NYSE$MCO

Moody's Corp. · Q4 2021 earnings

Q4 2021 earnings · · Investor relations

Briefing

Moody's reported record revenue driven by growth in both MIS and MA, strategically invested in business, and introduced new medium-term guidance.

Moody's Corporation reported a strong Q4 2021 with revenue reaching $1.5 billion, a 19% increase year-over-year, and diluted EPS of $2.28, up 37%. The company strategically invested in its business and introduced new medium-term guidance, expecting revenue to grow by at least 10% on an average annualized basis and adjusted operating margin to be in the low-50s percent range.

  • Moody's Corporation reported Q4 2021 revenue of $1.5 billion, up 19% from Q4 2020.
  • Q4 2021 diluted EPS was $2.28, up 37% from Q4 2020, and adjusted diluted EPS was $2.33, up 22%.
  • Moody's Investors Service (MIS) revenue increased by 19% to $871 million.
  • Moody's Analytics (MA) revenue increased by 20% to $668 million, with recurring revenue growing 22%.

Headline financials

Total Revenue

$1.54B

Previous: $1.29B+19.3%
EPS (adj)

$2.33

Previous: $1.91+22.0%
Operating Margin

33.4%

Previous: 34.4%-2.9%
Adjusted Operating Margin

38.3%

Previous: 41.2%-7.0%
Capital Expenditures

$62M

Previous: $20M+210.0%
Free Cash Flow

$237M

Previous: $638M-62.9%
Net Income

$427M

Previous: $314M+36.0%
Operating Income

$514M

Previous: $444M+15.8%
Gross Profit

$1.05B

Previous: $881M+19.6%
Cash & Equivalents

$1.81B

Previous: $2.6B-30.3%
Total Assets

$14.7B

Previous: $12.4B+18.3%
Stock-Based Comp

$48M

Previous: $44M+9.1%

Revenue & EPS history

Moody's · Revenue · Quarterly

$1.54B

Q4 2021+19.3%vs Q4 2020
Beat estimate in 12 of 16 quarters(75%)
ActualEstimate

Revenue by segment

Moody's · $1.53B total across 6 segments · Q4 2021

  • Research & Insights
    $454M+200.7%
  • Corporate Finance
    $444M+19.7%
  • Decision Solutions
    $214M-47.0%
  • Structured Finance
    $161M+66.0%
  • Financial Institutions
    $137M+6.2%
  • Public, Project, and Infrastructure Finance
    $118M-2.5%

Forward guidance

Moody's provided its outlook for full year 2022. They expect revenue to increase in the high-single-digit percent range and adjusted diluted EPS to be in the range of $12.40 to $12.90.

Tailwinds

  • U.S. and Euro area GDPs to each expand by approximately 3.5% - 4.5%.
  • Global benchmark rates to increase from historic lows.
  • U.S. high yield interest rate spreads to widen, moving slightly above the historical average of approximately 500 bps.
  • Inflation rates to remain above central bank targets in many countries.
  • U.S. unemployment to fall to approximately 3.5%.

Headwinds

  • MIS's full year 2022 global rated issuance will decrease in the low-single-digit percent range.
  • Moody’s outlook assumes that the Company continues to not experience any material negative impact on its ability to conduct its operations as a result of COVID-19.
  • The 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 2022 results could differ materially from Moody’s current outlook.
  • Moody’s guidance assumes foreign currency translation.

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 Q4 2021

Historical avgQ4 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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