Moody’s(MCO)2025-04-23 20:23Financial Performance - Revenue for Q1 2025 was $1,924 million, a 7.7% increase from $1,786 million in Q1 2024[15] - Operating income rose to $846 million, up 5.6% from $801 million year-over-year[15] - Net income attributable to Moody's increased to $625 million, compared to $577 million in the same period last year, reflecting an 8.3% growth[15] - Earnings per share (EPS) for basic shares was $3.47, up from $3.16, representing a 9.8% increase[15] - The company reported a total comprehensive income of $685 million for Q1 2025, compared to $536 million in Q1 2024, an increase of 27.8%[18] - Adjusted Operating Income for Q1 2025 was $994 million, up from $906 million in Q1 2024, representing a 9.7% increase[211] - Adjusted Operating Margin for Q1 2025 was 51.7%, compared to 50.7% in Q1 2024[211] - Operating Income for Q1 2025 was $846 million, an increase from $801 million in Q1 2024[211] - Diluted EPS increased by 10% to $3.46, compared to $3.15 in Q1 2024[126] Assets and Liabilities - Total assets decreased to $15,096 million from $15,505 million at the end of 2024, a decline of 2.6%[21] - Total liabilities decreased to $11,238 million from $11,778 million, a reduction of 4.6%[21] - As of March 31, 2024, Moody's total shareholders' equity was $3,735 million, an increase from $3,476 million at December 31, 2023, reflecting a growth of approximately 7.5%[26] - Total debt stood at $7,694 million as of March 31, 2025, with a carrying value of $7,428 million after accounting for discounts and issuance costs[90] - The estimated fair value of total debt increased to $6,823 million as of March 31, 2025, compared to $6,026 million at December 31, 2024[96] Cash Flow - Net cash provided by operating activities was $757 million, slightly down from $775 million in Q1 2024[23] - Cash and cash equivalents at the end of Q1 2025 were $2,139 million, down from $2,408 million at the end of 2024, a decrease of 11.2%[21] - Cash provided by investing activities increased by $320 million, primarily due to a $514 million increase in net sales and maturities of investments[193] - The company expects to have positive operating cash flow over the next twelve months[207] Revenue Segments - The company operates in two reportable segments: MA (Moody's Analytics) and MIS (Moody's Investors Service), focusing on integrated risk assessment and credit ratings respectively[32][34] - The MA segment generated total external revenue of $859 million, up 7.5% from $799 million in the prior year[42] - Corporate Finance (CFG) revenue within the MIS segment rose to $564 million, reflecting a 6.63% increase from $529 million in the same quarter last year[42] - Total ratings revenue reached $1,056 million, representing an 8% increase from $979 million in the prior year[42] - Total external revenue from the United States was $1,065 million, up from $969 million in 2024, while total non-U.S. revenue increased to $859 million from $817 million[112] Restructuring and Expenses - The company incurred restructuring charges of $33 million in Q1 2025, significantly higher than $5 million in Q1 2024[15] - The Strategic and Operational Efficiency Restructuring Program is expected to generate annualized savings of $250 million to $300 million, with a completion target by the end of 2026[77] - The restructuring program incurred total expenses of $33 million in Q1 2025, with cumulative expenses reaching $78 million[78] - Compensation expenses for the three months ended March 31, 2025, totaled $642 million, compared to $609 million in the same period of 2024[108] Tax and Dividends - The effective tax rate (ETR) for the three months ended March 31, 2025, was 22.3%, a decrease from 23.3% in the prior year, primarily due to increased excess tax benefits from stock-based compensation[53] - Moody's declared dividends of $0.85 per share in 2024, totaling $155 million, while in 2025, the dividend increased to $0.94 per share, totaling $171 million[29] Share Repurchase and Stock Options - The company has approximately $1.2 billion remaining under the $1.5 billion share repurchase authority approved on October 15, 2024[205] - The company granted 0.1 million employee stock options with a weighted average grant date fair value of $163.59 per share during the first quarter of 2025[50] Other Financial Metrics - The company recognized a net increase of $7 million in its unrecognized tax position (UTP) reserves during the first quarter of 2025[54] - The amortization expense for acquired intangible assets was $53 million for Q1 2025, compared to $49 million in Q1 2024[76] - The company reported a net customer relationships value of $1,475 million as of March 31, 2025, an increase from $1,404 million at the end of 2024[76]