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Moody's Corp - $MCO - Earnings Analysis: Strong revenue and earnings growth in FY 2024.

By sagebytes in Business —

Business Model

Moody's Corporation operates through two main segments: Moody's Investors Service (MIS) and Moody's Analytics (MA). MIS generates revenue primarily from rating fees paid by debt issuers. MA generates revenue from subscriptions, software, and professional services.

Revenue Sources

  • Moody's Investors Service (MIS): Rating fees from debt issuance and monitoring.
  • Moody's Analytics (MA): Subscription fees, software licenses, and professional services.

Income Statement Analysis

  • Revenue increased by 20% year-over-year.
  • Operating income increased by 35% year-over-year.
  • Net income increased by 28% year-over-year.
  • Basic EPS increased by 29% year-over-year.

Balance Sheet Analysis

  • Total assets increased by 5.9% year-over-year.
  • Total stockholders equity increased by 7.2% year-over-year.
  • Total liabilities increased by 5.7% year-over-year.

Cash Flow Analysis

  • Net cash provided by operating activities increased significantly, reflecting higher net income.
  • Net cash used in investing activities increased, mainly due to purchases of investments and acquisitions.
  • Net cash used in financing activities decreased, mainly due to repayment of notes and shares.
  • Cash and cash equivalents at the end of period increased.

Capital Allocation

Moody's is committed to using its cash flow for strategic investments, organic growth, and returning capital to shareholders through dividends and share repurchases. The Company has remaining share repurchase authority of $1.6 billion as of December 31, 2024.

Management Commentary

Moody's delivered a strong finish in Q4, capping a year of incredible achievements with full year revenue growth of 20%.

Management believes that current assumptions and other considerations used to estimate amounts reflected in Moody’s consolidated financial statements are appropriate.

Overall Sentiment: Positive, reflecting strong financial results and strategic execution.

Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.