Moody’s (NYSE: MCO) Q1 2026 record results and raised 2026 buyback view
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Moody’s Corporation reported record first-quarter 2026 results, with higher revenue, margins and earnings. Total revenue rose to $2.1 billion, up 8% from $1.9 billion a year earlier, driven by both Moody’s Investors Service and Moody’s Analytics.
Operating income increased to $922 million, lifting the operating margin to 44.3%, while Adjusted Operating Margin expanded to 53.2%. Diluted EPS grew 8% to $3.73 and Adjusted Diluted EPS rose 13% to $4.33, reflecting strong operating leverage.
Operating cash flow climbed 24% to $939 million and Free Cash Flow reached $844 million, up 26%. Moody’s returned about $1.7 billion to shareholders via $1.5 billion of share repurchases and $185 million of dividends, and now guides 2026 Adjusted Diluted EPS to $16.40–$17.00 and share repurchases of approximately $2.5 billion.
Positive
- Record profitability and raised share repurchase outlook: Q1 2026 Adjusted Diluted EPS rose 13% to $4.33, Adjusted Operating Margin expanded to 53.2%, and 2026 share repurchase guidance was increased to $2.5B, signaling robust earnings power and confidence in cash generation.
Negative
- None.
Insights
Moody’s posted record Q1 2026 results with stronger earnings, margins and higher 2026 capital return plans.
Moody’s delivered Q1 2026 revenue of $2.079 billion, up 8%, with both Moody’s Analytics and Moody’s Investors Service growing 8%. Operating income reached $922 million, and Adjusted Operating Margin expanded from 51.7% to 53.2%, showing meaningful operating leverage.
Diluted EPS increased from $3.46 to $3.73, while Adjusted Diluted EPS rose 13% to $4.33. Free Cash Flow grew 26% to $844 million, supporting substantial shareholder returns of about $1.7 billion in the quarter through buybacks and dividends.
For full-year 2026, Moody’s now targets Diluted EPS of $16.00–$16.60 and Adjusted Diluted EPS of $16.40–$17.00, and increased planned share repurchases from approximately $2.0 billion to about $2.5 billion. Segment guidance implies mid- to high-single-digit revenue growth with MA and MIS maintaining attractive margins, although outcomes remain sensitive to issuance volumes, interest rates and macro assumptions detailed in the outlook.
8-K Event Classification
3 items: 2.02, 7.01, 9.01
3 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q1 2026 Revenue: $2.079 billion
Q1 2026 Diluted EPS: $3.73
Q1 2026 Adjusted Diluted EPS: $4.33
+5 more
8 metrics
Q1 2026 Revenue
$2.079 billion
Total MCO revenue, up 8% year over year
Q1 2026 Diluted EPS
$3.73
GAAP diluted EPS, up 8% from $3.46
Q1 2026 Adjusted Diluted EPS
$4.33
Non-GAAP EPS, up 13% from $3.83
Q1 2026 Adjusted Operating Margin
53.2%
Expanded from 51.7% a year earlier
Q1 2026 Free Cash Flow
$844 million
Free Cash Flow, up 26% from $672 million
Q1 2026 Capital Returned
$1.7 billion
Approximate share repurchases and dividends combined
2026 Adjusted EPS Guidance
$16.40–$17.00
Full-year 2026 Adjusted Diluted EPS outlook
2026 Share Repurchase Plan
Approximately $2.5 billion
Planned 2026 repurchases, subject to conditions
Key Terms
Adjusted Operating Margin, Free Cash Flow, organic constant currency revenue, Annualized Recurring Revenue (ARR), +2 more
6 terms
Adjusted Operating Margin financial
"MCO’s Adjusted Operating Margin2 expanded by 150 bps to 53.2%."
Adjusted operating margin shows how much profit a company makes from its core business activities, after removing unusual or one-time costs and income. It helps investors see the company's true profitability by providing a clearer picture, similar to removing unexpected expenses to understand the regular performance. This metric is useful for comparing companies or tracking performance over time, as it highlights consistent earning power.
Free Cash Flow financial
"Free Cash Flow2 of $844 million up 26%."
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
organic constant currency revenue financial
"MCO revenue of $2.1 billion increased 8%... and 6% on an organic constant currency2 basis."
Annualized Recurring Revenue (ARR) financial
"ARR3 increased 8% year-over-year to $3.6 billion, led by Decision Solutions..."
Annualized recurring revenue (ARR) is the predictable amount of income a business expects to earn from ongoing customer subscriptions or contracts over a year. It provides a clear picture of the company's steady revenue stream, much like estimating the annual salary based on consistent monthly pay. Investors use ARR to gauge the company's growth and stability over time.
Non-operating (expense) income, net financial
"Total non-operating (expense) income, net | (52) | | | (42) |"
reserve for an international non-income tax obligation financial
"including 3% related to a reserve for an international non‑income tax obligation"
Earnings Snapshot
Revenue: $2.079 billion · Guidance included
Q1 2026
Revenue
$2.079 billion
+8% vs Q1 2025
Operating Margin
44.3%
+30 bps vs Q1 2025
Adjusted Operating Margin
53.2%
+150 bps vs Q1 2025
Diluted EPS
$3.73
+8% vs Q1 2025
Adjusted Diluted EPS
$4.33
+13% vs Q1 2025
Operating cash flow
$939 million
+24% vs Q1 2025
Free Cash Flow
$844 million
+26% vs Q1 2025
Guidance
For full-year 2026, Moody’s expects revenue growth in the high-single-digit percent range, operating margin of approximately 45%, Adjusted Operating Margin of 52%–53%, Diluted EPS of $16.00–$16.60, Adjusted Diluted EPS of $16.40–$17.00, and approximately $2.5 billion of share repurchases.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
__________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 22, 2026
(Exact Name of Registrant as Specified in Charter)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||||||
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||||||
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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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. | ☐ | ||||
TABLE OF CONTENTS
ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION | 3 | ||||||
| ITEM 7.01 | REGULATION FD DISCLOSURE | 3 | ||||||
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS | 3 | ||||||
| SIGNATURES | 4 | |||||||
| EXHIBIT 99.1 | ||||||||
2
Item 2.02, "Results of Operations and Financial Condition"
On April 22, 2026, Moody's Corporation (the "Registrant") announced its financial results for the quarter ended March 31, 2026, as well as its outlook for 2026. A copy of the press release containing the announcement is included as Exhibit 99.1.
The information contained in this Current Report, including the exhibit hereto, is being furnished and shall not be deemed "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into future filings under the Securities Act of 1933, as amended, or the Exchange Act, unless it is specifically incorporated by reference therein.
Item 7.01, "Regulation FD Disclosure"
The information set forth under Item 2.02, "Results of Operations and Financial Condition" is incorporated herein by reference.
Item 9.01, "Financial Statements and Exhibits"
(d) Exhibits
99.1 | Press release of Moody's Corporation dated April 22, 2026, announcing results for the quarter ended March 31, 2026. | ||||
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. | ||||
3
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 hereunto duly authorized.
| MOODY'S CORPORATION | |||||
| By: | /s/ Elizabeth M. McCarroll | ||||
| Elizabeth M. McCarroll | |||||
| Managing Director – Corporate Governance, Securities and Corporate Secretary | |||||
Date: April 22, 2026
4
MOODY'S CORPORATION ACHIEVED RECORD RESULTS FOR FIRST QUARTER 2026
NEW YORK, NY - April 22, 2026 - Moody's Corporation (NYSE: MCO) today announced results for the first quarter 2026 and updated select metrics within its outlook for full-year 20261.
“Both MIS and MA delivered strong results this quarter with sustained growth and powerful operating leverage. MIS achieved record revenues of $1.2 billion on over $2 trillion in rated issuance and delivered an adjusted operating margin of 67%. MA continued its growth momentum with 8% ARR3 growth and 250 basis points of adjusted operating margin expansion. As AI adoption accelerates, it is driving demand for Moody’s decision-grade connected intelligence in high-stakes environments.”
— Rob Fauber, President and Chief Executive Officer, Moody’s Corporation
First Quarter 2026 Highlights
•MCO revenue of $2.1 billion increased 8% from the prior-year period, and 6% on an organic constant currency2 basis.
•MCO’s operating margin was 44.3%; MCO’s Adjusted Operating Margin2 expanded by 150 bps to 53.2%.
•Diluted EPS up 8% and Adjusted Diluted EPS2 up 13% from the prior-year period, powered by strong topline growth and operating leverage.
•Operating cash flow of $939 million up 24%; Free Cash Flow2 of $844 million up 26%.
•Accelerated capital returns: $1.7 billion share repurchases and dividends in the first quarter; raised full-year share repurchase guidance to approximately $2.5 billion1.
•Reaffirmed guidance for full-year 2026 MCO revenue growth1 in the high-single digit percent range and Adjusted Diluted EPS1 within the range of $16.40 to $17.00.
•Named Christina Kosmowski as CEO of Moody’s Analytics, effective June 2026.
First Quarter 2026 Financial Results
The following table summarizes the key financial performance measures for the first quarter of 2026.
Three Months Ended March 31, | ||||||||||||||||||||
| Amounts in millions, except percentages and per share amounts | 2026 | 2025 | % Change | |||||||||||||||||
| MCO Revenue | $ | 2,079 | $ | 1,924 | 8 | % | ||||||||||||||
| MCO Operating Margin | 44.3 | % | 44.0 | % | 30 bps | |||||||||||||||
MCO Adjusted Operating Margin2 | 53.2 | % | 51.7 | % | 150 bps | |||||||||||||||
| MCO Diluted EPS | $ | 3.73 | $ | 3.46 | 8 | % | ||||||||||||||
MCO Adjusted Diluted EPS2 | $ | 4.33 | $ | 3.83 | 13 | % | ||||||||||||||
| Operating Cash Flow | $ | 939 | $ | 757 | 24 | % | ||||||||||||||
Free Cash Flow2 | $ | 844 | $ | 672 | 26 | % | ||||||||||||||
| MA Revenue | $ | 926 | $ | 859 | 8 | % | ||||||||||||||
MA Organic Constant Currency Revenue2 | $ | 899 | $ | 845 | 6 | % | ||||||||||||||
MA ARR3 | $ | 3,607 | $ | 3,343 | 8 | % | ||||||||||||||
| MA Adjusted Operating Margin | 32.5 | % | 30.0 | % | 250 bps | |||||||||||||||
| MIS Revenue | $ | 1,153 | $ | 1,065 | 8 | % | ||||||||||||||
| MIS Transactional Revenue | $ | 790 | $ | 732 | 8 | % | ||||||||||||||
| MIS Adjusted Operating Margin | 66.7 | % | 66.0 | % | 70 bps | |||||||||||||||
1 Guidance as of April 22, 2026. Refer to page 5 for table of all items for which the Company provides guidance and page 7 for disclosure regarding the assumptions used by the Company with respect to its guidance. 2 Refer to the tables at the end of this press release for reconciliations of the non-GAAP adjusted and organic constant currency measures to U.S. GAAP. 3 Refer to Table 10 at the end of this press release for the definition of and further information on the Annualized Recurring Revenue (ARR) metric. | ||||||||||||||
1
| SEGMENT RESULTS | ||
Moody’s Analytics (MA)
•Revenue increased 8% compared to the prior-year period. Foreign currency translation favorably impacted revenue by 3%. Revenue increased by 6% on an organic constant currency2 basis.
•Recurring revenue increased 11% year-over-year, or 7% on an organic constant‑currency2 basis, and represented 98% of total MA revenue.
•Transactional revenue declined 54% year-over-year reflecting the impact of the Learning Solutions divestiture as well as MA’s ongoing shift towards subscription-based solutions.
•ARR3 increased 8% year-over-year to $3.6 billion, led by Decision Solutions which increased 10% year-over-year.
The following table summarizes MA revenue, revenue growth and organic constant currency2 revenue growth by line of business and the split between recurring and transaction revenue for the first quarter of 2026.
Three Months Ended March 31, | % Change | |||||||||||||||||||||||||
| Amounts in millions, except percentages | 2026 | 2025 | Revenue | Organic Constant Currency2 | ||||||||||||||||||||||
Decision Solutions | ||||||||||||||||||||||||||
| Banking | $ | 133 | $ | 141 | (6) | % | 3 | % | ||||||||||||||||||
| Insurance | $ | 181 | $ | 163 | 11 | % | 9 | % | ||||||||||||||||||
| KYC | $ | 118 | $ | 101 | 17 | % | 11 | % | ||||||||||||||||||
| Total Decision Solutions | $ | 432 | $ | 405 | 7 | % | 7 | % | ||||||||||||||||||
| Research and Insights | $ | 255 | $ | 236 | 8 | % | 6 | % | ||||||||||||||||||
| Data and Information | $ | 239 | $ | 218 | 10 | % | 5 | % | ||||||||||||||||||
| Total MA Revenue | $ | 926 | $ | 859 | 8 | % | 6 | % | ||||||||||||||||||
| Total MA Recurring Revenue | $ | 909 | $ | 822 | 11 | % | 7 | % | ||||||||||||||||||
| Total MA Transaction Revenue | $ | 17 | $ | 37 | (54) | % | n/m4 | |||||||||||||||||||
The following table summarizes MA ARR3 and ARR growth by line of business as of March 31, 2026.
| Amounts in millions, except percentages | March 31, 2026 | Growth | ||||||||||||
Decision Solutions | ||||||||||||||
| Banking | $ | 422 | 10 | % | ||||||||||
| Insurance | 706 | 7 | % | |||||||||||
| KYC | 473 | 13 | % | |||||||||||
| Total Decision Solutions | $ | 1,601 | 10 | % | ||||||||||
| Research and Insights | 1,027 | 7 | % | |||||||||||
| Data and Information | 979 | 6 | % | |||||||||||
| Total MA ARR | $ | 3,607 | 8 | % | ||||||||||
4 n/m: not meaningful. | ||||||||||||||
2
Moody’s Investors Service (MIS)
•Revenue increased 8% compared to the prior-year period, marking the highest quarter on record. Foreign currency translation favorably impacted MIS revenue by 2%.
•Record first quarter Investment Grade issuance, with a number of jumbo transactions driven by strong investor demand and increased AI‑related financing from hyperscalers.
•Leveraged loan revenue declined year-over-year, reflecting a more cautious market environment late in the quarter as well as relatively lower, though still robust, repricing activity.
•Infrastructure Finance posted its strongest quarter since 2020, delivering the second‑highest quarterly issuance, supported by significant infrastructure funding needs and rising AI and data‑center‑related activity.
•Financial Institutions growth was driven by recurring revenue from Banking issuers, as well as Private Credit activity.
The following table summarizes MIS revenue and revenue growth by line of business and the split between recurring and transaction revenue for the first quarter of 2026.
Three Months Ended March 31, | ||||||||||||||||||||
| Amounts in millions, except percentages | 2026 | 2025 | % Change | |||||||||||||||||
| Corporate Finance | $ | 633 | $ | 564 | 12 | % | ||||||||||||||
| Structured Finance | $ | 137 | $ | 138 | (1) | % | ||||||||||||||
| Financial Institutions | $ | 194 | $ | 191 | 2 | % | ||||||||||||||
| Public, Project and Infrastructure Finance | $ | 176 | $ | 163 | 8 | % | ||||||||||||||
| Total ratings revenue | $ | 1,140 | $ | 1,056 | 8 | % | ||||||||||||||
| MIS Other | $ | 13 | $ | 9 | 44 | % | ||||||||||||||
| Total MIS | $ | 1,153 | $ | 1,065 | 8 | % | ||||||||||||||
| Total MIS Recurring Revenue | $ | 363 | $ | 333 | 9 | % | ||||||||||||||
| Total MIS Transaction Revenue | $ | 790 | $ | 732 | 8 | % | ||||||||||||||
The following table summarizes changes in MIS revenue, transaction revenue and rated issuance volume for the first quarter of 2026.
| Three Months Ended March 31, 2026 | |||||||||||||||||
% Change | Revenue | Transaction Revenue | Rated Issuance Volume | ||||||||||||||
Investment Grade | 33 | % | 32 | % | |||||||||||||
High Yield | 31 | % | 21 | % | |||||||||||||
Leveraged Loans | (13) | % | (13) | % | |||||||||||||
Corporate Finance | 12 | % | 13 | % | 9 | % | |||||||||||
| Structured Finance | (1) | % | (5) | % | (5) | % | |||||||||||
| Financial Institutions | 2 | % | (4) | % | 6 | % | |||||||||||
| Public, Project and Infrastructure Finance | 8 | % | 7 | % | 4 | % | |||||||||||
| Total MIS | 8 | % | 8 | % | 6 | % | |||||||||||
3
| OPERATING EXPENSES AND MARGIN | ||
•Operating expenses grew 7% compared to the prior-year period, including 3% related to a reserve for an international non‑income tax obligation and a 2% unfavorable impact from foreign currency translation.
•MCO’s operating margin was 44.3%. MCO’s adjusted operating margin2 expanded by 150 bps to 53.2%.
•MA’s adjusted operating margin was 32.5%, up 250 bps from the prior-year period, reflecting strong revenue growth and ongoing cost and efficiency initiatives.
•MIS’s adjusted operating margin was 66.7%, up 70 bps from the prior-year period, reflecting the operating leverage of the business.
•Foreign currency translation had an immaterial impact on MCO’s operating and adjusted operating margins2.
| CAPITAL RETURN | ||
•Moody’s returned approximately $1.7 billion to shareholders, including $1.5 billion in share repurchases and $185 million in dividends.
•On April 20, 2026, the Moody’s Board of Directors declared a regular quarterly dividend of $1.03 per share of MCO Common Stock. The dividend will be payable on June 5, 2026, to shareholders of record at the close of business on May 15, 2026.
4
OUTLOOK | ||
Moody’s updated outlook for full year 2026, as of April 22, 2026, reflects assumptions about numerous factors that could affect its business and is based on currently available information reviewed by management through, and as of, today’s date. For a complete list of these assumptions, please refer to “Assumptions” on page 7 of this earnings release.
Full Year 2026 Moody's Corporation Guidance as of April 22, 2026 | ||||||||
Moody's Corporation (MCO) | Last Publicly Disclosed Guidance | Current Guidance | ||||||
| Revenue | Increase in the high-single-digit percent range | NC | ||||||
Operating Expenses | Increase in the mid-single-digit percent range | NC | ||||||
Operating Margin | 45% to 46% | Approximately 45% | ||||||
Adjusted Operating Margin (1) | 52% to 53% | NC | ||||||
Interest Expense, Net | $210 to $230 million | $220 to $240 million | ||||||
Non-operating (Expense)/Income (2) | ($180 to $200 million) | $70 to $90 million | ||||||
Effective Tax Rate | 23% to 25% | NC | ||||||
Diluted EPS | $15.00 to $15.60 | $16.00 to $16.60 | ||||||
Adjusted Diluted EPS (1) | $16.40 to $17.00 | NC | ||||||
Operating Cash Flow | $3.25 to $3.45 billion | NC | ||||||
Free Cash Flow (1) | $2.8 to $3.0 billion | NC | ||||||
Share Repurchases | Approximately $2.0 billion (subject to available cash, market conditions, M&A opportunities and other ongoing capital allocation decisions) | Approximately $2.5 billion (subject to available cash, market conditions, M&A opportunities and other ongoing capital allocation decisions) | ||||||
| Moody's Analytics (MA) | Last Publicly Disclosed Guidance | Current Guidance | ||||||
MA Revenue | Increase in the mid-single-digit percent range | NC | ||||||
MA Organic Constant Currency Revenue (3) | Increase in the high-single-digit percent range | NC | ||||||
ARR (4) | Increase in the high-single-digit percent range | NC | ||||||
MA Adjusted Operating Margin | 34% to 35% | NC | ||||||
| Moody's Investors Service (MIS) | Last Publicly Disclosed Guidance | Current Guidance | ||||||
| MIS Revenue | Increase in the high-single-digit percent range | NC | ||||||
| MIS Adjusted Operating Margin | Approximately 65% | NC | ||||||
NC - There is no difference between the Company’s current guidance and the last publicly disclosed guidance for this item. Note: All current guidance as of April 22, 2026. Given the close proximity of the anticipated closing date to the date of the filing of this document, the Company included in the current guidance the expected impact of the pending divestiture of the MA Regulatory Solutions business. (1) These metrics are adjusted measures. See below for reconciliation of these measures to their comparable U.S. GAAP measure. (2) Non-operating expense is inclusive of net interest expense and, as of April 22, 2026, includes an expected gain from the anticipated divestiture of the MA Regulatory Solutions business (expected to close in the second quarter of 2026). (3) Refer to Table 9 within this earnings release for the definition of organic constant currency revenue. See below for reconciliation of this measure to its comparable U.S. GAAP measure. (4) Refer to Table 10 within this earnings release for the definition of and further information on the ARR metric. | ||||||||
5
The following are reconciliations of the Company's adjusted forward-looking measures to their comparable U.S. GAAP measure. Refer to Table 7 and Table 11 for more details on the rationale for the excluded items below:
| Projected for the Year Ended December 31, 2026 | |||||
| Operating margin guidance | Approximately 45% | ||||
| Depreciation and amortization | Approximately 6% | ||||
| Restructuring | Approximately 1% | ||||
Reserve for international non-income tax obligation | Approximately 0.5% | ||||
| Adjusted Operating Margin guidance | 52% to 53% | ||||
| Projected for the Year Ended December 31, 2026 | |||||
| Operating cash flow guidance | $3.25 to $3.45 billion | ||||
Less: Capital expenditures (5) | Approximately $450 million | ||||
| Free Cash Flow guidance | $2.8 to $3.0 billion | ||||
| Projected for the Year Ended December 31, 2026 | |||||
| Diluted EPS guidance | $16.00 to $16.60 | ||||
Acquisition-related intangible amortization | Approximately $0.90 | ||||
| Restructuring | Approximately $0.40 | ||||
Reserve for international non-income tax obligation | Approximately $0.25 | ||||
Duplicative rent - NY HQ (6) | Approximately $0.10 | ||||
Gain on divestiture of business | Approximately ($1.25) | ||||
| Adjusted Diluted EPS guidance | $16.40 to $17.00 | ||||
| Projected for the Year Ended December 31, 2026 | |||||
MA Revenue | Increase in the mid-single-digit percent range | ||||
Inorganic revenue from acquisitions and divestitures (7) | Approximately 4% | ||||
FX impact | Approximately (0.5)% | ||||
MA Organic Constant Currency Revenue | Increase in the high-single-digit percent range | ||||
The following reconciles the drivers of projected MCO Operating Expense growth:
| Current Guidance | |||||
| FY 2026 Operating Expenses | Increase in the mid-single-digit percent range | ||||
Operating Growth | 2.5 to 3.5% | ||||
| Incentive and Stock-Based Compensation | Approximately 1% | ||||
| Depreciation and Amortization | Approximately 1% | ||||
Reserve for international non-income tax obligation and duplicative rent | Approximately 1% | ||||
| Acquired and Divested Companies | Approximately (1.5)% | ||||
(5) Approximately $100 million in incremental capital expenditures is associated with office relocations in New York and London. (6) Reflects duplicative rent expense related to the transition to Moody’s new global headquarters. Relocations of Moody’s global headquarters have been infrequent, and accordingly, this duplicative rent does not reflect the Company’s ongoing operating cost structure. (7) Primarily relates to the impact from the divestitures of MA’s Learning and Regulatory Solutions businesses. | ||||||||||||||
6
| ASSUMPTIONS | ||
Moody’s updated outlook for full year 2026, as of April 22, 2026, reflects assumptions about numerous factors that could affect its business and is based on currently available information reviewed by management through, and as of, today’s date. These assumptions include, but are not limited to, the effects of current economic conditions, including tariff and trade policies, the effects of interest rates, inflation, foreign currency exchange rates, capital markets’ liquidity, and activity in different sectors of the debt markets. Except to the extent specifically stated otherwise, this outlook does not take into account any acquisitions or dispositions that have not closed prior to the date of this release. This outlook also reflects uncertainties about global GDP growth and could be affected by the impact of changes in international economic conditions, geopolitical events, and international trade and economic policies. Actual full year 2026 results could differ materially from Moody’s current outlook.
This outlook incorporates various specific macroeconomic assumptions, including:
Full Year 2026 Moody's Corporation Guidance as of April 22, 2026 | ||||||||
| Forecasted Item | Last Publicly Disclosed Assumption | Current Assumption | ||||||
U.S. GDP (1) growth | 1.5% - 2.5% | NC (2) | ||||||
Euro area GDP (1) growth | 1.0% - 2.0% | NC (2) | ||||||
Global GDP (1) growth | 2.0% - 3.0% | NC (2) | ||||||
| Global policy rates | Monetary policy is close to neutral. Expecting one to two cuts to the Federal Funds Rate in 2026. The European Central Bank (ECB) will maintain its current policy stance | U.S. rate cut expectations pushed out to end of year or beyond; chance of a hike if conflict extends and spurs inflation | ||||||
| U.S. high yield spreads | To widen to around 470 bps over the next 12 months, close to historical average of around 500 bps | To widen to around 460 bps over the next 12 months, close to historical average of around 500 bps | ||||||
| U.S. inflation rate | 2.0% to 3.0% | NC (3) | ||||||
| Euro area inflation rate | Around 2.0% | Above 2.0% (3) | ||||||
| U.S. unemployment rate | 4.0% to 5.0% during 2026 | NC | ||||||
Global speculative grade default rate | To fall below 3% by year-end | To finish at around 3% by year-end | ||||||
| Global MIS rated issuance | Increase in the low-single-digit percent range | NC | ||||||
| GBP/USD exchange rate | $1.35 for the full year | $1.32 for the remainder of the year | ||||||
| EUR/USD exchange rate | $1.17 for the full year | $1.15 for the remainder of the year | ||||||
NC - There is no difference between the Company’s current guidance and the last publicly disclosed guidance for this item. Note: All current assumptions are as of April 22, 2026. Due to the close proximity of the anticipated closing date the current guidance includes the expected impact of the pending divestiture of the MA Regulatory Solutions business. (1) GDP growth represents real GDP. (2) Downside risk from the conflict in the Middle East to undermine the ongoing economic expansion. (3) Upside risk from sustained high energy prices. | ||||||||
7
| ABOUT MOODY’S CORPORATION | ||
In a world shaped by increasingly interconnected risks, Moody’s (NYSE:MCO) data, insights, and innovative technologies help customers develop a holistic view of their world and unlock opportunities. 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. Learn more at moodys.com.
| “SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 | ||
Certain statements contained in this document are forward-looking statements and are based on future expectations, plans and prospects for Moody’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. The forward-looking statements and other information in this document are made as of the date hereof, and Moody’s 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, Moody’s 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 impact 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 Moody’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; 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.
8
Table 1 - Consolidated Statements of Operations (Unaudited)
Three Months Ended March 31, | |||||||||||
| Amounts in millions, except per share amounts | 2026 | 2025 | |||||||||
| Revenue | $ | 2,079 | $ | 1,924 | |||||||
| Expenses: | |||||||||||
| Operating | 531 | 491 | |||||||||
Selling, general and administrative | 477 | 439 | |||||||||
| Depreciation and amortization | 122 | 113 | |||||||||
| Restructuring | 27 | 33 | |||||||||
| Charges related to asset abandonment | — | 2 | |||||||||
| Total expenses | 1,157 | 1,078 | |||||||||
| Operating income | 922 | 846 | |||||||||
| Non-operating (expense) income, net | |||||||||||
| Interest expense, net | (66) | (61) | |||||||||
Other non-operating income, net | 14 | 19 | |||||||||
| Total non-operating (expense) income, net | (52) | (42) | |||||||||
| Income before provision for income taxes | 870 | 804 | |||||||||
Provision for income taxes(1) | 209 | 179 | |||||||||
Net income attributable to Moody's | $ | 661 | $ | 625 | |||||||
| Earnings per share attributable to Moody's common shareholders | |||||||||||
| Basic | $ | 3.74 | $ | 3.47 | |||||||
| Diluted | $ | 3.73 | $ | 3.46 | |||||||
| Weighted average number of shares outstanding | |||||||||||
| Basic | 176.8 | 180.0 | |||||||||
| Diluted | 177.3 | 180.7 | |||||||||
(1) The Effective Tax Rate (ETR) was 24.0%, higher than the 22.3%, primarily reflecting a decrease in Excess Tax Benefits related to stock-based compensation. | ||
9
Table 2 - Condensed Consolidated Balance Sheet Data (Unaudited)
| Amounts in millions | March 31, 2026 | December 31, 2025 | |||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 1,469 | $ | 2,384 | |||||||
| Short-term investments | 41 | 64 | |||||||||
Accounts receivable, net of allowance for credit losses of $31 in 2026 and $29 in 2025 | 2,044 | 2,024 | |||||||||
| Other current assets | 660 | 714 | |||||||||
| Total current assets | 4,214 | 5,186 | |||||||||
Property and equipment, net of accumulated depreciation of $1,626 in 2026 and $1,572 in 2025 | 735 | 722 | |||||||||
| Operating lease right-of-use assets | 278 | 282 | |||||||||
| Goodwill | 6,335 | 6,368 | |||||||||
| Intangible assets, net | 1,805 | 1,866 | |||||||||
| Deferred tax assets, net | 249 | 305 | |||||||||
| Other assets | 1,116 | 1,101 | |||||||||
| Total assets | $ | 14,732 | $ | 15,830 | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued liabilities | $ | 1,153 | $ | 1,304 | |||||||
| Current portion of operating lease liabilities | 94 | 95 | |||||||||
| Current portion of long-term debt | 576 | — | |||||||||
| Deferred revenue | 1,820 | 1,582 | |||||||||
| Total current liabilities | 3,643 | 2,981 | |||||||||
| Non-current portion of deferred revenue | 54 | 56 | |||||||||
| Long-term debt | 6,387 | 6,994 | |||||||||
| Deferred tax liabilities, net | 311 | 315 | |||||||||
| Uncertain tax positions | 164 | 158 | |||||||||
| Operating lease liabilities | 256 | 262 | |||||||||
| Other liabilities | 774 | 859 | |||||||||
| Total liabilities | 11,589 | 11,625 | |||||||||
| Total Moody's shareholders' equity | 2,994 | 4,054 | |||||||||
| Noncontrolling interests | 149 | 151 | |||||||||
| Total shareholders' equity | 3,143 | 4,205 | |||||||||
Total liabilities, noncontrolling interests and shareholders' equity | $ | 14,732 | $ | 15,830 | |||||||
10
Table 3 - Condensed Consolidated Statements of Cash Flows (Unaudited)
| Three Months Ended March 31, | |||||||||||
| Amounts in millions | 2026 | 2025 | |||||||||
Cash flows from operating activities | |||||||||||
| Net income | $ | 661 | $ | 625 | |||||||
Reconciliation of net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 122 | 113 | |||||||||
| Stock-based compensation | 58 | 56 | |||||||||
| Deferred income taxes | 23 | 18 | |||||||||
Non-cash restructuring and abandonment-related charges | 1 | 3 | |||||||||
Provision for credit losses on accounts receivable | 4 | 5 | |||||||||
Net changes in other operating assets and liabilities | 70 | (63) | |||||||||
| Net cash provided by operating activities | 939 | 757 | |||||||||
Cash flows from investing activities | |||||||||||
| Capital additions | (95) | (85) | |||||||||
| Purchases of investments | (38) | (41) | |||||||||
| Sales and maturities of investments | 66 | 551 | |||||||||
Purchases of investments in non-consolidated affiliates | (1) | (10) | |||||||||
Receipts from settlements of net investment hedges | — | 32 | |||||||||
| Cash paid for acquisitions, net of cash acquired | (23) | (223) | |||||||||
| Net cash (used in) provided by investing activities | (91) | 224 | |||||||||
Cash flows from financing activities | |||||||||||
| Repayment of notes | — | (700) | |||||||||
Proceeds from stock-based compensation plans | 13 | 23 | |||||||||
Repurchase of shares related to stock-based compensation | (76) | (53) | |||||||||
Treasury shares | (1,471) | (373) | |||||||||
Dividends | (185) | (195) | |||||||||
| Net cash used in financing activities | (1,719) | (1,298) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (44) | 48 | |||||||||
| (Decrease) increase in cash and cash equivalents | (915) | (269) | |||||||||
Cash and cash equivalents, beginning of period | 2,384 | 2,408 | |||||||||
Cash and cash equivalents, end of period | $ | 1,469 | $ | 2,139 | |||||||
11
Table 4 - Non-Operating (Expense) Income, Net (Unaudited)
Three Months Ended March 31, | ||||||||||||||
| Amounts in millions | 2026 | 2025 | ||||||||||||
| Interest: | ||||||||||||||
| Income | $ | 12 | $ | 24 | ||||||||||
Expense on borrowings(1) | (55) | (72) | ||||||||||||
Expense on UTPs and other tax related liabilities(2) | (16) | (6) | ||||||||||||
| Net periodic pension costs - interest component | (7) | (7) | ||||||||||||
Interest expense, net | $ | (66) | $ | (61) | ||||||||||
Other non-operating income, net: | ||||||||||||||
FX losses | $ | (6) | $ | (5) | ||||||||||
| Net periodic pension income - non-service and non-interest cost components | 9 | 9 | ||||||||||||
Income from investments in non-consolidated affiliates | 14 | 11 | ||||||||||||
| Gain on investments | 3 | 3 | ||||||||||||
Other | (6) | 1 | ||||||||||||
Other non-operating income, net | $ | 14 | $ | 19 | ||||||||||
| Total non-operating (expense) income, net | $ | (52) | $ | (42) | ||||||||||
(1) Expense on borrowings includes interest on long-term debt and realized gains/losses related to interest rate swaps and cross currency swaps. | ||
(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. | ||
12
Table 5 - Financial Information by Segment (Unaudited)
The table below shows revenue and Adjusted Operating Income by reportable segment. Adjusted Operating Income is a financial metric utilized by the Company’s chief operating decision maker to assess the profitability of each reportable segment.
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amounts in millions | MA | MIS | Eliminations | Consolidated | MA | MIS | Eliminations | Consolidated | |||||||||||||||||||||||||||||||||||||||
| Total external revenue | $ | 926 | $ | 1,153 | $ | — | $ | 2,079 | $ | 859 | $ | 1,065 | $ | — | $ | 1,924 | |||||||||||||||||||||||||||||||
| Intersegment revenue | 3 | 51 | (54) | — | 3 | 49 | (52) | — | |||||||||||||||||||||||||||||||||||||||
| Total revenue | 929 | 1,204 | (54) | 2,079 | 862 | 1,114 | (52) | 1,924 | |||||||||||||||||||||||||||||||||||||||
Compensation expense | 374 | 307 | — | 681 | 362 | 280 | — | 642 | |||||||||||||||||||||||||||||||||||||||
Non-compensation expense | 202 | 91 | — | 293 | 192 | 96 | — | 288 | |||||||||||||||||||||||||||||||||||||||
Intersegment expense | 51 | 3 | (54) | — | 49 | 3 | (52) | — | |||||||||||||||||||||||||||||||||||||||
Total | 627 | 401 | (54) | 974 | 603 | 379 | (52) | 930 | |||||||||||||||||||||||||||||||||||||||
| Adjusted Operating Income | $ | 302 | $ | 803 | $ | — | $ | 1,105 | $ | 259 | $ | 735 | $ | — | $ | 994 | |||||||||||||||||||||||||||||||
| Adjusted Operating Margin | 32.5 | % | 66.7 | % | 53.2 | % | 30.0 | % | 66.0 | % | 51.7 | % | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 100 | 22 | — | 122 | 94 | 19 | — | 113 | |||||||||||||||||||||||||||||||||||||||
| Restructuring | 20 | 7 | — | 27 | 26 | 7 | — | 33 | |||||||||||||||||||||||||||||||||||||||
Reserve for international non-income tax obligation | 34 | — | — | 34 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Charges related to asset abandonment | — | — | — | — | 2 | — | — | 2 | |||||||||||||||||||||||||||||||||||||||
| Operating income | $ | 922 | $ | 846 | |||||||||||||||||||||||||||||||||||||||||||
| Operating margin | 44.3 | % | 44.0 | % | |||||||||||||||||||||||||||||||||||||||||||
Non-operating (expense) income, net | (52) | (42) | |||||||||||||||||||||||||||||||||||||||||||||
Income before provision for income taxes | $ | 870 | $ | 804 | |||||||||||||||||||||||||||||||||||||||||||
13
Table 6 - Transaction and Recurring Revenue (Unaudited)
The following tables summarize the split between transaction revenue and recurring revenue. In the MA segment, recurring revenue represents subscription-based revenue and software maintenance revenue. Transaction revenue in 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. In the MIS segment, excluding MIS Other, transaction revenue represents the initial rating of a new debt issuance, as well as other one-time fees, while recurring revenue 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. In MIS Other, transaction revenue represents revenue from professional services, while recurring revenue represents financial instrument pricing services.
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| Amounts in millions | Transaction | Recurring | Total | Transaction | Recurring | Total | |||||||||||||||||||||||||||||
Decision Solutions | |||||||||||||||||||||||||||||||||||
Banking | $ | 6 | $ | 127 | $ | 133 | $ | 26 | $ | 115 | $ | 141 | |||||||||||||||||||||||
| 5 | % | 95 | % | 100 | % | 18 | % | 82 | % | 100 | % | ||||||||||||||||||||||||
Insurance | $ | 4 | $ | 177 | $ | 181 | $ | 6 | $ | 157 | $ | 163 | |||||||||||||||||||||||
| 2 | % | 98 | % | 100 | % | 4 | % | 96 | % | 100 | % | ||||||||||||||||||||||||
KYC | $ | — | $ | 118 | $ | 118 | $ | — | $ | 101 | $ | 101 | |||||||||||||||||||||||
| — | % | 100 | % | 100 | % | — | % | 100 | % | 100 | % | ||||||||||||||||||||||||
Total Decision Solutions | $ | 10 | $ | 422 | $ | 432 | $ | 32 | $ | 373 | $ | 405 | |||||||||||||||||||||||
| 2 | % | 98 | % | 100 | % | 8 | % | 92 | % | 100 | % | ||||||||||||||||||||||||
| Research & Insights | $ | 3 | $ | 252 | $ | 255 | $ | 3 | $ | 233 | $ | 236 | |||||||||||||||||||||||
| 1 | % | 99 | % | 100 | % | 1 | % | 99 | % | 100 | % | ||||||||||||||||||||||||
| Data & Information | $ | 4 | $ | 235 | $ | 239 | $ | 2 | $ | 216 | $ | 218 | |||||||||||||||||||||||
| 2 | % | 98 | % | 100 | % | 1 | % | 99 | % | 100 | % | ||||||||||||||||||||||||
| Total MA | $ | 17 | $ | 909 | $ | 926 | $ | 37 | $ | 822 | $ | 859 | |||||||||||||||||||||||
| 2 | % | 98 | % | 100 | % | 4 | % | 96 | % | 100 | % | ||||||||||||||||||||||||
| Corporate Finance | $ | 484 | $ | 149 | $ | 633 | $ | 427 | $ | 137 | $ | 564 | |||||||||||||||||||||||
| 76 | % | 24 | % | 100 | % | 76 | % | 24 | % | 100 | % | ||||||||||||||||||||||||
| Structured Finance | $ | 74 | $ | 63 | $ | 137 | $ | 78 | $ | 60 | $ | 138 | |||||||||||||||||||||||
| 54 | % | 46 | % | 100 | % | 57 | % | 43 | % | 100 | % | ||||||||||||||||||||||||
| Financial Institutions | $ | 105 | $ | 89 | $ | 194 | $ | 109 | $ | 82 | $ | 191 | |||||||||||||||||||||||
| 54 | % | 46 | % | 100 | % | 57 | % | 43 | % | 100 | % | ||||||||||||||||||||||||
| Public, Project and Infrastructure Finance | $ | 124 | $ | 52 | $ | 176 | $ | 116 | $ | 47 | $ | 163 | |||||||||||||||||||||||
| 70 | % | 30 | % | 100 | % | 71 | % | 29 | % | 100 | % | ||||||||||||||||||||||||
| MIS Other | $ | 3 | $ | 10 | $ | 13 | $ | 2 | $ | 7 | $ | 9 | |||||||||||||||||||||||
| 23 | % | 77 | % | 100 | % | 22 | % | 78 | % | 100 | % | ||||||||||||||||||||||||
| Total MIS | $ | 790 | $ | 363 | $ | 1,153 | $ | 732 | $ | 333 | $ | 1,065 | |||||||||||||||||||||||
| 69 | % | 31 | % | 100 | % | 69 | % | 31 | % | 100 | % | ||||||||||||||||||||||||
| Total Moody's Corporation | $ | 807 | $ | 1,272 | $ | 2,079 | $ | 769 | $ | 1,155 | $ | 1,924 | |||||||||||||||||||||||
| 39 | % | 61 | % | 100 | % | 40 | % | 60 | % | 100 | % | ||||||||||||||||||||||||
14
Table 7 - Adjusted Operating Income and Adjusted Operating Margin (Unaudited)
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) charges related to asset abandonment and iv) a reserve for an international non-income tax obligation. 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.
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.
Below is a reconciliation of these measures to their most directly comparable U.S. GAAP measures:
Three Months Ended March 31, | |||||||||||
| Amounts in millions | 2026 | 2025 | |||||||||
| Operating income | $ | 922 | $ | 846 | |||||||
| Depreciation and amortization | 122 | 113 | |||||||||
| Restructuring | 27 | 33 | |||||||||
Reserve for international non-income tax obligation | 34 | — | |||||||||
| Charges related to asset abandonment | — | 2 | |||||||||
| Adjusted Operating Income | $ | 1,105 | $ | 994 | |||||||
| Operating margin | 44.3 | % | 44.0 | % | |||||||
| Adjusted Operating Margin | 53.2 | % | 51.7 | % | |||||||
Table 8 - Free Cash Flow (Unaudited)
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:
| Three Months Ended March 31, | |||||||||||
| Amounts in millions | 2026 | 2025 | |||||||||
| Net cash provided by operating activities | $ | 939 | $ | 757 | |||||||
| Capital additions | (95) | (85) | |||||||||
| Free Cash Flow | $ | 844 | $ | 672 | |||||||
| Net cash (used in) provided by investing activities | $ | (91) | $ | 224 | |||||||
| Net cash used in financing activities | $ | (1,719) | $ | (1,298) | |||||||
The increase in both operating cash flow and Free Cash Flow2 was primarily driven by higher operating income in both segments. | ||
15
Table 9 - Organic Constant Currency Revenue Growth (Unaudited)
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 March 31, | |||||||||||||||||||||||||||||
| Amounts in millions | 2026 | 2025 | Change | Growth | |||||||||||||||||||||||||
| MCO revenue | $ | 2,079 | $ | 1,924 | $ | 155 | 8% | ||||||||||||||||||||||
| FX impact | (46) | — | (46) | ||||||||||||||||||||||||||
| Inorganic revenue from acquisitions | (5) | — | (5) | ||||||||||||||||||||||||||
Divestitures | — | (14) | 14 | ||||||||||||||||||||||||||
Organic constant currency MCO revenue | $ | 2,028 | $ | 1,910 | $ | 118 | 6% | ||||||||||||||||||||||
| MA revenue | $ | 926 | $ | 859 | $ | 67 | 8% | ||||||||||||||||||||||
| FX impact | (25) | — | (25) | ||||||||||||||||||||||||||
| Inorganic revenue from acquisitions | (2) | — | (2) | ||||||||||||||||||||||||||
Divestitures | — | (14) | 14 | ||||||||||||||||||||||||||
Organic constant currency MA revenue | $ | 899 | $ | 845 | $ | 54 | 6% | ||||||||||||||||||||||
| Decision Solutions revenue | $ | 432 | $ | 405 | $ | 27 | 7% | ||||||||||||||||||||||
| FX impact | (10) | — | (10) | ||||||||||||||||||||||||||
| Inorganic revenue from acquisitions | (2) | — | (2) | ||||||||||||||||||||||||||
Divestitures | — | (14) | 14 | ||||||||||||||||||||||||||
Organic constant currency Decision Solutions revenue | $ | 420 | $ | 391 | $ | 29 | 7% | ||||||||||||||||||||||
Banking revenue | $ | 133 | $ | 141 | $ | (8) | (6)% | ||||||||||||||||||||||
FX impact | (2) | — | (2) | ||||||||||||||||||||||||||
Divestitures | — | (14) | 14 | ||||||||||||||||||||||||||
Organic constant currency Banking revenue | $ | 131 | $ | 127 | $ | 4 | 3% | ||||||||||||||||||||||
Insurance revenue | $ | 181 | $ | 163 | $ | 18 | 11% | ||||||||||||||||||||||
FX impact | (2) | — | (2) | ||||||||||||||||||||||||||
Inorganic revenue from acquisitions | (2) | — | (2) | ||||||||||||||||||||||||||
Organic constant currency Insurance revenue | $ | 177 | $ | 163 | $ | 14 | 9% | ||||||||||||||||||||||
KYC revenue | $ | 118 | $ | 101 | $ | 17 | 17% | ||||||||||||||||||||||
| FX impact | (6) | — | (6) | ||||||||||||||||||||||||||
Organic constant currency KYC revenue | $ | 112 | $ | 101 | $ | 11 | 11% | ||||||||||||||||||||||
| Research and Insights revenue | $ | 255 | $ | 236 | $ | 19 | 8% | ||||||||||||||||||||||
| FX impact | (4) | — | (4) | ||||||||||||||||||||||||||
Constant currency Research and Insights revenue | $ | 251 | $ | 236 | $ | 15 | 6% | ||||||||||||||||||||||
| Data and Information revenue | $ | 239 | $ | 218 | $ | 21 | 10% | ||||||||||||||||||||||
| FX impact | (11) | — | (11) | ||||||||||||||||||||||||||
Constant currency Data and Information revenue | $ | 228 | $ | 218 | $ | 10 | 5% | ||||||||||||||||||||||
16
Three Months Ended March 31, | |||||||||||||||||||||||||||||
| Amounts in millions | 2026 | 2025 | Change | Growth | |||||||||||||||||||||||||
| MA recurring revenue | $ | 909 | $ | 822 | $ | 87 | 11% | ||||||||||||||||||||||
| FX impact | (25) | — | (25) | ||||||||||||||||||||||||||
| Inorganic recurring revenue from acquisitions | (2) | — | (2) | ||||||||||||||||||||||||||
Organic constant currency MA recurring revenue | $ | 882 | $ | 822 | $ | 60 | 7% | ||||||||||||||||||||||
Decision solutions recurring revenue | $ | 422 | $ | 373 | $ | 49 | 13% | ||||||||||||||||||||||
| FX impact | (10) | — | (10) | ||||||||||||||||||||||||||
| Inorganic recurring revenue from acquisitions | (2) | — | (2) | ||||||||||||||||||||||||||
Organic constant currency Decision Solutions recurring revenue | $ | 410 | $ | 373 | $ | 37 | 10% | ||||||||||||||||||||||
Banking recurring revenue | $ | 127 | $ | 115 | $ | 12 | 10% | ||||||||||||||||||||||
| FX impact | (2) | — | (2) | ||||||||||||||||||||||||||
Organic constant currency Banking recurring revenue | $ | 125 | $ | 115 | $ | 10 | 9% | ||||||||||||||||||||||
Insurance recurring revenue | $ | 177 | $ | 157 | $ | 20 | 13% | ||||||||||||||||||||||
| FX impact | (2) | — | (2) | ||||||||||||||||||||||||||
| Inorganic recurring revenue from acquisitions | (2) | — | (2) | ||||||||||||||||||||||||||
Organic constant currency Insurance recurring revenue | $ | 173 | $ | 157 | $ | 16 | 10% | ||||||||||||||||||||||
KYC recurring revenue | $ | 118 | $ | 101 | $ | 17 | 17% | ||||||||||||||||||||||
| FX impact | (6) | — | (6) | ||||||||||||||||||||||||||
Organic constant currency KYC recurring revenue | $ | 112 | $ | 101 | $ | 11 | 11% | ||||||||||||||||||||||
Research & Insights recurring revenue | $ | 252 | $ | 233 | $ | 19 | 8% | ||||||||||||||||||||||
| FX impact | (4) | — | (4) | ||||||||||||||||||||||||||
Organic constant currency Research & Insights recurring revenue | $ | 248 | $ | 233 | $ | 15 | 6% | ||||||||||||||||||||||
Data & Information recurring revenue | $ | 235 | $ | 216 | $ | 19 | 9% | ||||||||||||||||||||||
FX impact | (11) | — | (11) | ||||||||||||||||||||||||||
Organic constant currency Data & Information recurring revenue | $ | 224 | $ | 216 | $ | 8 | 4% | ||||||||||||||||||||||
MIS revenue | $ | 1,153 | $ | 1,065 | $ | 88 | 8% | ||||||||||||||||||||||
| FX impact | (21) | — | (21) | ||||||||||||||||||||||||||
Inorganic revenue from acquisitions | (3) | — | (3) | ||||||||||||||||||||||||||
Organic constant currency MIS revenue | $ | 1,129 | $ | 1,065 | $ | 64 | 6% | ||||||||||||||||||||||
| Corporate Finance revenue | $ | 633 | $ | 564 | $ | 69 | 12% | ||||||||||||||||||||||
| FX impact | (10) | — | (10) | ||||||||||||||||||||||||||
| Organic constant currency Corporate Finance revenue | $ | 623 | $ | 564 | $ | 59 | 10% | ||||||||||||||||||||||
| Structured Finance revenue | $ | 137 | $ | 138 | $ | (1) | (1)% | ||||||||||||||||||||||
| FX impact | (3) | — | (3) | ||||||||||||||||||||||||||
| Organic constant currency Structured Finance revenue | $ | 134 | $ | 138 | $ | (4) | (3)% | ||||||||||||||||||||||
| Financial Institutions revenue | $ | 194 | $ | 191 | $ | 3 | 2% | ||||||||||||||||||||||
| FX impact | (5) | — | (5) | ||||||||||||||||||||||||||
| Organic constant currency Financial Institutions revenue | $ | 189 | $ | 191 | $ | (2) | (1)% | ||||||||||||||||||||||
| PPIF revenue | $ | 176 | $ | 163 | $ | 13 | 8% | ||||||||||||||||||||||
| FX impact | (3) | — | (3) | ||||||||||||||||||||||||||
| Organic constant currency PPIF revenue | $ | 173 | $ | 163 | $ | 10 | 6% | ||||||||||||||||||||||
17
Table 10 - Key Performance Metrics - Annualized Recurring Revenue (Unaudited)
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. Given the close proximity of the anticipated closing date to the date of this document, the Company excluded contracts associated with the MA Regulatory Solutions business from ARR to reflect the expected impact of the pending divestiture.
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 | March 31, 2026 | March 31, 2025 | Change | Growth | |||||||||||||||||||
| MA ARR | |||||||||||||||||||||||
| Banking | $ | 422 | $ | 382 | $ | 40 | 10% | ||||||||||||||||
| Insurance | 706 | 658 | 48 | 7% | |||||||||||||||||||
| KYC | 473 | 419 | 54 | 13% | |||||||||||||||||||
Total Decision Solutions | $ | 1,601 | $ | 1,459 | $ | 142 | 10% | ||||||||||||||||
| Research and Insights | 1,027 | 964 | 63 | 7% | |||||||||||||||||||
| Data and Information | 979 | 920 | 59 | 6% | |||||||||||||||||||
| Total MA ARR | $ | 3,607 | $ | 3,343 | $ | 264 | 8% | ||||||||||||||||
18
Table 11 - Adjusted Net Income and Adjusted Diluted EPS Attributable to Moody's Common Shareholders (Unaudited)
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) charges related to asset abandonment; and iv) and a reserve for an international non-income tax obligation and related interest and penalties.
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.
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.
Below is a reconciliation of these measures to their most directly comparable U.S. GAAP measures:
Three Months Ended March 31, | |||||||||||||||||
| Amounts in millions | 2026 | 2025 | |||||||||||||||
| Net Income attributable to Moody's common shareholders | $ | 661 | $ | 625 | |||||||||||||
Pre-tax acquisition-related intangible amortization | $ | 53 | $ | 53 | |||||||||||||
Tax on acquisition-related intangible amortization | (13) | (13) | |||||||||||||||
Net acquisition-related intangible amortization | 40 | 40 | |||||||||||||||
| Pre-tax restructuring | $ | 27 | $ | 33 | |||||||||||||
| Tax on restructuring | (6) | (8) | |||||||||||||||
| Net restructuring | 21 | 25 | |||||||||||||||
Pre-tax reserve for international non-income tax obligation and related interest and penalties | $ | 53 | $ | — | |||||||||||||
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 | 45 | — | |||||||||||||||
| Pre-tax charges related to asset abandonment | $ | — | $ | 2 | |||||||||||||
| Tax on charges related to asset abandonment | — | — | |||||||||||||||
| Net charges related to asset abandonment | — | 2 | |||||||||||||||
| Adjusted Net Income | $ | 767 | $ | 692 | |||||||||||||
19
Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| Diluted earnings per share attributable to Moody's common shareholders | $ | 3.73 | $ | 3.46 | |||||||||||||
Pre-tax acquisition-related intangible amortization | $ | 0.30 | $ | 0.29 | |||||||||||||
Tax on acquisition-related intangible amortization | (0.07) | (0.07) | |||||||||||||||
Net acquisition-related intangible amortization | 0.23 | 0.22 | |||||||||||||||
| Pre-tax restructuring | $ | 0.15 | $ | 0.18 | |||||||||||||
| Tax on restructuring | (0.03) | (0.04) | |||||||||||||||
| Net restructuring | 0.12 | 0.14 | |||||||||||||||
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 | |||||||||||||
| Tax on charges related to asset abandonment | — | — | |||||||||||||||
| Net charges related to asset abandonment | — | 0.01 | |||||||||||||||
| Adjusted Diluted EPS | $ | 4.33 | $ | 3.83 | |||||||||||||
| Note: The tax impacts in the tables above were calculated using tax rates in effect in the jurisdiction for which the item relates. | ||
| TELECONFERENCE DETAILS | ||
| Date and Time | April 22, 2026, at 9:00 a.m. Eastern Time (ET). | |||||||
| Webcast | The webcast and its replay can be accessed through Moody’s Investor Relations website, ir.moodys.com, within “Events & Presentations.” | |||||||
| Dial In | U.S. and Canada | ‘+1-800-715-9871 | ||||||
Other callers | ‘+1-646-307-1963 | |||||||
| Passcode | 515 6491 | |||||||
| Dial In Replay | A replay will be available immediately after the call on April 22, 2026 and until April 29, 2026. | |||||||
U.S. and Canada | ‘+1-800-770-2030 | |||||||
Other callers | ‘+1-609-800-9909 | |||||||
| Passcode | 515 6491 | |||||||
20
FAQ
How did Moody’s (MCO) perform financially in Q1 2026?
Moody’s posted strong Q1 2026 results, with revenue rising 8% to $2.079 billion and operating income reaching $922 million. Diluted EPS grew to $3.73, while Adjusted Diluted EPS increased 13% to $4.33, reflecting improved profitability and leverage.
What were Moody’s (MCO) segment results for Moody’s Analytics and Moody’s Investors Service in Q1 2026?
In Q1 2026, Moody’s Analytics revenue increased 8% to $926 million, with ARR up 8% to $3.607 billion and Adjusted Operating Margin at 32.5%. Moody’s Investors Service revenue rose 8% to $1.153 billion, and its Adjusted Operating Margin improved to 66.7%.
What is Moody’s (MCO) earnings guidance for full-year 2026?
For full-year 2026, Moody’s guides to operating margin of approximately 45% and Adjusted Operating Margin of 52%–53%. It expects Diluted EPS of $16.00–$16.60 and Adjusted Diluted EPS between $16.40 and $17.00, supported by high-single-digit revenue growth.
How important is recurring revenue and ARR to Moody’s Analytics in 2026?
Recurring revenue is central to Moody’s Analytics, representing 98% of its Q1 2026 revenue. MA’s Annualized Recurring Revenue (ARR) reached $3.607 billion, up 8% year over year, driven by 10% growth in Decision Solutions ARR and solid increases in Research, Insights, Data and Information.