OREANDA-NEWS. IHS Inc. (NYSE: IHS), the leading global source of information and analytics, today reported results for the third quarter ended August 31, 2015.
  • Revenue of $588 million, up 6 percent from the prior-year period
  • Total organic revenue growth of 3 percent, with 5 percent subscription organic revenue growth
  • Adjusted EBITDA of $190 million, up 9 percent from the prior-year period
  • Adjusted earnings per diluted share (Adjusted EPS) of $1.56, up 5 percent from the prior-year period

Adjusted EBITDA, Adjusted EPS, and free cash flow are non-GAAP financial measures used by management to measure operating performance. These terms are defined elsewhere in this release. Please see schedules appearing later in this release for reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures.

Third Quarter and Year-to-Date 2015 Financial Performance

                 
    Three months ended August 31,   Change   Nine months ended August 31,   Change
(in thousands, except percentages and per share data)   2015   2014   $   %   2015   2014   $   %
Revenue   $ 587,945     $ 556,011     $ 31,934     6 %   $ 1,725,613     $ 1,648,477     $ 77,136     5 %
                                 
Net income   $ 59,244     $ 46,517     $ 12,727     27 %   $ 149,716     $ 134,431     $ 15,285     11 %
Adjusted EBITDA   $ 189,996     $ 174,441     $ 15,555     9 %   $ 544,387     $ 503,349     $ 41,038     8 %
                                 
GAAP EPS   $ 0.86     $ 0.68     $ 0.18     26 %   $ 2.16     $ 1.95     $ 0.21     11 %
Adjusted EPS   $ 1.56     $ 1.49     $ 0.07     5 %   $ 4.41     $ 4.23     $ 0.18     4 %
                                 
Cash flow from operations   $ 162,377     $ 167,476     $ (5,099 )   (3 )%   $ 496,661     $ 542,450     $ (45,789 )   (8 )%
Free cash flow   $ 133,727     $ 135,198     $ (1,471 )   (1 )%   $ 398,973     $ 459,136     $ (60,163 )   (13 )%
                                                         

“My first full quarter back in the CEO role at IHS has been very productive,” said Jerre Stead, IHS chairman and chief executive officer. “IHS and shareholders will benefit as the company executes on its long-term strategy and captures the full potential of prior investments and the operational initiatives we are implementing.”

“We continue to be pleased with the strength of our Industrials revenue growth, while our Resources revenue continues to be negatively impacted by market pressures,” said Todd Hyatt, IHS chief financial officer. “We continue to deliver solid profit and margin expansion, with Adjusted EBITDA of $190 million for the quarter, up 9 percent versus a year ago.”

Third Quarter and Year-to-Date 2015 Revenue Performance

Third quarter 2015 revenue increased 6 percent compared to the third quarter of 2014, and year-to-date 2015 revenue increased 5 percent compared to the same period in 2014. The components of revenue growth are described below by segment and in total.

       
      Change in revenue
      Third quarter 2015 vs. third quarter 2014     Year-to-date 2015 vs. year-to-date 2014
(All amounts represent percentage points)     Organic   Acquisitive   Foreign

Currency

     Organic   Acquisitive   Foreign

Currency
Americas     5 %   6 %   (1 )%     3 %   5 %   (1 )%
EMEA     (2 )%   4 %   (4 )%     — %   3 %   (4 )%
APAC     — %   6 %   (3 )%     1 %   6 %   (2 )%
Total     3 %   5 %   (2 )%     2 %   5 %   (2 )%
                             

The subscription-based business grew 5 percent organically in the third quarter of 2015 compared to the same period of 2014, as described in the following table.

                 
    Three months ended August 31,   Percent change   Nine months ended August 31,   Percent change
(in thousands, except percentages)   2015   2014   Total   Organic   2015   2014   Total   Organic
Subscription revenue   $ 466,600     $ 432,128     8 %   5 %   $ 1,374,088     $ 1,275,848     8 %   5 %
Non-subscription revenue   121,345     123,883     (2 )%   (4 )%   351,525     372,629     (6 )%   (10 )%
Total revenue   $ 587,945     $ 556,011     6 %   3 %   $ 1,725,613     $ 1,648,477     5 %   2 %
                                                         

Third Quarter and Year-to-Date 2015 Segment Performance

Segment results were as follows:

  • Americas. Third quarter revenue forAmericas increased$34 million, or 9 percent, to$397 million, and included 6 percent organic growth for the subscription-based business. Third quarter Adjusted EBITDA forAmericas increased$12 million, or 9 percent, to$145 million. Third quarter operating income forAmericas increased$3 million, or 3 percent, to$93 million.

    Year-to-date revenue for Americas increased $74 million, or 7 percent, to $1,165 million. Year-to-date Adjusted EBITDA for Americas increased $24 million, or 6 percent, to $417 million. Year-to-date operating income for Americas decreased $9 million, or 3 percent, to $252 million.

  • EMEA. Third quarter revenue for EMEA decreased$4 million, or 3 percent, to$135 million, and included 1 percent organic growth for the subscription-based business. Third quarter Adjusted EBITDA for EMEA increased$4 million, or 9 percent, to$45 million. Third quarter operating income for EMEA increased$3 million, or 9 percent, to$38 million.

    Year-to-date revenue for EMEA decreased $6 million, or 1 percent, to $398 million. Year-to-date Adjusted EBITDA for EMEA increased $6 million, or 6 percent, to $120 million. Year-to-date operating income for EMEA increased $1 million, or 1 percent, to $95 million.

  • APAC. Third quarter revenue for APAC increased$2 million, or 4 percent, to$56 million, and included 6 percent organic growth for the subscription-based business. Third quarter Adjusted EBITDA for APAC increased$3 million, or 25 percent, to$16 million. Third quarter operating income for APAC increased$5 million, or 43 percent, to$15 million.

    Year-to-date revenue for APAC increased $8 million, or 6 percent, to $162 million. Year-to-date Adjusted EBITDA for APAC increased $7 million, or 20 percent, to $45 million. Year-to-date operating income for APAC increased $6 million, or 18 percent, to $40 million.