S&P; Global (SPGI) Q4 2024 Earnings Call Transcript

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S&P Global (NYSE: SPGI)
Q4 2024 Earnings Call
Feb 11, 2025, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to S&P Global's fourth quarter and full year 2024 earnings conference call. I'd like to inform you that this call is being recorded for broadcast. [Operator instructions] To access the webcast and slides, go to investor.spglobal.com. [Operator instructions] I would now like to introduce Mr.

Mark Grant, senior vice president of investor relations for S&P Global. Sir, you may begin.

Mark Grant -- Senior Vice President, Investor Relations

Good morning, and thank you for joining today's S&P Global fourth quarter and full year 2024 earnings call. Presenting on today's call are Martina Cheung, president and chief executive officer; and Chris Craig, interim chief financial officer. We issued a press release with our results earlier today. In addition, we have posted a supplemental slide deck with additional information on our results and guidance.

If you need a copy of the release and financial schedules or the supplemental deck, they can be downloaded at investor.spglobal.com. The matters discussed in today's conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including projections, estimates and descriptions of future events. Any such statements are based on current expectations and current economic conditions and are subject to risks and uncertainties and that may cause actual results to differ materially from results anticipated in these forward-looking statements. Additional information concerning these risks and uncertainties can be found in our Forms 10-K and 10-Q filed with the U.S.

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Securities and Exchange Commission. In today's press release and during the conference call, we are providing non-GAAP adjusted financial information. This information is provided to enable investors to make meaningful comparisons of the company's operating performance between periods and to view the company's business from the same perspective as management. The press release contains financial measures calculated in accordance with GAAP that corresponds to the non-GAAP measures we are providing, and the press release and the supplemental deck contain reconciliations of such GAAP and non-GAAP measures.

The financial metrics we'll be discussing today refer to non-GAAP adjusted metrics, unless explicitly noted otherwise. I would also like to call your attention to certain European regulations. Any investor who has or expects to obtain ownership of 5% or more of S&P Global should contact investor relations to better understand the potential impact of this legislation on the investor and the company. We are aware that we have some media representatives with us on the call.

However, this call is intended for investors, and we would ask that questions from the media be directed to our Media Relations team, whose contact information can be found in the press release. At this time, I would like to turn the call over to Martina Cheung. Martina?

Martina Cheung -- President and Chief Executive Officer

Thank you, Mark. By any measure, 2024 was an incredible year for S&P Global. Excluding Engineering Solutions, which was divested in 2023, revenue increased 15%, and revenue from our subscription products increased 7%. We benefited from strong market trends, including record debt issuance for our Ratings business and strong equity valuations for our index business.

However, we also continue to demonstrate the discipline and operational excellence our shareholders have come to expect from us, delivering accelerated revenue growth in Commodity Insights and strong steady growth in both Market Intelligence and Mobility, despite some market headwinds on those two businesses. We continue to take a balanced approach to profitability and investment, which allowed us to make important investments in technology, AI and products while still expanding margins more than 300 basis points. We delivered 25% growth in adjusted EPS in 2024. This exceeded the midpoint of our initial guidance range by more than 13%.

Our disciplined approach to capital allocation allowed us to return $4.4 billion to shareholders over the course of 2024 through our cash dividend and the repurchase of 6.7 million shares. We expect to continue strong capital returns in 2025, as we recently announced the 52nd consecutive increase to our cash dividend and a newly approved share repurchase authorization up to $4.3 billion. In total, you'll see this would allow us to maintain our target of returning 85% or more of the $6 billion in adjusted free cash flow we are expecting in 2025. I've been very impressed with our people's ability to execute and deliver such strong results, embracing the leadership transition and the increased focus on our customers and our enterprise advantages.

With that increased focus on serving our clients at the enterprise level, we announced the establishment of the chief client office and the Enterprise Data Office. We're excited to share the successes from these initiatives with you as we progress through the year. We're also pleased to share that our new chief financial officer, Eric Aboaf, will be joining us officially on February 19. We are gaining momentum in our product innovation and AI initiatives across the organization as well, as I'll share with you in a moment.

Lastly, we continue the cycle of optimizing our portfolio of businesses, so that we are best positioned for long-term profitable growth. In 2024, we acquired best-in-class solutions to support strategic growth through Visible Alpha, ProntoNLP and World Hydrogen Leaders. We also divested noncore businesses, Fincentric and PrimeOne. One of my first priorities as CEO was to strengthen and deepen our relationship with key strategic customers at the highest levels of leadership.

I had more than 100 meetings with some of our most important stakeholders to ensure a smooth transition of these key relationships. These important discussions include not just our customers, but also strategic, commercial and technology partners. Together with our new chief client officer, I met 85% of our largest strategic customers just in the last 100 days. We are instilling in our executive leadership team, a clear need to be where our customers are.

Our success depends on the value we create and deliver for our customers, so I've asked our division leadership to make these relationships a personal priority for them as well. This emphasis on customer engagement is a natural evolution for S&P Global. We've always made customer value a focus. But by making customer engagement a higher priority at the executive level, we are building stronger relationships, so that we can accelerate our response to customers' challenges.

This engagement can also serve as opportunities to partner or co-invest with our customers. One such example is the UBS Leveraged Loan Index partnership. Through these many meetings, I'm picking up a consistent set of themes, which align very well with our competitive advantages and reinvigorate our optimism and confidence in our ability to compete and win. While generative AI is not a new topic for our customers, they're moving beyond just considering what this technology can do and focusing on use cases that can scale quickly and contribute to strong financial results.

Customers increasingly turn to us to benefit from our years of experience scaling AI technology from Kensho. We continue to see impactful headlines and market news on a near daily basis. Customers are deeply engaged to determine the potential impact to their business from tariffs, regional competitiveness and other aspects of global trade. S&P Global is a world-class provider of data insights and thought leadership in these vital areas, and our customers are turning to us for that expertise.

Customers continue to feel the impact of the innovation taking place in financial markets with the flow of capital to passive funds, but also increasingly to private markets and digital assets. Through our leadership in benchmarks, private credit, private equity workflow tools and innovation like our Stablecoin Assessments, our customers see us as a critical partner in navigating this sea change over the coming years. Additionally, customers recognize our leadership and seek our insights in energy transition. Energy transition is a complex issue encompassing energy security, technology innovation and the financing of the various investments needed over the coming decades.

For example, in utilities, the depth and breadth of our expertise and data sets across oil, liquid natural gas, carbon, renewable energy, electric utilities and reporting all helped drive the 23% growth in revenue from our energy transition and sustainability products in the fourth quarter. As we look to 2025, we are hearing general expectations for some improvements in the macroeconomic environment. There is some variability by geographic region here, with caution and uncertainty around Europe and Asia, providing some ballast against the general optimism we're seeing in the U.S. markets.

We are seeing strong demand for our products and some modest tailwinds from vendor consolidation. We continue to see the benefits from the breadth of our offerings, as our enterprise approach allows us to meet more of our customers' needs in a more cost-effective way. As we've discussed for some time now, we continue to see conditions in the financial services end market below what we would consider normal, though we do expect a gradual improvement over the course of the year. We are also experiencing a highly competitive environment in financial services and somewhat elevated price sensitivity, most notably impacting Market Intelligence.

Now, turning to the 2024 issuance environment. We saw nearly $4 trillion in billed issuance in 2024, significantly outpacing our expectations, with extremely favorable market conditions, including tight credit spreads and lowering interest rates. We saw many issuers take advantage in 2024 to refinance debt and felt very strong activity in CLO volumes, as well as repricing and amend and extend activity. While this does create a very difficult compare for 2025, we believe the refinancing walls and a recovering M&A environment will contribute to modest growth in build issuance this year, as we'll discuss in more detail in a moment.

As we look next to the Vitality Index, I'm encouraged that this index continues to accomplish its intended purpose. When we introduced this metric at our investor day in 2022, we discussed the importance of making sure we were prioritizing new products that can contribute to our financial performance over time. We also noted that new products would remain in the Vitality Index for a finite time and would eventually mature out. The focus is to make sure that revenue from maturing products is replaced by new and enhanced products that can scale quickly.

At the beginning of 2024, we had a number of meaningful products mature out of the Vitality Index. Those products contributed a combined $330 million to the index in 2023, nearly 25% of the total index. By continuing to innovate and invest in fast growing products, we were able to more than replace that mature revenue and end the year with an index of $1.5 billion, representing nearly 11% of total revenue. At the end of 2024, we had another group of products mature out of the Vitality Index, and we are confident that our focus on customer value and rapid innovation will once again enable us to deliver a Vitality Index at or above 10% this year.

Turning to just a few examples of that innovation. As the world's leading provider of benchmarks, we continue to invest and innovate to launch new benchmark products and make our existing benchmarks better. In 2024, we expanded the collection of multi-asset class indices offered through S&P Dow Jones Indices, and we launched the Leveraged Loan Indices in partnership with UBS. We continue to introduce new Platts price assessments every year, and 2024 saw the launch of new assessments for various chemicals, beef and poultry.

We also introduced a first-of-its-kind product in the digital asset space to assess Stablecoins. We know that data and technology lay at the heart of almost everything we do, so we continue to make meaningful investments in our internal technology and our technology products. We are finding new ways to leverage the remarkable data estate that we have, and just one example of that, in 2024 was the introduction of the market fixed income securities data in Capital IQ Pro. Part of our focus on technology must include a strategy to leverage the incredible technological advancement taking place in the world today, such as generative AI.

First, beginning with our people. We are continuing to build a culture that embraces AI, and we are empowering our people with the tools, training and resources they need to thrive. In 2024, we introduced our internally developed Copilot called S&P Spark Assist. Since introducing Spark Assist, we have seen over 1,300 different use cases developed and shared internally across what we call our Spark Store.

As we focus on developing AI skills across our entire workforce, we are seeing our people truly embrace the use of these powerful tools to automate workflows, more quickly ingest new information and more efficiently generate their own work products. We firmly believe that as we embrace the use of AI internally, it will unlock significant potential for product innovation as well. Just as we learned with Kensho's incredible innovations over the years, tools and resources that improve our productivity and efficiency will likely benefit our customers as well. Through ongoing customer meetings, we hear, again and again, they want to be able to access and integrate S&P Global's data into their AI workloads.

In order to expand and facilitate how and where customers can connect to our data, we launched a new solution, Kensho LLM-ready API that enables users to seamlessly integrate complex, high-priority S&P Global data sets into generative AI models for their own internal use. It integrates with large language models like GPT, Gemini or Claude, allowing customers to use natural language to query our tabular datasets. This is all part of our ongoing effort to bring our data into this new era of GenAI and ensure that we are meeting customers where they are and where they are going in their AI journeys. We also embedded generative AI functionality in our major desktop applications, including ChatAI for Platts Connect, as well as ChatIQ and Document Intelligence for Capital IQ Pro, all with the same vision of empowering our customers to more quickly and effectively gain insights from our data with AI.

We also identified and acquired market-leading solutions that we believe strengthen our competitive position in multiple areas, while contributing to the immediate financial results of the company. These include Visible Alpha and ProntoNLP in our Market Intelligence division and World Hydrogen Leaders in our Commodity Insights division. With the ultimate goal of driving profitable long-term revenue growth, we will continue to lean into these kinds of innovation: development of tools for our own efficiency and productivity, organic development of new products for our customers, partnerships to develop new products and token acquisitions to accelerate the pace of scale and leadership. You'll notice that across these examples of innovation runs a common thread of generative AI.

When we look at the potential for generative AI across the business over the next several years, there are seemingly endless opportunities to innovate and add value for our customers. And with all this possibility, we will ensure that S&P Global remains an indispensable partner to our customers as they adopt AI into more and more of their workloads. We're doing this in many ways, including building sophisticated GenAI experiences, laying the groundwork for agentive workflows and investing in foundational AI capabilities that help our customers more quickly and effectively gain insights from our data. In the coming quarters and years, you'll see us lean more into practical applications that have the potential to move the needle on financial performance and enhance the value of our products.

We will prioritize those use cases that improve our revenue growth potential, improve our operational productivity and efficiency, improve the capabilities and skills of our people and safeguard the security around our proprietary data and our systems. This will require us to say no to a lot of things, but will allow us to effectively put investment dollars to work in ways that have the greatest potential to create real value. You've seen us do that in recent years with Spark Assist, ChatIQ and many of the important innovations from our Kensho team, and we will continue to highlight our progress in this important area going forward. Now, turning to our financial results.

Chris will walk through the fourth quarter results in more detail in a moment, but we are pleased and encouraged by the results we delivered for our shareholders in 2024. We continue to see strong growth in our market-driven and our subscription businesses, with total revenue increasing 14%, or 15% excluding the impact of Engineering Solutions. We also delivered over 300 basis points of margin expansion in the year. As Chris will discuss in a moment, we saw some elevated expenses in 2024 related to incentive compensation and commissions due to the very strong revenue beat this year.

Were it not for that increase in compensation expense, we would have had year-over-year margin expansion in every division. Now, I'll turn to Chris to review the financial results.

Chris Craig -- Interim Chief Financial Officer

Thank you, Martina. We finished 2024 with strong results as fourth quarter revenue grew by 14% compared to the prior year, with growth across all of our divisions. Notably, our market-driven businesses, Ratings and Indices each grew by over 20% in the quarter as we capitalized on favorable conditions in both the debt and equity markets. Adjusted diluted earnings per share increased 20% year over year to $3.77.

This is driven by a combination of our strong revenue growth, margin expansion of 260 basis points and a 2% reduction in fully diluted share count. Now, turning to strategic investment areas, where I'm excited to share that there was positive momentum across our key initiatives, all of which are helping drive sustainable growth for the company. Energy transition and sustainability revenue grew 23% to $104 million in the fourth quarter. Growth was driven primarily by strong performance in Commodity Insights energy transition offerings and positive fund flows and sustainability focused indices.

In Private Markets Solutions, revenue growth accelerated to 29% to $146 million in the fourth quarter. Growth was driven primarily by continued strong demand for our private market ratings and assessments within S&P Global Ratings. For revenue synergies, we exited the fourth quarter with an annualized run rate of $284 million, representing 81% of the target synergies we expected to achieve in 2026. During the quarter, we realized $74 million in revenue synergies.

We are pleased to see both cross-sell and new product revenue synergies coming in above our expectations in Q4. Finally, we generated approximately $409 million in Vitality revenue during the fourth quarter, resulting in an 11% Vitality Index. As previously highlighted, we anticipate a steady stream of innovative offerings to replace any products graduating from the index, ensuring sustained momentum in our product lineup. Now, turning to expenses.

We saw a total increase of 9% in the fourth quarter. This is primarily driven by ongoing investments in our core business and growth initiatives, coupled with increased incentives, commissions and compensation. The significant outperformance in our Ratings and Indices divisions during the fourth quarter increased incentive compensation across the enterprise. Turning to our divisions.

Market Intelligence revenue increased 5% in the fourth quarter or 6% excluding acquisitions and divestitures, with positive revenue growth in every business line. We continue to see the effect of cancellations early in 2024 impacting revenue growth in the fourth quarter. However, the fourth quarter is the largest renewal quarter of the year in MI, and we are pleased to see retention rates improve to the highest rates we've seen since 2023. We also had significant competitive wins in each of the business lines in Market Intelligence and no significant competitive losses.

Lastly, we had a very strong quarter of net new sales for Capital IQ Pro. Importantly, annualized contract value, or ACV, growth outpaced revenue growth soundly in the fourth quarter. This should position Market Intelligence to see gradually improving revenue growth rates as we progress through 2025. Desktop grew 8%, though growth would have been less than 1% excluding Visible Alpha.

Data & Advisory Solutions grew 4%, or 5% when excluding the impact of the PrimeOne divestiture, driven by strong demand for pricing and reference data, especially in the loan and CDS asset classes and industry and company data. Enterprise Solutions grew 6%, or 16% when excluding the impact of the Fincentric divestiture. Growth was driven by strong demand for our lending solution offerings, including ClearPar and Notice Manager, and renewals for our Enterprise Data Management software. Credit & Risk Solutions grew 2%, despite lapping a significant retroactive revenue benefit from a renewed and extended customer contract in the fourth quarter of 2023.

Excluding this onetime item, the growth in the business line would have accelerated to 7%, primarily driven by strong renewals and net new sales. Adjusted expenses increased 8% year over year, primarily driven by growth in compensation and cloud costs. Operating profit growth was positive in the quarter, while operating margin decreased 160 basis points to 32.6%. Full year margin contracted 50 basis points to 32.5%.

As Martina mentioned, incentive compensation was elevated due to the company's overall performance in 2024. Were it not for this impact, full year margins in Market Intelligence would have expanded year over year. As we noted in the slides, beginning with the first quarter of 2025, we will be reporting Market Intelligence results in three business lines. Enterprise Solutions and Credit & Risk Solutions will be unchanged, but we will be combining Desktop with Data & Advisory Solutions in a single reporting line called Data, Analytics and Insights.

This should make our results more easily comparable to others in the space. Now, turning to Ratings. In the fourth quarter, we saw refinancing activity drive issuance, as spreads narrowed to historically low levels and the continued strength in CLO volumes. As a result, Ratings revenue increased 27%, exceeding our internal expectations.

Transaction revenue grew by 54% in the fourth quarter, fueled by market conditions highlighted earlier that spurred robust demand for bond and bank loan ratings. This growth was further amplified by heightened activity in what is usually a seasonally low issuance period during the holiday season. Nontransaction revenue increased 8%, driven by an increase in annual and program fees and an increase in new rating mandates. Adjusted expenses increased 10%, primarily due to increased incentive compensation.

This resulted in a 42% increase in operating profit and a 630 basis point increase in operating margin to 59.7%. For the full year, Ratings margin expanded 650 basis points to 63%. And now turning to Commodity Insights. Revenue increased 10%, driven by double-digit growth in Energy & Resources Data & Insights and Advisory & Transactional services.

Price Assessments and Energy & Resources Data and Insights grew 9% and 10%, respectively. Growth was driven by strength in our traditional offerings, such as our crude and refined product suite. In addition, both business lines continue to benefit from favorable commercial conditions. Advisory & Transactional Services revenue grew by 27%, or 18% when excluding the impact from the World Hydrogen Leaders acquisition.

This is primarily driven by continued strong demand for energy and transition products and services, as well as strong trading volumes across all commodity sectors in Global Trading Services. Upstream Data & Insights revenue increased by 3%, driven by growth in our research insights offerings and strong demand for subscription-based software and analytics products. Adjusted expenses increased 9%. Operating profit for Commodity Insights increased 11%, and operating margin expanded by 60 basis points to 45%.

Full year margin increased by 70 basis points to 46.8%. And now turning to Mobility. Revenue increased 9% in the fourth quarter, driven by demand for the CARFAX product suite and strong performance from our insurance-related products. Dealer revenue increased 10% year over year, driven by continued new business growth at CARFAX and automotiveMastermind offerings.

Manufacturing revenue increased 1% as the business line continued to see lower transaction revenue related to our Recall business, offsetting strong growth in our subscription-based offerings. The headwinds facing our Recall business began in early 2024, and we expect to fully lap that headwind by the second quarter of 2025. Growth in financials and other accelerated to 18% as the business line benefited from strong underwriting volumes and market share growth. Adjusted expenses increased 7%.

This resulted in operating profit increasing by 12% for the quarter and operating margin expanding by 100 basis points to 34.7%. Full year margin increased by 20 basis points to 39%. Now, turning to S&P Dow Jones Indices. Revenue increased 21%, primarily driven by growth in asset-linked fees, which benefited from higher AUM, as well as growth in Data & Custom Subscriptions.

Asset-linked fees were up 31%, driven by market appreciation and inflows. In the fourth quarter, we recorded net inflows of $486 billion, which, along with market appreciation brought total ETF AUM to approximately $4.4 trillion. Exchange traded derivatives revenue grew 4%, primarily driven by an increase in realized revenue per contract, partially offset by slightly lower contract volumes. Data & Custom Subscriptions increased 5% year over year as we continue to implement commercial initiatives across the various product offerings within the business line.

However, growth in the fourth quarter was partially offset by a retrospective revenue adjustment. Excluding the impact of this onetime headwind, Data & Custom Subscriptions would have grown by 10%. Adjusted expenses increased 15% year over year, primarily due to increased incentive compensation, combined with continued investment in our strategic growth initiatives. Indices operating profit increased 24%, and operating margin expanded by 180 basis points to 67.9%.

For the full year, Indices operating margin expanded by 140 basis points to 70.3%. 2024 was a tremendous year, and our financial results reflect that. As we look to 2025 and beyond, the innovation and investment that we made in 2024 position us very well to continue delivering long-term profitable growth and create meaningful value for our shareholders. With that, I'll hand it back to Martina to walk through the outlook and the guidance.

Martina Cheung -- President and Chief Executive Officer

Thank you, Chris. Our financial guidance for 2025 assumes global GDP growth of 3%, U.S. inflation of 2.3% and an average price for Brent crude of $72 per barrel. These all represent some degree of mean reversion from the figures we've seen over the last couple of years, which we think should contribute to a stable issuance environment and a gradually improving backdrop for our financial services customers as we progress through 2025.

We acknowledge, however, the degree of macro and geopolitical uncertainty that exists right now and that there is a range of potential outcomes beyond our base case assumptions. Our base case assumption is that we see at least one more rate cut this year in the U.S. We recognize that market expectations around the pace of 2025 breakups have moderated over the last several months. But as we've seen in recent years, these rate movements are difficult to predict with a high degree of confidence.

As such, we are taking a prudent approach to our forecast for billed issuance. We expect low single-digit growth in billed issuance in 2025 from a record high base in 2024. Turning to our most recent refinancing study. When we compare these refinancing walls to last year's study, we see that next 12-month maturities, meaning 2025 maturities now compared to 2024 maturities measured at this time last year, are approximately 4% higher than they were at this point last year.

The maturities expected over the next three years, however, are approximately 1% lower than they were 12 months ago. Our billed issuance forecast takes both of these rates into account. The maturity walls make up just one of the factors we consider when providing an outlook on billed issuance. Given the record issuance here we've had and the deceleration we are expecting in 2025, we wanted to provide some additional context around our outlook for low single-digit growth in billed issuance.

Importantly, we saw an acceleration in the pull forward of the 2025 maturity wall during the fourth quarter, which impacts our outlook in two ways. First, it drove stronger issuance than we expected during the fourth quarter of 2024. We saw that in our financial results, and it creates a more difficult compare this year. Second, it obviously decreases the amount of near-term maturities that are available to get refinanced in 2025.

We continue to expect favorable market conditions around stable rates and credit spreads, and we are encouraged by the robust maturity walls over the next few years, all of which inspires confidence that issuance will see positive growth in 2025. Our outlook for the Ratings division assumes the refinancing of 2025 maturities and modest pull forward from the 2026 and later maturities. We also expect some improvement in the M&A environment relative to the last couple of years, and there should be some tailwinds to issuance as a result. Lastly, our expectation is that the mix of issuance is likely to shift slightly in favor of investment grade compared to what we saw in 2024.

Against that backdrop, we are introducing our financial guidance for 2025. This slide illustrates our guidance for GAAP results. Moving to our adjusted guidance. We expect revenue growth in the range of 5% to 7% in 2025.

We expect adjusted operating margin in the range of 49% to 50%, which represents up to 100 basis points of margin expansion beyond the high profitability level reported in 2024. Through a combination of robust organic revenue growth, disciplined execution and strong capital returns, we expect to generate adjusted diluted earnings per share in the range of $17 to $17.25, representing double-digit growth at the high end. Turning to our outlook by division. In Market Intelligence, we expect revenue growth in the range of 5% to 6.5%.

We exited 2024 with a very strong renewal quarter, with the highest retention rate we've seen in the last six quarters. That sets up the subscription business for improving growth, but we would still be lapping the elevated cancellations from the prior quarters. As a result, we expect the growth rate to be the lowest in the first quarter and improve as we progress through the year. Due to the timing of revenue recognition, the lapping of acquisitions and divestitures and the phasing of investments, we also expect margins to be the lowest in the first quarter.

However, we expect to take a very disciplined approach to expense management in Market Intelligence this year and expect to deliver margins in the range of 33% to 34%, representing 50 to 150 basis points of margin expansion year over year. For Ratings, we expect revenue growth in the range of 3% to 5%, as billed issuance growth and modest price increases are somewhat offset by expected unfavorable mix of billed issuance. We continue to take a balanced approach to investments and profitability in Ratings. And through continued expense discipline and improved efficiencies, we expect to deliver margins in the range of 63% to 64%, despite the slower expected growth in 2025.

In Commodity Insights, we expect revenue growth in the range of 7% to 8.5% and margins in the range of 47% to 48%. We expect continued robust demand for our energy transition products, as well as our market-leading Platts price assessments. Given the long runway and secular tailwinds in this business, we continue to invest to further distance ourselves from competitors in this space. Despite the ongoing investments, we expect to deliver 20 to 120 basis points of margin expansion in CI with an expected margin range of 47% to 48% in 2025.

In Mobility, we expect continued strong growth in the range of 7% to 8.5%. We have reinvested revenue upside in the last couple of years, which has tempered margin expansion, but we expect the necessary pace of investment to slow somewhat in 2025. As such, we are expecting margins in the range of 39% to 40%, representing approximately 50 basis points of margin expansion at the midpoint. Lastly, in Indices, our guidance assumes relatively flat equity asset prices from the end of 2024, given the very strong returns in the S&P 500 over the last two years.

As such, we expect revenue growth in the range of 8% to 10%. Given margins are already above our medium-term targets and given the attractive slate of investment opportunities in Indices, we are making the decision to reinvest incremental profit for future growth in 2025. As a result, we expect margins to remain relatively flat to 2024 levels and are guiding to a range of 69.5% to 70.5%. I refer you to our supplemental materials on our investor relations website for some additional details on our financial guidance, but we are also expecting to deliver approximately $6 billion in adjusted free cash flow in 2020.

Since the merger closed, our free cash flow conversion rate, or adjusted free cash flow as a percentage of adjusted net income, has been at or above 100% every year and peaked in 2024 as we optimized our working capital and streamlined cash collections. This does create a difficult compare for working capital and free cash flow growth in 2025, but we expect to maintain a free cash flow conversion rate at or above 100% in 2025 as well. In closing, through the various leadership roles I've held over the last 15 years within S&P Global, I've seen the ins and outs of our businesses up close at every stage of the cycle. Our company sits at the crossroads with so many vitally important secular trends: data and artificial intelligence, energy transition, active to passive management and public and private market dynamics.

We also sit at the nexus of all the major global markets: equity, fixed income and commodities. We have the right people in place, we are making the right investments, and we are building the right strategy. It's an incredibly exciting time to be at S&P Global. With that, we will turn the call back over to Mark for your questions.

Mark Grant -- Senior Vice President, Investor Relations

Thank you, Martina. [Operator instructions] Operator, we will now take the first question.

Questions & Answers:

Operator

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

Manav Patnaik -- Analyst

Thank you. Good morning. Martina, maybe I just want to focus broadly on the Market Intelligence segment. Just first, in terms of the portfolio, the two divestitures you already did, just curious on what we should expect in terms of if there's other areas in there that you wanted to clean up.

And just to clarify. I think you talked about ACV and bookings and stuff being really good in the fourth quarter. But then in the prepared remarks that you still mentioned there's a lot of desktop competition and pricing pressures. So was that ACV comment specific to a particular area within Market Intelligence? Just wanted to clarify that.

Martina Cheung -- President and Chief Executive Officer

Manav, thanks so much for your question. I would say as a matter of course and for a complete management team, we're always looking at optimizing across our overall portfolio to make sure we're the right owners of any particular products. And we want to make sure, of course, that the collection of products that we have is doing the best possible to create value for our clients and also, of course, for our shareholders. So that's something that we'll continue to do across the enterprise.

In terms of the Market Intelligence performance going into 2025, maybe I'll go back to a little bit of some of the remarks and add some additional context. So for example, in Q4, as we mentioned, we had very strong performance on retention. We had the lowest the level of cancels that we had in well over a year, and we were able to do that through strong customer engagement and really strong differentiation in the products that we have. Importantly, we saw good competitive wins and no competitive losses in that quarter.

And we did that without needing to pull forward any of the pipeline from Q1, for example. So we do feel that we are starting off with the new leadership team in a good position. The new leadership team has been incredibly focused on making sure that we're aligning our go-to-market efforts to best meet our customers' needs and also focus on simplifying and making sure that we are completely overall focused on growth in the business. To your question on the ACV and the specific pressure, that was a comment overall for Market Intelligence.

And specifically, just calling back to the earlier quarters last year where we did see elevated cancellations and we did see some softness that we were calling out in the financial's end market, in Q4, we had that very strong retention rate with lower cancellations. So on the one hand, we would expect to continue to experience and lap the cancellations from earlier in the year. That informs our view on maybe a softer start to the year and gradual improvement throughout the course of the year as we lap those cancellations. But also we saw what we think is the beginnings of a recovery in the financial end markets, and we'd expect that to gradually improve throughout the course of the year as well.

Thanks for the question.

Operator

Thank you. Our next question comes from Alex Kramm with UBS. Your line is open.

Alex Kramm -- Analyst

Good morning. Just to follow up on Market Intelligence, and hopefully, I'm not asking the same question again. But on ACV growth, can you be more specific how much that ACV growth actually was and how much of revenue that typically encompasses? And then, related to that, there's new management in that segment. You talked a little bit about the changes that you're doing on a companywide basis.

But can you maybe be specific in terms of what has happened so far in terms of any changes in go-to-market strategy? Any other things that have been implemented to maybe squeeze out that extra couple of percent of growth that we're all hoping for?

Martina Cheung -- President and Chief Executive Officer

Great. Alex, thanks so much for the question. What I would say is on the ACV growth, that was contributed to a point or two of additional revenue growth for us -- faster revenue growth for us. But maybe just to take a step back on what happened in Q4.

Q4 is actually our largest renewal quarter, and that's one of the reasons why we're very, very pleased with the results that we saw there and the positioning for us going into 2025. And then, to the management changes, I would say it's a new leadership team. We are very focused on simplification, eliminating silos in the business, making sure that the business lines are communicating and working very well together to ensure that we're bringing the greatest value to our customers. We're also incredibly focused on making sure that we can accelerate where possible the go-to-market strategy around new products, and some of those that are very interesting and give us a great step in the door with our clients would be some of the new additions to our Desktop, for example, Document Intelligence and ChatIQ, but also things like getting our market fixed income data out onto our Desktop product, as well as our Kensho LLM-ready APIs.

So a lot of innovation focused on execution, focused on making sure that the team is operating in the highest level of efficiency and integrating GenAI where possible.

Mark Grant -- Senior Vice President, Investor Relations

Alex, just one quick thing, Mark -- this is Mark. We had just a little bit of feedback in the room here. I wanted to clarify one point. The ACV growth in Market Intelligence was about one point or two faster than the revenue growth in MI.

So just wanted to make sure we get that clearly.

Chris Craig -- Interim Chief Financial Officer

Alex, just one point I'd also add on. Subscription revenue growth actually grew about 4% and recurring variable revenue increased about 20%, primarily driven by Enterprise Solutions, lending and Notice Manager and ClearPar products. On a combined basis, subscription revenue came in at 6% overall, which came in at the low end of our guidance.

Operator

Thank you. Our next question comes from Faiza Alwy with Deutsche Bank. Your line is open.

Faiza Alwy -- Analyst

Hi. Thank you. So I wanted to ask about Ratings outlook. I think, Martina, you mentioned that you're being prudent.

So curious around how much visibility do you have at this point. What are you expecting in terms of an M&A contribution? And maybe the best way to answer this is if you could give us any color with respect to quarterly cadence around revenue growth within the Ratings segment?

Martina Cheung -- President and Chief Executive Officer

Faiza, thanks so much for the question. Maybe just to answer the last question there, the last part of that, we don't guide on a quarterly basis, but let me take a step back and give you a little bit of context for how we're thinking about the Ratings outlook. Our base case as we outlined includes, we would say, kind of modest expectations on the rate cut front, just one more cut to about 4.1%, for example, in the U.S. in 2025.

I think, importantly, we don't assume a protracted trade war. We do not assume massive changes around economic growth, both in the U.S. and, as well as across our existing assumptions for -- and forecast for economic growth in other regions. And I think it's important to note that we would assume we continue to see favorable conditions with tight spreads as we go throughout the year for 2025.

Then more specifically, we had in Q4 an interesting quarter. We had been signaling throughout the course of last year that we did expect the back half of the year to be slower. And then, obviously, as we went through into Q3, we were still signaling that we thought Q4 was going to be a bit softer. And then, Q4 outperformed, as you saw in our financial results.

The result there, of course, is that it has reduced the level of maturities that we were anticipating to come to market in 2025. Now, that being said, as I said in the prepared remarks, we're still about 4% higher relative to this time last year in terms of in-year maturities. So the low single-digit guide on the billed issuance point is a combination of full maturity drawdown for '25, some very modest pull forward from '26 and out years. And then, we have modeled in what I would characterize as modest expectations for recovery in M&A.

We're not overly optimistic on that. We're still keeping a very balanced view on what we would expect from an opportunistic issuance standpoint. I guess, the only other point I would make just on the issuance point is just calling your attention to the fact that we expect a slight skew toward investment grade. And of course, if that comes under frequent issuer programs, you wouldn't see it in the billed issuance guide.

And so, that's all taken into consideration. And then, maybe just the other point on non-transaction, we'd expect to see that grow around the same level as the transaction, driven primarily by surveillance fees. Thanks for your question.

Operator

Thank you. Our next question comes from Ashish Sabadra with RBC Capital Markets. Your line is open.

Ashish Sabadra -- Analyst

Thanks for taking my question. I wanted to focus on the margins. Margins are now -- the margin guidance are more at the higher end of the midterm guidance and was better than, I think, what we were expecting. You mentioned a disciplined approach to expense management, as well as balanced approach in investments and profitability, both in MI and Ratings.

How should we think about the incremental margins going forward and not only for '25, but over the next several years?

Martina Cheung -- President and Chief Executive Officer

Yes. Ashish, thanks so much for your question. And maybe just to take a step back, we were obviously very pleased with the 2024 full year results on margins and achieving our IR Day margin range. We -- as you see from our guidance in 2025, we're at the high end of the guidance range from IR Day, and that is several factors.

First, we are extremely disciplined around expense management. One of the core operating motions for this leadership team is making sure that we are putting every next dollar to work in the place where we can see the greatest return for value creation for our customers, but also long-term shareholder value, and that is giving us some ideas around how we can actually be more efficient. We're looking at location strategy. We're looking at efficiency throughout our infrastructure, our cloud spend, etc.

And then, very importantly, we're integrating AI across the organization. You heard us talk about Spark Assist. We have almost 30,000 users on Spark Assist. Every one of those users is finding ways to spend less time doing some of the more mundane tasks and more time on the value-added tasks.

So that's an area of great excitement for us. And some of that productivity gain is reflected in the margin guidance that we provided today.

Chris Craig -- Interim Chief Financial Officer

And Ashish, if I could add. We do spend a fair amount of time looking at the incremental margins. And it's worth noting that as a market-driven business, we have reasonably high incremental margins in the high double digits.

Operator

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

Toni Kaplan -- Analyst

Thanks so much. I wanted to go back to Market Intelligence as well. Martina, you said in the prepared remarks, you're experiencing a highly competitive environment and elevated price sensitivity in MI. I was just hoping to get just a little bit more color on that.

Which -- are there specific areas of Market Intelligence seeing more competition? And previously, I know it is always a competitive space. And are you seeing sort of start-ups or large vendors more competing on price or just coming into the market? Just anything on the competitive angle would be helpful in the pricing as well.

Martina Cheung -- President and Chief Executive Officer

Toni, thanks so much for your question. I would say that the comment in the prepared remarks is largely a reflection on what we were seeing in the financial end markets. We commented throughout the course of last year that in addition to the softness -- somewhat softness in the markets that we did see increased competition and price sensitivity. Now, all that being said, in Q4, we saw a couple of trends, which are important for us and things that we want to continue to focus on.

The first is our competitive breadth in terms of all of the products that we can bring, not just within Market Intelligence, but we're also seeing opportunities to connect in other products, for example, Commodity Insights products. That breadth allows us to position ourselves for opportunities where we can benefit from vendor consolidation activity with our clients. We want to make sure we're very focused on that going forward. Another thing I would say is that we have an opportunity here, and we're seeing it already in the conversations that have taken place through the chief client office, but we think that there could be some good opportunities here just to make sure that we're bringing everything that we can to our clients.

In some cases, our clients may not even know the full picture of how they can benefit from the products and services that they're purchasing from us. And so, the strengthened -- strengthening the relationships is a way for us to make sure they're getting the most value and that we're getting opportunities to demonstrate more ways to create value for them. So that's on the competitive environment, but also how we differentiate ourselves. I think on price, we believe we have a very differentiated set of capabilities, and we will always try to align the price with the value that we create for the -- for our clients.

Obviously, we don't sort of guide forward on that. But that's really a -- at the intersection of the value we create for our clients and the economics that we have with them. Thanks for the question.

Operator

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

Jeffrey Silber -- Analyst

Thank you so much. With all the, I guess, luster coming out of Washington, D.C., I just was wondering, can you talk a little bit about your exposure to U.S. federal government as a client, specifically from a DOGE impact? And then, more broadly, with some of the moves that the president has talked about or potentially talked about, what do you think the impact could be on your business, for instance, increased tariffs in China?

Chris Craig -- Interim Chief Financial Officer

Jeff, thanks for your question. First, our exposure -- to your first question, our exposure to the U.S. government contracts is less than 1% of our consolidated revenue. And then, just really looking at exchange rates, for 2025, we do expect variability in exchange rates that could impact revenue.

But we do have natural hedges in place from the geographic distribution of our people, as well as an active hedging program to mitigate any EPS risk from foreign exchange rates. And just for modeling purposes, our guidance assumes that foreign exchange rates as of mid-January.

Martina Cheung -- President and Chief Executive Officer

And Jeff, maybe just to add in there as well. When we think about the overall impact of tariffs on our businesses, we've been going very deep with our division presidents across the board on this. Just as a reminder, we don't expect to see a protracted trade war here. That being said, we do see a potential for some small impact across the divisions that's taken into consideration as part of the guidance that we provided today.

Operator

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

George Tong -- Analyst

Hi. Thanks. Good morning. You mentioned MI growth should gradually improve over the course of this year.

And I know you talked about some of the recent strength you've seen in ACV performance. Can you elaborate on what you're seeing in the business and external environment that should drive accelerating MI growth over the course of the year?

Martina Cheung -- President and Chief Executive Officer

George, it's Martina. Thanks so much for the question. Well, we will be, as I've commented, lapping higher cancellations from 2024 in the first part of the year. So as you think about the course of the year, as I said, we would be expecting a softer first half compared to second half, with gradual improvement in both the book of business from an ACV standpoint as we lap those cancellations, but also the external environment for financial services where we had been highlighting that softness throughout the course of last year.

The, I would say, competitive differentiation that we have has contributed to some strong competitive wins. We're excited about that. Of course, our goal is to continue that. But importantly, I think we saw no competitive losses in Q4, which was, I think, a really good sign for the stepped-up initiatives around go-to-market with the Market Intelligence commercial team.

And overall, we continue to work across the organization, partnering closely with the chief client office as well. So thanks so much for that question, George.

Operator

Thank you. Our next question comes from Andrew Steinerman with J.P. Morgan. Your line is open.

Andrew Steinerman -- Analyst

Hi, Martina. After a few years of big swings in Ratings revenues, '22 down, '24 up, do you feel like the Ratings revenue market has entered a period of kind of, let's call it, more regular growth over the next few years, kind of more in line with your medium-term targets for Ratings revenues? And specifically, when you mentioned that the M&A volumes are assumed for '25 to be more gradual of an improvement in billed issuance, could you just be more specific about those assumptions around M&A volumes in your billed issuance guide?

Martina Cheung -- President and Chief Executive Officer

Andrew, thanks for the question. I would say, look, we definitely have hit back to -- in fact, higher than even 2021, which is the last high watermark and certainly higher than prepandemic levels with the 2024. So to some extent, I think '25 is difficult because you have that very challenging comparable. But the market volumes generally we see as being back to the levels that we would have expected.

And that, as you know, has informed our views on our billed issuance guidance, as well as our overall guidance for 2025. On M&A, we are always balanced. We know that there's a very healthy optimism in the market around M&A. We've been, I would say, prudent, and we have modest expectations from M&A volumes and opportunistic issuance this year.

We always look at this, as you know, with the facts and the information that we have at a given point in time. And this is -- issuance, in particular, is inherently challenging to predict, but this is how we see it today. And of course, to the extent that we see things that could change our guidance range, we would certainly come back to you on that.

Operator

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

Andrew Nicholas -- William Blair and Company -- Analyst

Hi. Good morning. Thanks for taking my question. Martina, in your prepared remarks, I think I caught you saying that you'd lean more into practical AI applications in the coming quarters and years.

And so, I'm just curious, as capabilities on generative AI have evolved over the past 12, 24 months, have your thoughts evolved in terms of the opportunities, threats, investment requirements on this front? And is it fair to say that as it relates to 2025 specifically, generative AI is maybe more an efficiency gain than a top line driver? Or how would you kind of bifurcate the impact in 2025 specifically?

Martina Cheung -- President and Chief Executive Officer

Andrew, thanks so much for the question. Well, we have -- I would say we're about, as you said, kind of two years or so into generative AI. And we absolutely continue to believe that this is really a fundamentally transformational technology. And our ability to integrate that technology and apply that technology, both to our internal operations as well to our products, is a core importance to us.

We weren't surprised, I would say, in terms of how the capabilities have evolved most recently in the sense that similar to other technology innovations, we would have expected the cost to decrease over a period of time. But I would note that we have been creating our products, either internal or external products, out of our BAU investments. Over the past several years, we have a really strong innovation flywheel with Kensho, which everybody in the organization has been benefiting from, as well as, obviously, our clients. Fair to say certainly that '24 is more of an efficiency drive.

That being said, we're obviously not separating out the detailed specifics here, and we do have a very healthy pipeline of ways in which we plan to generate value, both on the efficiency front and the revenue front as we go forward. I would also say that our ability to continue to prioritize investments in this area is going to be important. We have done this out of BAU. We've been able to balance the margin expansion this year, for example, in the guidance and continue to invest in generative AI.

We're going to want to make sure we can continue to invest going forward to generate more and more value from this technology. Thanks for the question.

Operator

Thank you. Our next question comes from Peter Christiansen with Citi. Your line is open.

Peter Christiansen -- Analyst

Good morning. Thanks for the question. Great to be part of the call. Martina, I'd like to talk about synergy realization.

You seem to be executing really well there in terms of the degree of realization you see happening in '25. And if you could talk to how you see some of the elements of the Vitality Index or some of these AI products contributing to synergy realization, whether that could present an uplift to overall benefits there.

Martina Cheung -- President and Chief Executive Officer

Pete, thanks so much for your question. Yes, we are very pleased on the synergy realization. We came into the year ahead of target on both the cross-sell and new product synergies. So overall, quite excited, and we expect to continue the pace of realization of synergies through the time line as we had planned.

So that's an area of good momentum for us. I might separate out a little bit the -- how we think about the Vitality Index and AI products. So on the Vitality Index, these are products which, as you know, will come in and out of the index, depending on their level of maturity. We have very robust governance process for making sure that we're tracking the Vitality revenues, and we are pleased to be targeting at or above 10% for 2025.

That is a great indication of our ability to have strong innovative product launches and generate return on investment from those products. As it relates to AI, I do think that we will see continued innovation through AI. I think this is going to come through both enhancements to our current products. So just to give you a couple of examples there.

The Document Intelligence capability and the ChatIQ capability on Capital IQ Pro were launched just a few months ago, and we've already had about 60,000 users benefiting from those capabilities on Capital IQ Pro, for example. We've also had our new product, the one that I was mentioning, just to give you that as an example, the Kensho LLM-ready API. We're having dozens of conversations with our clients right now because of the need and interest from our clients to integrate our data into their own LLM applications internally. So I would expect to see more of that type of activity as we go forward.

We have lots of innovation in the pipeline, and that will contribute to our ability to grow our business in the next several years. Thanks so much for the question, Pete.

Operator

Thank you. Our next question comes from David Motemaden with Evercore. Your line is open.

David Motemaden -- Evercore ISI -- Analyst

Hey. Good morning. Thanks for squeezing me in here. I just had a follow-up question on Market Intelligence.

Martina, you had mentioned some good competitive wins, no losses in the quarter within Market Intelligence, and that was done without the need to pull forward any from the first quarter pipeline. I'm wondering if you could just talk a little bit about the pipeline and what you're seeing. If -- it sounds like some execution you guys have been doing has been successful. But I'm wondering if you're seeing any signs of improvement in the external environment at all.

Martina Cheung -- President and Chief Executive Officer

Yes. David, thanks so much for the question. We are seeing a gradual improvement overall in the external environment. That's reflected in the pipeline, which started off at a good, strong point for 2025.

Thanks for the question.

Operator

Thank you. Our next question comes from Owen Lau with Oppenheimer. Your line is open.

Owen Lau -- Analyst

Hi. Good morning. Thank you for taking my question. Maybe a broader question from me.

On Slide 7, Martina, you talked about elevating engagement with customers. As you get to know more customers and partners, is there anything you have learned from these conversations that you could do something differently to enhance the value of your products in the future?

Martina Cheung -- President and Chief Executive Officer

Owen, thanks so much for the question. And yes, absolutely, very constructive conversations with our customers, as well as our partners. There are a lot of things that we picked up. I think maybe I could bucket them into probably like three categories.

Obviously, we're looking for -- as we do this, we're looking for indications on how our customers are feeding their own sentiment, their own progress in their businesses. It's an incredibly critical point of reference for us clearly, as we think about growing our relationships with them. And that's reflected in the guide, of course, that we provided, as well as some of the thoughts that we have, for example, around how we grow in different divisions and across the enterprise. The second point I would make is the broad and very high enthusiasm among our strategic accounts for the chief client office.

As a concept, the idea of having that single point contact, very, very well received. The team has been able to already do hundreds of meetings and a number of very broad top-to-top management meetings where we've been able to showcase what we're already doing and the value we're creating, as well as what more we can do. And of course, that's generating its own pipeline and potential opportunities as well. So look, I think the more we can do of that, the better.

The better we understand our customers at the most senior levels and their strategies, the better we can respond and innovate. We're excited about the chief client office for that. But we also see all of our division teams without exception really leaning in and stepping up. And it's great to see that activity which we will plan to continue going forward.

Thanks, Owen.

Operator

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

Shlomo Rosenbaum -- Analyst

Hi. Thank you for taking my question, also squeezing me in. Martina, I just want to ask you a little bit more about the ratings issuance environment and just the visibility that you have to that. I know it's notoriously hard to do.

And just given the change in administration in the U.S., the geopolitical environment, do you feel like you have better visibility than normal going into a year where things are recovering? Or do you feel like it's less because of what's going on? And maybe you could just talk about what could put things in the debt issuance environment above your expectations versus below your expectations? And if there are specific areas like maybe IPOs picking up or just point us to a few things that we should look for as potential milestones one way or the other.

Martina Cheung -- President and Chief Executive Officer

Shlomo, thanks for your question. Well, with Ratings being a market-driven business and, of course, you see this with Index as well, we do come in with a broader guidance range than we do for the subscription businesses. And of course, that allows us a little bit more flexibility because of the inherent difficulty in predicting what's going to happen in these markets. I would say the level of volatility that we are seeing is, we'll say, not completely foreign in the sense that this market has experienced intense volatility over a period of time now.

And our ability to predict where the market is going to go is really informed by how we -- what we're hearing from our customers. That's obviously the most important part of this is actually getting the feedback directly from customers, and that's obviously informing our guidance as we go forward. But of course, we're also, as I had mentioned, looking at the maturity walls. We're looking at the issuance environment from the perspective of interest rates and spreads, as well as opportunistic activity.

Those are all features of the bottom-up builds that we do when we're creating the billed issuance guide, for example. And I would say maybe some of the other things to think about into the long term would be GDP rates. Over a longer period of time, issuance ultimately is much more closely correlated to GDP. But our guidance for this year, of course, has an embedded base case for GDP.

Maybe just -- potentially a little bit of additional color. Sector-by-sector, last year, I'd highlighted the infrastructure. I had highlighted data center, ABS issuance. I'd highlighted private credit.

We expect to see ongoing momentum in sub-asset classes like that, as well as we go into 2025. So hopefully, that's helpful. Thanks, Shlomo.

Operator

Thank you. Our next question comes from Jason Haas with Wells Fargo. Your line is open.

Jason Haas -- Wells Fargo Securities -- Analyst

Hey. Good morning and thanks for taking my question. I apologize if I'm going to ask a two-parter here. So the first, there was a comment in the prepared remarks that you're now expecting -- or you're now seeing the refi walls over the next three years going to be down 1%.

So I thought previously you talked about the refi walls being pretty supportive for the next several years. So I was curious if there's any change in expectations, if you're expecting more maybe more subdued issuance over the next few years. And then, I also wanted to follow up, I don't think it was asked yet, on the Mobility segment. The guidance for the 7% to 8.5% growth, I think it's pretty in line with your long-term targets.

But 2024, my understanding was a little bit subdued because of the lack of recall activity. So I thought we might see the growth step up a bit this year. So maybe you didn't assume any recall activity again for this year, but I was curious if you could comment on that as well.

Martina Cheung -- President and Chief Executive Officer

Yes. Jason, thanks so much for the questions. So on the refi walls and three years out, we mentioned that because it is a reflection of the pull forward that we saw in 2024 and, in particular, in Q4 of 2024, so no further impact to the guidance range that we provided for 2025. It's more a point of context.

And then, from the Mobility standpoint, the 7% to 8.5% growth, a few things impacting this. We do expect strong growth across all products in Mobility. The Recall business impact was reasonably small and isolated to the manufacturing segment last year. We are seeing also, I would say, some great opportunities within our CARFAX business.

We've seen great results from the integration of Market Scan, good flows on dealers, etc. Maybe just to highlight a couple of puts and takes that are taken into consideration as part of the guidance range. The team has called out vehicle affordability, for example, with some higher prices still remaining in the U.S. That can have multiple impacts.

It can put a little bit of pressure on the OEMs, for example. But it can also afford us the opportunity to provide either incentives, sales and marketing, advice and/or planning solutions advice. So some of the minor, I would say, headwinds in the Mobility sector are taken into consideration as part of the guidance for 2025.

Operator

Thank you. Our next question comes from Jeffrey Meuler with Baird. Your line is open.

Jeffrey Meuler -- Analyst

Thank you. Your Market Intelligence employee headcount growth has been, I guess, higher than I would have expected given the end market environment. I heard you stress that you'll be very disciplined on expense management there this year. But maybe more broadly, can you just address, is that, I guess, investment ahead of revenue? Is it -- is there a productivity opportunity that you're now getting after more aggressively? And then, does the 35% to 37% still stand as an intermediate-term margin target? Or anything that changes that on, I don't know, AI, portfolio actions, market challenges, etc.?

Chris Craig -- Interim Chief Financial Officer

Jeff, thanks for your question. First, the MI headcount increase about 6%, which is essentially in line with the revenue growth. Second, what you are seeing in there is through the acquisition of Visible Alpha, we -- there were about 700 employees or so that came over with that acquisition. So that growth is actually in line with our expectations.

Martina Cheung -- President and Chief Executive Officer

And Jeff, I would say that the IR Day target, we're still continuing to maintain our focus on working toward our IR day targets across the enterprise. And you've seen us obviously achieve the IR Day targets substantially in 2024 and at the enterprise level, of course, for 2025 as well, but we continue to maintain our focus on that.

Operator

Thank you. Our next question comes from Craig Huber with Huber Research Partners. Your line is open.

Craig Huber -- Analyst

Thank you for taking the question. Martina, I'm curious, you said you've spoke to a number -- a lot of your customers when you first started up as CEO. Can you maybe just give us a flavor of the optimism that you're hearing out there, how that may have changed? Obviously, we have a big change here in the administration in Washington, D.C. And just touch upon the policies that Trump has put in place here.

And what's -- how you feel like that backdrop is favorable, the negative parts if they're already in your head.

Martina Cheung -- President and Chief Executive Officer

Craig, thanks so much for the question. I think the engagements and the sentiment, I would say, differs by region. So within the U.S., for example, we've seen quite a lot of optimism in the private markets. We've seen optimism for M&A deal flow.

We've seen, obviously, consistent with some of the financials reporting really strongly, some optimism there as well and interest in our products. I think that maybe varies a little bit depending on if you're in Europe or Asia, where you may have some more muted feedback, let's say, and more kind of a neutral outlook. And so, the feedback tends to vary. I think in every one of these conversations, everyone is another opportunity for us to help our clients in some way.

We -- the number of times that I've been able to say, "Hey, we cover that from a research standpoint in this division or that group," and then provide some of the research or point to where they can access information, that's very valuable for our customers, and we'll continue to do that. We always say that we're here in the good times, as well as the challenging times. And to the extent that our customers are concerned, we're here to help them with information to make their decisions as well. Thanks for the question.

Operator

Thank you. Our next question comes from Scott Wurtzel with Wolfe Research. Your line is open.

Scott Wurtzel -- Wolfe Research -- Analyst

Good morning, guys. Thank you for taking my question. You mentioned some reinvestment on the Index side of the business given where margins are now. Just wondering if you can share a little bit more color on your prioritization of investments there and where those dollars are going.

Martina Cheung -- President and Chief Executive Officer

Scott, thanks for the question. Well, we're excited. We see really a wide range of opportunities across asset classes in the Index division. We've seen opportunities in the multi-asset class indices, factors, thematics, the sustainability indices.

And I think we also see opportunities to continue to invest over the next several years in ETDs and the liquid ecosystem. So really, a lot of opportunities, a strong addressable market and a very innovative team there. And so, that's the reason why we are prioritizing investments and having modest -- very modest margin expansion in 2025. Thanks, Scott.

Operator

Thank you. We will now take our final question from Russell Quelch with Redburn Atlantic. Your line is open.

Russell Quelch -- Redburn Atlantic -- Analyst

Thank you for squeezing me in. Martina, you talked about private credit being a major TAM opportunity in Ratings previously. Can you provide an update on where you are in terms of executing on this opportunity? Wondering if you can be specific perhaps around how much revenue private credit is contributing to Ratings right now. Any thoughts around sort of cadence of growth, new products you're working on here, conversations with the private credit houses would be useful.

And perhaps, just on a separate note, do you have any view on the TAM opportunity for the Ratings business that might come if Fannie and Freddie are privatized?

Martina Cheung -- President and Chief Executive Officer

Russell, thanks so much for the question. So private credit, indeed, in Ratings has been a strong opportunity. One of the things that we have also said in addition to recognizing that opportunity is that we would rate deals wherever they come, whether it's in the public market or the private markets. We also, of course, recognized back in 2022 the absolute importance of making sure that we were engaged at the right levels with the private market issuers, and we've been very focused on that.

You see that reflected in the results. The strong growth in the overall credit revenues for S&P Global were very much reflecting the strong growth in Ratings. I would say that we have an incredible overall breadth of solutions around the private markets, in addition to private credit, and that's something that we're excited about as we go forward. It's the software businesses, the marquee businesses, Wall Street Office eye level, but it's also the valuation solutions that we offer, which are very much in demand.

It's the private indices and the opportunity to innovate further there, as well as the work that we're doing in credit ratings. And so, I would say we would see a continuation of the hard work that the teams are doing across the divisions. We don't break out the revenue numbers by division, but this continues to be a top area of focus for us. And I think on your last question with respect to Fannie and Freddie, we're not going to speculate right now what that could look like.

But certainly, if there are more facts coming to the table on that, we'll certainly get back to you on it. All right. So I'm going to go to some closing remarks. I want to say thanks so much for everybody joining us.

I'm incredibly proud of our colleagues' performance in 2024. We've had incredible execution and great results. Our people are focused on the right priorities, customer engagement and rapid innovation. I do want to pause a second and give just a really, really special thank you to Chris Craig for his work as Interim CFO.

I have enjoyed working with Chris for every minute of that Interim CFO time period and look forward to continuing to work with you. And then, looking ahead, our focus remains clear. We have a really collaborative leadership team that is focused on delivering customer value. We're building on our legacy of disciplined execution.

We have solid 2025 guidance, and we're going to continue to create long-term profitable growth and shareholder value. And so, let me just say this is the beginning. With our unparalleled data and technology, our benchmarks and our people, we're going to continue to unlock our potential, and I look forward to sharing more. Thank you.

Operator

That concludes this morning's call. A PDF version of the presenter slides is available for downloading from investor.spglobal.com. Replays of the entire call will be available in about two hours. The webcast with audio and slides will be maintained on S&P Global's website for one year.

The audio-only telephone replay will be maintained for one month. On behalf of S&P Global, we thank you for participating and wish you a good day.

Duration: 0 minutes

Call participants:

Mark Grant -- Senior Vice President, Investor Relations

Martina Cheung -- President and Chief Executive Officer

Chris Craig -- Interim Chief Financial Officer

Manav Patnaik -- Analyst

Alex Kramm -- Analyst

Faiza Alwy -- Analyst

Ashish Sabadra -- Analyst

Toni Kaplan -- Analyst

Jeffrey Silber -- Analyst

George Tong -- Analyst

Andrew Steinerman -- Analyst

Andrew Nicholas -- William Blair and Company -- Analyst

Peter Christiansen -- Analyst

David Motemaden -- Evercore ISI -- Analyst

Owen Lau -- Analyst

Shlomo Rosenbaum -- Analyst

Jason Haas -- Wells Fargo Securities -- Analyst

Jeffrey Meuler -- Analyst

Craig Huber -- Analyst

Scott Wurtzel -- Wolfe Research -- Analyst

Russell Quelch -- Redburn Atlantic -- Analyst

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