10-QPeriod: Q2 FY2026

MOODYS CORP /DE/ Quarterly Report for Q2 Ended Jun 30, 2026

Filed July 23, 2026For Securities:MCO

Summary

Moody's Corporation (MCO) reported robust financial results for the quarter and six months ended June 30, 2026. Total revenue increased by 15% year-over-year for the quarter, reaching $2.185 billion, and by 12% for the first six months to $4.264 billion. This growth was driven by a significant 25% increase in Moody's Investors Service (MIS) revenue, largely due to strong issuance activity in corporate finance, structured finance, financial institutions, and public, project, and infrastructure finance sectors. Moody's Analytics (MA) also contributed with a 4% revenue increase, primarily from Data & Information and Insurance offerings, though it was partially offset by the impact of recent business divestitures. Profitability saw substantial improvement, with net income attributable to Moody's rising by 52% year-over-year to $878 million for the quarter and by 28% to $1.539 billion for the six-month period. This strong bottom-line performance was boosted by a significant gain on the divestiture of the MA Regulatory Solutions business, which added $181 million to non-operating income. Diluted EPS also saw a substantial increase, up 57% for the quarter to $5.03 and 31% for the six months to $8.75. The company also demonstrated strong cash flow generation, with free cash flow increasing to $1.532 billion for the first six months of 2026.

Key Highlights

  • 1Total revenue grew 15% year-over-year to $2.185 billion in Q2 2026, driven by strong performance in both MIS and MA segments.
  • 2Moody's Investors Service (MIS) revenue surged 25% to $1.260 billion, fueled by robust issuance activity across various finance sectors.
  • 3Moody's Analytics (MA) revenue increased 4% to $925 million, supported by Data & Information and Decision Solutions, despite recent divestitures.
  • 4Net income attributable to Moody's surged 52% to $878 million for the quarter, aided by a $181 million gain on business divestitures.
  • 5Diluted EPS increased by 57% year-over-year to $5.03 for the quarter.
  • 6Free Cash Flow for the first six months of 2026 was $1.532 billion, a significant increase from the prior year.
  • 7The company announced a quarterly dividend of $1.03 per share, reflecting continued confidence in financial performance.

Frequently Asked Questions

Revenue growth was primarily driven by a strong 25% increase in Moody's Investors Service (MIS) revenue, fueled by robust issuance activity in corporate finance, structured finance, financial institutions, and public, project, and infrastructure finance sectors. Moody's Analytics (MA) also contributed positively with a 4% revenue increase, driven by Data & Information and Decision Solutions, despite recent business divestitures. Overall, total revenue increased by 15% year-over-year.

The divestiture of the MA Regulatory Solutions business in the second quarter of 2026 resulted in a pre-tax gain of $179 million, which was recognized as part of "Gain on business divestitures" in the consolidated statements of operations. This gain significantly boosted non-operating income by $181 million, contributing to a substantial 52% year-over-year increase in net income attributable to Moody's for the quarter.

Moody's demonstrates strong financial health. For the first six months of 2026, net cash provided by operating activities increased to $1.718 billion. Free Cash Flow also showed significant improvement, reaching $1.532 billion for the same period. The company had $1.467 billion in cash and cash equivalents as of June 30, 2026, and maintains ample liquidity to meet its obligations and fund strategic initiatives.

The company incurred restructuring charges totaling $32 million for the quarter and $59 million for the six months, related to its 'Strategic and Operational Efficiency Restructuring Program' aimed at organizational simplification and efficiency. Additionally, there was a reserve recorded for an international non-income tax obligation, impacting operating expenses. The gain on business divestitures, however, more than offset these charges in contributing to overall profitability.