Moody’s(MCO) - 2024 Q4 - Annual Results

Financial Performance - Moody's Corporation reported Q4 2024 revenue of $1.7 billion, a 13% increase year-over-year, and full year revenue of$ 7.1 billion, up 20%[1]. - Moody's Investors Service (MIS) revenue grew 18% in Q4 2024, with transactional revenue increasing by 29%, and full year revenue up 33%[16]. - Moody's Analytics (MA) revenue increased 8% in Q4 2024, driven by 11% growth in Decision Solutions, with full year revenue growth of 8%[12]. - The company achieved a diluted EPS of $2.17 in Q4 2024, a 17% increase, and a full year diluted EPS of$ 11.26, up 29%[28]. - Revenue for Q4 2024 was $1,672 million, a 13% increase from$ 1,480 million in Q4 2023[42]. - The company reported a total revenue of $7,088 million for the year ended December 31, 2024, compared to$ 5,916 million in 2023, marking a 20% increase[54]. - Adjusted Operating Income for 2024 was $3,408 million, up from$ 2,597 million in 2023, reflecting a 31% increase[65]. - Free Cash Flow for 2024 was $2,521 million, compared to$ 1,880 million in 2023, indicating a 34% growth[68]. Revenue Segments - The MA segment's total external revenue for Q4 2024 was $863 million, a 8% increase from$ 796 million in Q4 2023[58]. - The MIS segment generated $809 million in total revenue for Q4 2024, up from$ 684 million in Q4 2023, representing an 18% increase[58]. - Decision Solutions revenue increased by 10% to $1,516 million in 2024 from$ 1,383 million in 2023[70]. - Corporate Finance revenue surged by 39% to $1,950 million in 2024, up from$ 1,404 million in 2023[70]. - Total Decision Solutions revenue for 2024 was $1,516 million, with recurring revenue contributing 91%[60]. Future Projections - Moody's projects 2025 revenue growth in the high-single-digit percent range and Adjusted Diluted EPS between$ 14.00 and $14.50, reflecting a growth rate in the low-to-mid-teens[3]. - Moody's expects global GDP growth of 2.0% to 3.0% in 2025, with U.S. GDP growth projected at 1.5% to 2.5%[35]. - Moody's Corporation expects revenue growth in the high-single-digit percent range for 2025[84]. - The company projects an operating margin of approximately 43% and an adjusted operating margin of approximately 50% for 2025[84]. - Moody's Analytics (MA) revenue is expected to increase in the high-single-digit percent range for 2025[84]. - Moody's Investors Service (MIS) revenue is anticipated to grow in the mid-to-high-single-digit percent range for 2025[84]. - Operating cash flow guidance for 2025 is set between$ 2.75 billion and $2.95 billion[85]. - Free cash flow guidance for 2025 is projected to be between$ 2.40 billion and $2.60 billion[85]. Operating Metrics - Operating expenses for 2024 increased by 11%, with projections for 2025 to rise in the low-to-mid-single-digit percent range[20]. - Moody's operating margin was 33.6% in Q4 2024, with an adjusted operating margin of 43.8%, reflecting a 120 basis point improvement year-over-year[25]. - Adjusted Operating Income for Q4 2024 was$ 733 million, up from $631 million in Q4 2023, reflecting a margin of 43.8%[54]. - The Adjusted Operating Margin improved to 48.1% in 2024, compared to 43.9% in 2023[65]. Cash and Assets - Cash and cash equivalents at the end of Q4 2024 were$ 2,408 million, an increase from $2,130 million at the end of Q4 2023[46]. - Total assets increased to$ 15,505 million in 2024, up from $14,622 million in 2023[43]. - Total liabilities rose to$ 11,778 million in 2024, compared to $11,146 million in 2023[43]. - The company reported net cash provided by operating activities of$ 2,838 million for the year, an increase from $2,151 million in 2023[46]. - Capital additions for 2024 were$ 317 million, compared to $271 million in 2023[46]. - The company issued$ 496 million in notes during the financing activities of 2024[46]. - Moody's Corporation's net cash used in financing activities was $1,446 million in 2024, down from$ 1,584 million in 2023[68]. Dividends and Income - The company declared a quarterly dividend of $0.94 per share, an 11% increase from the previous dividend of$ 0.85[32]. - Interest income increased to $29 million in Q4 2024 from$ 19 million in Q4 2023, while interest expense decreased to $52 million from$ 66 million[49]. - The company reported a net periodic pension income of $5 million in Q4 2024, compared to$ 9 million in Q4 2023[49]. - Total non-operating income for the year ended December 31, 2024 was $61 million, an increase from$ 49 million in 2023[49]. - Adjusted Net Income for 2024 was $476 million, compared to$ 402 million in 2023, reflecting a growth of 18%[79]. - Adjusted Diluted EPS for 2024 was $2.62, up from$ 2.19 in 2023, marking an increase of 20%[80]. Strategic Focus - Moody's plans to continue focusing on new product development and global expansion to enhance competitive positioning[40]. - Recurring revenue in the Decision Solutions segment accounted for 91% of total revenue in Q4 2024, indicating strong subscription-based growth[58]. - The company incurred $43 million in charges related to asset abandonment during the year, primarily due to outsourcing production of sustainability content[54].