Moody’s Q3 Revenue Up 9%

Moody’s Corporation reported revenue of $1.4 billion for the three months ended September 30, 2020, up 9% from the prior-year period. Foreign currency translation favorably impacted Moody’s revenue by 1%.

Moody’s Corporation 3Q20 revenue of $1.4 billion, up 9% from 3Q19
Moody’s Investors Service revenue of $825 million, up 11%; Moody’s Analytics revenue of $531 million, up 7%
3Q20 diluted EPS of $2.47, up 24% from 3Q19; adjusted diluted EPS of $2.69, up 25% ¹
FY 2020 guidance range for diluted EPS raised to $9.30 to $9.50; adjusted diluted EPS guidance raised to $9.95 to $10.15

“This quarter, customer demand for Moody’s services, insights and solutions continued to drive strong revenue growth across both Moody’s Investors Service and Moody’s Analytics. Moody’s Investors Service benefitted from a third consecutive record issuance quarter as fixed-rate issuers took advantage of historically low borrowing costs to refinance existing debt and strengthen liquidity positions. Moody’s Analytics top-line grew on increased sales of know-your-customer solutions, research and data feeds. As the results of the first nine months have continued to exceed our expectations, we are raising and narrowing our full year 2020 adjusted diluted EPS guidance range to $9.95 to $10.15, with the expectation for debt issuance to moderate in the final quarter,” said Raymond McDaniel, President and Chief Executive Officer of Moody’s.

“As previously announced, after leading Moody’s for more than 15 years as CEO, I will retire at the end of the year and hand the reins over to Rob Fauber. I extend my sincere gratitude to all of our employees – their dedication and hard work has positioned Moody’s for continued success. I am confident in Rob’s leadership of the company going forward given his impressive track record and deep understanding of our businesses.”

Moody’s Corporation reported revenue of $1.4 billion for the three months ended September 30, 2020, up 9% from the prior-year period. Foreign currency translation favorably impacted Moody’s revenue by 1%.

Moody’s Investors Service (MIS) Third Quarter Revenue Up 11%: Revenue for MIS for the third quarter of 2020 was $825 million, up 11% from the prior-year period. Foreign currency translation favorably impacted MIS revenue by 1%. The MIS adjusted operating margin was 64.2%.

Moody’s Analytics (MA) Third Quarter Revenue Up 7%: Revenue for MA for the third quarter of 2020 was $531 million, up 7% from the prior-year period. Organic MA revenue¹ was $510 million, up 9% and excluded the impact of the divestiture of Moody’s Analytics Knowledge Services (MAKS) and acquisitions completed in the past twelve months. Foreign currency translation favorably impacted total MA revenue by 2%. The MA adjusted operating margin was 31.4%.

YEAR-TO-DATE REVENUE UP 13%: Moody’s Corporation reported revenue of $4.1 billion for the first nine months of 2020, up 13% from the prior-year period. The impact of foreign currency translation was negligible. MIS revenue totaled $2.6 billion, up 19% from the prior-year period. The impact of foreign currency translation was negligible. The MIS adjusted operating margin was 63.0%. MA revenue totaled $1.5 billion, up 6% from the prior-year period. Organic MA revenue¹ was $1.5 billion, up 8% and excluded the impact of the divestiture of MAKS and acquisitions completed in the past twelve months. The impact of foreign currency translation was negligible. The MA adjusted operating margin was 29.8%.

YEAR-TO-DATE OPERATING EXPENSES UP 2%

Operating expenses for Moody’s Corporation in the first nine months of 2020 totaled $2.1 billion, up 2% from the prior-year period. Foreign currency translation favorably impacted Moody’s operating expenses by 1%.

Operating income of $1.9 billion was up 30% as compared to the first nine months of 2019. Adjusted operating income of $2.1 billion was up 23% from the prior-year period. The impact of foreign currency translation for both Moody’s operating income and adjusted operating income was negligible. Moody’s operating margin was 47.6% and the adjusted operating margin was 52.3%.

The effective tax rate for the first nine months of 2020 was 20.0%, down from the prior-year period effective tax rate of 21.4%.

Diluted EPS of $7.73 was up 40% from the first nine months of 2019. Adjusted diluted EPS of $8.24 was up 31%. Both year-to-date diluted EPS and adjusted diluted EPS included a $0.27 per share tax benefit related to employee share-based compensation, compared to a $0.22 per share tax benefit in the first nine months of 2019.