Q3 2024 Moody's Corp Earnings Call Transcript
Key Points
- Moodys Corp (MCO) reported a 23% increase in revenue for the third quarter of 2024, marking the highest third-quarter revenue performance in the company's history.
- The ratings business experienced a remarkable 41% increase in revenue, driven by a strong issuance environment and a 70% rise in transactional revenue.
- The company achieved a 32% growth in adjusted diluted EPS and a free cash flow conversion rate of over 100% of net income.
- Moody's Analytics delivered 7% overall revenue growth, with recurring revenue growing by 9%, indicating strong customer retention and demand for their solutions.
- The Decision Solutions line of business, including banking, insurance, and KYC, continues to lead with almost $1.4 billion of ARR, growing at 12%.
- There was a slowdown in ARR growth for the Data & Information segment, partly due to lower renewals of large federal government contracts and customer transitions to MSCI for sustainability content.
- The company noted a deceleration in KYC ARR growth to 14% in the third quarter, down from 19% the previous year, due to lower renewal rates for government contracts.
- Moody's Analytics faced pressure from attrition events and lower sales in the banking and asset manager customer segments, impacting overall ARR growth.
- The adoption of GenAI capabilities has been slower than expected among large financial institutions, affecting the anticipated acceleration in Research & Insights ARR growth.
- The company anticipates a mid-single-digit decline in global issuance for the fourth quarter, reflecting intra-year pull forward and potential election-related volatility.
Good day, everyone and welcome to the Moody's Corporation third-quarter 2024 earnings call. At this time, I would like to inform you that this conference is being recorded. (Operator Instructions) I will now turn the call over to Shivani Kak, Head of Investor Relations. Please go ahead.
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Thank you. Good morning and thank you for joining us today. I'm Shivani Kak, Head of Investor Relations. This morning, Moody's released its results for the third quarter 2024 as well as our revised outlook for select metrics for full-year 2024. The earnings press release and the presentation to accompany this teleconference are both available on our website at ir.moodys.com.
During this call, we will also be presenting non-GAAP or adjusted figures. Please refer to the tables at the end of our earnings press release filed this morning for reconciliations between all adjusted measures referenced during this call in US GAAP. I call your attention to the safe harbor language, which can be
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