Subscription Model & Acquisitions Aid S&P Global Amid Low Liquidity

S&P Global’s SPGI top line benefits from its subscription-based revenues, which carry a low churn rate in the dynamic finance sector. Recent acquisitions are instrumental to its segmental growth and strong revenues per employee, collectively boosting the bottom line. Shareholder-friendly policies are an added advantage.

Meanwhile, weakening liquidity and rising operating costs remain significant concerns for the company. SPGI faces strong challenges in boosting profitability and scalability amid heightened competition in the automotive industry.

SPGI reported mixed fourth-quarter 2025 results. Its earnings of $1.86 per share marginally missed the Zacks Consensus Estimatebut grew 14.1% from the year-ago quarter. Total revenues of $3.92 billioncame marginally ahead of the consensus estimate and rose 9% year over year.

How is SPGI Faring?

SPGI’s subscription-based revenue model is the primary growth catalyst for its top line. Its inherent resilience and compelling growth drivers provide a significant strength for revenue generation. The company supplies mission-critical data and analytics incorporated by clients, resulting in a low churn rate and recurring revenues across its segments.

S&P Global Inc. Revenue (TTM)

S&P Global Inc. revenue-ttm | S&P Global Inc. Quote

SPGI pursues growth through strategic acquisitions. The acquisition of ORBCOMM and TeraHelix in April and June 2025, respectively, strengthens its supply chain and maritime offerings by providing important insights for vessel tracking and monitoring.

These acquisitions also aid S&P Global’s advanced data modeling and linking abilities, improving dataset integration capabilities across platforms and advancing its AI and GenAI path. The company completed the acquisition of ProntoNLP in January 2025 to strengthen its textual data analytics capabilities, which are anticipated to fuel broader enterprise-wide AI applications.

Additionally, its IHS Markit acquisition has significantly aided the S&P Dow Jones and Market Intelligence divisions. The buyout improved fixed income positioning with the iBoxx franchise by enabling innovative products and strengthening multi-asset class offerings at S&P Dow Jones. The acquisition benefited the Market Intelligence segment by introducing high-value and high-growth products, including enterprise solutions, maritime data, critical private credit capabilities and business valuations.

SPGI consistently rewards its shareholders through share repurchases and dividend payments. It paid dividends of $1 billion, $1.1 billion and $1.1 billion, while repurchasing shares worth $12 billion, $3.3 billion and $18.6 billion in 2022, 2023 and 2024, respectively.

Meanwhile, the company is experiencing an increase in expenses due to investments in ongoing productivity programs, higher compensation costs driven by investments in growth initiatives, the completion of acquisitions and higher incentive costs.

SPGI faces significant competition from firms like Moody's Corp. and Fitch Ratings, which affect its profitability and ability to innovate while maintaining cost efficiency.

SPGI’s current ratio (a measure of liquidity) at the end of the fourth quarter of 2025 was 0.82, lower than the industry average of 1.03. This suggests that the company may struggle to fulfill its short-term obligations and maintain sufficient liquidity in the future.

SPGI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Snapshots

Trane Technologies TT reported impressive fourth-quarter 2025 results. TT’s quarterly earnings of $2.86 per share beat the Zacks Consensus Estimate by 1.4% and increased 9.6% from the year-ago quarter.

TT’s total revenues of $5.1 billion surpassed the consensus estimate by 1.3% and increased 5.5% from the year-ago quarter.

Booz Allen Hamilton BAH registered mixed results for the third quarter of fiscal 2026. BAH’s earnings per share of $1.77 beat the consensus mark by 40.5% and increased 14.2% from the year-ago quarter.

BAH’s revenues of $2.6 billion missed the Zacks Consensus Estimate by 3.9% and declined 10.2% from the year-ago quarter.

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This article originally published on Zacks Investment Research (zacks.com).

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