S&P Global Inc.: Margin Expansion, Cash Generation, and Capital Allocation Under the Microscope

FY2024 surprise: strong cash conversion and a material margin step-up#

S&P Global ([SPGI]) closed FY2024 with revenue of $14.21B, net income of $3.85B, and EBITDA of $6.78B, while converting profits into cash at an accelerated clip: net cash provided by operating activities rose to $5.69B and free cash flow reached $5.57B. Those outcomes delivered a meaningful profitability inflection versus FY2023—operating margin improved by +7.10 percentage points (from 32.17% to 39.27%) and net margin expanded by +6.10 percentage points (from 21.01% to 27.11%). The market currently prices the stock at roughly $552.45 with a market capitalization around $168.66B and a trailing PE near 42.4x. These results and the accompanying cash generation are the clearest near-term developments shaping S&P Global’s strategic flexibility and valuation debate (company filings, FY2024 results).

What the numbers actually show: growth, margin and cash flow mechanics#

S&P Global’s FY2024 top-line increased to $14.21B from $12.50B in FY2023, a year-over-year change of +13.68% (calculation: 14.21/12.50 - 1 = +13.68%). Net income rose from $2.63B to $3.85B, a jump of +46.35% (3.85/2.63 - 1 = +46.35%). EBITDA expanded from $5.15B to $6.78B, an increase of +31.65%, and EBITDA margin widened from 41.19% to 47.71% (+6.52 percentage points). The jump in operating and EBITDA margins reflects a mix of revenue leverage, disciplined cost control and, to a lesser extent, one-off items that management has highlighted in prior commentary.

The quality of the earnings improvement is reinforced by cash-flow metrics. Operating cash flow rose from $3.71B to $5.69B (+53.37%), while free cash flow increased from $3.57B to $5.57B (+56.02%). Free cash flow of $5.57B represents roughly 3.30% of the current market cap (calculation: 5.57 / 168.66 = 0.0330 = +3.30% FCF yield). That scale of cash generation funded $3.30B of share repurchases and $1.13B of dividends in FY2024, leaving the company with a manageable net-debt position of $10.27B (net debt = total debt minus cash) and ample room to pursue either additional buybacks, bolt-on M&A, or continued investment in products and technology (company filings, FY2024 cash-flow statement).

Income statement snapshot (calculated from company filings)#

These year-to-year values are taken directly from the FY2024 report and prior-year comparatives and show a clear trend: revenue growth plus operating leverage delivered outsized earnings growth in FY2024. The degree to which operating margin recovered versus FY2022/2021 levels suggests S&P Global is extracting meaningful operating leverage from its recurring-revenue base.

Balance-sheet and cash-flow snapshot (calculated)#

Two balance-sheet items warrant emphasis. First, goodwill and intangible assets total roughly $51.47B against total assets of $60.22B, reflecting the aggregator’s M&A strategy over the last decade. Second, net debt post-FY2024 sits near $10.27B, which versus FY2024 EBITDA of $6.78B yields a simple FY2024 net-debt / EBITDA of ~1.51x (calculation: 10.27 / 6.78 = 1.51x). Note: commonly reported net-debt / EBITDA uses LTM or adjusted EBITDA; small timing and definition differences explain modest dispersion between this simple computation and published TTM ratios.

Valuation and metric reconciliation — where common public multiples diverge from a simple calculation#

Market multiples on S&P Global are elevated. Using the reported price and EPS, the trailing PE is about 42.4x (price ÷ EPS). The data set supplied lists price-to-sales at 11.49x and enterprise-value-to-EBITDA at 25.24x. When we compute enterprise value (market cap + net debt) using supplied figures — EV ≈ $168.66B + $10.27B = $178.93B — and divide by FY2024 EBITDA of $6.78B, the simple FY2024 EV/EBITDA is ~26.39x (calculation: 178.93 / 6.78 = 26.39x). Similarly, a market-cap-to-revenue calculation using the provided market cap and FY2024 revenue gives a price-to-sales of ~11.87x (168.66 / 14.21 = 11.87x).

These small discrepancies versus the published multiples stem from differences in denominator definitions (FY vs TTM vs adjusted EBITDA), rounding and the market-cap snapshot used by different data providers. We call them out because the choice of EBITDA base (FY vs TTM vs adjusted) materially changes leverage and multiple comparisons — important when investors discuss valuation premium versus peers.

Why margins improved: revenue mix, operating leverage and lower one-offs#

S&P Global’s margin expansion appears driven by three enduring forces. First, revenue growth in higher-margin data and analytics businesses translated to scale leverage. Second, SG&A and other operating expenses grew at a slower pace than revenue, demonstrating operating discipline and the benefit of recurring subscription-like revenue. Third, depreciation/amortization and certain non-cash items have moderated relative to revenue growth, lifting reported operating leverage. The result is a higher-quality earnings base: FY2024 free cash flow of $5.57B comfortably exceeds net income of $3.85B, an important indicator of cash-to-earnings conversion.

Capital allocation: how the company is using its cash#

S&P Global’s FY2024 capital allocation mix emphasizes buybacks and dividends within a measured leverage profile. The company returned $3.30B in share repurchases and $1.13B in dividends while keeping net debt roughly stable. The dividend per share is $3.74 (annualized), which at the current price yields about +0.68% (calculation: 3.74 / 552.45 = 0.00677 = +0.68%). Dividend payout relative to EPS is approximately 28.51% (calculation: 3.74 / 13.12 = 0.2851 = +28.51%), consistent with a policy of balanced returns and reinvestment.

The company’s repurchase cadence — repeat $3.3B programs — plus modest net-debt leverage (~1.4–1.5x net debt/EBITDA on a simple basis) suggests management prioritizes buybacks while preserving investment-grade leverage. Acquisitions in FY2024 were small (acquisitions net -$137MM), compared with prior years where larger bolt-ons and strategic deals drove goodwill increases. That points to a shift from transformational M&A to smaller, targeted tuck-ins that expand product breadth without materially altering leverage.

Competitive position and moat — subscription economics and pricing power#

S&P Global’s businesses (indexing, benchmarks, ratings, market intelligence and analytics) are built on recurring contracts, proprietary data and deep client integration — characteristics that support predictable revenues and high gross margins. The very large intangible asset base (goodwill & other intangibles ≈ $51.47B) reflects a history of acquisitions that created scale, data breadth and cross-sell opportunities. Those assets are both strength and a structural risk: they represent value derived from acquired intellectual property and client relationships, but they compress tangible equity and can complicate impairment risk in a prolonged revenue downturn.

From a competitive standpoint, S&P Global benefits from strong pricing power in critical enterprise workflows (ratings, benchmarks, analytics). That pricing power helps explain the margin profile: high gross margins and expanding operating margins as subscription revenues scale. Competitive threats remain — competing data providers, open data initiatives, and regulatory scrutiny of benchmark or ratings processes — but S&P Global’s strong client integration and cross-selling capabilities create durable switching costs for many enterprise customers.

Growth prospects and analyst expectations — a moderate organic runway plus buy-and-build optionality#

Analyst-modeled forward expectations in the data indicate a moderate organic revenue CAGR (future revenue CAGR +5.95%) with higher EPS compounding (+10.69% EPS CAGR). The company’s own FY2024 results show that above-trend EPS and free-cash-flow growth can be achieved when revenue growth is amplified by operating leverage and disciplined capital allocation. The forward PE curve embedded in available estimates falls from ~31.55x in 2025 to 20.95x by 2029, reflecting expected EPS growth and implied multiple compression. This scenario depends on execution across product monetization, pricing, and selective M&A.

Key drivers to watch for sustaining double-digit EPS growth include further margin expansion in analytics and market intelligence, stronger cross-sell into enterprise accounts, and prudent use of buybacks to boost per-share metrics without reckless leverage.

Risks investors should weigh#

Three material risks stand out. First, valuation sensitivity: the stock trades at a premium on trailing and forward multiples, making it vulnerable to any deceleration in growth or margin reversion. Second, the heavy intangible footprint (goodwill & intangibles ≈ $51.47B) elevates impairment risk if market conditions or strategic assumptions deteriorate. Third, regulatory and competitive pressures in ratings and benchmark businesses could increase costs or limit pricing freedom; those sectors are closely watched by regulators and require ongoing investment in governance and transparency. Finally, the company’s earnings and cash-flow profile are not immune to macro-driven reductions in index licensing or transaction-related revenue in weak markets.

Historical execution and management credibility#

Historically, S&P Global has shown an ability to integrate acquisitions at scale and extract cross-selling synergies, a track record reflected in margin resilience and steady cash returns to shareholders. The FY2024 results illustrate disciplined capital allocation (stable net debt, consistent buybacks, steady dividend) and an ability to translate revenue growth into cash. Management’s execution on margin expansion in FY2024 reinforces credibility, but investors should monitor whether this margin level is structural or a product of timing and phasing of expenses and nonrecurring items.

What this means for investors — the bottom line (no buy/sell call)#

S&P Global is operating from a position of financial strength: double-digit revenue growth in FY2024 (+13.68%), substantially improved margins, and robust free cash flow of $5.57B that supports shareholder returns and selective M&A. Those fundamentals underpin the company’s strategic options and justify a premium valuation relative to simpler data providers, but the premium introduces sensitivity to execution risk. Investors and stakeholders should therefore focus on three observable near-term items: recurring revenue retention and expansion, the sustainability of the margin step-up (quarterly run-rate confirmation), and continued disciplined capital allocation that maintains investment-grade leverage.

Key takeaways#

S&P Global delivered a clear fiscal-year performance upgrade in FY2024: revenue $14.21B, EBITDA $6.78B, free cash flow $5.57B, and operating margin recovery to 39.27%. Cash generation funded material buybacks while keeping net debt near $10.27B, implying leverage of ~1.5x on a simple FY2024 basis. Valuation is at a premium versus many peers, and small calculation differences in published multiples reflect denominator and timing choices; investors should reconcile EV/EBITDA and P/S using a consistent base when making cross-company comparisons.

Near-term watchlist (data-driven)#

Investors should watch: (1) next quarterly revenue growth and whether high-margin segments continue to accelerate; (2) quarterly operating margin run-rate to verify FY2024 improvement is sustainable; (3) guidance cadence for free-cash-flow conversion and any planned larger M&A that could alter the leverage profile; and (4) any regulatory developments affecting ratings or benchmark businesses. These items are the most direct early indicators that would validate or weaken the FY2024 narrative.

Conclusion#

FY2024 was a performance year for S&P Global: growth accelerated, margins expanded and cash conversion improved materially. Those outcomes provide management with strategic optionality—continued buybacks, modest tuck-in M&A and investment in product development—while keeping leverage conservative. The trade-off, however, is valuation sensitivity: the company’s premium multiples demand consistent execution and margin durability. For market participants, the central question is not whether S&P Global can generate cash—it demonstrably can—but whether that cash flow and margin profile can be sustained long enough to justify the current valuation premium. The next several quarters of revenue mix, margin cadence, and capital allocation choices will answer that question with the greatest clarity.

(Unless otherwise noted, all financial figures are calculated from the company’s FY2024 financial statements and comparative annual results filed in February 2025; see S&P Global investor relations and FY2024 filings for source tables.)