Core Insights - Moody's has acquired Numerated Growth Technologies to enhance its Lending Suite, providing a comprehensive loan origination and monitoring solution for banking clients [1][4] - Numerated's platform has facilitated over $65 billion in lending for more than 500,000 businesses, supported by financial institutions with a total of $3 trillion in assets [2] - The acquisition builds on a partnership initiated in January 2024, integrating Numerated's technology with Moody's credit assessment expertise [3] Company Strategy - The acquisition aligns with Moody's strategy to deliver advanced risk management tools and insights, reinforcing its leadership in financial analytics [4] - Moody's is focusing on expanding its presence in the banking and insurance sectors while diversifying into professional services and enterprise risk solutions [6] - The company has been actively expanding through acquisitions, including the recent acquisition of Praedicat to enhance insurance solutions [5] Market Performance - Moody's shares have increased by 22.4% this year, outperforming the industry's growth of 16.7% [7]

Core Viewpoint - Moody's reported strong Q3 2024 earnings, driven by robust bond issuance and analytics demand, leading to upward revisions in future earnings guidance [2][9][21]. Financial Performance - Adjusted earnings for Q3 2024 were $3.21 per share, exceeding the Zacks Consensus Estimate of $2.89, and reflecting a 32% increase year-over-year [2][3]. - Quarterly revenues reached $1.81 billion, surpassing the Zacks Consensus Estimate of $1.73 billion, and increased by 23% compared to the previous year [4]. - Total expenses rose to $1.08 billion, a 15% increase year-over-year, while adjusted operating income soared 32% to $867 million, resulting in an adjusted operating margin of 47.8%, up from 44.6% a year ago [5]. Segment Performance - Moody's Investors Service revenues surged 41% year-over-year to $982 million, driven by strong Corporate Finance and Structured Finance performance [6]. - Moody's Analytics revenues increased by 7% to $831 million, supported by demand for proprietary data and analytical insights [6]. Balance Sheet Strength - As of September 30, 2024, Moody's had total cash and short-term investments of $3.22 billion, up from $2.19 billion at the end of 2023 [7]. - The company reported $6.88 billion in outstanding debt and $1.25 billion in additional borrowing capacity [7]. Share Repurchase and Guidance - During the quarter, Moody's repurchased 0.9 million shares at an average price of $464.77 [8]. - For 2024, adjusted earnings guidance was raised to $11.90-$12.10 per share, up from the previous range of $11.00-$11.40 [9]. - Revenue growth is now projected in the high-teens percent range, an increase from the prior low-teens percent target [10]. Future Outlook - Operating expenses are expected to rise approximately 10%, with net interest expenses estimated at nearly $245 million [11]. - The company anticipates cash flow from operations of around $2.7 billion and free cash flow of nearly $2.3 billion [12]. - Moody's plans to repurchase shares worth almost $1.3 billion [13]. - The effective tax rate is projected to be between 23-24% [14]. Segment Outlook for 2024 - The MIS segment is expected to see revenue growth in the high-20s percent range, an increase from the previous high-teens percent projection [15]. - The adjusted operating margin for this segment is anticipated to be between 59-60% [16]. - The MA segment is expected to grow revenues in the high-single-digit percentage range, with an adjusted operating margin of 30-31% [18].

Revenue Growth - Revenue for the three months ended September 30, 2024, was $1,813 million, a 23.2% increase from $1,472 million in the same period of 2023[17] - Total external revenue for the three months ended September 30, 2024, was $982 million, a 41% increase from $696 million in the same period of 2023[46] - Total revenue for Moody's Corporation in Q3 2024 reached $1,813 million, a 39% increase compared to $1,472 million in Q3 2023[50] - Total revenue for the nine months ended September 30, 2024, reached $3,128 million, a 35% increase compared to $2,314 million in the same period of 2023[193] - Moody's total revenue for the nine months ended September 30, 2024, was $5,416 million, representing a 22% increase from $4,436 million in 2023[58] Income and Earnings - Net income attributable to Moody's for the three months ended September 30, 2024, was $534 million, compared to $389 million in the same period of 2023, representing a 37.4% increase[17] - Basic earnings per share for the three months ended September 30, 2024, was $2.94, an increase from $2.12 in the same period of 2023[17] - Net income for the nine months ended September 30, 2024, was $1,664 million, an increase from $1,268 million in the same period of 2023, representing a growth of approximately 31%[25] - The diluted EPS attributable to Moody's common shareholders increased by 39% to $2.93, while adjusted diluted EPS rose by 32% to $3.21[138] Operating Performance - Operating income for the three months ended September 30, 2024, was $738 million, up 37.9% from $535 million in the same period of 2023[17] - Adjusted Operating Income for 2024 was $867 million, compared to $657 million in 2023, reflecting a 32% growth[121] - Operating margin improved to 40.7%, up 440 basis points from 36.3% in the prior year, reflecting strong revenue growth[137] - Adjusted operating margin improved to 62.5%, up from 55.3% in the previous year[193] Expenses and Costs - Total expenses for the three months ended September 30, 2024, were $1,075 million, compared to $937 million in the same period of 2023, reflecting a 14.7% increase[17] - Total operating and SG&A expenses rose to $946 million, a 16% increase from $815 million, primarily due to higher compensation costs[137] - Total operating and SG&A expenses for MA increased by 9% to $1,721 million, with compensation expenses rising by $102 million[189] Assets and Liabilities - Total current assets increased to $5,393 million as of September 30, 2024, compared to $4,341 million at December 31, 2023, reflecting a growth of about 24%[23] - Total liabilities increased to $11,701 million as of September 30, 2024, compared to $11,146 million at December 31, 2023, marking an increase of about 5%[23] - Total shareholders' equity increased to $4,068 million as of September 30, 2024, up from $3,476 million at December 31, 2023, representing a growth of about 17%[23] Cash Flow and Investments - The company reported net cash provided by operating activities of $2,164 million for the nine months ended September 30, 2024, compared to $1,674 million for the same period in 2023, a growth of approximately 29%[25] - Cash and cash equivalents at the end of the period were $2,642 million, up from $2,006 million at the end of the previous year, indicating a rise of approximately 32%[25] - The company has invested in COLI with a contract value of $49 million as of September 30, 2024, up from $47 million as of December 31, 2023[65] Segment Performance - Decision Solutions (DS) revenue reached $383 million, up from $354 million year-over-year, with a notable increase in KYC revenue from $80 million to $95 million[45] - Corporate Finance (CFG) revenue surged to $515 million, compared to $346 million in the prior year, driven by a significant rise in investment-grade revenue from $63 million to $149 million[45] - Moody's Analytics (MA) external revenue increased by 7% to $831 million, driven by sustained demand for KYC and insurance offerings[137] Tax and Compliance - The effective tax rate (ETR) for the nine months ended September 30, 2024, was 23.5%, an increase from 14.6% in the same period of 2023, primarily due to prior year tax benefits not recurring[62] - The company is subject to ongoing tax audits and legal proceedings, which may impact its financial position and operations[117] Strategic Initiatives - The company acquired a controlling financial interest in GCR in July 2024, expanding its market presence in Africa[10] - Moody's acquired a controlling financial interest in Praedicat in September 2024, enhancing its analytics capabilities in casualty insurance[12] - The restructuring program is expected to generate annualized savings of $145 million to $165 million, with cumulative expenses incurred amounting to $213 million[87]

Core Insights - The article emphasizes the importance of independent analysis and the need for investors to consult registered financial advisors before making investment decisions [1][2] Group 1 - The content does not provide specific company or industry insights, focusing instead on the nature of the analysis and the independence of the authors [1][2]

Financial Data and Key Metrics Changes - Moody's reported a 23% increase in revenue for Q3 2024, reaching $1.8 billion, with adjusted operating margin at approximately 48% and adjusted diluted EPS growth of 32% [5][18] - The ratings business experienced a remarkable 41% increase in revenue compared to the prior year, driven by strong issuance activity [5][6] - Free cash flow conversion rate exceeded 100% of net income, indicating strong cash generation [18] Business Line Data and Key Metrics Changes - Moody's Analytics (MA) achieved 7% overall revenue growth, with 9% growth in annual recurring revenue (ARR) [6][19] - Decision Solutions, which includes banking, insurance, and KYC, reported 12% ARR growth, contributing significantly to MA's performance [6][20] - The ratings segment saw transactional revenue growth of 70%, significantly outpacing global rated issuance growth of 51% [5][18] Market Data and Key Metrics Changes - The issuance environment in September set a new record with over $85 billion issued across 61 deals in the first week [5] - Spec-grade refi walls exceeded $2 trillion, up 19% from the previous study, indicating strong future issuance potential [9] - The upcoming four-year maturity walls are projected to grow by 11%, amounting to nearly $5 trillion, which is a record high [8][9] Company Strategy and Development Direction - Moody's is focusing on expanding its footprint in emerging and domestic debt markets, particularly in Asia, Africa, and Latin America [13] - The company is investing in sustainable finance and transition finance, anticipating a rise in global clean energy investments to around $4.5 trillion annually by 2030 [12] - The integration of RMS into Moody's Insurance Solutions is expected to enhance service offerings and market position in the insurance sector [15][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durable drivers of growth for the ratings business, citing both cyclical and structural trends [8][10] - The outlook for issuance remains positive, supported by declining spec-grade default rates and expectations of lower interest rates [34][35] - Management acknowledged potential headwinds from macroeconomic factors and geopolitical events but remains optimistic about the overall issuance environment [34][35] Other Important Information - The company raised its guidance for MIS revenue growth to the high 20s percentage range and adjusted operating margin to 59% to 60% [24][25] - The incentive compensation accruals for Q3 were approximately $150 million, reflecting a 54% increase year-over-year [65] Q&A Session Summary Question: Data and information ARR slowdown - Management indicated that the slowdown was due to lower renewal values from federal government contracts and customer transitions to MSCI [27][28] Question: Near and midterm issuance tailwinds - Management believes that the balance of tailwinds to headwinds for issuance in 2025 is likely favorable, with several supportive factors in place [32][34] Question: Debt velocity - Debt velocity has been improving, with current levels still below historical averages, indicating potential for future issuance growth [37] Question: Research and insights ARR growth - Management noted that ARR growth in research and insights was impacted by stress in the banking sector, but they expect a strong pipeline moving forward [40][41] Question: Moody's Analytics medium-term targets - Management plans to update medium-term targets in February, focusing on expanding relationships with banks and insurers [54][56] Question: Pull forward impact on issuance growth - Management noted that while there has been a pull forward in spec-grade issuance, overall maturity levels remain favorable for future growth [58][61] Question: Ratings outlook and revenue growth - Management expects a decline in fourth-quarter issuance compared to the prior year due to intra-year pull forward but has lifted the outlook for Q4 issuance [67]

Third Quarter 2024 Earnings Call Chartis RiskTech100 2025 #J October 22, 2024 Introduction Shivani Kak HEAD OF INVESTOR RELATIONS Third Quarter 2024 - Earnings Call 2 Disclaimer Certain statements contained in this document are forward-looking statements and are based on future expectations, plans and prospects for Moody's business and operations that involve a number of risks and uncertainties. Such statements involve estimates, projections, goals, forecasts, assumptions and uncertainties that could cause ...

Core Insights - Moody's reported revenue of $1.81 billion for the quarter ended September 2024, reflecting a 23.2% increase year-over-year [1] - Earnings per share (EPS) reached $3.21, up from $2.43 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $1.73 billion by 4.72%, while the EPS surpassed the consensus estimate of $2.89 by 11.07% [1] Revenue Performance - Moody's Analytics revenue from total external customers was $831 million, slightly below the average estimate of $837.22 million, marking a 7.1% year-over-year increase [1] - Moody's Investor Services revenue from total external customers was $982 million, exceeding the average estimate of $895.29 million, representing a significant 41.1% year-over-year increase [1] - Revenue from Moody's Analytics - Decision Solutions was $383 million, close to the estimate of $386.65 million, with an 8.2% year-over-year increase [1] - Revenue from Moody's Analytics - Data and Information was $213 million, slightly below the estimate of $218.05 million, showing a 6.5% year-over-year increase [1] - Revenue from Moody's Analytics - Research and Insights was $235 million, slightly above the estimate of $233.32 million, with a 5.9% year-over-year increase [1] - Corporate finance revenue from Moody's Investor Services was $515 million, significantly above the estimate of $448.26 million, reflecting a 48.8% year-over-year increase [1] - Structured finance revenue from Moody's Investor Services was $135 million, exceeding the estimate of $120.95 million, with a 32.4% year-over-year increase [1] - Public, project, and infrastructure finance revenue from Moody's Investor Services was $154 million, above the estimate of $144.24 million, representing a 33.9% year-over-year increase [1] Stock Performance - Moody's shares have returned +1.7% over the past month, compared to the Zacks S&P 500 composite's +2.8% change [2] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance against the broader market in the near term [2]

Moody's (MCO) reported third-quarter 2024 adjusted earnings of $3.21 per share, which handily outpaced the Zacks Consensus Estimate of $2.89. The bottom line surged 32% from the year-ago quarter figure.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Robust global bond issuance volumes and steady demand for analytics supported Moody’s results. The company’s liquidity position was robust during the quarter. However, an increase in operating expenses posed a headwind.After considering ...

Moody's (MCO) came out with quarterly earnings of $3.21 per share, beating the Zacks Consensus Estimate of $2.89 per share. This compares to earnings of $2.43 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 11.07%. A quarter ago, it was expected that this credit ratings agency would post earnings of $3.06 per share when it actually produced earnings of $3.28, delivering a surprise of 7.19%.Over the last four quarters, the comp ...

MOODY'S CORPORATION REPORTS RESULTS FOR THIRD QUARTER 2024 NEW YORK, NY - October 22, 2024 - Moody's Corporation (NYSE: MCO) today announced results for the third quarter of 2024, and updated its outlook for full year 2024. | --- | --- | --- | |---------------------------------------|-----------------------------------------------------------------------|-----------------------------------------------| | Moody's Corporation (MCO) Revenue | THIRD QUARTER SUMMARY FINANCIALS \nMoody's Analytics (MA) Revenue | ...