Moody’s Q3 2026 earnings rise to $734 million
The completed MA Regulatory Solutions sale produced a cumulative $294 million pre-tax gain, including $115 million recognized in the third quarter.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Rhea-AI Filing Summary
Moody’s Corporation (MCO) reported third-quarter 2026 revenue of $2.023 billion, compared with $2.007 billion a year earlier, and net income attributable to Moody’s of $734 million, versus $646 million. Diluted earnings per share were $4.24, compared with $3.60.
For the first nine months, revenue was $6.287 billion versus $5.829 billion, and net income attributable to Moody’s was $2.273 billion versus $1.849 billion. Operating cash flow totaled $2.471 billion, compared with $2.043 billion.
The company completed the sale of its MA Regulatory Solutions business in the second quarter and recorded an additional $115 million pre-tax gain in the third quarter after post-closing conditions were met, bringing the cumulative pre-tax gain to $294 million. Its restructuring program is expected to generate annualized savings of $300 million to $350 million, with substantial completion expected by the end of 2027; expected pre-tax personnel and related restructuring charges are $285 million to $330 million.
4 points · 0 major0 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month revenue reached $6.287 billion, versus $5.829 billion.
- Moderate pointNine-month operating cash flow was $2.471 billion, versus $2.043 billion.
- Moderate pointThird-quarter net income attributable to Moody’s was $734 million, versus $646 million.
- Minor pointNine-month net income attributable to Moody’s was $2.273 billion, versus $1.849 billion.
Negative
- Moderate pointCorporate Finance revenue was $530 million, versus $576 million in the third quarter.
Filing Explained
As of
Key Figures
Third-quarter revenue: $2.023 billion
Net income attributable to Moody’s: $734 million
Diluted earnings per share: $4.24
+4 more
7 metrics
Third-quarter revenue
$2.023 billion
Three months ended September 30, 2026
Net income attributable to Moody’s
$734 million
Three months ended September 30, 2026
Diluted earnings per share
$4.24
Three months ended September 30, 2026
Nine-month revenue
$6.287 billion
Nine months ended September 30, 2026
Operating cash flow
$2.471 billion
Nine months ended September 30, 2026
Cumulative pre-tax gain
$294 million
MA Regulatory Solutions business sale
Expected annualized restructuring savings
$300 million to $350 million
Strategic and Operational Efficiency Restructuring Program
Key Terms
Remaining performance obligations, gain contingency, fair value hedges
3 terms
Remaining performance obligations financial
"aggregate amount of the transaction price allocated to remaining performance obligations"
Remaining performance obligations are the work a company still needs to complete for its customers, like finishing a service or delivering a product. It’s important because it shows how much future income the company has coming in from current agreements, giving a clearer picture of its ongoing business.
gain contingency financial
"recognized as a gain contingency in accordance with ASC 450"
A gain contingency is a possible future increase in a company’s assets or reduction in its liabilities that depends on an uncertain event — for example, winning a lawsuit, receiving an insurance payout, or closing a favorable sale. Investors care because such outcomes can raise a company’s value if they occur, yet accounting rules usually prevent companies from booking these gains until they are realized, so disclosures and probability estimates shape expectations and perceived risk.
fair value hedges financial
"designated these swaps as fair value hedges"
Fair value hedges are financial contracts used to offset changes in the market value of a specific asset or liability, like locking a price to protect against swings in value. For investors, they matter because they reduce sudden swings in reported earnings and balance-sheet values that arise from market movements, helping reveal the company’s underlying performance much like insurance smooths out the financial impact of an unexpected loss.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were MCO’s third-quarter 2026 revenue and earnings?
MCO reported third-quarter revenue of $2.023 billion, compared with $2.007 billion a year earlier. Net income attributable to Moody’s was $734 million, versus $646 million, and diluted earnings per share were $4.24, compared with $3.60.
How much did MCO recognize from the MA Regulatory Solutions sale?
MCO completed the sale in the second quarter and recorded a pre-tax gain of $179 million. In the third quarter, it recognized an additional $115 million pre-tax gain after certain post-closing conditions were met, bringing the cumulative pre-tax gain to $294 million.
What cash outlays are expected for MCO’s restructuring program?
Cash outlays associated with the program are expected to be $285 million to $330 million, with payments expected through 2028. The program is expected to be substantially complete by the end of 2027.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
| Form | |||||
(Mark one)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2026
Or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission file number 1-14037
____________________
(Exact name of registrant as specified in its charter)
| (State of Incorporation) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| ☑ | Accelerated filer | ☐ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
| Shares Outstanding at September 30, 2026 | ||
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Table of Contents
| MOODY’S CORPORATION INDEX TO FORM 10-Q | ||||||||
| Page(s) | ||||||||
Glossary of Terms and Abbreviations | 3 | |||||||
PART I. FINANCIAL INFORMATION | ||||||||
Item 1. | Financial Statements | |||||||
Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2026 and 2025 | 6 | |||||||
Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Nine Months Ended September 30, 2026 and 2025 | 7 | |||||||
Consolidated Balance Sheets (Unaudited) at September 30, 2026 and December 31, 2025 | 8 | |||||||
Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2026 and 2025 | 9 | |||||||
Consolidated Statements of Shareholders’ Equity (Unaudited) for the Three and Nine Months Ended September 30, 2026 and 2025 | 10 | |||||||
Notes to the Consolidated Financial Statements (Unaudited) | 14 | |||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | |||||||
The Company | 43 | |||||||
Critical Accounting Estimates | 43 | |||||||
Reportable Segments | 44 | |||||||
Results of Operations | 45 | |||||||
Liquidity and Capital Resources | 77 | |||||||
Non-GAAP Financial Measures | 79 | |||||||
Recently Issued Accounting Standards | 86 | |||||||
Contingencies | 86 | |||||||
Forward-Looking Statements | 87 | |||||||
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 89 | ||||||
Item 4. | Controls and Procedures | 89 | ||||||
PART II. OTHER INFORMATION | ||||||||
Item 1. | Legal Proceedings | 90 | ||||||
Item 1A. | Risk Factors | 90 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 90 | ||||||
Item 5. | Other Information | 90 | ||||||
Item 6. | Exhibits | 91 | ||||||
SIGNATURES | 92 | |||||||
2
Table of Contents
GLOSSARY OF TERMS AND ABBREVIATIONS
The following terms, abbreviations and acronyms are used to identify frequently used terms in this report:
TERM | DEFINITION | ||||
Acquisition-Related Intangible Amortization Expense | Amortization expense relating to definite-lived intangible assets acquired by the Company from all business combination transactions | ||||
Adjusted Diluted EPS | Diluted EPS excluding the impact of certain items as detailed in the section entitled “Non-GAAP Financial Measures” | ||||
Adjusted Net Income | Net Income excluding the impact of certain items as detailed in the section entitled “Non-GAAP Financial Measures” | ||||
Adjusted Operating Income | Operating income excluding the impact of certain items as detailed in the section entitled “Non-GAAP Financial Measures” | ||||
Adjusted Operating Margin | Adjusted Operating Income divided by revenue | ||||
| AI | Artificial Intelligence | ||||
Americas | Represents countries within North and South America, excluding the U.S. | ||||
AOCI(L) | Accumulated other comprehensive income/loss; a separate component of shareholders’ equity | ||||
ARR | Annualized Recurring Revenue; a supplemental performance metric to provide additional insight on the estimated value of MA's recurring revenue contracts at a given point in time, excluding the impact of FX and contracts related to acquisitions | ||||
ASC | The FASB Accounting Standards Codification; the sole source of authoritative GAAP as of July 1, 2009, except for rules and interpretive releases of the SEC, which are also sources of authoritative GAAP for SEC registrants | ||||
Asia-Pacific | Represents Australia and countries in Asia including but not limited to: China, India, Indonesia, Japan, Republic of South Korea, Malaysia, Singapore, Sri Lanka and Thailand | ||||
ASU | The FASB Accounting Standards Update to the ASC. Provides background information for accounting guidance and the bases for conclusions on the changes in the ASC. ASUs are not considered authoritative until codified into the ASC | ||||
AUD | Australian dollar | ||||
| BitSight | A provider that helps global market participants understand cyber risk through ratings, analytics, and performance management tools; the Company acquired a minority investment in BitSight in 2021 | ||||
Board | The board of directors of the Company | ||||
BPS | Basis points | ||||
CAD | Canadian dollar | ||||
CAPE Analytics | A provider of AI-powered property risk intelligence; the Company acquired CAPE Analytics in January 2025 | ||||
| CCXI | China Cheng Xin International Credit Rating Co. Ltd.; the first and largest domestic credit rating agency approved by the People’s Bank of China; the Company acquired a 49% interest in 2006 and currently owns 30% of CCXI | ||||
CEO | Chief Executive Officer | ||||
CFG | Corporate finance group; an LOB of MIS | ||||
CMBS | Commercial mortgage-backed securities; an asset class within SFG | ||||
CODM | Chief Operating Decision Maker; identified as the Company's CEO | ||||
| COLI | Corporate-Owned Life Insurance | ||||
Common Stock | The Company’s common stock | ||||
Company | Moody’s Corporation and its subsidiaries; MCO; Moody’s | ||||
Compensation expense | Compensation expenses include salaries, benefits, incentive and stock-based compensation and other related expenses for employees. These expenses are charged to income as incurred | ||||
CP | Commercial Paper | ||||
CP Program | A program entered into on August 3, 2016 allowing the Company to privately place CP up to a maximum of $1 billion for which the maturity may not exceed 397 days from the date of issue, and which is backstopped by the 2024 Facility | ||||
CRAs | Credit rating agencies | ||||
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TERM | DEFINITION | ||||
| Data and Information (D&I) | LOB within MA which is powered by the world's largest database on companies and credit and serves as a critical input to financial analysis and AI model development/risk assessment | ||||
| Decision Solutions (DS) | LOB within MA; a set of cloud-based platforms embedding Moody's data and analytics directly into regulated banking, insurance, and KYC workflows | ||||
| Duplicate Rent | Duplicate rent expense incurred during the build-out and transition to the Company's new New York City headquarters | ||||
EMEA | Represents countries within Europe, the Middle East and Africa | ||||
EPS | Earnings per share | ||||
| ESTR | Euro Short-Term Rate | ||||
ETR | Effective tax rate | ||||
EU | European Union | ||||
EUR | Euros | ||||
Excess Tax Benefits | The difference between the tax benefit realized at exercise of an option or delivery of a restricted share and the tax benefit recorded at the time the option or restricted share is expensed under GAAP | ||||
Exchange Act | The Securities Exchange Act of 1934, as amended | ||||
External Revenue | Revenue excluding any intersegment amounts | ||||
FASB | Financial Accounting Standards Board | ||||
FIG | Financial institutions group; an LOB of MIS | ||||
Fintellix | A company specializing in data-driven risk and analytics for banks and financial institutions; acquired by ICRA in October 2025 | ||||
Free Cash Flow | Net cash provided by operating activities less cash paid for capital additions | ||||
FX | Foreign exchange | ||||
GAAP | U.S. Generally Accepted Accounting Principles | ||||
GBP | British pounds | ||||
| GDP | Gross domestic product | ||||
HKD | Hong Kong Dollars | ||||
ICRA | ICRA Limited; a provider of credit ratings and research in India | ||||
| ICR Chile | A domestic credit rating agency with operations in Chile; the Company acquired ICR Chile in Q3 2025 | ||||
| INR | Indian rupee | ||||
JPY | Japanese yen | ||||
| KYC | Know-your-customer | ||||
LOB | Line of business | ||||
MA | Moody’s Analytics - a reportable segment of MCO; consists of three LOBs - Decision Solutions; Research and Insights; and Data and Information | ||||
MAKS | Moody’s Analytics Knowledge Services; formerly known as Copal Amba; provided offshore research and analytic services to the global financial and corporate sectors; business was divested in the fourth quarter of 2019 and was formerly a reporting unit within the MA reportable segment | ||||
MCO | Moody’s Corporation and its subsidiaries; the Company; Moody’s | ||||
MD&A | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||||
M&A | Mergers and acquisitions | ||||
MERIS | Middle East Rating & Investors Service is an Egypt-based domestic credit rating agency acquired by Moody's in Q1 2026 | ||||
MIS | Moody’s Investors Service - a reportable segment of MCO; consists of five LOBs - CFG; SFG; FIG; PPIF; and MIS Other | ||||
MIS Other | Consists of financial instruments pricing services in the Asia-Pacific region, ICRA non-ratings revenue, and revenue from professional services. These businesses are components of MIS; MIS Other is an LOB of MIS | ||||
Moody’s | Moody’s Corporation and its subsidiaries; MCO; the Company | ||||
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Table of Contents
TERM | DEFINITION | ||||
| MSS | Moody's Shared Services; primarily consists of information technology and support staff such as finance, human resources and legal that support both MA and MIS | ||||
Net Income | Net income attributable to Moody’s Corporation, which excludes net income from consolidated noncontrolling interests belonging to the minority interest holder | ||||
NM | Percentage change is not meaningful | ||||
Non-compensation expense | Non-compensation expenses include costs incurred that are not related to employee compensation. This includes, but is not limited to, consulting and professional service fees, hosting expenses, rent, and marketing expenses. These expenses are charged to income as incurred | ||||
Non-GAAP | A financial measure not in accordance with GAAP; these measures, when read in conjunction with the Company’s reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company’s performance, facilitate comparisons to competitors’ operating results and to provide greater transparency to investors of supplemental information used by management in its financial and operational decision making | ||||
NRSRO | Nationally Recognized Statistical Rating Organization, which is a credit rating agency registered with the SEC | ||||
OCI(L) | Other comprehensive income (loss); includes gains and losses on cash flow and net investment hedges, certain gains and losses relating to pension and other retirement benefit obligations and foreign currency translation adjustments | ||||
Operating segment | Term defined in the ASC relating to segment reporting; the ASC defines an operating segment as a component of a business entity that has each of the three following characteristics: i) the component engages in business activities from which it may recognize revenue and incur expenses; ii) the operating results of the component are regularly reviewed by the entity’s CODM; and iii) discrete financial information about the component is available | ||||
PPIF | Public, project and infrastructure finance; an LOB of MIS | ||||
Recurring Revenue | For MA, represents subscription-based revenue and software maintenance revenue. For MIS, represents recurring monitoring fees of a rated debt obligation and/or entities that issue such obligations, as well as revenue from programs such as commercial paper, medium-term notes and shelf registrations. For MIS Other, represents financial instrument pricing services. | ||||
| Research and Insights (R&I) | LOB within MA that provides credit research, economic analysis and scenario modeling used in investment, risk, and regulatory decisions | ||||
RMBS | Residential mortgage-backed securities; an asset class within SFG | ||||
ROU Asset | Assets which represent the Company’s right to use an underlying asset for the term of a lease | ||||
SEC | U.S. Securities and Exchange Commission | ||||
SFG | Structured finance group; an LOB of MIS | ||||
SG&A | Selling, general and administrative expenses | ||||
SGD | Singapore dollar | ||||
| SOFR | Secured Overnight Financing Rate | ||||
Strategic and Operational Efficiency Restructuring Program | Multi-year restructuring program approved by the CEO of Moody’s on December 19, 2024, and expanded in July 2026, relating to the Company's strategy to realign the business toward high priority growth areas and to consolidate certain functions to simplify the organizational structure to enable efficiency and improved operating leverage; includes a reduction in staff, the rationalization and exit of certain real estate leases, incremental amortization of certain software, and the exit of certain businesses and product offerings | ||||
Tax Act | The “Tax Cuts and Jobs Act” enacted into U.S. law on December 22, 2017, which significantly amends the tax code in the U.S. | ||||
Transaction Revenue | For MA, represents revenue from one-time sales, including those from perpetual software license fees, software implementation services, risk management advisory projects, and training and certification services. For MIS (excluding MIS Other), represents the initial rating of a new debt issuance as well as other one-time fees. For MIS Other, represents revenue from professional services. | ||||
U.K. | United Kingdom | ||||
U.S. | United States | ||||
USD | U.S. dollar | ||||
UTPs | Uncertain tax positions | ||||
5
Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
MOODY’S CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Amounts in millions, except per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Operating | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Restructuring | |||||||||||||||||||||||
Charges related to asset abandonment | |||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Non-operating income (expense), net | |||||||||||||||||||||||
| Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Other non-operating income, net | |||||||||||||||||||||||
| Gain on business divestitures | |||||||||||||||||||||||
| Total non-operating income (expense), net | ( | ( | |||||||||||||||||||||
| Income before provision for income taxes | |||||||||||||||||||||||
| Provision for income taxes | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | |||||||||||||||||||||||
| Net income attributable to Moody's | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per share attributable to Moody's common shareholders | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average number of shares outstanding | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
6
Table of Contents
MOODY’S CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(Amounts in millions)
Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| Pre-tax amounts | Tax amounts | After-tax amounts | Pre-tax amounts | Tax amounts | After-tax amounts | ||||||||||||||||||||||||||||||
| Net Income | $ | $ | |||||||||||||||||||||||||||||||||
| Other Comprehensive Income (Loss): | |||||||||||||||||||||||||||||||||||
| Foreign Currency Adjustments: | |||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments, net | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
Net gains (losses) on net investment hedges | ( | ( | |||||||||||||||||||||||||||||||||
| Cash Flow Hedges: | |||||||||||||||||||||||||||||||||||
Reclassification of losses included in net income | |||||||||||||||||||||||||||||||||||
| Pension and Other Retirement Benefits: | |||||||||||||||||||||||||||||||||||
| Net actuarial gains (losses) | ( | ( | |||||||||||||||||||||||||||||||||
| Total other comprehensive income (loss) | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||
| Comprehensive income | |||||||||||||||||||||||||||||||||||
| Less: comprehensive income (loss) attributable to noncontrolling interests | ( | ||||||||||||||||||||||||||||||||||
| Comprehensive Income Attributable to Moody's | $ | $ | |||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| Pre-tax amounts | Tax amounts | After-tax amounts | Pre-tax amounts | Tax amounts | After-tax amounts | ||||||||||||||||||||||||||||||
| Net Income | $ | $ | |||||||||||||||||||||||||||||||||
| Other Comprehensive Income (Loss): | |||||||||||||||||||||||||||||||||||
| Foreign Currency Adjustments: | |||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments, net | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Net gains (losses) on net investment hedges | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Cash Flow Hedges: | |||||||||||||||||||||||||||||||||||
Reclassification of losses included in net income | |||||||||||||||||||||||||||||||||||
| Pension and Other Retirement Benefits: | |||||||||||||||||||||||||||||||||||
Amortization of actuarial gains and prior service credits included in net income | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Net actuarial gains (losses) | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total other comprehensive (loss) income | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||
| Comprehensive income | |||||||||||||||||||||||||||||||||||
| Less: comprehensive loss attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||||||||||||||
| Comprehensive Income Attributable to Moody's | $ | $ | |||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
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Table of Contents
MOODY’S CORPORATION
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Amounts in millions, except share and per share data)
| September 30, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Short-term investments | |||||||||||
Accounts receivable, net of allowance for credit losses of $ | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
Property and equipment, net of accumulated depreciation of $ | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Deferred tax assets, net | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued liabilities | $ | $ | |||||||||
| Current portion of operating lease liabilities | |||||||||||
| Current portion of long-term debt | |||||||||||
| Deferred revenue | |||||||||||
| Total current liabilities | |||||||||||
| Non-current portion of deferred revenue | |||||||||||
| Long-term debt | |||||||||||
| Deferred tax liabilities, net | |||||||||||
| Uncertain tax positions | |||||||||||
| Operating lease liabilities | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
Contingencies (Note 15) | |||||||||||
| Shareholders' equity: | |||||||||||
Preferred stock, par value $ | |||||||||||
Series common stock, par value $ | |||||||||||
Common stock, par value $ | |||||||||||
| Capital surplus | |||||||||||
| Retained earnings | |||||||||||
Treasury stock, at cost; | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total Moody's shareholders' equity | |||||||||||
| Noncontrolling interests | |||||||||||
| Total shareholders' equity | |||||||||||
Total liabilities, noncontrolling interests and shareholders' equity | $ | $ | |||||||||
The accompanying notes are an integral part of the consolidated financial statements.
8
Table of Contents
MOODY’S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Amounts in millions)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities | |||||||||||
| Net income | $ | $ | |||||||||
| Reconciliation of net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Stock-based compensation | |||||||||||
| Deferred income taxes | |||||||||||
Non-cash restructuring and abandonment-related charges | |||||||||||
| Provision for credit losses on accounts receivable | |||||||||||
| Gain on business divestitures | ( | ||||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable | |||||||||||
| Other current assets | ( | ||||||||||
| Other assets | ( | ||||||||||
| Lease obligations | ( | ( | |||||||||
| Accounts payable and accrued liabilities | ( | ( | |||||||||
| Deferred revenue | ( | ( | |||||||||
Uncertain tax positions and other non-current tax liabilities | |||||||||||
| Other liabilities | |||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities | |||||||||||
| Capital additions | ( | ( | |||||||||
| Purchases of investments | ( | ( | |||||||||
| Sales and maturities of investments | |||||||||||
| Purchases of investments in non-consolidated affiliates | ( | ( | |||||||||
| Receipts from settlements of net investment hedges | |||||||||||
| Cash paid for acquisitions, net of cash acquired | ( | ( | |||||||||
| Cash received upon business divestitures | |||||||||||
| Net cash (used in) provided by investing activities | ( | ||||||||||
| Cash flows from financing activities | |||||||||||
| Repayment of notes | ( | ||||||||||
| Proceeds from stock-based compensation plans | |||||||||||
| Repurchase of shares related to stock-based compensation and excise tax payments on share repurchases | ( | ( | |||||||||
| Treasury shares | ( | ( | |||||||||
| Dividends | ( | ( | |||||||||
Dividends to noncontrolling interests | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
| Decrease in cash and cash equivalents | ( | ( | |||||||||
| Cash and cash equivalents, beginning of period | |||||||||||
| Cash and cash equivalents, end of period | $ | $ | |||||||||
The accompanying notes are an integral part of the consolidated financial statements.
9
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MOODY’S CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)
(Amounts in millions, except per share data)
Shareholders of Moody's Corporation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Capital Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total Moody's Shareholders' Equity | Non- Controlling Interests | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends ($ | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued for stock-based compensation plans at average cost, net | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury shares repurchased, inclusive of excise tax of $ | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment, net of net investment hedge activity (net of tax of $ | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
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MOODY'S CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
(Amounts in millions, except per share data)
Shareholders of Moody's Corporation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Capital Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total Moody's Shareholders' Equity | Non- Controlling Interests | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends ($ | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued for stock-based compensation plans at average cost, net | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury shares repurchased, inclusive of excise tax of $ | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment, net of net investment hedge activity (net of tax of $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net actuarial losses | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of actuarial gains and prior service credits | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of losses on cash flow hedges | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
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MOODY'S CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
(Amounts in millions, except per share data)
Shareholders of Moody's Corporation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Capital Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total Moody's Shareholders' Equity | Non- Controlling Interests | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2026 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends ($ | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued for stock-based compensation plans at average cost, net | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury shares repurchased, inclusive of excise tax of $ | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment, net of net investment hedge activity (net of tax of $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net actuarial losses | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of losses on cash flow hedges | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2026 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
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MOODY'S CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
(Amounts in millions, except per share data)
Shareholders of Moody's Corporation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Capital Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total Moody's Shareholders' Equity | Non- Controlling Interests | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends ($ | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued for stock-based compensation plans at average cost, net | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noncontrolling interest resulting from majority acquisition | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury shares repurchased, inclusive of excise tax of $ | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment, net of net investment hedge activity (net of tax of $ | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net actuarial gains (net of tax of $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of actuarial gains and prior service credits | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of losses on cash flow hedges | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
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MOODY’S CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(tabular dollar and share amounts in millions, except per share data)
NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Moody’s is a global provider of integrated perspectives on risk that empowers organizations and investors to make better decisions. Moody’s reports in two reportable segments: MA and MIS.
MA comprises three interconnected businesses: i) Research & Insights, which provides credit research, economic analysis and scenario modeling used in investment, risk, and regulatory decisions; ii) Data & Information, which is powered by the world's largest database on companies and credit and serves as a critical input to financial analysis and AI model development/risk assessment; and iii) Decision Solutions, a set of cloud-based platforms embedding Moody's data and analytics directly into regulated banking, insurance, and KYC workflows. Together, these businesses benefit from deep customer integration, long-term subscription structures, and data assets that are proprietary in sourcing, breadth, and historical depth.
MIS publishes credit ratings and provides assessment services on a wide range of debt obligations, programs and facilities, and the entities that issue such obligations in markets worldwide, including various corporate, financial institution and governmental obligations, and structured finance securities.
These interim financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the Company’s consolidated financial statements and related notes in the Company’s 2025 annual report on Form 10-K filed with the SEC on February 18, 2026. The results of interim periods are not necessarily indicative of results for the full year or any subsequent period. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented have been included. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.
Certain reclassifications have been made to prior period amounts to conform to the current presentation.
Recently Issued Accounting Standards
In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" ("ASU No. 2024-03"). The amendments in this ASU require more detailed disclosures about specific expense categories in the notes to financial statements (including employee compensation, depreciation and intangible asset amortization) and apply to both interim and annual reporting periods. ASU No. 2024-03 also requires disclosure of total selling expenses for both interim and annual reporting periods, with an additional requirement to provide an entity’s definition of selling expenses in annual reporting. This ASU is effective in fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments in this ASU should be applied either (1) prospectively for annual and interim reporting periods beginning after the aforementioned effective dates or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures. The Company expects this guidance to result primarily in expanded disclosures and additional expense disaggregation.
In September 2025, the FASB issued ASU 2025-06 "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software" ("ASU No. 2025-06"). This ASU eliminates prescriptive software development stages and requires capitalization of software costs when (1) management commits to funding the project, and (2) completion and intended use are probable, with consideration to when significant uncertainty associated with the development activities of the software no longer exists. This ASU also clarifies the disclosure requirements for internal-use software costs and supersedes prior guidance on website development costs. This ASU is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted. Entities may transition using prospective, modified prospective, or retrospective approaches. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.
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NOTE 2. REVENUES
Revenue by Category
The following table presents the Company’s revenues disaggregated by LOB:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| MA: | |||||||||||||||||||||||
| Decision Solutions (DS) | |||||||||||||||||||||||
| Banking | $ | $ | $ | $ | |||||||||||||||||||
| Insurance | |||||||||||||||||||||||
| KYC | |||||||||||||||||||||||
| Total DS | |||||||||||||||||||||||
| Research and Insights (R&I) | |||||||||||||||||||||||
| Data and Information (D&I) | |||||||||||||||||||||||
| Total external revenue | |||||||||||||||||||||||
| Intersegment revenue | |||||||||||||||||||||||
| Total MA | |||||||||||||||||||||||
| MIS: | |||||||||||||||||||||||
| Corporate Finance (CFG) | |||||||||||||||||||||||
| Investment-grade | |||||||||||||||||||||||
| High-yield | |||||||||||||||||||||||
| Bank loans | |||||||||||||||||||||||
Other accounts (1) | |||||||||||||||||||||||
| Total CFG | |||||||||||||||||||||||
| Structured Finance (SFG) | |||||||||||||||||||||||
| Asset-backed securities | |||||||||||||||||||||||
| RMBS | |||||||||||||||||||||||
| CMBS | |||||||||||||||||||||||
| Structured credit | |||||||||||||||||||||||
| Other accounts | |||||||||||||||||||||||
| Total SFG | |||||||||||||||||||||||
| Financial Institutions (FIG) | |||||||||||||||||||||||
| Banking | |||||||||||||||||||||||
| Insurance | |||||||||||||||||||||||
| Managed investments | |||||||||||||||||||||||
| Other accounts | |||||||||||||||||||||||
| Total FIG | |||||||||||||||||||||||
| Public, Project and Infrastructure Finance (PPIF) | |||||||||||||||||||||||
| Public finance / sovereign | |||||||||||||||||||||||
| Project and infrastructure | |||||||||||||||||||||||
| Total PPIF | |||||||||||||||||||||||
| Total ratings revenue | |||||||||||||||||||||||
| MIS Other | |||||||||||||||||||||||
| Total external revenue | |||||||||||||||||||||||
| Intersegment revenue | |||||||||||||||||||||||
| Total MIS | |||||||||||||||||||||||
| Eliminations | ( | ( | ( | ( | |||||||||||||||||||
| Total MCO | $ | $ | $ | $ | |||||||||||||||||||
(1) Other includes: recurring monitoring fees of a rated debt obligation and/or entities that issue such obligations as well as fees from programs such as commercial paper, medium term notes, and ICRA corporate finance revenue.
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Table of Contents
The following tables present the Company’s revenues disaggregated by LOB and geographic area:
| Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| U.S. | Non-U.S. | Total | U.S. | Non-U.S. | Total | ||||||||||||||||||||||||||||||
| MA: | |||||||||||||||||||||||||||||||||||
| Decision Solutions | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Research and Insights | |||||||||||||||||||||||||||||||||||
| Data and Information | |||||||||||||||||||||||||||||||||||
| Total MA | |||||||||||||||||||||||||||||||||||
| MIS: | |||||||||||||||||||||||||||||||||||
| Corporate Finance | |||||||||||||||||||||||||||||||||||
| Structured Finance | |||||||||||||||||||||||||||||||||||
| Financial Institutions | |||||||||||||||||||||||||||||||||||
| Public, Project and Infrastructure Finance | |||||||||||||||||||||||||||||||||||
| Total ratings revenue | |||||||||||||||||||||||||||||||||||
| MIS Other | |||||||||||||||||||||||||||||||||||
| Total MIS | |||||||||||||||||||||||||||||||||||
| Total MCO | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| U.S. | Non-U.S. | Total | U.S. | Non-U.S. | Total | ||||||||||||||||||||||||||||||
| MA: | |||||||||||||||||||||||||||||||||||
| Decision Solutions | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Research and Insights | |||||||||||||||||||||||||||||||||||
| Data and Information | |||||||||||||||||||||||||||||||||||
| Total MA | |||||||||||||||||||||||||||||||||||
| MIS: | |||||||||||||||||||||||||||||||||||
| Corporate Finance | |||||||||||||||||||||||||||||||||||
| Structured Finance | |||||||||||||||||||||||||||||||||||
| Financial Institutions | |||||||||||||||||||||||||||||||||||
| Public, Project and Infrastructure Finance | |||||||||||||||||||||||||||||||||||
| Total ratings revenue | |||||||||||||||||||||||||||||||||||
| MIS Other | |||||||||||||||||||||||||||||||||||
| Total MIS | |||||||||||||||||||||||||||||||||||
| Total MCO | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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Table of Contents
The following table presents the Company’s reportable segment revenues disaggregated by segment and geographic region:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| MA: | |||||||||||||||||||||||
| U.S. | $ | $ | $ | $ | |||||||||||||||||||
| Non-U.S.: | |||||||||||||||||||||||
| EMEA | |||||||||||||||||||||||
| Asia-Pacific | |||||||||||||||||||||||
| Americas | |||||||||||||||||||||||
| Total Non-U.S. | |||||||||||||||||||||||
| Total MA | |||||||||||||||||||||||
| MIS: | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| Non-U.S.: | |||||||||||||||||||||||
| EMEA | |||||||||||||||||||||||
| Asia-Pacific | |||||||||||||||||||||||
| Americas | |||||||||||||||||||||||
| Total Non-U.S. | |||||||||||||||||||||||
| Total MIS | |||||||||||||||||||||||
| Total MCO | $ | $ | $ | $ | |||||||||||||||||||
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Table of Contents
The following tables summarize the split between Transaction Revenue and Recurring Revenue:
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| Transaction | Recurring | Total | Transaction | Recurring | Total | ||||||||||||||||||||||||||||||
| Decision Solutions | |||||||||||||||||||||||||||||||||||
Banking | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
Insurance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
KYC | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
Total Decision Solutions | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Research and Insights | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Data and Information | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
Total MA (1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Corporate Finance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Structured Finance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Financial Institutions | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Public, Project and Infrastructure Finance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| MIS Other | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Total MIS | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Total Moody's Corporation | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
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Table of Contents
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| Transaction | Recurring | Total | Transaction | Recurring | Total | ||||||||||||||||||||||||||||||
| Decision Solutions | |||||||||||||||||||||||||||||||||||
Banking | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
Insurance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
KYC | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | |||||||||||||||||||||||||||||||
Total Decision Solutions | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Research and Insights | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Data and Information | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
Total MA (1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Corporate Finance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Structured Finance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Financial Institutions | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Public, Project and Infrastructure Finance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| MIS Other | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Total MIS | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
| Total Moody's Corporation | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| % | % | % | % | % | % | ||||||||||||||||||||||||||||||
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The following tables present the timing of revenue recognition:
Three Months Ended September 30, 2026 | Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||||||||||||
| MA | MIS | Total | MA | MIS | Total | ||||||||||||||||||||||||||||||
| Revenue recognized at a point in time | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Revenue recognized over time | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Three Months Ended September 30, 2025 | Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| MA | MIS | Total | MA | MIS | Total | ||||||||||||||||||||||||||||||
| Revenue recognized at a point in time | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Revenue recognized over time | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Unbilled receivables, deferred revenue and remaining performance obligations
Unbilled receivables
For certain MA arrangements, the timing of when the Company has the unconditional right to consideration and recognizes revenue occurs prior to invoicing the customer. In addition, certain MIS arrangements contain contractual terms whereby the customers are billed in arrears for annual monitoring services, requiring revenue to be accrued as an unbilled receivable as such services are provided.
The following table presents the Company's unbilled receivables, which are included within accounts receivable, net, at September 30, 2026 and December 31, 2025:
As of September 30, 2026 | As of December 31, 2025 | ||||||||||||||||||||||
| MA | MIS | MA | MIS | ||||||||||||||||||||
| Unbilled Receivables | $ | $ | $ | $ | |||||||||||||||||||
Deferred revenue
The Company recognizes deferred revenue when a contract requires a customer to pay consideration to the Company in advance of when revenue related to that contract is recognized. This deferred revenue is relieved when the Company satisfies the related performance obligation and revenue is recognized.
Significant changes in the deferred revenue balances during the three and nine months ended September 30, 2026 and 2025 are as follows:
Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| MA | MIS | Total | MA | MIS | Total | ||||||||||||||||||||||||||||||
Balance at June 30, | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Changes in deferred revenue: | |||||||||||||||||||||||||||||||||||
| Revenue recognized that was included in the deferred revenue balance at the beginning of the period | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Increases due to amounts billable excluding amounts recognized as revenue during the period | |||||||||||||||||||||||||||||||||||
| Reclassification to liabilities held-for-sale | ( | ( | |||||||||||||||||||||||||||||||||
| Effect of exchange rate changes | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Total changes in deferred revenue | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Balance at September 30, | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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| Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| MA | MIS | Total | MA | MIS | Total | ||||||||||||||||||||||||||||||
| Balance at December 31, | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Changes in deferred revenue: | |||||||||||||||||||||||||||||||||||
| Revenue recognized that was included in the deferred revenue balance at the beginning of the period | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Increases due to amounts billable excluding amounts recognized as revenue during the period | |||||||||||||||||||||||||||||||||||
Adjustment related to divestiture of business (1) | ( | ( | |||||||||||||||||||||||||||||||||
| Reclassification to liabilities held-for-sale | ( | ( | |||||||||||||||||||||||||||||||||
| Increases due to acquisitions during the period | |||||||||||||||||||||||||||||||||||
| Effect of exchange rate changes | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Total changes in deferred revenue | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Balance at September 30, | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Deferred revenue - current | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Deferred revenue - non-current | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
(1) Reflects adjustments to the deferred revenue balance that was disposed of pursuant to the divestiture of the MA Regulatory Solutions business, which was divested in the second quarter of 2026, as more fully discussed in Note 11.
For the MA segment, the decrease in deferred revenue for the three months ended September 30, 2026 and 2025 was primarily due to the recognition of annual subscription and maintenance revenue for the period, for which billing occurs in December and January. For the nine months ended September 30, 2026 and 2025, the decrease in the deferred revenue balance is attributable to recognition of revenues related to the aforementioned December billings, partially offset by the impact of the high concentration of billings in the first quarter.
For the MIS segment, the change in the deferred revenue balance for all periods presented was primarily related to the significant portion of contract renewals that occur during the first quarter and are generally recognized over a one year period.
Remaining performance obligation
Remaining performance obligations in the MA segment include both amounts recorded as deferred revenue on the balance sheet as of September 30, 2026 as well as amounts not yet invoiced to customers as of September 30, 2026, largely reflecting future revenue related to signed multi-year arrangements for hosted and installed subscription-based products. As of September 30, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $4.4 billion. The Company expects to recognize into revenue approximately 55 % of this balance within one year , approximately 25 % of this balance between to two years and the remaining amount thereafter.
Remaining performance obligations in the MIS segment largely reflect deferred revenue related to monitoring fees for certain structured finance products, primarily CMBS, where the issuers can elect to pay the monitoring fees for the life of the security in advance. As of September 30, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $89 million. The Company expects to recognize into revenue approximately 25 % of this balance within one year , approximately 55 % of this balance between to five years and the remaining amount thereafter. With respect to the remaining performance obligations for the MIS segment, the Company has applied a practical expedient set forth in ASC Topic 606 permitting the omission of unsatisfied performance obligations relating to contracts with an original expected length of one year or less.
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NOTE 3. STOCK-BASED COMPENSATION
Presented below is a summary of the stock-based compensation cost and associated tax benefit included in the accompanying consolidated statements of operations:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Stock-based compensation cost | $ | $ | $ | $ | |||||||||||||||||||
| Tax benefit | $ | $ | $ | $ | |||||||||||||||||||
During the first nine months of 2026, the Company granted 0.1 million employee stock options, which had a weighted average grant date fair value of $133.17 per share. The Company also granted 0.5 million shares of restricted stock in the first nine months of 2026, which had a weighted average grant date fair value of $444.87 per share. Both the employee stock options and restricted stock generally vest ratably over four years 0.1 million shares of performance-based awards whereby the number of shares that ultimately vest is based on the achievement of certain non-market-based performance metrics of the Company over three years . The weighted average grant date fair value of these awards was $436.24 per share.
The following weighted average assumptions were used in determining the fair value using the Black-Scholes option-pricing model for options granted in 2026:
| Expected dividend yield | % | ||||
| Expected stock volatility | % | ||||
| Risk-free interest rate | % | ||||
| Expected holding period | |||||
Unrecognized stock-based compensation expense at September 30, 2026 was $10 million and $310 million for unvested stock options and restricted stock, respectively, which is expected to be recognized over a weighted average period of 1.9 years and 2.5 years, respectively. Additionally, there was $60 million of unrecognized stock-based compensation expense relating to the aforementioned non-market-based performance-based awards, which is expected to be recognized over a weighted average period of 2.1 years.
The following table summarizes information relating to stock option exercises and restricted stock vesting:
| Nine months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Exercise of stock options: | |||||||||||
| Proceeds from stock option exercises | $ | $ | |||||||||
| Aggregate intrinsic value | $ | $ | |||||||||
| Tax benefit realized upon exercise | $ | $ | |||||||||
Number of shares exercised | |||||||||||
| Vesting of restricted stock: | |||||||||||
| Fair value of shares vested | $ | $ | |||||||||
| Tax benefit realized upon vesting | $ | $ | |||||||||
| Number of shares vested | |||||||||||
| Vesting of performance-based restricted stock: | |||||||||||
| Fair value of shares vested | $ | $ | |||||||||
| Tax benefit realized upon vesting | $ | $ | |||||||||
Number of shares vested (1) | |||||||||||
(1) The number of shares vested in 2025 was approximately 15 thousand.
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NOTE 4. INCOME TAXES
Moody’s ETR was 24.0 % and 25.4 % for the three months ended September 30, 2026 and 2025, respectively, and was 24.4 % and 24.2 % for the nine months ended September 30, 2026 and 2025, respectively. The decrease in ETR for the three months ended September 30, 2026 compared to the same period in the prior year of 1.4 % primarily reflects tax benefits recognized pursuant to the lapse of a statute of limitations related to tax exposures assumed in a prior-year M&A transaction, for which the sellers had indemnified Moody's coupled with certain non-U.S.-related tax benefits. The benefit related to the indemnified tax exposures, including the associated reduction to Interest expense, net, was offset by the release of the related indemnification asset within Other non-operating income, net, resulting in no impact to net income. The Company’s year-to-date provision for income taxes is computed by applying its estimated annual ETR to the pre-tax earnings and adjusting for specific tax events recognized in the period in which they occur.
The Company classifies interest related to UTPs in interest expense, net in its consolidated statements of operations. Penalties, if incurred, would be recognized in other non-operating income, net. The Company had a net decrease in its UTP reserves of $3 million, net of federal tax, during the third quarter of 2026 and a net increase of $9 million ($6 million, net of federal tax) during the first nine months of 2026.
Moody’s is subject to U.S. federal income tax as well as income tax in various state, local and foreign jurisdictions. The Company’s U.S. federal income tax returns for 2023 through 2025 remain open to examination. Currently, the Company's New York State tax returns for 2022 through 2024 are under examination. Additionally, New York City tax returns for the years 2018 through 2022 are also under examination, while returns for 2023 and 2024 are open for examination. Furthermore, the Company's U.K. corporate income tax returns are under audit for the years 2017 through 2023, with the 2024 return still open for examination.
The following table shows the amount the Company paid for income taxes:
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Income taxes paid | $ | $ | |||||||||
NOTE 5. RECONCILIATION OF WEIGHTED AVERAGE SHARES OUTSTANDING
Below is a reconciliation of basic to diluted shares outstanding:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Dilutive effect of shares issuable under stock-based compensation plans | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
| Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above | |||||||||||||||||||||||
The calculation of basic shares outstanding is based on the weighted average number of shares of common stock outstanding during the reporting period. The calculation of diluted EPS requires certain assumptions regarding the use of both cash proceeds and assumed proceeds that would be received upon the exercise of stock options and vesting of restricted stock outstanding as of September 30, 2026 and 2025.
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NOTE 6. CASH EQUIVALENTS AND INVESTMENTS
The table below provides additional information on the Company’s cash equivalents and investments:
| As of September 30, 2026 | |||||||||||||||||||||||||||||||||||
Balance sheet location | |||||||||||||||||||||||||||||||||||
| Cost | Gains/(Losses) | Fair Value | Cash and cash equivalents | Short-term investments | Other assets | ||||||||||||||||||||||||||||||
Certificates of deposit and money market deposit accounts/funds (1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Mutual funds | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| As of December 31, 2025 | |||||||||||||||||||||||||||||||||||
Balance sheet location | |||||||||||||||||||||||||||||||||||
Cost | Gains/(Losses) | Fair Value | Cash and cash equivalents | Short-term investments | Other assets | ||||||||||||||||||||||||||||||
Certificates of deposit and money market deposit accounts/funds (1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Mutual funds | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
(1) Consists of time deposits, money market deposit accounts and money market funds. The remaining contractual maturities for the certificates of deposits classified as short-term investments are one month to 12 months at both September 30, 2026 and December 31, 2025. The remaining contractual maturities for the certificates of deposits classified in other assets are 13 months to 18 months at September 30, 2026 and 13 months to 22 months at December 31, 2025. Time deposits with a maturity of less than 90 days at time of purchase are classified as cash and cash equivalents.
In addition, the Company invested in COLI. As of September 30, 2026 and December 31, 2025, the contract value of the COLI was $48 million and $50 million respectively.
NOTE 7. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The Company is exposed to global market risks, including risks from changes in FX rates and changes in interest rates. Accordingly, the Company uses derivatives in certain instances to manage financial exposures that occur in the normal course of business. The Company does not hold or issue derivatives for speculative purposes.
Derivatives and non-derivative instruments designated as accounting hedges:
Fair Value Hedges
Interest Rate Swaps
The Company has entered into interest rate swaps to convert the fixed interest rate on certain of its long-term debt to a floating interest rate based on the SOFR. The purpose of these hedges is to mitigate the risk associated with changes in the fair value of the long-term debt, thus the Company has designated these swaps as fair value hedges. The fair value of the swaps is adjusted quarterly with a corresponding adjustment to the carrying value of the debt. The changes in the fair value of the swaps and the underlying hedged item generally offset and the net cash settlements on the swaps are recorded each period within interest expense, net in the Company’s consolidated statements of operations.
The following table summarizes the Company’s interest rate swaps designated as fair value hedges:
| Notional Amount | ||||||||||||||||||||||||||
| Hedged Item | Nature of Swap | As of September 30, 2026 | As of December 31, 2025 | Floating Interest Rate | ||||||||||||||||||||||
| 2014 Senior Notes due 2044 | Pay Floating/Receive Fixed | $ | $ | |||||||||||||||||||||||
| 2017 Senior Notes due 2028 | Pay Floating/Receive Fixed | |||||||||||||||||||||||||
| 2018 Senior Notes due 2029 | Pay Floating/Receive Fixed | |||||||||||||||||||||||||
| 2018 Senior Notes due 2048 | Pay Floating/Receive Fixed | |||||||||||||||||||||||||
| 2022 Senior Notes due 2052 | Pay Floating/Receive Fixed | |||||||||||||||||||||||||
| 2022 Senior Notes due 2032 | Pay Floating/Receive Fixed | |||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||
Refer to Note 13 for information on the cumulative amount of fair value hedging adjustments included in the carrying amount of the above hedged items.
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The following table summarizes the impact to the statements of operations of the Company’s interest rate swaps designated as fair value hedges:
| Total amounts of financial statement line item presented in the statements of operations in which the effects of fair value hedges are recorded | Amount of income/(loss) recognized in the consolidated statements of operations | ||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Interest expense, net | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Description | Location on Consolidated Statements of Operations | ||||||||||||||||||||||
| Net interest settlements and accruals on interest rate swaps | Interest expense, net | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||
| Fair value changes on interest rate swaps | Interest expense, net | $ | ( | $ | $ | ( | $ | ||||||||||||||||
| Fair value changes on hedged debt | Interest expense, net | $ | $ | ( | $ | $ | ( | ||||||||||||||||
Net investment hedges
Debt designated as net investment hedges
The Company has designated €500 million of the 2015 Senior Notes due 2027 and €750 million of the 2019 Senior Notes due 2030 as net investment hedges to mitigate FX exposure related to a portion of the Company’s euro net investment in certain foreign subsidiaries against changes in euro/USD exchange rates. These hedges are designated as accounting hedges under the applicable sections of ASC Topic 815 and will end upon the repayment of the notes in 2027 and 2030, respectively, unless terminated early at the discretion of the Company.
Cross currency swaps designated as net investment hedges
The Company enters into cross-currency swaps to mitigate FX exposure related to a portion of the Company’s net investment in certain foreign subsidiaries against changes in exchange rates. The following tables provide information on the cross-currency swaps designated as net investment hedges under ASC Topic 815:
As of September 30, 2026 | ||||||||||||||||||||||||||
| Pay | Receive | |||||||||||||||||||||||||
| Nature of Swap | Notional Amount (1) | Weighted Average Interest Rate | Notional Amount | Weighted Average Interest Rate | ||||||||||||||||||||||
| Pay Fixed/Receive Fixed | € | $ | ||||||||||||||||||||||||
| Pay Floating/Receive Floating | € | $ | ||||||||||||||||||||||||
| Pay Fixed/Receive Fixed | HK$ | —% | $ | |||||||||||||||||||||||
| Pay Fixed/Receive Fixed | S$ | —% | HK$ | |||||||||||||||||||||||
As of December 31, 2025 | ||||||||||||||||||||||||||
| Pay | Receive | |||||||||||||||||||||||||
| Nature of Swap | Notional Amount (1) | Weighted Average Interest Rate | Notional Amount | Weighted Average Interest Rate | ||||||||||||||||||||||
| Pay Fixed/Receive Fixed | € | $ | ||||||||||||||||||||||||
| Pay Floating/Receive Floating | € | $ | ||||||||||||||||||||||||
| Pay Fixed/Receive Fixed | HK$ | —% | $ | |||||||||||||||||||||||
| Pay Fixed/Receive Fixed | S$ | —% | HK$ | |||||||||||||||||||||||
(1) € = euro, HK$ = Hong Kong dollar, S$ = Singapore dollar
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As of September 30, 2026 these hedges will expire and the notional amounts will be settled as follows unless terminated early at the discretion of the Company:
EUR/USD | HKD/USD | SGD/HKD | ||||||||||||||||||||||||||||||||||||
| Years Ending December 31, | Notional Amount (Pay) (1) | Notional Amount (Receive) | Notional Amount (Pay) (1) | Notional Amount (Receive) | Notional Amount (Pay) (1) | Notional Amount (Receive) (1) | ||||||||||||||||||||||||||||||||
| 2027 | € | $ | HK$ | $ | S$ | HK$ | ||||||||||||||||||||||||||||||||
| 2028 | ||||||||||||||||||||||||||||||||||||||
| 2029 | ||||||||||||||||||||||||||||||||||||||
| 2030 | ||||||||||||||||||||||||||||||||||||||
| 2031 | ||||||||||||||||||||||||||||||||||||||
| 2032 | ||||||||||||||||||||||||||||||||||||||
| 2033 | ||||||||||||||||||||||||||||||||||||||
| 2036 | ||||||||||||||||||||||||||||||||||||||
| Total | € | $ | HK$ | $ | S$ | HK$ | ||||||||||||||||||||||||||||||||
(1) € = euro, HK$ = Hong Kong dollar, S$ = Singapore dollar
The following table provides information on the gains/(losses) on the Company’s net investment and cash flow hedges:
| Derivative and Non-Derivative Instruments in Net Investment Hedging Relationships | Amount of Gain/(Loss) Recognized in AOCL on Derivative, net of Tax | Amount of Loss Reclassified from AOCL into Income, net of Tax | Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) | |||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||
| Cross currency swaps | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Long-term debt | ( | |||||||||||||||||||||||||||||||||||||
| Total net investment hedges | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Derivatives in Cash Flow Hedging Relationships | ||||||||||||||||||||||||||||||||||||||
| Cross currency swap | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Interest rate contracts | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||
| Total cash flow hedges | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||
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| Derivative and Non-Derivative Instruments in Net Investment Hedging Relationships | Amount of Gain/(Loss) Recognized in AOCL on Derivative, net of Tax | Amount of Loss Reclassified from AOCL into Income, net of Tax | Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) | |||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||
| Cross currency swaps | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Long-term debt | ( | |||||||||||||||||||||||||||||||||||||
| Total net investment hedges | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Derivatives in Cash Flow Hedging Relationships | ||||||||||||||||||||||||||||||||||||||
Cross currency swaps | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Interest rate contracts | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total cash flow hedges | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||
The cumulative amount of net investment hedge and cash flow hedge gains (losses) remaining in AOCL is as follows:
Cumulative Gains (Losses), net of tax | |||||||||||
| September 30, 2026 | December 31, 2025 | ||||||||||
Net investment hedges | |||||||||||
| Cross currency swaps | $ | ( | $ | ( | |||||||
| FX forwards | |||||||||||
| Long-term debt | ( | ( | |||||||||
| Total net investment hedges | $ | ( | $ | ( | |||||||
| Cash flow hedges | |||||||||||
| Interest rate contracts | $ | ( | $ | ( | |||||||
| Cross currency swaps | |||||||||||
| Total cash flow hedges | ( | ( | |||||||||
| Total net gain in AOCL | $ | ( | $ | ( | |||||||
Derivatives not designated as accounting hedges:
Foreign exchange forwards
The Company also enters into foreign exchange forward contracts to mitigate the change in fair value on certain assets and liabilities denominated in currencies other than a subsidiary’s functional currency. These forward contracts are not designated as accounting hedges under the applicable sections of ASC Topic 815. Accordingly, changes in the fair value of these contracts are recognized immediately in other non-operating income, net, in the Company’s consolidated statements of operations along with the FX gain or loss recognized on the assets and liabilities denominated in a currency other than the subsidiary’s functional currency. These contracts have expiration dates at various times through December 2026.
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The following table summarizes the notional amounts of the Company’s outstanding foreign exchange forwards:
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||
Notional amount of currency pair (1): | Sell | Buy | Sell | Buy | |||||||||||||||||||||||||
| Contracts to sell USD for GBP | $ | £ | $ | £ | |||||||||||||||||||||||||
Contracts to sell USD for JPY | $ | ¥ | $ | ¥ | |||||||||||||||||||||||||
Contracts to sell USD for CAD | $ | C$ | $ | C$ | |||||||||||||||||||||||||
Contracts to sell USD for SGD | $ | S$ | $ | S$ | |||||||||||||||||||||||||
Contracts to sell USD for EUR | $ | € | $ | € | |||||||||||||||||||||||||
Contracts to sell USD for INR | $ | ₹ | $ | ₹ | |||||||||||||||||||||||||
Contracts to sell EUR for USD | € | $ | € | $ | |||||||||||||||||||||||||
| Contracts to sell AUD for USD | A$ | $ | A$ | $ | |||||||||||||||||||||||||
(1) € = euro, £ = British pound, S$ = Singapore dollar, $ = U.S. dollar, ¥ = Japanese yen, C$ = Canadian dollar, ₹= Indian Rupee, A$ = Australian dollar | |||||||||||||||||||||||||||||||||||||||||||||||
Total Return Swaps
The Company has entered into total return swaps to mitigate market-driven changes in the value of certain liabilities associated with the Company's deferred compensation plans. The fair value of these swaps at September 30, 2026 and related gains in the three and nine months ended September 30, 2026 were not material. The notional amount of the total return swaps as of September 30, 2026 and December 31, 2025 was $71 million and $72 million, respectively.
The following table summarizes the impact to the consolidated statements of operations relating to the gains (losses) on the Company’s derivatives which are not designated as hedging instruments:
| Derivatives not designated as accounting hedges | Location on Consolidated Statements of Operations | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| FX forwards | Other non-operating income, net | $ | $ | ( | $ | ( | $ | ||||||||||||||||
| Total return swaps | Operating expense | $ | ( | $ | $ | $ | |||||||||||||||||
| Total return swaps | SG&A expense | $ | $ | $ | $ | ||||||||||||||||||
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The table below shows the classification between assets and liabilities on the Company’s consolidated balance sheets for the fair value of the derivative instrument as well as the carrying value of its non-derivative debt instruments designated and qualifying as net investment hedges:
| Derivative and Non-Derivative Instruments | ||||||||||||||||||||
| Balance Sheet Location | September 30, 2026 | December 31, 2025 | ||||||||||||||||||
| Assets: | ||||||||||||||||||||
| Derivatives designated as accounting hedges: | ||||||||||||||||||||
| Cross-currency swaps designated as net investment hedges | Other assets | $ | $ | |||||||||||||||||
| Derivatives not designated as accounting hedges: | ||||||||||||||||||||
| FX forwards on certain assets and liabilities | Other current assets | |||||||||||||||||||
| Total assets | $ | $ | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Derivatives designated as accounting hedges: | ||||||||||||||||||||
| Cross-currency swaps designated as net investment hedges | Accounts payable and accrued liabilities | $ | $ | |||||||||||||||||
Interest rate swaps designated as fair value hedges | Accounts payable and accrued liabilities | |||||||||||||||||||
| Cross-currency swaps designated as net investment hedges | Other liabilities | |||||||||||||||||||
| Interest rate swaps designated as fair value hedges | Other liabilities | |||||||||||||||||||
| Total derivatives designated as accounting hedges | ||||||||||||||||||||
| Non-derivatives designated as accounting hedges: | ||||||||||||||||||||
Debt designated as net investment hedge | Current portion of long-term debt | |||||||||||||||||||
Debt designated as net investment hedge | Long-term debt | |||||||||||||||||||
Total non-derivatives designated as accounting hedges | ||||||||||||||||||||
| Derivatives not designated as accounting hedges: | ||||||||||||||||||||
| FX forwards on certain assets and liabilities | Accounts payable and accrued liabilities | |||||||||||||||||||
| Total liabilities | $ | $ | ||||||||||||||||||
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NOTE 8. GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS
The following table summarizes the activity in goodwill for the periods indicated:
| Nine Months Ended September 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| MA | MIS | Consolidated | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross goodwill | Accumulated impairment charge | Net goodwill | Gross goodwill | Accumulated impairment charge | Net goodwill | Gross goodwill | Accumulated impairment charge | Net goodwill | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at beginning of year | $ | $ | ( | $ | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Additions/ adjustments (1) | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | ( | — | ( | ( | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Adjustment related to divestiture of business (2) | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Ending balance | $ | $ | ( | $ | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
| Year Ended December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| MA | MIS | Consolidated | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross goodwill | Accumulated impairment charge | Net goodwill | Gross goodwill | Accumulated impairment charge | Net goodwill | Gross goodwill | Accumulated impairment charge | Net goodwill | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at beginning of year | $ | $ | ( | $ | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Additions/ adjustments (3) | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | ( | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification to assets held-for-sale (2) | ( | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Divestiture of business (4) | ( | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Ending balance | $ | $ | ( | $ | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
(1) The 2026 additions relate to the acquisitions of Fintellix and MERIS in 2026.
(2) The 2025 reclassification to assets held for sale for the MA segment relates to the divestiture of the MA Regulatory Solutions business. The 2026 change reflects adjustment to the goodwill allocated to the MA Regulatory Solutions business, which was divested in the second quarter of 2026, as more fully discussed in Note 11.
(3) The 2025 additions/adjustments primarily relate to the acquisition of CAPE Analytics and ICR Chile in 2025.
(4) The 2025 divestiture of business for the MA segment in the table above relates to the divestiture of the MA Learning Solutions Business.
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Acquired intangible assets and related amortization consisted of:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Customer relationships | $ | $ | |||||||||
| Accumulated amortization | ( | ( | |||||||||
| Net customer relationships | |||||||||||
| Software/product technology | |||||||||||
| Accumulated amortization | ( | ( | |||||||||
| Net software/product technology | |||||||||||
| Database | |||||||||||
| Accumulated amortization | ( | ( | |||||||||
| Net database | |||||||||||
| Trade names | |||||||||||
| Accumulated amortization | ( | ( | |||||||||
| Net trade names | |||||||||||
Other (1) | |||||||||||
| Accumulated amortization | ( | ( | |||||||||
| Net other | |||||||||||
Total acquired intangible assets, net | $ | $ | |||||||||
(1) Other intangible assets primarily consist of trade secrets, covenants not to compete, and acquired ratings methodologies and models.
Amortization expense relating to acquired intangible assets is as follows:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Amortization expense | $ | $ | $ | $ | |||||||||||||||||||
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NOTE 9. RESTRUCTURING
On December 19, 2024, the CEO of Moody’s approved the Strategic and Operational Efficiency Restructuring Program, the scope of which was expanded in July 2026. The Company currently estimates that upon completion, the program will result in annualized savings of $300 million to $350 million. This program relates to the Company's strategy to realign its operations toward high priority growth areas and to foster operating efficiency/leverage via simplification of organizational structures and technology enablement. This program will primarily include a reduction in staff, the rationalization and exit of certain leased office spaces, the retirement of certain legacy software applications, and the exit of certain businesses and product offerings, including the divestiture of the MA Regulatory Solutions business. The program includes $285 million to $330 million of expected pre-tax personnel and related restructuring charges, an amount that includes severance and other costs primarily determined under the Company's existing severance plans, expense related to the modification of equity awards, and additional costs to support the execution of the restructuring program. In addition, the program is expected to result in $5 million of non-cash charges from the exit from certain leased office spaces and $10 million to $15 million of non-cash charges related to incremental amortization of internally developed software due to a reduction in the useful life of the software assets. The savings generated from the Strategic and Operational Efficiency Restructuring Program are expected to strengthen the Company's operating margin, with a portion being deployed to support strategic investments. The Strategic and Operational Efficiency Restructuring Program is expected to be substantially complete by the end of 2027. Cash outlays associated with this program are expected to be $285 million to $330 million, which are expected to be paid through 2028.
Total expense included in the accompanying consolidated statements of operations relating to the aforementioned restructuring program is below:
| Three months ended September 30, | Nine months ended September 30, | Cumulative expense incurred | |||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||
| Strategic and Operational Efficiency Restructuring Program | |||||||||||||||||||||||||||||
Personnel and related costs (1) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Real estate-related costs (2) | |||||||||||||||||||||||||||||
Internally developed software-related charges (3) | |||||||||||||||||||||||||||||
| Total Restructuring | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
(1) Primarily includes severance costs, expense related to the modification of equity awards, professional service fees for assistance with the reorganization of the Company's workforce and operating model and costs associated with the divestiture of the MA Regulatory Solutions business.
(2) Includes the incremental amortization of ROU Assets that have been abandoned or for which abandonment is planned in future periods.
(3) Includes the incremental amortization in the period relating to a change in estimated useful lives for certain internally developed software that has been abandoned or for which abandonment is planned in future periods.
Changes to the restructuring liability for the aforementioned restructuring program were as follows:
Balance as of December 31, 2025 | $ | ||||
| Strategic and Operational Efficiency Restructuring Program: | |||||
Cash payments | ( | ||||
Balance as of September 30, 2026 (1) | $ | ||||
(1) Restructuring liability is primarily comprised of employee termination costs and other severance-related charges.
As of September 30, 2026, substantially all of the remaining $49 million restructuring liability is expected to be paid out in the next twelve months.
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NOTE 10. FAIR VALUE
The tables below present information about items that are carried at fair value at September 30, 2026 and December 31, 2025:
| Fair Value Measurement as of September 30, 2026 | |||||||||||||||||
| Description | Balance | Level 1 | Level 2 | ||||||||||||||
Assets: | |||||||||||||||||
Derivatives (1) | $ | $ | $ | ||||||||||||||
Money market funds/mutual funds | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
| Liabilities: | |||||||||||||||||
Derivatives (1) | $ | $ | $ | ||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
| Fair Value Measurement as of December 31, 2025 | |||||||||||||||||
| Description | Balance | Level 1 | Level 2 | ||||||||||||||
| Assets: | |||||||||||||||||
Derivatives (1) | $ | $ | $ | ||||||||||||||
Money market funds/mutual funds | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
| Liabilities: | |||||||||||||||||
Derivatives (1) | $ | $ | $ | ||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
(1) Represents fair value of certain derivative contracts as more fully described in Note 7 to the consolidated financial statements.
The following are descriptions of the methodologies utilized by the Company to estimate the fair value of its derivative contracts, money market mutual funds and mutual funds:
Derivatives:
In determining the fair value of the derivative contracts in the table above, the Company utilizes industry standard valuation models. Where applicable, these models project future cash flows and discount the future amounts to a present value using spot rates, forward points, currency volatilities, interest rates as well as the risk of non-performance of the Company and the counterparties with whom it has derivative contracts. The Company established strict counterparty credit guidelines and only enters into transactions with financial institutions that adhere to these guidelines. Accordingly, the risk of counterparty default is deemed to be minimal.
Money market funds and mutual funds:
The mutual funds in the table above are deemed to be equity securities with readily determinable fair values with changes in the fair value recognized through net income under ASC Topic 321. The fair value of these instruments is determined using Level 1 inputs as defined in the ASC Topic 820.
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NOTE 11. OTHER BALANCE SHEET AND STATEMENTS OF OPERATIONS INFORMATION
The following tables contain additional detail related to certain balance sheet captions:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Other current assets: | |||||||||||
| Prepaid taxes | $ | $ | |||||||||
| Prepaid expenses | |||||||||||
| Capitalized costs to obtain and fulfill sales contracts | |||||||||||
| Foreign exchange forwards on certain assets and liabilities | |||||||||||
| Interest receivable on interest rate and cross currency swaps | |||||||||||
Assets held-for-sale | |||||||||||
Consideration receivable from divestiture of business(1) | |||||||||||
| Other | |||||||||||
| Total other current assets | $ | $ | |||||||||
| Other assets: | |||||||||||
| Investments in non-consolidated affiliates | $ | $ | |||||||||
| Deposits for real-estate leases | |||||||||||
| Indemnification assets related to acquisitions | |||||||||||
Mutual funds, certificates of deposit and money market deposit accounts/funds | |||||||||||
| Company owned life insurance (at contract value) | |||||||||||
Capitalized costs to obtain sales contracts | |||||||||||
| Derivative instruments designated as accounting hedges | |||||||||||
| Pension and other retirement employee benefits | |||||||||||
| Other | |||||||||||
| Total other assets | $ | $ | |||||||||
| Accounts payable and accrued liabilities: | |||||||||||
| Salaries and benefits | $ | $ | |||||||||
| Incentive compensation | |||||||||||
| Customer credits, advanced payments and advanced billings | |||||||||||
| Dividends | |||||||||||
| Professional service fees | |||||||||||
Interest accrued on debt | |||||||||||
| Accounts payable | |||||||||||
| Income taxes | |||||||||||
Reserve for international non-income tax obligation | |||||||||||
| Pension and other retirement employee benefits | |||||||||||
| Accrued royalties | |||||||||||
| Foreign exchange forwards on certain assets and liabilities | |||||||||||
| Derivative instruments designated as accounting hedges | |||||||||||
| Restructuring liability | |||||||||||
| Interest payable on interest rate and cross currency swaps | |||||||||||
Liabilities held-for-sale | |||||||||||
| Other | |||||||||||
| Total accounts payable and accrued liabilities | $ | $ | |||||||||
(1) Represents the consideration related to the sale of the MA Regulatory Solutions business that became realizable during the second quarter and third quarter of 2026 following achievement of certain post-closing conditions, as discussed further in the "Gain on business divestitures" section below. | |||||||||||
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| September 30, 2026 | December 31, 2025 | ||||||||||
| Other liabilities: | |||||||||||
| Pension and other retirement employee benefits | $ | $ | |||||||||
| Interest accrued on UTPs | |||||||||||
| MAKS indemnification provisions | |||||||||||
| Derivative instruments designated as accounting hedges | |||||||||||
| Restructuring liability - non-current portion | |||||||||||
| Other | |||||||||||
| Total other liabilities | $ | $ | |||||||||
Investments in non-consolidated affiliates:
The following table provides additional detail regarding Moody's investments in non-consolidated affiliates, as included in other assets in the consolidated balance sheets:
| September 30, 2026 | December 31, 2025 | ||||||||||
Equity method investments (1) | $ | $ | |||||||||
Investments measured using the measurement alternative (2) | |||||||||||
| Other | |||||||||||
| Total investments in non-consolidated affiliates | $ | $ | |||||||||
(1) Equity securities in which the Company has significant influence over the investee but does not have a controlling financial interest in accordance with ASC Topic 323. | |||||||||||
(2) Equity securities without readily determinable fair value for which the Company has elected to apply the measurement alternative in accordance with ASC Topic 321. | |||||||||||
Moody's holds various investments accounted for under the equity method, the most significant of which is the Company's minority investment in CCXI. Moody's also holds various investments measured using the measurement alternative, the most significant of which is the Company's minority interest in BitSight.
Earnings from non-consolidated affiliates, which are included within other non-operating income, net, are disclosed within the table below.
Other non-operating income, net:
The following table summarizes the components of other non-operating income, net:
| Three months ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| FX losses | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net periodic pension income - non-service and non-interest cost components | |||||||||||||||||||||||
| Income from investments in non-consolidated affiliates | |||||||||||||||||||||||
Gain on investments | |||||||||||||||||||||||
Other | ( | ( | ( | ( | |||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
Gain on business divestitures:
MA Regulatory Solutions business
In the second quarter of 2026, the Company completed the sale of the MA Regulatory Solutions business, which resulted in a pre-tax gain of $179 million. During the third quarter of 2026, the Company recognized an additional pre-tax gain of $115 million related to the sale of this business, resulting in a cumulative pre-tax gain of $294 million on the transaction. The additional gain recognized during the third quarter of 2026 reflected additional consideration that became realizable upon satisfaction of certain post-closing conditions.
The Company's accounting policy is to recognize contingent consideration related to the sale of a business as a gain contingency in accordance with ASC 450, Contingencies. Under this policy, contingent consideration is excluded from the initial measurement of gain or loss upon the divestiture of a business and is recognized in earnings when the contingency is resolved and the consideration becomes realizable.
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MA Learning Solutions business
During the nine months ended September 30, 2026, the Company recorded an incremental $2 million pre-tax gain resulting from customary post-close purchase price adjustments related to the MA Learning Solutions business, which was divested in the fourth quarter of 2025. As a result, the total pre-tax gain on the divestiture of the MA Learning Solutions business was $25 million.
NOTE 12. COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS
The amounts reclassified out of AOCL, as shown in the consolidated statements of comprehensive income, were not material for all periods presented.
The following tables show changes in AOCL by component (net of tax):
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| Gains/(Losses) | Pension and Other Retirement Benefits | Cash Flow Hedges | Foreign Currency Translation Adjustments | Net Investment Hedges | Total | Pension and Other Retirement Benefits | Cash Flow Hedges | Foreign Currency Translation Adjustments | Net Investment Hedges | Total | |||||||||||||||||||||||||
Balance at June 30, | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Amounts reclassified from AOCL | |||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Balance at September 30, | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| Pension and Other Retirement Benefits | Cash Flow Hedges | Foreign Currency Translation Adjustments | Net Investment Hedges | Total | Pension and Other Retirement Benefits | Cash Flow Hedges | Foreign Currency Translation Adjustments | Net Investment Hedges | Total | ||||||||||||||||||||||||||
Balance at December 31, | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Amounts reclassified from AOCL | ( | ( | |||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Balance at September 30, | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
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NOTE 13. INDEBTEDNESS
The Company’s debt is recorded at its carrying value, which represents the issuance amount plus or minus any issuance premium or discount, except for certain debt as depicted in the table below, which is recorded at the carrying value adjusted for the fair value of an interest rate swap used to hedge the fair value of the note.
The following table summarizes total indebtedness:
| September 30, 2026 | |||||||||||||||||||||||||||||
| Notes Payable: | Principal Amount | Fair Value of Interest Rate Swaps (1) | Unamortized (Discount) Premium | Unamortized Debt Issuance Costs | Carrying Value | ||||||||||||||||||||||||
| $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||
| ( | ( | ( | |||||||||||||||||||||||||||
| ( | ( | ( | |||||||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||
| ( | ( | ( | |||||||||||||||||||||||||||
| ( | ( | ( | |||||||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||
Total debt | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||
| Current portion | ( | ||||||||||||||||||||||||||||
| Total long-term debt | $ | ||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||
| Notes Payable: | Principal Amount | Fair Value of Interest Rate Swaps (1) | Unamortized (Discount) Premium | Unamortized Debt Issuance Costs | Carrying Value | ||||||||||||||||||||||||
| $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||
| ( | ( | ( | |||||||||||||||||||||||||||
| ( | ( | ( | |||||||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||
| ( | ( | ( | |||||||||||||||||||||||||||
| ( | ( | ( | |||||||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||
Total long-term debt | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||
(1) The fair value of interest rate swaps in the tables above represents the cumulative amount of fair value hedging adjustments included in the carrying value of the hedged debt.
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Notes Payable
At September 30, 2026, the Company was in compliance with all covenants contained within all of the debt agreements. All of the debt agreements contain cross default provisions which state that default under one of the aforementioned debt instruments could in turn permit lenders under other debt instruments to declare borrowings outstanding under those instruments to be immediately due and payable. As of September 30, 2026, there were no such cross defaults.
The repayment schedule for the Company’s borrowings is as follows:
| Year Ending December 31, | Year Ending Total | ||||
2026 (After September 30,) | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | $ | ||||
Interest expense, net
The following table summarizes the components of interest as presented in the consolidated statements of operations and the cash paid for interest:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Income | $ | $ | $ | $ | |||||||||||||||||||
Expense on borrowings(1) | ( | ( | ( | ( | |||||||||||||||||||
Expense on UTPs and other tax related liabilities(2) | ( | ( | ( | ( | |||||||||||||||||||
| Net periodic pension costs - interest component | ( | ( | ( | ( | |||||||||||||||||||
| Interest expense, net | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Interest paid(3) | $ | $ | $ | $ | |||||||||||||||||||
(1) Expense on borrowings includes interest on long-term debt, as well as realized gains/losses related to interest rate and cross currency swaps, which are more fully discussed in Note 7.
(2) Interest expense on UTPs and other tax related liabilities in 2026 includes interest accrued relating to a reserve pursuant to an international non-income tax obligation.
(3) Interest paid includes net settlements on interest rate and cross currency swaps, which are more fully discussed in Note 7.
The fair value and carrying value of the Company’s debt as of September 30, 2026 and December 31, 2025 are as follows:
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||||||||||||||||||
| Total debt | $ | $ | $ | $ | |||||||||||||||||||
The fair value of the Company’s debt is estimated based on quoted prices in active markets as of the reporting date, which are considered Level 1 inputs within the fair value hierarchy.
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NOTE 14. LEASES
The Company has operating leases, substantially all of which relate to the lease of office space. The Company’s leases which are classified as finance leases are not material to the consolidated financial statements. Certain of the Company’s leases include options to renew, with renewal terms that can extend the lease term from one year to 20 years at the Company’s discretion.
The following table presents the components of the Company’s lease cost:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
| Sublease income | ( | ( | ( | ( | |||||||||||||||||||
| Variable lease cost | |||||||||||||||||||||||
| Total lease cost | $ | $ | $ | $ | |||||||||||||||||||
The following tables present other information related to the Company’s operating leases:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | $ | $ | $ | ||||||||||||||||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | $ | $ | $ | ||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||
Weighted-average remaining lease term | |||||||||||
Weighted-average discount rate applied to operating leases | % | % | |||||||||
The following table presents a maturity analysis of the future minimum lease payments included within the Company’s operating lease liabilities at September 30, 2026:
| Year Ending December 31, | Operating Leases | |||||||
2026 (After September 30,) | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| After 2030 | ||||||||
Total lease payments (undiscounted) (1) | ||||||||
| Less: Interest | ||||||||
| Present value of lease liabilities: | $ | |||||||
| Lease liabilities - current | $ | |||||||
| Lease liabilities - noncurrent | $ | |||||||
(1) Future minimum lease payments are presented net of tenant improvement allowance the Company expects to receive.
In the fourth quarter of 2025, the Company entered into an operating lease for a new headquarters in New York City. During the nine months ended September 30, 2026, the Company was granted access to approximately 90 % of the leased floors, resulting in lease commencement for those floors. Accordingly, the related ROU assets and operating lease liabilities were recognized and are reflected in the consolidated balance sheet as of September 30, 2026.
The Company has not yet been granted access to one remaining leased floor. Accordingly, the ROU assets and operating lease liabilities as of September 30, 2026 do not yet reflect the amounts associated with that floor. Future minimum lease payments related to the floor are approximately $50 million.
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NOTE 15. CONTINGENCIES
Given the nature of the Company's activities, Moody’s and its subsidiaries are subject to legal and tax proceedings, governmental, regulatory and legislative investigations, subpoenas and other inquiries, and claims and litigation by governmental and private parties that are based on ratings assigned by MIS or that are otherwise incidental to the Company’s business. Moody’s and MIS also are subject to periodic reviews, inspections, examinations and investigations by regulators in the U.S. and other jurisdictions, any of which may result in claims, legal proceedings, assessments, fines, penalties or restrictions on business activities. Moody’s also is subject to ongoing tax audits as addressed in Note 4 to the consolidated financial statements.
Management periodically assesses the Company’s liabilities and contingencies in connection with these matters based upon the latest information available. For claims, litigation and proceedings and governmental investigations and inquiries not related to income taxes, the Company records liabilities in the consolidated financial statements when it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated and periodically adjusts these as appropriate. When the reasonable estimate of the loss is within a range of amounts, the minimum amount of the range is accrued unless some higher amount within the range is a better estimate than another amount within the range. In instances when a loss is reasonably possible but uncertainties exist related to the probable outcome and/or the amount or range of loss, management does not record a liability but discloses the contingency if material. As additional information becomes available, the Company adjusts its assessments and estimates of such matters accordingly. Moody’s also discloses material pending legal proceedings pursuant to SEC rules and other pending matters as it may determine to be appropriate.
In view of the inherent difficulty of assessing the potential outcome of legal proceedings, governmental, regulatory and legislative investigations and inquiries, claims and litigation and similar matters and contingencies, particularly when the claimants seek large or indeterminate damages or assert novel legal theories or the matters involve a large number of parties, the Company often cannot predict what the eventual outcome of the pending matters will be or the timing of any resolution of such matters. The Company also may be unable to predict the impact (if any) that any such matters may have on how its business is conducted, on its competitive position or on its financial position, results of operations or cash flows. As the process to resolve any pending matters progresses, management will continue to review the latest information available and assess its ability to predict the outcome of such matters and the effects, if any, on its operations and financial condition and to accrue for and disclose such matters as and when required. However, because such matters are inherently unpredictable and unfavorable developments or resolutions can occur, the ultimate outcome of such matters, including the amount of any loss, may differ from those estimates.
NOTE 16. SEGMENT INFORMATION
The Company is organized into two operating segments: MA and MIS and accordingly, the Company reports in two reportable segments: MA and MIS.
Revenue for MA and expenses for MIS include an intersegment fee charged to MIS from MA for certain MA products and services utilized in MIS’s ratings process. Additionally, revenue for MIS and expenses for MA include intersegment fees charged to MA for the rights to use and distribute content, data and products developed by MIS. These intersegment fees are generally based on the market value of the products and services being transferred between the segments.
Overhead expenses include costs such as rent and occupancy, information technology and support staff such as finance, human resources and legal. Such costs and corporate expenses that exclusively benefit one segment are fully charged to that segment.
For overhead costs and corporate expenses that benefit both segments, costs are generally allocated to each segment based on historical/budgeted revenue amounts.
“Eliminations” in the following table represent intersegment revenue/expense. Moody’s does not report the Company’s assets by reportable segment, as this metric is not used by the CODM to allocate resources to the segments. Consequently, it is not practical to show assets by reportable segment.
Financial Information by Segment
The table below shows revenue, significant expenses regularly provided to the CODM and Adjusted Operating Income by reportable segment. The CODM, identified as the Company's CEO, utilizes the Adjusted Operating Income measure to assess the profitability of the Company and each of its reportable segments each quarter. Adjusted Operating Income is used in our budgeting and forecasting process, enabling the allocation of capital resources across the Company's strategic initiatives.
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Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| MA | MIS | Eliminations | Consolidated | MA | MIS | Eliminations | Consolidated | ||||||||||||||||||||||||||||||||||||||||
| Total external revenue | $ | $ | $ | — | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||||||||||||||||
| Intersegment revenue | ( | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||
| Revenue | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Compensation expense | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Non-compensation expense | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Intersegment expense | ( | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||
| Total | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Adjusted Operating Income | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring | |||||||||||||||||||||||||||||||||||||||||||||||
| Duplicate Rent | |||||||||||||||||||||||||||||||||||||||||||||||
| Charges related to asset abandonment | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating Income | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Non-operating income (expense), net | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||
Income before provision for income taxes | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| MA | MIS | Eliminations | Consolidated | MA | MIS | Eliminations | Consolidated | ||||||||||||||||||||||||||||||||||||||||
| Total external revenue | $ | $ | $ | — | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||||||||||||||||
| Intersegment revenue | ( | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||
| Revenue | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Compensation expense | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Non-compensation expense | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Intersegment expense | ( | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||
Total | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Adjusted Operating Income | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring | |||||||||||||||||||||||||||||||||||||||||||||||
Reserve for international non-income tax obligation | |||||||||||||||||||||||||||||||||||||||||||||||
| Duplicate Rent | |||||||||||||||||||||||||||||||||||||||||||||||
| Charges related to asset abandonment | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating Income | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Non-operating income (expense), net | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||
Income before provision for income taxes | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
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The table below shows cumulative restructuring expense incurred through September 30, 2026 by reportable segment.
| MA | MIS | Total | |||||||||||||||
Strategic and Operational Efficiency Restructuring Program | $ | $ | $ | ||||||||||||||
The costs expected to be incurred related to the Strategic and Operational Efficiency Restructuring Program are $215 million to $240 million for the MA segment and $85 million to $110 million for the MIS segment, which include allocations of charges associated with corporate functions. This restructuring program is more fully discussed in Note 9.
Consolidated Revenue Information by Geographic Area
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| United States | $ | $ | $ | $ | |||||||||||||||||||
| Non-U.S.: | |||||||||||||||||||||||
| EMEA | |||||||||||||||||||||||
| Asia-Pacific | |||||||||||||||||||||||
| Americas | |||||||||||||||||||||||
| Total Non-U.S. | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
This discussion and analysis of financial condition and results of operations should be read in conjunction with the Moody’s Corporation consolidated financial statements and notes thereto included elsewhere in this quarterly report on Form 10–Q.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains Forward-Looking Statements. See “Forward-Looking Statements” commencing on page 87 for a discussion of uncertainties, risks and other factors associated with these statements.
THE COMPANY
In a world shaped by increasingly interconnected risks, Moody's data, insights, and innovative technologies help customers develop a holistic view of their world and unlock opportunities. Moody’s offerings are distinguished by our vast proprietary and curated data and validated analytical models, which provide the trusted foundation that enables our customers to navigate an increasingly complex risk landscape. Moody’s solutions enable the transformation of information into decision-grade intelligence, which is deeply interconnected across risk domains. Moody's also offers valuable insights into financial stability and creditworthiness for organizations, debt instruments, and securities, serving a key role in bringing transparency to the global debt markets. With a rich history of experience in global markets and a diverse workforce of approximately 16,000 across more than 40 countries, Moody's gives customers the comprehensive perspective needed to act with confidence and thrive in a dynamic global environment. Moody’s has two reportable segments: MA and MIS.
Moody's Analytics | Moody's Investors Service | ||||
MA provides curated data, intelligence and analytical tools to help business and financial leaders make confident decisions. | For more than 115 years, MIS has been a leading provider of credit ratings, research, and risk analysis helping businesses, governments, and other entities around the globe. | ||||
MA comprises three interconnected businesses: i) Research & Insights, which provides credit research, economic analysis and scenario modeling used in investment, risk, and regulatory decisions; ii) Data & Information, which is powered by the world's largest database on companies and credit and serves as a critical input to financial analysis and AI model development/risk assessment; and iii) Decision Solutions, a set of cloud-based platforms embedding Moody's data and analytics directly into regulated banking, insurance, and KYC workflows. Together, these businesses benefit from deep customer integration, long-term subscription structures, and data assets that are proprietary in sourcing, breadth, and historical depth.
MIS publishes credit ratings and provides assessment services on a wide range of debt obligations, programs and facilities, and the entities that issue such obligations in markets worldwide, including various corporate, financial institution and governmental obligations, and structured finance securities.
Critical Accounting Estimates
Moody’s discussion and analysis of its financial condition and results of operations are based on the Company’s consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires Moody’s to make estimates and judgments that affect reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the dates of the financial statements and revenue and expenses during the reporting periods. These estimates are based on historical experience and on other assumptions that are believed to be reasonable under the circumstances. On an ongoing basis, Moody’s evaluates its estimates, including those related to goodwill and other acquired intangible assets, impairment of long-lived assets, pension and other retirement benefits, investments in non-consolidated affiliates, income taxes, and contingencies. Actual results may differ from these estimates under different assumptions or conditions. Item 7, MD&A, in the Company’s annual report on Form 10-K for the year ended December 31, 2025, includes descriptions of some of the judgments that Moody’s makes in applying its accounting estimates in these areas. Since the date of the annual report on Form 10-K, there have been no material changes to the Company’s critical accounting estimates disclosures.
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Goodwill
At July 31 of each year, Moody’s evaluates its goodwill for impairment at the reporting unit level, defined as an operating segment (i.e., MA and MIS), or one level below an operating segment (i.e., a component of an operating segment).
The Company has three reporting units: two within the Company’s ratings business (one for the ICRA business and one that encompasses all of Moody’s other ratings operations) and one reporting unit within MA.
At July 31, 2026, the Company performed qualitative assessments for each of the three reporting units. These qualitative assessments resulted in the Company determining that it was not more likely than not that the fair value of any reporting unit was less than its carrying amount.
Reportable Segments
The Company is organized into two reportable segments as of September 30, 2026: MA and MIS, which are more fully described in the section entitled “The Company” above and in Note 16 to the consolidated financial statements.
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RESULTS OF OPERATIONS
The following footnotes are applicable throughout the discussion of the Company's results of operations:
(1) Refer to the section entitled "Non-GAAP Financial Measures" of this MD&A for the definition and methodology that the Company utilizes to calculate this metric.
(2) Refer to the section entitled "Key Performance Metrics" of this MD&A for the definition and methodology that the Company utilizes to calculate this metric.
Three months ended September 30, 2026 compared with three months ended September 30, 2025
Executive Summary
The following table provides an executive summary of key operating results for the quarter ended September 30, 2026. Following this executive summary is a more detailed discussion of the Company’s operating results as well as a discussion of the operating results of the Company’s reportable segments.
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Three Months Ended September 30, | ||||||||||||||
| Financial measure: | 2026 | 2025 | % Change Favorable (Unfavorable) | Insight and Key Drivers of Change Compared to Prior Year | ||||||||||
| Moody's total revenue | $ | 2,023 | $ | 2,007 | 1 | % | — reflects growth in MA partially offset by modestly lower MIS revenue | |||||||
| MA external revenue | $ | 936 | $ | 909 | 3 | % | — sustained demand for insurance offerings and cloud-based banking and KYC solutions within Decision Solutions; partially offset by — the impacts of the MA Learning Solutions and MA Regulatory Solutions divestitures — continued demand for ratings data feeds, credit research product offerings and company data applications — Organic constant currency revenue(1) and ARR(2) both increased 8% | |||||||
| MIS external revenue | $ | 1,087 | $ | 1,098 | (1 | %) | — lower issuance activity in leveraged finance within CFG driven by a challenging prior-year quarter comparative and increased market volatility; partially offset by — increased investment-grade issuance supported by continued AI-related financing, including activity from hyperscalers in the technology sector; and — increased PPIF issuance driven by higher U.S. Public Finance and Sovereign activity, as well as strong Project Finance issuance attributable to data center-related financing needs | |||||||
| Total operating and SG&A expenses | $ | 966 | $ | 945 | (2 | %) | — increases in costs to support operating growth, including technology infrastructure and AI usage costs; and — higher incentive compensation which aligns with actual/projected financial and operational performance relative to targets; partially offset by — the impact of recent business divestitures | |||||||
| Depreciation and amortization | $ | 124 | $ | 123 | (1 | %) | — in line with the prior year | |||||||
| Restructuring | $ | 27 | $ | 21 | (29 | %) | — relates to the Company's restructuring program, more fully discussed in Note 9 to the consolidated financial statements | |||||||
| Total non-operating income (expense), net | $ | 62 | $ | (50) | 224 | % | — a gain in 2026 on the divestiture of the MA Regulatory Solutions business as more fully discussed in Note 11 to the consolidated financial statements | |||||||
| Operating margin | 44.8 | % | 45.7 | % | (90 | BPS) | — Operating margin and Adjusted Operating Margin(1) contraction reflects modest operating expense growth outpacing overall revenue growth | |||||||
Adjusted Operating Margin(1) | 52.6 | % | 52.9 | % | (30 | BPS) | ||||||||
| ETR | 24.0 | % | 25.4 | % | (140 | BPS) | — primarily reflects tax benefits recognized pursuant to the lapse of a statute of limitations related to tax exposures assumed in a prior-year M&A transaction, coupled with non-U.S.-related tax benefits | |||||||
| Diluted EPS | $ | 4.24 | $ | 3.60 | 18 | % | — increase in Diluted EPS primarily reflects the gain on the divestiture of the MA Regulatory Solutions business, coupled with a decrease in the diluted weighted average shares outstanding as a result of share repurchases | |||||||
Adjusted Diluted EPS(1) | $ | 4.14 | $ | 3.92 | 6 | % | — increase in Adjusted Diluted EPS(1) primarily reflects a decrease in the diluted weighted average shares outstanding as a result of share repurchases | |||||||
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Moody's Corporation
Three Months Ended September 30, | % Change Favorable (Unfavorable) | ||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| Revenue: | |||||||||||||||||
| United States | $ | 1,134 | $ | 1,118 | 1 | % | |||||||||||
| Non-U.S.: | |||||||||||||||||
| EMEA | 596 | 594 | — | % | |||||||||||||
| Asia-Pacific | 178 | 180 | (1 | %) | |||||||||||||
| Americas | 115 | 115 | — | % | |||||||||||||
| Total Non-U.S. | 889 | 889 | — | % | |||||||||||||
| Total | 2,023 | 2,007 | 1 | % | |||||||||||||
| Expenses: | |||||||||||||||||
| Operating | 524 | 492 | (7 | %) | |||||||||||||
| SG&A | 442 | 453 | 2 | % | |||||||||||||
| Depreciation and amortization | 124 | 123 | (1 | %) | |||||||||||||
| Restructuring | 27 | 21 | (29 | %) | |||||||||||||
Charges related to asset abandonment | — | 1 | 100 | % | |||||||||||||
| Total | 1,117 | 1,090 | (2 | %) | |||||||||||||
| Operating income | $ | 906 | $ | 917 | (1 | %) | |||||||||||
Adjusted Operating Income(1) | $ | 1,064 | $ | 1,062 | — | % | |||||||||||
| Interest expense, net | $ | (54) | $ | (58) | 7 | % | |||||||||||
| Other non-operating income, net | 1 | 8 | (88 | %) | |||||||||||||
| Gain on business divestitures | 115 | — | NM | ||||||||||||||
| Non-operating income (expense), net | $ | 62 | $ | (50) | 224 | % | |||||||||||
| Net income attributable to Moody's | $ | 734 | $ | 646 | 14 | % | |||||||||||
| Diluted weighted average shares outstanding | 173.3 | 179.6 | 4 | % | |||||||||||||
| Diluted EPS attributable to Moody's common shareholders | $ | 4.24 | $ | 3.60 | 18 | % | |||||||||||
Adjusted Diluted EPS(1) | $ | 4.14 | $ | 3.92 | 6 | % | |||||||||||
| Operating margin | 44.8 | % | 45.7 | % | |||||||||||||
Adjusted Operating Margin(1) | 52.6 | % | 52.9 | % | |||||||||||||
ETR | 24.0 | % | 25.4 | % | |||||||||||||
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The table below shows Moody’s global staffing by geographic area:
| September 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | % | |||||||||||||||||||||
| MA | U.S. | 2,688 | 2,853 | (6 | %) | ||||||||||||||||||
| Non-U.S. | 4,626 | 5,106 | (9 | %) | |||||||||||||||||||
Total(3) | 7,314 | 7,959 | (8 | %) | |||||||||||||||||||
| MIS | U.S. | 1,548 | 1,572 | (2 | %) | ||||||||||||||||||
| Non-U.S. | 4,659 | 4,257 | 9 | % | |||||||||||||||||||
Total(4) | 6,207 | 5,829 | 6 | % | |||||||||||||||||||
| MSS | U.S. | 655 | 680 | (4 | %) | ||||||||||||||||||
| Non-U.S. | 1,460 | 1,484 | (2 | %) | |||||||||||||||||||
| Total | 2,115 | 2,164 | (2 | %) | |||||||||||||||||||
| Total MCO | U.S. | 4,891 | 5,105 | (4 | %) | ||||||||||||||||||
| Non-U.S. | 10,745 | 10,847 | (1 | %) | |||||||||||||||||||
| Total | 15,636 | 15,952 | (2 | %) | |||||||||||||||||||
(3) Headcount decrease year over year is primarily due to business divestitures.
(4) Headcount increase year over year is primarily due to business acquisitions.
GLOBAL REVENUE
Three months ended September 30, | ||||||||||||||
2026-----------------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
Global revenue ⇑ $16 million | U.S. Revenue ⇑ $16 million | Non-U.S. Revenue was in line with prior year | |||||||||||||||
The 1% increase in global revenue reflects growth of 3% in MA, partially offset by a decline of 1% in MIS. On an organic constant currency basis, revenue(1) grew 3%. Refer to the section entitled “Segment Results” of this MD&A for a more comprehensive discussion of the Company’s segment revenue.
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Third Quarter Operating Expense ⇑ $32 million | ||
Compensation expenses of $372 million increased $8 million, reflecting: | Non-compensation expenses of $152 million increased $24 million, reflecting: | |||||||
| — higher incentive compensation which aligns with actual/projected financial and operational performance relative to targets | — increases in costs to support operating growth, including technology infrastructure and AI usage costs | |||||||
Third Quarter SG&A Expense ⇓ $11 million | ||
Compensation expenses of $278 million were generally in line with the prior year period | Non-compensation expenses of $164 million decreased $18 million, primarily reflecting: | ||||
| — lower charitable contributions compared to the prior year | |||||
| Depreciation and amortization | ||
Depreciation and amortization was generally in line with the prior year.
| Restructuring | ||
The amounts reflect charges and adjustments related to the Company's restructuring program, more fully discussed in Note 9 to the consolidated financial statements.
Operating margin 44.8%, ⇓ 90 BPS | Adjusted Operating Margin(1) 52.6%, ⇓ 30 BPS | ||||
Operating margin and Adjusted Operating Margin(1) contraction was driven by operating expense growth outpacing modest overall revenue growth.
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Interest Expense, net ⇓ $4 million | Other non-operating income ⇓ $7 million | ||||
| Interest expense decrease is primarily due to: | Decrease in income is primarily due to: | |||||||||||||
— lower interest expense on borrowings of $4 million, reflecting favorable impacts from fixed-to-floating interest rate swaps due to a lower interest rate environment compared with the prior year, as well as the maturity of certain swaps in prior periods; and | — the release of an indemnification asset of $8 million associated with the lapse of a statute of limitations related to tax exposures assumed in a prior-year M&A transaction(5) | |||||||||||||
— a $2 million reduction in tax-related interest expense primarily reflecting the lapse in the statute of limitations related to tax exposures assumed in a prior-year M&A transaction(5); partially offset by | ||||||||||||||
— a decrease in interest income of $5 million reflecting lower cash balances and lower interest rates | ||||||||||||||
(5) These amounts offset the tax benefit described in the ETR section below, and accordingly, have no impact to Net Income.
Gain on business divestitures ⇑ $115 million | ||
Primarily reflects the gain on divestiture of the MA Regulatory Solutions business.
ETR ⇓ 140 BPS | ||
The decrease in ETR primarily reflects tax benefits recognized pursuant to the lapse of a statute of limitations related to tax exposures assumed in a prior-year M&A transaction, for which the sellers had indemnified Moody's(5), coupled with non-U.S.-related tax benefits. The benefit related to the indemnified tax exposures including the associated reduction to Interest expense, net, was offset by the release of the related indemnification asset within Other non-operating income, net, resulting in no impact to Net Income.
Diluted EPS ⇑ $0.64 | Adjusted Diluted EPS(1) ⇑ $0.22 | ||||
The increase in Diluted EPS primarily reflects the gain on the divestiture of the MA Regulatory Solutions business, coupled with a decrease in the diluted weighted average shares outstanding as a result of share repurchases.
The increase in Adjusted Diluted EPS(1) primarily reflects a decrease in the diluted weighted average shares outstanding as a result of share repurchases.
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Segment Results
Moody’s Analytics
The table below provides a summary of revenue and operating results, followed by further insight and commentary:
Three Months Ended September 30, | % Change Favorable (Unfavorable) | ||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| Revenue: | |||||||||||||||||
| Decision Solutions (DS) | $ | 426 | $ | 424 | — | % | |||||||||||
| Research and Insights (R&I) | 260 | 252 | 3 | % | |||||||||||||
| Data and Information (D&I) | 250 | 233 | 7 | % | |||||||||||||
| Total external revenue | 936 | 909 | 3 | % | |||||||||||||
| Intersegment revenue | 3 | 3 | — | % | |||||||||||||
| Total MA revenue | 939 | 912 | 3 | % | |||||||||||||
| Expenses: | |||||||||||||||||
Compensation expense | 352 | 353 | — | % | |||||||||||||
Non-compensation expense | 205 | 196 | (5 | %) | |||||||||||||
| Total compensation and non-compensation expense | 557 | 549 | (1 | %) | |||||||||||||
| Intersegment expense | 51 | 50 | (2 | %) | |||||||||||||
| Total | 608 | 599 | (2 | %) | |||||||||||||
Adjusted Operating Income | $ | 331 | $ | 313 | 6 | % | |||||||||||
Adjusted Operating Margin | 35.3 | % | 34.3 | % | |||||||||||||
| Depreciation and amortization | 102 | 101 | (1 | %) | |||||||||||||
| Restructuring | 22 | 15 | (47 | %) | |||||||||||||
Charges related to asset abandonment | — | 1 | 100 | % | |||||||||||||
Reserve for international non-income tax obligation | — | — | NM | ||||||||||||||
| Duplicate Rent | 3 | — | NM | ||||||||||||||
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MOODY'S ANALYTICS REVENUE
Three months ended September 30, | ||
2026-----------------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
MA: Global revenue ⇑ $27 million | U.S. Revenue ⇑ $29 million | Non-U.S. Revenue ⇓ $2 million | ||||||
The 3% increase in global MA revenue reflects growth in the U.S. (8%), while international revenue was in line with prior year.
–Organic constant currency revenue(1) growth was 8%.
–Recurring revenue growth and organic constant currency recurring revenue(1) growth was 6% and 9%, respectively.
–ARR(2) increased 8%.
DECISION SOLUTIONS REVENUE
Three months ended September 30, | ||||||||||||||
2026-----------------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
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DS: Global revenue ⇑ $2 million | U.S. Revenue ⇑ $16 million | Non-U.S. Revenue ⇓ $14 million | ||||||
Global DS revenue for the three months ended September 30, 2026 and 2025 was comprised as follows:
Global DS revenue was in line with the third quarter of 2025 and reflects increases in the U.S. (10%), offset by a decline internationally (5%). DS recurring revenue grew 7%. Organic constant currency revenue(1) and organic constant currency recurring revenue(1) growth for DS was 12% and 13%, respectively, and ARR grew 10%.
The most notable drivers of the growth are as follows:
–Insurance revenue grew 9%
–recurring revenue growth of 10% was primarily attributable to continued demand for subscription-based revenue for catastrophe modeling tools
–ARR(2) grew 10%
–KYC revenue grew 8%
–recurring revenue growth of 9% reflects sustained demand and strong customer retention for KYC solutions
–ARR(2) grew 12%, reflecting the aforementioned strong demand for KYC solutions
–Banking revenue declined 16%, primarily reflecting the impact of both the MA Learning Solutions divestiture in the fourth quarter of 2025 and the divestiture of MA Regulatory Solutions in the second quarter of 2026. Organic constant currency revenue(1) growth for Banking was 19%
–recurring revenue was in line with the third quarter of 2025, primarily reflecting:
–the expansion of existing customer relationships to cloud-based subscription banking offerings that enable customers' lending, risk management and finance workflows; and
–an increase resulting from the timing of revenue recognition for installed software subscriptions;
offset by
– the impact of the MA Regulatory Solutions divestiture in the second quarter of 2026.
–Organic constant currency recurring revenue(1) grew 22%, reflecting the aforementioned growth drivers.
–Transaction revenue declined 88% reflecting the impact of the divestiture of the MA Learning Solutions business and MA's continued strategic shift to cloud-based subscription-based solutions.
–ARR(2) grew 8% reflecting the aforementioned expansion of existing customer relationships to cloud-based subscription banking offerings. The lower rate of ARR growth relative to organic constant currency recurring revenue growth primarily reflects the timing of revenue recognition for installed software subscriptions.
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RESEARCH AND INSIGHTS REVENUE
Three months ended September 30, | ||
2026-----------------------------------------------------------------------------------2025
___________________________________________________ ________________________________________________
R&I: Global revenue ⇑ $8 million | U.S. Revenue ⇑ $2 million | Non-U.S. Revenue ⇑ $6 million | ||||||
Global R&I revenue increased 3% compared to the third quarter of 2025 and reflects growth in both the U.S. (1%) and internationally (5%). Recurring revenue increased 4%.
The revenue increase was attributable to continued demand and strong customer retention for credit research product offerings.
ARR(2) increased 6%.
DATA AND INFORMATION REVENUE
Three months ended September 30, | ||
2026-----------------------------------------------------------------------------------2025
________________________________________________________________________________________________________
D&I: Global revenue ⇑ $17 million | U.S. Revenue ⇑ $11 million | Non-U.S. Revenue ⇑ $6 million | ||||||
Global D&I revenue increased 7% compared to the third quarter of 2025 and reflects growth in both the U.S. (13%) and internationally (4%). Constant currency revenue(1) growth for D&I was 8%.
This growth was primarily driven by continued strong demand for ratings data feeds and company data applications, which also contributed to a 7% increase in ARR(2).
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MA: Third Quarter Compensation and Non-Compensation Expense ⇑ $8 million | ||
Compensation expenses of $352 million decreased $1 million reflecting: | Non-compensation expenses of $205 million increased $9 million reflecting: | |||||||
— a decrease in salaries and benefits primarily attributable to the divestitures of MA Learning Solutions and MA Regulatory Solutions businesses, while the underlying expense was generally in line with the prior year; offset by | — increases in costs to support operating growth, including technology infrastructure and AI usage costs | |||||||
| — higher incentive compensation which aligns with actual/projected financial and operational performance relative to targets | ||||||||
MA: Adjusted Operating Margin 35.3% ⇑ 100 BPS | ||
Adjusted Operating Margin expansion primarily reflects the aforementioned 3% increase in global MA revenue, supported by operational efficiency/disciplined cost management.
| Depreciation and amortization | ||
Depreciation and amortization was generally in line with the prior year.
Restructuring | ||
The amounts reflect charges and adjustments related to the Company's restructuring program, more fully discussed in Note 9 to the consolidated financial statements.
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Moody’s Investors Service
The table below provides a summary of revenue and operating results, followed by further insight and commentary:
Three Months Ended September 30, | % Change Favorable (Unfavorable) | ||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| Revenue: | |||||||||||||||||
| Corporate finance (CFG) | $ | 530 | $ | 576 | (8 | %) | |||||||||||
| Structured finance (SFG) | 153 | 146 | 5 | % | |||||||||||||
| Financial institutions (FIG) | 213 | 208 | 2 | % | |||||||||||||
| Public, project and infrastructure finance (PPIF) | 179 | 161 | 11 | % | |||||||||||||
| Total ratings revenue | 1,075 | 1,091 | (1 | %) | |||||||||||||
| MIS Other | 12 | 7 | 71 | % | |||||||||||||
| Total external revenue | 1,087 | 1,098 | (1 | %) | |||||||||||||
| Intersegment revenue | 51 | 50 | 2 | % | |||||||||||||
| Total MIS revenue | 1,138 | 1,148 | (1 | %) | |||||||||||||
| Expenses: | |||||||||||||||||
Compensation expense | 299 | 284 | (5 | %) | |||||||||||||
Non-compensation expense | 103 | 112 | 8 | % | |||||||||||||
| Total compensation and non-compensation expense | 402 | 396 | (2 | %) | |||||||||||||
| Intersegment expense | 3 | 3 | — | % | |||||||||||||
| Total | 405 | 399 | (2 | %) | |||||||||||||
Adjusted Operating Income | $ | 733 | $ | 749 | (2 | %) | |||||||||||
Adjusted Operating Margin | 64.4 | % | 65.2 | % | |||||||||||||
| Depreciation and amortization | 22 | 22 | — | % | |||||||||||||
| Restructuring | 5 | 6 | 17 | % | |||||||||||||
| Duplicate Rent | 4 | — | NM | ||||||||||||||
The following chart presents changes in rated issuance volumes compared to the third quarter of 2025. To the extent that changes in rated issuance volumes had a material impact to MIS's revenue compared to the prior year, those impacts are discussed below.
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MOODY'S INVESTORS SERVICE REVENUE
Three months ended September 30, | ||||||||||||||
2026-----------------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
MIS: Global revenue ⇓ $11 million | U.S. Revenue ⇓ $13 million | Non-U.S. Revenue ⇑ $2 million | ||||||
The 1% decrease in global MIS revenue reflects a decline in the U.S. (2%), partially offset by growth internationally (1%).
The decrease is reflective of lower revenues within CFG, offset by growth across all other ratings LOBs, as discussed in further detail below.
CFG REVENUE
Three months ended September 30, | ||||||||||||||
2026-----------------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
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CFG: Global revenue ⇓ $46 million | U.S. Revenue ⇓ $27 million | Non-U.S. Revenue ⇓ $19 million | ||||||
Global CFG revenue for the three months ended September 30, 2026 and 2025 was comprised as follows:
* Other includes: recurring monitoring fees of a rated debt obligation and/or entities that issue such obligations as well as fees from programs such as commercial paper, medium term notes, and ICRA corporate finance revenue.
The decrease in CFG revenue of 8% reflects declines in the U.S. (7%) and internationally (11%).
Transaction revenue decreased $59 million compared to the same period in the prior year, which primarily reflected:
–a decrease in speculative-grade issuance reflecting increased market volatility; and
–lower bank loan issuance, primarily reflecting reduced refinancing activity compared with a strong prior-year;
partially offset by
–an increase in investment grade issuance, supported by continued AI‑related financing, including activity from hyperscalers in the technology sector as well as continued strong investor demand.
SFG REVENUE
Three months ended September 30, | ||||||||||||||
2026---------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
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SFG: Global revenue ⇑ $7 million | U.S. Revenue ⇓ $2 million | Non-U.S. Revenue ⇑ $9 million | ||||||
The increase in SFG revenue of 5% reflects growth internationally (24%), partially offset by a decline in the U.S. (2%).
–Organic constant currency revenue(1) growth for SFG was 3%.
Recurring revenue increased by $5 million, primarily reflecting the impact of annual price increases and higher monitored credits.
Transaction revenue increased $2 million compared to the third quarter of 2025, mainly attributable to:
–higher activity from asset-backed securities, covered bonds and RMBS, supported by strong investor demand and favorable spread conditions;
partially offset by:
–a decline in structured credit issuance compared to strong issuance in the prior year.
FIG REVENUE
Three months ended September 30, | ||||||||||||||
2026-----------------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
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FIG: Global revenue ⇑ $5 million | U.S. Revenue ⇑ $2 million | Non-U.S. Revenue ⇑ $3 million | ||||||
Global FIG revenue for the three months ended September 30, 2026 and 2025 was comprised as follows:
The increase in FIG revenue of 2% reflects growth in the U.S. (2%) and internationally (3%).
Recurring revenue increased by $6 million, primarily reflecting the impact of annual price increases and higher monitored credits.
PPIF REVENUE
Three months ended September 30, | ||||||||||||||
2026-----------------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
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PPIF: Global revenue ⇑ $18 million | U.S. Revenue ⇑ $13 million | Non-U.S. Revenue ⇑ $5 million | ||||||
Global PPIF revenue for the three months ended September 30, 2026 and 2025 was comprised as follows:
The increase in PPIF revenue of 11% reflects growth in the U.S. (12%) and internationally (9%).
Transaction revenue increased $15 million compared to the third quarter of 2025, which primarily reflected:
–an increase in U.S. Public Finance activity, driven by increased issuance across Housing, Healthcare and Regional sectors, as well as stronger Sovereign issuance; and
–higher U.S. project finance activity primarily driven by data center-related financing.
MIS: Third Quarter Compensation and Non-Compensation Expenses ⇑ $6 million | ||
Compensation expenses of $299 million increased $15 million reflecting: | Non-compensation expenses of $103 million decreased $9 million reflecting: | |||||||
| — growth in salaries and benefits primarily driven by annual salary increases and increased headcount, largely attributable to acquisitions; and | — lower charitable contributions compared to the prior year | |||||||
| — higher incentive compensation which aligns with actual/projected financial and operational performance relative to targets | ||||||||
MIS: Adjusted Operating Margin 64.4% ⇓ 80 BPS | ||
MIS Adjusted Operating Margin contraction primarily reflects the aforementioned modest decline in revenue coupled with a modest increase in total compensation and non-compensation costs.
Restructuring | ||
The amounts reflect charges and adjustments related to the Company's restructuring program, more fully discussed in Note 9 to the consolidated financial statements.
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Nine months ended September 30, 2026 compared with nine months ended September 30, 2025
Executive Summary
The following table provides an executive summary of key operating results for the nine months ended September 30, 2026. Following this executive summary is a more detailed discussion of the Company’s operating results as well as a discussion of the operating results of the Company’s reportable segments.
| Nine Months Ended September 30, | ||||||||||||||
| Financial measure: | 2026 | 2025 | % Change Favorable (Unfavorable) | Insight and Key Drivers of Change Compared to Prior Year | ||||||||||
| Moody's total revenue | $ | 6,287 | $ | 5,829 | 8 | % | — reflects revenue growth in both segments | |||||||
| MA external revenue | $ | 2,787 | $ | 2,656 | 5 | % | — sustained demand for insurance offerings and cloud-based KYC and banking solutions within Decision Solutions; partially offset by — the impacts of the MA Learning Solutions and MA Regulatory Solutions divestitures — continued demand for ratings data feeds, credit research product offerings and company data applications — Organic constant currency revenue(1) and ARR(2) both grew 8% | |||||||
| MIS external revenue | $ | 3,500 | $ | 3,173 | 10 | % | — strong investment‑grade issuance activity in CFG supported by AI‑related financing from hyperscalers in the technology sector; and — strong Project and Infrastructure Finance issuance activity related to data centers and broader build-out of technology infrastructure — Organic constant currency revenue(1) growth was 9% | |||||||
| Total operating and SG&A expenses | $ | 2,955 | $ | 2,807 | (5 | %) | — an increase in costs to support operating growth, including technology infrastructure and AI usage costs — a reserve recorded for an international non-income tax obligation; and — higher incentive compensation which aligns with actual/projected financial and operational performance relative to targets; partially offset by — the impact of business divestitures | |||||||
| Depreciation and amortization | $ | 372 | $ | 356 | (4 | %) | — higher amortization of internally developed software, primarily related to the development of MA cloud-based solutions | |||||||
| Restructuring | $ | 86 | $ | 81 | (6 | %) | — relates to the Company's restructuring programs. The Strategic and Operational Efficiency Restructuring Program is more fully discussed in Note 9 to the consolidated financial statements | |||||||
| Total non-operating income (expense), net | $ | 135 | $ | (138) | 198 | % | — a gain on the divestiture of the MA Regulatory Solutions business as more fully discussed in Note 11 to the consolidated financial statements | |||||||
| Operating margin | 45.7 | % | 44.3 | % | 140 BPS | — Operating margin and Adjusted Operating Margin(1) expansion reflects revenue growth coupled with disciplined cost management | ||||||||
Adjusted Operating Margin(1) | 53.7 | % | 51.8 | % | 190 BPS | |||||||||
| ETR | 24.4 | % | 24.2 | % | (20 BPS) | — in line with prior year | ||||||||
| Diluted EPS | $ | 12.98 | $ | 10.26 | 27 | % | — increase in Diluted EPS reflects growth in operating income and the gain on the divestiture of the MA Regulatory Solutions business, as well as a decrease in the diluted weighted average shares outstanding as a result of share repurchases | |||||||
Adjusted Diluted EPS(1) | $ | 13.14 | $ | 11.30 | 16 | % | — increase in Adjusted Diluted EPS(1) reflects growth in Adjusted Operating Income(1) coupled with a decrease in the diluted weighted average shares outstanding as a result of share repurchases | |||||||
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Moody’s Corporation
| Nine Months Ended September 30, | % Change Favorable (Unfavorable) | ||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| Revenue: | |||||||||||||||||
| United States | $ | 3,532 | $ | 3,175 | 11 | % | |||||||||||
| Non-U.S.: | |||||||||||||||||
| EMEA | 1,861 | 1,776 | 5 | % | |||||||||||||
| Asia-Pacific | 551 | 521 | 6 | % | |||||||||||||
| Americas | 343 | 357 | (4 | %) | |||||||||||||
| Total Non-U.S. | 2,755 | 2,654 | 4 | % | |||||||||||||
| Total | 6,287 | 5,829 | 8 | % | |||||||||||||
| Expenses: | |||||||||||||||||
| Operating | 1,573 | 1,472 | (7 | %) | |||||||||||||
| SG&A | 1,382 | 1,335 | (4 | %) | |||||||||||||
| Depreciation and amortization | 372 | 356 | (4 | %) | |||||||||||||
| Restructuring | 86 | 81 | (6 | %) | |||||||||||||
Charges related to asset abandonment | — | 4 | 100 | % | |||||||||||||
| Total | 3,413 | 3,248 | (5 | %) | |||||||||||||
| Operating income | $ | 2,874 | 2,581 | 11 | % | ||||||||||||
Adjusted Operating Income (1) | $ | 3,377 | 3,022 | 12 | % | ||||||||||||
| Interest expense, net | $ | (178) | (180) | 1 | % | ||||||||||||
| Other non-operating income, net | 17 | 42 | (60 | %) | |||||||||||||
| Gain on business divestitures | 296 | — | NM | ||||||||||||||
| Non-operating income (expense), net | $ | 135 | (138) | 198 | % | ||||||||||||
| Net income attributable to Moody’s | $ | 2,273 | $ | 1,849 | 23 | % | |||||||||||
| Diluted weighted average shares outstanding | 175.1 | 180.2 | 3 | % | |||||||||||||
| Diluted EPS attributable to Moody’s common shareholders | $ | 12.98 | $ | 10.26 | 27 | % | |||||||||||
Adjusted Diluted EPS (1) | $ | 13.14 | $ | 11.30 | 16 | % | |||||||||||
| Operating margin | 45.7 | % | 44.3 | % | |||||||||||||
Adjusted Operating Margin (1) | 53.7 | % | 51.8 | % | |||||||||||||
| Effective tax rate | 24.4 | % | 24.2 | % | |||||||||||||
GLOBAL REVENUE
Nine months ended September 30, | ||
2026-----------------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
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Global revenue ⇑ $458 million | U.S. Revenue ⇑ $357 million | Non-U.S. Revenue ⇑ $101 million | |||||||||||||||
Growth in global revenue reflected increases in both MA and MIS, both in the U.S. and internationally. Refer to the section entitled “Segment Results” of this MD&A for a more comprehensive discussion of the Company’s segment revenue.
YTD Operating Expense ⇑ $101 million | ||
Compensation expenses of $1,139 million increased $45 million, reflecting: | Non-compensation expenses of $434 million increased $56 million, reflecting: | |||||||
| — higher incentive compensation which aligns with actual/projected financial and operational performance relative to targets; and | — increases in costs to support operating growth, including technology infrastructure and AI usage costs | |||||||
| — growth in salaries and benefits primarily reflecting annual salary increases and higher employee benefit costs | ||||||||
YTD SG&A Expense ⇑ $47 million | ||
Compensation expenses of $856 million increased $38 million, reflecting: | Non-compensation expenses of $526 million increased $9 million, reflecting: | ||||
| — growth in salaries and benefits primarily reflecting annual salary increases and higher employee benefit costs; and | — a reserve recorded in the first quarter of 2026 for an international non-income tax obligation; partially offset by | ||||
| — higher incentive compensation which aligns with actual/projected financial and operational performance relative to targets | — lower charitable contributions compared to the prior year; and | ||||
| — lower professional services costs | |||||
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| Depreciation and amortization | ||
The increase is primarily driven by amortization of internally developed software, which relates to the development of MA cloud-based solutions.
| Restructuring | ||
The amounts reflect charges and adjustments related to the Company's restructuring program, more fully discussed in Note 9 to the consolidated financial statements.
Operating margin 45.7%, ⇑ 140 BPS | Adjusted Operating Margin(1) 53.7%, ⇑ 190 BPS | ||||
Operating margin and Adjusted Operating Margin(1) expansion reflects revenue growth of 8% coupled with disciplined cost management
Interest Expense, net ⇓ $2 million | Other non-operating income ⇓ $25 million | ||||
| The slight decrease in interest expense, net is primarily due to: | Decrease in income is primarily due to: | |||||||
— lower interest expense on borrowings of $28 million reflecting favorable impacts from fixed-to-floating interest rate swaps due to a lower interest rate environment compared with the prior year, coupled with the maturity of both debt and interest rate swaps; mostly offset by | — an increase in FX losses of $7 million | |||||||
— the release of an indemnification asset of $8 million associated with the lapse of a statute of limitations related to tax exposures assumed in a prior-year M&A transaction(6); and | ||||||||
— lower interest income of $21 million reflecting lower cash balances resulting from higher share repurchase activity coupled with lower interest rates | — accrued penalties of $3 million related to a reserve for an international non-income tax obligation | |||||||
(6) The $8 million release of the indemnification asset and a $2 million reduction in tax-related interest expense (included within Interest Expense, net), is offset by a $6 million tax benefit recognized pursuant to the lapse of a statute of limitations related to tax exposures assumed in a prior-year M&A transaction, for which the sellers had indemnified Moody's, and accordingly, has no impact to Net Income.
Gain on business divestitures ⇑ $296 million | ||
Primarily reflects the gain on divestiture of the MA Regulatory Solutions business.
ETR ⇑ 20 BPS | ||
The ETR was in line with the prior year.
Diluted EPS ⇑ $2.72 | Adjusted Diluted EPS(1) ⇑ $1.84 | ||||
The increase in Diluted EPS reflects:
–growth in operating income;
–the gain on the divestiture of the MA Regulatory Solutions business; and
–a decrease in the diluted weighted average shares outstanding as a result of share repurchases.
The increase in Adjusted Diluted EPS(1) reflects growth in Adjusted Operating Income(1) coupled with a decrease in the diluted weighted average shares outstanding as a result of share repurchases.
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Segment Results
Moody’s Analytics
The table below provides a summary of revenue and operating results, followed by further insight and commentary:
| Nine Months Ended September 30, | % Change Favorable (Unfavorable) | ||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| Revenue: | |||||||||||||||||
| Decision Solutions (DS) | $ | 1,281 | $ | 1,242 | 3 | % | |||||||||||
| Research and Insights (R&I) | 771 | 737 | 5 | % | |||||||||||||
| Data and Information (D&I) | 735 | 677 | 9 | % | |||||||||||||
| Total external revenue | 2,787 | 2,656 | 5 | % | |||||||||||||
| Intersegment revenue | 9 | 9 | — | % | |||||||||||||
| Total MA Revenue | 2,796 | 2,665 | 5 | % | |||||||||||||
| Expenses: | |||||||||||||||||
Compensation expense | 1,083 | 1,070 | (1 | %) | |||||||||||||
Non-compensation expense | 614 | 588 | (4 | %) | |||||||||||||
| Total compensation and non-compensation expense | 1,697 | 1,658 | (2 | %) | |||||||||||||
| Intersegment expense | 154 | 149 | (3 | %) | |||||||||||||
| Total | 1,851 | 1,807 | (2 | %) | |||||||||||||
Adjusted Operating Income | $ | 945 | $ | 858 | 10 | % | |||||||||||
Adjusted Operating Margin | 33.8 | % | 32.2 | % | |||||||||||||
| Depreciation and amortization | 304 | 292 | (4 | %) | |||||||||||||
| Restructuring | 69 | 59 | (17 | %) | |||||||||||||
Charges related to asset abandonment | — | 4 | 100 | % | |||||||||||||
| Reserve for international non-income tax obligation | 36 | — | NM | ||||||||||||||
| Duplicate Rent | 4 | — | NM | ||||||||||||||
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MOODY'S ANALYTICS REVENUE
Nine months ended September 30, | ||
2026-----------------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
MA: Global revenue ⇑ $131 million | U.S. Revenue ⇑ $81 million | Non-U.S. Revenue ⇑ $50 million | ||||||
The 5% increase in global MA revenue reflects growth both in the U.S. (7%) and internationally (3%).
–Organic constant currency revenue(1) growth was 8%.
–Recurring revenue growth and ARR(2) both increased 8%.
These increases are reflective of growth across all LOBs, as discussed in further detail below.
DECISION SOLUTIONS REVENUE
Nine months ended September 30, | ||
2026-----------------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
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DS: Global revenue ⇑ $39 million | U.S. Revenue ⇑ $40 million | Non-U.S. Revenue ⇓ $1 million | ||||||
Global DS revenue for the nine months ended September 30, 2026 and 2025 was comprised as follows:
Global DS revenue grew 3% compared to the first nine months of 2025 and reflects an increase in the U.S. (8%), while international revenue was in line with the prior period. Organic constant currency revenue(1) and organic constant currency recurring revenue(1) growth for DS was 10% and 12%, respectively. ARR(2) growth was 10%.
The most notable drivers of the growth are as follows:
–Insurance revenue grew 10%
–recurring revenue growth of 11% in Insurance was attributable to continued demand resulting in new sales for subscription-based catastrophe modeling solutions
–Organic constant currency revenue(1) growth for Insurance was 9%
–ARR(2) grew 10%, reflecting the aforementioned continued demand for subscription-based catastrophe modeling tools
–KYC revenue grew 12%
–recurring revenue growth of 13% in KYC reflects strong demand for KYC and compliance solutions reflecting increased customer and supplier risk data usage
–Both organic constant currency revenue(1) and organic constant currency recurring revenue(1) growth for KYC were 10%
–ARR(2) grew 12%, reflecting the aforementioned strong demand for KYC solutions
–Banking revenue declined 12%, primarily reflecting the impact of both the MA Learning Solutions divestiture in the fourth quarter of 2025 and the divestiture of MA Regulatory Solutions in the second quarter of 2026. Organic constant currency revenue(1) growth for Banking was 12%.
–recurring revenue growth of 4% within Banking reflected:
–expansion of existing customer relationships to cloud-based subscription banking offerings that enable customers' lending, risk management and finance workflows; and
–an increase resulting from the timing of revenue recognition for installed software subscriptions;
partially offset by:
– the divestiture of the MA Regulatory Solutions business.
–Organic constant currency recurring revenue(1) growth for Banking was 17% due to the aforementioned increase in cloud-based subscription banking offerings and timing of revenue recognition for installed software subscriptions
–Transaction revenue declined by 84%, reflecting the impact of the divestiture of the MA Learning Solutions business and MA's continued strategic shift to cloud-based subscription offerings
–ARR(2) grew 8% reflecting the aforementioned expansion of existing customer relationships to cloud-based subscription banking offerings. The lower rate of ARR growth relative to organic constant currency recurring revenue growth primarily reflects the timing of revenue recognition for installed software subscriptions.
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RESEARCH AND INSIGHTS REVENUE
Nine months ended September 30, | ||
2026-----------------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
R&I: Global revenue ⇑ $34 million | U.S. Revenue ⇑ $14 million | Non-U.S. Revenue ⇑ $20 million | ||||||
Global R&I revenue increased 5% compared to the first nine months of 2025 and reflects growth in both the U.S. (3%) and internationally (6%). Constant currency revenue(1) growth for R&I was 4%.
Recurring revenue growth and constant currency recurring revenue(1) growth were 5% and 4%, respectively.
The revenue increase was attributable to continued strong retention and demand for credit research product offerings, which contributed to ARR(2) growth of 6%.
DATA AND INFORMATION REVENUE
Nine months ended September 30, | ||
2026-----------------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
D&I: Global revenue ⇑ $58 million | U.S. Revenue ⇑ $27 million | Non-U.S. Revenue ⇑ $31 million | ||||||
Global D&I revenue increased 9% compared to the first nine months of 2025 and reflects growth in both the U.S. (11%) and internationally (7%).
This growth was mainly driven by continued strong demand for ratings data feeds and company data applications, coupled with a favorable impact from foreign currency translation.
Organic constant currency revenue(1) growth for D&I was 7%.
ARR(2) grew 7% for D&I.
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MA: YTD Compensation and Non-Compensation Expense ⇑ $39 million | ||
Compensation expenses of $1,083 million increased $13 million reflecting: | Non-compensation expenses of $614 million increased $26 million reflecting: | |||||||
| — growth in salaries and benefits, largely driven by unfavorable changes in foreign exchange rates, partially offset by the impact of business divestitures | — increases in costs to support operating growth, including technology infrastructure and AI usage costs | |||||||
MA: Adjusted Operating Margin 33.8% ⇑ 160 BPS | ||
Adjusted Operating Margin expansion primarily reflects the aforementioned 5% increase in global MA revenue, supported by operational efficiency/disciplined cost management.
| Depreciation and amortization | ||
| Restructuring | ||
The amounts reflect charges and adjustments related to the Company's restructuring program, more fully discussed in Note 9 to the consolidated financial statements.
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Moody’s Investors Service
The table below provides a summary of revenue and operating results, followed by further insight and commentary:
| Nine Months Ended September 30, | % Change Favorable (Unfavorable) | ||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| Revenue: | |||||||||||||||||
| Corporate finance (CFG) | $ | 1,814 | $ | 1,652 | 10 | % | |||||||||||
| Structured finance (SFG) | 441 | 419 | 5 | % | |||||||||||||
| Financial institutions (FIG) | 629 | 590 | 7 | % | |||||||||||||
| Public, project and infrastructure finance (PPIF) | 579 | 486 | 19 | % | |||||||||||||
| Total ratings revenue | 3,463 | 3,147 | 10 | % | |||||||||||||
| MIS Other | 37 | 26 | 42 | % | |||||||||||||
| Total external revenue | 3,500 | 3,173 | 10 | % | |||||||||||||
| Intersegment royalty | 154 | 149 | 3 | % | |||||||||||||
| Total | 3,654 | 3,322 | 10 | % | |||||||||||||
| Expenses: | |||||||||||||||||
Compensation expense | 912 | 844 | (8 | %) | |||||||||||||
Non-compensation expense | 301 | 305 | 1 | % | |||||||||||||
| Total compensation and non-compensation expense | 1,213 | 1,149 | (6 | %) | |||||||||||||
| Intersegment expense | 9 | 9 | — | % | |||||||||||||
| Total | 1,222 | 1,158 | (6 | %) | |||||||||||||
Adjusted Operating Income | $ | 2,432 | $ | 2,164 | 12 | % | |||||||||||
Adjusted Operating Margin | 66.6 | % | 65.1 | % | |||||||||||||
| Depreciation and amortization | 68 | 64 | (6 | %) | |||||||||||||
| Restructuring | 17 | 22 | 23 | % | |||||||||||||
| Duplicate Rent | 5 | — | NM | ||||||||||||||
The following chart presents changes in rated issuance volumes compared to the first nine months of 2025. To the extent that changes in rated issuance volumes had a material impact on MIS's revenue compared to the prior year, those impacts are discussed below.
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MOODY'S INVESTORS SERVICE REVENUE
Nine months ended September 30, | ||
2026-----------------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
MIS: Global revenue ⇑ $327 million | U.S. Revenue ⇑ $276 million | Non-U.S. Revenue ⇑ $51 million | ||||||
The 10% increase in global MIS revenue reflects growth in the U.S. (14%) and internationally (4%).
–Organic constant currency revenue(1) growth was 9%.
The increase is reflective of growth across all ratings LOBs, as discussed in further detail below.
CFG REVENUE
Nine months ended September 30, | ||
2026-----------------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
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CFG: Global revenue ⇑ $162 million | U.S. Revenue ⇑ $173 million | Non-U.S. Revenue ⇓ $11 million | ||||||
Global CFG revenue for the nine months ended September 30, 2026 and 2025 was comprised as follows:
* Other includes: recurring monitoring fees of a rated debt obligation and/or entities that issue such obligations as well as fees from programs such as commercial paper, medium term notes, and ICRA corporate finance revenue.
The increase in CFG revenue of 10% reflects growth in the U.S. (16%), partially offset by a decline in revenue internationally (2%).
–Organic constant currency revenue(1) growth for CFG was 9%.
Transaction revenue increased $127 million compared to the prior year, which primarily reflected strong investment-grade issuance activity supported by AI‑related financing, including activity from hyperscalers in the technology sector and continued strong investor demand.
Recurring revenue increased $35 million, primarily reflecting the impact of annual price increases and higher monitored credits.
SFG REVENUE
Nine months ended September 30, | ||
2026-----------------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
SFG: Global revenue ⇑ $22 million | U.S. Revenue ⇑ $5 million | Non-U.S. Revenue ⇑ $17 million | ||||||
Global SFG revenue for the nine months ended September 30, 2026 and 2025 was comprised as follows:
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The increase in SFG revenue of 5% reflects growth in both the U.S. (2%) and internationally (14%).
–Organic constant currency revenue(1) growth for SFG was 3%.
Transaction revenue increased $12 million compared to the same period in the prior year, primarily reflecting:
–higher asset-backed securities, RMBS and covered bonds activity, supported by strong investor demand;
partially offset by:
–a decline in structured credit issuance compared to strong issuance in the prior-year.
Recurring revenue increased $10 million, primarily reflecting the impact of annual price increases and higher monitored credits.
FIG REVENUE
Nine months ended September 30, | ||
2026-----------------------------------------------------------------------------------2025
_______________________________________________________________________________________________________
FIG: Global revenue ⇑ $39 million | U.S. Revenue ⇑ $29 million | Non-U.S. Revenue ⇑ $10 million | ||||||
Global FIG revenue for the nine months ended September 30, 2026 and 2025 was comprised as follows:
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The increase in FIG revenue of 7% reflects growth both in the U.S. (10%) and internationally (4%).
–Organic constant currency revenue(1) growth for FIG was 6%.
Transaction revenue increased $22 million compared to the same period in the prior year, reflecting increased volumes from issuers in the banking sector supported by favorable spreads and strong investor demand.
Recurring revenue increased $17 million, primarily reflecting the impact of annual price increases and higher monitored credits.
PPIF REVENUE
Nine months ended September 30, | ||
2026-----------------------------------------------------------------------------------2025
______________________________________________________________________________________________________
PPIF: Global revenue ⇑ $93 million | U.S. Revenue ⇑ $66 million | Non-U.S. Revenue ⇑ $27 million | ||||||
Global PPIF revenue for the nine months ended September 30, 2026 and 2025 was comprised as follows:
The 19% increase in PPIF revenue reflects growth in both the U.S. (21%) and internationally (16%).
–Constant currency revenue(1) growth for PPIF was 18%.
Transaction revenue increased $82 million compared to the same period in the prior year, primarily reflecting strong issuance in U.S. project and infrastructure finance related to data centers and broader build-out of technology infrastructure.
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MIS: YTD Compensation and Non-Compensation Expense ⇑ $64 million | ||
Compensation expenses of $912 million increased $68 million, reflecting: | Non-compensation expenses of $301 million were generally in line with the prior year | |||||||
| — growth in salaries and benefits primarily driven by annual salary increases and increased headcount, largely attributable to acquisitions; and | ||||||||
| — higher incentive compensation which aligns with actual/projected financial and operational performance relative to targets | ||||||||
Adjusted Operating Margin of 66.6% ⇑ 150 BPS | ||
MIS Adjusted Operating Margin expansion primarily reflects the aforementioned 10% increase in revenue and operating leverage in the business.
Restructuring Charges | ||
The amounts reflect charges and adjustments related to the Company's restructuring programs. The Strategic and Operational Efficiency Restructuring Program is more fully discussed in Note 9 to the consolidated financial statements.
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LIQUIDITY AND CAPITAL RESOURCES
Moody's remains committed to using its cash flow to create value for shareholders by both investing in the Company's employees and growing the business through targeted organic initiatives and inorganic acquisitions aligned with strategic priorities. Additional excess capital is returned to the Company’s shareholders via a combination of dividends and share repurchases.
Cash Flow
The following is a summary of the changes in the Company’s cash flows followed by a brief discussion of these changes:
| Nine Months Ended September 30, | $ Change Favorable (Unfavorable) | ||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| Net cash provided by operating activities | $ | 2,471 | $ | 2,043 | $ | 428 | |||||||||||
| Net cash (used in) provided by investing activities | $ | (130) | $ | 44 | $ | (174) | |||||||||||
| Net cash used in financing activities | $ | (3,190) | $ | (2,454) | $ | (736) | |||||||||||
Free Cash Flow (1) | $ | 2,200 | $ | 1,798 | $ | 402 | |||||||||||
(1) Free Cash Flow is a non-GAAP measure and is defined by the Company as net cash provided by operating activities minus cash paid for capital expenditures. Refer to “Non-GAAP Financial Measures” of this MD&A for further information on this financial measure.
Net cash provided by operating activities
Net cash flows from operating activities for the nine months ended September 30, 2026 increased by $428 million compared to the same period in 2025, with the most notable drivers reflecting:
–growth in operating income of $293 million coupled with various changes in working capital; and
–approximately $70 million in lower incentive compensation payments in 2026 (based on full-year 2025 financial and operating results) compared to payments made in the prior year (based on full-year 2024 financial and operating results).
Net cash (used in) provided by investing activities
The $174 million increase in cash used in investing activities in the nine months ended September 30, 2026 compared to the same period in 2025 was primarily due to:
–a $523 million decrease in sales and maturities of investments primarily due to the maturity of certificates of deposit in the first quarter of 2025, of which the proceeds were used to repay notes payable in the prior year;
partially offset by:
–cash received from the divestiture of businesses of $200 million, primarily relating to the sale of the MA Regulatory Solutions business in the second quarter of 2026; and
–lower cash paid for acquisitions (net of cash acquired) of $204 million, primarily due to amounts paid for the acquisition of CAPE Analytics in the first quarter of 2025.
Net cash used in financing activities
The $736 million increase in cash used in financing activities in the nine months ended September 30, 2026 compared to the same period in the prior year was primarily attributed to:
–higher cash paid for treasury share repurchases in 2026 of $1.4 billion compared to the same period in the prior year;
partially offset by:
–a $700 million repayment of notes payable in the prior year.
Cash and cash equivalents and short-term investments
The Company’s aggregate cash and cash equivalents and short-term investments of $1.6 billion at September 30, 2026 included approximately $1.3 billion located outside of the U.S. Approximately 28% of the Company’s aggregate cash and cash equivalents and short-term investments is denominated in EUR and GBP. The Company manages both its U.S. and non-U.S. cash flow to maintain sufficient liquidity in all regions to effectively meet its operating needs.
The Company regularly evaluates which entities will indefinitely reinvest earnings outside the U.S. The Company has provided deferred taxes for those entities whose earnings are not considered indefinitely reinvested. Accordingly, the Company continues to repatriate a portion of its non-U.S. cash in these subsidiaries and will continue to repatriate certain of its offshore cash in a manner that addresses compliance with local statutory requirements, sufficient offshore working capital and any other factors that may be relevant in certain jurisdictions. Notwithstanding the Tax Act, which generally eliminated federal income tax on future cash repatriation to the U.S., cash repatriation may be subject to state and local taxes or withholding or similar taxes.
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Material Cash Requirements
The Company's material cash requirements consist of the following contractual and other obligations:
Financing Arrangements
Indebtedness
At September 30, 2026, Moody’s had $7.1 billion of outstanding principal on debt and $1 billion of additional capacity available under the Company’s CP Program, which is backstopped by the $1.25 billion 2024 Facility.
The repayment schedule for the Company’s borrowings outstanding at September 30, 2026 is as follows:
For additional information on the Company's outstanding debt, refer to Note 13 to the consolidated financial statements.
Future interest payments and fees associated with the Company's debt and credit facility are expected to be $3.4 billion, of which approximately $200 million is expected to be paid in each of the next five years, and the remaining amount expected to be paid thereafter.
Management may consider pursuing additional long-term financing when it is appropriate in light of cash requirements for operations, share repurchases and other strategic opportunities, which could result in higher financing costs.
Purchase Obligations
Purchase obligations generally include multi-year agreements with vendors to purchase goods or services and mainly include data center/cloud hosting fees and fees for information technology licensing and maintenance. As of September 30, 2026, these purchase obligations totaled approximately $1.2 billion, of which approximately 40% is expected to be paid in the next twelve months and another approximate 45% is expected to be paid over the next two subsequent years, with the remainder to be paid thereafter.
Leases
The Company has remaining payments relating to its operating leases of approximately $1.0 billion at September 30, 2026, primarily related to real estate leases, of which approximately $100 million in payments are expected over the next twelve months. For more information on the expected cash flows relating to the Company's operating leases, refer to Note 14 to the consolidated financial statements.
Pension and Other Retirement Plan Obligations
The Company does not anticipate making significant contributions to its funded pension plan in the next twelve months. This plan is overfunded at September 30, 2026, and accordingly holds sufficient investments to fund future benefit obligations. Payments for the Company's unfunded plans are not expected to be material in either the short or long-term.
Dividends and share repurchases
On October 20, 2026, the Board approved the declaration of a quarterly dividend of $1.03 per share for Moody’s common stock, payable December 11, 2026 to shareholders of record at the close of business on November 20, 2026. The continued payment of dividends at this rate, or at all, is subject to the discretion of the Board.
On October 21, 2025, the Board approved $4.0 billion in share repurchase authority. At September 30, 2026, the Company had approximately $1.4 billion of remaining authority under this authorization.
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Restructuring
As more fully discussed in Note 9 to the consolidated financial statements, the Company is currently in the process of executing the Strategic and Operational Efficiency Restructuring Program. Future cash outlays associated with this program are expected to be approximately $110 million to $155 million, which are expected to be paid out through 2028.
Sources of Funding to Satisfy Material Cash Requirements
The Company believes that it has the financial resources needed to meet its cash requirements and expects to have positive operating cash flow over the next twelve months. Cash requirements for periods beyond the next twelve months will depend, among other things, on the Company’s profitability and its ability to manage working capital requirements. The Company may also borrow from various sources as described above.
NON-GAAP FINANCIAL MEASURES
In addition to its reported results, Moody’s has included in this MD&A certain adjusted results that the SEC defines as “Non-GAAP financial measures.” Management believes that such adjusted financial measures, when read in conjunction with the Company’s reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company’s performance, facilitate comparisons to competitors’ operating results and can provide greater transparency to investors of supplemental information used by management in its financial and operational decision-making. These adjusted measures, as defined by the Company, are not necessarily comparable to similarly defined measures of other companies. Furthermore, these adjusted measures should not be viewed in isolation or used as a substitute for other GAAP measures in assessing the operating performance or cash flows of the Company. Below are brief descriptions of the Company’s adjusted financial measures accompanied by a reconciliation of the adjusted measure to its most directly comparable GAAP measure:
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Adjusted Operating Income and Adjusted Operating Margin:
The Company presents Adjusted Operating Income and Adjusted Operating Margin because management deems these metrics to be useful measures to provide additional perspective on Moody's operating performance. Adjusted Operating Income excludes the impact of: i) depreciation and amortization; ii) restructuring charges/adjustments; iii) a reserve for an international non-income tax obligation; iv) Duplicate Rent expense incurred during the build-out and transition to the Company's new New York City headquarters; and v) charges related to asset abandonment. Depreciation and amortization are excluded because companies utilize productive assets of different estimated useful lives and use different methods of acquiring and depreciating productive assets. Restructuring charges/adjustments and charges related to asset abandonment, which the Company believes are not reflective of its ongoing operating cost structure, are excluded as the frequency and magnitude of these charges may vary widely across periods and companies. The reserve for an international non-income tax obligation is excluded because the Company believes it is not indicative of its ongoing operating cost structure. Duplicate Rent expense incurred during the build-out and transition to the Company's new New York City headquarters is excluded because it relates to an infrequent corporate headquarters relocation and is not indicative of the Company's ongoing operating cost structure.
Management believes that the exclusion of the aforementioned items, as detailed in the reconciliation below, allows for an additional perspective on the Company’s operating results from period to period and across companies. The Company defines Adjusted Operating Margin as Adjusted Operating Income divided by revenue.
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Operating income | $ | 906 | $ | 917 | $ | 2,874 | $ | 2,581 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Depreciation and amortization | 124 | 123 | 372 | 356 | |||||||||||||||||||
| Restructuring | 27 | 21 | 86 | 81 | |||||||||||||||||||
Reserve for international non-income tax obligation | — | — | 36 | — | |||||||||||||||||||
| Duplicate Rent | 7 | — | 9 | — | |||||||||||||||||||
| Charges related to asset abandonment | — | 1 | — | 4 | |||||||||||||||||||
| Adjusted Operating Income | $ | 1,064 | $ | 1,062 | $ | 3,377 | $ | 3,022 | |||||||||||||||
| Operating margin | 44.8 | % | 45.7 | % | 45.7 | % | 44.3 | % | |||||||||||||||
| Adjusted Operating Margin | 52.6 | % | 52.9 | % | 53.7 | % | 51.8 | % | |||||||||||||||
Adjusted Net Income and Adjusted Diluted EPS attributable to Moody's common shareholders:
The Company presents Adjusted Net Income and Adjusted Diluted EPS because management deems these metrics to be useful measures to provide additional perspective on Moody’s operating performance. Adjusted Net Income and Adjusted Diluted EPS exclude the impact of: i) amortization of acquired intangible assets; ii) restructuring charges/adjustments; iii) a reserve for an international non-income tax obligation and related interest and penalties; iv) charges related to asset abandonment; v) Duplicate Rent expense incurred during the build-out and transition to the Company's new New York City headquarters; and vi) gain on business divestitures.
The Company excludes the impact of amortization of acquired intangible assets as companies utilize intangible assets with different estimated useful lives and have different methods of acquiring and amortizing intangible assets. These intangible assets were recorded as part of acquisition accounting and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. Furthermore, the timing and magnitude of business combination transactions are not predictable and the purchase price allocated to amortizable intangible assets and the related amortization period are unique to each acquisition and can vary significantly from period to period and across companies. Restructuring charges/adjustments and charges related to asset abandonment, which the Company believes are not reflective of its ongoing operating cost structure, are excluded as the frequency and magnitude of these items may vary widely across periods and companies. The reserve for an international non-income tax obligation and related interest and penalties are excluded because the Company believes they are not indicative of its ongoing operating cost structure. Duplicate Rent expense incurred during the build-out and transition to the Company's new New York City headquarters is excluded because it relates to an infrequent corporate headquarters relocation and is not indicative of the Company's ongoing operating cost structure. Gain on business divestitures are excluded due to their infrequent nature and because they do not reflect the Company's ongoing operations.
The Company excludes the aforementioned items to provide additional perspective when comparing net income and diluted EPS from period to period and across companies as the frequency and magnitude of similar transactions may vary widely across periods.
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
Amounts in millions | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||
Net Income attributable to Moody's common shareholders | $ | 734 | $ | 646 | $ | 2,273 | $ | 1,849 | |||||||||||||||||||||||||||
Pre-tax acquisition-related intangible amortization | $ | 51 | $ | 55 | $ | 157 | $ | 163 | |||||||||||||||||||||||||||
Tax on acquisition-related intangible amortization | (12) | (14) | (38) | (40) | |||||||||||||||||||||||||||||||
Net acquisition-related intangible amortization | 39 | 41 | 119 | 123 | |||||||||||||||||||||||||||||||
Pre-tax restructuring | $ | 27 | $ | 21 | $ | 86 | $ | 81 | |||||||||||||||||||||||||||
Tax on restructuring | (7) | (5) | (22) | (20) | |||||||||||||||||||||||||||||||
| Net restructuring | 20 | 16 | 64 | 61 | |||||||||||||||||||||||||||||||
Pre-tax reserve for international non-income tax obligation and related interest and penalties | $ | — | $ | — | $ | 52 | $ | — | |||||||||||||||||||||||||||
Tax on reserve for international non-income tax obligation and related interest and penalties | — | — | (8) | — | |||||||||||||||||||||||||||||||
Net reserve for international non-income tax obligation and related interest and penalties | — | — | 44 | — | |||||||||||||||||||||||||||||||
Pre-tax charges related to asset abandonment | $ | — | $ | 1 | $ | — | $ | 4 | |||||||||||||||||||||||||||
Tax on charges related to asset abandonment | — | — | — | (1) | |||||||||||||||||||||||||||||||
Net charges related to asset abandonment | — | 1 | — | 3 | |||||||||||||||||||||||||||||||
Pre-tax Duplicate Rent | $ | 7 | $ | — | $ | 9 | $ | — | |||||||||||||||||||||||||||
Tax on Duplicate Rent | (2) | — | (2) | — | |||||||||||||||||||||||||||||||
Net charges related to Duplicate Rent | 5 | — | 7 | — | |||||||||||||||||||||||||||||||
| Pre-tax gain on divestiture of MA Regulatory Solutions | $ | (115) | $ | — | $ | (294) | $ | — | |||||||||||||||||||||||||||
Pre-tax gain on divestiture of MA Learning Solutions | $ | — | $ | — | $ | (2) | $ | — | |||||||||||||||||||||||||||
| Tax on gain on business divestitures | 34 | — | 89 | — | |||||||||||||||||||||||||||||||
| Net gain on business divestitures | (81) | — | (207) | — | |||||||||||||||||||||||||||||||
| Adjusted Net Income | $ | 717 | $ | 704 | $ | 2,300 | $ | 2,036 | |||||||||||||||||||||||||||
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| Diluted earnings per share attributable to Moody's common shareholders | $ | 4.24 | $ | 3.60 | $ | 12.98 | $ | 10.26 | |||||||||||||||||||||||||||
Pre-tax acquisition-related intangible amortization | $ | 0.29 | $ | 0.31 | $ | 0.90 | $ | 0.90 | |||||||||||||||||||||||||||
Tax on acquisition-related intangible amortization | (0.07) | (0.09) | (0.22) | (0.22) | |||||||||||||||||||||||||||||||
Net acquisition-related intangible amortization | 0.22 | 0.22 | 0.68 | 0.68 | |||||||||||||||||||||||||||||||
Pre-tax restructuring | $ | 0.16 | $ | 0.12 | $ | 0.49 | $ | 0.45 | |||||||||||||||||||||||||||
Tax on restructuring | (0.04) | (0.03) | (0.12) | (0.11) | |||||||||||||||||||||||||||||||
Net restructuring | 0.12 | 0.09 | 0.37 | 0.34 | |||||||||||||||||||||||||||||||
Pre-tax reserve for international non-income tax obligation and related interest and penalties | $ | — | $ | — | $ | 0.30 | $ | — | |||||||||||||||||||||||||||
Tax on reserve for international non-income tax obligation and related interest and penalties | — | — | (0.05) | — | |||||||||||||||||||||||||||||||
Net reserve for international non-income tax obligation and related interest and penalties | — | — | 0.25 | — | |||||||||||||||||||||||||||||||
Pre-tax charges related to asset abandonment | $ | — | $ | 0.01 | $ | — | $ | 0.02 | |||||||||||||||||||||||||||
Tax on charges related to asset abandonment | — | — | — | — | |||||||||||||||||||||||||||||||
Net charges related to asset abandonment | — | 0.01 | — | 0.02 | |||||||||||||||||||||||||||||||
Pre-tax Duplicate Rent | $ | 0.04 | $ | — | $ | 0.05 | $ | — | |||||||||||||||||||||||||||
Tax on Duplicate Rent | (0.01) | — | (0.01) | — | |||||||||||||||||||||||||||||||
Net charges related to Duplicate Rent | 0.03 | — | 0.04 | — | |||||||||||||||||||||||||||||||
| Pre-tax gain on divestiture of MA Regulatory Solutions | $ | (0.66) | $ | — | $ | (1.68) | $ | — | |||||||||||||||||||||||||||
Pre-tax gain on divestiture of MA Learning Solutions | — | — | (0.01) | — | |||||||||||||||||||||||||||||||
| Tax on gain on business divestitures | 0.19 | — | 0.51 | — | |||||||||||||||||||||||||||||||
| Net gain on business divestitures | (0.47) | — | (1.18) | — | |||||||||||||||||||||||||||||||
| Adjusted Diluted EPS | $ | 4.14 | $ | 3.92 | $ | 13.14 | $ | 11.30 | |||||||||||||||||||||||||||
Note: the tax impacts in the table above were calculated using tax rates in effect in the jurisdiction for which the item relates.
Free Cash Flow:
The Company defines Free Cash Flow as net cash provided by operating activities minus cash paid for capital additions. Management believes that Free Cash Flow is a useful metric in assessing the Company’s cash flows to service debt, pay dividends and to fund acquisitions and share repurchases. Management deems capital expenditures essential to the Company’s product and service innovations and maintenance of Moody’s operational capabilities. Accordingly, capital expenditures are deemed to be a recurring use of Moody’s cash flow. Below is a reconciliation of the Company’s net cash flows from operating activities to Free Cash Flow:
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net cash provided by operating activities | $ | 2,471 | $ | 2,043 | |||||||
| Capital additions | (271) | (245) | |||||||||
| Free Cash Flow | $ | 2,200 | $ | 1,798 | |||||||
| Net cash (used in) provided by investing activities | $ | (130) | $ | 44 | |||||||
| Net cash used in financing activities | $ | (3,190) | $ | (2,454) | |||||||
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Organic Constant Currency Revenue Growth (Decline):
The Company presents organic constant currency revenue growth as its non-GAAP measure of revenue growth. Management deems this measure to be useful in providing additional perspective in assessing the Company's revenue growth excluding both the inorganic revenue impacts from certain acquisition and divestiture activity completed within the last 12 months and the impacts of changes in foreign exchange rates. The Company calculates the dollar impact of foreign exchange as the difference between the translation of its current period non-USD functional currency results using comparative prior period weighted average foreign exchange translation rates and current year reported results.
Below is a reconciliation of the Company's reported revenue and growth (decline) rates to its organic constant currency revenue growth (decline) measures:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts in millions | 2026 | 2025 | Change | Growth | 2026 | 2025 | Change | Growth | ||||||||||||||||||||||||||||||||||||||||||
| MCO revenue | $ | 2,023 | $ | 2,007 | $ | 16 | 1% | $ | 6,287 | $ | 5,829 | $ | 458 | 8% | ||||||||||||||||||||||||||||||||||||
| FX impact | 5 | — | 5 | (51) | — | (51) | ||||||||||||||||||||||||||||||||||||||||||||
| Inorganic revenue from acquisitions | (6) | — | (6) | (17) | — | (17) | ||||||||||||||||||||||||||||||||||||||||||||
Divestitures | — | (42) | 42 | — | (92) | 92 | ||||||||||||||||||||||||||||||||||||||||||||
Organic constant currency MCO revenue | $ | 2,022 | $ | 1,965 | $ | 57 | 3% | $ | 6,219 | $ | 5,737 | $ | 482 | 8% | ||||||||||||||||||||||||||||||||||||
| MA revenue | $ | 936 | $ | 909 | $ | 27 | 3% | $ | 2,787 | $ | 2,656 | $ | 131 | 5% | ||||||||||||||||||||||||||||||||||||
| FX impact | 2 | — | 2 | (28) | — | (28) | ||||||||||||||||||||||||||||||||||||||||||||
| Inorganic revenue from acquisitions | — | — | — | (2) | — | (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Divestitures | — | (42) | 42 | — | (92) | 92 | ||||||||||||||||||||||||||||||||||||||||||||
Organic constant currency MA revenue | $ | 938 | $ | 867 | $ | 71 | 8% | $ | 2,757 | $ | 2,564 | $ | 193 | 8% | ||||||||||||||||||||||||||||||||||||
| Decision Solutions revenue | $ | 426 | $ | 424 | $ | 2 | —% | $ | 1,281 | $ | 1,242 | $ | 39 | 3% | ||||||||||||||||||||||||||||||||||||
| FX impact | 1 | — | 1 | (11) | — | (11) | ||||||||||||||||||||||||||||||||||||||||||||
| Inorganic revenue from acquisitions | — | — | — | (2) | — | (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Divestitures | — | (42) | 42 | — | (92) | 92 | ||||||||||||||||||||||||||||||||||||||||||||
Organic constant currency Decision Solutions revenue | $ | 427 | $ | 382 | $ | 45 | 12% | $ | 1,268 | $ | 1,150 | $ | 118 | 10% | ||||||||||||||||||||||||||||||||||||
Banking revenue | $ | 118 | $ | 140 | $ | (22) | (16)% | $ | 370 | $ | 419 | $ | (49) | (12)% | ||||||||||||||||||||||||||||||||||||
| FX impact | — | — | — | (2) | — | (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Divestitures | — | (41) | 41 | — | (91) | 91 | ||||||||||||||||||||||||||||||||||||||||||||
Organic constant currency Banking revenue | $ | 118 | $ | 99 | $ | 19 | 19% | $ | 368 | $ | 328 | $ | 40 | 12% | ||||||||||||||||||||||||||||||||||||
Insurance revenue | $ | 186 | $ | 171 | $ | 15 | 9% | $ | 550 | $ | 502 | $ | 48 | 10% | ||||||||||||||||||||||||||||||||||||
| FX impact | 1 | — | 1 | (1) | — | (1) | ||||||||||||||||||||||||||||||||||||||||||||
| Inorganic revenue from acquisitions | — | — | — | (2) | — | (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Divestitures | — | (1) | 1 | — | (1) | 1 | ||||||||||||||||||||||||||||||||||||||||||||
Organic constant currency Insurance revenue | $ | 187 | $ | 170 | $ | 17 | 10% | $ | 547 | $ | 501 | $ | 46 | 9% | ||||||||||||||||||||||||||||||||||||
KYC revenue | $ | 122 | $ | 113 | $ | 9 | 8% | $ | 361 | $ | 321 | $ | 40 | 12% | ||||||||||||||||||||||||||||||||||||
| FX impact | — | — | — | (8) | — | (8) | ||||||||||||||||||||||||||||||||||||||||||||
Constant currency KYC revenue | $ | 122 | $ | 113 | $ | 9 | 8% | $ | 353 | $ | 321 | $ | 32 | 10% | ||||||||||||||||||||||||||||||||||||
| Research and Insights revenue | $ | 260 | $ | 252 | $ | 8 | 3% | $ | 771 | $ | 737 | $ | 34 | 5% | ||||||||||||||||||||||||||||||||||||
| FX impact | — | — | — | (5) | — | (5) | ||||||||||||||||||||||||||||||||||||||||||||
| Constant currency Research and Insights revenue | $ | 260 | $ | 252 | $ | 8 | 3% | $ | 766 | $ | 737 | $ | 29 | 4% | ||||||||||||||||||||||||||||||||||||
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Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts in millions | 2026 | 2025 | Change | Growth | 2026 | 2025 | Change | Growth | ||||||||||||||||||||||||||||||||||||||||||
| Data and Information revenue | $ | 250 | $ | 233 | $ | 17 | 7% | $ | 735 | $ | 677 | $ | 58 | 9% | ||||||||||||||||||||||||||||||||||||
| FX impact | 1 | — | 1 | (12) | — | (12) | ||||||||||||||||||||||||||||||||||||||||||||
| Constant currency Data and Information revenue | $ | 251 | $ | 233 | $ | 18 | 8% | $ | 723 | $ | 677 | $ | 46 | 7% | ||||||||||||||||||||||||||||||||||||
| MA recurring revenue | $ | 928 | $ | 875 | $ | 53 | 6% | $ | 2,752 | $ | 2,549 | $ | 203 | 8% | ||||||||||||||||||||||||||||||||||||
| FX impact | 2 | — | 2 | (28) | — | (28) | ||||||||||||||||||||||||||||||||||||||||||||
| Inorganic recurring revenue from acquisitions | — | — | — | (2) | — | (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Divestitures | — | (22) | 22 | — | (40) | 40 | ||||||||||||||||||||||||||||||||||||||||||||
Organic constant currency MA recurring revenue | $ | 930 | $ | 853 | $ | 77 | 9% | $ | 2,722 | $ | 2,509 | $ | 213 | 8% | ||||||||||||||||||||||||||||||||||||
Decision Solutions recurring revenue | $ | 421 | $ | 395 | $ | 26 | 7% | $ | 1,259 | $ | 1,150 | $ | 109 | 9% | ||||||||||||||||||||||||||||||||||||
| FX impact | 1 | — | 1 | (11) | — | (11) | ||||||||||||||||||||||||||||||||||||||||||||
| Inorganic recurring revenue from acquisitions | — | — | — | (2) | — | (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Divestitures | — | (22) | 22 | — | (40) | 40 | ||||||||||||||||||||||||||||||||||||||||||||
Organic constant currency Decision Solutions recurring revenue | $ | 422 | $ | 373 | $ | 49 | 13% | $ | 1,246 | $ | 1,110 | $ | 136 | 12% | ||||||||||||||||||||||||||||||||||||
Banking recurring revenue | $ | 115 | $ | 115 | $ | — | —% | $ | 358 | $ | 343 | $ | 15 | 4% | ||||||||||||||||||||||||||||||||||||
| FX impact | — | — | — | (2) | — | (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Divestitures | — | (21) | 21 | — | (39) | 39 | ||||||||||||||||||||||||||||||||||||||||||||
Organic constant currency Banking recurring revenue | $ | 115 | $ | 94 | $ | 21 | 22% | $ | 356 | $ | 304 | $ | 52 | 17% | ||||||||||||||||||||||||||||||||||||
Insurance recurring revenue | $ | 184 | $ | 168 | $ | 16 | 10% | $ | 541 | $ | 487 | $ | 54 | 11% | ||||||||||||||||||||||||||||||||||||
| FX impact | 1 | — | 1 | (1) | — | (1) | ||||||||||||||||||||||||||||||||||||||||||||
| Inorganic recurring revenue from acquisitions | — | — | — | (2) | — | (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Divestitures | — | (1) | 1 | — | (1) | 1 | ||||||||||||||||||||||||||||||||||||||||||||
Organic constant currency Insurance recurring revenue | $ | 185 | $ | 167 | $ | 18 | 11% | $ | 538 | $ | 486 | $ | 52 | 11% | ||||||||||||||||||||||||||||||||||||
KYC recurring revenue | $ | 122 | $ | 112 | $ | 10 | 9% | $ | 360 | $ | 320 | $ | 40 | 13% | ||||||||||||||||||||||||||||||||||||
| FX impact | — | — | — | (8) | — | (8) | ||||||||||||||||||||||||||||||||||||||||||||
Constant currency KYC recurring revenue | $ | 122 | $ | 112 | $ | 10 | 9% | $ | 352 | $ | 320 | $ | 32 | 10% | ||||||||||||||||||||||||||||||||||||
Research and Insights recurring revenue | $ | 258 | $ | 249 | $ | 9 | 4% | $ | 764 | $ | 728 | $ | 36 | 5% | ||||||||||||||||||||||||||||||||||||
| FX impact | — | — | — | (5) | — | (5) | ||||||||||||||||||||||||||||||||||||||||||||
| Constant currency Research and Insights recurring revenue | $ | 258 | $ | 249 | $ | 9 | 4% | $ | 759 | $ | 728 | $ | 31 | 4% | ||||||||||||||||||||||||||||||||||||
Data and Information recurring revenue | $ | 249 | $ | 231 | $ | 18 | 8% | $ | 729 | $ | 671 | $ | 58 | 9% | ||||||||||||||||||||||||||||||||||||
| FX impact | 1 | — | 1 | (12) | — | (12) | ||||||||||||||||||||||||||||||||||||||||||||
| Constant currency Data and Information recurring revenue | $ | 250 | $ | 231 | $ | 19 | 8% | $ | 717 | $ | 671 | $ | 46 | 7% | ||||||||||||||||||||||||||||||||||||
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Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts in millions | 2026 | 2025 | Change | Growth | 2026 | 2025 | Change | Growth | ||||||||||||||||||||||||||||||||||||||||||
MIS revenue | $ | 1,087 | $ | 1,098 | $ | (11) | (1)% | $ | 3,500 | $ | 3,173 | $ | 327 | 10% | ||||||||||||||||||||||||||||||||||||
| FX impact | 3 | — | 3 | (23) | — | (23) | ||||||||||||||||||||||||||||||||||||||||||||
| Inorganic revenue from acquisitions | (6) | — | (6) | (15) | — | (15) | ||||||||||||||||||||||||||||||||||||||||||||
Organic constant currency MIS revenue | $ | 1,084 | $ | 1,098 | $ | (14) | (1)% | $ | 3,462 | $ | 3,173 | $ | 289 | 9% | ||||||||||||||||||||||||||||||||||||
Corporate Finance revenue | $ | 530 | $ | 576 | $ | (46) | (8)% | $ | 1,814 | $ | 1,652 | $ | 162 | 10% | ||||||||||||||||||||||||||||||||||||
| FX impact | 2 | — | 2 | (11) | — | (11) | ||||||||||||||||||||||||||||||||||||||||||||
| Inorganic revenue from acquisitions | — | — | — | (1) | — | (1) | ||||||||||||||||||||||||||||||||||||||||||||
Organic constant currency Corporate Finance revenue | $ | 532 | $ | 576 | $ | (44) | (8)% | $ | 1,802 | $ | 1,652 | $ | 150 | 9% | ||||||||||||||||||||||||||||||||||||
Structured Finance revenue | $ | 153 | $ | 146 | $ | 7 | 5% | $ | 441 | $ | 419 | $ | 22 | 5% | ||||||||||||||||||||||||||||||||||||
| FX impact | — | — | — | (4) | — | (4) | ||||||||||||||||||||||||||||||||||||||||||||
| Inorganic revenue from acquisitions | (3) | — | (3) | (4) | — | (4) | ||||||||||||||||||||||||||||||||||||||||||||
Organic constant currency Structured Finance revenue | $ | 150 | $ | 146 | $ | 4 | 3% | $ | 433 | $ | 419 | $ | 14 | 3% | ||||||||||||||||||||||||||||||||||||
Financial Institutions revenue | $ | 213 | $ | 208 | $ | 5 | 2% | $ | 629 | $ | 590 | $ | 39 | 7% | ||||||||||||||||||||||||||||||||||||
| FX impact | — | — | — | (5) | — | (5) | ||||||||||||||||||||||||||||||||||||||||||||
| Inorganic revenue from acquisitions | — | — | — | (1) | — | (1) | ||||||||||||||||||||||||||||||||||||||||||||
Organic constant currency Financial Institutions revenue | $ | 213 | $ | 208 | $ | 5 | 2% | $ | 623 | $ | 590 | $ | 33 | 6% | ||||||||||||||||||||||||||||||||||||
PPIF revenue | $ | 179 | $ | 161 | $ | 18 | 11% | $ | 579 | $ | 486 | $ | 93 | 19% | ||||||||||||||||||||||||||||||||||||
| FX impact | — | — | — | (5) | — | (5) | ||||||||||||||||||||||||||||||||||||||||||||
| Constant currency PPIF revenue | $ | 179 | $ | 161 | $ | 18 | 11% | $ | 574 | $ | 486 | $ | 88 | 18% | ||||||||||||||||||||||||||||||||||||
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Key Performance Metrics:
The Company presents ARR on an organic constant currency basis for its MA business as a supplemental performance metric to provide additional insight on the estimated value of MA's recurring revenue contracts at a given point in time. The Company uses ARR to manage and monitor performance of its MA operating segment and believes that this metric is a key indicator of the trajectory of MA's recurring revenue base.
The Company calculates ARR by taking the total recurring contract value for each active renewable contract as of the reporting date, divided by the number of days in the contract and multiplied by 365 days to create an annualized value. The Company defines renewable contracts as subscriptions, term licenses, maintenance and renewable services. ARR excludes transaction sales including one-time training, services and perpetual licenses. In order to compare period-over-period ARR excluding the effects of foreign currency translation, the Company bases the calculation on currency rates utilized in its current year operating budget and holds these FX rates constant for the duration of all current and prior periods being reported. Additionally, to provide better perspective in assessing growth, the Company excludes from ARR contracts associated with acquisitions and divestitures completed within the last 12 months.
The Company’s definition of ARR may differ from definitions utilized by other companies reporting similarly named measures, and this metric should be viewed in addition to, and not as a substitute for, financial measures presented in accordance with GAAP.
| Amounts in millions | September 30, 2026 | September 30, 2025 | Change | Growth | |||||||||||||||||||
| MA ARR | |||||||||||||||||||||||
Decision Solutions | |||||||||||||||||||||||
| Banking | $ | 412 | $ | 382 | $ | 30 | 8% | ||||||||||||||||
| Insurance | 736 | 671 | 65 | 10% | |||||||||||||||||||
| KYC | 489 | 435 | 54 | 12% | |||||||||||||||||||
Total Decision Solutions | $ | 1,637 | $ | 1,488 | $ | 149 | 10% | ||||||||||||||||
| Research and Insights | 1,043 | 988 | 55 | 6% | |||||||||||||||||||
| Data and Information | 1,008 | 942 | 66 | 7% | |||||||||||||||||||
| Total MA ARR | $ | 3,688 | $ | 3,418 | $ | 270 | 8% | ||||||||||||||||
RECENTLY ISSUED ACCOUNTING STANDARDS
Refer to Note 1 to the consolidated financial statements located in Part I of this Form 10-Q for a discussion on the impact to the Company relating to recently issued accounting pronouncements.
CONTINGENCIES
Legal proceedings in which the Company is involved also may impact Moody’s liquidity or operating results. No assurance can be provided as to the outcome of such proceedings. In addition, litigation inherently involves significant costs. For information regarding legal proceedings, see Item 1 - "Financial Statements," Note 15 "Contingencies” in this Form 10-Q.
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FORWARD-LOOKING STATEMENTS
Certain statements contained in this quarterly report on Form 10-Q are forward-looking statements and are based on future expectations, plans and prospects for the Company's business and operations that involve a number of risks and uncertainties. Such statements involve estimates, projections, goals, forecasts, assumptions and uncertainties that could cause actual results or outcomes to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements. Those statements appear at various places throughout this quarterly report on Form 10-Q, including in the sections entitled “Contingencies” under Item 2, “MD&A,” commencing on page 43 of this quarterly report on Form 10-Q, under “Legal Proceedings” in Part II, Item 1, of this Form 10-Q, and elsewhere in the context of statements containing the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “will,” “predict,” “potential,” “continue,” “strategy,” “aspire,” “target,” “forecast,” “project,” “estimate,” “should,” “could,” “may,” and similar expressions or words and variations thereof relating to the Company’s views on future events, trends and contingencies or otherwise convey the prospective nature of events or outcomes generally indicative of forward-looking statements. Stockholders and investors are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements and other information in this document are made as of the date of this quarterly report on Form 10-Q, and the Company undertakes no obligation (nor does it intend) to publicly supplement, update or revise such statements on a going-forward basis, whether as a result of subsequent developments, changed expectations or otherwise, except as required by applicable law or regulation. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the Company is identifying certain factors that could cause actual results to differ, perhaps materially, from those indicated by these forward-looking statements.
Those factors, risks and uncertainties include, but are not limited to:
–the uncertain effects of U.S. and foreign government actions affecting international trade and economic policy, including changes and volatility in tariffs and trade policies and retaliatory actions, on credit markets, customers, and customer retention, and demand for our products and services;
–the impact of general economic conditions (including significant government debt and deficit levels and inflation or recessions and related monetary policy actions by governments in response thereto) on worldwide credit markets and on economic activity, including on the level of merger and acquisition activity, and their effects on the volume of debt and other securities issued in domestic and/or global capital markets;
–the uncertain effects of U.S. and foreign government initiatives and monetary policy to respond to the current economic climate, including instability of financial institutions, credit quality concerns, and other potential impacts of volatility in financial and credit markets;
–the impacts of geopolitical events and actions, such as the Russia-Ukraine military conflict, military conflicts in the Middle East, and tensions between India and Pakistan, and of tensions and disputes in political and global relations, on volatility in world financial markets, on general economic conditions and GDP in the U.S. and worldwide and on the Company's own operations and personnel;
–other matters that could affect the volume of debt and other securities issued in domestic and/or global capital markets, including regulation, increased utilization of technologies that have the potential to intensify competition and accelerate disruption and disintermediation in the financial services industry, as well as the number of issuances of securities without ratings or securities which are rated or evaluated by non-traditional parties;
–the level of merger and acquisition activity in the U.S. and abroad;
–the impact of MIS’s withdrawal of its credit ratings on countries or entities within countries and of Moody’s no longer conducting commercial operations in countries where political instability warrants such actions;
–concerns in the marketplace affecting our credibility or otherwise affecting market perceptions of the integrity or utility of independent credit agency ratings;
–the introduction or development of competing and/or emerging technologies and products;
–pricing pressure from competitors and/or customers;
–the level of success of new product development and global expansion;
–the impact of regulation as an NRSRO, the potential for new U.S., state and local legislation and regulations;
–the potential for increased competition and regulation in the jurisdictions in which we operate, including the EU;
–exposure to litigation related to our rating opinions, as well as any other litigation, government and regulatory proceedings, investigations and inquiries to which Moody’s may be subject from time to time;
–provisions in U.S. legislation modifying the pleading standards and EU regulations modifying the liability standards, applicable to CRAs in a manner adverse to CRAs;
–provisions of EU regulations imposing additional procedural and substantive requirements on the pricing of services and the expansion of supervisory remit to include non-EU ratings used for regulatory purposes;
–uncertainty regarding the future relationship between the U.S. and China;
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–the possible loss of key employees and the impact of the global labor environment;
–failures or malfunctions of our operations and infrastructure;
–any vulnerabilities to cyber threats or other cybersecurity concerns;
–the timing and effectiveness of our restructuring programs;
–currency and foreign exchange volatility;
–the outcome of any review by tax authorities of Moody’s global tax planning initiatives;
–exposure to potential criminal sanctions or civil remedies if Moody’s fails to comply with foreign and U.S. laws and regulations that are applicable in the jurisdictions in which Moody’s operates, including data protection and privacy laws, sanctions laws, anti-corruption laws, and local laws prohibiting corrupt payments to government officials;
–the impact of mergers, acquisitions, or other business combinations and the ability of Moody’s to successfully integrate acquired businesses;
–the level of future cash flows;
–the levels of capital investments; and
–a decline in the demand for credit risk management tools by financial institutions, corporate or government entities.
These factors, risks and uncertainties as well as other risks and uncertainties that could cause Moody’s actual results to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements are described in greater detail under “Risk Factors” in Part I, Item 1A of Moody’s annual report on Form 10-K for the year ended December 31, 2025, and in other filings made by the Company from time to time with the SEC or in materials incorporated herein or therein. Stockholders and investors are cautioned that the occurrence of any of these factors, risks and uncertainties may cause the Company’s actual results to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements, which could have a material and adverse effect on the Company’s business, results of operations and financial condition. New factors may emerge from time to time, and it is not possible for the Company to predict new factors, nor can the Company assess the potential effect of any new factors on it. Forward-looking and other statements in this document may also address our corporate responsibility progress, plans, and goals (including sustainability and environmental matters), and the inclusion of such statements is not an indication that these contents are necessarily material to investors or required to be disclosed in the Company’s filings with the Securities and Exchange Commission. In addition, historical, current, and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
In the nine months ended September 30, 2026, the Company entered into new cross-currency swap hedging transactions designated as net investment hedges, which are disclosed in Note 7 to the consolidated financial statements. The related sensitivity analysis disclosed in our Form 10-K for the year ended December 31, 2025 for our derivatives and non-derivatives designated as net investment hedges has been updated below to reflect the Company's exposure to market risk as of September 30, 2026. There have been no material changes to the Company's market risk other than the aforementioned cross-currency swaps during the nine months ended September 30, 2026. For a discussion of the Company’s exposure to market risk, refer to the Company’s market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of our Form 10-K for the year ended December 31, 2025.
Derivatives and non-derivatives designated as net investment hedges:
The Company designates derivative instruments and foreign currency-denominated debt as hedges of foreign currency risk of net investments in certain foreign subsidiaries (net investment hedges) under ASC Topic 815, Derivatives and Hedging.
Cross-currency swaps
As of September 30, 2026, the Company had cross-currency swaps designated as net investment hedges to mitigate FX exposure related to a portion of the Company’s net investment in certain foreign subsidiaries against changes in exchange rates. The notional values and corresponding interest rates are disclosed in Note 7 to the consolidated financial statements located in Item 1 of this Form 10-Q.
•If the euro were to strengthen 10% relative to the U.S. dollar, there would be an approximate $450 million unfavorable impact to the fair value of the cross-currency swaps recognized in OCI.
•If the Hong Kong dollar were to strengthen 10% relative to the U.S. dollar, there would be an approximate $50 million unfavorable impact to the fair value of the cross-currency swaps recognized in OCI.
•If the Singapore dollar were to strengthen 10% relative to the Hong Kong dollar, there would be an approximate $30 million unfavorable impact to the fair value of the cross-currency swaps recognized in OCI.
The aforementioned unfavorable impacts recognized within OCI would be offset by favorable currency translation gains on the Company’s hedged net investments in those foreign subsidiaries.
Euro-denominated debt
As of September 30, 2026 the Company has designated €500 million of the 2015 Senior Notes and €750 million of the 2019 Senior Notes as a net investment hedge to mitigate FX exposure relating to euro denominated net investments in subsidiaries. If the euro were to strengthen 10% relative to the U.S. dollar, there would be an approximate $140 million unfavorable adjustment to OCI related to these net investment hedges. This adjustment would be offset by favorable translation adjustments on the Company’s euro net investment in subsidiaries.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures: The Company carried out an evaluation, as required by Rule 13a-15(b) under the Exchange Act, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, as of the end of the period covered by this report (the “Evaluation Date”). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the communication to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
The Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, has determined that there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, these internal controls over financial reporting during the three-month period ended September 30, 2026.
The Company's disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives as specified above. The Company's management does not expect, however, that our disclosure controls and procedures will prevent or detect all instances of error and fraud. Any control system, regardless of how well designed and operated, is based upon certain assumptions, and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
For information regarding legal proceedings, see Item 1 – “Financial Statements – Notes to Consolidated Financial Statements (Unaudited),” Note 15 “Contingencies” in this Form 10-Q.
Item 1A. Risk Factors
There have been no material changes from the significant risk factors and uncertainties previously disclosed under the heading "Risk Factors" in the Company's annual report on Form 10-K for the year ended December 31, 2025, that if they were to occur, could materially adversely affect the Company’s business, financial condition, operating results and/or cash flow. For a discussion of the Company’s risk factors, refer to Item 1A. “Risk Factors” contained in the Company’s annual report on Form 10-K for the year ended December 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
MOODY'S PURCHASES OF EQUITY SECURITIES
For the three months ended September 30, 2026
| Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares That May Yet be Purchased Under the Program(2) | ||||||||||||||||||||||
| July 1- 31 | 349,749 | $ | 485.56 | 344,148 | $ | 1,628 | million | |||||||||||||||||||
| August 1- 31 | 217,285 | $ | 489.23 | 216,695 | $ | 1,522 | million | |||||||||||||||||||
| September 1- 30 | 239,544 | $ | 474.54 | 239,357 | $ | 1,409 | million | |||||||||||||||||||
| Total | 806,578 | $ | 483.26 | 800,200 | ||||||||||||||||||||||
(1) Includes surrender to the Company of 5,601; 590; and 187 shares of common stock in July, August, and September, respectively, to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees.
(2) As of the last day of each of the months. On October 21, 2025, the Board authorized $4 billion in share repurchase authority. At September 30, 2026 there was approximately $1.4 billion of share repurchase authority remaining under this authorization. There is no established expiration date for the remaining authorization.
During the third quarter of 2026, Moody’s issued a net 43 thousand shares under employee stock-based compensation plans.
Item 5. Other Information
On August 10, 2026 , Robert Fauber , the Company's Chief Executive Officer , adopted a trading plan intended to satisfy Rule 10b5-1(c). The plan relates to the sale of up to 40,600 shares of Moody’s Corporation common stock between November 9, 2026, and October 29, 2027 . The shares include: i) shares which will be acquired upon the exercise of employee stock options; ii) vested restricted stock units; and iii) vested performance share units.
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Item 6. Exhibits
Exhibit No | Description | |||||||
| 3 | Articles of Incorporation and By-laws | |||||||
| .1 | Restated Certificate of Incorporation of the Registrant, effective April 17, 2024 (incorporated by reference to Exhibit 3.3 to the Report on Form 8-K of the Registrant, file number 1-14037, filed April 19, 2024) | |||||||
| .2 | Amended and Restated By-laws of Moody’s Corporation, effective October 14, 2025 (incorporated by reference to Exhibit 3.2 to the Report on Form 10-K of the Registrant, file number 1-14037, filed February 18, 2026) | |||||||
| 4 | Instruments Defining the Rights of Security Holders, Including Indentures | |||||||
| .1* | Nineteenth Supplemental Indenture, dated as of October 7, 2026, among the Company, Computershare Trust Company, N.A., successor to Wells Fargo Bank, National Association, as Resigning Trustee, and U.S. Bank Trust Company, N.A., as Successor Trustee | |||||||
31 | Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
| .1* | Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
| .2* | Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
32 | Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||
| .1* | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. The Company has furnished this certification and does not intend for it to be considered filed under the Securities Exchange Act of 1934 or incorporated by reference into future filings under the Securities Act of 1933 or the Securities Exchange Act of 1934 | |||||||
| .2* | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. The Company has furnished this certification and does not intend for it to be considered filed under the Securities Exchange Act of 1934 or incorporated by reference into future filings under the Securities Act of 1933 or the Securities Exchange Act of 1934 | |||||||
| 101.INS* | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF* | Inline XBRL Definitions Linkbase Document | |||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document | |||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104* | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | |||||||
| * Filed herewith | ||||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| MOODY’S CORPORATION | ||||||||
| By: | / S / NOÉMIE HEULAND | |||||||
Noémie Heuland | ||||||||
Senior Vice President and Chief Financial Officer | ||||||||
(principal financial officer) | ||||||||
| By: | / S / JASON PHILLIPS | |||||||
Jason Phillips | ||||||||
Chief Accounting Officer and Corporate Controller | ||||||||
| (principal accounting officer) | ||||||||
| Date: October 21, 2026 | ||||||||
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