Moody's Corporation

MCO
Financial Analysis · Updated May 12, 2026 · Coverage 2026-Q2
Latest Q Revenue
$2.1B
Q1 2026 · +8.1% YoY
TTM ROIC
38.4%
FY2025 · NOPAT / Invested Capital (Goodwill + Intangibles + PP&E + Net Working Capital); excludes negative equity distortion from buybacks · WACC ~8.2% · Moat spread +30.2pp

Financial Snapshot

ticker: MCO step: 04 generated: 2026-05-12 source: quick-research

Moody's Corporation (MCO) — Financial Snapshot

Income Statement Summary

Metric FY2023 FY2024 FY2025 YoY (FY25)
Revenue $5.92B $7.09B $7.72B +8.9%
Moody's Analytics $3.31B $4.41B $4.84B +9.75%
Moody's Investors Service $2.61B $2.68B $2.88B +7.47%
Adjusted Operating Margin ~45% ~48% ~50% +200 bps
Adjusted Diluted EPS $10.42 $12.42 $14.94 +20%
GAAP Diluted EPS $8.79 $11.18 $13.50+ +20%+

FY2026 Guidance

Metric 2026 Guide
Revenue Growth High single-digit %
Adjusted EPS $16.40–17.00 (~+10–14% YoY)
Total Debt Issuance Growth Low single-digit %
First Half Issuance High single-digit % growth (vs. H1 2025)
Second Half Issuance Mid-single-digit % decline (vs. H2 2025)

Cash Flow & Capital Allocation (FY2025)

Metric Value
Operating Cash Flow ~$3.0B
Free Cash Flow ~$2.8B
Capital Expenditures ~$0.2B (asset-light)
Share Repurchases ~$1.2B
Dividends Paid ~$0.6B
Quarterly Dividend $0.94
Annual Dividend $3.76
Dividend Yield ~0.6%
Cash & Marketable Securities ~$2.5B
Total Debt ~$6.5B (post-RMS + Bureau van Dijk financing)
Net Debt / EBITDA ~1.4x

Q1 2026 Trends

Metric Q1 2026
EPS Beat Confirmed
Revenue Beat consensus
Private Credit Revenue Growth +60% (FY25 trajectory)
Total Debt Rated (FY25) $6.6T (busiest Q4 in company history)

Key Ratios (approximate)

  • P/E: ~36x (FY26 adjusted EPS midpoint $16.70) | EV/EBITDA: ~25x | FCF Yield: ~2.6%
  • Revenue Growth (FY25): +8.9% | FCF Margin: ~36%
  • Adjusted Operating Margin: ~50% (industry-best)
  • Dividend Yield: ~0.6% | Buyback Yield: ~1.2%
  • Net Debt / EBITDA: ~1.4x

Growth Profile

FY25 was a strong year — adjusted EPS +20% to $14.94 driven by:

  • Moody's Analytics +9.75% on subscription compounding + KYC/Decision Solutions growth.
  • Moody's Investors Service +7.47% on ratings cycle recovery; $6.6T of debt rated (busiest Q4 ever).
  • Private credit revenue +60% growth.
  • Operating margin expanded 200 bps on operating leverage.

The 2026 setup:

  • Continued mid-to-high single-digit revenue growth.
  • EPS growth of +10–14% driven by margin expansion + buybacks.
  • Private credit secular tailwind: AUM >$2T in 2026 → ~$4T by 2030.
  • Subscription mix (~63% of revenue) compounding above market growth.

The structural thesis: Moody's is the higher-multiple twin to S&P Global, with more recurring revenue mix (63% vs. SPGI ~50%) but smaller index franchise. Multi-decade compounder.

Forward Estimates

FY2026 Guide:

  • Revenue: $8.3–8.5B (+8–10%)
  • Adjusted EPS: $16.40–17.00 (+10–14%)
  • Free Cash Flow: ~$3.0B+

Bull case: Debt issuance cycle accelerates; private credit revenue continues +50%+ growth; Moody's Analytics maintains 10%+ growth; multiple expands to 40x P/E. Bear case: Issuance cycle pauses; regulatory pressure on issuer-paid ratings model; AI commoditizes Moody's Analytics data products; multiple compresses to 30x P/E. Consensus targets ~$540–600 vs. trading ~$480–520 (~10–25% implied upside).

Deeper Financial Analysis

The fundamental tier adds 9 additional research dimensions for $MCO.

Revenue Breakdown
Segment revenue, geographic mix, product-line contribution margins, and cohort dynamics.
Financial Trends
Quarter-over-quarter momentum, leading indicators, and inflection point analysis.
Balance Sheet
Debt structure, liquidity runway, dilution risk, and working capital dynamics.
Capital Allocation
Buyback cadence, M&A appetite, dividend policy, and reinvestment priorities.
Returns on Capital (ROIC)
Multi-year ROIC vs. WACC, marginal returns on reinvestment, sales-to-invested-capital efficiency, and moat spread.
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Markdown: /stocks/mco/financials/md · → thesis · → memo