Summary
Moody's Corporation (MCO) reported a decrease in revenue for the second quarter of 2022 compared to the prior year, primarily driven by a significant decline in its Moody's Investors Service (MIS) segment due to lower issuance volumes. This was partially offset by strong growth in the Moody's Analytics (MA) segment, fueled by acquisitions and organic expansion across its lines of business, particularly in Decision Solutions. Despite the revenue challenges in MIS, the company incurred restructuring charges related to its "2022 - 2023 Geolocation Restructuring Program." Profitability was impacted by lower revenues, increased operating expenses including integration costs from recent acquisitions, and a higher effective tax rate. The company continues to manage its capital through dividends and share repurchases, with significant remaining authority for buybacks. Overall, the report highlights the contrasting performance between the two segments, with MA showing robust growth while MIS faces headwinds from market volatility.
Financial Highlights
55 data points| Revenue | $1.38B |
| Cost of Revenue | $393.00M |
| Gross Profit | $988.00M |
| SG&A Expenses | $368.00M |
| Operating Expenses | $873.00M |
| Operating Income | $508.00M |
| Net Income | $327.00M |
| EPS (Basic) | $1.78 |
| EPS (Diluted) | $1.77 |
| Shares Outstanding (Basic) | 184.10M |
| Shares Outstanding (Diluted) | 184.90M |
Key Highlights
- 1Total revenue decreased by 11% to $1.38 billion for the three months ended June 30, 2022, compared to $1.55 billion in the prior year period.
- 2Moody's Investors Service (MIS) revenue declined by 28% to $706 million, primarily due to a 32% decrease in rated issuance volumes, impacted by market volatility, rising borrowing costs, and the Russia/Ukraine conflict.
- 3Moody's Analytics (MA) revenue grew by 18% to $675 million, driven by inorganic growth from acquisitions and strong organic growth across all its lines of business, with notable strength in Decision Solutions.
- 4Diluted Earnings Per Share (EPS) decreased by 42% to $1.77, down from $3.07 in the prior year quarter, reflecting lower revenues and increased expenses.
- 5The company incurred a $31 million restructuring charge in the current quarter related to its "2022 - 2023 Geolocation Restructuring Program."
- 6Operating expenses (operating and SG&A) increased by 10% to $761 million, driven by acquisition-related costs and higher salaries/benefits, partially offset by lower incentive compensation.
- 7Cash flow from operations decreased significantly to $761 million for the first six months of 2022, down from $1.27 billion in the prior year, impacting Free Cash Flow.