MOODYS CORP /DE/ Quarterly Report for Q1 Ended Mar 31, 2022

Summary

Moody's Corporation (MCO) reported a 5% decrease in total revenue to $1.52 billion for the first quarter of 2022 compared to $1.60 billion in the prior year. This decline was primarily driven by a significant 20% drop in Moody's Investors Service (MIS) revenue, largely due to reduced rated issuance volumes amidst market volatility, inflation concerns, and rising borrowing costs. Conversely, Moody's Analytics (MA) revenue saw a strong 23% increase, bolstered by recent acquisitions and continued growth in KYC products and subscription-based sales. Net income attributable to Moody's decreased by 32% to $498 million ($2.68 per diluted share) from $736 million ($3.90 per diluted share) in the prior year. This was impacted by lower MIS revenue and increased operating expenses, including integration costs for recent acquisitions. Despite the revenue headwinds in MIS, the company continues to return capital to shareholders through dividends and share repurchases, with approximately $1.17 billion remaining under its share repurchase authorization.

Key Highlights

• 1Total revenue decreased by 5% to $1.52 billion, driven by a 20% decline in MIS revenue.
• 2Moody's Analytics (MA) revenue grew by 23%, fueled by acquisitions and organic growth in key product areas.
• 3Net income attributable to Moody's declined by 32% to $498 million, with diluted EPS falling to $2.68 from $3.90.
• 4Operating expenses increased by 16%, partly due to integration costs associated with recent acquisitions.
• 5The company repurchased $1.95 million shares for approximately $645 million during the quarter, with $1.17 billion remaining on its repurchase authorization.
• 6The Russia/Ukraine conflict has led to market volatility and adversely impacted MIS rated issuance volumes.
• 7Moody's continues to manage its capital effectively, with a focus on returning value to shareholders through dividends and buybacks.

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