Shlomo Rosenbaum : Okay. And if I could sneak in one just housekeeping. The AR DSO was up a little bit sequentially. Were there any deals that closed particularly towards the very end of the quarter that kind of pushed it up?
Mark Kaye : Shlomo, this is Mark here. This might be a record for a question on an earnings call around DSOs. I anticipate you’re looking at our externally reported accounts receivable over, I think, three months revenue annualized. And I’m guessing you’re seeing a number of around 115 in the fourth quarter around, let’s call, at 110 for full year. Internally, we’re able to do a little bit more of a precise calculation because we can use sales. And so if I think about ending sort of ending accounts receivable off of the — divided by three-month sales annualized, we get a much lower number of around 71 for the full year. That 71 days is a little bit up from what I saw in the last year. And the driver here is just around the integration of acquisitions into our corporate processes as we bring sort of that same discipline and rigor to the DSO processes of the companies we’ve acquired.
Operator: Your next question comes from the line of Russell Quelch from Redburn.
Russell Quelch : Just want to go back to this point around the MIS guidance, if I may, to start. If I pose it this way, we’ve got data that we’ve been presented with historically that shows there to be perhaps a 5% refi wall in ’23 over ’22. If I haircut that by a couple of percent for defaults which I think would be conservative, the starting point, therefore, is 3% growth. And as George pointed out, historical pricing is 4% to 5% with the potential for a positive pricing mix, which would get me to sort of 8% to 10% as a baseline growth for next year. And that’s without assuming anything for sort of new issuance recovery, and you said new issuance recovery is sort of low single digits. So I’m just trying to square that with this sort of low mid-single-digit guidance because it does seem like there’s a big gap there between the way I built it and what your guidance suggests.
Mark Kaye : This is Mark here. Russell, nice to have you on the call. One other element to add to your model is the reporting of MIS other revenues for 2023 vis-Ã -vis 2022. Those are down in the range of $10 million to $15 million primarily to reflect the incorporation of some of our ESG products and capabilities into our MA revenue set. That’s really what’s driving the difference between sort of the issuance outlook and the revenue outlook we provided this morning.
Russell Quelch : Okay. I might follow up with you on that one. And then Mark, just another question, maybe flipping over to Decision Solutions. I appreciate there’s been a few on this now. But wondered how much of the growth in Q4 was related to pricing. And how much might be related to you increasing cross-sells between the products where you’ve been investing in that growth? And if you would argue, there was upside risk to the guidance if corporate M&A activity recovers — I’m sorry, that’s a 10% guidance for MA.
Rob Fauber : What was that last bit of the question? I’m sorry, Russell.
Russell Quelch : Yes, apologies. Wondering whether there is upside risk to the 10% MA growth guidance if we see a recovery in corporate M&A activity next year — or sorry, this year?
Rob Fauber : To the MA guidance?
Russell Quelch : Yes, 10% MA guidance.
Rob Fauber : Let me just start with the question about Decision Solutions and pricing. And with the biggest growth engine in Decision Solutions is our KYC business. And just to give you a sense, new sales almost doubled in 2022. And we had a greater than 50% increase in the number of new customers, and we had a meaningful increase in the average sale price. That’s not just pricing. What that really does is the bundling of products and capabilities that’s allowing us to have a larger ticket size. So I think what you’re really seeing certainly in KYC is a lot of new customers coming into the market. We’re obviously doing a very nice job of bringing those into the Moody’s family when you look at our growth rates relative to the overall market but also continuing to be able to provide additional capabilities to folks who are already then using the products and services.
So I’d say that’s actually probably a similar story to kind of a lesser extent for what we’re doing around banking. We’ve just got a suite of cloud-based solutions that we continue to build out that allows us to bundle those solutions together and to increase the ticket sizes and the size of the relationship that we’ve got with our customers. So it’s not just about price increases there. Of course, there’s an element of that as we continue to enhance the value proposition of all of our products. But I think it’s really more around cross-sell, and in the case of KYC, especially just new customer acquisition.
Russell Quelch : Okay. And then the second point, I’ll rephrase it better in terms of the MA revenue growth guidance of 10%. Is there upside risk to that if we see a recovery in corporate M&A activity?
Rob Fauber : I don’t really see those two things tied tightly together. There’ll be upside to the MIS guidance, obviously, but I don’t necessarily think so from an MA standpoint.
Operator: Your next question comes from the line of Craig Huber from Huber Research Partners.
Craig Huber : I guess, Rob, you’ve talked about this, let’s go a little deeper here. Your medium-term outlook, you said that’s five years here, you’re talking about low to mid-single-digit MIS revenue growth long term, which is the same range that you’re giving for this year. We all know 2022 was obviously a very rough macro year M&A for the marketplace for most of the bloody year was quite low. Debt taken on for share buybacks was quite low last year. Refinancings last year seemed like that was low versus what it should be the next few years, that you agree on that and stuff. And when you think about pricing, historically, you’ve done 3% to 4% price, maybe it’s a little bit higher than that, but at least 3% to 4%. How do you square all that with only up 2% to, say, 5% on average for the next five years with the base year seemingly being so low? Is it just being overly conservative here? I’m just trying to get a better sense of this. I get a lot of questions on this.
Rob Fauber : Yes. I understand that some will view us as conservative. And obviously, time will tell, and I hope that’s correct, Craig. I guess it just comes back to kind of what I talked about earlier when we look at kind of a longer-term average in terms of overall issuance and where we ended up 2022 and what we see, at least in front for us for 2023, we think implies as we, I think, in line with our medium-term targets. So I think that’s what it comes back to. But as I said, the one thing that maybe to think about in terms of are we being conservative, I touched on this a little bit earlier in the call is, while on one hand, we’re at relatively similar levels of issuance from pre pandemic, I mean, a little bit lower but not significantly lower, the mix is different.
So last year, we had much more issuance coming from financial institutions as a percent of the total than corporates. And so as that — if that mix shift changes back to what we’ve seen over the last, call it, six, seven years pre-pandemic, then yes, I think in that case, we’d see faster corporate growth that might provide some upside to the way we think about the medium-term targets.
Craig Huber : Then also just on the pricing, can you guys tell us what you’re expecting pricing for MIS this year to be a similar question for MA?
