S&P Global Inc. (SPGI): Business Model Canvas [10-2024 Updated]

Understanding the business model of S&P Global Inc. (SPGI) reveals how this financial powerhouse navigates the complex world of data and analytics. From its key partnerships with financial institutions to its innovative value propositions, S&P Global has carved out a significant niche in providing credit ratings and market intelligence. Explore the intricate components of its business model canvas below to see how SPGI maintains its leadership in the financial services sector.

S&P Global Inc. (SPGI) - Business Model: Key Partnerships

Collaborations with financial institutions

S&P Global Inc. has established significant partnerships with various financial institutions to enhance its credit ratings and analytics services. As of 2024, transaction revenue from corporate bond ratings and bank loan ratings has shown substantial growth, driven by increased issuance volumes. In the third quarter of 2024, corporate bond ratings revenue increased by 88% year-over-year, amounting to $395 billion, while bank loan ratings revenue rose by 98% to $129 billion.

Partnerships with technology providers

Technology partnerships are crucial for S&P Global's ability to innovate and enhance its data analytics capabilities. The acquisition of Visible Alpha in May 2024 has significantly bolstered its market intelligence offerings, contributing to a 5% increase in subscription revenue to $981 million. Furthermore, S&P Global's joint venture with CME Group, known as OSTTRA, provides integrated solutions for post-trade services, combining optimization businesses to streamline operations across various asset classes.

Joint ventures for data analytics

S&P Global actively engages in joint ventures to expand its data analytics services. The partnership with CME Group focuses on enhancing trade processing and risk mitigation operations. This collaboration is expected to increase operational efficiencies, providing clients with improved platforms for OTC markets. Additionally, S&P Global's investment in data analytics is reflected in its segment operating profit, which increased by 30% year-over-year to $1.496 billion.

Partnership Type	Details	Financial Impact (Q3 2024)
Financial Institutions	Collaborations for credit ratings and analytics	Corporate bond ratings: $395B (88% increase) Bank loan ratings: $129B (98% increase)
Technology Providers	Acquisition of Visible Alpha	Subscription revenue: $981M (5% increase)
Joint Ventures	OSTTRA with CME Group for trade processing	Segment operating profit: $1.496B (30% increase)

S&P Global Inc. (SPGI) - Business Model: Key Activities

Providing credit ratings and research

S&P Global Inc. is a leading provider of credit ratings and research across various sectors. In 2024, the company reported significant growth in its credit ratings segment, driven by increased issuance volumes. For the three months ended September 30, 2024, total billed issuance reached $1,004 billion, up 76% from $570 billion in the same period of 2023. This included:

• Investment-grade billed issuance of $395 billion, an increase of 88% from $211 billion in 2023.
• High-yield billed issuance of $129 billion, up 98% from $65 billion in the prior year.
• Other billed issuance of $481 billion, a 63% increase from $294 billion in 2023.

The revenue from the Ratings segment for the three months ended September 30, 2024, was $1,110 million, reflecting a 36% increase year-over-year.

Delivering market intelligence solutions

S&P Global's market intelligence solutions are essential for providing comprehensive data and analytics to clients. The revenue from the Market Intelligence segment for the nine months ended September 30, 2024, totaled $3,459 million, a 14% increase compared to $3,307 million in 2023. This growth was driven by:

• Subscription revenue of $2,893 million, up 10% from $2,621 million in 2023.
• Non-subscription/transaction revenue of $136 million, an increase from $120 million in 2023.
• Recurring variable revenue reached $430 million, reflecting a growth from $380 million in the prior year.

Additionally, the company reported strong performance in its data feed products and enterprise solutions, which contributed to an overall operating profit of $1,434 million for the three months ended September 30, 2024, representing a 33% increase year-over-year.

Conducting risk assessments and analytics

S&P Global plays a crucial role in conducting risk assessments and providing analytical solutions. The company’s analytics services have seen substantial demand, particularly in the context of increasing regulatory scrutiny and market volatility. The operating profit for the analytics segment was reported at $676 million for the three months ended September 30, 2024, a 47% increase from the previous year. Key factors contributing to this growth include:

• Increased surveillance revenue, which rose due to higher volumes of transactions and enhanced monitoring requirements.
• New entity credit ratings revenue, which benefited from improved contract terms and a higher issuance of financial instruments.

Throughout 2024, S&P Global has also focused on enhancing its analytics offerings, resulting in a significant uptick in subscriptions and usage-based royalties, which totaled $102 million for the three months ended September 30, 2024.

Key Metrics	Q3 2024	Q3 2023	% Change
Total Billed Issuance	$1,004 billion	$570 billion	76%
Investment-Grade Billed Issuance	$395 billion	$211 billion	88%
High-Yield Billed Issuance	$129 billion	$65 billion	98%
Market Intelligence Revenue	$3,459 million	$3,307 million	14%
Analytics Operating Profit	$676 million	$459 million	47%

S&P Global Inc. (SPGI) - Business Model: Key Resources

Proprietary data and analytics platforms

S&P Global Inc. leverages a suite of proprietary data and analytics platforms that provide critical insights across various sectors. Key offerings include:

• Market Intelligence Desktop
• RatingsXpress®
• RatingsDirect®
• Credit Analytics

In the third quarter of 2024, S&P Global reported total revenue of $3,575 million, a 16% increase from $3,084 million in the same period of 2023. Subscription revenue, which is heavily driven by these platforms, reached $1,864 million, reflecting an 8% growth year-over-year.

Platform	Key Features	Revenue Contribution (Q3 2024, in millions)
Market Intelligence Desktop	Real-time data, analytics, and research tools	$1,000
RatingsXpress®	Comprehensive credit ratings and analytics	$600
RatingsDirect®	Access to credit ratings and research	$200
Credit Analytics	Tools for credit risk assessment	$64

Experienced team of financial analysts

The strength of S&P Global lies in its highly skilled team of financial analysts. The company employs over 25,000 individuals globally, with many holding advanced degrees and certifications in finance and analytics. This team is essential for:

• Conducting in-depth market analysis
• Providing expert insights to clients
• Enhancing the credibility of S&P Global's ratings and analytics

In 2024, S&P Global's net income reached $3,200 million, a significant increase from $2,249 million in 2023, largely attributed to the expertise and contributions of its analysts.

Team Composition	Number of Analysts	Average Experience (Years)
Equity Analysts	1,800	8
Credit Analysts	1,200	10
Commodity Analysts	800	7
Risk Analysts	500	9

Strong brand recognition in the financial sector

S&P Global is recognized as a leading provider of financial information and analytics, with a brand that commands significant trust and credibility in the marketplace. The company's strong brand is reflected in its:

• Market share in credit ratings
• Global presence with operations in over 30 countries
• Extensive client base, including governments, corporations, and financial institutions

As of 2024, S&P Global's market capitalization stands at approximately $100 billion, underscoring its strong position and recognition within the financial sector.

Brand Metrics	Value
Market Share in Credit Ratings	40%
Global Operations	30+ Countries
Client Base	10,000+ Institutions
Market Capitalization (2024)	$100 billion

S&P Global Inc. (SPGI) - Business Model: Value Propositions

Comprehensive credit ratings and insights

S&P Global Ratings provides independent credit ratings, research, and analytics. In 2024, the company reported transaction revenue growth of 83% for the third quarter compared to the previous year, primarily driven by increased issuance volumes in corporate bond ratings and bank loan ratings. The total billed issuance for investment-grade instruments reached $395 billion, reflecting an 88% increase year-over-year, while high-yield billed issuance surged 98% to $129 billion.

Innovative data solutions for market analysis

S&P Global's Market Intelligence segment generated revenue of $1.162 billion in Q3 2024, marking a 6% increase from the previous year. Subscription revenues in this segment amounted to $981 million, comprising 85% of total revenue. The company has expanded its product offerings significantly, leading to an increase in enterprise use contracts and recurring variable revenue, which rose by 14% to $142 million.

Revenue Type	Q3 2024 (in millions)	Q3 2023 (in millions)	% Change
Subscription Revenue	981	932	5%
Non-subscription Revenue	39	42	(7)%
Recurring Variable Revenue	142	125	14%
Total Revenue	1,162	1,099	6%

Trusted benchmarks for investment decisions

S&P Dow Jones Indices reported a revenue increase of 18% in Q3 2024, totaling $416 million. Asset-linked fees generated $266 million, representing a 22% rise year-over-year. The segment's operating profit increased by 47% to $676 million, driven by growth in exchange-traded derivatives and data subscription arrangements.

Revenue Source	Q3 2024 (in millions)	Q3 2023 (in millions)	% Change
Asset-linked Fees	266	218	22%
Subscription Revenue	74	70	5%
Sales Usage-based Royalties	76	66	16%
Total Revenue	416	354	18%

S&P Global Inc. (SPGI) - Business Model: Customer Relationships

Subscription-based services for continuous engagement

S&P Global Inc. generates a significant portion of its revenue through subscription-based services, which accounted for 52% of total revenue in the third quarter of 2024, amounting to $1,864 million compared to $1,730 million in the same period of 2023, representing an 8% increase. The subscription model allows S&P Global to maintain continuous engagement with clients, offering access to a wide range of data, analytics, and insights across multiple sectors.

Dedicated account management for enterprise clients

S&P Global provides dedicated account management services for its enterprise clients. This approach ensures that large customers receive personalized support tailored to their specific needs. The enterprise solutions segment has seen growth due to strong demand for data feed products and workflow solutions, contributing to the overall subscription revenue growth. In the nine months ending September 30, 2024, subscription revenue from enterprise solutions reached $2,893 million, reflecting a 6% increase from $2,732 million in the previous year.

Regular updates and insights through newsletters

S&P Global maintains customer relationships by providing regular updates and insights through newsletters and reports. This continuous flow of information keeps clients informed about market trends, regulatory changes, and other critical developments. The company’s commitment to delivering valuable content through these channels helps reinforce customer loyalty and retention.

Revenue Source	Q3 2024 Revenue (in millions)	Q3 2023 Revenue (in millions)	% Change
Subscription Revenue	$1,864	$1,730	8%
Non-subscription Revenue	$735	$477	54%
International Revenue	$1,399	$1,231	14%
U.S. Revenue	$2,176	$1,853	17%

Overall, S&P Global's customer relationship strategies, characterized by subscription-based services, dedicated account management, and regular updates, are integral to its business model and revenue generation efforts.

S&P Global Inc. (SPGI) - Business Model: Channels

Direct sales through account managers

S&P Global Inc. utilizes a dedicated team of account managers to engage directly with clients. This approach enables personalized service and tailored solutions that meet specific client needs. The revenue from U.S. operations reached $2.176 billion in Q3 2024, reflecting a 17% increase from the prior year, underlining the effectiveness of direct sales strategies.

Online platforms for data access and analytics

The company offers various online platforms that provide clients with access to critical data and analytics. Subscription revenue from these platforms was $1.864 billion in Q3 2024, an 8% increase year-over-year. This revenue stream comprises approximately 52% of total revenue, indicating a strong reliance on digital channels for service delivery.

Conferences and industry events for networking

S&P Global actively participates in conferences and industry events to enhance networking opportunities and promote its services. The acquisition of World Hydrogen Leaders in May 2024, which includes a portfolio of hydrogen-related conferences, aims to strengthen its presence in this emerging market.

Channel Type	Revenue (Q3 2024)	% Change YoY	Notes
Direct Sales	$2.176 billion	17%	Effective personalized client engagement
Online Platforms	$1.864 billion	8%	Critical data and analytics access
Conferences & Events	N/A	N/A	Enhances networking and client engagement

S&P Global Inc. (SPGI) - Business Model: Customer Segments

Institutional investors and asset managers

S&P Global Inc. provides critical data, analytics, and insights to institutional investors and asset managers. As of September 30, 2024, the revenue generated from this segment was approximately $1.4 billion, reflecting an increase of 14% compared to the previous year. This growth is largely attributed to heightened demand for credit ratings and market intelligence services, which support investment decisions and risk assessments.

Corporations seeking credit ratings

Corporations are significant clients of S&P Global, particularly for credit ratings. In the nine months ended September 30, 2024, S&P Global reported transaction revenue of $1.8 billion from corporate ratings, an increase of 66% year-over-year. The volume of investment-grade rated issuances reached $1.2 trillion, up 42% from the previous year, driven by refinancing activities and new debt issuances. The increase in corporate bond ratings revenue is a key driver of this segment's growth.

Commodities traders and market participants

Commodities traders and market participants rely on S&P Global for market data and insights. Revenue from the Commodity Insights segment was approximately $643 million for the nine months ended September 30, 2024, reflecting a 22% increase from the prior year. This segment benefits from the rising demand for market data and analytics, with a notable increase in trading volumes across various commodities. The acquisition of World Hydrogen Leaders in May 2024 further enhanced S&P Global's offerings in this space.

Customer Segment	Revenue (9 Months Ended Sept 30, 2024)	Year-over-Year Growth (%)	Key Drivers
Institutional Investors and Asset Managers	$1.4 billion	14%	Increased demand for analytics and insights
Corporations Seeking Credit Ratings	$1.8 billion	66%	Rise in investment-grade rated issuances
Commodities Traders and Market Participants	$643 million	22%	Increased trading volumes and market data demand

S&P Global Inc. (SPGI) - Business Model: Cost Structure

Operating costs associated with data management

The operating costs for S&P Global Inc. related to data management reflect significant investments in technology and infrastructure necessary to maintain its services. For the nine months ended September 30, 2024, total operating-related expenses amounted to approximately $3.277 billion, which represents an increase from $3.109 billion in the same period in 2023, reflecting a growth of 5%. This increase is indicative of the company's ongoing commitment to enhancing its data analytics capabilities and maintaining its competitive edge in the market.

Cost Category	2024 (in millions)	2023 (in millions)	% Change
Operating-related expenses	3,277	3,109	5%

Employee salaries and benefits

Employee salaries and benefits represent a substantial portion of S&P Global's cost structure. As of September 30, 2024, total employee-related expenses, including salaries, incentives, and benefits, were approximately $2.1 billion, reflecting an increase from $1.9 billion in 2023. This increase is due to annual merit increases, additional headcount, and higher incentives tied to performance metrics.

Cost Category	2024 (in millions)	2023 (in millions)	% Change
Employee-related expenses	2,100	1,900	10.53%

Research and development expenditures

Research and development (R&D) expenditures are crucial for S&P Global's innovation and product development initiatives. For the nine months ended September 30, 2024, R&D expenses totaled approximately $350 million, compared to $300 million in the same period the previous year, showing a year-over-year increase of about 16.67%. This increase underscores the company's strategic focus on enhancing its product offerings and advancing technology solutions to meet evolving market demands.

Cost Category	2024 (in millions)	2023 (in millions)	% Change
Research and Development	350	300	16.67%

S&P Global Inc. (SPGI) - Business Model: Revenue Streams

Subscription fees for data services

S&P Global generates a significant portion of its revenue through subscription fees for various data services. For the nine months ended September 30, 2024, subscription revenue was $5,464 million, reflecting a growth of 5% compared to $5,194 million in the same period of 2023. Subscription revenue accounted for approximately 51% of total revenue during this timeframe.

The following table outlines the subscription revenue performance for the three and nine months ended September 30:

Period	Subscription Revenue (in millions)	% Change	% of Total Revenue
Three Months 2024	$1,864	8%	52%
Three Months 2023	$1,730	-	56%
Nine Months 2024	$5,464	5%	51%
Nine Months 2023	$5,194	-	55%

Transaction fees for credit ratings

Transaction fees are another critical revenue stream for S&P Global, particularly from its credit ratings division. For the nine months ended September 30, 2024, transaction revenue reached $2,305 million, up 44% from $1,600 million in the same period of 2023. This growth is primarily attributed to increased issuance volumes in corporate and government debt instruments.

The following table summarizes the transaction revenue details for the three and nine months ended September 30:

Period	Transaction Revenue (in millions)	% Change	% of Total Revenue
Three Months 2024	$735	54%	21%
Three Months 2023	$477	-	16%
Nine Months 2024	$2,305	44%	22%
Nine Months 2023	$1,600	-	17%

Asset-linked fees from investment products

S&P Global also earns asset-linked fees, primarily from its index-related products. For the nine months ended September 30, 2024, these fees amounted to $756 million, an increase of 18% from $638 million in the same period of 2023. This revenue stream is largely driven by the performance of ETFs and mutual funds linked to S&P Dow Jones Indices.

The following table provides an overview of asset-linked fees for the three and nine months ended September 30:

Period	Asset-linked Fees (in millions)	% Change	% of Total Revenue
Three Months 2024	$266	22%	7%
Three Months 2023	$218	-	7%
Nine Months 2024	$756	18%	7%
Nine Months 2023	$638	-	7%

Article updated on 8 Nov 2024

Resources:

1. S&P Global Inc. (SPGI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of S&P Global Inc. (SPGI)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View S&P Global Inc. (SPGI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.