10-Q · April 23, 2026
Moody’s reported a strong Q1: total revenue rose 8% YoY to $2,079 million and adjusted diluted EPS increased to $4.33 (up 13% YoY), driven by 8% growth in both Moody’s Analytics (MA) and Moody’s Investors Service (MIS).…
Earnings analysis · 10-Q
MCO earnings analysis
Filed October 21, 2026 · Our reading of the company's report
The latest report
Moody’s delivered $2.023 billion of third-quarter revenue, up 1% year over year but below the prior quarter, while operating margin contracted 90 basis points to 44.8%. GAAP EPS increased 18% to $4.24, primarily due to…
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Moody’s delivered $2.023 billion of third-quarter revenue, up 1% year over year but below the prior quarter, while operating margin contracted 90 basis points to 44.8%. GAAP EPS increased 18% to $4.24, primarily due to a $115 million divestiture gain and share repurchases, although underlying adjusted EPS was $4.14. MA showed solid recurring growth and margin expansion, but MIS declined 1% as Corporate Finance issuance weakened. Nine-month cash generation was strong, with $2.200 billion of free cash flow, but the quarter’s margin pressure and capital-markets volatility support a neutral outlook.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $4.24
- Operating margin
- 44.8%
What stood out
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Revenue grew modestly; margins weakened
Third-quarter revenue was $2.023 billion, up 1% from $2.007 billion a year ago but down from $2.19 billion in the prior quarter. Operating margin was 44.8%, down 90 basis points year over year and 310 basis points sequentially.
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EPS benefited from divestiture gain
GAAP diluted EPS was $4.24, up 18% from $3.60 year over year but down from $5.03 in the prior quarter. The year-over-year increase included a $115 million gain on the divestiture of MA Regulatory Solutions and lower diluted shares of 173.3 million versus 179.6 million.
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MA recurring base continued to expand
MA external revenue increased 3% to $936 million, while adjusted operating income increased 6% to $331 million and adjusted operating margin expanded to 35.3% from 34.3%. MA ARR increased 8% to $3.688 billion.
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MIS performance was mixed
MIS external revenue declined 1% to $1.087 billion. Corporate Finance fell 8% to $530 million, offset by 11% growth in Public, Project and Infrastructure Finance to $179 million and 5% growth in Structured Finance to $153 million.
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Cash generation improved
Nine-month operating cash flow increased to $2.471 billion from $2.043 billion, while free cash flow rose to $2.200 billion from $1.798 billion. Capital additions were $271 million, representing approximately 11% of operating cash flow.
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Capital returns remained substantial
At September 30, 2026, aggregate cash, cash equivalents and short-term investments were $1.6 billion, including approximately $1.3 billion outside the U.S.; outstanding debt principal was $7.1 billion. The company repurchased $1.4 billion of shares during the first nine months and had approximately $1.4 billion of remaining authorization.
What to watch
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Expense growth pressured margins
Consolidated operating expenses increased 2% to $966 million while revenue increased only 1% to $2.023 billion, driving operating margin down to 44.8% from 45.7%. Technology infrastructure and AI usage costs increased, and restructuring charges rose to $27 million from $21 million.
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Capital-markets activity remains volatile
MIS Corporate Finance revenue declined 8% to $530 million, with transaction revenue down $59 million year over year. Management cited lower speculative-grade issuance, lower bank-loan issuance and increased market volatility.
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Material contractual obligations
The company had $7.1 billion of outstanding debt and expects $3.4 billion of future interest payments and fees. It also had approximately $1.2 billion of purchase obligations and $1.0 billion of remaining operating-lease payments at September 30, 2026.
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No material risk-factor updates
The filing states there were no material changes to the risk factors disclosed in the 2025 Form 10-K. Separately, a 10% strengthening of the euro would produce an approximate $450 million unfavorable fair-value impact on cross-currency swaps in OCI, offset by translation gains on hedged net investments.
Management's outlook
The 10-Q does not provide explicit quantitative full-year guidance. The filing states that management expects positive operating cash flow over the next twelve months, and that future restructuring cash outlays are expected to be approximately $110 million to $155 million through 2028.
Earlier filings 4
10-K · February 18, 2026
Moody’s 2025 10-K reiterates a two-segment strategy (Moody’s Analytics and Moody’s Investors Service) focused on embedding decision-grade data and analytics into customer workflows and scaling recurring MA offerings…
10-Q · July 24, 2025
Moody’s reported quarter (Q2 ended June 30, 2025) revenue of $1,898.0M, up $81M (+4.5%) versus Q2 2024 ($1,817.0M) but modestly below Q1 2025 ($1,920.0M). Operating income rose to $818M (operating margin 43.1% vs 42.7%…
10-Q · July 24, 2024
Moody’s reported Q2 revenue of $1,817 million and GAAP diluted EPS of $3.02. Revenue rose $323 million (+21.6%) versus Q2 2023 and operating income expanded to $775 million (+40.9% y/y), while cash and cash equivalents…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.