Moody's Corp at Goldman Sachs Communacopia & Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: George Tong - Goldman Sachs - Analyst : So let's start with the high-level evolution of Moody's. Moody's right now is much more than the rating agency. Could you provide an overview of Moody's today versus the pure-play rating agency that the company was a couple of years ago?

Question: George Tong - Goldman Sachs - Analyst : Yeah. You mentioned the vast real estate of data that came with BvD. For those who are new to the stock, can you talk a little bit more about the details and extent of the variety of data that you have within Moody's Analytics?

Question: George Tong - Goldman Sachs - Analyst : Yeah, yeah. Now, how does your vast data estate translate into financial performance?

Question: George Tong - Goldman Sachs - Analyst : Right. You've made a lot of progress with GenAI, and you're often seen as the first mover in implementing GenAI in the space. Why do you think Moody's is well positioned to win in GenAI? Can you share a little bit about your approach and what you've done so far?

Question: George Tong - Goldman Sachs - Analyst : Right. You've formed partnerships with Google and Microsoft in your work with AI. Can you talk a little bit more about these partnerships and then what you're doing with them?

Question: George Tong - Goldman Sachs - Analyst : Right, right. You've been in the market nine months now with a GenAI-enabled product. Can you share some of the learnings from being in the market and what some of the customer feedback has been? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2024 / 4:30PM, MCO.N - Moody's Corp at Goldman Sachs Communacopia & Technology Conference

Question: George Tong - Goldman Sachs - Analyst : Yeah. What does the increased engagement from customers and the increased opportunity for cross-sell mean for future growth of Moody's Analytics?

Question: George Tong - Goldman Sachs - Analyst : Yeah. Let's talk a little bit more about some of the recent trends, including ARR. With your 2Q results, Moody's widened its ARR guidance range because of uncertainty in the second half of the year that's expected. Can you talk about what you're seeing in the marketplace that's prompting this updated view to the guide?

Question: George Tong - Goldman Sachs - Analyst : Right. In the second quarter, if you look at within MA, the research and insights growth of ARR --

Question: George Tong - Goldman Sachs - Analyst : Good color, yes. No, no worries. So sticking with the recent trends. If you look at research and insights, as of 2Q, the growth was around 6%, and that's below the double-digit growth that you're seeing in decision solutions and data and information. Can you talk a little bit about the trends that you're seeing within just R&I? And when you would expect ARR growth there to improve towards that double-digit range?

Question: George Tong - Goldman Sachs - Analyst : Got it. That's helpful. Now Steve, in addition to running Analytics, you're very well versed with the MIS business, the ratings business. Can you talk a little bit about your latest expectations for global debt issuance trends? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2024 / 4:30PM, MCO.N - Moody's Corp at Goldman Sachs Communacopia & Technology Conference

Question: George Tong - Goldman Sachs - Analyst : The first half of 2024 benefited from some pull-forward of debt issuance activity. Are you concerned at all that this could create a void in growth or a pothole in growth either in the second half of this year, the debt issuance, or in 2025 for debt issuance?

Question: George Tong - Goldman Sachs - Analyst : Yes, makes sense. Let's talk about margins. So if we start with MA margins, what's your strategy in balancing investments you're making in the GenAI and new products with delivering margin expansion? And what would you say is your medium-term target for MA margins?

Question: George Tong - Goldman Sachs - Analyst : Got it. And then, I guess, similarly, within the MIS segment from a margin perspective, how much further upside would you say there is with operating margins beyond 60% perhaps with benefits coming in from GenAI and other productivity initiatives?

Question: George Tong - Goldman Sachs - Analyst : Right, makes sense. Well, Steve, we're just about out of time. Thank you for the incredible insights and time. Please join me in thanking Steve.