Moody's Q3: Earnings Above Street View, Double-Digit Revenue Growth & More

Moody's Corp (NYSE: MCO) reported third-quarter FY23 sales growth of 15% year-on-year to $1.472 billion, beating the analyst consensus estimate of $1.463 billion.

Moody's Analytics revenue climbed 13% Y/Y to $776 million, and Moody's Investor Service grew 18% to $696 million.

Total expenses grew 9% versus the prior-year period. The operating margin for the quarter expanded 390 basis points to 36.3%.

Adjusted EPS of $2.43 beat the consensus of $2.30.

Cash flow from operations year-to-date totaled $1.67 billion, with a free cash flow of $1.48 billion.

The company held $2 billion in cash and equivalents as of September 30, 2023.

On October 23, 2023, the Board of Directors declared a regular quarterly dividend of $0.77 per share of MCO, payable on December 15, 2023, to stockholders of record at the close of business on November 24, 2023.

As of September 30, 2023, Moody's had $6.9 billion of outstanding debt and an undrawn $1.25 billion revolving credit facility.

"We are in a new era of exponential risk which requires an urgent evolution for our customers.," said President and CEO Rob Fauber.

"To address this, Moody's is investing in the momentum of the business and introducing transformative technologies to advance our capabilities, help our customers navigate decision-making at speed and scale and drive long-term sustainable growth."

Outlook: Moody's reaffirmed FY23 adjusted EPS outlook of $9.75-$10.25 versus an estimate of $10.03. MCO continues to see FY23 revenue growth in the high-single-digit percent range.

Price Action: MCO shares are trading higher by 4.30% at $318.76 on the last check Wednesday.