Ewout Steenbergen
Executive Vice President, Chief Financial Officer, S&P Global, Inc. at S&P Global
Thank you, Doug. As a reminder, the financial metrics that we will be discussing today refer to non-GAAP adjusted metrics unless explicitly noted otherwise. This was an exciting quarter for S&P Global as we saw growth accelerate across all five of our divisions, and revenue and margins both outperformed our internal expectations. Adjusted earnings per share increased 10% year-over-year. While reported revenue grew 8%, this actually understates the accomplishments of the team during the third quarter because, excluding Engineering Solutions and the small tuck-ins done earlier this year, revenue growth was an impressive 11%. We also expanded adjusted margins by 100 basis points and reduced our fully diluted share count by 4% year-over-year.
As you saw in the press release earlier this morning, we plan to continue share count reduction with the launch of an incremental $1.3 billion accelerated share repurchase program in the coming weeks. Revenue in the quarter was driven by growth across all divisions, led by outperformance in our Ratings division, which benefited from elevated issuance activity in the high-yield and bank loan markets. While the environment remains unpredictable for the debt markets, we saw stronger issuance volume throughout the third quarter than we expected, particularly in September. Adjusted expenses were up 6% year-over-year, while the adjusted operating income increased 10%. Acceleration is further demonstrated by our strategic growth initiatives. sustainability and energy transition revenue grew 36% to $78 million in the quarter, driven by strong demand in climate and physical risk products and our energy transition products.
As Doug highlighted earlier, we're fulfilling our customer needs for raw data and reporting capabilities around sustainability and energy transition, and this is evident by the third quarter growth. This acceleration reconfirms our continued optimism around the long-term potential of this important part of our growth. Moving to private market solutions. We saw revenue increase by 18% year-over-year to $109 million, driven by strong growth in Market Intelligence private market software solutions, including iLEVEL and a return to strong growth in Ratings private market revenue as bond issuance and private credit estimate activity both improved in the quarter. We're also encouraged by the demand we're seeing in our private market valuation and benchmark offerings.
Vitality revenue, which is the revenue generated by innovation through new or enhanced products from across the organization, was $369 million in the third quarter, representing a 22% increase compared to prior year. Importantly, Vitality revenue represented 12% of our total revenue in the quarter, making it the third consecutive quarter of improvement in our Vitality Index score. Now turning to synergies. In the third quarter of 2023, we recognized $149 million of expense savings due to cost synergies, and our annualized run rate exiting the quarter was $588 million. We expect to complete our cost synergy program by year-end with a run rate of approximately $600 million. We continue to make progress on our revenue synergies as well with $25 million in synergies achieved in the third quarter and an annualized run rate of $112 million.
Turning to expense growth. We are pleased to see that our efforts to optimize our portfolio and deliver cost synergies offset most of the year-over-year expense growth in the third quarter. Our total expenses increased less than 6% year-over-year, though we continue to see some inflationary pressure on compensation expense. Due to the decisive expense actions we took last year, the reset of incentive compensation this year continues to contribute meaningfully to expense growth, though we do not expect any further headwinds from this going forward. We are confident that we continue to strike the appropriate balance between disciplined expense management and investing in our business, as evidenced by the volume of new products coming to the market this year and our expectation to deliver more than 100 basis points of adjusted margin expansion for the full year at the midpoint of our guidance range.
Now let's turn to the division results. Market Intelligence revenue increased 8%, driven by strong growth in Data & Advisory Solutions and Enterprise Solutions. Desktop grew 5% in the third quarter, driven by strong subscription growth as ACV growth continued to outpace revenue growth, partially offset by modest softness in onetime sales. Renewal rates continue to remain strong in the mid- to high 90s range. Data & Advisory Solutions and Enterprise Solutions each grew by 9% in the quarter, benefiting from double-digit growth in subscription-based offerings. Credit & Risk Solutions continues to see strong new sales for RatingsXpress and RatingsDirect products as well as continued double-digit growth in credit analytics. Adjusted expenses increased 9% year-over-year, primarily due to compensation expense. Operating profit increased 6%, and the operating margin decreased 60 basis points to 33.3%.
On a trailing 12-month basis, margins improved 140 basis points. As we progress through the fourth quarter, we expect continued acceleration in revenue growth as we move into the most favorable comparison quarter for the year. Furthermore, we see the business continuing to benefit from the launch of new products and monetization of cross-sell referrals as part of the division's overall revenue synergy program. As a result, we are tightening our full year guidance for revenue growth by 100 basis points to a range of 6.5% to 7.5% while reaffirming our full year margin outlook. Now turning to Ratings. In the third quarter, we saw continued improvements in issuance activity, particularly due to refinancing in the bank loan and high-yield markets. Revenue increased 20% year-over-year, well above our internal expectations.
However, growth was helped by a $19 million cumulative catch-up for customers' self-reported commercial paper issuance in non-transaction revenue, which primarily benefited structured finance. Excluding this impact, Ratings would have grown approximately 17% in the third quarter. Transaction revenue grew 34% in the third quarter, driven primarily by growth in bank loan and high-yield issuance. non-transaction revenue increased 13%, primarily due to an increase in annual fees, which includes the catch-up revenue I mentioned previously as well as growth in Ratings Evaluation Service activity and at CRISIL. Excluding the impact of the catch-up revenue, non-transaction revenue would have grown approximately 8%. Adjusted expenses increased 18%, primarily due to the write-down of incentive compensation expense in the year-ago period. This resulted in a 22% increase in operating profit and a 70 basis points increase in operating margin to 56.6%.
On a trailing 12-month basis, margins are still impacted by the relatively low margins in the fourth quarter of last year. As Doug mentioned, we're tightening our billed issuance growth assumption for 2023 to 5% to 7%. This reflects the outperformance we saw in the third quarter, but also reflects our slightly lower expectation for investment-grade issuance in the fourth quarter relative to our prior forecast. While we expect continued growth in non-transaction, we still see headwinds in issuer credit ratings revenue as fewer new issuers come to the market. As a result, we are increasing Ratings revenue guidance range by 100 basis points, now expecting growth of 6% to 8% for the full year and reiterating our margin guidance. And now turning to Commodity Insights.
Revenue growth increased 11% following a second consecutive quarter of double-digit growth in both Price Assessments and Energy & Resources Data & Insights. Upstream Data and Insights increased approximately 2% year-over-year, benefiting from better-than-expected demand for both content and software as well as slightly improved retention rates. The business line continues to prioritize growth in its subscription base. Price Assessments and Energy & Resources Data & Insights grew 12% and 10%, respectively. Growth was driven by continued strength in our benchmark data and insights products. We also continue to see strong commercial momentum in our subscription offerings for both business lines. Advisory and Transactional Services revenue grew 33%, driven by strong trading volumes across all sectors in Global Trading Services and strong performance in advisory revenue in the quarter.
The business line continues to benefit from market-driven volumes, but we're also seeing positive results in key areas of strategic investment, including energy transition. Adjusted expenses increased 6%. Operating profit for Commodity Insights increased 17%, and the operating margin improved 260 basis points to 48.4%. Trailing 12-month margins improved 240 basis points. We continue to see Commodity Insights benefit from strong secular trends around energy transition and sustainability and demand for benchmarks, data and insights. Following this quarter's strong performance, we are raising the low end and tightening Commodity Insights' overall revenue guidance range, now expecting growth of 8.5% to 9.5% for the full year. There's no change to our margin guidance. In our Mobility division, revenue increased 10% year-over-year.
The team continues to execute well with the third consecutive quarter of double-digit growth in the dealer segment and continued growth in new business in the Manufacturing and Financials and Other segments. Dealer revenue increased 30% year-over-year, driven by the continued benefit of price realization within the last year and new store growth, particularly in CARFAX for Life and used car subscription products as well as the addition of Market Scan. Manufacturing grew 4% year-over-year, driven by elevated recall activity and continued strength in marketing solutions. Financials and Other increased 9% as the business line continues to see healthy underwriting volumes and a favorable pricing environment similar to last quarter. Adjusted expenses increased 10%, driven primarily by increased incentive compensation expense, but also due to the inorganic contribution to expenses from the Market Scan acquisition.
This resulted in a 10% increase in adjusted operating profit and 20 basis points of operating margin contraction year-over-year. Trailing 12-month margins have contracted 100 basis points. We expect continued strong growth in used car subscription products as we progress through the fourth quarter. We also expect Mobility to continue to benefit from dealerships and OEMs increasing their incentive spend on new vehicles as affordability is hampered by rising rates. As a result, we are narrowing our guidance for revenue growth to a range of 9% to 10% for the full year. There is no change to our margin guidance. Now turning to S&P Dow Jones Indices. Revenue increased 6%, primarily due to gains in exchange-traded derivative volumes and asset-linked fees. We're very pleased to see asset-linked fees return to positive revenue growth in the third quarter.
Revenues were up 4% year-over-year, driven by higher ETF AUM, which benefits from both market appreciation and net inflows, but was partially offset by mix shift into lower-priced products, continuing the pattern from last quarter. Exchange-traded derivative volume increased 18%, primarily driven by an approximately 20% increase in S&P 500 Index options volume. Data & Custom Subscriptions increased 2% year-over-year, driven by continued strength in end-of-day contract growth. During the quarter, expenses increased 9% year-over-year, with the majority of the increase driven by the write-down of incentive compensation in the year-ago period. Operating profit in Indices increased 5%, and the operating margin decreased 90 basis points to 69.4%. Trailing 12-month margins have contracted 80 basis points.
There's no change to our revenue outlook for Indices. However, as a result of the continued cost discipline and outperformance year-to-date, we're increasing our margin guidance for the division to a range of 68% to 69% for the full year. Now let's move to the latest views from our economists, who are forecasting global GDP growth of 3.1% in 2023. While outlooks vary somewhat by region, our economists are forecasting a period of subdued global growth fueled by higher-for-longer rates with a soft landing base case assumption as we move through the first half of next year. We continue to expect inflation to remain above the target rates of central banks and energy commodity prices such as crude oil to remain above the historical averages as well.
For the full year, we assume Brent crude will average approximately $84 per barrel, slightly higher than our last estimate as we expect Brent grew to average $88 in the fourth quarter. Now let's turn to our guidance. This slide represents our GAAP guidance for headline metrics. Adjusted guidance for the company reflects the results through the third quarter as well as our most recent views on the macroeconomic environment and market conditions. We're narrowing our expectations for total revenue growth to a range of 4.5% to 5.5% for the full year to reflect the changes discussed earlier on our divisional revenue outlook. Furthermore, we are maintaining our operating profit margin guidance of 45.5% to 46.5% with the expectation that we will achieve full year margins close to the midpoint of the range.
We have provided the granular guidance on corporate unallocated expense, deal-related amortization, interest expense and tax rate in the supplemental deck posted to our IR site. This includes a 50 basis point reduction in our adjusted effective tax rate to a range of 20.5% to 21.5%. As a result of this quarter's strong performance and our expectations for the remainder of the year, we're increasing and tightening our full year adjusted diluted EPS guidance to a range of $12.50 to $12.60. The final slides in this deck illustrate our revenue and margin guidance by division, reflecting the drivers that I mentioned previously. In conclusion, our business has demonstrated exceptional growth across divisions this quarter while we continue to manage expenses prudently.
Furthermore, I'm pleased with the progress being made across our cost synergy initiatives and growth across revenue synergies as we see more and more new products coming to the market that would have been impossible without the merger. The teams have done a truly excellent job executing on our key strategic initiatives while still driving profitable growth across all divisions this quarter, and we look forward to delivering a strong finish to 2023. And with that, I would like to invite Martina Cheung, President of S&P Global Ratings and Executive Lead for Sustainable1, to join us. And we'll turn the call back over to Mark for your questions.
