Operator: Our next question comes from George Tong with Goldman Sachs. Your line is open.
George Tong: You narrowed the guidance for revenue growth in Market Intelligence with the midpoint unchanged at 7%. Does that suggest stabilizing trends in your sustainability and energy transition business? And how are broader client budget and spending trends in the segment performing?
Ewout Steenbergen: Generally, George, this is coming from multiple drivers within Market Intelligence, not only from sustainability and energy transition. So first of all, the core business is strong. We see healthy growth. We see a good sales momentum. We see that the ACV book is really growing a little bit faster than actually the revenue we are reporting, for example, in Desktop. And as you know, ACV is an early indicator of future revenues. So we’re really, really pleased by that. Also, the revenue synergies are becoming more meaningful at this moment. So that really helps to contribute growth. The capital markets volumes are stabilizing. We don’t see a lot of pickup of M&A yet. But last year, it was really a headwind, and that headwind is going away.
And then also the comps become more easy, for example, from an FX perspective. And then you’re right, sustainability and several other factors drive here the growth as well. So we are actually really positive about the outlook for Market Intelligence growth in the fourth quarter and implicitly what you’re seeing in our guidance range is that we would expect further acceleration of the growth of the top line of Market Intelligence in the next quarter.
Operator: Our next question comes from Craig Huber with Huber Research Partners. Your line is open.
Craig Huber: Yes. Could you just update us, please, on where you’re sitting at right now for the synergies for IHS, both the cost and the revenue synergy, what that run rate is now at year-end and where you aspire to be versus your original expectations?
Ewout Steenbergen: If you think about the cost synergies, we have raised those twice over the last period, as you know. So the $600 million is the target that we’re aiming for. We’re almost done. We are effectively done. There are a few more projects that will be finalized at year-end. That is just purely timing of some of those projects, and then we will be able to declare that we hit the $600 million. And then we won’t talk about cost synergies anymore from that point onwards because cost synergies are also related to operational integration. And we are more or less running the company now as a fully combined company. We’re not talking about one part versus the other part anymore. So it’s good to close off cost synergies and really think about the company as one company going forward.
That doesn’t mean that we will stop with efficiency and productivity programs. Obviously, we have a track record to always look for new opportunities, and we will get back to you at that point in time with new updates. From a revenue synergy perspective, we actually like the progress that we have made during the third quarter. It’s quite a big step to $112 million of run rate. We’re getting now close to 1/3 of the overall target. We have always said that is a 5-year trajectory to get to $350 million, more a focus in the first part on cross-sell. Most of what you see now reported as revenue synergies is coming from cross-sell. But we have these new products that are being launched, and those new products will help with the next phase of revenue synergy delivery.
So we feel we’re right on track. We’re really on the right path to deliver on the $350 million. So we feel very good about it.
Operator: Our next question comes from Seth Weber with Wells Fargo. Your line is open.
Seth Weber: I just wanted to ask about the reacceleration in the sustainability and energy transition business. Last quarter, you talked about some uncertainty with the regulatory landscape and political climate, et cetera. I mean, can you just frame — the numbers seem to be back on track here. Has anything really changed? Or is it just more adoption of new products or customers just getting more used to the new normal? Or maybe just any perspective on that?
Martina Cheung: Seth, it’s Martina. I can take that question. Yes, very pleased with the Q3 results. We saw about 55% growth in Trucost and about 37% in CI. But the growth was actually across all divisions. So we saw inflows into the core climate and sustainability indices, for example, in S&P Dow Jones and really strong demand for the Mobility energy transition products as well as the FPOs in Ratings. So really great progress and momentum across the board. Look, I think the key thing here and we’ve been saying this for quite some time, firstly, the long-term drivers and the needs in this business have not changed, notwithstanding some of the, call it, the minor slowdowns that we may have seen in the past year for various different reasons.
Customers, corporations still need to look at operational risk in their supply chains. They still need to report against their net zero transition plans. If they’re exposed in any way to Europe, they have to report against some pretty complicated regulations there, for example. We still have banks who are looking at finance emissions and looking to deploy capital into sustainability. And we have asset owners and asset managers who are obviously either looking for alpha or looking to allocate to the asset class. And so fundamentals haven’t changed. We believe we have the best, most comprehensive and deep offerings in this area across all of our businesses. Commodity Insights is a leader in energy transition analytics and advisory, for example.
But one of the other things that I would say is — and this is just what’s so exciting to me around sustainability with the merger, we are launching products now bringing together some of the most unique and fantastic IP across the division. So the real asset data that we have launched brings together data from Mobility, Commodity Insights, Market Intelligence and Sustainable1. And it’s going to be a real powerhouse in that area going forward as we see more and more needs for much more specific emissions transition, biodiversity and nature data at the real asset level. So that’s just one example. Super excited going forward and very pleased with Q3. Thanks for the question.
Operator: Our next question comes from Owen Lau with Oppenheimer. Your line is open.
Owen Lau: Could you please add more color on the strength in private market and also iLEVEL? Where is the demand coming from? I mean, did you take shares from your competitor or your product can automate a process and replace in wholesale?
Doug Peterson: Owen, this is Doug. Let me take that. Let me start by taking a step back and talking about what we’re seeing is this really interesting and very rapid transformation of the private markets. If you go back 25, 30 years ago, private markets was just private equity. It was LBOs. It’s private equity. But over the last 25 years and it’s accelerating the last 3 or 4 is many, many different asset classes, many different strategies on the asset side. And on the investor side, you also see a whole diversification of the types of investors that have gone into private markets and private credit, which started obviously with pension funds and insurance companies, endowments and add to that now private wealth individuals even.
So you see a completely different need for data and analytics across those areas. And as an example, this — a lot of this is brand-new volume. It’s not necessarily you’re taking market share from anybody. You’re finding new applications to bring to the market to provide the information both to the GPs and the LPs, but also to now even investors at a different level, the private market investors and individual investors. So we see that the kinds of tools that we’re bringing, for instance, the iLEVEL software, which you mentioned, this provides a data service. It provides transparency to the market. It gives you more frequent information about the portfolio than you might see from what was coming directly from the GPs themselves. We also have products which we believe are going to be applied in the future from our DVA area, which includes information about pricing.
