Moody’s (NYSE:MCO) Q4 2025 Earnings call February 18, 2026 09:00 AM ET Speaker6Good day, everyone, and welcome to the Moody's Corporation Fourth Quarter and Full Year 2025 earnings call. At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the company, we will open the conference up for question and answers following the presentation. The call is scheduled to last approximately one hour. I will now turn the cal ...

Company Overview - Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) is a biotechnology company founded in 2013 and headquartered in San Diego, California, focusing on RNA medicines for rare and infectious diseases, utilizing a differentiated RNA technology platform to target large market opportunities [4] Recent Developments - Citi has lowered its price target on Arcturus from $9 to $7 while maintaining a Neutral rating, indicating a selective approach towards SMID-cap biotech as it heads into 2026, with a focus on upcoming clinical and regulatory catalysts [1] - Arcturus has initiated a first-in-human Phase 1 study for ARCT-2304, a self-amplifying mRNA-based pandemic influenza vaccine, which is seen as a significant early inflection point for the company [3] - Positive safety and immunogenicity data from the Phase 1 study could enhance Arcturus' strategic positioning, potentially leading to future partnerships, grant funding, or non-dilutive capital [3] Market Sentiment - Until clinical results are disclosed, Arcturus shares are expected to remain range-bound, with market sentiment influenced by expectations regarding data timing and management commentary [3]

Core Viewpoint - Nvidia reported strong Q3 FY2026 earnings, exceeding market expectations with revenue of $57.01 billion, a 3.48% increase over forecasts, and adjusted EPS of $1.30, surpassing analyst estimates by 3.46% [1][2] Financial Performance - Revenue grew by 26% year-over-year, primarily driven by the data center segment, which contributed $51.2 billion, reflecting a 66% increase [2] - Gross profit increased by 60% to $41.8 billion, although gross margin decreased by 1.2 percentage points to 73.4% due to a shift from selling individual chips to complete systems [2] - Operating income rose by 65% to $36 billion, with net income also increasing by 65% to $31.9 billion, translating to basic EPS of $1.31 [3] - Cash and cash equivalents grew by 40% to $60.6 billion, with total assets at $161.1 billion and total liabilities at $42.3 billion, indicating a healthy balance sheet [3] - Operating cash flow increased by 40% to $66.5 billion, while free cash flow rose by 36% to $61.7 billion, showing improved efficiency in converting sales to cash [3] Future Guidance - Management expects Q4 revenue to be around $65 billion, indicating continued strong momentum, with gross margin projected at approximately 74.8% [3] Valuation Metrics - Nvidia's current trading price is around $188 per share, with a 10% increase over the past six months and a 42% return over the past year [7] - The expected P/E ratio (GAAP) is approximately 40, which is about 26% higher than the industry average, while the expected price-to-book ratio is 29, significantly above the sector median [9] - Analysts believe that Nvidia's dominant position in the AI market justifies its premium valuation, as it reportedly holds 90% of the AI market [9][10] Growth Drivers - The reopening of the Chinese market is expected to drive growth, with over 2 million orders for H200 chips, each priced at approximately $27,000, potentially adding a full quarter's profit if successful [11] - The upcoming launch of the Rubin platform in H2 2026 is anticipated to significantly reduce the cost of running AI models, potentially leading to a substantial market expansion [12][13] - Analysts project that if Rubin captures 60% to 70% of the high-performance chip market by 2028, it could generate $150 to $200 billion in gross profit, translating to $120 to $160 billion in net profit [13] Competitive Position - Nvidia's CUDA software platform has become the industry standard, creating high switching costs for customers, which enhances its competitive moat [9][10] - Each new generation of Nvidia's chips shows exponential performance growth, reducing the attractiveness of older models and driving a cycle of upgrades [10] Conclusion - Despite geopolitical risks and concerns about an AI bubble, analysts maintain a positive outlook on Nvidia, viewing it as a leader in a potentially transformative technology for the next decade [16]

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **US Economics** sector, focusing on the **3Q GDP** performance and its components, particularly the impact of **AI spending** and trade dynamics on economic growth. Core Insights and Arguments - **Real GDP Growth**: The real GDP rose by **4.3% quarter-over-quarter annualized rate** in 3Q, surpassing both the internal estimate of **3.0%** and the consensus estimate of **3.3%** [1][21] - **Consumption Contribution**: Consumption increased by **3.5%**, contributing approximately one-third of the GDP upside, with goods spending up **3.1%** and services spending up **3.7%** [1][5] - **Net Exports**: Net exports contributed **1.6 percentage points** to GDP growth, with exports rising by **8.8%** and imports falling by **4.7%** [1][4] - **AI Spending**: AI-related expenditures accounted for nearly all the increase in capital expenditures, contributing **0.2 percentage points** to real GDP growth, although this was offset by imports of AI-related capital goods [1][8] - **Inflation Metrics**: Core PCE prices rose by **2.9%**, aligning with expectations, while headline PCE was at **2.8%** [1][4][7] Additional Important Insights - **Personal Income Trends**: Real disposable personal income saw a minimal increase of **0.05%**, indicating a slowdown compared to the first half of the year, with the saving rate dropping from **5.0%** in 2Q to **4.2%** in 3Q [1][6] - **Software Spending Fluctuations**: The contribution of software spending to GDP growth was affected by significant price swings, with real spending reported at **19%** in 1Q, **27%** in 2Q, and only **3%** in 3Q [1][9] - **Residential Investment Decline**: Real residential investment fell by **5.1%** in 3Q, marking the third consecutive quarter of decline [1][19] - **Trade Dynamics**: The trade sector showed strength, particularly in exports of aircraft, computers, and business services, which surged significantly [1][20] Conclusion - The conference call highlighted a robust economic performance in 3Q driven by strong consumption and trade, while also noting the complexities introduced by AI spending and inflation dynamics. The data suggests potential challenges ahead, particularly in personal income growth and residential investment trends.

Financial Data and Key Metrics Changes - The company reported net earnings of CAD 8.5 billion and earnings per share of CAD 8.61, representing increases of 17% and 16% respectively from the prior year [11] - Record revenues of CAD 29 billion were up 14%, driven by double-digit revenue growth across each business line [11] - The return on equity (ROE) was 14.4%, up 70 basis points from the prior year [12] Business Line Data and Key Metrics Changes - In Canadian Personal and Business Banking, adjusted net income was stable year-over-year, with revenues up 12% due to margin expansion and favorable business mix [33] - Canadian Commercial Banking and Wealth Management saw net income and pre-provision pretax earnings increase by 9% and 13% respectively, with revenues up 15% driven by higher average fee-based assets [35] - U.S. Commercial Banking and Wealth Management net income increased by 35% year-over-year, with revenues up 9% due to deposit growth and wider deposit margins [36] - Capital Markets segment net income was up 58% year-over-year, with revenues increasing by 32% across various businesses [37] Market Data and Key Metrics Changes - Cross-business referrals in the U.S. commercial and wealth franchise increased by 23% from the prior year [17] - The U.S. Capital Markets revenue and net income were up 39% and 50% respectively from the prior year, indicating strong growth in this market [17] Company Strategy and Development Direction - The company aims to grow its mass affluent and private wealth franchise, leveraging its Imperial Service platform and strategic partnerships [13] - A focus on digital-first personal banking is emphasized, with recognition for leadership in digital banking and the launch of a new digital platform for the U.S. market [15] - The strategy includes leveraging a connected platform to deepen client relationships and expand the U.S. franchise [16] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in the bank's ability to navigate uncertainties in the operating environment, including ongoing trade negotiations [20] - The outlook for fiscal 2026 anticipates moderate economic growth supported by stimulative monetary policy [21] - Management remains committed to delivering sustainable relative outperformance and profitable growth over the long term [22] Other Important Information - The company returned over CAD 5 billion to shareholders through dividends and share repurchases, reinforcing confidence in long-term value delivery [25] - The CET1 ratio at the end of the quarter was 13.3%, indicating a stable capital position [31] Q&A Session Summary Question: ROE Improvement and Strategy - Analysts inquired about the potential for commercial banking to achieve a best-in-class ROE and the structural disadvantages the bank may face [54] - Management responded that the strategy is positioned to deliver profitable growth and premium ROE, with a focus on deepening client relationships and leveraging technology [56][59] Question: NIM Improvements - Analysts asked for a breakdown of NIM improvements based on product and deposit mix [66] - Management indicated that the tractoring strategy has been a persistent tailwind, with expectations for continued benefits in both personal and business banking [67][70] Question: Expense Growth and Operating Leverage - Questions were raised regarding expected operating leverage across segments and technology spending [78] - Management acknowledged that while some segments may face challenges, the overall goal is to achieve positive operating leverage at the all-bank level [81][82] Question: Capital Deployment Strategy - Analysts sought clarity on capital deployment strategies, including M&A appetite [112] - Management reiterated a focus on organic growth, dividends, buybacks, and opportunistic tuck-in acquisitions to enhance ROE [120][122]

Financial Data and Key Metrics Changes - The company reported net earnings of CAD 8.5 billion and earnings per share of CAD 8.61, representing increases of 17% and 16% respectively from the prior year [6] - Record revenues of CAD 29 billion were up 14%, driven by double-digit revenue growth across each business line [6] - The return on equity (ROE) was 14.4%, an increase of 70 basis points from the prior year [7] Business Line Data and Key Metrics Changes - Canadian Personal and Business Banking adjusted net income was stable year-over-year, with revenues up 12% due to margin expansion and favorable business mix [18] - Canadian Commercial Banking and Wealth Management saw net income and pre-provision pretax earnings increase by 9% and 13% respectively, with revenues up 15% [19] - U.S. Commercial Banking and Wealth Management net income increased by 35% year-over-year, with revenues up 9% [20] - Capital Markets segment net income was up 58% year-over-year, with revenues increasing by 32% [21] Market Data and Key Metrics Changes - Cross-business referrals in the U.S. commercial and wealth franchise increased by 23% from the prior year [10] - The U.S. capital markets revenue and net income were up 39% and 50% respectively from the prior year, indicating strong growth in this market [10] Company Strategy and Development Direction - The company aims to grow its mass affluent and private wealth franchise, focusing on client relationships and capital-light, fee-based revenue [8] - A digital-first personal banking strategy is being emphasized, with recognition for leadership in digital banking [9] - The company is leveraging its connected platform to deepen client relationships and expand its U.S. franchise [9] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in the company's ability to navigate uncertainties in the operating environment, including trade negotiations and economic growth expectations for 2026 [11] - The outlook assumes that trade deals will extend, supporting moderate economic growth across geographies [11] Other Important Information - The company announced a 10% increase in its quarterly dividend to common shareholders, reflecting confidence in its earnings power [6] - Total provisions for credit losses were up 44% year-over-year, largely due to higher performing provisions [15] Q&A Session Summary Question: Discussion on ROE and competitive positioning - Management emphasized that the strategy is designed to deliver profitable growth and a premium ROE, targeting the right client segments and leveraging technology [34][36] Question: NIM improvements breakdown - Management indicated that the NIM improvements are driven by product mix and pricing discipline, with expectations for continued execution on strategy [39][42] Question: Expense growth and operating leverage - Management acknowledged elevated expenses but expects to normalize expense growth in line with revenue growth, targeting positive operating leverage across all businesses [45][57] Question: Capital deployment strategy and M&A appetite - Management reiterated a four-pronged approach to capital deployment, focusing on organic growth, dividends, buybacks, and opportunistic tuck-in acquisitions [74]

Financial Data and Key Metrics Changes - Q1 fiscal year 2026 revenue was $5 billion, down 15% year-over-year and down 13% quarter-over-quarter, compared to guidance of $6 billion-$7 billion [15] - Non-GAAP gross margin for Q1 was 9.5% versus 9.6% in Q4 [17] - GAAP diluted EPS was $0.26 compared to guidance of $0.30-$0.42, and non-GAAP diluted EPS was $0.35 versus guidance of $0.40-$0.52 [18] - Cash flow used in operations for Q1 was $918 million compared to cash flow generated from operations of $864 million in the prior quarter [18] - Q1 closing inventory was $5.7 billion, up from $4.7 billion in Q4 [18] Business Line Data and Key Metrics Changes - AI GPU platforms represented over 75% of Q1 revenues, continuing to be the key growth driver [15] - Enterprise channel revenues totaled $1.5 billion, representing 31% of revenues, down from 36% in the prior quarter [15] - OEM appliance and large data center segment revenues were $3.4 billion, representing 68% of Q1 revenues, up from 63% in the last quarter [16] Market Data and Key Metrics Changes - By geography, the U.S. represented 37% of Q1 revenues, Asia 46%, Europe 14%, and the rest of the world 3% [16] - Year-over-year, U.S. revenues decreased 57%, while Asia grew 143% [16] - Asia's growth was attributed to a U.S.-based customer opening a large data center in Asia [16] Company Strategy and Development Direction - The company is focused on leading the AI growth trend with innovative solutions, including the DCBBS [7] - The DCBBS is critical for future success, enabling rapid planning, design, and deployment of AI-ready data centers [9] - The company is executing an aggressive global expansion, with new production facilities in Taiwan, the Netherlands, Malaysia, and soon the Middle East [11] - The long-term goal is to expand revenues in higher margin segments such as data center building block solutions and software service offerings [21] Management's Comments on Operating Environment and Future Outlook - Management expects to ship at least $10.5 billion in the December quarter, with a full-year revenue outlook raised to at least $36 billion [14][22] - The company anticipates a sequential growth through fiscal 2026, driven by strong demand for AI infrastructure [14] - Management acknowledged the challenges of ramping production and the complexities of new GPU racks impacting revenue timing [8][15] Other Important Information - The company executed a $1.8 billion AR facility to strengthen working capital [19] - The Q1 cash conversion cycle was 123 days, up from 96 days in Q4 [19] - Capital expenditures for Q1 totaled $32 million, resulting in negative free cash flow of $950 million for the quarter [18] Q&A Session Summary Question: What is driving the increased revenue guidance? - Management indicated that the availability of NVIDIA Blackwell Ultra chipsets is a key driver for increased revenue guidance, alongside market share expansion [26] Question: When will DCBBS impact gross margins? - DCBBS has received positive feedback, and management expects it to ramp up quickly, contributing to higher profit margins in the future [28] Question: What components contribute to the strong order outlook? - The strong order outlook is driven by GPU products like Blackwell Ultra and AMD MI350, along with a focus on providing end-to-end data center solutions [32] Question: Is there conservatism in the revenue guidance? - Management confirmed that the revenue guidance is conservative, with expectations for continued growth as capacity and technology mature [42] Question: How is the company managing working capital? - The company has implemented an accounts receivable sale program to enhance working capital flexibility, especially as revenues double [56] Question: What is the status of the Malaysia plant? - The Malaysia plant is starting to ramp up production and is expected to contribute significantly going forward [51] Question: How does the company plan to improve margins? - Management is focused on leveraging additional business, expanding manufacturing in various geographies, and enhancing DCBBS strategies to improve margins [75]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $133.3 million, representing a 7.6% increase from Q2 and a 4.9% increase year-over-year, marking the highest revenue in five quarters [6][11][12] - Q4 revenue guidance is set at $143 million at the midpoint, indicating a 22% year-on-year growth, the largest increase in nearly two years [7][16] - Gross margin expanded by 20 basis points quarter-over-quarter and 50 basis points year-over-year to 69.5% on a non-GAAP basis [11][12] - Non-GAAP EPS for Q3 was $0.28, reflecting a 17% growth both year-over-year and quarter-over-quarter [12][13] Business Line Data and Key Metrics Changes - Communications and computing revenue grew 21% year-over-year and 8% sequentially, driven by increased use cases in general-purpose and AI-optimized servers [7][11] - The industrial and automotive segment saw a 6% sequential increase, with growth tempered by strategic shipping to normalize channel inventory [7][8] Market Data and Key Metrics Changes - The communications and computing segment is expected to account for over 55% of total revenue in 2025, growing to about 60% in 2026 [21] - The company is experiencing strong growth in the China automotive market, while aerospace and defense applications are also performing well globally [24] Company Strategy and Development Direction - The company is focused on capitalizing on investments in AI and data center infrastructure, with a robust innovation pipeline and increasing design wins [5][6] - The strategy includes normalizing channel inventory by year-end 2025, positioning for renewed growth into 2026 [8][15] - The company aims to deliver above-average revenue growth, supported by expanding addressable markets and increasing average selling prices from new products [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory, citing strong bookings and a favorable outlook for 2026 driven by the communications and computing segment [6][21] - The company noted that macroeconomic conditions could impact growth, but several factors are fueling confidence, including increased infrastructure capital expenditures [8][9] Other Important Information - The company remains debt-free and has repurchased approximately $15 million of common stock during the quarter, with a total of $86 million repurchased in the first nine months of 2025 [15] - The company expects to continue generating strong free cash flow while strategically investing in capital expenditures [13][15] Q&A Session Summary Question: Is the increased confidence in the outlook for 2026 contingent on the expected normalization in industrial and auto channel inventory? - Management indicated that the growth in communications and computing is expected to accelerate further into 2026, independent of industrial and automotive inventory normalization [21][23] Question: Can you discuss regional performance in the industrial and automotive segment? - Management noted strong performance in the China automotive market and increasing design wins in aerospace and defense globally [24] Question: What has changed in the last 90 days to increase confidence? - A successful Open Compute Summit led to increased activity and spending, with forecasts for hyperscalers being raised [28][29] Question: How is the Avant platform performing? - Both Nexus and Avant platforms are performing well, with expectations for significant growth in 2026 and 2027 [32][43] Question: What is the current view on the automotive market? - Management is seeing inventories come down and is optimistic about the automotive market's recovery [112]

Core Viewpoint - Alibaba Cloud is reducing prices for its Elastic Compute Service (ECS) products in overseas markets, with the highest reduction reaching 10.26%, signaling an aggressive expansion strategy in Europe, Asia-Pacific, and the Middle East [2][3][4] Group 1: Price Reduction Details - The price adjustment will take effect on October 30, 2025, and affects regions including Frankfurt, Tokyo, and Dubai, with reductions ranging from 3.74% to 10.26% [2][3] - This is not the first price cut for Alibaba Cloud in overseas markets; a previous reduction in April 2022 saw discounts of up to 65% across various services [3] - The current price cut is seen as a signal of Alibaba Cloud's intent to accelerate its market presence in overseas regions, particularly in Europe and the Asia-Pacific [3] Group 2: Global Expansion Strategy - Alibaba Cloud has been pursuing a global strategy since its first overseas launch in Hong Kong in May 2014, expanding into North America, Europe, Japan, Southeast Asia, and the Middle East [4] - The company is also focusing on Latin America, with plans to establish cloud computing nodes in Brazil, France, and the Netherlands, and expand data centers in Mexico, Japan, South Korea, Malaysia, and Dubai [5] - As of September 2023, Alibaba Cloud operates in 29 regions with 91 available zones globally [5] Group 3: Competitive Landscape - Alibaba Cloud holds the leading position in the domestic cloud computing market, with a 33% market share in China's cloud infrastructure services as of Q1 2025 [6] - In contrast, the overseas market is dominated by major players like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, which collectively hold 65% of the global cloud infrastructure spending [7] - The focus of competition has shifted from price to AI and application scenarios, with Chinese cloud providers leveraging strengths in real-time audio-video and gaming social PaaS to differentiate themselves [7][8] Group 4: Future Outlook - The global AI industry has seen investments exceeding $400 billion in the past year, with projections of over $4 trillion in cumulative investment over the next five years [8] - Alibaba Cloud aims to position itself among the top 5-6 global cloud computing platforms, which is seen as a critical challenge for the company moving forward [8]

Financial Data and Key Metrics Changes - Net sales for Q2 reached $12.79 billion, up 10.9% year over year in U.S. dollars and 10.2% on an FX neutral basis [17] - Adjusted EBITDA was $294 million, an increase of nearly 6% in U.S. dollars and 5% in constant currency [26] - Non-GAAP net income increased to $142 million from $120 million in 2024, representing an over 18% increase in U.S. dollars [27] Business Line Data and Key Metrics Changes - Client and Endpoint Solutions grew nearly 14% on an FX neutral basis, driven by strong demand in desktop, notebook, and smartphone categories [17] - Advanced Solutions saw mid-single digit growth, supported by servers, storage, and cybersecurity, particularly in Asia Pacific markets [17] - Cloud business continued to grow, contributing to overall positive performance across all business lines [7][16] Market Data and Key Metrics Changes - North America net sales were $4.98 billion, up 13.8% year over year on an FX neutral basis, driven by strong growth in servers, storage, and cybersecurity [20] - Asia Pacific demonstrated the highest net sales growth at 16.2% year over year in U.S. dollars, with strong performance in Client and Endpoint Solutions [21] - Latin America returned to growth with net sales of $853 million, increasing 0.8% in U.S. dollars and 6.4% in constant currency [22] Company Strategy and Development Direction - The company is focusing on its xVantage platform to streamline operations and enhance customer experiences through AI and automation [11][12] - Recent divestitures of non-core assets are part of a strategy to improve operational effectiveness and concentrate on core strengths [10] - The evolution into a platform company aims to provide customers with speed, scale, and service, enhancing overall business efficiency [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ransomware attack in July but confirmed it had no impact on Q2 results, emphasizing a strong recovery and operational resilience [4][6] - The company expects continued year-over-year top line growth in Q3, with guidance reflecting some conservatism due to the cyber incident [30][31] - Management remains optimistic about the impact of the platform strategy and the overall business environment moving forward [16] Other Important Information - The company ended Q2 with net working capital of $4.6 billion, an increase from $3.9 billion year over year, driven by higher sales and investment needs [28] - Adjusted free cash flow was an outflow of $263 million, reflecting investments to grow the business [29] - The company announced a 2.6% increase in its quarterly dividend to be paid in Q3 [29] Q&A Session Summary Question: Expectations for endpoint and advanced solutions revenue growth in Q3 - Management expects mid-single digit growth for client and endpoint solutions, with stronger performance in desktop and notebook categories, while smartphone growth is anticipated to be lower [36][38] Question: Impact of government subsidies on mobility growth in China - Management noted that some growth in mobility was likely driven by government subsidies, but overall demand remained strong [39][41] Question: Demand pull forward in North America - Management did not observe significant demand pull forward across categories, with some minor effects in desktop and notebook refresh [46][47] Question: Implications of the recent bill on customer discussions - Management indicated that the impact of the recent bill is not significant for their business, as public sector sales are a minor part of their overall revenue [49][50] Question: Market cycle positioning for various products - Management believes the market is in a mid-cycle phase, with growth observed in storage, server, and networking categories [57] Question: Cash flow dynamics and expectations for the year - Management expects Q3 cash flow to be neutral to slightly negative due to inventory investments, with a positive cash flow anticipated in Q4 as inventory converts to receivables [91][92]