Doug Peterson: Alex, this is Doug, and thank you for the question. And let me just take a step back to — for 1 second to a higher level about the integration and the merger overall. We’re thrilled with the progress, and you’ve seen that today with some of the new product launches that we described, which are bringing together information, data research from across the portfolio. And within Market Intelligence, we have the same kind of integration going on. As you know, we always looked at the integration of the integration. We realized that IHS Markit had done a lot of acquisitions. They’ve grown a lot of products. And one of the opportunities is to continue to consolidate those and put those together. And we see a lot of progress there.
This is something you should hold us to and watch us how we’re going to continue to bring together the areas. As you know, within Market Intelligence, we’ve got a lot of opportunities to attack new markets. As an example, corporates, financial services at IHS Markit truly was focused on financial services. A lot of their products are very attractive to corporates. We’re finding a lot of opportunities as you’ll hear us talk about and you know related to sustainability and private markets. So we look at this opportunity to continue to consolidate the businesses internally, which is going to bring upside from an expense point of view. And we’re also going to be investing for growth, especially in areas like sustainability, private markets and then expanding areas like our reference pricing, which can be used in so many different ways.
But your thesis is right. We’re going to continue to consolidate, and we will also look very carefully at the overall portfolio.
Operator: Our next question comes from Andrew Steinerman with JPMorgan. Your line is open.
Andrew Steinerman: Ewout, it’s Andrew. Could you just tell us how M&A revenues in dollars contributed to MI, Mobility, Ratings and overall in the third quarter?
Ewout Steenbergen: Of course, Andrew, and I had expected you to ask about organic constant currency revenue. So let me first give that number. That was 10.4% for the quarter. Specifically for Market Intelligence, 7; for Ratings, 18.5; Mobility 8.2; Commodities, 10.9; and Indices, 5.8. In terms of adjustments with respect to acquisitions, there was $3.8 million of correction for Market Intelligence, given the acquisitions we have done there. And for Mobility, $5.6 million. And then there was a correction for Engineering Solutions from last year of $96 million. So if you combine that with the FX impact, which you can find in the supplemental deck, you would come to that organic constant currency growth of 10.4. And as you and I are very much in agreement, that is a very healthy basis to look at the real performance of the divisions.
Operator: Our next question comes from Jeff Silber with BMO Capital Markets. Your line is open.
Jeff Silber: So your Investor Day was a little less than a year ago, and I’m just curious, can you just compare how you felt about some of the businesses then compared to how you feel about them now? Anything better or worse compared to that time period?
Doug Peterson: Jeff, this is Doug. Well, let me take a step back again. And if you recall, we had our Investor Day. It was 1 year ago almost. It’s on December 1, 2022. At that time, we laid out our new vision Powering Global Markets and the 5 pillars that we use to manage the business as well as allocate capital. At that time, we put in place longer-term ’25, ’26 targets for revenue growth and for margins. We’re well on track for all of those. And we also laid out at the time some really interesting and for us, ambitious targets for new products and new services. And we also feel really confident about what we’re seeing. We feel like we targeted and have identified the most important secular trends and market trends and that we’re growing in that direction. There’s excellent reception for that. So 1 year in, almost 1 year into those targets, we’re very confident about achieving them, and we’re really excited about our prospects.
Operator: Our next question comes from Scott Wurtzel with Wolfe Research. Your line is open.
Scott Wurtzel: Just one for Martina. I would love to hear just your thoughts a little bit more on some of the performance in Ratings in the context of the private credit market. And then maybe also some of your thoughts on where you think the private credit market is heading relative to public debt markets and how the company can further play in that space.
Martina Cheung: Scott, thanks so much for the question. Just reflecting the prior question as well when we did the IR Day, I said that 2 points. One is that the private markets were not going away in the sense that they were going to continue to grow. And the second is that we saw that as an opportunity. And both things have played out as expected this year. We’re very pleased with our overall performance from a Ratings standpoint in the private markets. It comes in the form of a couple of areas, so increased demand for fund ratings. There’s been a real healthy pipeline, lot of dialogue with the sponsors and fund managers. We’ve also seen quite a bit of demand on the structured credit front, which we had highlighted as a key trend that we thought we would see, and that has certainly played out this year.
And as we see the overall AUM and allocation to the asset class increase, we’re very well positioned. We’re out in the market with credit estimates, portfolio assessments, et cetera, with our Ratings team and then having really, really great dialogue with the market participants. So very pleased from a Ratings standpoint.
Operator: Our next question comes from Andrew Nicholas with William Blair. Your line is open.
Andrew Nicholas: A lot of really good color on new product development. Vitality Index is ticking higher. Growth there is good. I’m just curious and I don’t know if this is one that you can quantify, but just how much of that is a result of investments in product development on the gen AI side? Or is that something that can create kind of a new leg of accelerated growth as you continue to kind of harvest your investments there?
Ewout Steenbergen: Thank you, Andrew. And we are very happy that you are recognizing the level of innovation, the level of entrepreneurship, the level [Audio Gap] company. We’re very happy and pleased around that. If you think about the background of this, this is coming from, first of all, the merger. The merger gives us a lot of benefit in combining products, features, data sets, platform, capabilities. And that is really driving a part of it. Second part of it is really the investments we’re making, strategic growth initiatives. And we’re really pleased with what we’re seeing in sustainability, energy transition, private markets and several other areas that fall out of that but are also very entrepreneurial. You see growth in areas in Indices like thematics, factor-based.
We launched something that is called more the credit fix. We have car listings in Mobility and many other areas. So generally, investments in growth initiatives are really starting to pay off. And that is ultimately then also showing up in the Vitality Index, which is something that is maybe unique as a metric. And we’re, as far as we know, the only company in our industry publishing this, but it is a clear indication of innovation that we would like to publish. With respect to AI and gen AI, it’s powering many of the products that we are having, but it is more embedded. I wouldn’t say the new really gen AI features that it is really in the number so far because most of those products are still under development. And we will get back to you once we are really at a production-grade level kind of offering that we can bring to our customers.
So I think it’s a little bit too early for the impact of gen AI, but more to come on that over the next few quarters.
