Moody’s Corporation reported revenue of $1.6 billion for the three months ended March 31, 2021, up 24% from the prior-year period. Foreign currency translation favorably impacted Moody’s revenue by 3%.

Moody’s Investors Service (MIS) First Quarter Revenue Up 30%

Revenue for MIS for the first quarter of 2021 was $1.0 billion, up 30% from the prior-year period. Foreign currency translation favorably impacted MIS revenue by 3%. The MIS adjusted operating margin was 67.7%.

Corporate finance revenue was $605 million, up 34% from the prior-year period, largely driven by heightened leveraged loan and speculative grade bond activity in the U.S. and EMEA as issuers refinanced existing debt and funded M&A activity.

Financial institutions revenue was $162 million, up 30% from the prior-year period. This reflected a favorable mix of infrequent U.S. securities firms and insurance companies continuing to opportunistically issue debt given the attractive rate and spread environment.

Public, project and infrastructure finance revenue was $143 million, up 31% from the prior-year period, primarily due to refinancing in the utilities sector.

Structured finance revenue was $116 million, up 21% from the prior-year period. Improved market conditions, specifically tightened spreads, led to a significant increase in collateralized loan obligation (CLO) refinancing activity and commercial mortgage-backed securities (CMBS) issuance.

Moody’s Analytics (MA) First Quarter Revenue Up 14%

Revenue for MA for the first quarter of 2021 was $564 million, up 14% from the prior-year period. Organic MA revenue1 was $545 million, up 10% and excluded the impact of acquisitions completed in the past twelve months. Foreign currency translation favorably impacted total MA revenue by 4%. The MA adjusted operating margin was 32.9%.

Research, Data and Analytics (RD&A) revenue was $419 million, up 17% from the prior-year period. Organic RD&A revenue1 was $402 million, up 12%, and excluded revenue from the acquisitions of Regulatory DataCorp, Acquire Media and Catylist. RD&A’s robust growth reflected strong demand for compliance solutions amidst increased customer and supplier risk data usage and new data feed sales. Results were further bolstered by high customer retention and renewal rates for research products.

Enterprise Risk Solutions (ERS) revenue was $145 million, up 5% from the prior-year period. Organic ERS revenue1 was $143 million, up 4%, which excluded revenue from the acquisition of ZM Financial Systems. This result was driven by subscription growth from IFRS 17 products, as well as credit assessment and loan origination solutions.

 

First Quarter Operating Expenses and Operating Income

First quarter 2021 operating expenses for Moody’s Corporation totaled $747 million, up 7% from the prior-year period. Ongoing cost efficiency initiatives held expenses approximately flat, excluding incremental incentive and stock compensation accruals, higher operating costs from recent acquisitions and a 3% unfavorable impact from foreign currency translation.

Operating income of $853 million was up 44% from the first quarter of 2020. Adjusted operating income of $914 million was up 41% from the prior-year period, and excluded depreciation and amortization and restructuring charges. Foreign currency translation favorably impacted both operating income and adjusted operating income by 4%. Moody’s operating margin was 53.3% and the adjusted operating margin1 was 57.1%.

Source:  Moody’s Earnings Release