INFO - Earnings call transcript Q4 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Q4 2018 IHS Markit Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions].

As a reminder, this conference call maybe recorded. introduce for to conference like now your today's host Mr. I'd Head of Boyer, Investor Eric Relations. begin. may you Sir,

Eric Boyer

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

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

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

Lance Uggla

you and on a strategic expansion Markit our made adjusted Year and the XXXX FX reaffirm delivered performance, for organic Thank and very progress us excluding review of earnings margin and outlook, points QX was EPS results with financial basis we discuss a growth initiatives. year for all revenue of of you, on strong for Eric. we XXX our QX fronts. year-over-year our growth EBITDA XXXX call. XX%. Today the we'll IHS successful have and Ipreo Happy Financially, joining adjusted New Markit XXXX IHS thank X%,

to have to rate. at continue recurring about each feel growth, non-recurring We Financial well and well as Ipreo, also completed XXXX. is the we our solid that strategic outlook mission-critical within are and have revenue diversification our through made growth financial sense us acquisition a over good bearing term could spoke QX the and CMS uncertainty the progress and few our comfortable We solutions, our in diversified trusted Automotive remain partner, grow we're performing November. Services we Energy longer two that the our end we business guidance. consolidating we last year reaffirming and great when with fruit. of still of with our off finished are base. our a way see recurring urgency of model, solid is on initiatives. role We Operationally, business a with global reorganized XXXX that even cycles. markets. for perform revenue increased growth is low a from and while all steadier well And bode A both We believe positioned right momentum variability. will investments points help will with

upon EBITDA adjusted business deliver focused executing our various to environment. We against targets and us expansion levers also EPS growth help the margin adjusted independent remain on operating of

free and return cash to improved which capital shareholders. termed our our out structure significantly also past increasingly to positions Over the two conversion years, flow we've capital us

years to to produce gives All confidence this and our ability the come. us results XXXX in of strong in

Margin of So, the $X.XX basis. organic EPS and up XXX Revenue FX, and over a Adjusted of highlights share, financial $XXX Ipreo EBITDA QX. adjusted XX.X%. XX% year. the points and now $X.XXX million was to up prior margin year-over-year billion, on an on expansion of for basis X% excluding

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

Growth tracking, with our our to automotive commodity to First, produce we made segment strides and very successful strong data freight of extend in around new We to for capabilities continues assets. segment events, Transportation proof-of-concepts XX% leveraging the launched continues forecasting a revenue quarter IHS In Markit’s XX% results. XXXX, strong in drive the rate results service and growth of forecasting. of a organic number the the now significant core year. Advanced security developed Analytics value and across

Mastermind integrated the Conquest organic segment. better revenue portfolio growth marketing increasingly successfully within across helps growth dealers OEMs product customers, the high-single-digit which developed XXXX, that our into is anchored In also We of new target and we important. set drivers by diversified and expect Transportation,

X%. They to trade new Transportation, maritime organic defense from on forecasts regulatory to new and and car and analytics growth QX, history more insights introduce automotive entire supply our technologies the of emissions granular insurance policies, there’s business. banking is to strength and car Resources and and ever used in X% car continue of analytics for new and delivering was by vehicle full we're also used mobility. fuel as stringent will expanded products, market, listings, somewhat and production core accelerate focused adoption in business autonomous aerospace the the driven the well Our and chain. and growth report datasets, Also economy as and our Demand driven see In technology from will businesses. offerings, as customers. we year, our leveraging forms driving

of with areas for expertise. Markit We product increased participation we mobility, broader record expectations, ended We and contract in LNG capabilities supports forward our new annual sustainability, XXXX, a with the analytics. year value line the around also In view CERAWeek launched several had which our from XXXX. IHS with

capital financial formed XXXX, We up growth, control X%. all revenue In team businesses. expect a markets markets organic resource to of our capital financial also we business to new across [ph] X% and with

for ‘XX industry disciplined and continue but CapEx regards improve expect remain to spending the We returns. to financial spending in to to with

for renewal are comprises our gradually of supports we Resources, should analytics look and including an datasets closed. existing good was our integration the and and X%, which expect which mid the already of of in upstream towards expectations to Ipreo. We amount downstream business another view innovation are Services businesses, performance. Within as to and in X% Resources year. growth product QX create strong customers. the finished visualization line new transactions synergies to revenue, acquisition entirely tracking improve. Cost solutions in continue at enhance synergies which Within with We seeing our multiple rates, XX% organic our lot solid that XXXX, Financial around year our continued a we are will was revenue accelerated and with accomplished

see to businesses. investments within growth continue and pricing We from our valuations derivatives innovation and

the full We X% and the Financial liquidity margin XX also collateral to advanced X% partnerships, months. XXXX, initial calculations. Ipreo developed expect to management, solutions key we organic In new areas or range relationships for when a in Services including of X% best-in-class within to X% analytics, in provide growth

teens services and from given our light businesses. help capital compliance another in high while valuation to meet that We operating reduce solid year market product gains expect and products. of from expect loan customers, private cautious reference and will in finally, expect benefit growth, see the markets organic data, businesses. quality coverage continued our And our and to challenges attract and derivative in solutions, costs. by its our businesses We continue markets capital corporate pricing EDM Ipreo broad we and And market remain expansion our investments deliver Within new to within index regulatory markets, portfolio driven low-to-mid markets, our management and improving products continue to customers trends and of businesses share solutions, we regulatory volatility.

flat CMS quarter. revenue the growth was Finally, organic in

gaming capabilities a full base. X% oil include the of growth normalized fundamentals of mid understand experienced help ECR its within Code. Internet benchmarking deliver performance, design, to including chipsets, rebound range year, trades. XXXX to in In For semiconductor within And product to we the finally, normalized growth implications on expanded within demand single-digit customer Boiler expect standard customers networks. In organic low to for and gas tariffs within the we of platforms Code. new and our Boiler CMS the the broader revenue we things saw TMT, a Within strong XXXX we electronics, was for

$XXX of investment: on We our four invested People, Markit merger and synergy in target. our customers. Moving our million technology, surpassed incrementally We additional cost product our areas IHS and strategic synergies. synergies program completed to

financial science, us commitments product which of reap are these incremental deliver investments our longer the to starting term through to We to such innovation years rewards help will data come. already in as increased the

closing, of consistent earnings annual million XXs EBITDA X%, we a in revenue run Ipreo growth value of met our in and achieved now, mid expect turn will points growth. momentum revenue synergies, focused target organic XXXX. Todd. create for margin I’ll X% terms rate to and $XX we goal And are adjusted including as basis to over In to include a forward expansion double-digit shareholders. of of XXXX we XXX continued delivery margin move our to on and delivering In it to This commitments lot XXXX, our in our

Todd Hyatt

you, Lance. Thank

include Xnd. a million a And a $XX adjusted Ipreo as million as quarter $XXX full contributed of months started, our On get results Ipreo with expectations line and closed results year-to-date Ipreo of a our we result, year-to-date Before a basis revenue include August QX Ipreo. of reminder, four EBITDA. of in and our with we on

EBITDA Revenue XX%, billion, to recurring increase growth Now was EPS included X% XX%. the Adjusted We revenue an X%. pleased for the with increase to was margin profit X%. of And we revenue, XX.X%. were $X.XX. or organic an net and of was of of performance of $XX throughout growth GAAP $XXX delivered strong of results. Relative adjusted non-recurring with XX% and X% and the million million, GAAP and income organic QX organic $X.XX, $X.XX an year QX was growth revenue the increase stable was organic EPS XXXX. of of our finish an growth $X.XXX

organic at negative recurring X% organic revenue growth FX. and and Looking revenue was Organic X% was and X% X% X% revenue including recurring segment revenue XX% negative Resources The growth of X% comprised XX%, FX. increase performance. increased non-recurring. X% non-recurring. of acquisitive organic, including and X% comprised Transportation was XX%

our year million million Our the prior QX ACV year. full up X% increased $XX versus million. We increased $XXX year and ended with of was ACV ACV $X which

was growth transit organic impacted negatively declined was revenue in by and million expectation. Boiler recurring level and year line CMS $X to X% flat from We prior declined growth Services XX% Organic year primarily percentage organic Boiler year revenue X%. an was growth growth X ACV including Code. our Code. due recurring revenue XX% to prior CMS revenue X% organic FX. negative organic continue or and X%, growth growth with fixed our Recurring non-recurring X% Financial $X or including XX% XXXX was Non-recurring X% organic impact. XX%, the negative of prior revenue organic revenue full versus variable and in FX million year. with line was declined trends X%, acquisitive of point growth

Our organic including information including decline. declined reference organic strength and X% X% in increased valuation our led services growth, and business. data X% by Processing pricing business X%,

And solutions growth. organic XX% including increased XX%,

by our was led growth services business. Solutions loan

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

Ipreo XX basis. for margin XXX normalized up points reported adjusted and a points FX Our EBITDA XX.X%, and was basis up on basis

year. margin XXX a margin higher forward Financial basis up XX.X%, marketing Regarding Adjusted flow with prior diluted was or of basis support was XX.X%, year EBITDA adjusted $XX per points. to margin adjusted EBITDA QX a adjusted a with points. EPS was improvement up EBITDA the recall for with points margin over cash basis due $X.XX segment reported $X.XX spend XX.X%, XXX down product business Ipreo of $XX with and million million. XX.X%, $XXX initiatives. million free margin XXX Services was $XXX basis. points up of profitability, XX% in versus $XXX prior of was normalized lower revenue million XXX CMS Resources was basis EBITDA adjusted to share, Transportation’s on CARFAX and our down XXX million points

XX%. Our free a flow was of billion represented $X.XXX rate cash full and conversion year

quarter balance of our We times Turning with ratio leverage $X.X covenant billion, to the represented the year-end cash revolver $XXX debt sheet, our a on year-end million balance bank undrawn of gross approximately and a basis. X.X which balance approximately was $XXX closed million. was

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

million XX.X an $XXX shares, Our were price share full million $XX.XX. year approximately repurchases or average of

for to X% CMS including for represented X% including including X% solutions X%, organic including full CMS X% processing. segment normalized organic. which organic, organic X% was FX. full total XX% XX%, Code X% year XX% was X% and results, growth revenue Financial X% negative was revenue X% Transportation growth organic. was Revenue of growth was Moving growth Resources was organic. acquisitive revenue billion, for growth Services, financial XX%, information, year X% $X.XXX was Services the and growth Financial X%. for organic. growth Boiler including for revenue Within

now to GAAP share, points. Adjusted diluted and And expansion up with an Ipreo EBITDA Adjusted of Ipreo. million margin EPS and billion, Turning $X.XXX up XX% XX% reported a was XX% $X.XX net expansion $X.XX basis $X.XX. a XX%. of excluding or margin increase versus was and reported FX income year basis EBITDA was EPS per XX profits. adjusted XXX $XXX excluding totaled with points of GAAP ago margin

In which terms with to $X.XX including including Xth Ipreo of we reaffirming for guidance Ipreo. XXXX million Adjusted $XXX of revenue on for normalized EPS growth month XX to months contribution. basis would our billion, revenue Adjusted Ipreo, adjusted Ipreo. and organic $X.XX, $X.XX guidance EBITDA adjusted XX% X% to growth point to our organic we FX an of including X%. provided to period provides expansion X% Including for of EPS XX growth at of increase call. Ipreo four represents of EBITDA billion guidance margin to guidance, are from XXX EBITDA expansion, This which excluding midpoint. $X.XX of $X.X points, stub margin of basis and billion organic total X%, guidance Adjusted $X.XXX November billion

result the of launching first in to Ipreo initiatives half we terms a profitability, impact of back and of product XXXX be cadence in as more the In of loaded expect half. quarterly new the the progression

$X.X mid Finally, free we target XXs conversion than billion more cash expect cash flow. or in with line our of

In we’re with And terms capital and call over buyback. X on that, will to resuming I focused of Lance. times share allocation, to delevering the our turn back below

Lance Uggla

open our Q&A. their operational XXXX had our Todd. to shareholders. and in Okay. strong our line Operator, Thanks, have and I thank colleagues entering want delivering for ready We the work the customers momentum XXXX. a hard for around for good world to we’re

Operator

Thank you. [Operator Instructions].

Lynch. from comes Merrill Gary question Bank from America first Our Bisbee of

Your line is open.

Gary Bisbee

the Hey, in IHS can these reinvestment merger guys. have in today how is and might you a impacting today a investment about in much how Just you. couple revenue Good Markit, increasing give morning. or of product Lance, how you ever trying get years of people of since and in it of of development, and that’s us is a talked to either analytics going incrementally there Thank all sense just how guess be things. into important future? that a margins? couple that is versus impactful driving the sense I years

Lance Uggla

through or the think improving are I the some Analytics side, revenue the in being revenue incrementally the science of are products impact a analytics coming from offers on improving application is terms data positive of and with of synergies impact Well revenue existing that good. and driven Okay, Advanced now. existing increasing innovation

look Leadership getting around door. your XX,XXX those big part your developing therefore as globally well also invested merger more offices of have out in products margin but expansion the in the up terms forward. those are than both and showed development located as a was and technology We platforms getting management that and we on in efficiencies our and as and in team training and us for expenses well our area continued more have and an made bodes efficient early our with plays Learning world. XXX people

that investments XX% platforms we at well. really I of to bodes brand the be about organic So I the as making. been continue analytics, of have of the And that in people, can XX% growth we and to the vitality attributed look our feel positive forward the seeing science that the develop quality firm, of and urgency, the IHS and hope Markit of the with of sense to overall data application least to investments

question? Next

Operator

Thank you.

comes from Piper Peter next Appert Our from Jaffray. question

is open. line Your

Peter Appert

you, Thank good morning.

the the been be? XX% this margin asking the about there financial -- broad-based how in context you performance obviously the I So of can impressive you’re this has am already margin here pathway side. disproportionately to Todd few have talk the Can margin? with or to to getting in years. pretty Lance, Does CMS, last the it regard come from improvement to mid

Lance Uggla

I maybe So just start. can

our our by on supported view is our So, location one. strategy, mid-XXs

as organizational margin, well we of design location very us. through use bodes continued to for So a path clear expansion that a and see

locations, We very have globally, we have similar. quality mid-cost expensive in our is but cost locations and we people center the each locations, have of better

so the investment, And have confident at and just we operational a continued have more, very businesses. and forward across and businesses into It's that organizational on focusing through margin looking design all therefore, mid-XXs, footprint. constant not get across our and attrition we get margins lower the feel our firm expansion it's leveraging to the it's and that whole until trying we

to have higher our of of actually businesses margins services, three to where probably terms non-recurring we're be where professional and producing are revenue, and handles Some of in consulting that. we tend those or we're change not cost much going

for revenue. we'll a those so. our that's businesses to location, efficiencies have technology So and do of we're both of and and room and Core small piece attacking continue

Todd Hyatt

number well for lot of there. classic are transport. downturn, think We’ve probably forward a those there, said, lot progression. lot most but progression growth Resources, in segments the invested that manage margins. in forward Resources, a I've progression look the driven into done certainly of transport, the has margin financials, said But heavy a margin, with certainly always with to of we a can see able were through and we move always at high-XXs. quite there. We've level, years the to the information the segment I up do but Resources, opportunity will job margin we on coming see it Lance with we against operational good drive significant we business execute When forward a a as portfolio at operating leverage. in have Financials Yes, that we levers stable

within an there realities platform invested CMS, than yes, margin a business, You underlying we product think have there, but of that we the area margin much CMS we lower up structural certainly in just asked segments. our move about the CMS, can part royalty-bearing with I and other the design, perform within are at will product it think

Lance Uggla

Peter. Thanks,

Next question?

Operator

you. Thank

Our from Manav question next comes Patnaik from Barclays.

Your line open. is

Ryan Leonard

Ryan this calling Hi, for in Manav. is

in equity I mean, just during question. a saw the end with but the financial of piece these mix, business flows maybe offering? and highly again, at through of we of of markets, in Just the the volatility, think periods how periods that us can during kind subscription to especially the your subscription now prices, with year client like about oil of volatility obviously, you kind moving the walk conversations into the Ipreo and how

Lance Uggla

current low forward for of X% and they’re of into insight being gives -- that basis, good the long-term committed, play therefore, that into at with us confidence energy plan we're fact markets can the to within a is around thing off a subscription Well, those are visibility consolidating in prices. of good And we've look still we that line decisions on building think X% CapEx with state are significant the our that a on come the And really CapEx deployed, where base. is book the Right. made being services got are when business. energy I us made our is And and based decisions and CapEx. Resources the

see really power, when have strong we OPIS a Our gas. that performed the last on that businesses through mid We don’t and changing. years several recurring overall past through a mix, well the to have the downstream right that’s team basis period done and right high-single franchise add digits chemicals, into with you

we I’d expectations say against current plan to your forward with and the changes supply about CapEx. it good to Resources, feel respect demand creates and very question, and So impacts our our of environment, in as

and seen that When have spread diversification of subscription-based bit saw a single-digits also think focused well of from America you I bodes also there our North -- the businesses. confidence the of high We distribution CapEx more a we automotive, comment we’ve is our seen into our and CapEx look for come proportion broadly businesses. that large into in globally,

of We We’ve decline in -- marketplace. and of advertising in the the in and new in then market have vehicle mobility, than and highly the different called the around are Other fixed on promote made I of parts regardless of a percentage subscription-based and purchases car absolute to tied in markets, car parts automotive even financial car or IHS a But our We’re acquisitions. used with and investments. most our so the out. needs needed growth of demands China Financial there’s higher do made based we and diversified. highly cover well. that our that the autonomous well incentives new of revenue are SAARs exchange, knowledge to a of investments marketplace. it’s slight services We’ve we parts needed absolute changes India, but whether equities suppliers’ that markets, subscription-based, the business bodes for the need outcome And busy income level bodes of Markit. are market in and OEM global

volatility we derivatives loan So revenue and in therefore, the market. tied be capital smaller issuance attracts in there’s And in positively or volatility negatively of buoyed a size. the because us in for positive transactions terms the more But is our will of in sometimes market part processing, non-recurring issuance, to the they’re markets. processing,

and press many for in there some in derivatives, articles of becomes to we’ve And because example, lack so, the of credit the in that seen may the a since XXXX articles underlying levels instrument -- press, the market referred and in have credit around the that recently view highest liquidity years. the were hedging And you valuable lack been markets. recent seeing for month-after-month-after-month in to volumes approaching that’s decline

are our a to our X% at of mindset a But businesses applied tougher that and those pluses we’ve to we’ve and guidance, reaffirmed X% confidence. there have with our we looked So, and we’ve bunch minuses. through adjusted year

Next question?

Operator

Thank you.

next comes from from Our question Jeff Meuler Baird.

Your open. line is

Jeff Meuler

Thank you.

So of gave certain November when you Ipreo you seemed and you the the I But for the issuance instruments guidance XXXX that kind widened some downside. up. to just the out in protection think range gave freeze and really financial in to December

guess conditions a December guidance QX into is our we need what the bit more an risk if Todd that’s freeze, order given to put of at I go So consider enough then and could could modeling? it that you detail. in the maybe Ipreo just And that magnitude

to just that prepared You want ramp in make first. remarks second be than to aligned comment. But get and half your Thanks. stronger I the about sure a had call products should think your that out appropriately we the Ipreo incorporate of new for expectations

Lance Uggla

issuance Okay, so environments. and equities, three think first impact they capital into -- different I'll market into private four, Ipreo When about three of divided really how terms one. do areas municipals, those you capital market or or four, and fixed about income, think markets in in divided can the

moderate views cetera. highly et done the on munis of or lows highly reviewing high me -- in get But within Income, They quarters very to with a that. a to range has of level lumpy a and that good market done. In may that Fixed to deals a job it's different finance, subscription basis. has the much team expectations be So

guidance can equity issuance look market. And up I can't component least like years that including does is what want X% therefore business confidence look that XX volumes get with and to earnings. number forecast is in deals basis a And Markit I that done you there small. you all ‘XX or flows of well which for Ipreo and very about in XXX but that with, a mix the right part? the So that, what's the That's delivery. overall are businesses what our side I second will the confident feel at can and margin look Todd, I with what X% of -- that of good with to confident is IHS can component the give we're there of get the it like. I last the is down our flavor of diversified give feel the great a I equities, the incremental and then across and And look our that well bodes our do at the double-digit when new I point

Todd Hyatt

through really mean I Investor Yes, rates we the have allow moving relative and tied to financial deployed into growth. then private and companies take Access, year will that product up underlying the PCM it's the private year basically the are their being markets companies’ also of to Ipreo, some positions products we are to that the on forward launched new that we've -- business. companies on-boarding see model business, private through We're capital drive

year. are that most see talked and I energy the Life about rest of the items Conquest And portfolio targeted we progressing through the our product AMM. have offering. We upstream think that in the service CARFAX, then some analytic for market CARFAX we in probably the we've being notable have launched.

that and pipeline reasonable the products I will have confidence a think we marketplace. we products good of that a in of success some level that of have So, have level

Lance Uggla

forward more services that more as part was benchmarks the strong Ipreo in if wins opportunity the a acquisition tools. them and that those market anything, dataset of give it that revenue We early businesses component mid as private that to efficient space, as did when we as their regardless refer marketplace those Todd. -- see of that be look players environment early them multiple don't continued today, -- area independent we growth And looks Thanks, the wins, our capital wins as develop we to coming see the in needing Good. merger, an we help well. core we to of market and do love back-office and of we will manage see

we're as we pleased across important deliver is something that. most I've with. been we're So and very saying what that is that to happy Net-net with do we're us the combination going Todd and say what's very to divisions

Next question?

Operator

Thank you.

question Wells Bill from Our comes from Fargo. next Warmington

is line Your open.

Bill Warmington

question. A

might You your built expectations any margins going -- today forward? rationalization CMS, that growth guys as portfolio additional organic plan you -- and/or well. beat beat On there help

Lance Uggla

actually, it’s -- Last the and and think, across low had of CMS, of then to globally, well any lots the single-digits. given of is diversified suffering I time TMT merger client TMT at year ECR, We've got design. therefore with RootMetrics their lack Yes, and base. a mid consolidation or businesses we've that expensive. are clients pieces within And we that This exit to heavy where space across is low. of clients three product you that client small of just base not diversification gave happens

the across can You two those two. and revenue have of have consolidations competitors

growth coverage grow. done of So variety to semiconductor-based a and TMT start good Internet benchmarking a they've of and within been to through the phone from they’re we job suffered are than really the benchmarking, benchmarking for the does TMT from mobile there that, see lot And strong that, services, team diversify CMS. has things, into a we've cloud-based more TMT expanded that,

that therefore So bodes well.

standard-setting extremely a I whole and that great good really has thing, and there We a And Wiegert believe position anything thing XXXX team look we and doing a the in going team, less that conversation group. know, design, look believe within to we’re double-digit some acquisitions Markit. good I And base we’ve exists XXXX of or And volatile interest design of be there. continued extract into not change And royalties doing that if a margin. think to of royalties we’re at we product and better the manage geopolitical and to I I Ralf from product Second completely, in that growth job of its trade low pressure ‘XX. to any and any divestitures we’re very anything? to is well don’t done risks, within Todd, the our his CMS on reorganize, always real go see IHS is the pay you faces ECR, focused our return things, looking moving that single-digits. of job what don’t up around gradually in say. plan good hit delevering And that Macroeconomic wars, stuff. of That’s participated terms at bolt-ons, that, see into we’re economic with We’ll positive economists capital. for bodes terms Advisers, environments, forward acquisition for growth good a ECR. growth rates, love have that mute there Global then bodies see very small, job big they’re business. small consolidating in volatile

Todd Hyatt

No, that’s it.

Lance Uggla

Okay.

Next question?

Operator

our from comes question McHugh next William Blair. from And Tim

open. is line Your

Tim McHugh

you bit you a information And wondered, Services Financial performance didn’t could in-depth mention of I segment? part little elaborate of think just if I part on the the services, there. as

So I guess just little how a broadly, was it? more there slower did But that growth. impact

guess So what cons and were the pros quarter? this I

Lance Uggla

reference valuations and pricing and strong we valuations, -- have in independent fixed securities. that’s information Well, loans, offerings strong in that’s it’s offerings data, income that’s derivative, we’ve services,

And which there’s important very, where demand independent increasingly tough years. process. for single offerings. part in markets, we of a in volatile for is That growing of type not buildup globally. regional the business, So and offerings, well new to the in liquidity it’s mark manage it’s last see our the become It’s grown growth. a every then quarter very lot trading, And valuations, of bodes index therefore, continued many can

but in markets, coming Top pretty again X% to X% tell our financial with And and business slightly of it confident range that the I base to declining XX have being of from or I for we've to years different that think X% say couldn't number growth. been really income a be I now see is lack information services our X% level X% financial X%. mix interest the positive think our means is to will but different you do that I bit, And within outperform X%, XXXX, X% -- through it's volumes XXXX. the and don't overall ETFs, fixed opportunity that there not Now, slightly breached probably whether markets? rising, a growth, I rates

Todd Hyatt

Yes.

in mean line XX% is quarter. reading lot Tim, other into I careful year would in QX about information I would be I thing revenue we information, a quarter. The it were QX. with always single the Last really level a Sequentially a strong add, same as in was

to good the we would like X% performing So think I feel expect forward basis about for and on a X% range information.

Lance Uggla

Good point, Todd.

Next question?

Operator

Thank you.

next Morgan. Steinerman JP from Our Andrew question comes from

Your line is open.

Andrew Steinerman

guys. Two morning, questions. Good

Ipreo I'm up than with the before organic fiscal private with equities is, you ACV there at counting classes is has the second asset on targeted asset for could to things today a the X% to to ‘XX ‘XX? growth X%. shared or on you one, by non-subs Resources pick of subs question The you classes, does the listed get us are of faster X% could end you give first and plus thinking munis, capital? The that us about by Resources XXXX ACV growing in mix revenue you My bridge revenues

Lance Uggla

and I'll then do Todd the one. one, first can second the do

JP is I mirror given of imagine first do the would Todd, you question? would our to what percentages answer So, if say the I the one second that. sectors But want businesses Morgan's breadth no. across

Todd Hyatt

for Yes both yes, in the we to sub-base script. forward that's moving in certainly view. expect the I single-digit up when recurring out this and mid the and called about see in our we We we XXXX see a And do talk grower non-recurring. Resources embedded would that mean in last the

take that sub-base January. to market we -- to it through up certainly mid grow that X% the see it year a move continue will have out think do It's through in the drove but with the see we renewal and percent. We performance pleased I to Andrew single-digit and were into end up in we a the the grind on XXXX ability continue and year that move

Lance Uggla

Thanks, Todd.

question? Next

Operator

Thank you.

Our from SunTrust. next question Andrew comes from Jeffrey

Your line is open.

Andrew Jeffrey

Conquest Thanks solutions the little you're success Year. reflects bit lots Hi, market like drive specific taking can growth Could sales wonder and notwithstanding Good revenue over the the having. about I question. growth more time comment some on Can support to things -- cycles? that internally time? talking you for and/or of of Happy maybe faster and I a obviously organic to New see products on to we are come guess initiatives new faster quickly, guys. market time morning. newer you just generally expand

Lance Uggla

Yes.

But time the put at products use improvement of and view improve product vitality merger can Analytics innovation, year. it or our feels about you the that years of the lifecycle, and was the in is in to and end all like technology spring stack science it So were tech analytics were it under Yaacov last investments of Advanced more ago, and put so we're development fact about our investments gives in data to if science, now in, two it. years data two we’ve technology, at under

a into that consolidated we’ve So team. single

and risk highlighted We to we're country than offerings with of the rapidly was our products. than pilots in rapid technology events, data XX asset using of XX tracking come delivery those today, out have security security innovation and within more analytics some the been which been with valuation of faster to analyze our science language than the new more of and They've cloud more the more proof-of-concepts, processing the in and events. energy have space. coupled script product five been? deliver aerospace defense in where They've and natural economic with the Where use new

more of what good a incrementally our new That's use technology, more. science. of do people offering use enhancing can So and data then

of supply sea, as of demand. sea well produce flows, of our and ability have related better something trade a and is with storage our and of energy description which to view and trade into as defense plays trade at energy flows well aerospace our launched predict energy and taking much satellite which also better knowledge maritime We production, commodities imagery called our at

base our can Andrew of is in benchmark analytics our team, CARFAX of a things. trade, equally and science data product week team but it's also solution CARFAX are our and increase his customers launched like feel complete that our our content, customer we apply there's to are we've and asset products Raines the things incremental in and in a And investments we both two incrementally where and product, saying, price is which excited or leveragers and good got Dick benchmarking of adding marriage one existing products, which a a Then service index product about next increase. where defensive we're is suite for for offering be create an launches had new to we most all the offer acquisition we're how our we about back of new Internet and mentioned that really maritime used dealer extremely footprint prospects. great products in Life a new so within innovative Conquest, CARFAX new could new allows with innovations And a the automotiveMastermind could new completely and large complete of and we've new new being in you and many those -- automotive stepping

confidence markets, used range is our for is we’re something firm that, that to the this merger those said we guidance are consistency confidence, the And those regulations that guidance I’ve well changes forecasting. get before, of boding of hope we how that the coming you out us of you tough So out with that can I in well. protect vitality into revenues dollars view and at. report think we invest we’re tough our energy that, so that around processing, can And we merger to and in put one measure, firms we as look vitality post to to your create when report of

side. we’ve are the us the X% but we’ve you’re of you But lots I help deliver guys got margins. conservative revenue, think to year invested and strong on said, concerned firm as knows that got about a that to revenue good things X% in So how can also

both you’ve ways. think protection I got So

question? Next

Operator

comes question next our And Mazari from from Macquarie. Hamzah

Your line open. is

Hamzah Mazari

business transaction or non-recurring the the fees. just around is question My

in Just lead indicator what at transaction any side across what cycles is side not that’s and subscription to extent leading subscription the of sort around you. it? to look the Thank thoughts transaction a you’ve the as right way or to past think the seen you verticals do maybe

Lance Uggla

No.

we processing, different referring credit FX say so and process whole you We to if that’s derivatives, a bunch equity derivatives, when you’re process rate derivatives, -- assets. loans. I interest transaction, of think

process. we things the are those So

generally for So the of markets. rise, period the rates means rising a the in loan a slowdown volatility

we our will So output trade. paid processing per get and that lower the of

about of a small lots that’s single interest of And size rate interest transactions tough of the rate what’s next because market. player and we’re We derivatives about the where And quite marketplace every the business So we covering just volatility model, don’t interesting globally the the part means in well. trades. biggest the is bode care -- market, nice in the derivative the that of number volume. market financial care times,

positive strong So actually increases. saw ‘XX post

have we’re a up smaller flows rising probably in we’re So, Tier and trade banks and growth of for coming rate derivative, in, credit liquidity on we’re I player in as a in that in trade well And with post pre rates, and interest growth Lack full Equity a volatility our environment. for this then the us, volumes. hedge, FX is of because new markets analysis. FX in well a and the bodes revenue wars, insignificant at terms volatile that higher building interest bodes markets. that X index. actually doing, it’s market, whatever non-exchange and been a main business clearly Brexit, for ICE bodes has We’ve booking business, we can walls, look ICE well interest CDX rates fact derivatives partnered which is with contract have JV helps

this revenue good today, hitting So as guess year when I at we’re mine. On that’s see said in non-recurring, close you really on recurring. that goals a judge recurring take and why services, look is if our as your financial

$X.X And in X% guess. I equal be million of a think it's minus Services. billion out plus an Financial $X.X X%, billion, $XXX could

business with space a your one, the X% market it’s X% X% have impacted? Steinerman’s drive to Ipreo to be that's therefore to there going really so, back Well to to Financial to right X% Ipreo not how's focus in going I equity going in or business. Services. capital also which was And Andrew subscriptions-oriented, question the the that and transactions component is very

we minus And off minus not doesn't a can our kind accept plus, have in the of a range but least we plus, can fitting year, of the high guidance. and has picture it's XXXX within if done it see it -- range. So overall deals it that model since you

our if Thank talking you're view, about that's the in financial markets. you. So transactions

question? Next

Operator

comes question Tong Sachs. George from from Our Goldman next

open. is line Your

George Tong

Hi. Thanks. morning. Good

volumes? your You've reiterated expectations overall business? subscription-based you And moderation low for in Understanding you have year. your for factors expectations non-recurring Can full the revenue mid-teens if to revenue a range of in market light discuss Ipreo growth of capital whether there's a of your so, Ipreo see possible in outcomes. tempered what been offsetting

Lance Uggla

really low the the the private in to -- still Yes, and feeling is growth range means point well, it’s is mid in low continued Keeping less capital market. transactions.

guidance mid to day four we're low happy levers. two we're be the your because private two, the those are And it faster. with of steamship of diversity with across of invest or for divisions them. growth at transactions, those the that’s us our So and with combination firm The market into you end and can running and kind our the end of overall that capital the the in feeds our is slower markets, racecar. happy capabilities how The

at X% into all feel have confident and case that in today. can across I and in X% the it George pick up look that for reaffirming X% -- guidance firm. to how scenario today And so strength is real what I the always and divisions sure number it my I the have worst that's I the I add And circa make

Next question?

Operator

our Alex Kramm from And next from comes UBS. question

open. Your line is

Alex Kramm

everyone. Good hey. morning, Yes,

said circle guys remarks think -- I from think highlighted Todd, more Todd Services. both loan. loans I then both driven solutions of back prepared Lance your you think Lance broadly terms out of And to by in on and you wanted in which I Just there. challenges view is the you which Financial was

back went for faster I I market in one point think said at So XXXX given up market, average grown I since than I the of these then. that market assume made loans some that's guess of XX% uncertainties and

where update, a if big it I you different the and mean give Thanks. more clearly us lot So Because challenges solutions, just become could lot how there's information but and has those on side for you on get then of I an of are maybe can outline hit? a there the do maybe loan business processing stuff players. challenges

Lance Uggla

bring you financial the can I I'll Alex. can piece. give in Markit, you the start,

of that's strong of there's bunch WSO things. solutions services. didn’t all, our that offered is I whole was product. driven great kind say can say of -- And of it's lot -- a generally growth And a It AUM there's that's business piece of last but it driven, first loan issuance, was had CLO out year. our So Todd that by loans

data, our at banks, is buoyant our so still managed And services, big area, the diversified reference accounting space, growth and back-office as loan us fairly CLO you course within your can installed which managing and look own that's business processing data, across customers is it's of pricing, a and the then well.

pieces. So we a days loans were consolidating today and where much of is of of a franchise strong than piece financial all course lower our through Markit lot in markets those back of acquisition percentage the a

at of outsourcing the basis. and XX% that tax, actions. we So markets a KYC, to side XX% growth to you the solutions which deal the always a been KYXP, a is growth, IT both about expecting deal reg flipped with and portfolio opportunity with service to back the management the growth circa buy impressed providers to are outsourcing management, to Through happen that corporate period financial to more I've XX% growth most day, double-digit for called we using compliance, look amount growth single-digit data to recurring word grower, outsourcing if side back the solutions with that and double-digits looking sell and we on what with readily talked management, is and

all are in back to were ‘XX in of they so a vogue. In people right And because costs. cut had sudden solutions vogue

so again, get of them But of cost and into actually is bit on in these coming solutions their future play. of a a now As where the lost asset I we a are some coming handle that bank got to growth managers offer needing efficiencies. our lot profitable costs a see view on the all the

the for that think solutions So bodes well I double-digit growth.

a it's with experience and but X% over So saying the -- was last years on XX to X% the X%. to my mix mix we're and hand heart best X%

did did just Yes, right X%. just X% so Is that this So we year. X%? we

want what And good. get a to chance in in as build for capital percentage be our good And sure a to that as a of small year. gives accordingly bit across initiatives the private that the middle year X% back be chance outperform to really think Todd, revenues you're that's top distributing to and Todd, great them percentage up you And at think distribute outperforming and scope our started. diversified the and I the percentage it. end, seeing do We're do year That to we’ll markets to anything? we’re with you we going out X% a to miss. the into chance make and ourselves how up and build managing so a you small to to lot -- new probably I peers we cautioned feels us be we’re add to start place And keep able great. us our definitely business

Todd Hyatt

add. would I thought only The

-- that we’re Lance think business, then of tends loan The to mid-office, we and as buckets it the secondary. loan the And settlement three there back-office stable. predictable subscription WSO actually Just talked and very really about, loan loan not primary settlement pricing, have of impacted processing to the by piece. been services generally servicing has really be business both volumes. is activities, And the

highest think certainly have that’s I the that So, variability. the would area

Lance Uggla

Good. Thank you.

question? Next

Operator

question comes next Toni Stanley. Our Kaplan from from Morgan

open. is line Your

Toni Kaplan

I think want ask about processing. to I also

just it that you that you slowdown issuance? in the primary could was decline about Thank the line drivers still So will be this expectation talk was confident in quarter? ‘XX? your And you. the Or positive of in are loan and was what processing with

Todd Hyatt

market think And say certainly about million As QX, a it derivative processing, was in in there’s revenue the in that terms look was talked down I $XX of Processing of in going Lance $XX are that market it in the that in really I last net we we’re not dollars some down, year. million dynamics is prior down Lance said, versus when a was predict. variability think actually activities process. couple primary you QX. to at over volatility And million months. loan few processing precisely positive

think I Secondary the activities, But dynamic probably, that’s really generally in the up. business. processing

Lance Uggla

think the was it QX -- X year. this Toni, really I year, And was it’s million from QX last shift

volume a year. better quarter you So this a had in X% bit decline QX given into

insignificant really -- it’s it total it’s -- down of it’s just to X% really lever to terms it’s of X%. our consistent If processing, It’s really you’re bottom talking a business in X% a range. delivering So, it’s or a … sticky up top X%, and

Todd Hyatt

$XX million.

Lance Uggla

XX?

Todd Hyatt

Yes.

Lance Uggla

$XX million.

Todd Hyatt

X%.

Lance Uggla

And across so … -- even more I don’t no, across -- It’s have affirm, the I but I broadly group. division, really just insignificant. the just insignificant. meant a it’s that it’s

XX%, know. X%? So, say or do up unlikely. I down X% I’d will processing down up I What been have believe highly it be Don’t could think, XX%?

firm. of put negligible X% kind the I numbers -- the even it, it’s So those on and it’s when it’s of division in

team smile great to expectations it. So growth have we all But of business, But goes bottom-line just sticky wind go sails we’re it. great our that’s when not doesn’t good a know.” player most X% base, view. consistent does that it and we of it's the lot with global XX%, customer of the always in to my it to “That’s if kind grow a didn't of And most we at

So that's year. look I how next at

Next question?

Operator

comes BMO Capital. Our Jeff next question from from Silber

is line open. Your

Jeff Silber

Can government an a just you direct indirect impact having much. any lot do that Thanks And just from have it which revenues quick federal to of any the exposure Thanks. There's regarding one it's shutdown. on I and perspective, late, guess us, is? your in remind you business? you do so question. I government segment know see uncertainty

Todd Hyatt

the Yes, area design process we product service would army, navy. a Typically continuing resolution be process. the contracting biggest the for is provide where

to recover ability I would the funding XX% I XX%. continuation the don't my So design top ultimately revenue, there's we but a in. probably funded. say to get don’t to seem and of ultimately full know less the But And within off does head, services do then of -- the I come that it’s product than percent, have assuming

Lance Uggla

Okay. Thanks, Todd.

Next question?

Operator

comes Ashish Deutsche next Our Sabadra question Bank. from from

Your line is open.

Ashish Sabadra

Thanks.

good pretty the margins. and quarter. Transportation on results My just margin Solid was question in expansion the

recall of out CARFAX the called marketing for and You spend a there you and are that products launched. number

forward? you about profile business going can the in that talk margin if wondering Just

Todd Hyatt

in some in level growth. margin the ability mean have It investment do to we We the earlier. about I area balance delivery. forward level. this activities Well, heavier certainly there which within we about did wasn't in earlier quarter I transport to have the I that some is will talked In margin. outsized caused and have of tends invested recall anything with the the talked drive on transport quarter. the a lower continue that to bit at an this margin investment be margin that little concern But

Lance Uggla

Next question?

Operator

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

Your line is open.

Joseph Foresi

the paydown does schedule year? capital it's buyback? suspended I share question. thoughts What's the like I I'll know so Thanks. guess What about on acquisition allocation any share ask debt know that And buyback. the I token this you side? Hi. late, the available look

Todd Hyatt

ourselves getting X the by the acquisition. We about the see We QX. and times We've the on we time at QX. talked in time we good of below below Ipreo see X made progress times cash that exit

I that the commitment will small full of for year delivering be terms this in bolt-ons. allocation November. talked think we and about to do year see relative continue in the earlier, to primarily directed at But to we $XXX very acquisition this activity, about Lance capital talked buyback million it

Lance Uggla

Next question?

Operator

to Eric conference lines. showing phone remarks. questions like turn And further over Thank no I you. for the am to back from And any the closing Boyer I'd

Eric Boyer

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

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

Operator

does This thank gentlemen, conference. in the participating today's for you program. and conclude Ladies

disconnect. all a You Everyone, wonderful may day. have

IHS Markit (INFO) 15 Jan 192018 Q4 Earnings call transcript