Good day, ladies and gentlemen. Welcome to the IHS Markit First Quarter 2017 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Eric Boyer, Head of Investor Relations. Sir, you may begin.

Good morning, and thank you for joining us for the IHS Markit Q1 2017 earnings conference call. Earlier this morning, we issued our Q1 earnings release and posted supplemental materials to the IHS Markit Investor Relations website. Some of our comments and discussions on the quarter are based on non-GAAP measures. Our non-GAAP or adjusted numbers exclude stock-based compensation, amortization of acquired intangibles and other items. The non-GAAP results are a supplement to the GAAP financial statements. IHS Markit believes this non-GAAP presentation and the exclusion of these items is useful in order to focus on what we deem to be a more reliable indicator of ongoing operating performance. As a reminder, the conference call is being recorded and webcast and is a copyrighted property of IHS Markit. Any rebroadcast of this information in whole or in part without the prior written consent of IHS Markit is prohibited. Please keep in mind that the conference call, especially the discussion of our outlook, may contain statements about expected future events that are forward-looking and subject to risks and uncertainties. Factors that could cause actual results to differ and vary materially from expectations can be found in the IHS Markit filings with the SEC and on the IHS Markit website. After our prepared remarks, Jerre Stead, Chairman and CEO; Lance Uggla, President; and Todd Hyatt, EVP and Chief Financial Officer, will be available to take your questions. With that, it is my pleasure to turn the call over to Jerre Stead. Jerre?

Thank you, Eric, and thanks to all you for joining the IHS Markit Q1 Earnings Call. We will review our Q1 results, provide you with an update on our integration work and discuss some of the other highlights from the quarter. We were very pleased to start the New Year as a merged company, which has combined two world-class organizations. Our colleagues began 2017 with a running start, having already worked together for six months. This provides a platform for us to deliver solid financial performance, while we continue to make great progress on our integration. The high-level financial results in Q1 were revenue of $844 million, up 2% year-over-year on an organic basis; adjusted EBITDA of $320 million; and margins of 37.9%, representing expansion of 515 basis points on a reported basis. Adjusted EPS was $0.45, up 15% over the prior year. This quarter's results included good contribution from synergies, and we continued to have strong additional opportunities. In terms of core industrial verticals, Transportation, which includes our automotive, maritime & trade and aerospace and defense teams, continued to produce very strong organic growth of 9% for the quarter. Financial Services organic growth, which includes our financial information, solutions and processing businesses, also performed very well with 7% organic growth. And Resources, as expected, our energy business experienced a decline in our annual contract value. However, we continue to expect improvement through the remainder of the year as we see signs of the upstream market beginning to stabilize. Our Chemicals and OPIS teams provided continued strong performance. Although our CERAWeek conference fell into our second quarter this year, I did want to share that we have record breaking revenues. This year's conference was without a question, one of our most successful, with new and innovative programs focused on new…

Thanks, Jerre. Let me say it's great to be speaking with you again, and I look forward to seeing many of you at our upcoming Investor Day. This morning, I want to provide you a quick update on our integration efforts. Since the merger closed in mid-July, we've been executing against our integration plan and continue to make good progress. As you'll recall, we accelerated the amount of cost synergies that we expect to achieve in 2017 from our original guidance at the time of the merger announcement. Our initial cost integration efforts are focused on areas where we had some of the most significant overlap, such as shared services, corporate functions and facilities. We are confident in our line of sight to achieve a total cost synergy amount greater than our $125 million estimate through 2019. We plan to reinvest these additional savings back into our business around a number of key initiatives in the areas of technology, product development, customers and colleagues. We believe these investments will better position us to achieve our long-term financial objectives on a consistent basis of a mid-single digit organic revenue growth and an adjusted EBITDA margin in the mid-40s with at least 100 basis points of expansion annually. I look forward to providing more detail on these future investments at our Investor Day. We've also made progress on revenue synergies, identifying a substantive set of financial market participants that have interest in our deep industry expertise and insights within Resources, Transportation and Consolidated Markets. Additionally, we have validated the potential to sell our enterprise data management technology into our Resources customers, and have had early success. We're off to a good start, and I look forward to providing you future updates. Leading the integration effort has allowed me the opportunity to work closely with colleagues across the legacy businesses. I was able to take a step back from the day-to-day operations and to spend time better understanding the state of where our businesses are today, where we need to go as an organization in the future and to plan how we'll get there. I'm more convinced in the potential from this combination today than when we announced it last year. We have an incredible foundation built upon our market-leading assets, our colleagues and our customer base. We'll use some of the future financial benefits afforded to us by the merger to make measured investments to improve the productivity of our assets and colleagues to better serve our customers and to provide strong and consistent returns to our shareholders. I look forward to laying out our future path with you next month in New York. And with that, I'll turn it over to Todd.

Thank you, Lance. Before we get started with the results, I want to remind you that while Q1 results include IHS and Markit, prior year Q1 results only include legacy IHS. We've included Markit's year-over-year organic revenue growth and FX revenue impact in our revenue growth rates, and have included the remainder of Markit revenue as acquisitive revenue growth. Our Q1 absolute and organic revenue growth rates have also been normalized to take account of movement of CERAWeek from Q1, 2016 to Q2, 2017 and movement of our annual maritime event from Q2, 2016 to Q1, 2017. Now for the Q1 results. Revenue was $844 million, an increase of 54% on a reported basis. Adjusted EBITDA was $320 million, an increase of 78%, with margin of 37.9% and margin expansion of 515 basis points on a reported basis. Adjusted EPS was $0.45, an increase of 15%. Relative to revenue, we continue to see trends similar to those discussed throughout 2016. Total Q1 reported revenue growth was 54%. Organic revenue growth was 2%. Acquisitions contributed 55%, and FX was minus 2% headwind. Recurring organic growth was 2%, and non-recurring organic was 4%. Looking at segment performance, Transportation normalized growth was 11%, which included 9% organic, 2% acquisitive and minus 1% FX. Organic revenue growth was comprised of 9% recurring growth and 10% non-recurring growth. We continue to see very strong growth in our automotive business and stable but lower growth in the other transportation businesses. We continue to expect all-in and recurring Transportation organic growth in the high-single digits but also expect non-recurring growth to moderate due to difficult year-over-year comparisons in our recall business. Moving on to Resources, revenue declined 2%, including minus 8% organic, 7% acquisitive and minus 1% FX. The organic revenue decline was comprised of minus 8%…

Thanks, Todd. I want to thank our colleagues who worked tirelessly over the past year in getting us to this point, where we hit the ground running. Moving forward, we expect to benefit from improved energy markets and are focused on investing for profitable top line growth of our business to provide continued shareholder value creation. We very much look forward to sharing our strategy for IHS Markit's exciting future at our Investor Day on April 26 in New York City. Now Lance, Todd and I are ready for questions.

[Operator Instructions] Our first question comes from Peter Appert with Piper Jaffray. You may begin.

So Jerre, I was hoping you might just give us a little more color on what you're seeing within the Resources business, maybe some specific metrics possibly on what you're seeing in terms of pricing, renewal rates, et cetera. And I'm asking this in the context of CapEx within the industry looking better, and wondering if you're seeing any flow-through benefit in terms of your benefit to your businesses.

Great question, Peter. Thank you. As Todd said, and I did, we had a $12 million downturn that we expected in Q1. We also expect that to be flat in Q2 and for the year, flat. So you can think about second half positive. Pricing is where we continue to be -- as you know, we don't cut prices during that period of time. Certainly, a lot of our customers have reduced their usage of the regional pricing model, but that'll come back with time. Renewals are running very strong, as we would expect them to as we go forward. We had a very deep dive a week ago Investor Day with Q2, Q3 and Q4. I'm feeling bullish. If you saw the press release, I'll let Todd take the credit for this being the bottom of the barrel and on the way back up, but we feel quite positive about it. It's been almost three years, as you all know, and very much look forward to showing improvement as we come out of 2017 to positive organic growth in 2018. Thanks, Peter.

Thank you. Our next question comes from Gary Bisbee with RBC. You may begin.

Yes, if I can just follow-up on that, can you give us a little color about what's going on within the base? A quarter ago, you'd talked about some of the multi-year contracts that were going to renew around year-end and -- but that a lot of the base then had renewed down. Are you seeing pockets that are growing their spend? Some pockets that are still shrinking? Is it stabilization across the base? Just any incremental color to help there.

Good question, Gary. The minus $12 million was specifically those three year agreements that we talked about in Q4 results year-end, hit exactly as we expected. We've mentioned historically, and we'll -- I'll turn it over to Todd in just a minute with some specifics, but we haven't, indeed, seen increases, including on both pricing and usage, on a regional basis geographically in Q4 and certainly in Q1. Todd, you want to pick up, including Texas, for sure.

Yes. So Gary, when we evaluate this, we stratify the accounts and look at the accounts above $0.5 million account by account and then all the way down to accounts below $100,000. I think a couple of things that we're seeing. One, on the large accounts, these strategic changes that we talked about on prior calls going back last year where large customers were dropping coverage, strategically shifting their operations, we really see that we've cycled through most of that at this point. So a couple of things out there that -- but we don't see those as being hugely impactful. I think the bigger thing is in the smaller accounts, the less than $100,000. We're actually seeing very good growth coming from our inside sales business. That's largely a U.S. based business. And in the U.S., certainly, capital spending is increasing in the U.S. this year. The Permian is a very hot area. So we do see -- when we've really been impacted by the smaller accounts over the last couple years, we actually see very good traction in this tail of the business. So really, the large accounts stabilizing, strategic changes having been largely made by the big companies and then the smaller companies' good growth, really, in our inside sales group.

Thanks, Gary. And for those of you that were able to attend CERAWeek a couple weeks ago, the difference in attitude with all of our customers was noted very positively. Next question please?

Our next question is from Bill Warmington with Wells Fargo. You may begin.

Thank you. Good morning everyone. So I wanted to ask a question on the Transportation business. You had mentioned strength there. Automotive had historically been about three-quarters of the segment. And I wanted to ask, how is CARFAX and CARPROOF doing versus the vehicle registration or park info? And any change in demand in products for new versus used vehicles?

Great question, Bill. Todd, do you want to pick those up? That's a good question.

Yes, the Automotive, as you said, Bill, it's a bit north of 75% of Transport; continued to perform very well in both the used car and the new car parts of that market. In the used car, the new products, the used car listing product, continues to perform well. The business insurance area is a very strong grower. And even the core advantage business is growing at a strong rate. In the new car business, we talked about the big growth drivers in the past. Digital marketing being very strong. The emissions product that we released last year has been a very good grower. We continue to feel very good about all pieces of automotive. The thing I called out on the call is the non-recurring. We had points where we were hitting teens growth rates in non-recurring last year. We don't expect that to continue. We see some tough comps, particularly in recall. Recall continues to be good. But we do see the non-recurring still being a mid-single-digit grower, but that will back down just a little bit this year.

Thanks Bill, next question?

Our next question is from Jeff Silber with BMO Capital Markets. You may begin.

It's Henry Chien calling for Jeff.

Hi, Henry. How are you?

Hi, I am good, thank you. I just had a question on the reorganization or the consolidation, some of the leadership changes you mentioned. Is this more of a cost kind of move? Or is there a strategic shift? And any kind of color you can provide, whether you're changing how you're going to market or your sales team or any kind of changes there.

No, thanks, Henry. Good question. It's, for sure, not a cost move. It's to streamline our organization. One of the things Lance and I have worked on, actually for a year now, is to make sure that as we exit 2017 and we go into 2018, we've got exactly the right organization for years to come. And in this case, you think about the big businesses, that's what we've lined up. But pick up on it, Lance.

Yes. I think, Jerre, you said it's in the release in terms of simplification. And so these moves really do simplify the overall organization and give us the right operating structure to take the company forward for the next five, ten years.

That was our target. And I think we're right on that. Thank you, Henry, next question?

Our next question comes from Brandon Dobell with William Blair. You may begin.

Thanks, good morning guys. Maybe some, I guess, further color on how you guys think about the revenue synergy opportunities playing out here and whether or not the changed administration has you think any differently about what -- or how to sell some of the things in the Financial Services.

I'll start, Lance will pick up. We feel very good as we move forward on the cross-selling Brandon. For sure where we're at today is we'll give you -- and I hope you're there. I hope everybody in the call is there at our Investor Day. We'll actually give you examples of -- including customer names, of the cross-sell that we're feeling really good about. Give a little color, Lance.

Okay. So I think, again, in our discussion, we talked a little bit about two things. One, about financial market participants have a propensity to acquire data and use it to make decisions. And we're providing our content in its raw form as well as in a -- in a service around research, valuations, insights. And Financial Market participants have been hungry to learn about the data sets of the combined company but have also started to acquire those data sets in the services that we have available for them. So that, we see a nice runway for a long time to come, and the pipeline continues to build. The other one we talked about and I gave -- mentioned in the early part of this call was the use of our data management technology, which has been used for many years by financial market participants to organize their data sets in order to create providence and cleanliness of the data sets they use to do their business. When we reached out into the energy companies, we found that they as well, dealing in multiple different data sets across the commodities markets, had similar issues and challenges, and we've had early successes with taking our data management products and adapt them -- adapting them to the energy markets. So those are two good examples. But as Jerre said on the Investor Day, we'll get into some real examples, real demos and show you some of the products that we're creating together.

Our next question comes from Andrew Steinerman with JPMorgan. You may begin.

Hi, Todd, I want to ask you about your ACV prepared comments. After saying ACV should be flat for 2017, you went on to indicate that the IHS oil projection should be in the mid to high 50s for 2017. Obviously, oil prices right now are in the high 40s, having dropped during CERAWeek while we were there together. Do oil prices need to meet the IHS forecast of mid to high 50s for ACV to be flat this year?

Andrew, it's -- the primary driver is the spending, the capital spending, the budget cycles of the energy companies. And we don't see high 40s versus mid-50s as being impactful to our projection around sub-base for the remainder of the year.

Thanks Andrew. Next question?

Our next question comes from Jeff Mueler with Baird. You may begin.

This is Nick Nikitas on for Jeff. Just looking at the Financial Services segment and the organic growth improvement there, obviously, information is pretty steady, and you saw some nice improvement within solutions and processing. Can you just talk about the sustainability for both of those sub segments over the back half the remainder of 2017?

Yes, it's a great question. Todd, you start. Lance will wrap up.

Well, information we see as being very sustainable in this 4% to 6% long-term growth rate area. There's a great set of pricing reference data, economic indices, valuation services. We have always liked that part of the portfolio. So we do feel good about the ability to continue growth the way it's tracked historically, even in the legacy market world. Processing is driven by activities in the marketplace. And so there is more variability around processing from a market activity standpoint. And it's been a relatively strong loan market in the last quarter, and we'll all see how the market goes over the remainder of the year.

Lance?

No, that's -- I agree that what Todd said was perfect in that I do think that, as I mentioned a bit earlier, the propensity for financial market participants to consume information is high and has grown throughout the -- our life since the financial crisis. So spending on information is a core strategic component of the bank's strategy to do their job better, and we see that staying. We're -- that 4% to 6% range we see as a performance level that's available to us in the market. And we expect to -- as a long-term objective, to be within that. Processing is volume related. We have the connectivity. So the big infrastructure spend to connect to us is there, but the volumes are variable on top of that. And so 12% is a great organic growth number, coming from a lower base a year ago. But with low interest rates, one, the propensity for loan market participants to lock in, that's a positive. And two, when there's currency market and interest rate volatility, you find the derivatives processing volumes to pick up, and our charging mechanism is a per trade, and so it's not about the absolute size in dollar value but the propensity for those institutions to trade. And we see that -- we saw good strong organic growth in the processing from derivatives. And then on -- the final thing on solutions, the industry continues to look for ways to reduce their costs. We're active in and around document management, tax, KYC, vendor compliance, digital services, all great areas to be in and collectively back to 10% organic growth, which is good to see.

That's excellent. There's a really good article in The Wall Street Journal on that very subject that Lance just covered this morning. So it just even justifies more of what we're doing. Thank you. Next question?

Our next question comes from Manav Patnaik with Barclays. You may begin.

Hi, this is Ryan filling in for Manav. Just wanted to touch on the synergies comment. I guess, Lance, you made it sound like $125 million is now the minimum. And I guess maybe what have you seen so far that gives you confidence that, that can be exceeded? And is there any type of -- is that the initial bar and you see another leg starting in -- after 2019? Or do you think there is more upside within that time frame?

I'll start, and Lance will pick up. What we feel very good about is that we've laid out, we actually measure by week what we're doing and what we said we were going to do. And what Lance was trying to say was that the $125 million, we have high degree of confidence. Lance, pick up on the second part of this question of the future and where we're going.

Yes. I think -- I agree, Jerre. We're -- our comments earlier were that we felt the $125 million is in hand and that as we exceed that, we'd look to reinvest strategically in to four areas in the firm. All that would give us a higher propensity to move our organic -- move stronger into our organic growth ranges, and those areas were technology. So one key strategic area that we focused on throughout this merger period is looking at all our technology assets and how we can rationalize those as well as improve them for future product offerings and growth. Two was around colleagues in terms of learning and development and training and leadership. Three was with respect to our customer experience and online and inside sales. And then finally, the four, the last one was incremental product investments. And so we're looking to invest with any over performance, and we feel confident that we've done a great job to be able to do that.

And I'd just add two things to that because -- well, you'll see that in Investor Day. One, we're spending and built into our plans, in delivery and guidance, a lot of money this year and creating the background. We'll be 100% when we exit the year on a common Salesforce.com system. We've put our SAP systems together. We've got an entirely new human resource system going into place as well as integrating all of our backroom communications. So that's a big deal. That's built in. So the second comment that you'll hear more about in our Investor Day is that we expect that to deliver a situation that will allow us to provide 100 basis points of margin improvement for years to come, year-after-year as we deliver going forward. Thank you. Great question.

Our next question comes from Kevin McVeigh with Deutsche Bank. You may begin.

Great, thank you. Hey, in terms of the 2% to 4% range, nice job on getting the 2% in Q1. What are the puts and takes to get you kind of from the low end to the high range? And just to follow-up on that, what is the overinvestment due to the longer-term organic growth? Like is there a way to think about how much it should boost your organic growth as you pull some of these overinvestments on the cost synergies and put it back into the business?

Great question. I'll start on the second part and have Todd pick up. When we look -- you just heard Lance talk about a target of 4% to 6% organic growth. The beauty of a subscription-based business where 85% of our revenue is recurring is that when you get north of 5% and you control the costs as well as our teams are and will continue to, that generates basis points for years to come. And I think we feel very good about that. What Lance was talking about and we are going to do, again, you'll see it much more in a few weeks, is invest in opportunities that allow us to get to the upper end of that 4% to 6%. When we hit that, get north of 5%, we'll see lots of returns coming. And Todd, do you want to pick up?

Well, the things that get to the higher end of the revenue -- organic revenue growth are really the positive things that we talked about on this quarter. The stability in energy, improving energy through the year, good performance, very strong performance from financials, transport continuing at this high single digit level and then the CMS starting to turn the corner and move up. I mean, those are all positive signs. Now we have to continue to operate well as we go through the year, but those are certainly things that we wanted to see at an early stage to the year. Relative to the second part of the question, which is really this trade-off between revenue growth and margin and investment, for us, obviously, the revenue growth makes margin easier. We talked about that in the past. And so this 4% to 6% range that we talked about as a longer-term objective for the company, operating in that range, we believe, allows us the ability to deliver the type of margin expansion that Lance referenced on the call, this 100 points a year as well as also making investment in the business.

Thank you, next question?

Our next question is from Andrew Jeffrey with SunTrust. You may begin.

Hi, good morning, guys. Thanks for taking my question.

Hi, Andrew.

Lots of good ones already asked this morning. Jerre, I'm thinking back to a couple years ago in the context of some of the workflows you talked about and were designing in Resources. How do you think about those workflows in greater integration into your customers' day-to-day functionality in terms of the growth in Resources and market demand notwithstanding? In other words, is that now -- would you think now about those in terms of cross-sell and revenue synergies? How does that all fit into the go-to-market strategy?

Yes. Those are the investments we made in new products, actually, products that would pull us into the financial world that we had not been in previously. Feel very good about those. You'll see demos, as Lance talked about, at our Investor Day of those products being sold. In -- we've had -- both Lance and I have had the pleasure of being part of some of the sales of those going into financial institutes. Feel very good about those. As you remember, our last Investor Day, which was actually October 2015, we moderated the expectations of what we thought the -- those new products would be. I'd say today that we're on track with those and feel very good about the cross-selling as we go forward. Todd, anything?

Right. I think the platform investments that we've made historically position us for what we plan to do in the future.

And I'd just add one thing, because Lance has had a chance, as Yaacov, for instance, to see the biggest platform, and we put a lot of additional information there. Economic country risk is now on there. We've got -- if you think about the Connect platform, it serves a purpose that will continue to expand for years. Two things it does do is give us a much easier entrée for our customers. Equally important is it reduces our cost to maintain all of those separate products significantly. We announced today the critical move of Yaacov becoming our Chief Data Scientist. That's a place that you'll see us investing in years to come that'll create predictive analytics, that nobody else has done, at the same time reduce our infrastructure costs. Great question. Thank you.

Our next question is from Alex Kramm with UBS. You may begin.

Hey, good morning everyone. Just wanted to come back to the comments you made earlier on Transportation or particularly around autos. Sounded pretty positive what you're seeing out there. There were a few headlines in the last few weeks here about used car price indices dropping -- the biggest drop we've seen, I think, since 2008. So just wondering, has that changed anything in terms of the outlook? Do used car prices at all have an impact, positively or negative, on your business? How would you be thinking about it?

That's a good question. I'll start, Todd will pick up. Anything that is out of the normal is good for us. And you're right, I saw the article where used cars -- this is U.S. only, as you'll remember, and probably going on in Canada, too. Used cars prices have varied. What that does is drive an appetite for people, when they read that and understand it, to come online and use our information with CARFAX to make even better decisions. Todd?

Yes. The used car market in North America in terms of number of vehicles sold doesn't vary a lot. I mean, it sits around this $42 million -- or 42 million-unit level. But what we do is we allow dealers to more effectively participate in that market, and we provide information to consumers to make good informed decisions. So the market pricing doesn't -- as I see it, doesn't really have an impact on the underlying business and the services that we provide.

Thank you, next question.

Our next question is from Shlomo Rosenbaum with Stifel. You may begin.

Hi, thank you very much for taking my question. Hey, Lance, I just wanted to get a sense of your commentary about investing the excess of $125 million to drive better organic growth. Is this something that you're looking at in the interim? In other words, you're seeing through the target years of fiscal year 2016 that you're going to exceed those cost savings, and therefore, in the near term, you have more money to invest in that? Or is this kind of over a longer period of time? I'm just trying to understand that side of organic growth.

Pick that up, Lance. Thank you.

Okay. So well, first off, in terms of our strategic priorities, we've given you a little hint of those today in terms of the four areas that we've looked very closely at. I've had a great opportunity where -- with Jerre running the company, I've had the opportunity to spend a lot of time with the teams globally. And really, the excitement from the merger to now is really about the opportunity set of the great assets we have in terms of people and product and customers. And so we looked globally at the three or four areas where we felt we could put some incremental dollars to work that would give us a higher propensity to hit higher ends of organic revenue growth as we look forward into 2018, 2019, 2020. So that's what we're doing. What you'll see in terms of detail on that will come out at Investor Day, and so let's not jump the gun because the teams have put in a lot of great work where together, we'll be presenting and talking in detail those strategic initiatives. And we'll give you a lot more insight then. But we're on track on the synergy side. We're creating room to invest, and we're excited about that combination.

It's a great example of what a merger of equals really does. Thank you. Next question?

Our next question is from David Chu with Bank of America. You may begin.

Good morning, maybe a question for Lance. Can you just provide an update to the timing of electronification in Europe? Just wanted to see if this is still expected to be a 2018 event and maybe you can share the potential impact.

You're talking electronification in terms of...

Processing.

In terms of processing, okay. Sorry. So, no. So we -- so processing is -- as you know, is diversified across the loan markets and then within the derivative markets and FX. So quite a well-diversified suite. The -- we've seen little impact to date in terms of the electronification of markets. And in terms of a percentage of our overall business and revenue, it's very small.

Thank you, next question.

Our next question is from Hamzah Mazari with Macquarie.

Good morning, thank you. Just a question, if you could maybe frame for us the extent to which the non-recurring business is a good indicator of your re-occurring or sub business coming back? And is there still an opportunity to shift to a larger subscription mix from moving business from non-recurring to recurring? I know you mentioned some product rationalization in TMT. Thank you.

Yes, great. I'll start, Todd will pick that up. Yes, TMT is in the process and has done that last year and this year, small part of our business but has done a very good job of moving from a transaction base to an annual subscription base. I said a few minutes ago, we're north of 85% of recurring revenue. That's remarkable. And if we can keep it at that level and still get the kind of non-subscription-based business, we'd be very happy. Indicator-wise, so just give a thought on that, Todd, because there's really not much indicator difference, but non-sub versus sub.

Yes. A lot of the non-sub products, I guess the transactional orientation of those products provides -- in an up market, probably get a bit of a lift, and in a down market, we probably would see the transactions start to drop in advance of the subscription. But I don't know that there's a perfect correlation in that. I think when we look at energy, we see consulting is improving, pipelines are improving, backlogs are improving. We would expect to see improved non subs in energy and start to lead the way out of energy through the remainder of the year. We talked about this the CERAWeek event. We were happy with the performance of that event on multiple counts. So not a perfect correlation but certainly indicative at times of what's happening in the larger markets.

Thank you, next question.

Our next question is from Anj Singh with Credit Suisse.

Hi, good morning. Thanks for taking my question.

Good morning.

Had a follow-up on the non-recurring resources piece. It seems like the normalized organic growth worsened a little bit. Realizing it's small dollars, hoping for some more granularity there. With consulting, it seems like a small decline this Q versus flat last Q. Is this a little bit of choppiness in line with your expectations considering the stability in oil prices on a relative basis? Are the software maintenance fees taking more time to normalize than you had thought? And then finally, Todd, I think on your expectations of positive growth in this non-recurring resources piece, is that also positive if we were to normalize for CERAWeek?

Great question. Pick that up. The answer to that last part is yes. But just pick up the software and the consulting.

Well, the first point, as you said, the numbers are relatively small. So consulting was down $1 million year-over-year. We do have a good strong pipeline as we look at the next three quarters. And we do expect to see some improvement of consulting as we go through the year. The software, a little bit longer sales cycle around the software. Certainly, our expectation is that we can have some success in software as we go through the year. But I think that is an area that has lagged, and we do see that software has been -- year-over-year, the software, the other one times have been down a bit. On balances, we look across non subs for energy. We still do expect a positive grower for the year.

Thank you, next question.

Our next question comes from Joseph Foresi with Cantor Fitzgerald.

Hi, I wanted to revisit Financial Services. I think we talked a little bit last quarter about getting some uplift from a better bank outlook. Did that happen? Will it continue? And any noticeable shifts in budgeting there?

The question that you referred to was what did we expect to see with the Trump regime, if you will, and we said any change is good and uncertainty is great. And if you're wondering about uncertainty, I think what goes on every day today. But pick it up, Lance.

Sure. So we definitely -- I think part of the positive results come from the election. And that's given bit steeper yield curves. So that's given some -- a flow of profitability into financial market participants here in North America. In Europe and Japan, getting away from a negative rate environment, it's positive for banks. A view that there might be a tax shift in the U.S., positive for banks. So there's a general optimism for the North American participants post that election. And I think that gave some rise to additional loan processing volumes, which we've seen come through in terms of revenue. People thinking that rates might rise have a higher likelihood of walking in lower rate, so we saw that. We took advantage of that ourselves in terms of our issuance. The second thing is that you've got some volatility also in the world with uncertainty in terms of commentary coming out of Europe and North America, and that creates trading volatility, which plays well into our processing business as well. So a general kind of additional revenue, incremental revenue in processing on the back of the election.

Thank you, good question. Next question please?

Our next question comes from Toni Kaplan with Morgan Stanley. You may begin.

Good morning, this is Patrick in for Toni. I'm wondering if you can give us a bit of color around Resources margins during the quarter. It looked they were pretty much unchanged year-over-year.

Happy to do that. I'll start, Todd can pick up. If you look, we now have our three largest businesses all delivering 40% margins or better. If you think about Resources, when the revenue has been down consistently for 11 quarters now and delivering north of 40% margins, you can think what will happen as we predict the positive revenue growth coming into 2018.

Yes, I did call this out. We normalized the organic revenue growth to take account of the CERAWeek timing shift. But when you look at the reported numbers, obviously, Q1 of this year does not have CERAWeek. Q1 of last year had CERAWeek. That's a -- CERAWeek's a relatively good incremental contribution margin. So as a result, we were down on EBITDA year-over-year and didn't have as much margin as we -- margin expansion as we would have otherwise had. So that is an impact. Now I also said that we don't expect Resources to be a significant margin -- to have significant margin growth this year. It is negative revenue growth on a reported basis. And so basically, the two forces we'll see in Resources, on margins for the year are -- we'll see benefit from flow-through of the synergies that are benefiting all of the segments, and then we'll see lower revenue growth having some impact in the other direction.

And as I -- it's a great question, as we wrap that up. Like I said, you'll see then the margins, as we see the growth turn positive in 2018, we'll enjoy the margin recovery. I'm very, very proud. We all are, of what the Resources team have done in total during this very, very difficult time, managing costs very well in preparing for the uplift. Thanks. Next question?

Our next question comes from Andre Benjamin with Goldman Sachs. You may begin.

Thanks. I guess just a question on processing, some combination of Todd and Lance. I was just wondering what you've observed, the change in pricing and margin for the customers and business you retained on the electronic exchanges. And have you seen the anticipated pickup in volume? So I'm talking about in the U.S. business, those that have gone on to exchanges. In the past, you talked about the low oil prices driving some additional volume.

Yes, great question. Please, Lance.

Sure. Well, the electronic trade cost us less to execute and is a lower revenue for us, and it -- it's priced for the customer to be able to do more volume in an electronic market. We haven't seen huge impacts in terms of that business, but the mix of the business has shifted somewhat. We'll expect that to continue to shift, but I think the volume impact -- the revenue impact across the group is negligible.

Thank you very much. Last question.

Our last question is from Warren Gardiner with Evercore. You may begin.

Great, thanks. Lance, I guess just for you again. Really nice rebound in organic growth for solutions this quarter. Imagine some of the industry trends for WSO helped there. But can you just kind of give us some of the puts and takes there, maybe kind of flow through that 10% organic growth?

Yeah, good question, good wrap-up question. Thank you.

Okay. So on the positive side, our managed services around WSO, as you mentioned, tax, our document exchange, these are all strong -- is the amend release. These are all strong contributors to the growth. Slower market digital where large managed service is also positive in and about double digits. When you get into the ones that haven't added to the growth, KYC has been slow, slow for implementation, slow to establish, the utility as a single source of use across the industry. When I probably spoke to you last, there were three platforms. Now there's two. And so that put some improving thoughts in place in terms of the future, but it has been slow and much slower than we would have liked. Our KY3P, which is the vendor managed service, that's up and running now with good customer statistics, and we'll show you some of the product live and working with our customers and vendors at the Investor Day. So those are the pluses and minuses.

Thank you so much.

I would like to turn the call back to Eric Boyer for closing remarks.

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Ladies and gentlemen, this concludes today's conference. Thanks for your participation, and have a wonderful day.