In the world of market data, S&P Global and LSEG (London Stock Exchange Group) are the two "Goliaths" that compete directly with ICE and Bloomberg. While they all sell data, their business models and profitability profiles differ significantly based on their "moats."
Here is how they compare in terms of profitability and strategy as of late 2025.
1. S&P Global: The "Margin King"1
S&P Global is widely considered the most profitable of the group because of its Ratings and Indices businesses, which have incredibly high barriers to entry.
Profitability (2025): S&P Global maintains an adjusted operating margin of 48.5% – 49.5%.
3 This is significantly higher than a traditional bank or tech company.The "Market Intelligence" Segment: This is their direct data competitor to Bloomberg and LSEG (Workspace/Refinitiv). In 2025, this segment saw an acceleration to 7% organic growth.
4 The Moat: They own the S&P 500. Every time an ETF provider (like BlackRock or Vanguard) launches a fund tracking the S&P 500, they pay S&P Global a fee based on the assets in that fund. It is essentially a "tax" on global investing.
Strategic Move (2025): In April 2025, S&P announced the spin-off of its Global Mobility unit (which includes Carfax) to focus entirely on high-margin financial data and AI-driven analytics.
2. LSEG: The "Integrated Titan"
Since acquiring Refinitiv in 2021, LSEG has transformed from a stock exchange into a data and technology giant.
Profitability (2025): LSEG’s Adjusted EBITDA margins are approximately 48%, though its GAAP operating margins are lower due to the massive amortization costs from the $27 billion Refinitiv acquisition.
Data & Analytics Segment: This is their largest division, generating over £4 billion ($5B+) in annual revenue. In 2025, they successfully "sunsetted" the old Eikon platform, moving users to the newer Workspace platform.
The Microsoft Partnership: The biggest story for LSEG in 2025 is their 10-year partnership with Microsoft.
6 They are currently rolling out AI-powered "Copilots" directly into Excel and Teams, allowing bankers to pull LSEG data using natural language.The Moat: They own FTSE Russell (indices) and Tradeweb (fixed income trading). Like ICE, they own the "trading venues," which gives them proprietary data that others have to pay to access.
Direct Comparison: Data Segment Performance (2025 Est.)
| Feature | S&P Global | LSEG (Data & Analytics) | ICE Data Services |
| Annual Revenue | ~$14.5 Billion (Total) | ~$11 Billion (Total) | ~$2.4 Billion (Data only) |
| Operating Margin | ~49% | ~48% (EBITDA) | ~45% |
| Growth Rate | 6% – 8% | 5% – 7% | 4% – 5% |
| Core Product | Capital IQ / S&P 500 | Workspace (Refinitiv) | Bond Pricing / NYSE Data |
| Best For... | Equity research & ESG | Multi-asset trading & FX | Fixed income & Mortgages |
The "Battle of 2025": AI and Unbundling
Both S&P and LSEG are fighting a two-front war in 2025:
Generative AI: S&P is using its Kensho AI unit to automate the tagging of millions of documents, while LSEG is leveraging the Microsoft Azure cloud to integrate data into the "daily workflow" of users (moving away from the standalone terminal).
Fighting the "Bloomberg Tax": Both firms are positioning themselves as the "Value" alternative to Bloomberg. By offering better Excel integration and "unbundled" data feeds (where you only pay for what you use), they are successfully winning contracts from banks looking to cut their $300M Bloomberg bills.
No comments:
Post a Comment