MCO - Earnings call transcript Q2 2021

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Operator

Good day, everyone, and welcome to the Moody's Corporation Second Quarter 2021 Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded. [Operator Instructions]. I will now turn the call over to Shivani Kak, Head of Investor Relations. Please go ahead.

Shivani Kak

you. Thank thank results us for and XXXX. and second discuss full for XXXX quarter our you morning, to joining Moody's year Good revised outlook Shivani Relations. I'm of Head Kak, Investor released outlook for year quarter Moody's This the full results well our as XXXX. second morning, as of its XXXX for The earnings to a and accompany both are teleconference press our on release available website presentation this at ir.moodys.com. Moody's will lead conference call. Officer, and this Executive Chief President Rob Fauber, morning's on remarks Moody's the call is morning Kaye, Officer. prepared this Chief Mark Financial making Also

also the presenting call a statement, for risk of earnings I media turn made SEC's our may the adjusted the in found call website. with I for In non-GAAP release. section within Rob annual on the could members factors language, website earnings the the remarks out forward-looking also will forth filed on the over on figures. Discussion which point cause together factors our we now and XXXX, set and refer to in the and the report at between important discussed are XX, like These, year that the Act those company, be adjusted contained of measures the morning call, other any tables such Form and in the actual to Please December this would I by to to will XX-K this call safe may ended forward-looking end that GAAP. this During listen-only direct statements. from filings harbor meaning Analysis the all which be Fauber. during Reform results XXXX. can harbor a the safe our and SEC available differ end Litigation in with reconciliation this materially on of to press of mode. your I morning be contain attention to or referenced statements also attention the accordance the call Management's Act, Securities towards Private our of release your Today's

Robert Fauber

XXXX diluted morning, product innovation XXXX joining performance our with cost and XXXX integrated Thanks, take combined quarter, provide happy provided our our on my as Revenue MA's activity risk robust assessment significant the to providing for and everyone we'll results. second support second good including strong operating after second key XX% best-in-class the finance prepared second Kaye continue commentary, and quarter quarter market issuance a investments And growth it our conditions revenue and that The leveraged call. efficiency adjusted expansion Shivani, our XXXX. of questions. drove X% expense growth. going and begin delivered Mark and following in risk as solutions should contributed initiatives in further to performance details well supported I'm and to expansion, the always, EPS margin demand highlighted by to ratings general business. Moody's line as recurring well growth. Top update the strong Moody's heightened financial as backdrop offerings. Favorable the for remarks, to our sustained discipline fund of retention for ongoing M&A And assessment thanks revised business, as today's ongoing of rates on growth our outlook. results of in adjusted your in quarter increase financial be will

now year grow the solid of quarter, revenue As execution low guidance double-digit our revised in to and Moody's a forecast percent range. XXXX result we've in the our full

range $XX.XX of diluted be Additionally, guidance we've raised $XX.XX. our to adjusted the EPS to in

$X.XX, constant from X%. tough last achieved its revenue, MA That's an MIS quarterly highest quarter second prior revenue MA year results. revenue XX% XXX X%. Adjusted to million, basis operating organic ever while EPS basis, turning grew points to and margin comparable, was rose up operating the XX.X%. XX%. adjusted increased diluted expanded to XX% the despite year. income up Moody's adjusted Now $XXX currency On

highlighted level I call, in volumes issuance earnings decade. last their a highest that over reached the On

as had activity investment-grade declined This as anticipated, recent needs already quarter, in funding fulfilled substantially issuers many quarters. their

XX-year overall can the by declined shown still issuance XX%, line. above Although on the second the on was you well quarter blue as chart, see issuance as historical average

from While both a loans slower bonds, the persisted, we albeit this earlier demand outpaced the high-yield leveraged bit asset sequentially. in growth that saw classes year

We quarter, levels, revenue market, We our frequently momentum also relates by tight. to as remain issuance in the XX%. and illustration the CLO class. while issuance MIS increased to saw an grew This issuance quarter of which chart second rated revenue And relative spreads revenue declined on provides asset comment driven opportunistic second by our mix mix. refinancing MIS X%, in transactional issuance

down prior on the versus dark for the bottom bubble XX% left that investment-grade So see quarter can you green year. the was second the example, issuance. represents in issuance And corner

However, equity to markets and acquire of to programs, run, Credit financing overall tightened acceleration cost to use rates and as leveraged of loans, issuers and the cash that spreads we of commercial saw blue post-pandemic low on significantly a companies their for an businesses favorable of economy recover to M&A quarter's the the this economy. far strong debt. per keeping of issuance to issuers reasons. allowing by variety debt and as existing refinance combination dark growth conditions position opportunistically markets issuance the pay-as-you-go quarter, as a or continued issuance market which proportion the access on to bubble right, lower, over saw debt started trended up contributed has favorable mix. the the default And balances And greater led for Similar debt last issuers represented XXX%.

further for detail first from this go expect issuance call. half on in said, That activity XXXX remainder that environment opportunities We forecast into year. highs asset persist, we And saw the going guidance further in later issuers class to is the our of the by constructive to of to tap providing this the we to the markets. moderate historical Mark

retention and demonstrate demand growing strong Now our to revenue recurring market rates let's turn products. MA. the base MA's for

on Our has recurring period XX-month X sales XX%. trailing revenue points by of to the in renewable increased proportion the emphasis percentage

We businesses I financial high-growth the start as of KYC feeds. some customer to contributed know data with in crime compliance continue see to by trends and quarter We like your in which XXXX market. both call, highlighting X discussed earnings to these areas. briefly as the revenue in few spotlight and want further along and these key a of growth first I'll solutions management, significant areas well research and opportunities insurance asset recurring

I've accelerated your transformation has as pandemic before, in customer mentioned the onboarding. First, know digital customer and

before. know regulators Second, And organizations and requiring to become requires finally, are about financial to sophisticated, suppliers continues crime advanced detection capabilities. which than their ever more customers and more monitoring

regulatory of and our as other data acquisition Our solutions combine for market-leading GGY. intelligence, difficult that your better the our on and crime. contributing match ownership MA a financial and adverse to combat hundreds XX asset to others industry-leading segment are crime profiles millions scale, enabled providing to standards address sets a models as analyze of entities for of product actuarial our customer by and insights life We core new and Using structures Moody's and We management We million and generating moved to as expanding and information financial media, revenue know unique and of sheet leverage our artificial speed CECL. our offerings and on entered individuals. identifying products, detailed solution over managers to XX to well make we map portfolio world-class our and offerings help accounting our politically is risk solutions, exposed assessment growth such risks together compliance at and support then precision insurers global insurance customers compliance enables capabilities into and for to strategy. asset Similar analytics expanded to compelling further by and insurers are decisions to part balance creating integrated customer that IFRS and liability faster initially tools a include to is software.

data, of a to expertise analytics enables across insurers our managers and to asset from the set Now manage business with provide solutions comprehensive and wider risks. domain us more

and the our the contributed us position holistic our data trailing excited space, I've XX across the approach number cases use at assessment insurers of new of in while our months same and also we're our about to ahead and managers, risk evolve, as leveraging revenue of analytic integrating and increasingly innovating to important XX% product allows analytics existing to a our growth the time to such growing this industry sets serve times asset insights, and to segment. importance the this and range ability broader about the And build data has on in climate risk for capabilities. insurance analytics over talked Together, vast continues opportunity deliver As organic a provide scenarios. suite. our

example, offering For an and enterprises. small- company-specific million analytics predictive to risk to and customers industry-first for scoring which ESG companies ESG to supply of to chains. Moody's address ESG over Score we and sustainable risks ESG need, great This and quarter, and produce data integrating combines Predictor. and These XXX chain supply our a SME public is ESG on to are launched portfolio key this monitor methodology a assessment our market with screen ESG support medium-sized scores scores private capabilities example allow

our thought customers slavery credit chain. a Now years, and natural there's with leading base, customers with And G and human space. a slavery regulations industries opportunity this customer enhances of of S expanded ourselves the tools. coverage know-your-customer proprietary the to financial financial comply that provide Working leadership. moment, further our and previously risk in any states believe of institutions. supply stakeholders, impact score provider to track human of on unique their to processing to impact features of recently staying credit differentiating more few ESG ratings been trafficking disclosures, broaden TCFD language our leveraging undetected and within clearly instances we how are to are a as screen needing offering with E, our and a and quality will increasingly AI-enabled data disclosures KYC as and our to broader of to I'm understand and and beyond supplier range allow the and climate-related well over our an MIS, machine trafficking U.S. creditworthiness to we help MA, issuer's investors added climate learning past a across asked modern the In frequently new base on their cities. providing as the relating in is ESG In relevance companies we for we we proliferation on modern analytics, partnered insight various ESG

a a ESG Moody's firm our provide climate data just on practices. quantify regional leading assessments, bond but rigor assessed data requested analyze ESG to to environmental an our Europe, needs leveraging proposed to management customer minute commercial Score a In a client we year. green that a They and case and the also them worked and of our of large meet provided not second-party take robust portfolios. climate expertise on On efficient risk the that would that the existing XX few Through half second-party I risk integrate to of portfolios, provided selected this sophisticated individual more into types. The climate thought our And in-house and only opinions combining framework. with In recently their first financing with to the properties more their since principles. XX global opinion, we're how to the customer allowed their over green agency real on way. scores of create and I in XXXX, detail Predictor countries framework their and a we in-house properties training bank, aligned agenda estate sustainability to different Asia, and across ESG just XXXX with framework a into our talked to about. the with capabilities physical bond large thousands opinions studies our risk insights government second-party I climate and analysis customers' of embed ESG in how funds we also risk and a So illustrate Americas, requested assessment global also and customer, MA ESG hundreds climate of

our really So of climate our offerings commercializing risk customer and and ESG example it's great a across base. assessment

Investor about because Before these want I matter half examples and through was Rating the GlobalCapital was to Agency the highlight #X over third-party Mark, Agency to offerings that Moody's Awards. it Year strength Agency across And Awards year. MIS multiple industry Securitization the of ranked Global named a Rating in MIS of the few independent areas by turn Bond I firm. of this validation European Institutional the GlobalCapital the they Best Best the are Credit has recognition the Rating Credit in also our again. received first also of in

Moody's to equity are Mark Investment this Company As finally, And and our success. pace that I'm we as that, of of quarter. MA's and behalf together, contribute provide joined the I'm all help digital decisions innovation, This named to I to Climate XXXX Moody's thrilled both Top XX delivery, sustainability details have demonstrating call noted, second won to investing Breakthrough the Chartis' customers ongoing these to for thank And the our Risk underscore the well outlook the of their Solution And Diversity our which of MA, STORM our I to as of AI-based Best XX, was employees DiversityInc. on our wider employees customers pleased I'll sector. in of on better Finance's range update Awards. products ESG results diversity, XXX on team, Year our and would that these are ranked over one participants a Sustainable forefront to #X recognitions commitment now milestone Fortune further which the the awarding Score by transformation recognize critical of Solution to for an is sustained a Industry another. the our on in earlier within dedication AI our to quarter make enormously inclusion, like the to testament we Credit the Top in customer I'm in also that Awards. for Sentiment Moody's great recognitions. also executive at shown turn Moody's our proud Solutions our a position all Environmental with And to XXXX. efforts innovation, our risks.

Mark Kaye

the In issuance global quarter, increased Rob. second transaction by declined revenue X% you, MIS a while in Thank rated MIS X%, rise revenue, supported XX%.

predominantly favorable by financing decrease EMEA advantage compared infrequent to activity. liquidity-driven reduction EMEA compared versus is in on Revenue Structured in issuance funded and had of record, rose over in issuance. bank existing finance XXX% attributable declined declined contracted to XX% project a revenue highest environment. year pandemic. above public, deals transactions. M&A attractive revenue This X% result finance U.S. prior project finance to attributable mix, a XX%, debt an to a Financial activity X% period, this increased This quarter, is and uncertainty U.S. by surge issuers unfolding activity issuance. in Investment-grade and a issuance. approximately growth supply leveraged in corporate increase infrastructure infrastructure infrastructure a refinance supply. as due which take the X%, As finance supported was XXX of institutions CLO significant revenue the the seen issuers This to caused X% by to in to opportunistically our offset over refinancing increased rate ongoing who and decrease XX% as the was non-U.S. sought from due

efficiency higher initiatives In with revenue was legal results. and CMBS reserves further points offset operating XXXX strong to growth, MIS' margin by accruals, addition, operating incentive expanded compensation. formation XXX This partially enabled overall XX.X%. coupled adjusted basis lower by bolstered for

Moving to MA.

and This sales retention Second RD&A, growth rose to and double-digit in well robust on organic an demand strong increased basis. or rates trailing is for revenue data as due or research and feeds. an customer solutions revenue as on XX-month XX% quarter organic KYC compliance XX% XX% XX% basis. In

revenue For solutions. ERS, upcoming implementations This the overall SaaS-based rose as supporting of as asset growth insurance X% XX or driving our management and for X% ERS organically. and origination recurring XX%, accounting assessment tools as our IFRS such reflected demand well credit standards offerings,

recently restructuring of from the relates quarter. second XX% revenue in MA's expanded year prior period. revenue, percentage of basis margin to which operating recurring X XXX of points program, reflected ERS' the operating XX.X%. our leverage incremental the realization up Additionally, completed to comprised benefits adjusted the This quarter points

for liquidity to, items the on market. on full These and and based are personnel outlook and and Turning impact of activity market different company's XXXX sectors interest by in effects year the debt of as the detailed well is capital but capital geopolitical outlook own the assumptions markets Moody's not additional exchange foreign XXXX currency the conditions, conditions, rates, regarding pandemic; businesses responses to macroeconomic factors. earnings general reflects also guidance. assumptions include, well The regulators, many Moody's operations as rates, limited individuals economic regarding the as release. COVID-XX governments, in as

Our range will respectively; in and will a rise XXXX GDP remain U.S. X% full euro following year U.S. below of rates is by interest rate the X%, XXX and and by to by fall underpinned year-end. benchmark basis the default under decline macro XXXX spreads remaining high-yield assumptions: area U.S. to low, year-end; guidance unemployment approximately rate X% a to to the X% global points; below high-yield with X% will X% the

quarter currency exchange also guidance end assumes foreign rates. at Our translation of

Specifically, from subject rates could for of of and British pound $X.XX to U.S. euro. for assumptions for the balance year uncertainties current outlook. reflects our XXXX results differ forecast are the and $X.XX our for exchange the materially These the

reinvesting cost the We low our against to future programs our range. guidance the benefits to expenses forecast full year results, the investments. increase maintain our raising the second opportunity percent revenue grow metrics. balance growth-oriented across range in We for XXXX mid-single-digit quarter efficiency several for now as our double-digit expectation Following better-than-anticipated Moody's we are we from percent in

will project We We and XX%. billion full revenue cash approximately year cash, to on strategy. guidance operating investments improved of $X.X to available will important focused we $XX.XX margin are repurchases advance our Rob capital the anticipate assessment to acquisitions to our adjusted billion addressable conditions share $XX.XX approximately be ranges calls, outlook we and our between that to our raised earnings that EPS to now remain in to flow stability, market integrated respectively. has forecast and And and role. detailed play our To prior adjusted diluted other free Given which an Moody's at $X.X increased subject expense risk we strategy, billion. $X.X $XX.XX, opportunities and On markets diluted ongoing M&A end, and allocation. $XX.XX be

any we always, on and acquisitions any on divestitures, deals are pursuing. don't comment As won't specific we potential or that comment we

the current any We our obviously, the long-held our able business deals share any guidance could impact of included have a transaction repurchases. investments on organic acquisitions Under of in are and we we returning outlook, the allocation not to before reach. via excess cash future capital our terms but into that any affect prioritize depending inorganic policy,

Table list please range, For to low the proposals. up not single-digit from a guidance, to our previous from second does like grow of last Within percent decline. issuance strong any that complete MIS, the guidance, U.S. our quarter, would to project our potential a infrastructure we guidance of in following global of bill rated earnings aggregate impacts similar a refer factor release. low in now single-digit XX our We percent to reiterate quarter,

to better-than-expected meaningful and XX% increases compared outlook up flat, for well forecast respectively, conditions XX%. to and the of refinancing prior up bonds issuance as These raising up be as our and are is of heightened issuance activity. quarter result approximately be high-yield loans leveraged favorable ongoing to second We are XX% for our and approximately M&A approximately

the drive the loan in outlook be therefore to are creation to also that up issuance We supply improving structured will expect and XX%. CLO approximately leveraged increase continue

in active forecast surge very to are to XX%. slightly we range than year mandates a Following That's by the our for quarter, now guidance, to be after in full investment-grade X,XXX. a increasing to supply XXXX, of the Also, XX%. second decrease is in volumes new previous approximately our guidance anticipated which activity XXX lower decline

we pre-pandemic half will of historic we will compensation year ESG, moderate our a margin we single-digit conditions in remains the While issuance high in that issuance persist, favorable funding we adjusted to outlook percent and of improved and improved the early the believe needs outlook, more issuance as partially incentive forecast will XX% acceleration accruals range. the their investments the of second operating estimate automation With half of an in now to as the second revenue at return and will in market year issuers MIS' by offset approximately that MIS' is technology majority guidance levels. top pattern year. the to increase our liquidity-driven sawtooth believe line higher many in fulfill

dollar maintaining growth and revenue by single-digit a are from movements rates MA, retention products For robust and foreign customer acquisition. a our favorable renewable tailwinds demand guidance, we our growth stable organic low for rates, double-digit in given supported constant high exchange recent

while raising to adjusted range our back accelerating base we are margin into guidance effectively XX% investment We in to of expense business. to the strategic MA's XX% the continue be operating manage as

mentioned reaffirming to mid-single-digit As year full XXXX guidance range. our I in expense we increase are percent the previously,

This many remain our enables fund we higher update. improved the compensation with investment with our us into accruals initiatives prior associated our incentive business. outlook, revenue back and in reinvest both strategic and to organic of Although line efficiency assumptions cost expect our priorities

spending reiterate second organic to towards for key heavily we the Finally, the investments half will want that of weighted be our year.

a over Rob, turning few highlight I'd the takeaways. key to back Before like to call

First, strategic we delivering strong this business objectives, successfully again executed our quarter. and results

of management several research as MA, feeds momentum and provided recurring areas growth. revenue asset for and data compliance, Second, and specifically insurance as well KYC

let financial to the products be revise we and finally, robust to outlook. discipline performance evolving and our call to S G first turn offerings me enabling over that, Fourth, business. risks. us able the back pleased And into with to to our manage integrate half economic we continue of Third, Rob. enabled reinvest global solutions, expense XXXX of set culture following our an embed to are back our continuous stakeholders purposely the holistic a our E, And ongoing upwardly recovery, and and within

Robert Fauber

prepared Thanks, and questions. to Mark take Mark. This remarks. your be And concludes pleased Operator? our I would

Operator

[Operator Instructions]. and take first with Patnaik Barclays. We'll question our Manav ahead from go

Manav Patnaik

XQ I moving second issuance, could like. looks continues curious the assuming guess would kind was all seen what of help in happens that if is then with the know XQ kind terms pieces will color I in we've just said half moderate, guess hoping on but cadence helpful. a and see you you are of I run quarter. around us I the any was there based of big, I we'll XQ what seeing be what you're you

Robert Fauber

while conditions, half. good like Manav, outlook Year-to-date, really pace single-digit year in half. something in that issuance grown the rated have second expect the in half. CLOs, of a We're for had and global X% on the is remain prior driven by an issuance favorable, the for outlook to obviously, this issuance period. you leveraged those second assumes to our first improved moderating the from And that's in And improvement our issuance. to And looking earlier low decline second we sectors call. single-digit for just Yes, And year. primarily low the the half for of outlook now expectation have has we versus finance in we active year at at our an growth global issuance leveraged torrid finance and remain

first roughly the slightly the of just for for half half versus to be the flattish up year year. issuance the for modestly down So of to we're looking second

Mark Kaye

be in specific consistent with really is And the quarter, that that seen. pattern forecasts don't QX down historical then to would provide the we QX. but sawtooth And be general necessarily we've slightly issuance and revenue for MIS by idea slightly up in

Manav Patnaik

And helpful, Mark. could maybe That's I if up, Mark. follow very just

last lot I think hoping going there's you just some don't was gave recollect. I ESG of us that, quarter on. I but activity a obviously, numbers, But

released about lot us initiatives. just ESG you're Can should what how products the guys think targeting remind talk, You and we are and revenues what have run you rate a there? of of new of

Mark Kaye

Absolutely.

revenues ESG ESG basis that segments. both on the roughly compared stand-alone also a stand-alone full commercial last for quarter into growth and integrating a metrics $XX just basis integration into year, products. on quarter shy we're ESG from of I of analytics looking I MIS Second and were our the And up XX% on million for $XX this same another our spend and to we're just and and business year, period some worth reflects million the how definitely on also and MA product minute million then thought the a highlighting. think $X achievements to because X I'd they're risk

growth saw side, clients. the corporate physical we estate, commercial primarily very real testing for climate, on stress First quarterly assessments facility infrastructure strong in commercial risk bank and climate and

for area. We strong we've SPO demand taxonomy enable some specifically traction EU for really QX. finance market are that have going us had of sustainable to on we offerings, number the also of And has then lastly, and product, SPOs, gain saw introduced key supported a in side and to very commercial to our which allowed which us drive success in really the wins

On couple interesting of really to the market. products new the product side, a

than Regulation. allows into which greening the are climate We've and introduced of Data Regulatory allows really going then edge. has financial which also compliance, principal importantly, it most it's million the Sustainable reporting that EDF tool existing on climate-adjusted because obligations that first the SFDR something Solutions, first indicators. the into the Disclosure really it's spoke Finance Predictor And directly is that's adverse scores, for integrate help XXX Rob is us access to which launched network Score. we think important Catylist. like us on under are banking gives the This really And earlier We with a of competitive a that's SME the then investors And its new The products we're about third And kind. one our customers other EU the to of. based like models. Orbis, is the to a Moody's EDF. more our integrated scenarios, particularly ESG system It proud

Robert Fauber

But as ESG. product relatively going from you of Mark's still a there's us comments, on. a it's in so early of development and investment lot get Manav, a sense days lot for

Operator

go next McVeigh We'll and Kevin our Suisse. with take ahead Credit question from

Kevin McVeigh

Great. thoughts, And kind of a sits? add that's the know where amount but There's well. given that's let balance balance high-class current sheet. as cash problem, my a as Mark capital allocation of fair Rob, been just to I obviously me cash on congratulations the or any accumulating

Mark Kaye

Absolutely.

operate So first priority and effectively. the the our necessary has to really grow to capital and sheet the managing is when flexibility the business balance foremost, to ensure

record. by enhancing strategy could in And selectively, and and Beyond our well executed that, in balance reinvesting after said, to that policy, returning then with continue and integrated or we're and M&A addressable in seeking dividends approach. long-held prior then meaningfully consistent and our accelerate consistent appropriate have shareholders lot current of initiatives. look our opportunities, at first, capital of though and industrial and some team, by by by That going we'll the they cash our our repurchases. to bringing share our very to business seek with historically, both targets do that's capital fit our corporate we would with M&A markets a We strong to opportunities, a and logic sheet, new on that, M&A offerings track and do risk M&A our allocation capabilities we've larger our assessment demonstrated bolt-on have do way development deploy we very organically ultimately interesting

impact the include any specifically acquisitions. doesn't of outlook future Our

actually would time. an update spending to we deal, our on assess capital extent the repurchases and to through So are M&A to act that share need at returning able for plans we the commit to

Kevin McVeigh

follow-up. quick helpful. Super And just a then

are kind enough, ESG fast that initiatives that today. of market, Given you investing any thoughts amount how are you Just the the on and of just success incremental out much strategic around given had the enough? side there

Robert Fauber

Yes, I to call. -- do and you is Kevin, you think good this Rob. we're fast do investing we're I think enough. how doing, are on enough have the

about a of out across on you And every comments we've Mark's sense said, of on. the products I we've really of been part going new As integration breadth got development product the business. give rolling the that going

around base of to investing ESG and needs climate. So our meet customer we're the very focused entire on

Mark Kaye

would in half incurrence see to I the second really in And we an add acceleration expense that, of expect simply the year. should to

up quarter increase pick pace to expenses in those third to you'll we organic see As of large vis-a-vis fourth activities. investment, quarter strategic rather related the a support

Operator

Sachs. question Tong our next with ahead from and go Goldman George We'll take

George Tong

outlook mentioned of expect the versus of that now prior this decline has half does the past outlook single-digit for issuance flow-through issuance your second is that updated half How the or growth second reflect You words, low forecast also your other your global outlook in you just over quarter? specifically improved? In for the outperformance changed single-digit XQ low year.

Mark Kaye

start, further and really we George, an certainly, this then just perspective, from more detail. EPS I'll into in can go

year prior a XXXX EPS really, is primary in really sort latest year to of of MIS the $XX.XX the of of difficult increase in So of is the of full very actual strong our the guidance expected what reflection second range adjusted we the X% and quarter thought comparable. midpoint at operating driver the against performance

to down to EPS first that percentage We versus be If provided X that's to go really guidance X single-digit look year the low I have our that, quarter the adjusted increased versus specifically forecast to EPS will by prior at implies percent and the outlook range, XXXX in year period, the the really reflect that. we points due that X factors.

MIS can you year, and the of revenue the the outlook more talk we flat second implied approximately half and pull forward, Let's like. comps for the if would about say,

half And the the second investments hangover, into then acceleration just the or there. is strategic so the X% a small year. of Secondly we M&A have maybe of that thirdly,

Robert Fauber

And projected that's our you've Yes. seen year, I first we've an given outlook where just, for leveraged carried what with as through second the improvement the that half see markets in of think and versus half some we is earlier what thing the finance strength the of I the the in seen would other of add year the we've had year.

George Tong

there. seeing dive Can if helpful you're where then success investing And enough maybe deeper there? bit you a you on little it. Got and enabling you're growth super to That's follow-up, and in growth MA, we've been And the what's strong MA? investing color. believe that performance focusing a sustain into just certainly quick

Robert Fauber

Yes, sure.

seeing in research growth business, as data solutions. also of core that demonstrated some customer, we're service organic growth. revenue record delivering And strong MIS as high been for the single-digit one. in MA our risk risk has of of our and enterprise as track kind kind recurring talking that company revenue calls, very The are our about So these well a we've know on just obviously, solutions, feeds data business that, your a private areas driving

these alongside what's talked chain demand a of KYC bit of of and the this demand for got of of the precision understanding that. resiliency growth, emerging for compliance. kind and a this little give on nature each we've to the driving you about And touching greater demand sense just supply vetting. There's customer and So we automation

for all data So some rates KYC of driving high we is, feeds, talked growth in just we critical about uncertainty. retention of and mid-XXs of have space. market feeds. that research in we're very that in kind nature and the the that stress of the for reinforces I that webcast demand data credit Credit lots research, content And when think that of times

by space. side. And drive helping acquisition kind and really only enabled of and I is thing This of in increasing my we the coming space. and this ERS, very ongoing of is risk you've out this defined portfolio RiskFirst. other benefit and our rates quarter. asset was solutions, inside pension to Not calling penetration opening that remarks, IFRS all growth thought technology areas worth out we plans And got the for kind of management, have The together was on buy in of like demand but insurance of called some that XX the good design it got

and active all growth. development in continue very got fill product opportunities a expect pipeline to So to to going capabilities ongoing of support we and across we've to have our we're MA, product extend gaps

Operator

next Kaplan We'll Stanley. Morgan Toni with our question take from

Toni Kaplan

worked business? I of ERS next lower onetime guess at this of look And of I growth lot through? of I know a rate X wanted the like year ask straight baseline is related when what's And does to to sort quarters growth. about We've business. low and a single-digit had when you about for sales. But sort that normal beyond, fully get this

Robert Fauber

looking of call. And recurring to onetime rate. increasing to in XX% growth, right, ZM quarter. figure risk what's I revenue an solutions. drivers enhanced the preference X% And the and RiskCalc, seen And different the minute XX% X% is recurring last business Toni, we've dampened by at that that that talked our that asset recurring contraction ago this the in risk regards to in that. we customers just quarter reporting management solutions, constant revenue. Toni, of ERS had in something to we've have balance organic insurance revenue growth your range growth on Financial our space. on an basis. of requirements basis about and was The key total number. XX% and revenue at an recent driving you're for solutions. That's and and on leverage finance question, of represented recurring double-digit a got revenue focused in In was about growth so revenue, support, loss XX% growth up of you and SaaS And And like sheet We've offerings. growth, the liability revenue insurance revenue almost dollar but the onetime the ERS part revenue reported recurring customer why got RiskFrontier, good all the recurring XX% ERS growth And acquisition recurring both on we're I revenue products, in ERS. was so as bit our finance and a for and in credit continuing overall mean, quarter. a

revenue a would level That will decline for lead for future. our of rate the going business and overall. naturally onetime some I to foreseeable revenue for continued off the said, that level in at to de onetime that's expect relatively XXXX So decline decelerate eventually in ERS minimis our

have still to to we will off on-prem year. We and customers level see think decelerate that. I and going solutions, then sometime decide may next some who But that service decline you're want

Mark Kaye

lines a add revenue that, numbers onetime and as RD&A And being for of of at think the around least just ERS Toni, business maybe, million couple around to XXXX for quarter. a $XX both about

Toni Kaplan

wanted then topic, to I margins half But the year's Very margins. it, really overall and MIS prior from for the favorite guide XX%. helpful. MIS helpful versus turn to when I adjusted with bridge expenses. first the last XX And Slide at were was operating my look

the for You're guiding year. to, XX% I think,

the XX% in like back half. margins implies that So

I nonrecurring last incentive some should way building this know the this more margins, just and half. of of So in included year comp spend? pieces How of is much are severance what think in how we items there? obviously investment like extra and incentive about just year's second and pacing some is conservatism? you're comp, below last sort Like But

Mark Kaye

Sure.

towards half that of to do in capabilities, operating than the our margin. MIS MIS our which benefit actual first XXXX year above your XX.X%. observing. that Our partly is that margin updated better-than-expected operating basis year what the guidance outlook, in that operating points to really that. ESG And It's mind by we we're planning QX, technology leverage part are of normalized for to really adjusted rate, deploy full driven adjusted mix. we're the And the expanding the stack, another volumes important is and And operating to our quarter, to and addition That for of is issuance XXXX full in a you're it's is increase second keep higher by again point, investments flowing advance an margin, XXX to in our In underpinned to points and customers the we drivers discipline the leverage by MIS XXXX. of margin the basis that's approximately XX%. in run XXX strategic primary seeing spoke about expense through it's in

fourth It's third is and point, expect issuance margin, we're for to noting additional to We that quarter those in bring associated the MIS guiding that really XX% worth down your XXXX. actions also that with MIS year. just will full reset will the accruals the better-than-expected finally carrying incentive compensation the below

the making half I'm year of might point necessarily combining that onetime lot expense of incentive see more of that here comp, than for going year. key and we is this half run the XXXX look the is think this we to a the if first costs rate like So about second what in go-forward the some

Operator

our We'll from next with question UBS. take Alex Kramm

Alexander Kramm

coming the had of of to course, want have holistically. things little by everybody how So honest, if kind be myself, context, been put the than outlook, in everybody you terms I played I on better into margin grossly including and ask bit lot I a you obviously And a Just thought. issuance, guys definitely right? wide environment a to was think back think of the wrong months I MIS think XX call, to more this last out,

seen upside less feel you've about to continue confident that drivers of has And which changed? now that? ones factors perspective, And about outlook you a you -- that how so Like have think from they And just when how XX what do you your XX, as as manager, I'm curious, so, you these much play the do like think be? biggest feel that you would Like do that the would driven if months, do like how can that next some isolate you upside? out?

Robert Fauber

think the gets is it Infrastructure, in go-forward on from second all let terms of think Alex, how we of have about Day, that issuance -- that months, this finance second But now pull kind the if in are issuance leveraged and a Maybe we're first forecast little think the in see a I conditions how levels of of think the also how and of loans, for finance. strong in upside to about play an and bipartisan of because part of I agreement that's about a infrastructure last issuance. some the there's question about agreement may Rob. moderating seen where or we've downside half. bill. forward I be they touch the kind it's the that's costs bit leveraged And outlook breaking and you're we've market year in year, there We've that few key some there then of bit at And into on of particularly basis. I to the us. also But quite we to been thinking right, leveraged talk could I might we some very, half and start a And seen obviously, of me potential financing activity it's in of the around as post-Labor challenging the we terms earlier, the present around anticipated around half strong said seen news that outlook. very continuation understand upside. issuance for the very

I XXXX, volatility, another restrictions impact the escalation of certainly the a have even market a activity hoping strong to equity likely to is very strong to leveraged the Any quarter and half and year I from market downside, into note may or potentially and spreads as but it more Delta in but any to got we've impact we the year. some pretty market in have we continued that had tightened, topic, variant, issuance the to We kind conditions in had often last the third increase fourth that a volatility. have of finance of Then XXXX. a think correlated end year. comparable equity to challenging think as infections I of for equity second have quarter, due positive wave and I were with was about impact done this

of So due trajectory any that's of to rates. market interest something an course, going to or unanticipated inflation disruptions and watch we're

Alexander Kramm

proactive Great. the quickly. larger in comment I'm Okay. M&A curious particular, just made the around about gears of maybe bolt-ons. some then commentary you've And shifting here

be some some you for great you could growth and have? remind of us maybe this like think history. did when related So a more. to bolt-ons, these you're that like I deal in it I in little something be bit to love can then big about you dimensionalize of the just that, mean, looking what can largest BvD, of companies. you would if talk would of But you terms what I you larger And capacity define with how

this if Like of a you're is talking some that look a lot something deals needs doing for really But M&A them. bolt-ons, to do and of right? history these mean, is care you top I the accelerate mean, remind I done an smaller Like great job larger accelerated something also about accretion, just have or about? you maybe financially? that yourself, growth line you what You've us,

Robert Fauber

Yes.

larger So first what kind say think Alex, think and we clarify when Mark bolt-on. of I'll I what maybe means of I

have talked there offerings further customers. crime, what significant of M&A us and are Bureau we've of processes. And that for I analytics KYC got seen strategy serve some Within we've a workflows But of that they markets in Private of retention back M&A why we're of ERS investing such about van estate companies. going opportunities and end CRE from out result, clear on advance to larger to last I think a banks areas there's climate demand we've off the position where I that and over everybody RDC to company our an and related as are I know on to our better going ESG needs. a up And data to pretty think risk our you've as that business, market and are and area course, already businesses, these change and And our that is data, market. a analytics, to I where of a and make of area we customer lot our a very capabilities physical climate. of We've climate critical scale very then, made customers. bolt-on climate from particular, in to risk on number the expanding That's is on some call calls, high refer about an continue very and that and assessment back comprehensive come for over Dijk and where that. our insurance rates. see investments our -- quarters financial And is large having build about more opportunities certainly, deals. offering near-term are couple I'm demand our to, addressable commercial to understand acquisitions these risk a end customers' and the questions acquisitions building calls. to provided and real in we've been evolving And strong high-value data range we're focused

You small our both that and in acquisition customer space. doing and saw inorganically us very both Financial. do that on We're growth of this building base and with ZM organically existing a

So hopefully, that gives you some color.

Mark Kaye

capacity own part you question, And second capital that To your Alex, rating. cash the of a policies BBB+ give perspective, we from continuing just to really allocation to are our anchor around and positioning our of calculation around operating Moody's end trailing $X.X XX-month $X.X of adjusted net feel, income debt the the roughly quarter billion, billion. against our as at of billion $X a a puts

looking roughly at X.Xx we're point. at this So

Operator

Oppenheimer. take we'll from And with question next Lau our Owen

Owen Lau

is there potential us if please like that in on an Could business you could any on view give the Could news coming please about China? talk any? recently some China. update out from of there and your outlook impact strategy change So are China, there's you if Moody's

Robert Fauber

you the it's Good Owen, to Rob. on call. have

I of on will think in I going and Mark few that about are a talk developments China. the

that I integrated security referring to important One we and would business, of including is and for like consider those Moody's for the law. developments, security factors may first are our very matter customers. guess, assessment data China be as them, and I both say that think, I on elsewhere And the you for policy an impact data just risk

for implemented security law become I well little localization means as China the don't the by our early other scope, effective, how to to Owen, September. data and For play would being of impact is certain and the market And it just passed law over to business background guess how and suppliers these they're June broad some time. to on out. that to interpreted on in say, believe, a call, has as I business, everybody could of going the in the authorities. impact customers requirements that's a time And but transfer going But new by and also parts some that's going regulations law we has a it language that take China. our is ratings around I it beyond see I think data of impact going our that depend data And

So we'll have see. to

add it I it at long-term China, don't to it this changes So think anything But point. as to that? relates our to strategy in Mark,

Mark Kaye

over markets just to and to the mandatory interbank Yes. changes last requirements note also bonds the both the rating in policies Maybe may briefly, couple on bond of the the credit nonfinancial reports amend very regulators months negative the did issuance. for for as exchange of mandatory impact a regulatory domestic disclosure rating well requirement on as short-term revenue. CRA public remove have Those

sort or positive perspective regulatory into of the medium in long-term that investor-driven demand. for it's However, current a ratings from demand to more sustainable market transforming

Owen Lau

KYC investments line the I'm about maybe investors products? will expenses. of increase reinvestments very CRE, expect quickly MA are you to back go understand to these those think drive Mark, in just mentioned. on top your trying year? some to better growth investments helpful. or ROI in That's Do of this how Okay. Or can I these to and Rob of want stickiness year the you particular and the next

Robert Fauber

what thing real about capabilities And also our why to commercial I since we integration it, challenging about our it's let historically mentioned rolling just doing is investing asset And answer. COVID manual. analytics them that a evolving. make also pretty the Owen, But decided class decisions, -- give and And became the data insights workflows we Look, is and we're and build new insights our out estate, stress. we're and the we're touch give sense, me that to out on here. to of enhancements of class asset because customers the that fragmented particularly all especially to making you amidst just both, investor of is range and commercial you Yes. institution rolling we're financial if rapidly have We're out for that's real certainly And a really wanted the And think, what customers. major hearing been better maybe estate, products. from products. better a and existing lending

in a So give few market investing an we you and a to -- investing acquisition company years investments now making lending decision-making. data, we ago, but us to with of know that help lending and and property are made

build data. as in bit supplemented We And a more us there's we an good listings as of well that. product to so acquisition give internal year made the earlier

array an these the see existing products. of product in as areas as enhancements well are I going So you to expansion think of

Operator

And Markets. BMO we'll with take question our next from Silber Jeff Capital

Jeffrey Silber

you And the We other that lower-level hear in lot impacting that some read the just tight as countries, seeing market Is of and a for States. at I'm of customer specifically positions? some United some curious. about reps service all, the know I in or the labor well. maybe you're

Robert Fauber

employee it employees includes number Yes. turnover the company, and seen compensating a includes And the things, competitively employees need to that they bit pandemic increased. benchmarking think, a we've every as make an and and drags to importantly Like of this our also on sure our in market I opportunities, very of we're giving that we're want and uptick fairly. our But updating job environment. have in doing address flexibility that,

well have when calculus part a recruits, clear employees joining our so firm. that about very at flexibility Our made as it as employees, to staying a they are prospective very their or are these important us workplace is overall of thinking either

also for also that I best. is that we And where DE&I. that an initiatives really our approach we being institutions week to every company, purpose to with everything work have would financial day office. employees competitive at X we of clarity, that our back thing heart to mission. we a in support support employees diversity, a talent they advantage connect So somewhere do. I a the And those are that as as days last really world. our come so about aren't say to some provide prioritized value selves be talk they and fairness mandated the the think They just flexible their and equity to the interconnected see their can And and inclusion, relative and knowledge want greatly work authentic employees words. have at of our And to in be that

enormously committed Our people purpose. that to are

something strong also is think, has effect I a retentive that, that so And for us.

Jeffrey Silber

for Okay. That's then, you. really helpful. one And Mark,

helpful any the cadence get side. You we quarterly expense in XQ were and color providing Can very side, on on the what revenue the guidance should be XQ?

Mark Kaye

Yes, certainly, general that's historical pattern. then you slightly revenue very the MIS in slightly fourth And quarter third would in to up down look I really and happy driven by quarter. be sawtooth a idea. the issuance really the to give for

and You based of guidance down about digits maybe digits in issuances our could on up guidance in think quarter. based fourth sort similarity QX on being mid-single mid-single the

In should you'll relative an terms course, of flat to year in the investments QX. expenses the that third organic approximately spoke then prior expenses, acceleration in comparable quarter strategic definitely, account earlier. that, takes And our into be and of we accelerated see about

Operator

take Huber Research next We'll with question Huber Craig Partners. from our

Craig Huber

I on right? half couple first could. could. your ask, to more What's the costs I quarter? on that a your was that the quarter. you Mark, expect said that be million then And first outlook? And if I I comp, to $XX second I the hear year of same earlier What questions lines I first, we in costs think like think Did if opposed follow-up, year have as next to was lower cost. second a 'XX of incentive want had likewise, should cost of half the along I I,

Mark Kaye

Sure.

specifically Just to earlier clarify my on costs was related to question MIS.

You first just in year a the investing emphasizing look should second we year, in of the of to lot the business. more this XXXX, expect half be like will half next that

in revenue actual And XXXX. $XX of of you point the approximately comp $XX incentive the of that should And this QX and and incentive see quarter per expect year, the be full a comp. in quarter terms incentive fourth we between outlook. accruals reference, accrual driven than compensation, to million million of In for $XX by lower XXXX year accrued will second we purely took margin and improved QX million quarter for of third and just as

Craig Huber

I sort over and bank as added strength please? of here question the for outlook and the the you CMBS output, next of year CLOs ask, your think other loans want seen to here given what's My out stock RMBS, you've

Robert Fauber

Yes, Craig.

just the start structured me you then sense about let in to outlook. maybe So our contributing what's of finance give quarter some by talking and

in On market was in CLOs issuers activity And through see primarily active for as that get August. Mark due continue we continue refi. was U.S. We structured little many just of slower Obviously, market and due That's very activity, RMBS wait we obviously all tight. RMBS bankers improve. lot in up past MIS a kind that in in vintage to ABS rebound. bit nothing, to of this the like estate securitization ground CLO sorry, quarter saw seen strong a of want ABS a loan in little to revenue halt CLO U.S. in I to But you've are part Our still signs lot number second a very to down. issuance X about highest finance expected year of And fundamentals CMBS, seen and but tightening were got and in economic And of which Craig, this we've across even to to to see going while, but overall kind don't -- are will back what thing we've who they improvement XX%. that almost CLOs overall recently quarters. overall, ABS the supply, be space, got, contributing levels of elevated, transactions. the hearing softening market, probably we're amount outlook terms commercial just quite and of board a like and also say, structured last particularly some board. activity, given to and improvement spreads talking at of earlier, I of and just been year. there or talked that updated kind that's for sidelines. pent-up the the brought conditions, tighten Spreads the of a a across activity. are they're that And that's as on in this would of we're real in obviously, -- quarter space something because little finance refinancing in on of general demand leveraged XXXX XX% spreads think, to the an slowing Craig, the a remains last enormous our immaterial. something the supply refinancing in the issuance the the There's also a of bit probably widening And

Operator

our we'll And Blair. Andrew question from Nicholas take next with William

Andrew Nicholas

kind I ask wanted ESG in predictor a which that hoping business? And ESG product expand or the out score for to the and client that extent guess rolled products would interested not of market those spend that you you'd types this earlier the might products evolve terms have And Just lineup. then how most in Climate are on time? some those the in I'm consumers opinion addressable on about of you one know talking today. whether an the to suite that, of Solutions quarter. of over follow-up your I time answers March

Robert Fauber

Sure.

where wanted has customer for who income our mainstreamed globally start. investing. with that and broadening socially about really to the customer portfolio base, investors started base think on then The we types. now think essentially fixed So with portfolio is who I right, are maybe And market of customer -- responsible And construction equity let and that me obviously did out this it as to investors ESG all monitoring. focused kind start of content,

theme I wide includes in construction everything corporates sustainable portfolio into managing corporates for key corporates a So customer I but is that are range here, institutions, think got monitoring, investors and well and demand not issuers seeing only who the chains. that and -- that like but as And sustainable processes. ESG. considerations you've financial of And that's said, integration the also very as from And of you're Andrew, includes finance supply governments. engaged

at their and securing the You've ESG got they banks are collateral and wanting risks the of climate taking that to their loans. understand borrowers of

risk around risk You've and got the mitigation change. climate wanting investment to physical inform governments related who to are

that's integration talking entire about suite. so And our us so product across why hear much you

Andrew Nicholas

of somewhat all I on in hoping for for Perfect. follow-up. my the some relatedly answer an maybe investors, the initiatives Moody's kind specific That's progress of as update and And really the prior to topic question. you an is could obviously you underway mentioned there ESG helpful. then was give us important

Mark Kaye

Yes.

positioned ESG are business As to of I the fixed couple be to very bring answer of the let more income ESG-related broadly. initiatives, to markets are a think and just for about touch equity Moody's I well specific me on we interest. questions to that sustainability and able think help the areas transparency to But

is research first products. analytic data ESG The within our and

combination for really on our really One assessments and our that's dual for of materiality. to focus scoring financial just overlays a is And versus we're our technology-enabled we've because able materiality to the doing high-quality deliver that differentiators built insights of competitive be analytical reliable, customers.

it's market The as for risk second sort of exposure area hurricanes, the risk well the both the looking where sort risk, is at flood, data on risk heat, resource et to how on cetera, and very on that's that assessment supply operational asset whether And level as physical of companies capturing we're on climate, chain stress, strong use.

suite. earlier, on into the our us. made Rob point then active I sustainable product. the finally, very is ratings, and second we very differentiator that are mentioned just third strong, for The It's product to MA a our And quarter X first integrating our for insights certainly that

what here, we quotes to Now subject excellent experts. hearing short ESG maybe with solutions are tailor-made access matter clients from client to and directly that and analytics

Operator

We'll from RBC next Sabadra with Capital Ashish Markets. question take our

Ashish Sabadra

discuss data. cases organic the expand to on has the footprint company focus the further just initiatives other talk of you about can which I and going including details private been for use a slide just on for also company private of KYC your some inorganic was area I and your Thanks solid for and the company growth. and But if strong compliance, forward Congrats wondering the in to wanted on obviously results. traction data private data initiatives.

Robert Fauber

call. the Good you on have to

use mean emerging You're the I we're fastest-growing of mentioned data case earlier, as see a starting know customer. around demand And right. for private chain supply your and company to biggest addressing I kind around is risks.

a the data of a credit, the master out. cases. goes examples, seeing across I use very good of both few transfer marketing, So might entire company private trade But fuels list range development whole corporate growth call data on. and management, digital some our And pricing, that portfolio. tax we're and And

of is number different The a that say into we're I integrating would other thing offerings. data our

holistic our one understanding commercial real when of So for on "Hey, want instance, you a have in are properties imagine, of you investing is as that those around the think lending -- we to the more to saying, estate, profile buildings. the about customers or look, key tenants either we're can in things understand the

insights data. and to offerings. to integrating have, our We're tenants able into of now the So that the with of able course, leverage ERS We're Score, we're the give of tenants. the profile ESG ESG that into Predictor content also the profile credit

of we've their their to get data enhance banking being commercial origination who you our efficiency. customers imagine, to the idea into got own As that like platforms able

-- So for beyond this nice data we that's that some they're there are and very driving range us. just ways whole KYC, a different monetizing of are growth

Ashish Sabadra

cross-sell wanted including existing ask the and Again, customer about And offering insurance the you That's your But cross-sell for follow-up. to thanks penetrated? talking very to just particularly there there upsell, on your how about management there. opportunity, opportunity are the much slide base? more well and into is question holistic helpful a I side? asset pillar. How on was that

Robert Fauber

that Ashish, insurance? you're speaking right? specifically Do of have I

Ashish Sabadra

you and after going also the penetrated and insurance to like or want just logos. new is room are Yes, management well there cross-sell necessarily in to how that much how asset if generality talk upsell more offerings

Robert Fauber

franchise Yes. I'd is current start just highlighting maybe I our guess that focused primarily life on by insurance insurance. there And some. are

of insurance you and as life management buy between synergies kind side. there's asset can So imagine, some good and reasonably

with think insurance then actuarial at developed then And into by talked IFRS seen leveraging cross-sell that I we've that's reporting, we expand so And we've evolved been first regulatory And all, those started kind product, Solvency function in CECL. capabilities. around insurance and we And us these gives products an a then of life I one important II, of -- right, multiple regulatory very, products. opportunity XX able to we very companies. about offerings, our compliance product take combined and modeling. customers to as

land multiple So and strategy these one increasingly got then insurance are kind who where companies expand taking products here, of of we've and products. what is happens a taking

Operator

with Rosenbaum next We'll question take our from Shlomo Stifel.

Shlomo Rosenbaum

in It's reporting a specifically before, of characterizing just in that e-commerce, tight. want media, more data I finance, privacy real circle kind some it's about mean, education. just the were Owen's as I to back crackdown what's I on of to of going specific becoming now. in asked the right it the some laws it's question, regulatory questions of mean commercial risk. than environment been estate terms like hailing, the ride increasingly China

also do how for in businesses in business operating perspective own changes there what that the and are recommendations. of both of regulatory a to your being the mean terms China these various of your Just out able in you about in think rate then from operationally environment in might the terms that ratings and context

Robert Fauber

And wholly investor We've I U.S.-Sino because recent domestic relating U.S. in atmospherics challenging it meetings. the market comfortable a of Certainly, Hong and is in all market, say to companies in on to to remain changes. nationally and that I certainly, reinforces even and positions that through Yes. the to us. approach very be think, also that, I'm In going done approach to medium we've that evolving I these business our Chinese Hong get domestic work calls over to companies to with And given industries lot Kong, continue to is hub our And the U.S. for because about now what's these continue is government's business we questions it's landscape. to going on other important that guess we'll view. rating China would regards American do the a achieve talk ratings to an leadership think and and for obviously, to important China. going long navigate Kong relations, in got the players in I leading I operating today, owned term. advisory

to relates that I plans business substance in it sorts just guess As of we've issues is got different. for potential that no say the contingency Hong offices over would all of world, place for our and I advisory, the all Kong

Shlomo Rosenbaum

like to a to And here then is Okay. go much with over still going clients the I this to and There just little think being people meet you bit about being in in you by wondering of on ability in of seeing I are over was back How Toni because was done. face asking the terms ERS definitely that. impacted -- business in ERS. change a of your ability of of the momentum get recently? implementations much was kind of phase, lag by their impacted are do how And a still that?

Robert Fauber

growth, part I It's Yes. talked and our But now a to be the We our is being think only regards big site. with was. say revenue But SaaS of I talked virtual to I And on adapting which complexity some of done implementations, of the the is pandemic business able would it kind the about, great a solutions impacted I by smaller of think engagement but these not of when not was this about in customers. that challenged as on-prem virtual. just the installations, from part more which being the recurring by the our we've of that much unfolded on-prem, than that job that in solutions business. that you see to sales

I our on. I going part significant customers, of to virtually. you're we've terms what engagement decline So adapting of think -- done But touching to contributing overall great with think of you a in what that, fairly job in are I like onetime is said, is

Shlomo Rosenbaum

Can one more? in I sneak

Mark Kaye

Shlomo, ahead. Please, go

Shlomo Rosenbaum

real a just quick It's one.

Just quarter. a looks good Is that like a for year? million on in the revenue revenue Cortera, business? $XX generated Is the whole $X run of like assume you've rate million it to that

Mark Kaye

of and the comfortable and business sense other lot done, makes in acquisitions that the think Absolutely. pretty we're that which the executing we've some direction going. pace at our we for about Cortera specifically If we're I that of feel a

that level. looking for for I'd be the be just bit number, for impact assume around to revenue really so little M&A our on If we're of to but comfortable year, same you the the inclusive including Cortera for And widen of year. again, full million the aperture sort XXXX a $XX I RDC, not

Robert Fauber

they also to business. And be solutions products. increasingly, to different variety is that would very bit overall our our say I small a have And going data that what that's of a into data integrated just of and you're see going is

be particularly what we're business. focused individual on to data not results, our it's on doing going Cortera the focused to So more we're much solutions support broader

Operator

next James. take with We'll question from O'Shaughnessy our Raymond Patrick

Patrick O'Shaughnessy

we've stay for The been Biden nominee appreciate SEC the Steel, nature incrementally Secretary agency industry, going for administration's has with Institutions, potentially SEC regulations? administration? so Financial the a of to your current Treasury dialogue And concerned I on What's I'll reforms one previously structural rating called are enact Biden for Graham while, industry, question. Assistant for about the credit you in your the disruptive to and particular. more

Robert Fauber

I'd And have and we, our been we regulators back Patrick, with well And have have the industry. to question. strengthened have multiple very meet business. policymakers, and And And framework requirements I market under regulatory believe, provide over a the I thanks regime. you'd XX as allowing of market. which regulatory maintaining with subject an as the we guess conclusions of in months, policymakers highest interest substantially world. of been issuers kind expect, transparency strengthened for an think with and general, regulatory remained our past ratings to as discussion as policymakers is confidence we that imagine, a effectively. investors manage market the done at job around the you managing the guess around on a function met throughout to that excellent with in And I and business of say policies and I regulators. would going and very cross-section time, to the and And last of by the the think feedback a say, of characterize a have would our oversight conflicts feels rating a stress the over of it's have been lot efficiently what the our first XXXX, there focus ratings, I policymakers the independent of high for dialogue and that I by industry is and over the and from the that provide time around credit transparent And recently advisory with place jurisdictions. saying I've and we and would broad internal agency decade, in believe pandemic. continue our the And studied market and both decade. the Patrick, the the and ratings test ultimate to that quality. company, in and carefully I the in an that levels the well Most models SEC which range active same, robust that credit as procedures And industry, That operate represented over it's the an has controls for goes served We're last conclude, credit I allows are decade. I model group market business was is U.S. processes

Operator

question from Judah take and next ahead go with Sokel We'll our JPMorgan.

Judah Sokel

touched sneaking talk the end. kind revenue guidance where you delta have opposite the MA if margin MIS appreciate wondering was was margins. guidance in at here you staying the but listed. being outlook, could you dynamic, revenues Earlier, about the margins, I particularly in the I on between but you the raised same, of margins not

So I that seeing was what wondering what was happening over outlook. you're there, to change

Mark Kaye

a bit Maybe context with here. little I'll some start

renewable focused and nearly basis of You've seen over given large -- that's concurrently set that have to And line in or through expansion top is expansion that really profitability. XXXX. that, growth of done and So on us, sort XXX points the looking opportunity of ensure strategic investments, margin we right? organic MA while historically, we've since front

basis We MA combination adjusted XX% margin around up M&A than XX%, to us of to that's components think be by of XX.X%. done If and going to that plan that's of XXX basis by going of to we've XXXX points. higher XXX allocated margin have approximately our the points core of about that XX. already guidance investments done a I and and sort organic number XX offset basis to to gets operating we of actual points that, you raised fully expansion the that And we've XXX do midpoint X that see

a of terms year. see coming the through strong we full very So for in leverage guide the

Operator

Huber again our Craig Research with question Huber take from next We'll Partners.

Craig Huber

can a of will back we're get Mark, versus to sort that here. rough right terms past T&E like costs expenses? system pandemic think office? think how the in So on your I back wanted second come that to this COVID-XX to annualized it the we here, will go how back through tracking of back fully going we about you you at employees system us environment to for once help hopefully Or come in are is give get some the of costs in in this terms now? do once million a $XXX that what in number we

Mark Kaye

context a bit to and question. of maybe your little I'll Craig, the get So of then specifics

business. If I that to our half So most investment management answering and for an of the the disciplined interesting talk capacity year. in as half about and as are to of maintain question, the just I operating importantly, second sort I continues first comparison think expense management versus the about year very if team of think the create pleased your we highlight leverage

really X% the for that's first from get up are the was the M&A restructuring that savings, of was FX offshoring M&A operating half to effectively the is M&A the of XXXX and accelerate operating were XXXX about this and about half try this some FX, engaged because half how think that quarter, year. FX we've -- include that of we of about some second half plan, M&A the ended that T&E growth. holding think that the then we to that estate expenses MA year, of we've the real first X-ish does that if X%, expenses, to maybe of X%, and that about and expenses -- morning, of to core and operating maybe that excluding and reason really FX, really number mid-single-digit but year-over-year. X-X rationalization for percent that the provided implemented, we underlying saw those of the program, really year to in within initiatives for to about looking underlying to the really due X% Contrast probably half which the operating you And first percent. savings expense effectively the for guide And X% is operating expenses, excluding X%. So was effectively programs year, flat. the we which

And all second for compensation at the the somewhere that in accruals into organic $XX And and so accelerated to that half. account ramp take really expense looking initiatives, the we're and year. any $XX would million, gets additional the us to investments incentive between million

Craig Huber

annualize, environment, once have much we do how I'm office. when the of back we And cost sorry, want now, through it, cost this right the look then when to that in however extra back versus people COVID-XX employees you you come but get at

to was not where not assuming have where get it reasonable but going be You X. T&E to is think level back it's it's pre-pandemic, a going you XXX% -- I'm

two of think those add extra X% roughly mind nuggets million. $XXX in about we cost? it's an your you How or roughly If together, should that

Mark Kaye

and given specifically So sort Craig, we've trying XXXX. for I the provide go appreciate of before our full in of little year year of time not the that was end a July, the to we we're outlook address to bit follow-up got in which I question.

you Just would the probably a it is what around this to give in X/X have year sense, T&E been of XXXX.

generated off is of $XX realize the effective manner. certainly, So offshoring million have more and the of to that a flexibility, the savings. that a we we're we that and operate million workplace to also procurement other do of future way We've anticipate have year that executed based previously. for the of you're I really of Rob's lower. in around number quoting earlier much that cost telegraphed $XXX activities the coming about efficiencies think comments the We But million learned And and rate expecting run a portion to $XXX we is efficient in workplace back. T&E

efficiencies when that those give and of into delineation February clearer probably Some will and outlook update will be redeployed we bottom back next some year. flow we'll ultimately in through the a of line, the business, do the in investing to

Operator

conference are to to right. back additional the questions appears Fauber, or I'd this at further It All for remarks. turn closing any like no you there time. Mr.

Robert Fauber

again enjoy fall. thank I the forward with everybody joining just to look well the and summer. today's for rest want we call Be to speaking in the and of you

Operator

This Quarter concludes Second XXXX Earnings Moody's Call.

post following the Resources a call, reminder, Investor company under As will immediately this section breakdown revenue the the IR Moody's MIS the of page. home

of website. much. Time Eastern Thank IR replay a will you this be Moody's X:XX on Additionally, call very after available p.m.

Moody's (MCO) 28 Jul 212021 Q2 Earnings call transcript