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Moody’s Corporation has two major businesses, with credit ratings providing the larger share of revenue. Moody’s Investors Service (MIS) assigns and monitors ratings on debt and its issuers, giving investors a view of credit risk. Debt issuers pay most of its fees. Much of this revenue depends on how much rated debt companies, financial institutions and governments issue in global markets; annual arrangements and ongoing monitoring fees partly cushion changes in new issuance.
Moody’s Analytics (MA) serves financial institutions, companies and public-sector customers that need to assess risk and make decisions. It sells access to company and credit databases, research, analytical models and cloud software used in banking, insurance and customer identity checks. Customers pay for access through licenses and subscriptions, and most MA revenue is recurring.
The ratings business operates under rules governing matters such as conflicts of interest, fees and rating practices. MIS is not licensed as a credit-rating agency in China and issues global ratings on Chinese borrowers from outside the country. MA also faces legal limits on how it collects, combines and distributes personal and confidential data.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Moody’s results hinge on global debt issuance and recurring risk-data subscriptions; Fitch is an important ratings rival missing from this list.
S&P Global competes with Moody’s for issuers’ debt-rating fees and institutional customers’ spending on financial data and analytics, tying both to global debt issuance and data budgets. Watch its Ratings business for signals about the issuance activity that drives much of Moody’s ratings revenue.
Morningstar challenges Moody’s on two fronts: Morningstar DBRS rates debt, while its research and data subscriptions compete for institutional budgets with Moody’s Analytics. Watch demand for its paid research and data access as a signal of customers’ appetite for subscriptions like Moody’s.
Verisk Analytics competes with Moody’s RMS for insurers’ spending on models that estimate catastrophe exposures and losses. Insurer Slide licenses both Verisk Touchstone and Moody’s RMS, so watch catastrophe-model demand rather than assuming insurers choose only one provider.
FactSet competes with Moody’s Analytics for financial professionals’ subscriptions to data and tools used in research and risk management. Its portfolio-analytics and enterprise-data subscriptions are the relevant window into the customer spending that also matters to Moody’s.
MSCI competes with Moody’s Analytics for institutional investors’ spending on data and tools that assess financial and portfolio risk. Watch its risk analytics and portfolio tools for clues to demand from those shared customer groups.
RELX’s LexisNexis Risk Solutions competes with Moody’s for business customers buying tools to verify identities and assess financial-crime risk—the work covered by Moody’s know-your-customer, or KYC, offerings.
Nasdaq’s Adenza and Verafin compete with Moody’s Analytics for banks’ spending on software to manage risk, meet compliance requirements and address financial crime.
Intercontinental Exchange competes with Moody’s Analytics to sell fixed-income information and analytics to financial institutions. Watch that offering within its Fixed Income and Data Services business for clues to institutions’ demand for bond data and analysis.
MSCI, Inc. earningsMSCI
MSCI’s report will show institutional investors’ demand for risk analytics and portfolio tools, a clue to the customer spending Moody’s Analytics also competes for.
Watch demand for MSCI’s risk analytics and portfolio tools. Stronger demand suggests institutional investors are still paying for this kind of risk toolkit, supporting the customer-spending pool Moody’s Analytics competes for. Weaker demand may mean tighter budgets or spending shifting elsewhere, making those tool budgets harder for Moody’s to win. MSCI’s results are a clue, not proof of Moody’s subscription growth or decline.
Moody's Corporation earningsThis company
Moody’s report will show whether customers keep paying for its Analytics subscriptions and debt issuers keep paying for ratings.
Read recurring Moody’s Analytics revenue alongside Moody’s Investors Service (MIS) ratings revenue. Growth in the first means financial institutions and other customers keep renewing data and workflow subscriptions; growth in the second means fees from rated debt issuance are rising. Strength in both points to support from both engines. Weak ratings revenue with steady subscriptions points more to softer issuance; weakness in both raises concern about demand across the business.
S&P Global Inc. earningsSPGI
S&P Global’s report will show whether debt issuance is supporting its Ratings business, a market signal for Moody’s issuer-paid ratings.
Look at revenue in S&P Global’s Ratings business alongside its explanation of debt issuance. Stronger Ratings revenue suggests issuance may be supporting the market Moody’s issuer-paid MIS ratings also depend on; weaker revenue points to a possible market headwind. S&P Global’s result is a signal about the market, not a substitute for Moody’s own figures.
Fed Interest Rate Decision
Moody’s tracks the cost of borrowing across the economy: when rates rise, debt issuance can weaken and reduce the fees issuers pay MIS to rate securities.
Expected4.0%Last release4.0%
If it comes in above expectations
Higher borrowing costs may curb new debt issuance, reducing the volume of securities MIS rates and the transaction fees issuers pay it.
If it comes in below expectations
Lower borrowing costs may support new debt issuance, increasing the volume of securities MIS rates and the transaction fees issuers pay it.
