Moody’s (NYSE:MCO) Q4 2023 Earnings Conference

By / / Moody

The following is a summary of the Moody’s Corporation (MCO) Q4 2023 Earnings Call Transcript:

Financial Performance:

  • Moody’s reported an 8% increase in revenue and a 16% rise in adjusted diluted EPS in 2023.
  • The company’s adjusted recurrent revenue growth was 10% with mid-90% retention rates.
  • For the upcoming year, Moody’s expects an adjusted diluted EPS in the range of $10.25 to $11, assuming a tax rate of 22% to 24%.
  • The 2024 growth forecast for Moody’s Analytics is around 10% revenue growth with adjusted recurring revenue growth in low double digits.
  • Increased budgeted operating expenses for the next year by an extra $60 million are planned.
  • Moody’s projects a 2024 revenue growth in the high single to low double-digit percent range.
  • The predicted adjusted operating margin for 2024 lies between 44% to 46%.
  • The company anticipates a free cash flow between $1.9 billion to $2.1 billion in 2024.

Business Progress:

  • Moody’s has appointed Noemie Heuland as its new Chief Financial Officer.
  • The first ever GenAI enabled product was launched by Moody’s in December 2023.
  • The company continues to maintain strong ties with large corporations, including notable percentages of the Fortune 100 and Forbes 1000.
  • Moody’s is developing new award-winning solutions and integrating more datasets to add more functionalities.
  • Moody’s is investing heavily in expanding the markets it operates in and has registered growth in new segments like Know Your Customer and supplier risk management.
  • There is a planned increase in capital returns to stockholders for 2024.
  • Moody’s closed the 2022-23 geolocation restructuring program and expects depreciation/amortization expenses of approximately $450 million in 2024.
  • Focused investment in high growth areas, such as GenAI products and solutions for corporates and the public sector is a part of the company’s growth strategy.
  • Moody’s expects to grow structured finance by mid-single digits and improve leverage finance with predicted lower market uncertainty.
  • Notable contribution from GenAI-related products, particularly in their research and insights line, is anticipated by the company.
  • Moody’s CRE module has shown growth in the banking segment, especially due to current stress in the CRE sector.
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