Moody’s(US:MCO)2025-04-22 10:57Financial 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].