10-QPeriod: Q3 FY2025

MOODYS CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2025

Filed October 23, 2025For Securities:MCO

Summary

Moody's Corporation (MCO) reported a strong third quarter for fiscal year 2025, demonstrating robust revenue growth and improved profitability. Total revenue increased by 11% year-over-year to $2,007 million, driven by solid performance in both the Moody's Analytics (MA) and Moody's Investors Service (MIS) segments. MA saw a 9% revenue increase, fueled by demand in Insurance, KYC, and Data & Information offerings, while MIS experienced a 12% revenue jump, primarily attributed to strong investor demand and a favorable environment for debt issuance across its ratings lines of business. Profitability also saw significant improvement, with operating income rising by 24% and diluted Earnings Per Share (EPS) increasing by 23% to $3.60. The company's Adjusted Operating Margin expanded by 500 basis points to 52.9%, reflecting effective cost management and operational efficiencies gained from ongoing restructuring programs. Despite increased investments in technology and headcount, Moody's maintained disciplined cost control, leading to enhanced margins. The company also reaffirmed its commitment to shareholder returns, announcing a quarterly dividend and a substantial new share repurchase authorization, signaling confidence in its financial health and future prospects.

Financial Highlights

55 data points
Beta

Revenue

$2.01B

75.5% Gross Margin

Net Income

$646.00M

32.2% Net Margin

EPS (Diluted)

$3.60

Total Assets

$15.41B

Cash & Equivalents

$2.18B

Free Cash Flow

$658.00M

Financial Statements
Beta
Revenue$2.01B
Cost of Revenue$492.00M
Gross Profit$1.51B
SG&A Expenses$453.00M
Operating Expenses$1.09B
Operating Income$917.00M
Net Income$646.00M
EPS (Basic)$3.61
EPS (Diluted)$3.60
Shares Outstanding (Basic)178.90M
Shares Outstanding (Diluted)179.60M

Key Highlights

  • 1Total revenue increased by 11% year-over-year to $2,007 million for the third quarter of 2025.
  • 2Moody's Analytics (MA) revenue grew by 9% to $909 million, driven by strong performance in Insurance, KYC, and Data & Information segments.
  • 3Moody's Investors Service (MIS) revenue surged by 12% to $1,098 million, benefiting from robust investor demand and increased debt issuance.
  • 4Diluted Earnings Per Share (EPS) increased by 23% to $3.60 compared to the prior year's quarter.
  • 5Adjusted Operating Margin expanded significantly by 500 basis points to 52.9%, indicating improved operational efficiency and cost management.
  • 6The company announced an additional $4 billion share repurchase authorization, demonstrating a commitment to returning capital to shareholders.
  • 7Restructuring charges of $21 million were incurred related to the 'Strategic and Operational Efficiency Restructuring Program', aimed at enhancing long-term profitability.

Frequently Asked Questions

Revenue growth was driven by strong performance across both segments. Moody's Analytics saw increased demand for its Insurance and KYC offerings, as well as its data and insights products. Moody's Investors Service benefited from robust investor demand and increased debt issuance activity, particularly in leveraged finance and the financial institutions sector. Overall, global revenue increased by 11% year-over-year.

Total operating and SG&A expenses remained relatively flat year-over-year at $945 million. While there were increases in salaries and benefits due to headcount growth and investments in technology, these were offset by a decrease in incentive compensation, aligning with financial performance. Disciplined cost management, coupled with revenue growth, led to a significant expansion in operating margin by 500 basis points to 45.7% and an Adjusted Operating Margin of 52.9%.

Moody's demonstrated a strong commitment to shareholder returns. The company announced a quarterly dividend of $0.94 per share and, importantly, authorized an additional $4 billion for share repurchases, indicating confidence in its financial position and future cash flow generation capabilities. The company also had approximately $0.4 billion remaining under a previous repurchase authorization as of September 30, 2025.

The company incurred $21 million in restructuring charges in the third quarter of 2025 related to its 'Strategic and Operational Efficiency Restructuring Program'. This program is aimed at realigning operations, consolidating functions, and improving operating efficiency, with expected annualized savings of $250 million to $300 million. While these charges impacted reported expenses, the company views them as necessary investments for long-term margin expansion and operational improvement.