Moody’s(US:MCO)2025-10-23 20:35Financial Performance - Revenue for Q3 2025 reached $2,007 million, a 10.7% increase from $1,813 million in Q3 2024[16] - Operating income for Q3 2025 was $917 million, up 24.3% from $738 million in Q3 2024[16] - Net income attributable to Moody's for Q3 2025 was $646 million, representing a 21% increase compared to $534 million in Q3 2024[16] - Earnings per share (EPS) for Q3 2025 were $3.61, a 22.7% increase from $2.94 in Q3 2024[16] - Comprehensive income for the nine months ended September 30, 2025, was $1,951 million, compared to $1,728 million for the same period in 2024[19] - Net income for the nine months ended September 30, 2025, was $1,851 million, an increase from $1,664 million in 2024, representing a growth of 11.2%[24] - Total external revenue of $5,829 million for the nine months ended September 30, 2025, up from $5,416 million in the same period of 2024, representing a growth of 7.6%[52] - Adjusted Operating Income for the three months ended September 30, 2025, was $1,062 million, compared to $867 million for the same period in 2024, reflecting a year-over-year increase of 22.5%[127] Assets and Liabilities - Total assets as of September 30, 2025, were $15,415 million, slightly down from $15,505 million at the end of 2024[22] - Total liabilities decreased to $11,303 million from $11,778 million at the end of 2024, indicating improved financial health[22] - Cash and cash equivalents stood at $2,181 million, down from $2,408 million at the end of 2024[22] - Total shareholders' equity increased to $4,068 million as of September 30, 2024, up from $3,938 million at June 30, 2024, reflecting a growth of 3.3%[25] - As of September 30, 2025, total shareholders' equity stood at $4,112 million, an increase from $3,727 million at the end of 2024[35] - The company reported a total long-term debt of $7,168 million, with a carrying value of $6,983 million after adjustments for unamortized discounts and issuance costs[110] Cash Flow and Investments - Net cash provided by operating activities decreased to $2,043 million in 2025 from $2,164 million in 2024, a decline of 5.6%[24] - Cash flows from investing activities showed a net inflow of $44 million in 2025, a significant recovery compared to a net outflow of $875 million in 2024[24] - The company repurchased treasury shares amounting to $1,170 million in the nine months ended September 30, 2025, compared to $812 million in the same period of 2024[24] - Dividends paid in the nine months ended September 30, 2025, totaled $534 million, an increase from $465 million in 2024, marking a rise of 14.8%[24] Revenue Segmentation - Decision Solutions (DS) revenue for the third quarter of 2025 was $424 million, a 10.7% increase from $383 million in the third quarter of 2024[50] - Research and Insights (R&I) revenue increased to $252 million in Q3 2025 from $235 million in Q3 2024, reflecting a growth of 7.2%[50] - Data and Information (D&I) revenue rose to $233 million in Q3 2025, compared to $213 million in Q3 2024, marking a growth of 9.4%[50] - Corporate Finance (CFG) revenue for the third quarter of 2025 was $576 million, up from $515 million in the same quarter of 2024, an increase of 11.8%[51] - Total ratings revenue for the third quarter of 2025 was $1,091 million, a 12.0% increase from $974 million in Q3 2024[52] Restructuring and Efficiency - The company reported a restructuring charge of $21 million in Q3 2025, up from $6 million in Q3 2024, indicating ongoing adjustments in operations[16] - The Strategic and Operational Efficiency Restructuring Program is expected to yield annualized savings of $250 million to $300 million, with completion anticipated by the end of 2026[96] - Total restructuring expenses for the three months ended September 30, 2025, amounted to $21 million, while for the nine months, it was $81 million, leading to a cumulative expense of $126 million[97] Tax and Compliance - The effective tax rate (ETR) for the nine months ended September 30, 2025, was 24.2%, up from 23.5% in the same period of 2024, reflecting an increase of 0.7%[68] - The company paid $644 million in income taxes for the nine months ended September 30, 2025, compared to $391 million for the same period in 2024, indicating a significant increase of 65%[72] - The company expects to reverse $64 million in reserves for uncertain tax positions in the fourth quarter of 2025 due to a lapse of a statute of limitations[71] Employee and Stock Compensation - The company granted 0.1 million employee stock options with a weighted average grant date fair value of $163.59 per share during the first nine months of 2025[64] - Stock-based compensation expenses rose to $174 million in 2025 from $166 million in 2024, reflecting a growth of 4.8%[24] - The total number of employees decreased by 2% to 15,952 as of September 30, 2025, compared to 15,776 in the previous year[147] Market and Segment Insights - Moody's has two reportable segments: MA (Moody's Analytics) and MIS (Moody's Investors Service), focusing on integrated risk assessment solutions and credit ratings respectively[38] - Moody's Analytics (MA) external revenue increased by 9% to $909 million, driven by sustained demand for insurance and KYC offerings, as well as credit research products[146] - Moody's Investors Service (MIS) external revenue rose by 12% to $1,098 million, supported by strong investor demand and increased leveraged finance issuance[146]