Moody's (MCO) Q1 2026 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool

Wed, April 22, 2026 astatine 11:29 AM CDT

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Wednesday, April 22, 2026 astatine 9 a.m. ET

• Chief Executive Officer — Robert Fauber

• Chief Financial Officer — Noemie Heuland

Robert Fauber: Hey everybody, and acknowledgment for joining us. Q1 was a beardown commencement to the twelvemonth contempt a volatile geopolitical backdrop. And Moody's again delivered sustained gross maturation crossed some businesses and almighty operating leverage arsenic we proceed to capitalize connected the heavy currents driving request for our ratings and solutions. Now determination are 3 takeaways for the archetypal quarter. First, we delivered beardown fiscal performance. Both MIS and MA grew revenues by 8% and disciplined outgo absorption drove 150 ground points of adjusted operating borderline to 53.2%. Together, this contributed to adjusted diluted EPS of $4.33 and that was up 13%.

We returned $1.7 cardinal done buybacks and dividends successful the quarter, and we accrued afloat twelvemonth buyback guidance by $500 cardinal to astir $2.5 billion. Second, request remains steadfast crossed some businesses. And ratings issuance continues to bespeak semipermanent backing needs tied to infrastructure, technology, backstage recognition and vigor modulation adjacent arsenic volatility whitethorn impact timing. In analytics, engagement is strongest and our largest, astir strategical relationships, which proceed to turn materially faster successful a broader MA base, and we person a increasing pipeline of immoderate of the world's largest fiscal institutions to devour our cause acceptable intelligence, and that's supported by further enlargement with our hyperscaler and AI partners. Third, we're executing connected our strategical priorities.

And erstwhile our quality is embedded straight into lawsuit decision-making, we spot tangible outcomes, higher retention, expanding relationships and much durable recurring revenue. And similar past quarter, we'll stock immoderate circumstantial examples of meaningful lawsuit wins. So present fto maine crook to what's driving performance. In Ratings, arsenic I said, issuance remains anchored successful semipermanent backing needs tied to AI-driven infrastructure, backstage credit, vigor modulation successful emerging markets. And these are multiyear backing needs. They're not short-term cycles. And arsenic I said, volatility whitethorn impact timing, but the underlying request is structural. And that showed up intelligibly successful Q1.

In fact, successful the archetypal quarter, rated issuance surpassed $2 trillion for the archetypal time, and that was led by adjacent grounds investment-grade volumes, including respective jumbo AI-related financings totaling much than $100 billion. Private recognition enactment remained durable this 4th contempt expanding recognition concerns. As backstage marketplace standard and travel nether greater scrutiny, request for our autarkic recognition appraisal continues to increase, and that dynamic contributed to backstage recognition related gross successful Ratings increasing much than 80% year-over-year. In Moody's Analytics, we're embedding our quality into mission-critical workflows, peculiarly lending, underwriting and compliance wherever accuracy and auditability and spot are essential. And to enactment that displacement oregon grow however and wherever our customers entree Moody's Intelligence.