NYSE$MCO

Moody's Corp. · Q3 2021 earnings

Q3 2021 earnings · · Investor relations

Briefing

Moody's reported impressive double-digit revenue growth driven by investments in capabilities and product development.

Moody's Corporation reported Q3 2021 revenue of $1.5 billion, a 13% increase year-over-year. Diluted EPS was $2.53, up 2%, while adjusted diluted EPS was $2.69, flat compared to the prior-year period. The company raised and narrowed its full year 2021 diluted EPS and adjusted diluted EPS guidance ranges.

  • Moody’s delivered impressive double-digit revenue growth.
  • Moody's invested significantly in its capabilities and product development.
  • Full year 2021 revenue is projected to increase in the low-teens percent range.
  • The company raised and narrowed full year adjusted diluted EPS guidance range to $12.15 to $12.35.

Headline financials

Total Revenue

$1.53B

Previous: $1.36B+12.5%
EPS (adj)

$2.69

Previous: $2.69+0.0%
Operating Margin

44.3%

No prior period
Adjusted Operating Margin

48.3%

Previous: 53.2%-9.2%
Capital Expenditures

-$77M

Previous: -$83M+7.2%
Free Cash Flow

$397M

Previous: $384M+3.4%
Net Income

$474M

Previous: $467M+1.5%
Operating Income

$676M

Previous: $642M+5.3%
Gross Profit

$1.13B

Previous: $992M+14.1%
Cash & Equivalents

$2.24B

Previous: $2.49B-10.2%
Total Assets

$14.4B

Previous: $11.7B+23.5%
Stock-Based Comp

$41M

Previous: $38M+7.9%

Revenue & EPS history

Moody's · Revenue · Quarterly

$1.53B

Q3 2021+12.5%vs Q3 2020
Beat estimate in 12 of 16 quarters(75%)
ActualEstimate

Revenue by segment

Moody's · $1.52B total across 6 segments · Q3 2021

  • Corporate Finance
    $488M+5.9%
  • Research & Insights
    $445M+15.3%
  • Decision Solutions
    $156M+7.6%
  • Financial Institutions
    $153M+14.2%
  • Structured Finance
    $143M+62.5%
  • Public, Project, and Infrastructure Finance
    $130M-2.3%

Forward guidance

Moody's updated outlook for 2021 reflects assumptions about the impact of COVID-19, government and business responses, interest rates, inflation, foreign currency exchange rates, and capital markets' liquidity.

Tailwinds

  • Full year 2021 U.S. and Euro area GDPs to expand by approximately 5.5% - 6.5% and 4.5% - 5.5%, respectively
  • U.S. high yield interest rate spreads to slightly widen, but remain below the historical average of approximately 500 bps
  • U.S. unemployment to remain below 5%
  • Global high yield default rate to fall below 2% by the end of 2021
  • MIS's full year 2021 global rated issuance will increase in the high-single-digit percent range

Headwinds

  • The duration and severity of the COVID-19 crisis are unknown
  • Implications of COVID-19 or other situations or developments could affect these and many other factors that also could cause actual results to differ materially from Moody’s outlook.
  • These assumptions are subject to uncertainty, and actual full year 2021 results could differ materially from Moody’s current outlook.
  • Guidance assumes foreign currency translation
  • Share repurchases are subject to available cash, market conditions, M&A opportunities and other ongoing capital allocation decisions

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2021

Historical avgQ3 2021

+0.1%

Avg return

Earnings day

+0.4%

Avg return

5 days after

+1.0%

Avg return

30 days after

60%

44 / 73 earnings

Positive

+13.5%

Q2 2012

Best reaction

-8.9%

Q3 2018

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+3.8%+0.3%-2.3%
Q4 2025+6.6%+3.3%+2.8%
Q3 2025-2.6%+2.1%-1.1%
Q2 2025+0.0%-1.8%-1.7%
Q1 2025+4.0%+6.1%+14.1%
Q4 2024+4.4%+2.8%-11.6%
Q3 2024-3.7%-5.0%-1.9%
Q2 2024-3.7%-0.4%+6.6%
Q1 2024+2.1%+5.7%+6.5%
Q4 2023-8.6%-7.6%-4.4%
Q3 2023+1.5%+0.2%+18.6%
Q2 2023+0.7%-1.0%-7.2%
Q1 2023+0.8%+3.5%+2.3%
Q4 2022+2.9%+3.2%-7.6%
Q3 2022+4.9%+9.8%+21.6%
Q2 2022+1.0%+6.8%+5.3%
Q1 2022-2.2%-5.1%-10.8%
Q4 2021-3.2%-3.9%-11.3%
Q3 2021+2.9%-0.5%-2.2%
Q2 2021+0.6%-0.6%+0.7%
Q1 2021+1.1%+0.9%+2.7%
Q4 2020+0.6%+0.7%+4.7%
Q3 2020+0.4%+2.8%+5.9%
Q2 2020-3.5%-5.3%+1.0%
Q1 2020-5.2%-1.8%+4.9%
Q4 2019+0.7%+2.5%-21.4%
Q3 2019+0.1%-1.1%+2.8%
Q2 2019+6.8%+0.2%+6.6%
Q1 2019+2.4%+3.2%-1.9%
Q4 2018+2.6%+3.5%+7.9%
Q3 2018-8.9%-6.2%-3.1%
Q2 2018-8.0%-7.8%-6.7%
Q1 2018-1.5%-1.2%+5.7%
Q4 2017+4.7%+7.5%+11.8%
Q3 2017+0.7%+1.0%+5.4%
Q2 2017+5.0%+4.8%+2.6%
Q1 2017-2.3%-2.3%-0.5%
Q4 2016+2.4%+3.0%+1.6%
Q3 2016-4.9%-5.5%-7.0%
Q2 2016+1.3%+0.8%+0.3%
Q1 2016-3.1%
Q4 2015-8.9%
Q3 2015-5.0%
Q2 2015-1.3%
Q1 2015+0.8%
Q4 2014+5.0%
Q3 2014+2.3%
Q2 2014-1.6%
Q1 2014-1.6%
Q4 2013+3.3%
Q3 2013-3.7%
Q2 2013+3.6%
Q1 2013+4.9%
Q4 2012-3.2%
Q3 2012+5.3%
Q2 2012+13.5%
Q1 2012-1.0%
Q4 2011-0.6%
Q3 2011+2.0%
Q2 2011-2.2%
Q1 2011+0.3%
Q4 2010+0.4%
Q3 2010-0.2%
Q2 2010+1.4%
Q1 2009-7.5%
Q1 2010-2.8%
Q4 2007+2.2%
Q4 2009+2.2%
Q2 2009+2.2%
Q3 2008+2.0%
Q3 2009+2.0%
Q2 2008-4.9%
Q4 2008-4.9%

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