Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
Please consider a small donation if you think this website provides you with relevant information
| Statement |
|---|
| And the world's leading companies turn to us, they trust our market leading solutions and that gives us a tremendous base to sell into |
| So that's a really good sign |
| And I feel like we have some ambitious medium term targets that mean that we're going to continue to accelerate revenue growth in the MA business |
| So again, exciting opportunities for MIS to navigate with this technology |
| While financial institutions account for about 70% of ARR and MA, there's been very good demand coming from newer relationships beyond the financial services segment, 14% new sales compound annual growth rate over the last two years in these sectors and that's the corporate and public sector |
| Now building on these successes, we've got a great opportunity to expand in new customer segments, supporting new use cases |
| We're doing what we do well, developing good, solid product development pipelines; creating new product life cycles to generate revenue growth and support customer value propositions; continuing to invest in the sales force |
| We delivered 8% revenue growth, we grew adjusted diluted EPS by 16% and we were an early mover in GenAI adoption and innovation launching our first ever GenAI enabled product in December |
| In fact, our net expansion rate in the financial services sector stands at a healthy 109%, and I think that's a pretty clear indication of our ability to deepen relationships and deliver value |
| And in recent years, we've been successful in growing these relationships further and diversifying into new areas like KYC and supplier risk management |
| And I think fourth quarter to me really illustrated the tremendous operating leverage that's in the business |
| So pretty happy about that |
| And as we have upped the pace of product development to meet the strong market demand, for tools to better manage risk and to digitize and transform workflows for 2024, we expect MA revenue to grow at approximately 10% with ARR growth in the low double digit percent range |
| So I would say we're very encouraged by that |
| We've got a fantastic customer base, especially in financial services where we've been developing relationships for literally decades, landing new customers, expanding relationships and innovating with a proven track record of growth |
| And we've seen a very constructive start to the year, and consequently our revenue expectations for 2024 are in the high single to low double-digit percent range for MIS and I'll touch on this a bit more on the call, as well as I'm sure some asset specific issuance guidance |
| So looking out over 2024 and beyond, we're really excited about the great momentum in the business and the tremendous growth potential that we've got in front of us |
| We've got fantastic engagement across the company |
| So we're really excited about some of the changes we've made and we were able to get to market faster, that's partially because of the fact that we're leveraging GenAI tools and partially because we have some platform engineering elements that make us able to move a little bit more quickly |
| And we've seen really good growth there in the banking segment, that was one of the big drivers of growth for us |
| We've had really good interest from our banking customers especially |
| And at the top end, we're seeing really good engagement in a way that I say, I think, is going to be quite profound for us |
| We're poised to capitalize on the content, unlock opportunities from GenAI enablement and innovation; the widespread digitization and transformation programs across banks and insurers, the growing demand for third party risk management solutions and the ongoing growth of the private credit sector |
| And today, we have a base of recurring revenue of over $4 billion while our more transactional oriented revenue model across a $74 trillion universe of rated debt gives us upside as debt velocity improves |
| And together, this underpins our confidence in accelerating our revenue growth to the high single to low double digit percent range in 2024 |
| We have such a tremendous franchise with the financial services sector, we see great opportunities and have demonstrated great growth trends with some new customers in corporations that may be are nonfinancial in their orientation or public sector entities |
| And that's one of the reasons we're very excited about that dynamic |
| And with our wide range and capabilities that we've put together to deliver this holistic view of risk, I think we are uniquely well positioned at the intersection of these trends |
| I'm also very encouraged by our new GenAI enabled commercial real estate early warning system that we believe will significantly enhance commercial real estate portfolio monitoring capabilities for both lenders and investors |
| And I think we all understand our market leading position in ratings, but we've also built a market leading position with our MA business |
| Statement |
|---|
| And not dissimilar to past years, we were challenged to prioritize and balance organic investments with operational efficiency and productivity initiatives |
| And this turned out to be true for the Q4 where despite a very active November, December issuance was more muted than we had expected |
| We believe that will still be muted given what's going on in the CRE market, particularly in office |
| And I think total issuance in 2022 was something like 5% below that average |
| Rob Fauber There's almost like a tipping point where when there's too much stress in the banking system, it can ultimately become a headwind for us |
| Revenues came in lighter than we had expected, expenses came in almost exactly online in terms of what we had budgeted |
| And remember, that was in the context of like a 30% decline in issuance that year |
| I think as far back as 2022, you remember, we had that significant decline in issuance from the pandemic years |
| So essentially, the entire revenue miss dropped right down to adjusted operating income |
| We saw a pretty significant slowdown in first time mandates since, I'd say, third quarter of 2022 |
| And the last thing I'd say is if you look at where structured finance is at the moment, that's significantly below kind of that 10 year average for reasons that we may get into later in the call |
| But we drilled down, and I think we made the point that corporate issuance was something like 15% below that long term average excluding the pandemic |
| That number still looks a good bit lower than the averages over, call it, the last decade, which would imply that there's still room for issuance growth |
| And underpinning this is that, first of all, market uncertainty that we've experienced over the last couple of years starts to subside |
| For corporates, high yield, again, back to this market uncertainty that's subsiding, spreads have come in materially over the last 12 months |
| Some of it is actually seasonality that we see each year given that we do expect a slowdown in the second half through summer, and sometimes it tails off when we get into December |
| Steve Talinko So I mean, I think we've been talking a lot in the firm and with our customers about the impact of, I'll call it, stress in the CRE sector, particularly in the office sector |
| There's also a backdrop here |
| On the call, I talked about how total -- when we look at total global issuance, it was modestly below what was a, I'll call it kind of a 10 year average from, at the time it was, I think, 2012 to '22, excluding the two pandemic years |
| But then the margin is expected to follow a similar pattern to revenue, steadily ramping from a couple of percentage points below our full year guide of 30% to 31% in the first quarter to a couple of points above it by the time we get to Q4 |
Please consider a small donation if you think this website provides you with relevant information