Sep 24, 2020
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IHS Markit Revenues: How Does IHS Markit Make Money?

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Daniel Yergin vice chairman of IHS Markit Ltd. gestures as he speaks during a Bloomberg Television. [+] © 2019 BLOOMBERG FINANCE LP IHS Markit (NYSE:INFO) is a data services company that gives information research analytics and technology to customers in major industries financial markets and governments. The company s core competency lies in its ability to use its expertise to source and transform data into information and analytics that its customers use for their operational and strategic decisions

 

During this analysis we take a look at how the company makes money. View our interactive dashboard analysis on IHS Markit Revenues: How Does IHS Markit Make Money? A Look At IHS Markit s Key Business Segments 1. Financial Services (37% of 2019E revenue): The segment provides pricing and reference data indices valuation and trading services trade processing enterprise software and managed services to financial services companies

 

2. Transportation (30%): provides analysis and forecasts of sales and production for different vehicles and automotive components. It also provides performance measurement and marketing tools for original equipment manufacturers (OEMs) dealers and others. 3. Energy & Chemicals (20%): The segment includes the company s Energy offerings which supply information and expertise relating to the upstream midstream downstream sectors of the oil and gas industry as well as the power gas coal renewables sectors

 

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Product Design & Other (17%): The segment includes the company s Product Design offerings Technology Media & Telecom offerings and Economics and Country Risk offerings. What Are The Alternatives? Key competitors within the financial services space include Bloomberg Thomson Reuters and Factset. In the energy space the company competes with the likes of Wood Mackenzie and Rystad Energy

 

What Is The Basis of Competition? Companies within the information business compete based on pricing timeliness and quality (accuracy completeness and consistency) of data. Ability to mix content expertise tools technology and research and analysis into complete solutions is likewise an added advantage. IHS Markit s Total Revenue has grown from $2

 

7 billion in 2016 to $4 billion in 2018 and is expected to grow to about $4. 7 billion in 2 years Revenue growth of about $700 million over two years to be driven by roughly equal contribution of $320 million from all the (1) Transportation and (2) Financial Services divisions with remainder coming from any other 2 divisions

 

IHS-Markit has added $1. 3 billion to its revenue over the past two years driven primarily by the merger with Markit. Increasing sales from the Financial Services and Transportation segment are likely to feature another $700 million in revenue over the subsequent two years. TREFIS Revenue from Financial Services to increase to about $1

 

7 billion within the next two years with its share of Total Revenue expected to be about 37% by 2020 Segment revenue increased from $0. 4 billion in 2016 to $1. 4 billion in 2018 driven primarily by the merger with Markit. We expect revenue to grow by about 20% within the next two years to about $1

 

7 billion in 2020 driven by the Index business and Ipreo a financial services solutions and information provider that the company acquired in 2018. Revenue from Transportation to increase to about $1. 5 billion within the next two years with its share of Total Revenue expected to be about 31% by 2020 Segment revenue increased from $0

 

9 billion in 2016 to $1. 2 billion in 2018 driven primarily by the company s automotive product offerings. We expect revenue to grow by over 25% within the next two years to about $1. 5 billion in 2020 driven by offerings along with CARFAX and CARPROOF — which cater to the growing used car market — and other solutions along with Vehicle Performance & Compliance (VPaC) Monitor that enable automotive manufacturers to research the trade-offs between fuel economy vehicle performance and regulatory compliance

 

Revenue from Energy & Chemicals to increase to about $930 million within the next two years with its share of Total Revenue expected to be about 20% by 2020 Segment revenue remained almost flat at levels of around $860 million between 2016 and 2018. We expect revenue to grow by 6% within the next two years to about $930 million in 2020 driven by potentially higher spending by energy companies

 

Revenue from Financial Services to increase to about $580 million within the next two years with its share of Total Revenue expected to be about 12% by 2020 Segment revenue grew from around $530 million in 2016 to about $550 million in 2018 driven by the Product Design offerings as well as some growth within the Economics and Country Risk and Technology Media & Telecom space

 

We expect revenue to grow to about $580 million by 2020. What s behind Trefis? See How It s Powering New Collaboration and What-Ifs For CFOs and Finance Teams| Product R&D and Marketing Teams More Trefis Data Like our charts? Explore example interactive dashboards and create your own

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