Core Insights - Moody's reported an 8% year-over-year increase in quarterly revenue and a 14% rise in adjusted earnings per share (EPS) to $3.83, exceeding Wall Street estimates [1] - However, the company revised its full-year profit guidance downward, contributing to a 19% decline in its stock from the 52-week high amid economic uncertainties [2] Financial Performance - The company has a strong financial analytics technology platform, benefiting from a trend where corporations and institutions outsource parts of their investing workflow [3] - Moody's experienced robust demand for cloud-based subscriptions and data licensing, starting fiscal 2025 with strong performance [4] - The Moody's Investor Service segment saw an 8% year-over-year revenue increase due to momentum in global bond issuances and favorable market conditions [6] - Moody's Analytics group reported a 9% increase in annualized recurring revenue (ARR) and a 93% retention rate, indicating durable growth [7] - The adjusted operating margin reached 51.7%, up 100 basis points year-over-year, and the company increased its dividend by 11% to $0.94 per share, yielding 0.9% [8] Outlook and Guidance - Moody's faces challenges from a rapidly evolving operating environment, particularly due to recent changes in U.S. trade policy that may disrupt the economy [9] - A slowdown in global debt issuances could impact the credit ratings business and limit growth opportunities, leading to a tempered full-year growth and earnings outlook [10] - The revenue growth estimate for 2025 was revised from high single digits to mid-single digits, and adjusted EPS guidance was lowered to a range of $13.25 to $14 [11] - Despite solid fundamentals, the stock's valuation premium is difficult to justify, trading at a P/E ratio of 38, above the five-year average of around 35 [12] Investment Perspective - Current shareholders may find enough strong points to hold, but investors on the sidelines may discover better value and upside potential elsewhere in the market [14]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form10-Q (Mark one) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-14037 ____________________ Moody's Corporation (Exact name of registrant as specified in its charter) Delaware 13 ...

Financial Data and Key Metrics Changes - Moody's achieved record revenue of $1.9 billion in Q1 2025, up 8% year-over-year [12][36] - Adjusted operating margin reached 51.7%, an increase of 100 basis points from the previous year [12][36] - Adjusted diluted EPS grew 14% to $3.83 [12][36] Business Line Data and Key Metrics Changes - Moody's Investors Service (MIS) revenue grew 8% with issuance growth of 9%, achieving quarterly revenue of $1.1 billion [12][36] - Moody's Analytics (MA) revenue was $859 million, also up 8%, with Annual Recurring Revenue (ARR) growth of 9% [36][37] - Decision Solutions within MA saw ARR growth of 12%, driven by KYC, insurance, and banking solutions [37][39] Market Data and Key Metrics Changes - Private credit was a significant contributor to growth, with 143 private credit-related deals in Q1 2025, up from 69 in Q1 2024 [13][14] - Data center debt issuance reached $4 billion in Q1 2025, indicating strong demand for financing in digital infrastructure [16][17] - Economic losses from extreme weather events in Q1 2025 were reported at $83 billion, above the 21st-century average [33] Company Strategy and Development Direction - The company is focusing on enhancing its earnings power and market position amidst economic volatility [11][28] - Investments in AI and digital transformation are central to the company's strategy, with a focus on generative AI to drive growth and efficiency [22][23] - A partnership with MSCI aims to provide independent risk assessments for private credit investments, enhancing transparency in the market [31][123] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased uncertainty in the market due to tariffs and economic conditions, leading to a more conservative guidance approach [28][44] - The company expects a decrease in MIS rated issuance for 2025, projecting low to high single-digit declines [46][48] - Despite short-term challenges, management remains confident in the long-term demand for their solutions driven by deep market currents [30][55] Other Important Information - The company maintains a strong financial profile and plans to return at least $1.3 billion to shareholders in 2025 [54] - Adjusted diluted EPS guidance for 2025 is set between $13.25 and $14, representing a 9% growth at the midpoint [52] Q&A Session Summary Question: Can you walk us through your assumptions around what acquisitions were included in the prior guidance versus now? - No change in M&A assumptions with respect to MA revenue guidance; CAPE Analytics was already included [58][59] Question: What were the key assumptions that were made in terms of M&A volume? - Adjusted M&A growth expectations down to 15% from 50% due to trade policy uncertainty [65] Question: How sensitive are Research and Insights and Data and Information to current macro trends? - Research and Insights growth is mainly from CreditView; Data and Information faced slower growth due to government attrition [68][71] Question: Can you explain the guidance for a decrease in issuance versus flat to increased revenue growth for 2025? - Annual pricing initiatives and a positive mix shift are expected to support revenue despite decreased issuance [74][75] Question: Can you elaborate on the costs and efficiency program? - The efficiency program is generating gains, with expectations for MA margins to ramp into the mid-30s range by Q4 [80][81] Question: How do Fed rate cuts impact your issuance outlook? - Rate cuts present mixed effects; decelerating economic growth could negatively impact issuance despite lower rates [87] Question: What is the revenue model for the partnership with MSCI? - The revenue model has not been disclosed, but there is significant demand for rigorous third-party credit assessments in the private credit market [121][122] Question: What is the outlook for first-time mandates? - First-time mandates are expected to continue growing, particularly in the private credit market [128][129] Question: Are tariffs driving demand for KYC solutions? - Tariffs may drive demand for KYC and supply chain risk solutions, with a new corporate platform launched to address these needs [132]

Moody's reported strong first-quarter results in April 2025 with solid growth in both earnings and revenue.Credit ratings, research, and risk analysis provider Moody's Corp. (MCO 2.05%) reported first-quarter 2025 earnings on Tuesday, April 22, that topped analysts' consensus expectations. Adjusted earnings per share (EPS) of $3.83 came in ahead of the expected $3.52. Revenue of $1.924 billion was slightly over the anticipated $1.875 billion.Overall, Moody's achieved robust growth in Q1 2025, marking a succ ...

Moody's (MCO) reported first-quarter 2025 adjusted earnings of $3.83 per share, which outpaced the Zacks Consensus Estimate of $3.56. The bottom line grew 14% from the year-ago quarter figure.Shares of MCO lost 1% in pre-market trading as it lowered the 2025 guidance on “market volatility.” Robust global bond issuance volumes and steady demand for analytics supported Moody’s results. The company’s liquidity position was strong during the quarter. However, an increase in operating expenses posed a headwind.A ...

Core Insights - Moody's reported quarterly earnings of $3.83 per share, exceeding the Zacks Consensus Estimate of $3.56 per share, and up from $3.37 per share a year ago, representing an earnings surprise of 7.58% [1] - The company achieved revenues of $1.92 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.29%, compared to $1.79 billion in the same quarter last year [2] - Moody's shares have declined approximately 12.7% year-to-date, slightly underperforming the S&P 500's decline of 12.3% [3] Earnings Outlook - The future performance of Moody's stock will largely depend on management's commentary during the earnings call and the revisions of earnings estimates [3][4] - The current consensus EPS estimate for the upcoming quarter is $3.60, with expected revenues of $1.89 billion, and for the current fiscal year, the EPS estimate is $13.77 on revenues of $7.46 billion [7] Industry Context - The Financial - Miscellaneous Services industry, to which Moody's belongs, is currently ranked in the top 30% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Moody's Corporation reported Q1 2025 revenue of $1.9 billion, an 8% increase year-on-year[1]. - Moody's Analytics revenue was $859 million, also up 8% year-on-year, while Moody's Investors Service revenue reached $1.1 billion, reflecting the same growth rate[1]. - Revenue for Q1 2025 was $1,924 million, a 7.7% increase from $1,786 million in Q1 2024[44]. - Operating income increased to $846 million in Q1 2025, up from $801 million in Q1 2024, reflecting a growth of 5.6%[44]. - Net income attributable to Moody's rose to $625 million in Q1 2025, compared to $577 million in Q1 2024, marking an 8.3% increase[44]. - Basic earnings per share increased to $3.47 in Q1 2025, up from $3.16 in Q1 2024, representing a 9.8% growth[44]. - Adjusted Operating Income for Q1 2025 was $994 million, up from $906 million in Q1 2024, reflecting a growth of 9.7%[60]. - Adjusted Diluted EPS for Q1 2025 was $3.83, a 14% increase compared to the prior year, with full year 2025 guidance set between $13.25 to $14.00[3]. - Adjusted Net Income for the three months ended March 31, 2025, was $692 million, up from $618 million in 2024[74]. - Diluted EPS attributable to Moody's common shareholders increased to $3.46 for Q1 2025, compared to $3.15 in Q1 2024[74]. Revenue Growth - Annualized Recurring Revenue (ARR) increased by $260 million to $3.3 billion, representing a 9% growth year-on-year[13]. - Organic constant currency revenue growth for the Company was 8% for Q1 2025, with MA revenue growing by 7% and MIS revenue by 8%[66]. - Total external revenue in the MA segment was $859 million for Q1 2025, compared to $799 million in Q1 2024, marking an increase of 7.5%[54]. - The MA segment's recurring revenue increased by $70 million, reaching $822 million in Q1 2025, a growth of 9% year-over-year[66]. - Total MA ARR for the Company increased to $3,266 million for the year ended March 31, 2025, up from $3,006 million in 2024, representing a growth of 9%[71]. - The Banking segment's ARR rose to $453 million, an increase of $32 million or 8% compared to the previous year[71]. Expenses and Cash Flow - Operating expenses grew 9% year-on-year, including 3% from investments and operational costs, and 2% related to M&A[20]. - Cash flow from operations was $757 million, while free cash flow was $672 million, impacted by higher incentive compensation payments[34]. - Free Cash Flow for the three months ended March 31, 2025, was $672 million, slightly down from $697 million in the same period of 2024[63]. - The Company’s net cash provided by operating activities was $757 million for Q1 2025, down from $775 million in Q1 2024[63]. - The company repaid $700 million in notes during Q1 2025, impacting cash flows from financing activities[47]. Assets and Liabilities - Total assets decreased to $15,096 million as of March 31, 2025, down from $15,505 million at the end of 2024[46]. - Total liabilities decreased to $11,238 million as of March 31, 2025, compared to $11,778 million at the end of 2024[46]. - Cash and cash equivalents at the end of Q1 2025 were $2,139 million, down from $2,408 million at the beginning of the period[47]. - Goodwill increased to $6,237 million as of March 31, 2025, up from $5,994 million at the end of 2024, indicating potential acquisitions or growth in value[46]. Future Outlook - Moody's updated its full year 2025 U.S. GDP growth forecast to 0.0% - 1.0%, down from the previous 1.5% - 2.5%[37]. - Moody's expects a decline in global MIS rated issuance in the low-single-digit to high single-digit percent range for 2025[37]. - The Company projects a revenue increase in the mid-single-digit percent range for full year 2025, down from the previously expected high-single-digit percent range[77]. - Adjusted Diluted EPS guidance for 2025 is now set at $13.25 to $14.00, revised from the previous guidance of $14.00 to $14.50[77]. - Operating cash flow guidance for 2025 is projected to be between $2.65 billion and $2.85 billion[79]. - The effective tax rate is expected to remain between 23% to 25% for 2025[77]. - Moody's Analytics (MA) ARR is anticipated to increase in the high-single-digit to low-double-digit percent range for 2025[77]. - The Company plans to allocate at least $1.3 billion for share repurchases, subject to market conditions and other capital allocation decisions[77].

Core Viewpoint - Moody's is expected to report first-quarter 2025 results on April 22, with mixed revenue growth anticipated across its divisions due to various market conditions and strategic efforts. Group 1: Revenue Estimates - The Corporate Finance line is projected to generate revenues of $532.3 million, indicating a marginal rise from the previous year's quarter [2] - The Financial Institutions business line is estimated to bring in $201.1 million, reflecting a 3.1% increase [3] - Public, Project, and Infrastructure Finance revenues are expected to be around $141.2 million, suggesting a slight increase [3] - Structured Finance revenues are anticipated to reach $116.8 million, indicating a 2.5% rise [4] - Overall revenues for the Moody's Investors Service division are estimated at $1.1 billion, implying a 7.3% year-over-year increase [5] Group 2: Moody's Analytics Division - Revenues from the Moody's Analytics division are expected to rise to $868.4 million, representing an 8.7% increase from the prior year [7] - The division's growth is supported by rising demand for analytics and strategic inorganic growth efforts [6] Group 3: Earnings Expectations - The consensus estimate for earnings is $3.57, reflecting a 5.9% increase from the year-ago figure [9] - Sales are projected to be $1.89 billion, suggesting a growth of 5.7% [9] - The likelihood of Moody's beating the earnings estimate is low, with an Earnings ESP of -0.38% and a Zacks Rank of 3 [8]

Core Viewpoint - Analysts forecast Moody's (MCO) will report quarterly earnings of $3.57 per share, reflecting a year-over-year increase of 5.9%, with revenues expected to reach $1.89 billion, up 5.7% from the previous year [1]. Earnings Estimates - Over the past 30 days, the consensus EPS estimate has been adjusted upward by 0.8%, indicating a reassessment by covering analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong relationship between earnings estimate revisions and short-term stock performance [3]. Revenue Projections - Analysts predict 'Revenue- Total external customers- Moody's Analytics' at $864.70 million, a year-over-year increase of 8.2% [5]. - 'Revenue- Total external customers- Moody's investor services' is expected to be $1.02 billion, reflecting a 3.5% increase year-over-year [5]. - 'Revenue- Moody's Analytics- Data and Information' is projected to reach $223.22 million, indicating a 5.3% year-over-year change [5]. - 'Revenue- Moody's investor services (MIS) - Intersegment revenue' is estimated at $49.20 million, showing a 4.7% increase from the prior year [6]. - 'Revenue- Moody's Analytics- Research and Insights' is expected to be $237.95 million, a 7.2% increase year-over-year [7]. - 'Revenue- Moody's investor services' is forecasted to reach $1.06 billion, reflecting a 7.3% year-over-year change [7]. - 'Revenue- Moody's Analytics- Decision Solutions' is projected at $404.32 million, indicating a 10.8% increase from the previous year [8]. - 'Revenue- Moody's investor services- Public, project and infrastructure finance' is expected to be $141.20 million, a slight increase of 0.1% year-over-year [9]. - The consensus estimate for 'Revenue- Moody's investor services- Structured finance' stands at $116.83 million, reflecting a 2.5% increase from the prior year [10]. Stock Performance - Moody's shares have decreased by 3.3% in the past month, compared to a 4.2% decline in the Zacks S&P 500 composite [10].

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Moody's, with a focus on how actual results compare to estimates, which could significantly impact stock price [1][2]. Earnings Expectations - Moody's is expected to report earnings of $3.57 per share, reflecting a +5.9% year-over-year change, with revenues projected at $1.89 billion, up 5.7% from the previous year [3]. - The earnings report is scheduled for April 22, 2025, and could lead to stock price movements depending on whether the results exceed or fall short of expectations [2]. Estimate Revisions - The consensus EPS estimate has been revised 0.84% higher in the last 30 days, indicating a collective reassessment by analysts [4]. - The Most Accurate Estimate for Moody's is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.38%, suggesting a bearish outlook from analysts [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict deviations from consensus estimates, with a positive ESP being a strong indicator of an earnings beat [6][8]. - Moody's current Zacks Rank is 2 (Buy), but the negative Earnings ESP complicates predictions of an earnings beat [11]. Historical Performance - Moody's has consistently beaten consensus EPS estimates in the last four quarters, with a recent surprise of +0.77% when it reported earnings of $2.62 per share against an expectation of $2.60 [12][13]. Industry Comparison - American Express, another player in the financial services sector, is expected to report earnings of $3.46 per share, a +3.9% year-over-year change, with revenues projected at $17 billion, up 7.6% [17]. - The consensus EPS estimate for American Express has been revised 0.2% lower, resulting in an Earnings ESP of -0.05%, making it difficult to predict an earnings beat [18].