Moody’s (MCO) Q2 2024 earnings summary

Executive summary

• Achieved 22% year-over-year revenue growth in Q2 2024, reaching $1.82 billion, with strong performance in both Moody's Analytics (MA) and Moody's Investors Service (MIS) segments.

• Adjusted diluted EPS rose 43% to $3.28, and diluted EPS increased 47% to $3.02, with net income up 46% to $552 million.

• Operating margin expanded 590 basis points to 42.7%, and adjusted operating margin reached 49.6%.

• Growth was fueled by robust demand for insurance, KYC, and SaaS-based banking solutions in MA, and significant issuance activity across all MIS lines of business.

• Continued innovation, strategic investments, and partnerships, including GenAI-powered products and expanded collaborations, are expected to drive long-term growth.

Financial highlights

• Q2 2024 revenue: $1.82 billion (up 22% year-over-year); six-month revenue: $3.6 billion (up 22%).

• Adjusted diluted EPS: $3.28 for Q2 (up 43%); diluted EPS: $3.02 (up 47%); free cash flow for the first half: $1.29 billion (up $205 million year-over-year).

• Adjusted operating margin: 49.6% for Q2, up 590 bps year-over-year.

• MIS revenue grew 36% to $1.02 billion; MA revenue up 7% to $802 million, with MA ARR up 10% to $3.1 billion.

• Free cash flow guidance for 2024 increased to $2.0–$2.2 billion.

Outlook and guidance

• FY 2024 revenue expected to grow in the high single-digit to low double-digit percent range; adjusted operating margin guidance at 46%–47%.

• Adjusted diluted EPS guidance raised to $11.00–$11.40; share repurchase guidance increased to $1.3 billion.

• MIS revenue growth guidance raised to high teens percentage; MA revenue projected to grow in the high single-digit to low double-digit percent range.

• Year-end MA ARR guidance widened to high single-digit to low double-digit percentage growth due to strategic changes and market uncertainties.

• FY 2024 MIS rated issuance guidance raised across all categories, with total issuance growth of 20%-25%.