IHS Markit Ltd. (NASDAQ:INFO) Q2 2017 Earnings Conference Call Transcript
Jun 27, 2017 • 08:00 am ET
Thank you. (Operator Instructions) And our first question comes from the line of Peter Appert of Piper Jaffray. Your line is now open.
Thank you. Good morning. The Transportation performance has been particularly impressive here over the last bunch of quarters. So, I was hoping Todd or Lance, if you could just maybe unpack a little bit the drivers of the revenue growth, your confidence and the sustainability of it. And in particular, the margin performance relative to the guidance you'd given earlier about potential dilution from the autoMastermind transaction. How are you driving the margin improvement?
Okay. So, I think, in the case of transportation, margin improvements coming from strong revenue growth. We are across the firm, very focused on the cost side as well, but we're starting to invest and make sure that we can maintain the higher end of our growth ranges.
I think with Transportation, we feel we're very well set up now for long-term high single digit growth with a very broad, diversified set of revenue drivers coming from VPaC, recall, digital marketing, CARFAX, CARPROOF, extensions into the new markets that we've been focused on. And Masterminds is a piece of that puzzle. And together, we think our automotive and transportation assets can continue in a diversified way to give us high single digit growth longer term. So, I guess if you looked at this quarter, we'd say, it's a quarter that outperformed. I don't know if Todd, you want to add to that.
Yes. Couple of things I would add. I mean, this is the five-year anniversary shortly of Polk acquisition. And so, this performance has actually been delivered for I think five years. And there is strong business model, strong teams, and strong market position. And what we see as continued new product opportunity, continued analytics. And we expect those things will drive the forward growth.
In terms of margin, this is an area that we have invested in, we'll continue to invest at some level, but we're driving strong margins, and we'll continue to see margin expand as we move forward, but a lot of things working well in Transport.
The one thing I would call out. It's very heavy quarter for recall. And we do expect to see the non-recurring come down a bit in the second half of the year. Recurring will still stay very high -- high single digit range, but you should be aware of that. And we do expect non-recurring to come down from the levels that we saw in the first half of the year.
Thanks, Todd. Thanks, Peter. Next question?
Thank you. And our next question comes from Jeff Meuler of Baird. Your line is now open.
Yes. Thank you. So, good quarter overall. Just on the Resources margin, you guys did a great job there in the tough revenue environment. How are you thinking about as the environment starts to recover the level of investment that's required. Should Resources margins remain under pressure? And then,