Moody's Corporation

What they do

Moody's provides credit ratings, research, data and analytical tools to banks, insurers, investors, corporations and governments. MIS publishes credit ratings and assessment services on corporate, financial institution and governmental debt obligations and structured finance securities. MA provides research and insights, data and information, and cloud-based decision solutions across banking, insurance and KYC workflows, and its businesses deliver decision-grade intelligence to customers worldwide.

Revenue drivers

• Moody's Investors Service (MIS) — Publishes credit ratings and assessment services on debt obligations and issuers; generated $1,260 million in Q2 2026 revenue, about 58% of total, with transactional revenue of $891 million.
• Moody's Analytics (MA) — Subscription-based research, data and decision solutions; generated $925 million in Q2 2026 revenue, about 42% of total, with recurring revenue representing 99% of segment revenue.
• Decision Solutions — Cloud-based platforms for banking, insurance and KYC workflows; Q2 2026 revenue $423 million, led by insurance at $183 million and KYC at $121 million.
• Research and Insights / Data and Information — Fixed income and economic research and the company's database on companies and credit; Q2 2026 revenue was $256 million and $246 million, respectively.

Recent performance

Second quarter 2026 revenue was $2,185 million, up 15% from $1,898 million a year earlier, and 16% on an organic constant currency basis. Operating margin was 47.9% and adjusted operating margin expanded 440 basis points to 55.3%. Diluted EPS was $5.03, up 57%, and adjusted diluted EPS was $4.68, up 31%. MIS revenue rose 25% to $1,260 million with adjusted operating margin of 68.3%, while MA revenue rose 4% to $925 million, or 8% on an organic constant currency basis. Year-to-date operating cash flow was $1,718 million, up 32%, and free cash flow was $1,532 million, up 34%.

Strategy

Moody's is positioning itself at the intersection of risk, data, analytics and technology as capital markets evolve, funding needs grow and AI transforms workflows. MA is organized around three interconnected businesses: Research & Insights, Data & Information and Decision Solutions, which embed proprietary data and analytics directly into regulated customer workflows. The company repurchased approximately $2.2 billion of shares year-to-date and raised full-year repurchase guidance to up to $3.0 billion. Management reaffirmed full-year 2026 revenue growth guidance in the high-single digit percent range and narrowed adjusted diluted EPS guidance to $16.50 to $17.00.

Risks

• Regulatory risk — Moody's is subject to extensive federal, state, local and foreign regulation, particularly in the credit rating industry, and these regulations are complex and continually evolving.
• Goodwill and intangible impairment — Goodwill is tested for impairment at the reporting unit level, and a reporting unit fair value shortfall could require a material impairment charge.
• Revenue concentration in credit markets — MIS, the larger segment, is tied to debt issuance activity and generated $891 million of Q2 2026 transactional revenue, which can be volatile with market conditions.
• Macroeconomic and geopolitical conditions — Inflation, monetary policy actions, the Russia-Ukraine military conflict and Middle East conflicts are cited as factors that could disrupt operations and results.

Outlook

Management reaffirmed guidance for full-year 2026 MCO revenue growth in the high-single digit percent range. Adjusted diluted EPS guidance was narrowed to a range of $16.50 to $17.00. Full-year share repurchase guidance was raised to up to $3.0 billion. Guidance is stated as of July 22, 2026.