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NEW YORK - Moody’s Corporation (NYSE:MCO) reported better-than-expected second quarter results on Wednesday, with adjusted earnings per share of $3.56 exceeding analyst estimates of $3.38 and revenue of $1.9 billion surpassing the consensus forecast of $1.85 billion.
Following the earnings release, Moody’s shares fell 0.83% in pre-market trading.
The company’s total revenue increased 4% compared to the same period last year, primarily driven by an 11% growth in its Moody’s Analytics segment. The Moody’s Investors Service segment, which handles credit ratings, remained flat with revenue of $1.0 billion despite a 12% decline in issuance volume, reflecting favorable revenue mix.
"This past quarter, Moody’s provided the insights and expertise that helped markets make sense of a complex and rapidly changing global landscape," said Rob Fauber, President and Chief Executive Officer. "We continue to innovate and invest in our business as we capitalize on the deep currents that are driving demand for our solutions."
The company’s adjusted operating margin improved to 50.9%, up 130 basis points from the prior-year period. Moody’s Analytics saw its adjusted operating margin increase significantly to 32.1%, up 360 basis points YoY, reflecting strong revenue growth combined with disciplined cost management.
Based on the strong performance, Moody’s narrowed its full-year adjusted diluted EPS guidance to a range of $13.50 to $14.00, which at the midpoint implies 10% growth versus last year. The company also updated its expectations for MIS issuance and revenue growth.
"We are pleased to report a 4% increase in MCO’s second quarter revenues, driven by strong performance across both our business segments," said Noémie Heuland, Chief Financial Officer. "This, combined with the significant expansion in our segments’ adjusted operating margins, highlights the success of our strategy and efficiency initiatives."
The company’s recurring revenue, which comprises 96% of total Moody’s Analytics revenue, grew 12% on a reported basis and 8% on an organic constant currency basis. Annualized Recurring Revenue (ARR) increased to $3.3 billion, representing 8% growth compared to June 30, 2024.
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