New York, October 24, 2022 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings -and other ratings that are associated with the same analytical units for the rated entity(entities) listed below.
The review was conducted through a portfolio review discussion held on 17 October 2022 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. A possible outcome from periodic reviews is a referral of a rating to a rating committee.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.
Key Rating Considerations
The principal methodology used for the rated entities listed below was Business and Consumer Services published in November 2021. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Business and Consumer Services
Scale: Scale is considered because larger scale can be an indicator of a company's ability to influence business trends and pricing within its service segments and to support a stable or growing market position. Scale also can be an indicator of greater resilience to changes in demand, geographic diversity, cost absorption, R&D capabilities and of greater bargaining strength with customers, labor, and vendors. Revenue is an indicator of scale.
Business Profile: The business profile of a company is considered because it greatly influences its ability to generate sustainable earnings and operating cash flows. The business and consumer service industry comprises a vast array of business models encompassing a multitude of identifiable customer bases worldwide. We consider the underlying demand characteristics of a company's service offerings and their relative breadth, strength, and endurance of demand. Companies that have established a long history of strong demand for a diverse range of service offerings that are critical to customer needs generally entail lower risk compared to those that offer a single line of service which have less importance for customer needs or have a limited history of success.
Profitability: Profits matter because they are necessary to maintain a business's competitive position, including sufficient reinvestment in marketing, research, facilities, and human capital. Sustained high profitability is generally a strong indicator of substantial competitive advantages, particularly if combined with evidence of a stable or rising market share. EBITA Margin is an indicator of profitability.
Leverage and Coverage: Leverage and coverage measures are indicators of a company's financial flexibility and long-term viability, including its ability to adapt to changes in the economic and business environment within the segments in which it operates. Indicators of leverage and coverage include ratios such as: Debt / EBITDA, EBITA / Interest Expense, and Retained Cash Flow/ Net Debt.
Financial Policy: Management and board tolerance for financial risk is a consideration because it directly affects debt levels, credit quality, and the risk of adverse changes in financing and capital structure. Our assessment of financial policies includes the perceived tolerance of a company's governing board and management for financial risk and the future direction for the company's capital structure. Considerations include a company's public commitments in this area, its track record for adhering to commitments, and our views on the ability for the company to achieve its targets. Financial risk tolerance serves as a guidepost to investment and capital allocation.
Other Rating Considerations: Other considerations may include but are not limited to financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends also affect ratings.
• Accenture Capital Inc.
• Accenture plc
• Amdocs Limited
• Austin HoldCo Inc.
• Broadridge Financial Solutions Inc.
• CGI Inc.
• Cintas Corporation No. 2
• CSG Systems International, Inc.
• DXC Technology Company
• Equifax Inc.
• FactSet Research Systems Inc.
• Fair Isaac Corporation
• Gainwell Holding Corp.
• Genpact Limited
• TransUnion
• TTF Holdings, LLC
• UST Holdings LTD
• ZipRecruiter, Inc.
The principal methodology used for the rated entity listed below was Media published in June 2021. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Media
Scale: Scale is considered because it enables a media company to spread costs across a larger base of advertisers, distributors, or subscribers, obtain premium rates from advertisers and distributors, and negotiate more-favorable terms with content suppliers, talent, and other vendors. Scale is measured using total reported revenue.
Business Profile: The business profile of a media company provides insights into how competitive it is within its markets, whether it is gaining or losing market share, and how diversified it is. This factor is important because a company's pricing power, prospects for growth and ability to adapt to demand are meaningful drivers of its future cash flows. The business profile is assessed across three sub-factors: market position, market share trajectory and business model.
Leverage and Coverage: Leverage and coverage measures are indicators of a company's financial flexibility and long-term viability, including its ability to adapt to changes in the economic and business environment in the segments in which it operates. Among others, ratios such as Debt-to-EBITDA and EBITDA less Capex-to-Interest Expense are considered.
Financial Policy: Management and board tolerance for financial risk is considered because it directly affects debt levels, credit quality, and the risk of adverse changes in financing and capital structure. Our assessment of financial policies includes the perceived tolerance of a company's governing board and management for financial risk and the future direction for the company's capital structure. Considerations include a company's public commitments in this area, its track record for adhering to commitments, and our views on the ability of the company to achieve its targets. Many media companies have acquired other companies within and across media sub-sectors in order to consolidate their market positions, expand into new businesses or benefit from cost synergies. Given the limited growth opportunities in many traditional media sub-sectors, some companies face pressure to return cash to shareholders or develop new, faster-growth revenue streams. The quickening pace of technological change and the proliferation of competitors in online sub-categories could result in further M&A as companies seek to build scale, defend market share, acquire technical expertise, increase their subscriber base, or diversify their revenues.
Other Factors: Other factors may include, but are not limited to, financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends also affect ratings.
• Dotdash Meredith Inc.
The principal methodology used for the rated entities listed below was Software published in June 2022. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Software
Scale: Scale tends to be an indicator of success in developing breadth of customers and overall depth of business. It also typically confers economies of scale in research, engineering and development, and corporate overhead. Larger companies with strong cash flows also typically have greater access to capital markets and greater options in making acquisitions. Software companies often rely on acquisitions to obtain critical technology or promising product lines. Scale is measured by Revenue and Free Cash Flow.
Business Profile: The business profile factor provides an indication of a company's qualitative strength on several measures of diversification and our assessment of market share. Business Profile provides an indication of the likely stability and sustainability of the company's cash flows. To score highly on the factor overall, a company must demonstrate significant product diversity, geographic diversity, end-market diversity and strong market share. A strong position in one of these areas with weakness in the other can limit long-term stability of cash flows.
Profitability: Profitability is considered because it drives sustainable cash flow and a strong competitive position. We assess this using Return on Assets.
Leverage and Coverage: Leverage and Coverage measures are indicators of a company's financial flexibility and long-term viability. Financial flexibility is critical to software companies to adapt to evolving technology and trends. Software companies need resources to invest in research and development as well as to make strategic acquisitions both to acquire critical technology and to expand product suites to meet shifting customer demands. Ratios such as Debt/ EBITDA, EBITDA minus Capex/ Interest Expense, Free Cash Flow/ Debt and Cash and Marketable Securities/ Debt are indicators of leverage and coverage.
Financial Policy: Management and board tolerance for financial risk is a rating determinant as it directly affects debt levels, credit quality, and the risk of adverse changes in financing and capital structure. Our assessment of financial policies includes the perceived tolerance of a company's governing board and management for financial risk and the future direction for the company's capital structure. Considerations include a company's public commitments in this area, its track record for adhering to commitments, and our views on the ability for the company to achieve its targets. Financial risk tolerance serves as a guidepost to investment and capital allocation.
Other Factors: Other factors may include, but are not limited to, financial controls, quality of financial reporting, corporate legal structure, quality and experience of management, assessment of corporate governance as well as environmental and social considerations, exposure to uncertain licensing regimes and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends are also considered.
• FINThrive Software Intermediate Hldgs, Inc.
• Netsmart, Inc.
• Sovos Compliance LLC
• Zotec Partners, LLC
This announcement applies only to Rated Entities with EU rated, UK rated, EU endorsed and UK endorsed ratings. Rated Entities, with Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced herein to the extent necessary, if they are part of the same analytical unit.
Please see the Issuer page on https://ratings.moodys.com for each of the ratings covered, most updated credit rating action, rating history, and Credit Rating action Press Release including the rating rationale and factors that could lead to a rating upgrade or downgrade.
This publication does not announce a credit rating action.
For any credit ratings referenced in this publication, please see the issuer/deal page on https://ratings.moodys.com
for the most updated credit rating action information and rating history.
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