MCO

Financials

Moody's Corporation

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Market Data

Financials

XBRL · SEC EDGAR

2007–2025(19yr)

Revenue

Net Income

Free CF

Metric	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$2.3B	$1.8B	$1.8B	$2.0B	$2.3B	$2.7B	$3.0B	$3.3B	$3.5B	$3.6B	$4.2B	$4.4B	$4.8B	$5.4B	$6.2B	$5.5B	$5.9B	$7.1B	$7.7B	+8.9%
Gross Profit	$1.7B	$1.3B	$1.3B	$1.4B	$1.6B	$1.9B	$2.2B	$2.4B	$2.5B	$2.6B	$3.0B	$3.2B	$3.4B	$3.9B	$4.6B	$3.9B	$4.2B	$5.1B	$5.7B	+11.7%
Gross Margin	74.1%	71.9%	70.4%	70.2%	70.0%	70.9%	72.3%	72.1%	72.0%	71.5%	71.1%	72.0%	71.3%	72.5%	73.7%	70.5%	71.5%	72.6%	74.4%	+1.9pp
Operating Income	$1.1B	$748.2M	$687.5M	$772.8M	$888.4M	$1.1B	$1.2B	$1.4B	$1.5B	$638.7M	$1.8B	$1.9B	$2.0B	$2.4B	$2.8B	$1.9B	$2.1B	$2.9B	$3.4B	+16.6%
Operating Margin	50.1%	42.6%	38.3%	38.0%	39.0%	39.5%	41.5%	43.2%	42.3%	17.7%	43.0%	42.1%	41.4%	44.5%	45.7%	34.4%	36.1%	40.6%	43.4%	+2.9pp
Net Income	$701.5M	$457.6M	$402.0M	$507.8M	$571.4M	$690.0M	$804.5M	$988.7M	$941.3M	$266.6M	$1.0B	$1.3B	$1.4B	$1.8B	$2.2B	$1.4B	$1.6B	$2.1B	$2.5B	+19.5%
Net Margin	31.1%	26.1%	22.4%	25.0%	25.1%	25.3%	27.1%	29.7%	27.0%	7.4%	23.8%	29.5%	29.4%	33.1%	35.6%	25.1%	27.2%	29.0%	31.9%	+2.8pp
Free Cash Flow	$806.4M	$455.3M	$553.1M	$574.3M	$735.6M	$778.1M	$884.5M	$944.0M	$1.1B	$1.1B	$656.9M	$1.4B	$1.6B	$2.0B	$1.9B	$1.2B	$1.9B	$2.5B	$2.6B	+2.1%
FCF Margin	35.7%	25.9%	30.8%	28.3%	32.3%	28.5%	29.8%	28.3%	30.6%	30.8%	15.6%	30.9%	33.3%	38.0%	30.0%	21.8%	31.8%	35.6%	33.4%	-2.2pp
EPS (Diluted)	$2.58	$1.87	$1.69	$2.15	$2.49	$3.05	$3.60	$4.61	$4.63	$1.36	$5.15	$6.74	$7.42	$9.39	$11.78	$7.44	$8.73	$11.26	$13.67	+21.4%

Total Debt$7.0B

Cash & Equiv.$2.4B

Net Debt$4.6B

4 min read

1. THE BIG PICTURE

Moody’s is aggressively transforming from a cyclical credit rater into an indispensable data utility by embedding its proprietary risk intelligence directly into the daily software tools used by banks and insurers. While its legacy ratings business still provides massive cash flow, the future of Moody's Corporation rests on its ability to turn 115 years of data into subscription-based AI "agents" that customers cannot work without (10-K Item 1).

2. WHERE THE RISKS HIT HARDEST

The strategy of embedding intelligence into "mission-critical customer workflows" (Competitive Position) creates a dangerous dependency on third-party technology; any service failure or cyber-attack would not just lose a sale but potentially paralyze the operations of its clients (Risks). Furthermore, the "trusted nature" of its 115-year-old brand is constantly under fire from "ongoing exposure to government investigations" and class-action lawsuits that target the very rating opinions that form its core identity (Risks, 10-K Item 1). Finally, the emergence of "lower-cost, AI-driven alternatives" threatens to commoditize the proprietary insights that Moody's currently uses to justify its premium pricing (Risks).

3. WHAT THE NUMBERS SAY TOGETHER

Moody’s operates with a level of efficiency that its peers cannot match, boasting a 31.2% net margin and a 43.4% operating margin—the highest in its peer group (Peer Benchmarking). This profitability is fueled by a 17% jump in ratings revenue (MIS) and a 9% rise in analytics (MA), even as Moody's Corporation navigates a strategic shift toward subscription models (8-K). The most recent quarter’s revenue growth of 13% represents a significant acceleration from its 8.9% trailing twelve-month average, a divergence driven by "robust Investment Grade issuance" and 30% growth in Public, Project, and Infrastructure Finance (8-K). While Moody's Corporation is the most expensive in its group at 24.3x forward earnings, its 15.5% Return on Assets (ROAROAReturn on Assets — net income as a percentage of total assets. For banks, 1%+ is generally considered strong) is more than double that of its closest major competitor, S&P Global (Peer Benchmarking).

4. IS IT WORTH IT AT THIS PRICE?

At 24.3x forward earnings, the market is pricing in approximately 8.3% long-term growth (Computed Valuation). This expectation appears grounded in current performance, as Moody's recently delivered 8.9% revenue growth and is targeting adjusted diluted EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric as high as $17.00 for 2026 (8-K, Peer Benchmarking). The premium valuation—a 30% markup over the peer median—is supported by Moody's superior margin profile and its "regulatory moat" as a registered Nationally Recognized Statistical Rating Organization (Competitive Position). However, the sensitivity analysis shows that if growth were to slip to 7%, the justified multiple would drop to 18.4x, representing a 24% decline from current levels (Computed Valuation). Investors are essentially paying for the high switching costs of its integrated software and its dominant position in global debt markets.

5. WHAT WOULD CHANGE THIS VIEW?

Cautious if transaction revenue continues to decline as a percentage of the business mix without a corresponding expansion in Analytics margins, suggesting the subscription pivot is cannibalizing rather than complementing the core business (8-K).
Cautious if new "EU Regulation on ESG Rating Activities" or the "EU AI Act" imposes structural changes that limit the use of proprietary models in key international markets (Competitive Position).
Constructive if the $4.0 billion share repurchase authority is executed aggressively, signaling management's confidence in achieving the top end of its $15.00 to $15.60 diluted EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric guidance for 2026 (8-K).

6. BOTTOM LINE

Structural Advantage: High switching costs driven by deep integration into customer workflows and a regulatory moat as a primary global credit rater.

Bottom Line: Moody’s is a high-performance compounding machine that justifies its premium price as long as global debt markets remain active and its AI-driven transition stays on track.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Debt Issuance Volume: A majority of Moody’s Corporation’s credit-rating revenue is transaction-based, making Moody's Corporation’s financial results highly sensitive to the number and dollar volume of debt securities issued in global capital markets.
Litigation and Regulatory Proceedings: Moody’s Corporation faces ongoing exposure to government investigations, market studies, and class-action lawsuits regarding its rating actions and business practices, which can lead to significant damages, fines, and penalties.
Regulatory Compliance: Moody's Corporation operates in a highly regulated industry subject to complex, evolving laws (such as the Reform Act and Dodd-Frank Act) that increase operational costs and restrict business models.
Cybersecurity and Data Protection: As a processor of sensitive and proprietary information, Moody’s Corporation is a target for sophisticated cyber-attacks, which could lead to reputational damage, loss of customers, and regulatory sanctions.
Intellectual Property and Competition: Moody's Corporation’s competitive position relies on proprietary products; failure to protect this intellectual property or the emergence of lower-cost, AI-driven alternatives could reduce market share and pricing power.

2. Company-Specific Risks

Goodwill and Intangible Asset Impairment: At December 31, 2025, Moody’s Corporation held $6,368 million in goodwill and $1,866 million in intangible assets, with 94% of these assets residing in the Moody’s Analytics (MA) reporting unit; failure to meet financial projections could trigger significant non-cash impairment charges.
Key Personnel Dependency: Moody's Corporation’s success is highly dependent on the continued services of its President and Chief Executive Officer, Robert Fauber, and other senior officers.
Integration of Acquisitions: Moody’s Corporation’s growth strategy involves frequent acquisitions, which introduce risks related to the integration of disparate IT systems, accounting practices, and corporate cultures.
Climate-Related Operational Risks: Moody's Corporation’s physical offices and critical infrastructure are vulnerable to extreme weather events, which could disrupt business continuity and increase costs to maintain or resume operations.

3. Regulatory/Legal Risks

Credit Rating Agency (CRA) Oversight: Moody’s Investors Service (MIS) is subject to direct SEC jurisdiction and inspection, as well as stringent foreign regulatory frameworks in the EU, U.K., Australia, Hong Kong, and China, which can limit rating activities or impose financial penalties.
ESG and AI Regulation: New frameworks, such as the EU Regulation on ESG Rating Activities and the EU AI Act, impose substantive compliance requirements that may increase operating expenses and expose Moody's Corporation to fines.
Taxation and Global Minimum Tax: Moody’s Corporation is subject to the OECD’s Pillar II global minimum tax rules; while not currently material, future changes in tax treaties or the interpretation of the OBBBA could adversely affect Moody's Corporation’s effective tax rate.
Third-Party Risk Management: Financial regulators in the U.S. and abroad (including DORA in the EU) require Moody’s Corporation’s bank and financial services customers to exercise rigorous oversight of third-party providers, which may force Moody's Corporation to revise its service terms and compliance processes.

4. Financial Impact Map

Debt Issuance Volume → Revenue → Transaction-based fees are directly tied to the number and dollar volume of debt securities issued in capital markets.

Litigation and Regulatory Proceedings → Operating Expenses → Legal defense costs and potential settlements/fines are recorded as expenses and can require Moody's Corporation to increase liabilities in consolidated financial statements.

Goodwill and Intangible Asset Impairment → Operating Expenses → Failure to meet business objectives in reporting units results in a non-cash charge to operating expenses.

Cybersecurity and Data Protection → Operating Expenses → Costs associated with implementing, maintaining, and enhancing data protection measures, as well as potential fines and regulatory penalties, impact operating results.

Taxation and Global Minimum Tax → Provision for Income Taxes → Changes in tax laws, treaties, or the application of the 15% minimum effective tax rate (ETR) under Pillar II could materially affect Moody's Corporation’s effective tax rate and cash flows.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
14A	Mar 2026	—
8-K	Feb 2026	—
10-K	Feb 2026	Dec 2025
10-Q	Oct 2025	Sep 2025