Financial Trends -- 9/10
Near-textbook compounder. Revenue reaccelerating (+10.4% Q1'26) on recovering credit issuance (Ratings)
plus durable subscription/asset-linked compounding (Market Intelligence, Indices). Adjusted operating
margin expanding. Share count declining ~3.3% YoY via buybacks. FCF reaccelerating (+12.6% Q1'26) after a
soft FY2025 working-capital compare. No penalty modifiers trigger. Held from a perfect 10 by margin
expansion at the +100 bps threshold and FCF that is reaccelerating off a choppy FY2025 rather than
uniformly accelerating across all eight quarters.
Weight: 25%
Adj Op Margin
51.8%
+100 bps YoY | Expanding
FCF
Reaccel.
+12.6% YoY Q1'26 | Strong
Share Count
Declining
-3.3% YoY | Buyback-driven
Quarterly Revenue Trajectory ($M)
Revenue YoY reaccelerating: +5.8% (Q2'25 trough) to +10.4% (Q1'26).
After a mid-2025 dip on a tough Ratings comp, the YoY rate has climbed for three straight quarters.
The swing factor is Ratings, reaccelerating to +13.3% YoY as credit issuance recovered; Indices
(+16.6% YoY, asset-linked AUM/derivatives) and Market Intelligence (+8.1% YoY, durable subscriptions)
provide the compounding base.
Operating Profit & Margins (Q1'25 vs Q1'26)
Operating profit growing faster than revenue on both GAAP and adjusted bases.
GAAP operating profit +26.9% YoY and adjusted +12.4% YoY, each well ahead of the +10.4% revenue line.
Adjusted operating margin expanded +100 bps YoY to 51.8% — genuine operating leverage on an
asset-light, recurring-heavy franchise. No sign of the "revenue up, operating income down" penalty
pattern.
Annual Financial Summary (FY ends December)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $8,297M | $11,181M | $12,497M | $14,208M | $15,336M |
| Rev YoY | — | +34.8% | +11.8% | +13.7% | +7.9% |
| Adj Op Profit ($M) | $4,581M | $5,319M | $5,732M | $6,958M | $7,730M |
| Adj Op Margin | 55.2% | 47.6% | 45.9% | 49.0% | 50.4% |
| Net Income ($M) | $3,263M | $3,522M | $2,893M | $4,167M | $4,820M |
| Free Cash Flow ($M) | $3,336M | $2,244M | $3,287M | $5,278M | $5,135M |
| Long-Term Debt ($M) | $4,114M | $10,730M | $11,412M | $11,394M | $12,370M |
Key trends
- Revenue compounding, now reaccelerating: $8.3B (2021) to $15.3B (2025); the 2021→2022 step-change reflects the IHS Markit merger close (Feb 2022). Underlying YoY reaccelerated three straight quarters to +10.4% in Q1'26
- Adjusted operating margin rebuilt off the merger trough: from a 45.9% low (2023) back to 50.4% (2025), +450 bps off trough, now +100 bps YoY in Q1'26
- Net income accelerating: $2.9B (2023) to $4.8B (2025), +15.7% in FY2025 and +28.4% YoY in Q1'26
- FCF high and reaccelerating: FY2025 dipped 2.7% to $5.1B on working-capital timing, but Q1'26 FCF is already back to +12.6% YoY
- Share count declining ~3.3% YoY: buyback-driven, with 113% of adjusted FCF returned in FY2025
Segment Revenue Trajectory ($M, quarterly)
| Segment | Q1'25 | Q2'25 | Q3'25 | Q4'25 | Q1'26 | YoY |
|---|---|---|---|---|---|---|
| Ratings | $1,149M | $1,148M | $1,240M | $1,187M | $1,302M | +13.3% |
| Market Intelligence | $1,199M | $1,217M | $1,236M | $1,264M | $1,296M | +8.1% |
| Commodity Insights | $612M | $555M | $556M | $576M | $652M | +6.5% |
| Indices | $445M | $446M | $462M | $498M | $519M | +16.6% |
| Mobility | $420M | $438M | $445M | — | $454M | +8.1% |
The two most oligopolistic franchises are the fastest growers.
Indices (+16.6% YoY) and Ratings (+13.3% YoY) — the dominant price-setting positions — lead the
acceleration, while Market Intelligence (+8.1%) provides a durable subscription base. Mobility
(+8.1%) is slated to be spun off in 1H'26.
Free Cash Flow ($M, Annual)
FCF strongly positive every year. FY2025 dipped 2.7% to $5.1B on
working-capital/timing (the 2022 dip reflects IHS Markit merger costs). Q1'26 FCF has already
reaccelerated to +12.6% YoY, and management returned 113% of adjusted FCF to shareholders in FY2025
via buybacks and a 53rd consecutive dividend increase. Positive-and-growing FCF gate: cleared.
Share Count & Capital Return
- Share count declining steadily: 314.0M (Q1'24) to 297.6M (Q1'26), -3.3% YoY, buyback-driven
- Capital return exceeds FCF: FY2025 returned 113% of adjusted FCF (over $5B buybacks + 53rd consecutive dividend raise); ~$1B buyback planned in Q1'26 alone
Penalty Check -- No Modifiers Apply
| Penalty Test | Detail | Penalty |
|---|---|---|
| Negative FCF | FCF strongly positive every period; Q1'26 reaccelerating +12.6% YoY | None |
| Share Dilution | Share count declining ~3.3% YoY (314.0M to 297.6M) — the opposite of dilution | None |
| Revenue up, Op Income down | Both GAAP (+26.9%) and adjusted (+12.4%) operating profit growing faster than revenue | None |
| Debt outpacing revenue 3+ qtrs | Total debt flat/declining through Q3'25; rose only 2 quarters (Q4'25, Q1'26) on spin-related issuance — below the 3-quarter threshold | None |
Score Rationale
Score of 9/10 reflects a near-textbook market-infrastructure compounder. No penalty modifiers applied.
Supports 9/10:
- Revenue YoY reaccelerating three straight quarters (+5.8% trough in Q2'25 to +10.4% in Q1'26)
- Adjusted operating profit +12.4% and GAAP +26.9% YoY in Q1'26, both ahead of revenue
- Share count declining ~3.3% YoY, buyback-driven, no dilution
- FCF strongly positive every period and reaccelerating +12.6% YoY in Q1'26
- Net income accelerating +28.4% YoY in Q1'26; 113% of adjusted FCF returned in FY2025
Why not a perfect 10:
- Adjusted operating margin expansion is at the +100 bps threshold rather than comfortably above the "10" bar
- FCF is reaccelerating off a soft FY2025 (down 2.7%) rather than uniformly accelerating across all eight quarters
- Two watch-items: a two-quarter step-up in debt (spin/issuance related, not yet a 3-quarter trend) and the inherent cyclicality of Ratings, which is doing the heavy lifting on the recent acceleration
Composite quality gate — positiveGrowingFcf: YES. FCF positive every period; the subscription/asset-linked base (Market Intelligence + Indices) keeps the underlying compounding durable.
Data sourced from Daloopa (company_id: 564). Fiscal year ends December 31. All financials in USD.