Good day, everyone, and welcome to the Moody's Corporation Second Quarter 2025 earnings call. At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the company, we will open the conference up for questions and answers following the presentation. I will now turn the call over to Shivani Kak, Head of Investor Relations. Please go ahead. Thank you. Good morning, and thank you for joining us today. I'm Shivani Kak, Head of Investor Relations. This morning, Moody's released its results for the second quarter of 2025 and updated guidance for select metrics for full year 2025. The earnings press release and the presentation to accompany this teleconference are both available on our website at ir.moodys.com. During this call, we will also be presenting non-GAAP or adjusted figures. Please refer to the tables at the end of our earnings press release filed this morning for reconciliations between all adjusted measures referenced during this call in U.S. GAAP. I call your attention to the safe harbor language, which can be found towards the end of our earnings release. Today's remarks may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In accordance with the act, I also direct your attention to the management's discussion and analysis section and the risk factors discussed in our annual report on Form 10-K for the year ended December 31, 2024, and in other SEC filings made by the company, which are available on our website and on the SEC's website. These, together with the safe harbor statement, set forth important factors that could cause actual results to differ materially from those contained in any such forward-looking statements. I would also like to point out that members of the media may be on the call this morning in a listen-only mode. Rob. Thanks, Shivani, and thanks, everybody, for joining today's call. I'm going to kick off with some high-level takeaways on the operating environment and Moody's second quarter performance. Then I'm going to share some progress updates on our strategic investments and opportunities. Later in the call, Noémie is going to provide some details on the second quarter performance and outlook for the second half of the year. After we finish our prepared remarks, Noémie and I will be glad to take your questions. On to the results. This past quarter, Moody's provided the insights and expertise that helped markets to make sense of a complex and rapidly changing global landscape. Second quarter Moody's revenue of $1.9 billion grew 4% year-over-year. That's an impressive accomplishment given the April issuance air pocket and a tough comparable to the second quarter of last year when revenue grew 22%. We remain focused on disciplined expense management, delivering an adjusted operating margin of 50.9%. That's up 130 basis points from a year ago. Together, this translated to adjusted diluted EPS of $3.56. That's up 9%. That's actually 60% growth from the same quarter just three years ago. It illustrates just how much the earnings power of our business continues to grow. On the back of our second quarter performance, we've narrowed our guidance ranges for rated issuance, MIS revenue, and EPS. Starting with MIS, we continue to invest in strengthening our position as the agency of choice for issuers and investors. That pays dividends in times of uncertainty when markets turn to us for our insights and the quality of our analysts. Our ratings franchise delivered $1 billion in revenue this quarter. That's just shy of a second quarter record. It also marked our second consecutive quarter above the $1 billion revenue mark. While April started off slowly with several days of no issuance, conditions improved meaningfully as we moved into May and June. Markets stabilized, spreads narrowed back to pre-April levels, and issuance picked up significantly. That helped to offset the early softness. Both total revenue and transactional revenue growth were stronger than issuance growth. This outperformance was partially helped by a favorable issuance mix, and to a lesser degree, the growth in products and services not tied to issuance, such as certain private credit ratings. Looking ahead to the second half of the year, we're cautiously optimistic. The four key credit themes that we identified at the start of the year remain relevant, and they could influence the balance of 2025 and beyond. These include U.S. policy on trade, tax, and immigration, geopolitical tensions in the Middle East, the fiscal, economic, and security impact of European defense spending, and potential shocks triggering a pullback in risk appetite. Now, one of the deep currents driving demand in Moody's ratings that we've discussed a good deal on recent calls is the continued growth and evolution of the private credit markets. We have invested and engaged to become an important voice in this space, fulfilling a critical need for more transparency and insights. In the second quarter, we published a private credit webinar on the Moody's IR website, and it discusses the trends we are seeing in private credit and how Moody's is serving the market. We also hosted marquee credit conferences in both New York and London that drew nearly 1,000 people from across the entire private credit ecosystem. These events demonstrate the tremendous convening power of the Moody's brand and also underscore how much interest there is in having us play an important role as the leading opinion provider on credit in this market. Continuing the trend from the first quarter, private credit is an important driver of growth in ratings. In fact, in the second quarter, private credit-related transactions accounted for nearly 25% of first-time mandates, and the number of private credit-related deals increased by 50% year-over-year. Revenue related to private credit grew 75% in the second quarter across multiple lines of business and MIS, albeit off of a relatively low base, and it was a contributor to how we delivered flat revenue growth amidst an issuance environment that was down 12%. Private credit investment plays an increasingly important funding role in key sectors such as AI data center investment, transition finance, energy, and infrastructure. We are well positioned to address these growth opportunities. In fact, among others, we just rated a GBP 1.5 billion deal this quarter for a European utility company. That was the largest ever private credit-related deal in the U.K. As private credit grows, so too does the use of ratings in this space, as the biggest players in this market realize that a credible, independent assessment of credit risk, be it a rating or a model-derived score from a trusted firm like Moody's, provides additional transparency and comparability that broadens the investor base and provides a solid foundation as this market continues to scale. In addition to how we are addressing this need in ratings, this was also an important driver of our MA partnership with MSCI that we announced back in April. This presents great opportunities for us to leverage the world's best commercial credit franchise with data, models, ratings, and workflow to serve the emerging needs of a whole new group of investors and asset managers who now need enhanced credit underwriting and monitoring capabilities as they invest in this space. Drilling down into Moody's Analytics, our performance this quarter underscores the strategic role that MA plays in driving Moody's growth and earnings quality. We delivered another strong quarter with 11% revenue growth and 12% growth in recurring revenue. ARR grew 8%, led by a 10% increase in decision solutions. Recurring revenue held steady at 96% of MA's total, reinforcing the strength and predictability of our business model. While we continue to deliver steady growth, I think what really stood out this quarter was margin expansion. MA delivered an adjusted operating margin of 32.1%. That is a 360 basis point improvement year-over-year. That puts us solidly on track to deliver our full-year margin guidance of 32%-33%. Our best-in-class solutions continue to earn industry recognition. Recently, Moody's was ranked number one in the Chartis Quantitative Analytics 50 rankings for the third year in a row, winning 13 individual categories. These third-party awards are important because they are an external validation of our ability to deliver innovative and industry-leading solutions that meet the evolving needs of our customers. This recognition is also echoed in strong engagement at our annual banking and insurance customer conferences. At our banking conference, we showcased our integrated suite of products, including the advancements in building a fully end-to-end loan origination solution, incorporating key elements from our Numerated acquisition. This was a great validation of the addition of Numerated's front-end capabilities, as well as the AI enablement across our platform. Our newly launched lending origination package that features Numerated was adopted by several renewing customers as of early July, with an average contract value increase of nearly 15%. Notably, one of the largest Japanese banks cited the enhanced value proposition of the integrated offering as a key reason for their upgrade. We are optimistic this adoption trend will accelerate as we enter a heavy renewal cycle in the second half of the year. Our insurance conference drew record attendance and showcased new model releases, enhanced underwriting capabilities, and integrations with CAPE Analytics, which we acquired back in January. Feedback from customers was overwhelmingly positive, especially around the fit and value of CAPE's AI-enabled geospatial intelligence, data, and risk analytics in strengthening our catastrophe models. We are really encouraged by the early traction here. CAPE's ARR is more than 10% higher than when we closed the acquisition, and we expect that growth to accelerate further through year-end, making it a meaningful contributor to our broader insurance portfolio. Beyond our Insurance Solutions line of business, we are seeing strong cross-sell into our insurance customer base. Several insurance customers adopted our Maxsight Unified Risk and KYC platform. That includes a large multinational insurer in APAC that selected Moody's to consolidate multiple screening systems into a single streamlined solution. That not only simplifies their operations, but it also validates our synergy thesis from the RMS acquisition. While we delivered a strong quarter from both a growth and margin standpoint, we are not standing still. We continue to innovate, invest, and partner to capitalize on the deep currents driving demand for our solutions. You have heard me talk about how we are investing in the evolution of the markets this quarter. That included our partnership with MSCI to provide third-party credit scores on thousands of private credit companies and loans that we discussed on the last call. This past quarter, we also made another investment in our domestic ratings franchise in Latin America, building on the really great momentum that we have across the region. We completed our acquisition of ICR Chile, which is a leading provider of domestic credit ratings in Chile, which in turn is the third largest domestic bond market in Latin America. We are going to integrate this business into Moody's Local. Activity in these markets remains very healthy with Moody's Local new mandates year to date, up more than 30% year-over-year. That reinforces the importance of continuing to invest in our leading presence across the region and thought leadership in the debt markets of tomorrow. We also announced several exciting partnerships with major technology and data players. We are really excited about our data integration with SAP's new Business Data Cloud. The first dashboard product is set to launch in Q4, with more to come. That opens up a new distribution channel for our data to thousands of SAP customers. During the quarter, our new onboarding agent, leveraging our massive company database that we call Orbis, was featured during the keynote at Coupa's annual Inspire Conference, which drew over 3,000 attendees. Our risk data suite is now available on the Databricks Marketplace. That is another important step in our growing partnership with Databricks and significantly enhances the customer access and integration to our content and offers new monetization opportunities. Now, we know there is growing interest in understanding the contribution of GenAI to our business. While sales of our standalone GenAI solutions are not material yet, we wanted to provide a few meaningful indicators to demonstrate the progress and value that GenAI is already delivering. First, at a high level, is the deployment of GenAI across our portfolio. Over the past year, we have accelerated the rollout of our GenAI capabilities. By the end of the second quarter, approximately 40% of our products measured by ARR now include some form of GenAI enablement, whether offered as a standalone solution, as an upgrade, or embedded within the core product. A second way to look at progress is by looking at the growth of our total relationships with customers who have purchased or upgraded to standalone GenAI offerings from us. Their total spend across Moody's Analytics, measured by ARR, is approaching $200 million. That is growing at about twice the rate of MA overall. This cohort of GenAI adopters shows stronger and deeper engagement, and that reinforces the broader impact of our GenAI investment and innovation strategy. Finally, I want to share a milestone in our partnership with Microsoft. We are excited to share that Microsoft will use Moody's as their primary operational data provider for customer hierarchy and organization data management. Moody's data is helping power decision-making across Microsoft's operations and plays a significant role in facilitating Microsoft's view of their customers. This partnership integrates Moody's proprietary data sets into Microsoft's supply chain, compliance, credit, and know-your-customer business functions. The benefits from this partnership include enhanced risk management, AI innovation, and cost efficiencies. We believe this collaboration underscores the importance of data-driven decision-making and AI innovation in today's rapidly evolving business landscape. Some good execution this quarter, even with the choppy environment in April, and we're confident in our strategy: building, buying, partnering to capitalize on the powerful growth drivers shaping our markets. From expanding our GenAI capabilities to deepening our presence in high-growth regions and forging strategic partnerships, we're positioning Moody's to lead in an increasingly data-driven, AI-enabled world and to deliver long-term sustainable value for our stakeholders. With that, Noémie, over to you. Thank you, Rob, and hello, everyone. Thank you for joining us today. Indeed, we delivered strong results in the second quarter, and I'll walk you through the details and provide some additional color. Starting with MIS, revenue was flat versus the prior year, or declining by 1% when adjusted for positive FX movement effects, surfacing $1 billion for the second consecutive quarter. The trends of transaction revenue against issuance growth imply a favorable issuance mix this quarter from corporate finance, structured finance, and PPIF, and the contribution of private credit. Recurring revenue increased by 7% year-on-year from pricing initiatives and portfolio growth. Now, looking at our performance across asset classes, corporate finance transaction revenue declined 6% year-on-year as bank loans issuance slowed and M&A activity remained subdued. Notably, there was a significant decline in repricing activity, which contributed positively to the revenue mix. Investment-grade transaction revenue grew 18% on issuance growth of 16%. As issuers took advantage of tight spreads, reflecting elevated demand for high-quality paper. As you probably have seen in the press, this was particularly pronounced in the TMT sector. High-yield transaction revenue was broadly in line with last year, with notably strong performance in EMEA. In financial institutions, transaction revenue declined 6% year-on-year, driven by lower infrequent issuer activity, primarily in the insurance sector. Structured finance issuance declined by 25% in the second quarter as market volatility and wider spreads curtailed activity in April. Transaction revenue declined only 3%, helped by a favorable mix, particularly from a slowdown in CLO refinancing and from higher average fees in other asset classes. Finally, public project and infrastructure finance grew 3% in transaction revenue, driven primarily by U.S. public finance. Issuance was largely opportunistic to get ahead of any impending policy changes and market volatility. It's also worth noting that in the second quarter, our U.S. public finance group rated the highest quarterly issuance volume since 2007. First-time mandates were nearly 200 in the second quarter, which is very encouraging and keeps us on pace for our expectation of 700-800 for the full year in support of ongoing funding needs and the growth in private credit. In EMEA, first-time mandates were up year-over-year, driven by mandates in PPIF, which was supported by the increase in private credit. As private credit becomes a more prominent part of the market. It's important to note that some issuance activity is not captured in rated issuance figures reported by external data providers. Moving to margin, MIS delivered 64.2% adjusted operating margin, expanding 100 basis points from last year. As a reminder for modeling purposes, I'd like to say that the second quarter of 2024 included a one-time legal reserve related to a regulatory matter impacting the underlying margin expansion dynamics year-over-year. Taking seasonality into account, we continue to expect between 61%-62% adjusted operating margin for MIS for the full year. Turning to Moody's Analytics, revenue grew 11% in the second quarter, and that includes about 4 percentage points of growth from M&A and FX. Recurring revenue grew 12%, with organic constant currency recurring revenue growth of 8% in line with second-quarter ARR growth. Decision Solutions, which includes banking, insurance, and KYC, continues to deliver double-digit growth. KYC led the way with sustained strong demand for our data, analytics, and workflows, serving customers across industries. KYC ARR grew 17% last quarter and moderated slightly to 15% this quarter. The primary driver of this deceleration was the strategic termination of a longstanding redistribution partnership. We believe that this is in the best long-term interest of preserving the value of our proprietary data. Outside of this specific event, KYC new business growth remains strong, and we expect ARR growth to remain in the mid to high teens through the second half of the year. In banking, our portfolio of products, including our lending suite, risk and finance solutions, as well as data sales from the Legacy raise acquisition, among several other smaller product lines, delivered a blended ARR growth of 7%. We are concentrating our investments on supporting customers across the entire lending workflow, from origination to approval and beyond. Our flagship lending product, CreditLens, is proof of that success, with low teens ARR growth and mid teens new business growth, boosted by the ongoing integration of Numerated AI and data analytics capabilities, which you heard Rob touch on earlier. Insurance Solutions delivered 9% ARR growth, with a couple of dynamics to call out. An account loss following a merger dampened growth by about 1 percentage point, and we faced a tough comparable against record new business in the first half of last year. That said, our new business pipeline is building nicely, growing at double-digit pace, and we expect it will support at least high single-digit growth rates as we head into the second half of the year. Regarding the low double-digit growth with CAPE Analytics that Rob mentioned, I want to call out that this is not captured in the Insurance Solutions ARR metric as we wait to land the anniversary of our acquisitions before including them in the line of business and overall MA ARR. Turning to Research and Insights, we delivered ARR growth of 7%, supported by continued innovation in CreditView. This includes contributions for Research Assistant, as well as a modernized user experience with new features, scorecards, and peer analytics. We're also integrating real-time news and additional data sets to deliver richer, more timely signals, driving growth through strong retention rates and pricing power. Finally, Data and Information ARR grew 6%. Following some outside attrition from the U.S. government in the first quarter, we remained focused on driving growth through strong retention and new business production. We're also making meaningful progress on improving MA's margin profile. We are doing this by prioritizing investments, optimizing vendor relationships, revisiting legacy org structures, and deploying productivity tools across the organization. As a result, annualized compensation expense declined by 4% from the beginning of the year through June. We expect this continued rigor and discipline to support further margin expansion in the second half of 2025 and into 2026. As there were several discrete factors influencing performance across our lines of business this quarter, I wanted to provide transparency to help unpack the underlying drivers. Stepping back, Moody's Analytics continues to deliver high-predictable, high single-digit ARR growth, now paired with strong and sustainable margin expansion. This combination of consistent top-line performance and disciplined execution positions MA as a durable long-term growth engine for Moody's. Turning to the remainder of the year and our guidance, we are reaffirming our MA guidance metrics and updating our outlook for MIS issuance and revenue. These revisions primarily reflect better-than-expected second-quarter performance and a weaker US dollar. You can see the details on slide 12. For M&A-related issuance, our view is largely unchanged. We continue to expect 15% growth in announced M&A and flat-rated issuance. That said, we are monitoring the environment closely as macroeconomic and geopolitical uncertainty trends tend to disproportionately affect this aspect of issuance. Keep in mind, M&A is only one of many factors impacting overall issuance volumes. Issuance finished the second quarter ahead of our earlier expectations, leading us to update the low end of our prior guidance range. That said, uncertainty remains around several macro drivers, including tariff, central bank interest rate policy, inflation, the path of credit spreads, and the trajectory of M&A activity for the remainder of the year. The low end of our issuance forecast accounts for potential short-lived issuance air pocket, but does not anticipate a meaningful deterioration in the macroeconomic or geopolitical environment. On the revenue front, we now expect full-year MIS revenue growth in the low to mid single-digit% range, and we believe there is more upside than downside at our midpoint. From a modeling perspective, taking the midpoint of our guidance range, we anticipate MIS revenue to decline in the low single-digit year-over-year in Q3, followed by mid single-digit growth in Q4. Our full-year MIS adjusted operating margin guidance remains at 61%-62%. For Moody's Analytics, we continue to expect both revenue and ARR growth in the high single-digit percent range, consistent with the outlook we shared in our Q1 call. We also reaffirm our full-year adjusted operating margin guidance of 32%-33%, with a steady ramp upwards from the 32% we reported this quarter, reflecting both seasonality of revenue and expenses, as well as ongoing expense management efforts. At the MCO level, and excluding the impact from restructuring charges, we expect operating expense to ramp between $30 million-$45 million in the third quarter versus Q2, primarily related to our annual merit increases, followed by a gradual sequential increase in Q4. We anticipate approximately $100 million of incentive compensation for each of the remaining quarters of the year. Finally, our efficiency program continues to deliver results. We have already executed on annualized savings of over $100 million, which are helping offset annual salary increases and variable costs as the year progresses. Now, putting it all together, we continue to expect top line for MCO to grow in the mid single digit percent range, with adjusted operating margin in the 49%-50% range. Our updated adjusted diluted EPS guidance range now implies 10% growth at the midpoint versus last year. Echoing Rob's comments, we're executing well on our strategy from a position of financial strength. Looking forward, we're investing to capitalize on the cycle of demand drivers for our deep currents, such as digital transformation, AI adoption, and the expansion of private markets that are driving multi-year investment cycles for our customers, and in turn, generating demand from Moody's ratings, data, analytics, and workflow solutions. With that, I'd like to thank all of our colleagues for their contribution to yet another strong quarter for Moody's, and Operator, we're now happy to take any questions. Thank you. If you would like to ask a question, please dial star one on your telephone keypad. If you are on a speakerphone, please pick up your handset and make sure your mute function is turned off so that your signal reaches our equipment. We'll ask that you please limit yourself to one question. The option to rejoin the queue will be unavailable. Again, that is star one to ask a question. Our first question comes from Ashish Sabadra from RBC. Please go ahead. Your line is open. Taking my question. So a couple of moving pieces here on the decision solution. I was just curious if you could provide some more color on the strategic termination and the account loss, which is weighing on the KYC and insurance particularly, and how do we think about those headwinds. But also, as we think about going into the back half of the year, you have easier comp from the federal contract as well as the Moody's MSCI contract. So just puts and takes as we think about the decision solutions ARR going into the back half of the year. Thanks. Hey, Ashish. It's Rob. So first of all, just a little bit of color on some of the attrition, and Noémie touched on it. We had indicated, I think, last quarter that there was some government-related attrition. Noémie mentioned that we had strategically terminated a distribution partnership in KYC. So I think it counts as attrition, but that's a decision that we took because we thought it was in kind of the long-term interests of our business. We've continued to have some ESG-related attrition. We saw that in the first quarter, that continued into the second quarter, and as Noémie said, kind of a one-off attrition event in insurance related to an M&A deal. When we look at the drivers of ARR growth for the balance of the year in Decision Solutions, I'd say maybe three things. Let me start with banking. You heard Noémie touch on lending. Credit Lens is our flagship lending product. Over half the growth that we have in banking is driven by our lending products, and Credit Lens ARR growth is in kind of the low to mid teens. We have a very nice pipeline that has been building. It is 15% higher than it was this time last year. As we talked about in our prepared remarks, that has been supported by the addition of Numerated. We basically brought in an enhanced set of front-end capabilities. We have been integrating that into the Credit Lens platform and then going to market with a more comprehensive solution. We are seeing some very nice growth from that. As I mentioned, we are getting ready to go into a renewal cycle, and we have the opportunity to upgrade customers into that package. We think lending is a good driver in banking. In insurance, the pipeline has been building. We had a great insurance conference. We have a very important new model launch coming in the second half of the year, and there is a lot of customer demand around that. As we talked about CAPE, while it is not in the ARR numbers, we have gotten a great reception from customers and the integration of CAPE into the intelligent risk platform. CAPE would be accretive to ARR growth if we included it in that this year. One last thing, just in KYC, we have very strong cross-sell that continues into financial services customers. That is north of 20% ARR growth. We expect new sales to corporates to really kind of start to ramp in the fourth quarter of the year after we make some enhancements to our Maxsight platform. We have some good momentum with a recently signed partnership from a third-party payment platform. As Noémie said, excluding that attrition event, the ARR growth would continue to be in the high teens rate. Yeah. The other thing I would add, Ashish, is on our pipeline build. We are building pipeline pretty nicely as we are heading into the second half. Our pipeline is up significantly year-on-year. I think our ability to execute and convert that pipeline, combined with still relative effect of tariffs and other macro factors in customers' decision-making process, is really what is going to help us move towards the high end of that range. We have a good pipeline built and heavily weighted in the back half, which is a pretty normal pattern for our business. Our next question comes from Scott Wurtzel from Wolfe Research. Please go ahead. Your line is open. Hey, good morning, guys. Thank you for taking my question. Just wanted to ask a two-parter on MIS. I mean, just wondering if you guys think there was any potential pull forward of issuance during the quarter from the second half of the year as the macro environment kind of got a little bit more stable. And then just on the private credit side. There's been talk about how private credit can potentially perform better when public debt markets are a little shaky. Just wondering as public debt markets potentially got better as we moved throughout the quarter if you saw any changes in the performance of the private credit market as well. Thanks. Yeah. So first of all, hey, Scott. I would say I don't think there was meaningful pull forward shift. Last year, you remember on the calls we had this whole theme. We had the elections in the fourth quarter of the year, and the bankers were telling issuers that they should go ahead and pull issuance forward of the elections in case there was any turbulence in the markets. That hasn't been the case this year. We'll probably talk about at some point on this call, kind of a year-to-go outlook for issuance, and we'll talk a little bit about how we've approached that. But I wouldn't say that's been a meaningful theme. On private credit. I think it's not necessarily a case of either/or. I mean, I think what we're seeing here is it's both. We had some healthy performance issuance activity in the public markets, but we continue to see that in the private credit markets. And there's some real demand drivers for that. I mean, you heard the numbers that we talked about in our prepared remarks, 75% growth in private credit revenues for the quarter. But I would cite a couple of things that are a few things that are kind of driving this ongoing growth of private credit. And it's not I think a lot of people think about it as private credit as direct lending and as an alternative to going to public markets. But as we've tried to talk about on this call. Private credit's become much broader than that, right? So it's not just direct lending. There's fund finance. There's securitization. And you've got a few things going on. You've got insurers continuing to increase allocations to private credit. And that's also driving an increased demand for ratings. We're seeing rated feeder funds becoming more important in the fundraising stage for private credit. Fund finance itself is becoming a more prominent asset class within private credit. You've got a number of different lenders now in fund finance. And as I said, we've got the growth in ABF, particularly where you've got, I would say, more illiquid assets sitting on bank balance sheets, and private credit is one alternative for funding those assets. If you just look at the asset flows into private credit, and we've seen the headlines about the potential for going into the retail markets and retirement and so on. That means that there's going to be a lot of investor dollars continuing to come into this market, and that means they will need to be able to find supply. Our next question comes from Jeff Silber from BMO Capital Markets. Please go ahead. Your line is open. Thank you so much. Just wanted to focus on the operating margin expansion in the quarter. Were there any expenses maybe shifted from the second quarter to the back half of the year that drove that outperformance? If so, roughly how much? Thanks. Yeah. Thanks. This is really, so the answer is no. There is no real push for expenses from the second quarter to the sixth quarter. We made some adjustments to our incentive comp funding, as we always do. For the performance in the quarter, it is really related to our efforts around, especially around MA. As you saw, we've expanded our operating margin by 360 basis points from last year. We had prioritization of investments. We're looking at our portfolio and where we need to reallocate capital to support our growth areas that Rob touched on. We're optimizing our vendors' relationships. We've been very thoughtful with discretionary spends like T&E, other non-comp related items. We're also deploying productivity tools across the organization, which I think is a very important point. We've highlighted several internally developed use cases that are making our employee more efficient in previous calls, customer services, sales tools. We're enabling our employees to access GenAI Copilot very early on. We're using those on a day-to-day. As a matter of fact, if you look at our engineering groups, I think 80% of our population is using those tools. Our product headcount hasn't grown materially since last year, even though we're innovating a lot. It's really execution, focus on spend, and you expect us to continue to improve those margin profiles, especially in MA, throughout the rest of the year. Our next question comes from Russell Quelch from Rothschild & Co Redburn. Please go ahead. Your line is open. Yeah. Hi, guys. Thanks for having me on. This is really a follow-on from Ashish's question earlier, where you talked mainly about KYC and insurance ARR outlook. I wonder what you're seeing in the banking sector. If I was being picky, this is the fourth consecutive quarter of decline in banking ARR within Decision Solutions. That's come at a time where you're rolling out new upgrades or new solutions and upgrades to existing, as you articulated earlier. Can you give some color on what you're seeing in the banking sector, what conversations you're having with these clients? I'm just trying to get a sense of whether the growth can accelerate or re-accelerate here in this client segment and what the catalyst might be. Yeah. A couple of things. When we think about the banking customer base broadly, I would say we continue to have. Very good growth selling into the banking customer base. When we look at our banking segment within decision solutions, we've got a portfolio of products there. We've got, as I talked about, our lending suite. We've got risk and finance solutions. But we've also got, and I think Noémie called it out, we have the commercial real estate data that was what you might think of as the legacy Reis acquisition. We have our lending business. The growth of lending has actually been down over the last year or so. All that contributes to that 7% growth. That is why we wanted to kind of call out the real focus area for us is around lending. It's our largest product within our banking segment. As you heard me talk about, Russell, it's growing quite nicely. In fact, when you look at the combined ARR of lending and Numerated together, that ARR growth is going to be in the, actually, we think that'll be up in the high teens. Again, we feel very good about lending. But you have to kind of think about the full portfolio of what we have. Sorry. I think I said, if I said lending, I might have said learning. I'm realizing our learning business has been down. If I said lending, I misspoke. Our learning business has been down. Think of that as our training business. Our next question comes from George Tong from Goldman Sachs. Please go ahead. Your line is open. Hi. Thanks. Good morning. Mix was a tailwind this quarter to MIS revenue growth. How do you think your updated guidance on debt issuance by category will impact mix in the second half of the year? Yeah. Let me talk briefly about the second half, but maybe let me just talk about what contributed to the positive mix that we saw so far. I think some of those trends will continue. The most notable positive mix for us was in structured finance. There we had issuance that came out of ABCP and covered bond programs. We do not capture all of that issuance in our issuance data, but we picked up some very nice revenue from that. There was a shift in the mix of bank loans of repricing to actual new bank loans. There was a shift really away from repricing activity. There is lower repricing activity. In our PPIF segment, we saw a slowdown in the issuance from sub-sovereigns, but that is where we have less favorable economics. As we kind of look out for the rest of the year, I think we may see more infrequent issuers if markets remain open. You would see that in both investment grade as well as high-yield. That would potentially be favorable to mix. In structured finance, we have seen some real strength in commercial mortgage-backed security. Commercial mortgage-backed security and collateralized loan obligation activity would be positive to mix as well. The only other thing I would call out is Noémie mentioned that M&A has been still pretty muted through the first half of the year. As you know, we changed our M&A assumption. That will be something that we will watch for, because if we see a pickup in M&A, that would certainly be mix positive. Our next question comes from Shlomo Rosenbaum from Stifel. Please go ahead. Your line is open. Hi. Hi. Thank you. Hey, Rob, I wanted to ask you to go over some of the positive comments you had on the AI and GenAI, particularly just to clarify what you are talking about about the ARR being $200 million and growing two times the size of other products. Could you go over the specifics over that so we get that clear? Was that $200 million in some kind of products that have any aspect of AI? Just go over that and kind of give us a little bit more detail. Yeah. Yeah. I am glad you asked. As As I mentioned, the actual revenue solely from what you would think of as standalone AI products is still not material. We wanted to step back and think about how do we think about the benefit that we are seeing from our AI engagement. We actually looked at our customers that had taken at least one, had purchased at least one either upgrade or standalone AI offering, right? We think of those as the GenAI early adopters. With those customers, we are oftentimes having very different discussions with them because those discussions may be at a much more senior level. We are engaged with partners like the hyperscalers with these customers. We are doing proofs of concept and all sorts of things with those early adopters, so very deep engagement. When we looked at our relation, our overall, the total spend across MA from those relationships, so not just what they are paying us for AI, but all of the GenAI early adopters, the growth of those relationships has been basically double the growth that we see from the rest of our MA customers. I guess in some ways, that is not surprising because, like I said, this has led to a very different kind of engagement with those customers that allows us to then be able to talk about all sorts of other content sets and models and other capabilities that we can bring together for them. That is what we were trying to get at. Our next question comes from Faiza Alwy from Deutsche Bank. Please go ahead. Your line is open. Hi. Thank you. Good morning. I wanted to ask more about private credit and specifically how do you think about the contribution from private credit to MIS revenues? I know it is small, but certainly growing quite fast. Perhaps if you can talk about sort of where it is showing up because your recurring revenues in MIS have also been pretty strong. I'm curious if some of that is showing up there and then maybe how much of it is contributing to the mix on the structured finance side that you just talked about. Yep. We talked about the 75% growth that we saw in the quarter, and that's showing up in a few different places. The asset-backed finance is showing up in our structured finance ratings. When you think about what we're doing with BDCs, and obviously, BDCs are effectively engaged in direct lending. We rate, we have very strong coverage of public BDCs. All of the fund finance, so nav lines, sub lines, rated feeders, all of that kind of activity, that's rolling through our FIG franchise. We've even got some private credit rolling through project finance. We have investors who are investing in infrastructure and projects who are investing in deals that were unrated at the time of issuance. For them to invest in them, they actually want to get a rating from Moody's on that. Even in project finance, we're starting to see the impact of private credit. You can also see it in our first-time mandate numbers. We talked about something like a quarter of our first-time mandates for the second quarter were related to private credit. It's rolling through several different lines in the rating agency as well as contributing to our new mandate growth. Our next question comes from Toni Kaplan from Morgan Stanley. Please go ahead. Your line is open. Thanks so much. I wanted to ask about the environment in MA. ARR stepped down to 8%. It seems like there are some sort of one-off things like the insurance client, and you had mentioned the government in prior quarters. Just trying to understand, is it these one-off situations that are really driving that growth slower, or is the underlying environment really not that good? That's really what the bulk is. There are these sort of one-off things, but it's really the overall environment that has been getting worse. Just wanted to understand a little bit more clarity on that. Thanks. Hey, Toni. In general, these things we talked about contributed to attrition ticking down about one percentage point. It does have an impact. When you go down to the sub-segment level, these things, because of the size of the businesses, these events can actually have an impact on ARR growth in any given quarter. As it relates to the environment, maybe let me just talk a little bit about what we're seeing from a kind of a sales perspective. I would say we have seen a little bit of a lengthening in sales cycles. There's a but here or an and maybe, and that is that we've also seen average deal sizes increase. That is because we are seeing more products per sale, effectively, as we pull these things together and bundle them into solutions. A little bit longer sales cycles. Slightly larger average deal sizes. That is something that as long as those two things are going together, we feel comfortable with that. I would not say there has been a material deterioration in the end markets by any means. Our next question comes from Andrew Nicholas from William Blair. Please go ahead. Your line is open. Hi. Good morning. I wanted to stick with private credit if we could. Two-part question there. First, I think recently, Senator Warren has sent you a letter, Rob, on potential risks. Just curious how you are thinking about that given the rapid growth of this market. And then second, and maybe relatedly, can you talk to maybe the level of investment you have been making in that team, the size of that team, how aggressively you are hiring to support this effort now, understanding that it is still small in the whole scheme of things, but just interested in just how forward-leaning you want to be here. Thank you. Yeah. I would say, first of all, we have an important role to play as an independent assessor of credit risk. This market obviously has elements of opacity to it, and there is a desire from investors to have more transparency and more comparability as well. We think we have a very important role to play. One of the things I would stress is there is not a team. Think of this as we are leveraging all of the strengths of the rating agency, right, with all of the private credit methodologies going through our standard regulated, industrial strength methodology development process. The ratings are issued by rating analysts who are rating both public and private credit, right? These are people in our FIG team, in our structured finance team, in our project finance team, in our corporate team as well. Very experienced analysts, robust methodologies, all of the process integrity and regulation for the public markets is the same thing that is being applied to how we are approaching private credit in this case. Yes, in some cases where we are seeing increased flow, we would be adding to the fund finance team, or maybe it is to the esoterics team or the ABF team in structured finance to make sure that we can handle the flow. That is where we have been adding, I would say, adding the headcount. The last thing I would say is we do have a dedicated analytical coordinator. We have a global head of private credit who can kind of look across the franchise and make sure that we have consistency in how we are thinking about approaching the various elements of private credit and be able to help us think thematically across the portfolio. We do have a dedicated analytical leader who coordinates the activities across the rating teams. And then we have a dedicated commercial leader who sits in our commercial team and focuses on the alternative asset managers. Our next question comes from Owen Lau from Oppenheimer. Please go ahead. Your line is open. Hi. Good morning. Thank you for taking my question. I have a question about MA and somewhat related to AI. When I look at your number, research and insight was better than expected. Could you please unpack a little bit more on the drive of this strength? Is it mainly driven by Research Assistant? And then for Rob, given your earlier response to an AI question, do you start to see an acceleration of AI adoption in your client base? When it comes, I mean, sometimes it could come massively. Thanks. Yeah. If you look at the growth in research and insights ARR, there is a portion of that that is definitely driven by Research Assistant. There are some new product launches as well. We are pretty happy with the growth in research and insight. We also noted that the customers who have adopted Research Assistant have a higher NPS. They have a propensity to expand their relationship with us across the MA portfolio, as Rob alluded to. We have enhanced our platform. Relevancy, security. We have improved the precision of our search results. We include earnings calls, news. We ensure they are more aligned with user inquiries. That has definitely contributed to expansion and growth in that line of business. Yeah. As it relates to AI, I would say in some cases, it depends on the customer tier. Let me just take banks because that is our largest customer base. The largest banks we are working with, they are wanting to pull our data, perhaps our own specialized agents, into their internal AI workflow orchestration platforms that they are building, right? Think of our tier two and tier three bank customers. I talked about our Credit Lens platform as a great example. We are just building AI capabilities and integrating that into the platform itself. There is all sorts of AI enablement from spreading financials to monitoring covenants and writing credit memos and all of that. Our customers there are getting access to AI through the platform. In some cases, there may be modules that we would charge for on an à la carte basis because they add so much value. In other cases, we just embed that AI functionality into the platform. That enhances, we have already seen, leads to improved customer satisfaction and improved and increased usage. That gives us an opportunity then at renewal time to price behind that additional value. Lens platform as a great example. We are just building AI capabilities and integrating that into the platform itself. There is all sorts of AI enablement from spreading financials to monitoring covenants and writing credit memos and all of that. Our customers there are getting access to AI through the platform. In some cases, there may be modules that we would charge for on an à la carte basis because they add so much value. In other cases, we just embed that AI functionality into the platform. That enhances, we have already seen, leads to improved customer satisfaction and improved and increased usage. That gives us an opportunity then at renewal time to price behind that additional value. Lens platform as a great example. We are just building AI capabilities and integrating that into the platform itself. There is all sorts of AI enablement from spreading financials to monitoring covenants and writing credit memos and all of that. Our customers there are getting access to AI through the platform. In some cases, there may be modules that we would charge for on an à la carte basis because they add so much value. In other cases, we just embed that AI functionality into the platform. That enhances, we have already seen, leads to improved customer satisfaction and improved and increased usage. That gives us an opportunity then at renewal time to price behind that additional value. Lens platform as a great example. We are just building AI capabilities and integrating that into the platform itself. There is all sorts of AI enablement from spreading financials to monitoring covenants and writing credit memos and all of that. Our customers there are getting access to AI through the platform. In some cases, there may be modules that we would charge for on an à la carte basis because they add so much value. In other cases, we just embed that AI functionality into the platform. That enhances, we have already seen, leads to improved customer satisfaction and improved and increased usage. That gives us an opportunity then at renewal time to price behind that additional value. Lens platform as a great example. We are just building AI capabilities and integrating that into the platform itself. There is all sorts of AI enablement from spreading financials to monitoring covenants and writing credit memos and all of that. Our customers there are getting access to AI through the platform. In some cases, there may be modules that we would charge for on an à la carte basis because they add so much value. In other cases, we just embed that AI functionality into the platform. That enhances, we have already seen, leads to improved customer satisfaction and improved and increased usage. That gives us an opportunity then at renewal time to price behind that additional value. Lens platform as a great example. We are just building AI capabilities and integrating that into the platform itself. There is all sorts of AI enablement from spreading financials to monitoring covenants and writing credit memos and all of that. Our customers there are getting access to AI through the platform. In some cases, there may be modules that we would charge for on an à la carte basis because they add so much value. In other cases, we just embed that AI functionality into the platform. That enhances, we have already seen, leads to improved customer satisfaction and improved and increased usage. That gives us an opportunity then at renewal time to price behind that additional value. Lens platform as a great example. We are just building AI capabilities and integrating that into the platform itself. There is all sorts of AI enablement from spreading financials to monitoring covenants and writing credit memos and all of that. Our customers there are getting access to AI through the platform. In some cases, there may be modules that we would charge for on an à la carte basis because they add so much value. In other cases, we just embed that AI functionality into the platform. That enhances, we have already seen, leads to improved customer satisfaction and improved and increased usage. That gives us an opportunity then at renewal time to price behind that additional value. Our next question comes from Alex Kramm from UBS. Please go ahead. Your line is open. Yes, yes. Hello. I am late in the call here, but maybe I will sneak in another private credit question since that seems to be a topic these days. Look, Rob, I see all the opportunities and good growth that you're talking about. You mentioned that people are overly focused on direct lending sometimes. I do think that's the biggest area of fundraising in the last few years and a lot of dry powder. I'm just wondering what you're seeing on that side in particular because it seems like the deals are getting larger. They are more frequent. I don't think you're really participating in ratings there. I'm just wondering if you're looking at that market and say, "Hey, there's X% of our business on the corporate finance levered loan side that we may be missing out today." I'm just curious what the number is today and how quickly you think you can maybe replace it with other private credit opportunities if you're catching my drift. Thank you. Yeah. Maybe a couple of ways I think about that, Alex. Is there substitution from time to time where an issuer decided they do a large deal that would have otherwise been a public deal and that we would have rated and they do a private credit deal? Yes, that happens. We also see that issuers go in and out of public and private credit markets. There's no question that the private credit markets are more expensive than the public markets. We've seen deals come back into the public markets. In some ways, I think of that, Alex, as there's an element of that that's like another form of maturity wall because the rating opportunity may have been deferred in some cases, but not lost. The other thing I would say, Alex, and this goes back to the MSCI partnership. You remember how the Moody's business started. We were an investor pay model, right? Over time, investors valued ratings and the utility of ratings. Then we eventually switched to an issuer pay model because there was an investor demand pull that supported that. I think what we're doing with MSCI is important not just because of the immediate revenue opportunity, but it's the opportunity to have investors in the private credit space start to use ratings, right? These will be model-implied ratings expressed on the rating scale. Over time, you can imagine as investors are saying, "Okay, now I have a third-party independent view of credit that I can now discuss with the GP, ask perhaps why the rating is the same or different." I think we're wanting to condition those investors to start to be able to use ratings and value the comparability of those ratings between both private and public credit. Over time, I think we may see, Alex, that the GPs decide to say, "Hey, we're going to go ahead and start to get. These exposures rated or assessed by Moody's because the investors value that. That will take some time, but I think that's an opportunity as this market continues to mature. We are all out of time for questions today. This will conclude today's Q&A session. I would like to turn the call back over to Rob for any closing remarks. Okay w ith that, it's a wrap, and we look forward to talking to you on the next earnings call. Have a great day, everybody. Thank you. This concludes Moody's Corporation's second-quarter 2025 earnings call. As a reminder, immediately following this call, the company will post the MIS revenue breakdown under the investor resources section of the Moody's IR homepage. Additionally, a replay will be made available after the call on the Moody's IR website. Thank you.