10-QPeriod: Q2 FY2025

MOODYS CORP /DE/ Quarterly Report for Q2 Ended Jun 30, 2025

Filed July 24, 2025For Securities:MCO

Summary

Moody's Corporation (MCO) reported solid financial results for the second quarter and first half of 2025, demonstrating continued revenue growth driven by both its Moody's Analytics (MA) and Moody's Investors Service (MIS) segments. For the quarter, total revenue increased by 4% year-over-year to $1.9 billion, with MA showing a strong 11% increase in external revenue, fueled by demand in KYC, insurance, and banking solutions. MIS revenue remained stable year-over-year, primarily due to mixed performance in its various sub-segments, including a decline in bank loans offset by higher investment-grade issuance. Net income attributable to Moody's increased by 5% to $578 million for the quarter. The company also saw an expansion in its operating margin to 43.1% and its adjusted operating margin to 50.9%, driven by revenue growth and benefits from its restructuring programs. Diluted EPS rose 6% to $3.21. The company continues to manage its capital effectively, returning value to shareholders through dividends and share repurchases, while also investing in strategic growth initiatives.

Financial Highlights

55 data points
Beta

Revenue

$1.90B

74.2% Gross Margin

Net Income

$578.00M

30.5% Net Margin

EPS (Diluted)

$3.21

Total Assets

$15.49B

Cash & Equivalents

$2.17B

Free Cash Flow

$468.00M

Financial Statements
Beta
Revenue$1.90B
Cost of Revenue$489.00M
Gross Profit$1.41B
SG&A Expenses$443.00M
Operating Expenses$1.08B
Operating Income$818.00M
Net Income$578.00M
EPS (Basic)$3.22
EPS (Diluted)$3.21
Shares Outstanding (Basic)179.70M
Shares Outstanding (Diluted)180.20M

Key Highlights

  • 1Total revenue increased by 4% to $1.9 billion for Q2 2025, driven by growth in both segments.
  • 2Moody's Analytics (MA) revenue surged by 11% to $888 million, with particular strength in KYC, insurance, and banking solutions.
  • 3Moody's Investors Service (MIS) external revenue remained stable at $1.01 billion, reflecting a balance between growth in investment-grade issuance and declines in bank loans.
  • 4Net income attributable to Moody's grew 5% to $578 million for the quarter.
  • 5Operating margin improved to 43.1%, and Adjusted Operating Margin expanded to 50.9%, showcasing operational efficiency and benefits from restructuring.
  • 6Diluted EPS increased by 6% to $3.21 for the quarter.
  • 7The company continued its commitment to shareholder returns, with approximately $0.9 billion in remaining share repurchase authority and a quarterly dividend of $0.94 per share.

Frequently Asked Questions

The primary driver of revenue growth was the Moody's Analytics (MA) segment, which saw an 11% increase in external revenue, largely due to sustained demand for its KYC, insurance, and SaaS-based banking solutions. Moody's Investors Service (MIS) revenue remained stable year-over-year, with mixed performance across its sub-segments.

The restructuring program, particularly the 'Strategic and Operational Efficiency Restructuring Program,' contributed to margin expansion. For the quarter, restructuring charges amounted to $27 million. The company expects significant annualized savings from this program, which is helping to improve operating margins.

Moody's generated strong operating cash flow and is committed to using its cash flow for reinvestment in growth initiatives (organic and inorganic) and returning capital to shareholders through dividends and share repurchases. As of June 30, 2025, the company had approximately $0.9 billion of remaining share repurchase authority and declared a quarterly dividend of $0.94 per share.

Foreign currency exchange rates had a mixed impact. For MA, favorable FX translation rates contributed to revenue growth. However, unfavorable changes in FX translation rates were noted as a factor that partially offset the decrease in total operating and SG&A expenses. The company also provided sensitivity analyses for potential currency fluctuations on its net investment hedges.