Thank you for standing by, and welcome to the Second Quarter 2021 IHS Markit Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Please be advised that today’s call is being recorded. I would now like to hand the call over to Eric Boyer. Please go ahead.

Good morning, and thank you for joining us for the IHS Markit Q2 2021 earnings conference call. Earlier this morning, we issued our Q1 earnings press release and posted supplemental materials to the IHS Markit Investor Relations website. Our discussion in the quarter is based on non-GAAP measures or adjusted numbers, which exclude stock-based compensation, amortization of acquired intangibles, and other items. IHS Markit believes non-GAAP results are useful in order to enhance understanding of our ongoing operating performance, but they are a supplement to and should not be considered in isolation from or as a substitute for GAAP financial information. As a reminder, this conference call is being recorded and webcast, and is a copyrighted property of IHS Markit. Any rebroadcast of this information in whole or in part without the prior written consent of IHS Markit is prohibited. This conference call, especially the discussion of our outlook, may contain statements about expected future events that are forward-looking and subject to risks and uncertainties. Factors that could cause actual results to differ materially from expectations can be found in IHS Markit’s filings with the SEC and on the IHS Markit website. After our prepared remarks, Lance Uggla, Chairman and CEO; and Jonathan Gear, EVP and Chief Financial Officer, will be available to take your questions. With that, it is my pleasure to turn the call over to Lance.

Thank you, Eric. Thank you for joining us for the IHS Markit Q2 earnings call. We had another very strong quarter. Q2 revenue was $1.18 billion, with organic growth of 13%. Adjusted EBITDA of $517 million and margin of 43.8%, up 30 basis points year-over-year FX adjusted, and up 80 basis points now year-to-date; adjusted EPS up $0.81, up 17% over the prior year. So, overall, we’re pleased with the first half of our year, which puts us in an excellent position to raise our full-year guidance today. In terms of core industry verticals, let me first start with our Financial Services segment, which had another strong quarter with 9% organic growth in Q2. Within the division, information performed solidly with organic growth of 5%. Contributors included increased demand for our pricing, reference data, and valuations offerings, as well as continued growth in our equities regulatory reporting and trade and analytics platforms. Solutions had an excellent quarter, with 15% organic growth, and they continue to benefit from robust market activity in equities and loan markets, combined with a broad-based rebound of investment, customers in our software solutions, and our corporate actions and regulatory and compliance offerings. Finally, our processing business grew 6% organically, strengthened loans and derivatives performance as expected. For the full-year, we still expect Financial Services to be in the 7% to 8% organic growth range. Now, moving on to transportation, which had organic revenue growth of 39% in Q2. Now, you'll recall that the basis for comparison, the second quarter of 2020 was depressed by significant pricing concessions that we granted our customers at the height of the COVID-related lockdowns, as well as by particularly challenging trading conditions in the automotive market. However, there is more to this quarter than a low comparison. I'm pleased to say that this quarter’s performance also reflected strong underlying organic growth right across the transportation businesses. Our dealer businesses, which includes CARFAX and Mastermind, are once again experiencing rapid growth. In a retail environment marked by a shortage of inventory both used and new, and by rapidly escalating used car prices, our products are critical to helping the dealers acquire and sell more cars at the right price at the right time. Demand for our predictive solutions, volumes planning, power transmissions compliance, supply chain and technology are all accelerating, as the industry grapples with multiple supply chain disruptions, and as it faces major strategic decisions related to the technology megatrends, those include the connected car, autonomous driving, and electrification. Our marketing audience and measurements business is rapidly expanding its footprint with automotive market tiers. We recently announced a wide-ranging partnership with Nielsen, which we are very excited about. Lastly, our Maritime & Trade business continued to deliver strong performance, as a result of a very focused product strategy and disciplined execution over multiple quarters. For the full-year, we now expect transportation organic growth to be higher, in the 14% to 16% range, which is up from our previously noted 13% to 15% range. This represents a healthy underlying high single-digit growth rate, excluding the favorable year-over-year comparison due to the pandemic. Moving on to resources, our organic growth was flat in Q2. Our resources business performance was as expected, with recurring revenue consistent with Q1 and non-recurring revenue benefiting from the return of both CERAWeek and the World Petrochemical Conferences. Our ACV experienced slight positive growth in Q2, which we believe should accelerate in the back half, providing a stronger foundation for our 2022 recurring revenue. Our downstream organic revenue growth performed as expected and should accelerate throughout the rest of the year. Downstream is now 50% of the overall division and upstream 50%. That's a 10% shift year-over-year. In 2021, we continue to expect organic revenue results within resources to improve compared to 2020 and to be down year-over-year in the low single digits as upstream improves and downstream continues its growth trajectory. Finally, CMS organic revenue growth was in line with our expectations of 1% for the quarter. We expect improving results across CMS throughout the year. For the full-year, we expect CMS to deliver mid-single-digit organic growth. The only update we have on the merger is what S&P Global recently disclosed that we expect the deal to now close in calendar Q4. And now, I'll turn the call over to Jonathan.

Great. Thank you, Lance. Q2 highlights included revenue organic growth of 13%, adjusted EBITDA growth of 14%, GAAP net income and EPS both had growth of 122%, and adjusted EPS had growth of 17% year-over-year. Regarding revenue, our Q2 revenue was $1.18 billion, with total growth of 15%. Organic growth in the quarter was 13%, which included the current organic growth of 10% and non-recurring organic growth of 41%. This increase was driven by strong underlying growth in financial services and transportation, as well as benefiting from favorable year-over-year comparisons due to the impact of COVID on some of our transportation and resources businesses. Moving on to segment performance, our Financial Services segment drove organic growth of 9%, including 7% occurring in the quarter. Solutions, in particular, had strong performance, delivering 15% organic growth, primarily from strength in capital market issuances, corporate actions, and regulatory and compliance offerings, while information had 5% growth driven by pricing, valuations, and our equities regulatory reporting and trading analytics platforms. Processing had a 6% organic increase driven by volumes, primarily in loans. Our Transportation segment delivered organic growth of 39% in the quarter. This included growth of 38% recurring, as Q2 continued to have strong growth within our CARFAX and automotiveMastermind businesses, and accelerating growth within our Maritime & Trade business. Non-recurring revenue increased by 41%, primarily driven by strong performance in CARFAX, consumer and dealer transactions, core automotive insights, and Maritime & Trade events. Our resources segment remained flat, which has been comprised of an 8% recurring decline and a 73% non-recurring increase. Q2 organic ACB increased by 2 million in the quarter, and our trailing 12-month organic ACB is down 8% as we have now cycled through our subscription renewals since the North American energy market was severely impacted at the end of Q1 last year. We had great success with our entirely virtual CERAWeek and World Petrochemical Conferences, and we continue to see strong demand in our downstream businesses, particularly in our products and services to support energy transition and energy market supply chains. Our CMS segment had 1% organic growth, including 2% recurring and a decrease of 10% non-recurring. Moving now to profits and margins, adjusted EBITDA was $517 million, up from $63 billion versus the prior year. Adjusted EBITDA grew 14% with a margin of 43.8%, down 40 basis points, and up 30 basis points FX adjusted. Financial services adjusted EBITDA was $238 million, with a margin of 48.2%, down 320 basis points FX adjusted. Financial services margins reflect a return to more normal margin levels post-COVID. Transportation’s adjusted EBITDA was $171 billion, with a margin of 49.6%, up 870 basis points FX adjusted. We do expect margins to moderate in forward quarters as we see more expense tied to revenue growth. Resources adjusted EBITDA was $91 million with a margin of 41.4%, a decrease of 210 basis points FX adjusted as a result of lower revenue. CMS adjusted EBITDA was $29 million, with a margin of 23.3%, down 520 basis points FX adjusted. This quarter’s decrease was driven primarily by the return to more normal margins compared to the prior year in addition to a mix shift. We do expect margins to continue to improve in the back half of the year. Moving now to net income and EPS. Net income was $159 million and GAAP EPS was $0.40. Adjusted EPS was $0.81, an increase of 17% over the prior year. Our GAAP tax rate was 26%, and our adjusted tax rate was 20%. Q2 free cash flow was $301 million, and our trailing 12-month free cash flow conversion has increased to 56%. Turning to the balance sheet, our Q2 ending debt balance was $5.0 billion, representing a gross leverage ratio of approximately 2.6 times on a bank covenant basis, and 2.5 times net of cash. We closed the quarter with $217 million of cash, and our Q2 undrawn revolver balance was approximately $917 million. In the quarter, we paid off our $250 million, 364-day term loan. Our Q2 weighted average diluted share count was 400.7 million shares. As we mentioned in Q4, the merger agreement with S&P Global restricts our ability to purchase our shares, and therefore our share repurchase program is currently suspended, other than for the repurchase of shares associated with tax withholding requirements for share-based compensation. Moving to guidance, we had a strong first half of the year and are adjusting and raising our guidance ranges. We’re raising revenue guidance to $4.635 billion to $4.675 billion with organic growth of 7% to 8%. Approximately $30 million of this increase is due to changes in FX rates, which are benefiting revenue, negative to margin percentage, but neutral to adjusted EBITDA. Adjusted EBITDA is being raised to $2.02 billion to $2.03 billion with adjusted EBITDA margin expansion of approximately 100 basis points adjusted for FX. Adjusted EPS is being increased to $3.15 per share to $3.17 per share. Finally, we expect cash conversion in the mid-60s as we lap our 2020 one-time cash impacts. And with that, I will turn the call back over to Lance.

Thanks, Jonathan. We had another strong quarter as our end markets continue to recover and the teams have executed at a high level. We remain very confident in our ability to deliver strong results for the year as represented by our updated guidance. And operator, we're now ready to open the lines for questions.

Our first question comes from Kevin McVeigh with Credit Suisse. Your line is open.

Great, thanks. Good morning, everybody.

Hi, Kevin.

Hey, how are you? Hey, really, really great numbers in transportation and obviously, easier comp, but what's interesting to me is, we read a lot about constrained inventories, things like that. So, it seems like the numbers would have been that much stronger if not for, even if there was more inventory out there. Any puts and takes you’d call out in particular, Lance or Jonathan, just because again, it’s really amazing numbers there?

Yeah, why don't I start and then we'll pass it over to Edouard, actually, because he's on with us. But I think the biggest thing is, and Edouard can build on this some more, if you took out 2020, what you really want to look at is recurring revenue growth from 2019 to 2021, and that's a mid- to upper-teens number. So that's the blowaway number. From my perspective, the team's done an amazing job that comes down with non-recurring revenue. And if you take the overall quarter from 2019 to 2021, it's high single digits. And that's right in line if you look back to 2018, 2019, etc. So, my view is the teams recovered. They've done the maximum they can. They’ve innovated into new products. They’ve worked virtually well. I really think it’s been a stellar performance for them. But Edouard, do you want to add a little bit to that in terms of just your own color on the numbers?

Yes, absolutely. Thank you, Lance. Can you hear me now? Okay, cool. Thanks, Kevin, for the question. And just to build on what Lance said, good call out on the inventories. So, the industry is still in a process of recovery. And you're right. In this current environment, both dealers and carmakers have less of a need to spend on marketing. And that does create a headwind for some of our products. On the other hand, I would say that dealers, in particular, are currently seeing higher margins they’ve ever recorded. And when our customers do well, that’s obviously a good thing for us. So, you sort of have a balance here of headwinds and tailwinds. But the takeaway for me is that even in marked environments like today's auto industry, I think we're showing that our products are critical, must-have products that are helping dealers and carmakers sell more cars, and also, in the case of dealers, acquire used cars in a really tough, kind of used car market. So that's a big deal for us. And I'm really happy with how the business has been performing in response.

Thanks, Edouard. Next question.

Our next question comes from Gary Bisbee with Bank of America. Your line is open.

Hey, good morning. I guess on Financial Services, continues to do quite well, a two-part question. How important is issuance in the last couple of quarters across equity and debt markets? And outside of the issuance benefit, what else would you call out that continues to do quite well here? Thank you.

Okay, maybe I can start and then I'll hand it over to Adam. I guess first off, yeah, I look at Financial Services in high single digits, and I just, to me that’s a super strong quarter. So, great performance. I'd say the one thing I'd call out, which if you were following Markit, then IHS Markit over the years, we always viewed our solutions business as having double-digit growth opportunities. And for a little while that slipped into high-single-digits. It's been throughout 2019, 2020, and now 2021, we've started to see that recover and that's a 15% solution sort of growth. Albeit some of it’s non-recurring, what's really important is that solutions growth brings and draws recurring revenue. So, a really super performance by the solutions team. I don’t know, Adam, do you want to add in terms of issuance, etc.

Yeah. I mean, one of the nice things about our business is the diversification of the asset classes in which we operate and the types of businesses that we have. So, a strong issuance market gives us a bit of a lift. But in other market environments where you see volatility, we have other platforms or other businesses that respond well in those environments. So, you do have a bit of a balance. A heavy issuance market, like we saw in Q1, in particular, that started to moderate a bit into Q2. It gives us some amount of lift, but across the portfolio, the core is really the strength in our pricing, our valuations, and continued growth in demand for those products. And as Lance mentioned, our solutions, we made a significant investment over the last couple of years and we're winning some pretty significant mandates. And that's fueling growth. I think that will be an area of continued growth for us certainly over the mid-term.

Thanks, Adam. Next question.

Our next question comes from Jeff Meuler with Baird. Your line is open.

Yeah, thank you. On the macro around connected cars that you called out in the prepared remarks, obviously, not new, but I guess what's the strategy for CARFAX or IHS auto to collect connected car data in real-time or near real-time? And I guess how important is that to you, kind of intermediate to long-term as you defend your position or look to find new sources of revenue?

Edouard, do you want to take that one?

Yes, sure. Thank you, Jeff, and great question. So, over time, availability of connected car data is going to get bigger, and coverage is going to get much better. We see a couple of opportunities for us both in terms of access to data to supplement what we do today, and also new business models. Today, we are running a number of POCs across our business, both on the CARFAX side of the business to figure out what we can get from that base, and how can we supplement our existing resources, but also building that data set into workflows for carmakers such as dealer network optimization and dealer network design. So, it's an exciting opportunity for us. We see connected car data as being a critical source for us in the future. Right now, availability is limited. Coverage is very light and there are still some significant question marks around access to VIN-level data and who owns that data, which will have to play out over the next two or three years. So, let's continue to watch this space together on the floors, but it will take two or three years for connected car data to emerge as something that we can really leverage.

Thanks, Edouard. Next question.

Our next question comes from Andrew Steinerman with JPMorgan. Your line is open.

Hi, Lance. I just wanted to hear a little bit more specifically about what will drive the recovery in IHS' Resources ACV for the balance of the year. Surely I recognize Brent oil is back into the 70s. But just give us a sense of kind of where and why IHS is seeing additional subscription revenue coming into ACV?

Okay. Probably Brian can give you a real good detail and more granular. So, I'll pass it over to you, Brian.

Yeah. What we're seeing is there’s really high demand right now for our clean tech, carbon, biofuels, and crop science in our agri-group and plastics for chemicals. And what we've done this year is, we have new or expanded offerings in all those areas. So, we're just seeing that segment of the business really take off.

Okay. Thanks, Brian. Really, that’s that I mentioned that I think back at the merger 60/40, now, for the first time ever 50% downstream with agri having a 10% quarter. It really - the diversification is much, much better. And we'll continue to balance the set of assets with the energy transition and the team has done a good job. Thank you. Next question.

Our next question comes from Hamzah Mazari with Jefferies. Your line is open.

My question is more related to the S&P merger. Could you maybe, Lance, talk about any integration pre-planning that's gone on? Maybe you could touch on employee morale. Clearly, you know, the deal closes as you mentioned, Q4, but how is employee morale shaping up in terms of culturally and with that integration, you know, anything you can touch on, any color you can provide there from a pre-planning process, and also from an employee morale perspective? Thank you.

Right. Okay. Well, the year will be a year, December 1 to that final quarter. So, you know, it is a long time, but I have to say, you know, the team really got motivated together through COVID. So, you know, I just think the firm rallied around COVID. And culturally, you know, improved and delivered great results. And that carried us through most of the last year. Like anything, we worry that, you know, over time, you can get, you know, a merger fatigue. But we haven't noticed that at all. I think S&P has done a great job working with my teams on pre-merger planning. Because we've probably had an extra, you know, three or four months, they really have rolled up their sleeves and just went deeper. And the other thing you should know is, you know, we don't have that much of employee morale issues, because, you know, our energy team is completely different, you know, how the plots of this overlap is going to create a sale that's been announced. So, you know, even within Opus, people are excited about the fact that they'd be doing something new again. So, that's not an issue. There's no overlap with our upstream and downstream businesses in the Platts, really. The financial services, Adam’s going to be leading that. And, you know, it's an exciting integration given lots of opportunities. Automotive, transportation, no real need for overlaps, so Edouard is leading that. Sally's leading alliances and building a new team across S&P. So, I think, you know, the teams are all highly motivated. Where the overlap is, of course, in the services, and, you know we did a really good job, both firms have treated the employees very well through this merger period. And so, we haven't had a lot of people at all leaving the firm. And, you know, I feel my teams have done an exceptional job and are still highly motivated. Jonathan's been leading the IMO from our side. So, maybe he can add a little bit of additional color to that.

Sure, Lance. Will do. I mean, just as you let your question, there’s been some very intensive integration planning going on, completely going back to severance, but first we announced this. And teams have been stood up across all the different functions and areas, of course, being careful not to jump the gun, but really get ahead on the integration planning. And then that process, I think a couple of things have come out. First, I think, as we identified synergies at when we announced the deal. We've taken the last few quarters to really begin to solidify exactly the path to the synergies and I think we’re increasing confidence on how to get there. And the second thing culturally, to your question, it's been a great opportunity for the teams to really work with one another and get to know each other and get to know their future colleagues extremely well. And I think what's come out of that is certainly Lance and I knew from our discussions in the fall is the values of the two firms are very, very similar. And I think as the two teams have gotten to know each other, it's been relieving, if you will, for them to know that their colleagues are going to be working with other people that they want to work with. So, we’re making great progress both culturally, as well as the integration planning, and we feel well set up when we close.

Thanks, Jonathan. Next question.

Our next question comes from Shlomo Rosenbaum with Stifel. Your line is open.

Hi, this is Adam on for Shlomo. What level of costs were reintroduced into the business through the re-openings? And how might this have impacted margins in the quarter?

Jonathan, do you want to do that one?

Sure. There were a couple of different areas where we did. So, if you call last year, Q2 last year, when we were entering COVID, we took some significant cost reductions, some of those were permanent, and those permanent cost savings have indeed been permanent. They haven't crept back in, but some were temporary. There were impacts on executive salaries and a few other things we did; we pulled back on marketing spend, for example, on CARFAX given that the dealers had shut down in North America. And so those costs have been reversed. It does create a somewhat odd dynamic or the absolute margin of the segment level with transportation, for example, when we take significant costs reductions in Q2 of last year, you see significant year-on-year margin accretion, which is a little bit of a false economy, I would say. You should see that normalize going forward. But those have been the main costs that have come back in. Then of course, we continue to invest in the business and where we see strong performance, they should make investments to fund future growth. But the key point I'll call out is really you're seeing the year-on-year reverse of some of those temporary cost reductions from last year.

Thanks, Jonathan. Next question.

Our next question comes from George Tong with Goldman Sachs. Your line is open.

Hi, thanks. Good morning. You increased your full-year guidance for organic revenue growth given strength in transportation. How do you expect your updated guide to flow through to your fiscal 2022 outlook given current trends in each of your segments?

Yeah, I think I'll let Jonathan add after me, but, you know, the key thing that I think people should look at is, it's a very, you know, we're halfway – over halfway through our fiscal year. We've given you a very narrow; you know $40 million of revenue guidance, and an even narrower EBITDA guidance. And, you know, if you look at our track record, you know, over the last many years, we don't miss our guidance. So, the fact is, is we've given you a very accurate picture for this year, float all the way through into earnings. Of course, we also feel that, you know, our strong, you know mid-to-upper single-digit revenue profile as a firm is one that's very intact. And we expect that to continue. And so I don't see us changing the percentage of revenue growth expected into 2022, 2023, 2024, but that's not to say that as we go into those years, if we have strong, you know, first second quarter, we don't have any issue with, you know, raising our view forward, and we'd love to beat our guidance, but I don't see us changing, you know, across the mix of our businesses. So, you know mid-to-high single-digit revenue growth in 2022 off of our closing 2021 numbers. Jonathan, do you want to add anything else to that?

No, but maybe there's a couple comments to add to yours, Lance. I mean, first of all, we did give our 2021 guidance this time last year, coming out of all the noise of COVID. I’m actually really proud of the team that even with all the uncertainties back then, we are landing the plane kind of as we expected. And as Lance has alluded to, great, great performance by the team. Now, I will say, George, in terms of a raise in the guidance this time, obviously, we're doing on the back of what we saw in the first half of the year and what we're seeing going forward. I think at this point, we're not prepared to really give formal guidance for 2022. I think we'll be back to our normal cadence. Obviously, much rather be in a position of strength exiting the year than position of weakness. But as Lance was saying, I think at this point, no news in terms of changes to future growth will surely get back to you later in the year once we finalize our plans.

Thanks, Jonathan. Next question.

Our next question comes from Toni Kaplan with Morgan Stanley. Your line is open.

Thank you. I wanted to ask about ESG, when you think about the $70 million of ESG revenue, it spans across a number of different areas, emissions, data, supply chain, solar wind, hydrogen, etcetera. I guess who's competing against you in these areas? And are there any capabilities or datasets that you don't have right now that you would like to? Thank you.

Yeah, that's a good question, Toni. Thanks for that. So, I think where IHS Markit standalone has an edge in ESG is clearly around the E, and scope 123 emissions science-based targets, the challenges for corporations and governments who will want to regulate coming out of COP26, these are areas where we have real substantive detail, climate analytics. We have data that plays into climate analytics. So, location data around energy assets, our maritime and trade group has very detailed supply chain footprints for all the maritime fleet. We have some great new products and services that play into research and development around E. So, I think we have a competitive edge as IHS Markit in E. When you marry that with S&P Global, I actually think the combination gets even stronger, and they do have the RobecoSAM, Trucost, and other assets that are very, very valuable in terms of, you know, competing with the likes of MSCI, FTSE, the LSE group, you know various providers of ESG ratings and scores that are much more driven off the, you know, public knowledge, SNG versus the E. So, I think our combination is going to give us a competitive edge and give us a lot of opportunity to grow into, and I think across S&P Global and IHS Markit, this is a very strong double-digit growth engine for, you know, at least a decade. Because, you know, there's 1.5 trillion a year being spent on climate change now, and that number is expected to grow to something like 4.5 trillion. And so, I think we've got lots to offer, and you know we'll watch this space closely. Next question.

Our next question comes from Jeff Silber with BMO Capital Markets. Your line is open.

Thank you so much. This is actually a follow-up from Hamzah’s question on your internal workforce. You said you have not had a lot of people leave since the merger announcement. That's great. I'm assuming you've been hiring since, if you could just confirm the size of your workforce has increased since the merger announcement? And if so, how difficult is it to find these people, and are you having to pay higher than normal wages? Thanks.

Let the team add to this one. So, I'll go to Jonathan or if he wants to pass it to any of the division heads he can. We're definitely hiring, and we're definitely, you know, with the growth numbers, you know, we're growing. And in many cases, we're growing into new spaces in the markets to operate in. So, I haven't seen this have any challenges to hire. You know, and of course, in a merger, we make sure that we retain our people and look after them. So, I don't notice anything that stands out, you know, from my perspective. But if any of the division heads want to add anything in terms of hiring, etcetera, maybe you can start Jonathan if you know our overall employment growth across the group, year-over-year, and then if any of the division heads want to add?

Sure, maybe I’ll just give a general overview and then the division heads can supplement as they like. First off to your point is first, the attrition we've seen kind of year to date has been very much in line with what we normally see. And so no significant changes, we are growing. And you're absolutely right. We are growing and investing in all the different businesses that Adam, Edouard, and Brian lead, in particular growing in India has always been a growth sector for us. India is a hot market. Itself is – what we're very, very attractive employers always, you know, challenged to find great people. I would say that the challenge we have in finding people this year really is not that different from other years. It's always, you look attractive, the best people and pull them in is never easy, but we always try to get it done. So, we are growing. Certain markets are hotter than other markets, certain segments, particularly in technology, data science, etcetera, the usual places you would expect. Obviously difficult, but I wouldn't say dramatically different this year from prior years. But happy to open up to the divisional leads to add some more color.

I'll just add something to what Jonathan said. I would say it’s in pockets, right. I think it’s a great question. Technology is one of those pockets. You may have seen in some places an uptick in nutrition, and we have struggles to hire great tech talent in some locations. So, our strategy here is to diversify the sources of talent. But as you know, we are actively engaged in globalizing our talent footprint and that’s helping us, and in some cases, adjusted wages in areas needed.

Adam, do you want to add anything or Brian?

Yeah, no, the only comment maybe I’d make, Lance is we, obviously were operating a competitive job market. We put a lot of attention into our internship and our early careers programs where we brought large groups of young people into the firm and that pipeline, you know, that's like that gives us great strength forward. That's a real investment in the future of the firm. And I think that's a place where we've seen real progress both in our diversity and equality, as well as just bringing great talent that continues to join and progress within our firm.

Okay. Brian, anything?

No. I mean, I think I agree. I'm seeing the same things that Edouard and Adam are and definitely our internship programs really help onboard good talent as those are graduated. So, I think we're firing on all cylinders there.

Yeah. No, it's great. We have over 250 interns and 250 graduates joining. So, you know, that fuels a lot of our growth that manages our expenses. Okay, next question.

Our next question comes from Andrew Nicholas with William Blair. Your line is open.

Great. Thanks for taking my question. I know it's a smaller piece of business, but I was wondering if you could speak a bit to the performance of CMS in the quarter. And what the medium-term outlook looks like for that segment? I think recurring revenue held up decently well throughout the past, kind of year plus, and I know you get some non-recurring revenue from the boiler pressure, vessel codes in the back half of this year, but excluding that, do you think CMS can get into the mid-single-digits range, longer-term? And if so, what are the primary drivers to getting there? Thank you.

Yeah, I'll start that. Jonathan can add if needed. But, you know, we've really retooled CMS toward mid-single-digit growth. We called it out in this quarter that we expect the full-year to be mid-single-digits. So, you know, again I think you guys have strong confidence in the numbers we give you. And we expect to hit them. So, but you know, long-term organic growth means you do it over and over again. And then people give you that valuation expectation, and CMS has been, you know, in need of retooling and building out our tech platform, the team has done a great job. They are seeing demand, and that's flowing through to, you know, better recurring revenue. So, I think the team's done a great job. I think moving from low up to mid-single-digits is step one. And we expect that the team will be able to do that through this year and then again into next year. Jonathan?

Great last year – maybe just a few things I would add because if you look at CMS, there are really two divisions or two major divisions. One is product design. One is our economic and country risk. So, then, product design has been a multi-year investment back in technology and new platforms and products. We begin to see that lift take place that drives, as Lance said, not a single year, but kind of a multi-year sustainable organic growth. We do certainly see as we look the first half of the year and then look at what's building in the second half of the year. We do see a path for that to get to mid-single-digit seconds for the full-year, based on what we're seeing. That we think should be a sustainable growth rate. On the economic company risk that Adam mentioned, this has been some significant investments in terms of new products and new packaging around how we get much more of a persona-based approach with our products there. And similar story where those investments were made to, come in at the end of last year early this year, and received the benefit in our growth through our pipeline, we expect to see that lift second half of the year. So, our report divisions, our lowest growth rate first half of the year, we would expect it to get to mid-singles by the end of the year.

Thanks, Jonathan. Next question.

Our next question comes from Andrew Jeffrey with Truist Securities. Your line is open.

Hi, thank you. Good morning, everybody. Appreciate taking the question. Just wondering a little bit, Lance, you know, the transportation business has been fantastic and it sounds broad-based, some of what you described in terms of the market dynamics feels a little bit like a peak cycle. I just wonder if you could address that next year, obviously, comparison side, assuming supply chains loosen up a little bit. Used car prices perhaps normalize, anything we need to think about, you know, in terms of 2021 as being sort of an exceptional year that sets up just a tougher, you know, sort of macro backdrop for transportation next year?

Right. Well, I guess it's the merger of IHS and Markit, you know that, I got used to that question every single quarter. So, about 20 quarters of that same question. So it's a good – it obviously is a good question because it's the one that's on the mind of all of our analysts. And I think what you should be really looking at is high single-digit growth for transportation. And it does that time and time again, in a very diversified way. And sometimes it's used car markets, sometimes it's new car markets. Sometimes it's marketing and advertising, sometimes it's, you know, supply chain in predictive analytics. And so when everything's ticking, we can peak into double digits, but in general, I look at transportation, say it's a strong high single-digit performer with ample opportunity in its markets to maintain that. And it's not reliant on new or used car sales alone, but many things that are actually needed by the automotive suppliers, and the OEMs, regardless of the environment we're in. So, they all need to market from cars, they all need to spend their incentives, they all need to measure their emissions, they all need to order parts and study the supply chains. They all need to do R&D, and look into the future car, the connected car, the electrification of vehicles, next will be hydrogen. So, there's always stuff to be done. Then we get on the dealer floor. And the marriage of CARFAX and Mastermind and helping dealers sell cars in a connected digital world, those types of tools become even more important. So, I think, you can expect more of the same in the high-single-digit range for transportation. But, you know, this is an outsize quarter that’s catching up from, you know, a COVID period where, really the comparison. You know, it's exciting to get to save 39% we actually teased the team that it wasn't 40, because would have been a nicer number to shout out. But the fact is, it's really a high single digit consistent growth scenario, where the team's recovered really well. I'm all in there. I think that was our final question operator?

We do have a question from Doug Arthur with Huber Research. Your line is open.

Yes, thanks. I'll make it quick. Lance, last just on the ACV turning up, would you, I mean you’ve given various updates on your kind of pendulum swinging there on ACV, is it sort of as expected at this point or is it a little ahead of schedule?

No, I'd say as expected. We're definitely not ahead of schedule, but, you know, what I really like is the continued shift to a division that's highly diversified, like financial services, like transportation where we've got strong diversification across, you know, many facets of global economies that are dealing with energy transition, new sources of energy, circular economy and demands waste. This division is with its expertise and chemicals to agricultural business. The continued need for, you know, 90 million, 100 million barrels a day of oil, oil prices at 70, when it wasn't long ago, they were sub-50. So, you know, this team is always in thought leadership in center stage. And, yeah, we've had, it's been one of the toughest divisions as we've come out of, I had to go through COVID. But, you know, we're back to, you know, an expected, probably low-to-mid single-digit growth year in 2022 for energy. And, you know, if 2022 could be the first year where, you know, you've got CMS, you've got energy in the mid-single-digits, and you've got transportation and financial services in high-single-digits. You know, that's kind of, that's the home run and we're going to deliver this firm very strong into the S&P Global strategic merger. I think that might be the final question, but let me know operator.

Our final question is from Manav Patnaik with Barclays. Your line is open.

Thank you. Hi Lance. Sorry. I just wanted to unpack maybe, I'll keep it quick, that low-to-mid single-digit growth, you talked about resources. Can you just help break it down? You know, clearly, everyone's talking about energy transition going well, but that's probably, you know, a smaller part of the business. And I just wanted to understand how you guys see the dynamics between, you know, obviously, oil prices going up, but the energy companies still pressured and the zero-carbon world or whatever. So, you know, how do you see those moving pieces there? Yeah.

I think the easiest thing to do is, you take 50% of that division, and you call it high-single-digits. You know, agriculture had a 10. Chemicals has been consistently mid-to-high single-digits, Opus has been consistent mid-to-high single-digits, even an occasional quarter in double digits. And then you go to upstream and if you really want to be tough on upstream, you know, you could say it's flat, and that's your low-single-digits, upstream recovering though, off of the price concessions, etcetera to be low-to-mid single-digits puts the whole division at, you know, 5% to 7%. And so, you know, I don't think it's a tall order to see those types of revenue gross in 2022. And, you know, we're well set up for that. And the demand around, you know, just understanding energy-related assets in a world of – driven by regulatory change, climate change, investor perceptions, and demands, I actually think our team's roles to help energy market participants navigate these forward challenges. I think there's a lot of growth. We saw, you know, CERAWeek virtually, you know, I was shocked at the turnout and the needs of the teams to engage with market participants in thought leadership. We saw the same in the World Petrochemical Conference, and our Maritime & Trade, which is more around supply chain and trade analytics. So, I really – yeah, I guess I just, you know I'm not a crazy optimist, but I think that, you know, when we say mid, you know, single-digits we mean, and I think that Brian and the team, you know, have navigated COVID very well. But it was tough. It was the toughest division to run from a strategic point of view through this challenging period. It just had the most moving parts and the team, you know, I have to say, you know, they don't have the highest results. But, you know, for me, I give them a badge of honor. So, great job. We'll end there. I think operator, I'll try it one more time, unless somebody came in for another question. I think we're finished.

There are no further questions.

I'll turn it back to Eric.

Great. We thank you for your interest in IHS Markit. This call can be accessed via replay 855-859-2056 or international dial in 404-536-3406, conference ID 9174115, beginning in about two hours running through June 30, 2021. In addition, the webcast will be archived for one year on our website. Thank you and we appreciate your interest and time.

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