We last from is merger, and go the good had was. fair time, X% we'll talked guidance we've quarter. to this a If But said. held We've is quarter We of like summer. to hit it that that I back no, We have a present – we talk X%. view, our hit X% think question then final is we

Peter Appert

you. Thank

Lance Uggla

Next question.

Operator

Our of next question RBC. is from Gary Bisbee

open. is line Your

Gary Bisbee

to but do revenue, any top continue good well good what's guys, at this guess you can you on AMM? But Thank the on driving give sustainable very expansion the before is anything improvement? this more Transportation operating margin of of strong leverage, type us Hi, going morning. I And else on? how level you. profitability color obviously, business, Obviously, line. that such

Todd Hyatt

balanced particular, in and automotive, story really the And balancing think in delivery with we've I Well, over business those always margin. built a of last continued years, X two we items. investment have the X to

we've not of So, businesses versus longer moving high I up see all the into bit quarter term, higher information push scaled unusual these range. on in talked investment it's depending levels. another, to a But XXs one margin think about

leverage. that quarter Gary. was business underlying auto, really, of mean, elements it there complicated I in so, wasn't than more a operating that, And and strong provides – substantial the nothing information

Lance Uggla

Todd. Thanks,

Next question.

Operator

Bill question is next Warmington Our of Fargo. Wells from

open. Your is line

Bill Warmington

Good everyone. morning

intelligence. a So, question artificial you for on

company, to So, it AI going acquire S&P spent billion the and $X.X were development. to accelerate Kensho, to being new recently they product use that cost thought efficiencies Global

at you're a similar about Markit? So, a the capabilities? AI need I are you IHS build-versus-buy talk guys about to ask what to And are little trade-offs at how and machine point? wanted some thinking getting acquisition how make you you learning I'm to type within for is, using those bit to And going

Lance Uggla

Okay. It's Thanks, Lance. Bill.

our it's intelligence, one guess years that's thing of and And information of to an a over company, is lot the time, that of food operational as something when of spend activities. AI as lot that's learning jobs but start with is augmentation types back hear reports then terms of significant new putting the day And cost in doing a on if Scientist. moved improve do artificial for of next-level chain and the best-cost look that time, up of company These of technology, Science, processes again, that's some and around time time to of So, I impacting and Chief in when years put we operational of to in is a fruit AI-driven. into with kind all information XX about have to comes what of operational I those ultimately, Data probably put can the company, a internally. we which have back operational which the today, as been from intelligence where I of manage and you the for a Data the hyped XX of actually past from myself, those with that we the activities, there, an if of lot great we we X of use want actually which machine who functions. have efficiencies well the led, you move mentioned, lot pilot. And done processes And one definitely a proof-of-concepts, lower-hanging buzzwords conversations. Yaacov a of math look over computerized But we the information use The to through first role types things high Chief machine intelligence. we've found effectiveness the of fair last we've in that an another came built-in operational being processes them improve somebody locations. actually is start assistance I'd or artificial of did in use computer We've lot could to now merger, we previous the science, X repetitive take bit using or quantitatively north calls, learning, But which are the XX Mutnikas, or said buzzword a word AI. of

we go get processing. further up natural language chain a food and bit Now, the into

Risk data improved synergies Web, augmentation public-based, in then computer Country to content and be to into content World help and where those our from Internet that them insert & looking And our using in sets – web-based classify we're are available events a insert the and leverage explored both operational setting we're Wide into take in Here, multi-language us to to sets. data aerospace also & amount to can Jane's our catalogs. business, Economics of achieve defense, events them

a lot lot firm, ourselves. We'll to continue So, we're as a a doing ourselves. do

within the now think but any considered built a space, looked be a acquisitions of the part firm. or It's in, IHS around as that usual we're haven't We the at in up Markit. it's to Yaacov's team of team AI is – investing significant business hype is for area we and lot

question. Next

Operator

Our McVeigh Kevin from of is Deutsche question next Bank.

is open. line Your

Kevin McVeigh

Hi you? Lance. are How

Lance Uggla

Good.

Kevin McVeigh

the calibrate from kind you business? how of So, from great the Can into market possible synergies. give leveraging upside the of the just is – reinvestment job a perspective sense to maybe us that enabled synergies it you've and a

Lance Uggla

Yes, are on cost so revenues? cost the or you – talking

Kevin McVeigh

Cost.

Lance Uggla

okay. Yes,

said minimum $XXX we'd we when merged, cost we have that the million. – on So, we side, a

we hand, research, things that investments et areas And we've leverage said been our around content our the the of we the insights, firm was $XXX on put above And also also science to of we sets anything analytics, we our valuations, incremental range. invest we the we at we're investment felt we to data question we'd four and are business. to where those overall our that then in to that key end improve AI end propensity feel million, that said higher cetera. Bill's data those the incremental million categories in $XXX just some a year would – top think to can and achieve of and to work, talked some lead last really of the speaking our able I of back about that

business. we So, million number, merger our that the that $XXX to into and was put hand able any in a get synergies back to good – put and were additional

million leveraging and the That revenue very momentum XXXX, $XXX run anything, side, think feel, and grid. we on for million, the shifts Internet I vehicles in storage $XX revenue year's The the we at that impacting we impact and really has of CERAWeek, that's autonomous is as companies, as as cloud million, next And the accelerating we middle the and on the then quite could bigger synergies had, fast million, had well the Things. $XX see if of technology, we analytics in the a energy energy was On of business. going fact the targeted with the and excited intersection. financial interesting the and rate exit, around much our companies market this – all intersection and supply information around of the prices, intersecting to demands finance want distribution, automotive vehicles, of intersection look been we really electric of mobility energy the cheap is in participants the where how biggest power at with $XXX finally, all course, of of the and use chips were to

So, we felt together a next it event, firm-wide come a divisional CERAWeek around event. IHS not question. really really and felt Markit like Maybe

Operator

Our of from Patnaik Manav Barclays. question next is

line Your is open.

Manav Patnaik

coming to talked one guess, came the mind the you that. reminded when address scraping, through. thoughts I maybe thing regulations it how and you about prepared GDPR the are guys language guess me processing up just of, I hoping web and that natural I could that you my was are around

Lance Uggla

answer, Manav. easy an that's Yes,

be hand, don't foresee teams an there. have challenges excellent to job, in we and have prepared any do and We have and our to we it

Next question.

Operator

of question next is Andrew from JPMorgan. Our Steinerman

line open. is Your

Andrew Steinerman

understood. internally providers they're talking with that using in might a directly be company, IHS I analytics does that with is investing of companies on sure heard software or that analytics, also the just to the more spend are at some digital spend Schlumberger? I CERAWeek, the technology kind Emerson IHS? we oil those on about and help technology When themes make services wanted Lance, and doing data? of spend And more Or energy

Lance Uggla

Yes, both no, really. that's

of fuel also but we sets up Those is made of assets and in and there, so analysis have assets. one build into team scenario several have rapid software that So, terms primary working closely business valuations, our positive, been the of the we edge data a provide – with data – large us analytics, to been science data has out a more competitive that's course, geoscience much a giving asset our engineering for analytics. Vantage,

thank you. So,

question. Next

Operator

Jeff next Our Baird. question is from Meuler of

Your is line open.

Jeff Meuler

variation Yeah, you. different question. Maybe a thank on Peter's

So, numbers, I through the hitting when are the over bookings incrementally to me that segment calling guess, improve back to half, like Lance. flows Resources appreciate But guys expected the the to you it tougher comps to looks I consistently are that's largely, and out positively continue where time. the in revenue

headwinds Todd Because things call-outs or comps down. where So, other I Lance, already there should any or gets think be better and processing and that might Resources on is tough weaken? facing

or So, may growth other other you'd that call be areas just than we maybe out where of decelerate? CMS that should any cognizant nonrecurring like

Todd Hyatt

anything I wouldn't specific. say

primary the last think, performance, I the progressively one, really improved look hit seen performance, You when at five being we've quarters. processing. the But we over

X% when easier from grow so, you're it's at to And prior certainly the to year. X% a comparing

out I that the we've just ensuring delivering for level delivering aside are and of the of profit through think I the that half to aside processing, move I wouldn't way back And in from performing that us we're maintain to from items, discrete shareholders. but and we key the that the the boiler momentum move sustain robust the growth think, is into level made as a as year that year. to a continue call revenue expectations we So, code, to it's we

Lance Uggla

Todd. Thanks

question. Next

Operator

Blair. from next Our McHugh William is question of Tim

line Your open. is

Tim McHugh

of Wondering as look But just there. if that about – guess there, talked we elaborate, underlying guess, and can forward CMS, I thanks. strength you you improved sustainable? the I the trends Hi, on execution nonrecurring on better market kind in there? is

Todd Hyatt

which significant Chad low in improved believe we and did $X hit see performance lines wouldn't more talk number And a to Well, And that Ian, business performance. X% three was that growth for QX we did about for have boiler and Relative expect single number. revenue, delivering that as of that nonrecurring, million code certainly first, so I have through did I as we repeat in is see CMS, we we drove I said, what to [indiscernible] kudos in year. we sub we all segment. think for move some to indicative a of growth sub nonrecurring when the rate the that CMS, software

Lance Uggla

in products out looking as it it, that's in terms a is up as some I Jonathan leading out ECR of to the has been its And as the the side, the think working the Chad adding there a Also, to – a Ian extracting giving I operational technology. it on it on really and job I on as markets think bigger a [indiscernible] firm of And that Adam favorable great really then current of mentioned, and in presence, in doing build great tailwinds. and market we've some seat Weightman much technology TMC row Kansler Gear. side, well. Todd on much is guess for reporting and done team front with gives there, taken financial the the in brought can team's Ian team work forward terms that them into

So, working a they're all out good shout teams hard growth. those be of three to and for our part

Next question.

Operator

UBS. Our is from question of Kramm Alex next

is line open. Your

Alex Kramm

everyone. morning good Hi,

of into wanted if mean, which high end bit guidance X% is Just I'm the year. to more. for dig put correct, a at your up already little you again Resources I organically, the

the take about it upside it in you ticks So, higher, to we actually flowing thinking I that for outlook? that guess would are tick of I about continue year, of higher, some outlook what to if particular, on if it? the think to the for expect number rest line? the potentially would the bottom And How

Lance Uggla

much not is Aristotle on it's thought historically because such right. the start We've just and the news we And swallow one in say chemicals in I going power franchise sets, a it a we're of been we We've really we But And good that had quote and is companies, quarter. team. the recovering think delivering merged pleased have and that diversified on is, summer does we focus the I was and the too got it far gave pricing presence. we're division, upstream leading and gas And great focused weight a fact the XX%. Todd world-leading what fact "A we a and a think building He a I renewables and do call. OPIS CapEx. gas. thought and that we've X% said, world's for me data leaders. very got in the a make," upstream, deepest an we're still said got our number. Energy to have We've is have

go one So, year. right But low from the hey, and end the low single level there. we'll into of that is guide guidance, back think see single next some we're into digits, just our the we're our for the and right price quarter we how look let's Thanks. quarter, for digits – at we

Next question.

Operator

question is Silber of Jeff Our BMO. next from

is line open. Your

Henry Chien

Hi. Henry Chien for It's Jeff.

dig Services. Financial wanted into Just to

been seems like here. solid it pretty has So, momentum

or Just rest improve either end what activity of about organic profitability or wondering could think in the how in curious think momentum past? what Services thinking you're talked the here. – the markets we growth or Just some Should should the improved tick-up markets the synergies about year segment. we could that how for improving this Financial rate the improving sector maybe of the you've about of

Lance Uggla

place half, thing cautious that's puts X us – there are Number Yes, don't we making and being tough think Services ahead I the and get conservative Financial it's some in ourselves. a that so comps a the in that second of in sure of

year at I year. to comps go, So, and look big think last have wow, was a forward the you

that on It page. would of Number be I'd financial markets that my something Outside X creates So thing that, is volatility my activity. have like.

political of driving active. in whole markets of a bunch and volatility of more posturing, the therefore, things a kind tariffs, are geopolitical interesting that So, and, marketplaces, few some make

and called and tick, it then up So is I as passive last going but participants today. just a put to investment, a that announced. plus a regulation trend strong that might we've and teams there's meet and that's a can seesaw our would markets. those Todd been the put with cautiously franchise say financial finally, to seeing been signed see out that side. we would solid that very the we've continues. many trade a product for the product. I tick they again impacts have leading years And be on regulation. XX on market regulations performers the Indices for pricing, SFTR reporting And our developed index

of as hold. to So, implementation regulation the still take a is a continues little bit tailwind

political So, put could pluses comp minuses. around we've constructive good I uncertainty think got markets us, half and some or a tough in the that second

you. firm hold we've just we to time, the in given point guidance this at So,

Next question.

Operator

Capital. of is Mazari next Our question from Hamzah Macquarie

is Your line open.

Hamzah Mazari

you. how and look look your could next is years. there's improvement room you was out system Good you and tracking for any morning, maybe you. a few there you as hoping sense whether the I in sales force of thank over productivity metrics Thank us give what at

Lance Uggla

Okay, side, guys so financial on hitting see you're us AI, down we questions I studied you can the aren't sales yet. us breaking haven't Brand-new force from productivity.

productivity – any want all for sales to force have possible. the company, So, force sales best we hey,

do look their for management go firm, managers we've exceptional self-motivated within they we work teams and and and groups and deals Sales financial deals job much revenue financial sure that our across specialists sales hunters, big of and the are and specialists. synergies close broken in. sales So, renew account market to out addition managers us, they very are so make the so now commission-led that an all The product the into account have brought players. revenue account is across both for

senior Rose, Mark our one have account managers under is corporates. energy across experts, of is leading also, We who –

by And deepening into the commission productive specialists that not are account, financial we have by with the organizing that so, feel corporate account and specialists product our and relationship, biggest for us, customers then we a more cover and market sales of rather sales, much led if the managers the but our we customers group.

that, two last been quite seeing we've and work, So, that fruits done we're of the and that's we're years' the with pleased that.

thing second is gives technology. using The that productivity us

the have at if And course, to three. the to go fruit, to so, be of want had CRM. base, you we merged, And have when a good you – we lowest-hanging

So, productive. taking then through renewing and of prescreening, and tools a pipeline this be there's sales gives closing sales. the more we so, of for the constantly to all sales is obviously, then, a the knowledge only improve products qualifying, we globally. all And got hard high by to team More and managing the your to set for one and to and bar. And thing that class we're management, and think single have productivity. want want I working year, post we'll deal to CRM be want the do, world we've And teams the and a stages sure productive make fall you closing, our we to we do the us, capability with

Next question.

Operator

from is Foresi Fitzgerald. Cantor next Our of Joseph question

Your line is open.

Lance Uggla

Joe, are you there?

Joseph Foresi

hear me? Hello, can you

Lance Uggla

hear can we now. you Yes,

Joseph Foresi

the the trajectory call of to I an a a or if business? can get And through see But I'll rest on year? curveball. can Thanks. out margin anything we update revenue from a throw the processing

Todd Hyatt

mean, QX is I I wouldn't our QX quarter; biggest our smallest call quarter. out specifically. anything is

obviously, organic organic last but would than X% you're delivery thing this one quite year at look bit ratable say, think I when the a grower a grower comparing the year-over-year QX, last QX, this year. – you year X% I to bigger

basically same the in tough I this I volatility I So, the how single-digit the bit in had activity, very processing. up. years I have QX. processing last and a markets was the have so credit we'll dynamic. processing, the Derivative a built I But performs year. that don't more two probably strong out bit to refinancing, capital in across Lance perspective, We we in code why this think processing create And that's the would a loan And think we year, a expectation year. Last the a drag. it We balance low an comps, year loan tends From then when flattish, decline. was the think balances about slightly seasonal derivative expect look said, the see particularly talked year as processing, more. in processing, business of

Lance Uggla

Thanks Todd.

Next question.

Operator

Stanley. question of next Kaplan Toni from Our Morgan is

is open. Your line

Toni Kaplan

Hi, good morning.

been at to free around cash conversion the rate. flow high year, past XXs looking low XXs you've Just

hoping So, into the what that year. us Todd, of you was for I just dynamics mid-XXs that will this could drive be remind will the

Todd Hyatt

last expense. a for slightly free the Expect to improved QX. or track Historically, Yes, we be QX think is been strongest obviously, dynamic that in cash business. the that be really CapEx, the Toni, follows had down our have the and move big of billings expect – in into at we cash quarters the to and I much QX, line interest number occurred we patterns a collecting guide Expect year perspective, then we to as around and bit. with guide substantial interest QX, QX, tax thing, said will billing be from would

cash So those flow. big are of really the the drivers

acquisition-related I think the costs. is thing other the

As into quarters, moving integration see much we come year. into the the back we'll move wrap of the substantively we activity that as up half future down number of

Lance Uggla

Thanks Todd.

Next question.

Operator

is question from next Our Shlomo Rosenbaum.

line Your open. is

Shlomo Rosenbaum

you the million correctly. being million, quarter, if just think in guys something's without that bit I I heard not a thank we it tracking wanted little $XXX expecting ask about way my sure seems difference lower. $XXX calculation like and And you Resources, there's thought ACV talked with just million OPIS. don't to it's $XXX I last know for OPIS, in questions. or more it wasn't I expected. a and the heard Hi, I I the about taking I you

on If clarity just little more a us that. you can give

Todd Hyatt

OPIS we'll Shlomo, report that to year. The thing year move deliver concerning some we mean for quarterly growth base I mean continue in a don't as mid-single-digit flat on ACV sub surprising. still low – that's and us our perspective we think the anything I tracking mean, numbers are is expected. the the inside of a around bit, surprising. numbers and the from or into did a the add I I variability metric FX. in for we'll hugely flat so that's is the not And quarter performance is to for No, activity, nothing I that believe one quarter. think does there's We

the reset beginning we of as reset rates. we So, year, the current it exchange for

walk with item, the through reconciliation an we be can but you. could that So

Lance Uggla

Thanks, Thanks. Shlomo.

question. Next

Operator

Tong question next of Our Goldman from is George Sachs.

Your open. line is

George Tong

expansion EBITDA you of good XXX thanks, annual deliver you FX indicated Todd, activity morning. you your the to bps commitment FX. Can And to Hi, after an of a investment date? bps market normalized expect on FX, for your margin especially expansion of strong margin how full-year? synergies discuss much impact given cost to hit whether to margins open XXX toggling for you're

Todd Hyatt

we've the and level. FX, the in we at exposure about this have past, certainly so Yes, talked revenue

As have the revenue. dollar strengthens, less we

the more we As revenue. dollar have weakens,

offsetting equal very natural in have expenses. We hedges

dollar, saw where that revenue, really you very had in despite profit. years little fact it it so, the impact strengthening prior on impacted it a And the

really from expense and the we it sense That's $XX Now our we relative through what million And call FX doesn't to additional an deliver item flowing from margin we so make also offsetting nonoperational FX. have perspective, flowing dollar. over benefit, item. close to to saw In of try that. see revenue try is quarter, nonoperational of it, through But X% the a a FX. weakening to amount a from any

that and robust balance And believe margin said of profit think delivery, balance shareholders, look in we we'll to that investment, FX that so the we to we business ensure we've can at with guidance this a as we past, that basis. investment the as on in normalized continued delivery of future we'll relative is growth. that sustain So, delivery

Lance Uggla

Thanks Todd.

Next question.

Operator

Our America. of Ridley-Lane is next from Bank David of question

Your is open. line

David Ridley-Lane

morning. Good

within acquiring According up would for then sale. first Financial sense to for impact in, that that electronic Is a platform? of the in you? a could interest of interest higher an get relative have potentially trading any And area bond here assets of sneak notable there an quarter? Is you volatility in several are reports, Services are that the I to if one the wanted positive Just segment. press

Lance Uggla

have of comments either. the on about not Okay, but any sales rumored acquisitions, going that you any to we're any we spoke haven't engaged in

where sometimes respect in has with be Markit really to major question, I way can because first busy our to But volatility impact are whether had any services around don't in – volatility have are IHS to recurring for a markets the it businesses interesting of business we an there would Where think impact it's so The us. demanded most quarter volatility, places. impacts regardless. volume-based be be can or model, slow, really two

So, and paid generally, a we're derivatives smaller usually that basis, out And given mean one, trade, a marketplaces size on worked trade be is per historical more in has the market, positive. the frequent. higher-volatility to

fixed revenues down, improving. markets business So, in were our tough found income income processing where was we fixed rates

that and an can see and quarter a lock think, start be to – is piece Outside where don't rates I there's places you a extend can see and have loan wanting of that therefore, where of two And least thoughts can we say initial to and, lot places impact, interest rates in second to any corporates volatility see that, impact the when here, are I'd can additional those a didn't our Services. in major processing business Financial could The add quarter. at there in rise, in term my impact activity.

question. Next

Operator

Gary Bisbee next is Our of RBC. from question

is Your open. line

Gary Bisbee

expansion years, you've that's of you. cost consistent company's business strong very X.X financial business. a prior synergies had the business follow-up, Lance, the in the Hi, there with allowed product Financial parts than yet been The things, other more this the highest Services there's just flattish business, one leverage merger, some margin about Is of processing, was talked in quickly you've some another which margins. and margins lower-margin growing delivered? just delivering? this the the that and Or strong to on within one the had Financial Services drivers mix And you last margins. Thank quick the

Lance Uggla

two well, things. think think I – I

investing achieve I think we're cost the felt to we we margins the strategy the look it the said which we were for margin to a That's across from the at we for – comes we mid-XXs. we of also X-year focused businesses, set looked we IHS therefore, going on develop – we then and At home our at and synergies good, merger, the the invested whole best-cost in X were and gains, mid-XXs how strategy. side, revenue, businesses. cost at and we all we course, vision a firm, and do and through improving of very our incrementally. a have And but Markit premerger, were solutions time operational come our managing merger, the the looked to

Gurgaon, in our the way Europe; to and Bangalore, Southeast or We totaling of been and enhancing have third a And Eastern Penang we teams. seven approximately forward our Asia; manage we has have course, and significant Gdansk, Noida of us Bucharest, and locations, for build mid-XXs. X,XXX strategy Minsk, margin in have attrition great towards a that's

going We development, said at strongly efficiencies edge, be also were time we us a product the supportive also remember, gains. but said use gain to and competitive if merger of you to it'll that efficiencies that creating we technology on to both

we we're the well, at become has we to know, you division above a to the towards Every as add remotely to sight as be on AI you really stewards jobs. long-term to division, mid-XXs, a marching points our to want be us. more across XXX Now investing truly future. and learning each has firm, whole, that? think as because least over we're of And of machine to we basis strategy. margin. to believe operational technology and that, year don't to do also our that I should some used going every able but in be the a give I that's can Todd, company, And think important actually teams operate through effective and used it remote be And can a board,

Todd Hyatt

No, we're good.

Lance Uggla

No.

good. So

that's Okay, so it. Thanks.

question. Next

Operator

no There questions. further are

Eric Boyer

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

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

Lance Uggla

Thank you.

Operator

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

IHS Markit (INFO) 29 Mar 182018 Q1 Earnings call transcript