Moody's Corporation (MCO) Earnings Call Transcript & Summary

Good afternoon, everybody. Thank you for joining us again. For those of you who don't know me, my name is Manav Patnaik. I'm Barclays' business and information services analyst. Really pleased to be back here in London in person and happy to continue the dialogue we've had so far. Pleased to kick it off after lunch with Moody's, and we have with us David Platt, who's the Chief Strategy Officer. David, thank you for being here in person. I think this is your first time at this event, and I'm not sure if a lot of people have had the opportunity to meet you. So maybe you can just kick it off with a quick -- you've been in Moody's for a while. So just a quick bio and all the stuff that you've been involved with at Moody's just to help people appreciate some of the answers today.

Sure. Thank you for having me. And it is a pleasure to be with everyone in person. It's really great. So thank you. I've been at Moody's for nearly 10 years. In my title of Chief Strategy Officer, I look after global corporate development, which is our mergers and acquisitions, joint ventures, venture capital, minority investments; the development with my colleagues of the annual strategic plan which we present to our Board every July. So this year, we're on the 10th plan; a variety of sort of corporate special projects where we look at things in a fairly clinical manner, when there's questions about various things that come up as an operational and strategic matter; and also corporate affairs, which includes global communications and branding, corporate social responsibility, government, public and regulatory affairs. And then part of my duties also include now sitting on the Board of BitSight Technology, which is our investment in cybersecurity risk assessment. So in short, I'm -- I'd like to say I'm in the growth, voice and values business for Moody's, and I've sat on the operating committee for coming on 6, 7 years.

Perfect. That's a good setup. Don't worry, I will not ask you any issuance questions.

Thank you.

We got that out of the way in the prior discussion with S&P.

So maybe focus on, obviously, the corp dev, the M&A, which is skewed more towards Moody's Analytics. I think one of the things you guys have talked about is how Moody's wants to be a global integrated risk firm. And for a lot of us, I think Moody's Analytics has obviously evolved and grown over the years. But I think maybe just help us understand what the ambition there is with Moody's Analytics. A lot of different pieces that you've acquired over the years. But what is -- how should we be thinking of what the ultimate goal there is?

Sure. Well, first, I mean, we are very fortunate to be able to build off of the legacy and trusted position of the rating agency where we also spend a fair amount of time figuring where we can invest, notably on our domestic strategy and recently, our announced acquisition of majority control of GCR in Africa. But in terms of the global integrated risk assessment journey, and it has been a journey for the last 10 years just to take Moody's Analytics from where it was to today, we sort of think about sort of 3 pillars, which is around data and information, which is curated data that can be used by our customers in their various processes; research and insights; and decision solutions. And what we've really been trying to do, again, building on our legacy and history in credit risk, is ask what are some of the -- what are significant enterprise risks that our customers and stakeholders are dealing with. So notably, when we acquired Bureau van Dijk in 2017, we initially had thought about it as an extension into small- and medium-sized enterprise credit. But what it really gave us was -- besides sort of 250-odd million companies and company information, it gave us a very rich database of ownership taxonomy. So there's the entities and who owned them. So we've been able to sort of build upon that to -- into our KYC, KYS and AML solutions, which are fundamentally asking the question of who are you doing business with, right? Historically, when we thought about supply chain, folks have talked about it in the context of price. I need to buy XYZ supply, and I want to try and get the best price for my cost structure. But as the time has passed and certainly, as we've seen recent events unfold, we're asking ourself, "Okay, so where is this coming from? What -- who am I buying it from? Where are they located? What are the physical risks, the climate risk they're associated with? How are they doing it? Are they doing it in ethically sustainable manner? Are you in compliance with the regulatory requirements, whether it's OFAC or other?" That's -- those are questions that very much transcend price of just the raw material import. Similarly, lending. I mean there's multiple examples, but often, the best loan is the loan not made. So providing tools that allow, again, our customers -- financial institution customers to be able to more efficiently and holistically underwrite loans, pricing insurance, insurance analytics, which was a long growth initiative and took us ultimately multiple smaller acquisitions over the last 10-plus years, culminating recently in our acquisition of RMS in insurance analytics. But these very large enterprises that deal with a combination of operational resilience as well as navigating growth for our customers, so pricing insurance, judging the risk of loans, underwriting commercial real estate, understanding the cybersecurity profile of either a counterparty or your supply chain, because these are things where if there is a problem and something goes dark, it becomes a very serious problem for an organization to face.

Got it. I want to keep focusing on Moody's Analytics. But since you mentioned GCR, just a question around the rating side from a corp dev path. You just did GCR in Africa. I think you did Class based in Peru.

Peru, yes.

And over the years, you've done a bunch of these. But can you just help us understand what does that pipeline or landscape look like? Typically, you don't expect much -- I mean in the ratings business, it sounds like there's always a consistent flow. So how would you help us appreciate what that pipeline would look like?

So we -- first of all, well, both those transactions, Class and GCR, in terms of actually doing them, took -- they were measured in years. So GCR was nearly 2 years, and that is exclusive, frankly, of several years before that of relationship building. So in terms of the rating agency and what we're doing with their domestic strategy and also our -- what's called our Moody's local strategy, the answer is we want to have presence in -- beyond the developed world in multiple emerging markets. And that's been a long-standing pillar of the growth strategy for the rating agency. And we believe, by being local and having a perspective on local markets, ultimately, A, it informs understanding, certainly, of the region, besides the country. And ultimately, that transcends into support of our cross-border business. But I can tell you that all those various matters, whether it's Korea, Vietnam, India, Israel, Peru, now Africa, that's been, as I say, similar to Moody's Analytics. Those investments and that intentionality, those are multiyear endeavors. Even Malaysia, we announced a while back, that was -- that took -- from inception to completion, it took a decade. But why was it so important? So we could have a position in Islamic finance. So we're always thinking with the rating agency, our DNA as a 100-plus-year-old company, the time scale of investment is worthwhile.

Got it. And the other area that you invested a while back, China, clearly a big market. Your competitors are going at it slightly differently, stepping in organically and building out. I know you guys are choosing to stick with your minority investment. Can you just help us appreciate that strategy and should -- what we should be expecting basically in there?

So again, our presence in China is nearly 20 -- 20-plus years. And you're right. I mean we are approaching it differently. We made the effort in 2006 to essentially make what was then a venture capital investment in CCXI and to build a relationship with -- again, with folks who were on the ground, in country. And we sought to be a partner with them over the years, and we've been fortunate in our involvement. We now have 30% of the leading domestic rating agency. And we felt that -- and we felt and continue to feel that that's the right approach for us. As a related matter, we've made selective investments principally on the ESG side of things, [ SingTel ] refinance, a couple of others. And we feel that in terms of thought leadership, serving the domestic investors, serving international investors, that, that is a good way to do it. And then around that, we have other product offerings in Moody's Analytics that are fit-for-purpose in both domestic and for international investors.

Got it. All right. Let's go back to Moody's Analytics then. So one of the topics -- we hosted a keynote chat as well around ESG and climate. All the details, I think, we're going to be talking through with Mark Kaye, who's the CFO of Moody's, at a June ESG conference. But I wanted to focus on the RMS acquisition. I think we understand from a climate angle what it is. But maybe just to step back a bit for the benefit of the audience, just high level on what you acquired and kind of the [ rationale ] there.

So first of all, RMS was actually our second acquisition from DMGT, Daily Mail. We had acquired many years ago a company called Lewtan Technologies, which was in the structured data and analytics area. So we had a relationship with them that was, again, measured in years. And RMS was a business, obviously, insurance analytics, cat risk, natural risk, that we thought was something that we ultimately wanted to have as part of the Moody's family. Why? As I say, when most folks think of RMS, they think of climate. But you have over 1,000 people who are, first and foremost, passionate folks with values around what they're doing in terms of trying to take very complicated risks, whether it's climate, flood, earthquake, prospect for buyers, terrorism, cybersecurity, to make it understandable and usable. And I don't tend to use these words often, but there's brilliant people at that company who developed incredibly intricate models to understand, measure and help price cat resi. The richness of the data sets and, again, modeling capabilities at RMS was what drew us to the opportunity. And it's obviously -- again, the climate is very well known. But the ability then to take the -- those capabilities, the people and use it with our other risk data and decisioning solutions to cross-sell, up-sell, new sell, product development, I mean, there's a wide open range that we believe they're SaaS, and that had been actually a project that, that company had been undertaking for several years. We are very good -- well, I'd like to believe that we are very good on several up-selling. The MA sales force is really, again, an incredible group of people and sort of deeply connected with our customers. And again, using these data sets certainly around, as I said, physical risk just for starters, there's a tremendous richness of what we're able to do to accelerate growth.

Got it. And so just to that point of exciting growth, when you acquired it at least, it was a low- to no-growth business.

Right.

We've been tracking RMS through -- because, I guess, they're competitors to Verisk's AIR business. So can you just help us appreciate how you underwrote that no growth in your -- when you decided to acquire it and how -- putting timing aside perhaps or maybe just define how you plan to accelerate that?

Sure. Well, I mean, first of all, we build what I characterize as bottom-up acquisition models. And the -- when we were doing the initial diligence and -- well, not initial diligence. We've been looking at this for a long time. But basically, as a threshold matter, we're very good at assessing the maturity -- relative maturity of sales forces. And we've done that on many of our acquisitions. Again, you've got incredibly passionate people, great data scientists, great analysts, and they want to develop product. The selling part of it is like, "Oh, yes, we have to sell this, too." And that is its own discipline. And Moody's Analytics is very good at that. So there's a threshold matter when we look at it and like, "Okay, this is their sales force. It's relatively small relative to its analytics stack. And again, they have been focused for a long time on their SaaS conversion." So we have that -- we have the ability to sell. And then as you start to talk to our own customers, okay, so if we had climate, if we had fluvial data, if we had wildfire, if we had tsunami, we have all these sort of data, that would be incredibly useful to us. And some of the people we talk to, it's interesting because I talk to customers regularly, "Oh, I wasn't aware that you had that." So just as a minimum, having a sales force that's effective in selling it, that's sort of part A. Then part B is you go look at some of the use cases. Again, the biggest one is certainly -- biggest one -- all of the big ones is physical risk. And then this physical risk can be used in many other places. So -- and you're not just underwriting -- so you're not just underwriting the RMS itself. You're also -- again, these data sets are also self-reinforcing to other parts within Moody's Analytics because, as I say, physical risk is relevant to whether you want to underwrite the insurance policy and prospectively how you price it, whether you want to make the loan in the first place, whether you want to actually develop XYZ facility on a piece of ground that might be challenged from a wildfire or quake perspective. So in short, we had enough of these prospective use cases where as we thought about the addressable markets that we could serve and further productizing and selling this, that was what essentially underwrote the model. And harking back to BvD, when we did that one, it was sort of the same thing. That business was already doing nearly 9% top line growth. And again, just by bringing the professionalism of the Moody's Analytics sales team, we were able to, well, meaningfully accelerate even from there.

Yes, definitely. And I want to touch on that in a second, but going back to RMS. The $150 million run rate synergies, and you talked about the $25 million, I think perhaps you only pointed to how we get there between the sales and cross-selling, et cetera. But maybe just help us walk through how we get to that $150 million number.

Well, it will be more levered towards the back. We've largely -- remember, we just -- we're still working on the integration. And I might know this -- Manav, you and others might know this, but the integration management office actually now reports into corporate development, into my area. So it will be, as I say, from ideation to getting it wired in. So we have the sales force integration that has been in process, which is largely complete. So that's the sell more of what you have. And then we have our central product group, which is working with the folks at RMS around centers of gravity, centers of excellence, climate and the physical risk, where we're going to productize and bring that in both to some of our existing products. We were able to port some of it into, say, Orbis. And then we'll also be able to do new product development. So you'll see the ramp, but again, it will be more steered towards the back.

Got it. So maybe just to take a quick step back. RMS was one of your largest deals in a while, but nearly not as large as one of your competitors just did. So just curious, is Moody's looking for -- really for a larger -- maybe not transformative but just maybe a larger deal that gets a bigger mix away from -- or more into the analytics side of the equation?

So maybe as a threshold matter when I think about our strategy, what prospective competitors are doing, the expression that we use is sort of we run our own race. We've never had quotas in terms of the size of deal, the amount of deal. I hate to say it's almost sort of boring because, in many respects, it's the same answer but it happens to be, I think, the correct answer, which is we sort of are fundamentally asking ourselves the industrial logic. Okay? XYZ acquisition, irrespective of size, makes sense to us if we bring something to that opportunity that makes us better at risk and is serving our customers; answering, again, very complicated questions. You folks know this, right? If it's easy, everybody would do it. So we're trying to figure out -- they're hard, but I have to -- as a professional matter, we have to be able to explain it. And the rest of it, obviously, can we generate appropriate returns? And that's -- the complexity of generating returns in this environment, frankly, has been what we've seen, prices continuing to go up. You have to be able to bring real synergies to the table. I mean I'm incredibly optimistic for RMS because, as I say, I know what the acquisition case is and I also know around the richness of the data sets. And some of them, we haven't even -- we just barely scraped the surface. But the answer is we have to be able to explain it. We have to be able to make an appropriate risk-adjusted return. We have to be able to make sure that we've done the diligence. Again, you don't want to spend $100 to spend -- to buy $1,000 problem. And as we continue to evolve our company, there's the people part of it. Do we have people with sort of shared purpose who are going to come in and are going to enrich each other? So really, the answer is if we find something that sort of ticks those boxes, that's truly on strategy, that is around complicated enterprise risk and developing a standard at scale, then it's within the wheelhouse. But as to whether there's transactions -- sort of not every day, but obviously, I watch what others are doing. But on some of them, it's not that -- we're certainly not unaware of their existence. Whether it made sense to us, in most cases, it didn't. We have a very high bar.

Makes sense. So let's go back to BvD. I think I forget how many years ago when you announced the deal right before you were presenting at this conference. I remember that pretty clearly. But maybe just for the audience, what is BvD? And you talked about the growth is accelerating, but maybe also tie that into the RDC acquisition that you did and how now the joint assets are accelerating growth in insurance risk.

Sure. Absolutely. So again -- so Bureau van Dijk is -- was one of the largest depositories of sort of company information. So it had something on the order of 250 million customers -- companies in its databases. And what's interesting about it was it was aggregated data, so -- and actually, back in the day, Manav and I had talked about this, but it was a platform and all these many wires of different information from different sources that were going into the database -- again, significantly, including company ownership beside what does the company do, what was the financials, where is it. And -- but what was -- what took a commodity data and turned it into the way we talk about curated data was the fact that the platform itself had so much information that had gone into it that had been cleaned up, normalized and made easy so the customers could actually use it, and it was so embedded in workflow. That's what initially brought us to it. But the intellectual leap that we needed to make was it was a platform, not necessarily a content factory. So we had the company information. We had the ownership information. And we realized, okay, so this is great. Then we said we want to have the people, so the politically exposed personnel, the PEPs. So we said okay, we need to expand this from coupling the entity ownership to actually who are the people around some of these large companies. And that led us to RDC. And RDC -- the other thing is -- in terms of how we think about our M&A program and actually just the company at large is, is what the company does intrinsically consistent with our own mission, vision, purpose and values as a company, our orienting North Star in terms of the way the company is organized and what we care about. And in the first 30 seconds of the conversation with RDC is that -- so before I talk about the company, I want to talk about what our mission is. Our mission is to prevent criminal intrusion of the financial system. And I stopped there and I thought, "Well, if that's not sort of a standard type business, what is?" So they had a tremendously rich database that got built over nearly, at the time, about 20 years of these politically exposed people. And it was a tunable database and allowing you to basically look at someone got a speeding ticket, not such a big deal, to a variety of other activities that generally I think those in the room or online would frown upon. So then we had that. So now we have people. Then with Acquire Media, we were able to get essentially news information, data ingestion capabilities that allowed us to both continue to calibrate and monitor our data sets, right, because it's adjusting millions of pieces of information a day that lets us make sure that our data is actually up to date and then it also allowed us to develop screening and analytics tools on. One of them is called NewsEdge. And then from that -- again, now that you know the company, the ownership, the people, news and signals around it, then it was also a function of making the technology and the ability to use it and get the data. That led us to our more recent acquisition of Passfort company. So the company, as an example, part of its secret sauce is that it has the ability to tie into the actual source data. So you click into it, you're like, "Okay, so where does this data come from? Oh, the things -- the relevant database, it came from here." And that's in part driven by regulatory requirements. But that's a whole adventure from thinking SME credit to ultimately what has become, across several parts of Moody's Analytics, our Know Your Customer, Know Your Supplier, AML. And in some respect, we talk about it a little bit as sort of know your everything capabilities, but know your everything about the stuff that is important.

And just to frame it, like how would you characterize how big this know your everything business is to you? And it's clearly growing at a really high clip. And is that sustainable?

We -- well, in terms of its discrete size, we don't say how much we disclose. But the -- but I say that the overall -- I mean it's -- as I say, it's a -- the markets themselves are measured in the multibillions. Our -- the clip of usage, I mean, my expectation is that we'll continue to grow at similar growth rates that we've seen. And why is that? Because these questions around, again, supply chain, they're -- the use cases are sort of blurred. And I said this around the supplier landscape. It's not just, again, where something is sourced. Who is it sourced from? Are they on a sanctions list? Are they conducting their operations in a sustainable manner? It gets into the questions around, we're sitting here in the U.K., Modern Slavery Act. So there's all manner of operational and reputational dynamics driving this. And then the other thing is there's risks that folks aren't necessarily aware of or they're becoming -- they're happy to become aware of. I mean these questions around who is on the other side of the trade. That -- those are -- if you wind it back several years ago, folks sort of wanted to know it or they said, "Well, it's impossible to get that information." Now it's required. Now it's getting written into regulation. And as I say, cybersecurity disclosure, that was just yesterday, the closing of the period, that the SEC requested comments on prospective cyber disclosure, right? This is -- these are questions around -- both effecting any company's growth strategy, regulatory compliance and then operational resilience. Because as they say, if something goes down within your overall ecosystem of whatever your business is as a supply matter or as a reputational problem, it is very visible and it can be very problematic.

Got it. So maybe that's the way to lead into your -- you said you are on the Board of BitSight. And I think Moody's made, I think it was, a $250 million investment, which is a sizable investment. So can you just talk about what the cyber strategy is at Moody's and how that fits into all that have been said?

Sure. So again, talking about intentionality. We started our venture into cyber, gosh, way back in 2017. It was something we thought about. And the question was how do you play. It was becoming more clear, the prospect of cyber risk, cyber intrusion. The question of cyber resiliency was something that our issuers were asking, other customers were asking. And so -- all right. So like ESG. I mean ESG was something that was less of a focus just 10 years ago, and it's incredibly in focus now. So we thought, all right, well, what would one -- so we actually started working with our then CISO who went from being our CISO to forming the IMS cyber area. And basically, the way that we thought about it was there's 2 ways to think about sort of the cyber footprint or the cyber roof over one's head, which is outside signals, outside-in approach, which is sort of -- which is called service threat assessment. And then just sort of not dissimilar from the rating agency, the sort of the MNPI of being behind the wall around what's going on there. But there were no, I mean -- so there were companies that were essentially [ cleaning the surface ], BitSight notably, which is where we made the investment. And then this business that's getting behind the firewall was not necessarily what folks wanted to do because it's -- part of it's also hearing sort of the emperor has no clothes from a child. Once you start asking the question of how you dress, you're going to get an answer. But we had built -- we had also separately built -- started building a joint venture called VisibleRisk with our CISO cum Head of MIS Cyber cum Cofounder of VisibleRisk that we built with a venture capital company. So we were building this deep methodology, deep data inside the firewall business from scratch because there was nothing that we could -- there was nothing out there that marry the inside view and the outside in. And so we concluded that we needed to do something at scale. We wanted to do it with the market leader, which was BitSight. We initially thought that we might do something that's more as a commercial collaboration as we continue to build our VisibleRisk joint venture. But there was a turning point in our conversations where I said, "You know what, we should just be doing this together. It's a developing area. We should figure it out. You all are doing cyber 24/7. That's what you do. We have the VisibleRisk joint venture. You're going to do -- then I said, "By the way, we're going to raise $250 million." And he said -- the light went on and he said, "You know what, let's just do this together. I mean we want to come into the capital structure, and we'll bring the joint venture. And we will essentially align on a variety of sort of undertakings, statements of war. And we will work together across Moody's with you to help your company grow and then for us to be able to have the data and analytics that would inform thought leadership in the rating agency, just like what you're seeing we do with ESG and climate and then other opportunities to further monetize within Moody's Analytics." And so that's what we decided to do.

And in this specific case, why was it an investment versus an outright acquisition?

Well, in part that was informed by the desires of the parties. So I got a similar question from others, which is, "All right, Dave, you took an X percent stake. Why not 2 times X?" And my response was, "Well, that was what was on offer." And we just concluded that this was the right group of people to collaborate with in this matter. And then, again, what we would -- I mean it's working. We have -- we're building the pipes between us to get data analytical information from them to the rating agency. They're using it and starting to reference that in research reports, which is, again, the thought leadership. And I'd like to believe that with your thought leadership, relevance, addressing very hard problems, commercial success will follow. And that's what we're seeing.

Okay. Two other acquisitions I'm going to touch on. So BvD, when you first acquired it, it was predominantly European based. And I don't know what the update there is. But you then acquired Cortera, which gave you some U.S. presence. And so is that enough? And should we think about that as going after D&B? What's the competitive set like?

It was never -- it was -- again, the run your own race comment was never really about -- wasn't really about -- was not about D&B. It was about U.S. private company data. And on that particular front, we were -- we had data arrangements. And we decided -- as I said, BvD was a platform. And we in part said there's a tremendous amount of just data here that we have -- we want to have the factory. So we concluded on that particular data set that we just -- we wanted to have it. We continue to build the information, the supplier ecosystem, which is the intrinsic part of that business. And so -- but Cortera notably was important just because it's also a significant part of the data that was coming in. And by the way, that wasn't just one of these things we came up with. You just got to talk about time and intentionality. One of my first calls when I joined Moody's, running corporate development at the time, was to the venture capitalist, the then CEO, in March of 2013. So we had been -- we had wanted to acquire Cortera for a very long time. We built relationships with them. We built -- actually, we had commercial collaboration. And then when the time came, we were there, and frankly, we entered an auction. So we continue to build the data ecosystem, and then we have leadership who's doing that. And to the extent that we find another data factory that we felt we needed, we'll do it. But there's plenty of ways to collaborate with others.

That's really helpful. So maybe this is -- the data factory explains the next acquisition I want to talk to, which is REIS, which is the distant #2 to CoStar, right? So how does that get into the strategy in the context of running your own race and perhaps not going after CoStar?

So yes, CoStar is CoStar, and REIS had nothing to do, in our minds, with CoStar. The movement into CRE data and analytics was more important by -- really, it was more about our banking solutions, our lending and our underwriting. So a lot of what had been enterprise risk solutions, which is disaggregated, around banking and lending solutions was about underwriting C&I loans. And -- okay. So the other large class loans are CRE. And we concluded that, that was an area that was very much not okay, that we needed to have in our wheelhouse to be better at providing lending solutions and insights. And it further -- so I think of it in many respects as a capability, as is climate data and analytics. Because, again, if you're going to underwrite a CRE loan besides the cash flows -- we have the cash flow models. The economic models, we have those. The understanding of sort of the property characteristics and then narrowing it again with this physical risk -- I actually was a real estate lending person a long time ago. Suffice to say, locating -- building a property or making a loan in an inconvenient place leads to purely, potentially, inconvenient outcomes. So that's why we did it. But as you say, CoStar, they're CoStar. But that's not what we're trying to do. We're trying to build more bespoke -- just more rigorous data and analytics that play into various of the other things that we're doing within Moody's Analytics.

Got it. I just want to pause and see if there are any questions here. We got 5 minutes left here, so just want to see if any -- John?

Yes. Just on the data analytics, in terms of how it compares to the ratings business. The ratings business seems to be much higher quality businesses, I mean at least on the surface. But you are defining your competitive advantage as a very competent sales force that can sort of like bundle that into client needs. But already -- there was actually more to that because BvD was a great product on its own before you acquired it but was managed easily maybe because of your scale, treating this, in a way, as a stand-alone business obviously that actually parallels yours. So leveraging the data [indiscernible] maybe from lack of investment, lack of competent person and access to -- so just trying to define the role of the data analytics.

Yes. I know where you're trying to go. So first of all, in terms of the competitive imperative advantage, the fact that we have a great sales force, that's just in my opinion sort of a fact, that is a tool that we have. But our greatest strength as a company is the ability to -- is the analytics capability. And it's always been sort of an orienting sort of North Star. We have software engineers, data scientists, analysts, subject matter experts in sort of every industry. And the ability to -- again, as I said, BvD is just a good example because it shows you the beginning that -- we didn't have Bureau van Dijk until August of 2017. But we had a view that the deeper -- that there was a deeper need for some of these large but smaller credits and that we needed to have the global view of this that would sit alongside what we're also doing, again, in the rating agency. Because this private information is just very hard to get at, so we knew that we needed it and want it. But then as we thought about prospective use cases, and again, it was not by accident, we concluded that we had to expand the aperture to build a much more holistic view and capability around understanding counterparties, which -- and again, that was -- that's been a period of, what, it's 5 years now, several billion dollars of capital. But we built that with intent. Same thing with -- on insurance analytics. We -- the rating agency, of course, is a phenomenal business steeped in 100-year history. And again, we've been building Moody's Analytics since, what, 2007. But as we continue to assemble businesses and capabilities, both acquired and internally developed. We have a central product. We have a lot of folks looking at these questions, at these hard risks that our customers are seeking to understand. We're using that to continue to refine our strategy. And as we open the aperture and we're investing in these businesses as they scale, we will get operating leverage.

Any other questions? Okay. I'll end this with just one last one, which is we talked about a lot of the higher-profile deals, at least in my view, some of the names. But you've done a lot of other smaller deals, especially in the last couple of quarters. So what does the pipeline at Moody's look like? Should we be expecting a similar frequency of these small deals flowing in or just -- things just happened to align in the last few quarters?

Well, as I say, M&A is inconvenient. So if you're asking about the fact that the RMS and the BitSight airplanes landed around the same time, that was, in some respects, the deal.

Yes, fair enough.

So that was as much happenstance. I mean, I think the way to say it is we always have -- we're always in the market. We're always looking at opportunities of various size. But our -- as I say, we have a very high bar. We look at a lot of prospective ideas and then only a few sort of pass through the spring. So the team is always working on something.

Got it. All right. Fair enough. Okay. We're going to leave it there. Thank you so much for coming, and thanks again for your time. Appreciate it.

My pleasure.

Thank you.