Moody's Corporation Q3 FY2025 earnings call

Segment Performance

• MIS (Moody's Investors Service): Revenue grew 12% for the quarter, surpassing $1 billion for the third consecutive quarter. All Ratings lines of business contributed to growth, with the largest increase from leveraged finance activity, followed by financial institutions. Issuance totaled nearly $1.8 billion, marking the highest third quarter on record. Transaction revenue rose 14%, recurring revenue increased 8% year over year. Foreign exchange contributed a 1% uplift. By asset class, Corporate Finance transaction revenue grew 13%, Spec grade revenue rose 43%, Investment grade revenue declined but activity remained solid, Financial Institutions transactional revenue grew 34%, Public, Project, and Infrastructure finance transactional revenue was relatively flat, Structured Finance transaction revenue rose 10%. Private credit-related deals grew almost 70%, revenue tied to private credit grew over 60%.
• Moody's Analytics: Reported revenue grew 9% year over year, including 11% in Decision Solutions. ARR is now nearly $3.4 billion, up 8% versus last year. Recurring revenue is 93%, retention rate is 93%. Transactional revenue declined 19% this quarter. Decision Solutions delivered double-digit AR growth, KYC was the fastest growing part, Insurance delivered 8% AR growth, Banking line of business delivered 7% ARR growth, Research and Insights delivered 8% AR growth, Data and Information ARR grew 7%. Margin improved by 400 basis points in Q3, expected to be approximately 33% for the full year.