01—Abstract
Summary
Summary of the 10-Q filed October 21, 2026. Cited figures are marked; the original filing is the authoritative source.
Moody's Corporation (MCO) reported solid financial results for the nine months ended September 30, 2026, showcasing revenue growth driven by both its Moody's Analytics (MA) and Moody's Investors Service (MIS) segments.
Total revenue increased by 8% year-over-year, reaching $6.29 billiona. The MA segment saw a 5% increase in revenue, driven by strong performance in Data and Information, and continued demand in Insurance and KYC solutions within Decision Solutions. The MIS segment experienced a robust 10% revenue growth, primarily fueled by strong investment-grade issuance and project finance activity, particularly in areas like AI-related financing and data center infrastructure.
Profitability also saw an improvement, with operating income increasing by 11%b and Adjusted Operating Income rising by 12% for the nine-month period. This was supported by disciplined cost management, even with increased investments in technology infrastructure and AI. The company also benefited significantly from a substantial gain on the divestiture of its MA Regulatory Solutions business, contributing to a 27% increase in diluted EPS.
Free Cash Flow also demonstrated strength, growing to $2.2 billionc for the nine months ended September 30, 2026. Moody's continues to return capital to shareholders through dividends and share repurchases, with a remaining share repurchase authorization of approximately $1.4 billion.
02—Key points
Key Highlights
- Moody's Corporation reported an 8% increase in total revenue for the nine months ended September 30, 2026, reaching $6.29 billion.
- Both operating segments, Moody's Analytics (MA) and Moody's Investors Service (MIS), contributed to revenue growth, with MA up 5% and MIS up 10% year-over-year.
- The company recognized a significant gain on the divestiture of its MA Regulatory Solutions business, contributing to a substantial increase in net income and EPS.
- Free Cash Flow for the nine months ended September 30, 2026, increased to $2.2 billion, indicating strong cash generation capabilities.
- Diluted EPS saw a notable increase of 27% for the nine-month period, driven by revenue growth, the business divestiture gain, and share repurchases.
- Moody's continues to manage costs effectively, with operating expenses increasing at a slower pace than revenue, leading to improved operating margins.
- The company maintained its commitment to shareholder returns, with ongoing dividends and a significant remaining share repurchase authorization.
03—Questions
Frequently Asked Questions
What were the primary drivers of revenue growth for Moody's Corporation in the first nine months of 2026?
Revenue growth was driven by solid performance across both major segments. Moody's Analytics (MA) saw growth in Data and Information, and its Decision Solutions offerings (Insurance and KYC). Moody's Investors Service (MIS) benefited from strong investment-grade issuance, supported by AI-related financing, and robust project finance activity, particularly in data center development.
How did the divestiture of the MA Regulatory Solutions business impact the company's financial results?
The divestiture of the MA Regulatory Solutions business resulted in a significant pre-tax gain of $294 million for the nine months ended September 30, 2026. This gain substantially contributed to the increase in net income and diluted Earnings Per Share (EPS) for the period.
What is the outlook for Moody's free cash flow and capital allocation strategy?
Moody's generated strong Free Cash Flow of $2.2 billion for the nine months ended September 30, 2026. The company plans to continue investing in growth initiatives and employee development, while also returning excess capital to shareholders through dividends and share repurchases. Approximately $1.4 billion in share repurchase authority remained outstanding as of September 30, 2026.
How is the company managing expenses in the current environment?
Moody's has demonstrated disciplined cost management, with operating expenses growing at a slower rate than revenue. While there were increased investments in technology infrastructure and AI usage, alongside higher incentive compensation and a reserve for an international non-income tax obligation, the company's overall expense control led to improved operating margins.
04—Continue