Financial Highlights - Adjusted Diluted EPS grew by 22% due to record revenue performance[9] - Quarterly revenue surpassed $2 billion, up 11% year-over-year[12] - Adjusted Operating Margin expanded 510bps to 529%[12] - MCO revenue growth increased to be in the high-single-digit percent range[12] - Adjusted Diluted EPS is up 17% at the midpoint, for a range of $1450 to $1475[12] - Free Cash Flow is approximately $25 billion[43] Moody's Investors Service (MIS) - MIS revenue reached a record high of $11 billion[9] - MIS rated issuance guidance increased to the mid-single-digit percent range[40] - Refinancing walls approximately doubled since 2018, reaching $52 trillion in September 2025[13, 14] - Year-over-year increase of 6% since previous study; stock of forward maturities remains robust, exceeding $5 trillion funding deep currents[15] - Adjusted Operating Margin increased 560 bps to 652%[26] Moody's Analytics (MA) - MA delivered 400bps of margin expansion in Q3[16] - ARR grew by 8% versus the prior year, reaching $34 billion[12] - Decision Solutions ARR is up 10%[9] - Recurring revenue accounts for 96% of total revenue[17]

Core Viewpoint - The New York credit-ratings and research company has raised its full-year outlook following an increase in profit and revenue during the third quarter [1] Financial Performance - The company reported higher profit and revenue in the third quarter, which contributed to the positive revision of its full-year outlook [1]

Core Insights - Moody's raised its annual revenue and profit forecasts due to strong performance in its analytics unit and increased bond issuance activity [1] Group 1 - The analytics unit of Moody's is experiencing strong momentum, contributing positively to the company's financial outlook [1] - Robust bond issuance activity is a key factor driving the improved revenue and profit forecasts for Moody's [1]

Group 1 - The article discusses the importance of enabling Javascript and cookies in browsers to prevent access issues [1] - It highlights that users with ad-blockers may face restrictions when trying to access content [1]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [Third Quarter 2025 Financial Highlights](index=1&type=section&id=Third%20Quarter%202025%20Financial%20Highlights) Moody's Corporation reported strong Q3 2025 results, with consolidated revenue up **11%** and diluted EPS growing **23%** 3Q 2025 Summary Financials | Metric | 3Q 2025 Value | YoY Change | | :---------------------- | :------------ | :--------- | | MCO Revenue | $2.0 billion | ⇑ 11% | | MA Revenue | $909 million | ⇑ 9% | | MIS Revenue | $1.1 billion | ⇑ 12% | | MCO Diluted EPS | $3.60 | ⇑ 23% | | MCO Adjusted Diluted EPS | $3.92 | ⇑ 22% | YTD 2025 Summary Financials | Metric | YTD 2025 Value | YoY Change | | :---------------------- | :------------- | :--------- | | MCO Revenue | $5.8 billion | ⇑ 8% | | MA Revenue | $2.7 billion | ⇑ 9% | | MIS Revenue | $3.2 billion | ⇑ 6% | | MCO Diluted EPS | $10.26 | ⇑ 13% | | MCO Adjusted Diluted EPS | $11.30 | ⇑ 15% | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted strong top-line growth, operating leverage, and raised FY2025 adjusted diluted EPS guidance to **$14.50-$14.75** - CEO Rob Fauber noted strong top-line growth and significant operating leverage, attributing success to strategic investments[1](index=1&type=chunk) - CFO Noémie Heuland reported record MCO and MIS revenue and double-digit EPS growth, raising FY2025 adjusted diluted EPS guidance to **$14.50-$14.75**, representing **17%** year-over-year growth at the midpoint[3](index=3&type=chunk) [Revenue Analysis](index=3&type=section&id=REVENUE) [Moody's Corporation (MCO) Revenue](index=3&type=section&id=Moody%27s%20Corporation%20%28MCO%29%20Revenue) MCO consolidated revenue increased **11%** to **$2.0 billion** in Q3 2025 and **8%** to **$5.8 billion** YTD, with a **1%** favorable FX impact MCO Revenue Performance | Period | Revenue | YoY Growth | FX Impact | | :------- | :---------- | :--------- | :-------- | | 3Q 2025 | $2.0 billion | 11% | +1% | | YTD 2025 | $5.8 billion | 8% | +1% | [Moody's Analytics (MA) Revenue](index=4&type=section&id=Moody%27s%20Analytics%20%28MA%29%20Revenue) MA revenue grew **9%** in Q3 and YTD 2025, driven by **11%** recurring revenue growth, with ARR increasing **8%** to **$3.4 billion** [MA Third Quarter 2025 Revenue](index=4&type=section&id=MA%20Third%20Quarter%202025%20Revenue) MA revenue increased **9%** in Q3 2025, with recurring revenue up **11%** and transaction revenue declining **19%** due to strategic shifts MA Q3 2025 Revenue Growth | Metric | Growth Rate | Organic Constant Currency Growth | | :---------------- | :---------- | :------------------------------- | | Total Revenue | 9% | 6% | | Recurring Revenue | 11% | 8% | - MA's transaction revenue declined by **19%** in Q3 2025, reflecting a strategic shift towards subscription-based solutions[19](index=19&type=chunk) [MA Year-to-Date 2025 Revenue & ARR](index=4&type=section&id=MA%20Year-to-Date%202025%20Revenue%20%26%20ARR) YTD 2025 MA revenue grew **9%**, with recurring revenue up **11%**, and ARR reached **$3.4 billion**, an **8%** increase MA YTD 2025 Revenue Growth | Metric | Growth Rate | Organic Constant Currency Growth | | :---------------- | :---------- | :------------------------------- | | Total Revenue | 9% | 7% | | Recurring Revenue | 11% | 8% | MA Annualized Recurring Revenue (ARR) | Metric | Value (Sept 30, 2025) | Growth vs. Sept 30, 2024 | | :------------------------ | :-------------------- | :----------------------- | | Total MA ARR | $3.4 billion | 8% | | Decision Solutions ARR | - | 10% | | Banking ARR | $466 million | 7% | | Insurance ARR | $628 million | 8% | | KYC ARR | $407 million | 16% | | Research and Insights ARR | $970 million | 8% | | Data and Information ARR | $890 million | 7% | [Moody's Investors Service (MIS) Revenue](index=5&type=section&id=Moody%27s%20Investors%20Service%20%28MIS%29%20Revenue) MIS revenue grew **12%** in Q3 2025, achieving a record quarter, and **6%** YTD, with broad-based growth across segments [MIS Third Quarter 2025 Revenue](index=6&type=section&id=MIS%20Third%20Quarter%202025%20Revenue) MIS revenue increased **12%** in Q3 2025, a record quarter exceeding **$1 billion** for the third consecutive time, driven by Leveraged Finance and infrequent issuer issuance - MIS revenue grew **12%** in Q3 2025, reaching a record quarter and exceeding **$1 billion** for the third successive quarter[31](index=31&type=chunk) - Corporate Finance revenue growth was driven by Leveraged Finance issuers, primarily from ongoing refinancing[31](index=31&type=chunk) - Financial Institutions revenue growth was attributed to the strongest quarter in over a decade for infrequent issuer issuance in Banking[31](index=31&type=chunk) [MIS Year-to-Date 2025 Revenue](index=6&type=section&id=MIS%20Year-to-Date%202025%20Revenue) YTD 2025 MIS revenue grew **6%**, supported by constructive market conditions and strong investor demand across segments - MIS revenue grew **6%** YTD 2025, with market conditions remaining constructive despite tariff and trade volatility[31](index=31&type=chunk) - Corporate Finance revenue growth was driven by Investment Grade issuers and improved High Yield issuance[31](index=31&type=chunk) - Structured Finance increased primarily from continued momentum in CMBS and CLOs[31](index=31&type=chunk) [Operating Performance](index=7&type=section&id=OPERATING%20EXPENSES%20AND%20MARGIN) [MCO Operating Expenses](index=7&type=section&id=MCO%20Operating%20Expenses) MCO operating expenses were flat YoY in Q3 2025 due to offsets, and grew **5%** YTD, including restructuring and M&A impacts - Q3 2025 operating expenses were generally in line YoY, with investments and salary increases offset by lower incentive compensation and cost efficiency initiatives[37](index=37&type=chunk) - YTD 2025 operating expenses grew **5%**, including **2%** from restructuring charges and **2%** from inorganic expense growth from M&A, but were largely offset by savings from restructuring and lower incentive compensation[37](index=37&type=chunk) [Operating Margin and Adjusted Operating Margin](index=8&type=section&id=Operating%20Margin%20and%20Adjusted%20Operating%20Margin) MCO's adjusted operating margin expanded significantly in Q3 2025 by **510 basis points** to **52.9%**, and reached **51.8%** YTD Operating Margin Performance | Metric | 3Q 2025 | YoY Change (bps) | YTD 2025 | YoY Change (bps) | | :-------------------------- | :------ | :--------------- | :------- | :--------------- | | MCO Operating Margin | 45.7% | +500 (approx) | 44.3% | +160 (approx) | | MCO Adjusted Operating Margin | 52.9% | +510 | 51.8% | +240 (approx) | | MA Adjusted Operating Margin | 34.3% | +400 | 32.2% | +270 | | MIS Adjusted Operating Margin | 65.2% | +560 | 65.1% | +260 | [Earnings Per Share & Tax Rate](index=9&type=section&id=EARNINGS%20PER%20SHARE%20%28EPS%29) [Diluted EPS and Adjusted Diluted EPS](index=9&type=section&id=Diluted%20EPS%20and%20Adjusted%20Diluted%20EPS) Diluted EPS and Adjusted Diluted EPS grew **23%** and **22%** respectively in Q3 2025, driven by improved operating performance EPS Growth | Metric | 3Q 2025 Growth | YTD 2025 Growth | | :------------------- | :------------- | :-------------- | | Diluted EPS | 23% | 13% | | Adjusted Diluted EPS | 22% | 15% | [Effective Tax Rate (ETR)](index=9&type=section&id=Effective%20Tax%20Rate%20%28ETR%29) Q3 2025 ETR was **24.2%**, broadly in line, while YTD 2025 ETR was **25.4%**, higher due to prior year tax benefits and state income taxes Effective Tax Rate (ETR) | Period | ETR | Prior Year ETR | Change | | :------- | :---- | :------------- | :----- | | 3Q 2025 | 24.2% | - | Broadly in line | | YTD 2025 | 25.4% | 24.0% | Higher | - The higher YTD 2025 ETR reflects tax benefits recognized in Q3 2024 from uncertain tax position resolutions and an increase in current year state income taxes[45](index=45&type=chunk) [Capital Allocation & Liquidity](index=10&type=section&id=CAPITAL%20ALLOCATION%20AND%20LIQUIDITY) [Cash Flow and Dividends](index=10&type=section&id=Cash%20Flow%20and%20Dividends) YTD 2025 operating cash flow was **$2,043 million** and free cash flow was **$1,798 million**, both decreasing due to higher tax and incentive payments Cash Flow (YTD 2025) | Metric | Amount | | :------------------------ | :------------- | | Cash flow from operations | $2,043 million | | Free cash flow | $1,798 million | - The decrease in operating and free cash flow was primarily driven by higher tax and incentive compensation payments compared to the prior-year period[49](index=49&type=chunk) - A regular quarterly dividend of **$0.94** per share of MCO Common Stock was declared, payable on December 12, 2025[49](index=49&type=chunk) [Share Repurchases](index=10&type=section&id=Share%20Repurchases) Moody's repurchased **1.0 million** shares in Q3 2025, and authorized an additional **$4 billion** in share repurchase authority - Moody's repurchased **1.0 million** shares at an average cost of **$503.66** per share in Q3 2025[49](index=49&type=chunk) - An additional **$4 billion** in share repurchase authority was authorized on October 21, 2025, supplementing the **$398 million** remaining as of September 30, 2025[49](index=49&type=chunk) [Debt and Liquidity](index=10&type=section&id=Debt%20and%20Liquidity) As of September 30, 2025, Moody's had **$7.0 billion** of outstanding debt and an undrawn **$1.25 billion** revolving credit facility - As of September 30, 2025, Moody's had **$7.0 billion** of outstanding debt and an undrawn **$1.25 billion** revolving credit facility[49](index=49&type=chunk) [Outlook and Macroeconomic Assumptions](index=11&type=section&id=ASSUMPTIONS%20AND%20OUTLOOK) [Full Year 2025 Outlook Overview](index=11&type=section&id=Full%20Year%202025%20Outlook%20Overview) Moody's updated its full year 2025 outlook, reflecting assumptions on economic conditions, interest rates, inflation, and capital markets - The updated full year 2025 outlook reflects assumptions on economic conditions, interest rates, inflation, foreign currency, and capital markets liquidity[51](index=51&type=chunk) - The outlook does not include unclosed acquisitions or dispositions and acknowledges uncertainties from global GDP growth and geopolitical events[51](index=51&type=chunk) [Key Macroeconomic Assumptions](index=11&type=section&id=Key%20Macroeconomic%20Assumptions) Key macroeconomic assumptions for 2025 include increased U.S. and Global GDP growth forecasts and two federal funds rate cuts in Q4 Updated Macroeconomic Assumptions (Selected) | Forecasted Item | Last Publicly Disclosed Assumption | Current Assumption | | :------------------------ | :------------------------------- | :----------------- | | U.S. GDP growth | 0.5% - 1.5% | 1.5% - 2.5% | | Global GDP growth | 1.5% - 2.5% | 2.0% - 3.0% | | Global policy rates | Expecting two cuts from the U.S. Fed in 2H25. Other Central Banks to maintain easing bias | Two federal funds rate cuts in Q4. Differing inflation outlooks are driving varied monetary policy approaches across other central banks | | U.S. high yield spreads | To widen to around 430 bps over the next 12 months, close to historical average of around 500 bps | To widen to around 480 bps over the next 12 months, close to historical average of around 500 bps | | Global MIS rated issuance | Decrease in the low-single-digit to mid-single-digit percent range | Increase in the mid-single-digit percent range | [Teleconference Details](index=11&type=section&id=TELECONFERENCE%20DETAILS) [Teleconference Details](index=11&type=section&id=Teleconference%20Details) Details for the Q3 2025 earnings teleconference held on October 22, 2025, including webcast and replay information - The teleconference was held on October 22, 2025, at 9:00 a.m. ET, with webcast and replay available via Moody's Investor Relations website[54](index=54&type=chunk) [About Moody's Corporation](index=12&type=section&id=ABOUT%20MOODY%27S%20CORPORATION) [About Moody's Corporation](index=12&type=section&id=About%20Moody%27s%20Corporation) Moody's Corporation provides data, insights, and technologies to help customers understand risks and unlock opportunities globally - Moody's provides data, insights, and innovative technologies to help customers develop a holistic view of risks and unlock opportunities[56](index=56&type=chunk) - The company has approximately **16,000** employees across more than **40** countries[56](index=56&type=chunk) [Forward-Looking Statements and Risk Factors](index=12&type=section&id=SAFE%20HARBOR%22%20STATEMENT%20UNDER%20THE%20PRIVATE%20SECURITIES%20LITIGATION%20REFORM%20ACT%20OF%201995) [Forward-Looking Statements and Risk Factors](index=12&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This section contains forward-looking statements subject to risks and uncertainties, including economic conditions, geopolitical events, and regulatory changes - Statements in this document are forward-looking and involve risks and uncertainties that could cause actual results to differ materially[57](index=57&type=chunk) - Key risk factors include uncertain effects of government actions, general economic conditions, geopolitical events, regulatory changes, competition, and operational failures[57](index=57&type=chunk) [Financial Statements and Reconciliations](index=13&type=section&id=Financial%20Statements%20and%20Reconciliations) [Consolidated Statements of Operations](index=13&type=section&id=Table%201%20-%20Consolidated%20Statements%20of%20Operations%20%28Unaudited%29) The unaudited consolidated statements of operations detail Moody's financial performance for Q3 and YTD 2025 and 2024, including revenue, expenses, and EPS Consolidated Statements of Operations (Selected Data) | Metric | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Revenue | $2,007 million | $1,813 million | $5,829 million | $5,416 million | | Operating income | $917 million | $738 million | $2,581 million | $2,314 million | | Net income attributable to Moody's | $646 million | $534 million | $1,849 million | $1,663 million | | Diluted EPS | $3.60 | $2.93 | $10.26 | $9.09 | [Condensed Consolidated Balance Sheet Data](index=14&type=section&id=Table%202%20-%20Condensed%20Consolidated%20Balance%20Sheet%20Data%20%28Unaudited%29) The condensed consolidated balance sheet data provides Moody's financial position as of September 30, 2025, and December 31, 2024, detailing assets, liabilities, and equity Condensed Consolidated Balance Sheet (Selected Data) | Metric | Sep 30, 2025 | Dec 31, 2024 | | :------------------------ | :----------- | :----------- | | Total assets | $15,415 million | $15,505 million | | Total liabilities | $11,303 million | $11,778 million | | Total shareholders' equity | $4,112 million | $3,727 million | [Condensed Consolidated Statements of Cash Flows](index=15&type=section&id=Table%203%20-%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%28Unaudited%29) The condensed consolidated statements of cash flows present cash flows from operating, investing, and financing activities for YTD 2025 and 2024 Condensed Consolidated Statements of Cash Flows (Selected Data) | Metric (9 Months Ended Sep 30) | 2025 | 2024 | | :----------------------------- | :--- | :--- | | Net cash provided by operating activities | $2,043 million | $2,164 million | | Net cash provided by (used in) investing activities | $44 million | $(875) million | | Net cash used in financing activities | $(2,454) million | $(812) million | | Cash and cash equivalents, end of period | $2,181 million | $2,642 million | [Non-Operating (Expense) Income, Net](index=16&type=section&id=Table%204%20-%20Non-Operating%20%28Expense%29%20Income%2C%20Net%20%28Unaudited%29) This table details non-operating expense and income components, including interest, FX, and investment gains, for Q3 and YTD 2025 and 2024 Non-Operating (Expense) Income, Net (Selected Data) | Metric | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Interest expense, net | $(58) million | $(60) million | $(180) million | $(185) million | | Other non-operating income, net | $8 million | $25 million | $42 million | $45 million | | Total non-operating (expense) income, net | $(50) million | $(35) million | $(138) million | $(140) million | [Financial Information by Segment](index=17&type=section&id=Table%205%20-%20Financial%20Information%20by%20Segment%20%28Unaudited%29) This table provides revenue and Adjusted Operating Income by segment (MA and MIS) for Q3 and YTD 2025 and 2024, highlighting profitability Segment Revenue and Adjusted Operating Income (3 Months Ended Sep 30) | Segment | Total External Revenue (2025) | Adjusted Operating Income (2025) | Adjusted Operating Margin (2025) | Total External Revenue (2024) | Adjusted Operating Income (2024) | Adjusted Operating Margin (2024) | | :------ | :---------------------------- | :------------------------------- | :------------------------------- | :---------------------------- | :------------------------------- | :------------------------------- | | MA | $909 million | $313 million | 34.3% | $831 million | $253 million | 30.3% | | MIS | $1,098 million | $749 million | 65.2% | $982 million | $614 million | 59.6% | | Consolidated | $2,007 million | $1,062 million | 52.9% | $1,813 million | $867 million | 47.8% | Segment Revenue and Adjusted Operating Income (9 Months Ended Sep 30) | Segment | Total External Revenue (2025) | Adjusted Operating Income (2025) | Adjusted Operating Margin (2025) | Total External Revenue (2024) | Adjusted Operating Income (2024) | Adjusted Operating Margin (2024) | | :------ | :---------------------------- | :------------------------------- | :------------------------------- | :---------------------------- | :------------------------------- | :------------------------------- | | MA | $2,656 million | $858 million | 32.2% | $2,432 million | $721 million | 29.5% | | MIS | $3,173 million | $2,164 million | 65.1% | $2,984 million | $1,954 million | 62.5% | | Consolidated | $5,829 million | $3,022 million | 51.8% | $5,416 million | $2,675 million | 49.4% | [Transaction and Recurring Revenue](index=19&type=section&id=Table%206%20-%20Transaction%20and%20Recurring%20Revenue%20%28Unaudited%29) This table breaks down revenue into transaction and recurring components for MA and MIS segments for Q3 and YTD 2025 and 2024 Total Moody's Corporation Revenue Mix (3 Months Ended Sep 30) | Revenue Type | 2025 Amount | 2025 % of Total | 2024 Amount | 2024 % of Total | | :----------- | :---------- | :-------------- | :---------- | :-------------- | | Transaction | $787 million | 39% | $705 million | 39% | | Recurring | $1,220 million | 61% | $1,108 million | 61% | | Total | $2,007 million | 100% | $1,813 million | 100% | Total Moody's Corporation Revenue Mix (9 Months Ended Sep 30) | Revenue Type | 2025 Amount | 2025 % of Total | 2024 Amount | 2024 % of Total | | :----------- | :---------- | :-------------- | :---------- | :-------------- | | Transaction | $2,255 million | 39% | $2,159 million | 40% | | Recurring | $3,574 million | 61% | $3,257 million | 60% | | Total | $5,829 million | 100% | $5,416 million | 100% | [Adjusted Operating Income and Adjusted Operating Margin Reconciliation](index=21&type=section&id=Table%207%20-%20Adjusted%20Operating%20Income%20and%20Adjusted%20Operating%20Margin%20%28Unaudited%29) This table reconciles U.S. GAAP operating income to adjusted operating income, excluding specific charges, to assess core operating performance Adjusted Operating Income Reconciliation (3 Months Ended Sep 30) | Metric | 2025 | 2024 | | :------------------------------ | :--- | :--- | | Operating income | $917 million | $738 million | | Depreciation and amortization | $123 million | $108 million | | Restructuring | $21 million | $6 million | | Charges related to asset abandonment | $1 million | $15 million | | Adjusted Operating Income | $1,062 million | $867 million | | Operating margin | 45.7% | 40.7% | | Adjusted Operating Margin | 52.9% | 47.8% | [Free Cash Flow Reconciliation](index=21&type=section&id=Table%208%20-%20Free%20Cash%20Flow%20%28Unaudited%29) This table reconciles net cash from operating activities to Free Cash Flow for YTD 2025 and 2024, a key metric for cash available Free Cash Flow Reconciliation (9 Months Ended Sep 30) | Metric | 2025 | 2024 | | :-------------------------------- | :--- | :--- | | Net cash provided by operating activities | $2,043 million | $2,164 million | | Capital additions | $(245) million | $(243) million | | Free Cash Flow | $1,798 million | $1,921 million | [Organic Constant Currency Revenue Growth Reconciliation](index=22&type=section&id=Table%209%20-%20Organic%20Constant%20Currency%20Revenue%20Growth%20%28Unaudited%29) This table reconciles reported revenue growth to organic constant currency growth, excluding FX and acquisitions, for MCO and MA segments MCO Organic Constant Currency Revenue Growth (3 Months Ended Sep 30) | Metric | 2025 Revenue | 2024 Revenue | Change | Growth | | :------------------------------ | :----------- | :----------- | :----- | :----- | | MCO reported revenue | $2,007 million | $1,813 million | $194 million | 11% | | Organic constant currency MCO revenue | $1,970 million | $1,813 million | $157 million | 9% | MA Organic Constant Currency Revenue Growth (3 Months Ended Sep 30) | Metric | 2025 Revenue | 2024 Revenue | Change | Growth | | :----------------------------- | :----------- | :----------- | :----- | :----- | | MA reported revenue | $909 million | $831 million | $78 million | 9% | | Organic constant currency MA revenue | $882 million | $831 million | $51 million | 6% | [Annualized Recurring Revenue (ARR) Metrics](index=23&type=section&id=Table%2010%20-%20Key%20Performance%20Metrics%20-%20Annualized%20Recurring%20Revenue%20%28Unaudited%29) This table presents MA's Annualized Recurring Revenue (ARR) on an organic constant currency basis as of September 30, 2025 and 2024 MA Annualized Recurring Revenue (ARR) (September 30) | Segment | 2025 ARR | 2024 ARR | Change | Growth | | :------------------------ | :------- | :------- | :----- | :----- | | Decision Solutions | $1,501 million | $1,370 million | $131 million | 10% | | Research and Insights | $970 million | $899 million | $71 million | 8% | | Data and Information | $890 million | $832 million | $58 million | 7% | | Total MA ARR | $3,361 million | $3,101 million | $260 million | 8% | [Adjusted Net Income and Adjusted Diluted EPS Reconciliation](index=24&type=section&id=Table%2011%20-%20Adjusted%20Net%20Income%20and%20Adjusted%20Diluted%20EPS%20Attributable%20to%20Moody%27s%20Common%20Shareholders%20%28Unaudited%29) This table reconciles U.S. GAAP net income and diluted EPS to adjusted measures, excluding specific items, for a clearer view of core earnings Adjusted Net Income Reconciliation (3 Months Ended Sep 30) | Metric | 2025 | 2024 | | :------------------------------------------ | :--- | :--- | | Net Income attributable to Moody's common shareholders | $646 million | $534 million | | Net Acquisition-Related Intangible Amortization Expenses | $41 million | $39 million | | Net restructuring | $16 million | $5 million | | Net charges related to asset abandonment | $1 million | $12 million | | Net gain on previously held equity method investments | $0 million | $(5) million | | Adjusted Net Income | $704 million | $585 million | Adjusted Diluted EPS Reconciliation (3 Months Ended Sep 30) | Metric | 2025 | 2024 | | :------------------------------------------ | :--- | :--- | | Diluted EPS attributable to Moody's common shareholders | $3.60 | $2.93 | | Net Acquisition-Related Intangible Amortization Expenses | $0.22 | $0.21 | | Net restructuring | $0.09 | $0.03 | | Net charges related to asset abandonment | $0.01 | $0.07 | | Net gain on previously held equity method investments | $0.00 | $(0.03) | | Adjusted Diluted EPS | $3.92 | $3.21 | [Full Year 2025 Guidance](index=26&type=section&id=Table%2012%20-%202025%20Outlook) This table provides Moody's updated full year 2025 guidance for key financial metrics and segment performance, including adjusted measures Full Year 2025 Moody's Corporation Guidance (as of Oct 22, 2025) | Metric | Last Publicly Disclosed Guidance | Current Guidance | | :------------------------ | :------------------------------- | :--------------- | | MCO Revenue | Increase in the mid-single-digit percent range | Increase in the high-single-digit percent range | | Operating Margin | 42% to 43% | 43% to 44% | | Adjusted Operating Margin | 49% to 50% | Approximately 51% | | Diluted EPS | $12.25 to $12.75 | $13.15 to $13.40 | | Adjusted Diluted EPS | $13.50 to $14.00 | $14.50 to $14.75 | | Operating Cash Flow | $2.65 to $2.85 billion | Approximately $2.85 billion | | Free Cash Flow | $2.30 to $2.50 billion | Approximately $2.5 billion | | Share Repurchases | At least $1.3 billion | At least $1.5 billion | Full Year 2025 Segment Guidance (as of Oct 22, 2025) | Segment Metric | Last Publicly Disclosed Guidance | Current Guidance | | :------------- | :------------------------------- | :--------------- | | MA Revenue | Increase in the high-single-digit percent range | NC | | MA Adjusted Operating Margin | 32% to 33% | Approximately 33% | | MIS Revenue | Increase in the low-single-digit to mid-single digit percent range | Increase in the high-single-digit percent range | | MIS Adjusted Operating Margin | 61% to 62% | 63% to 64% |

Core Investment Strategy - The wide moat strategy focuses on investing in companies with durable competitive advantages that ensure long-term profitability and market leadership, allowing them to withstand economic fluctuations [1][2] Company Summaries Moody's Corp. (MCO) - Moody's maintains a dominant position in the credit rating industry, supported by strategic acquisitions and a strong balance sheet, which are expected to drive top-line expansion [6][10] - The company has a projected revenue growth rate of 8.2% and an earnings growth rate of 15.7% for the current quarter, with a recent improvement in earnings estimates by 0.3% [9][10] Stryker Corp. (SYK) - Stryker is experiencing robust growth due to its diversified business segments and innovation in medical technologies, leading to an increase in full-year organic growth guidance to 9.5–10% [11][12] - The expected revenue and earnings growth rates for the current quarter are 9.8% and 9.5%, respectively, with a recent earnings estimate improvement of 1.6% [12] CBRE Group Inc. (CBRE) - CBRE is well-positioned with a diverse range of real estate products and services, benefiting from a resilient business model and healthy outsourcing growth [13][14] - The company anticipates total revenue growth of 11.1% in 2025 and 7% in 2026, with expected revenue and earnings growth rates of 9.8% and 15.1% for the current quarter [14][15]

Core Viewpoint - Moody's Chief Economist Mark Zandi expresses optimism about the U.S. banking system but remains cautious regarding financial markets, indicating that current valuations are high and market sentiment is somewhat overheated, nearing bubble territory [1] Group 1: Economic Outlook - The highest 10% of income earners in the U.S. contribute approximately half of the national consumer spending, which supports economic growth despite inflation and tariffs [1] - The correlation between consumer spending capacity and capital market performance is highlighted, especially amid recent market volatility [1] Group 2: Market Risks - A potential reversal in the stock market could lead to a rapid reduction in spending by high-income households, posing challenges to the economic outlook [1]

Core Insights - Moody's is expected to report third-quarter 2025 results on October 22, with strong revenue growth anticipated in its Corporate Finance line, the largest revenue contributor within the Moody's Investors Service division [1][2] Corporate Finance - Global bond issuance activity remained healthy in the third quarter, driven by strong corporate refinancing needs, leading to robust leveraged loan issuance [2] - The Zacks Consensus Estimate for Corporate Finance revenues is $548.7 million, indicating a 6.5% increase year-over-year [2][10] Financial Institutions and Other Business Lines - The consensus estimate for revenues from the Financial Institutions business line is $174.9 million, suggesting a year-over-year increase of 2.9% [3] - Public, Project, and Infrastructure Finance business revenues are estimated at $155.2 million, implying nearly 1% growth [3] Structured Finance - Quarterly issuance volumes for collateral debt obligations were robust, with marginal improvements in commercial mortgage-backed securities and asset-backed securities [4] - The consensus estimate for Structured Finance revenues stands at $145.7 million, suggesting a 7.9% increase [4][10] Overall MIS Division Performance - The Zacks Consensus Estimate for MIS division revenues is $1.12 billion, implying an 8.9% year-over-year rise [5] Moody's Analytics Division - Revenues from the Moody's Analytics division are expected to have increased, with a consensus estimate of $909.52 million, indicating 9.1% growth from the prior year [6][7] - Increased expenses are anticipated due to costs related to acquisitions and restructuring efforts [7] Strategic Developments - Moody's plans to secure majority equity ownership in MERIS, a domestic credit rating agency in Egypt, enhancing its presence in the Middle East and Africa [8][9] Earnings Expectations - The Zacks Consensus Estimate for earnings is $3.65, reflecting a 13.7% rise from the previous year [12] - The consensus estimate for sales is $1.95 billion, suggesting a 7.6% increase [13]

Core Insights - PineStone Asset Management reduced its stake in Moody's Corporation by selling 46,977 shares, valued at approximately $23.7 million, during the quarter ended September 30 [2][6] - The remaining position in Moody's stands at nearly 2.3 million shares, worth about $1.1 billion, representing 6.7% of reportable assets under management (AUM) [2][3] Company Overview - Moody's Corporation has a market capitalization of $84.5 billion, with a trailing twelve months (TTM) revenue of $7.3 billion and a net income of $2.1 billion [4] - The company's shares closed at $471.04, reflecting a 3% decline over the past year, underperforming the S&P 500 by 17 percentage points [3][4] Business Model and Services - Moody's is a leading global provider of credit ratings, research, and risk analytics, leveraging its reputation and extensive data assets to deliver essential solutions to financial markets [5][8] - The company generates revenue primarily from its Moody's Investors Service and Moody's Analytics segments, offering subscription-based research, data products, credit ratings, and risk management solutions [8] Recent Performance and Outlook - Moody's reported steady recurring revenue growth across its analytics and ratings businesses, supported by disciplined cost control and increasing demand for data-driven risk insights [9] - The company is well-positioned for long-term growth, with a strong market presence, high-margin analytics growth, and a recurring revenue model, even amid cyclical credit market fluctuations [10]

Core Viewpoint - Standard & Poor's (S&P) downgraded France's sovereign credit rating from "AA-" to "A+" with a stable outlook, citing high uncertainty in public finances as the main reason for the downgrade [1][2]. Group 1: Credit Rating Downgrade - S&P's report indicates that despite the French government's submission of the 2026 budget draft, uncertainty in public finances remains high ahead of the 2027 presidential election [1]. - The suspension of pension reforms initiated in 2023 is viewed as a significant factor contributing to increased fiscal pressure [1]. - This marks the second downgrade by S&P in a year and a half, following a similar action by Fitch, reflecting a rapid decline in market confidence regarding France's fiscal outlook [2]. Group 2: Fiscal Projections - S&P forecasts that France's public debt as a percentage of GDP will rise to 121% by the end of 2028 [1]. - Under the assumption that the 2026 budget draft remains unchanged, S&P expects the government deficit as a percentage of GDP to slightly decrease to 5.3% in 2026 [1]. - The report emphasizes that significant fiscal consolidation measures are necessary to reverse the ongoing trend of rising government debt [1]. Group 3: Government Response and Market Reactions - The French Ministry of Economy and Finance acknowledged S&P's decision and reiterated the commitment to keep the 2025 deficit rate at 5.4% of GDP [2]. - Concerns are rising regarding Moody's upcoming update on France's sovereign rating, with fears that further downgrades could lead to increased borrowing costs for the country [2]. - It is projected that interest expenses could reach approximately €55 billion by 2025 if rating agencies continue to downgrade France's credit rating [2].