Moody's Corporation operates as an integrated risk assessment firm worldwide. It operates in two segments, Moody's Analytics and Moody's Investors Services. The Moody's Analytics segment develops a range of products and services that support the risk management activities of institutional participants in financial markets. It also offers credit research, credit models and analytics, economics data and models, and structured finance solutions; data sets on companies and securities; and SaaS solutions supporting banking, insurance, and know your customer workflows. The Moody's Investors Service segment publishes credit ratings and provides assessment services on various debt obligations, programs and facilities, and entities that issue such obligations, such as various corporate, financial institution, and governmental obligations, as well as structured finance securities. The company was formerly known as Dun and Bradstreet Company and changed its name to Moody's Corporation in September 2000. Moody's Corporation was founded in 1900 and is headquartered in New York, New York.

Moody's Corporation

It has been about a month since the last earnings report for Moody's (MCO). Shares have lost about 0.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Moody's due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.
Moody's Q2 Earnings Beat Estimates, Revenues & Expenses Rise Y/Y
Moody's has reported second-quarter 2025 adjusted earnings of $3.56 per share, which outpaced the Zacks Consensus Estimate of $3.44. The bottom line increased 8.5% from the year-ago quarter figure.
The results were primarily aided by an improvement in revenues and a steady demand for analytics. The company’s liquidity position was strong in the quarter. However, an increase in operating expenses posed a headwind.
After considering certain non-recurring items, net income attributable to Moody's was $578 million or $3.21 per share, up from $552 million or $3.02 per share in the prior-year quarter.
Revenues Improve, Costs Rise
Revenues were $1.90 billion, beating the Zacks Consensus Estimate of $1.85 billion. Also, the top line grew 4.5% year over year.
Total expenses were $1.08 billion, up 3.6% year over year.
Adjusted operating income of $966 million rose 7.1% year over year. The adjusted operating margin was 50.9%, rising from 49.6% a year ago.
Segment Performance Mixed
MIS segment revenues declined marginally year over year to $1.06 billion. The fall was due to weakness in Corporate Finance and Financial Institutions, partly offset by improvement in Structured Finance revenues.
MA segment revenues rose 10.5% to $891 million. Robust demand for Moody’s proprietary data and unique analytical insights contributed to the rise.
Balance Sheet Strong
As of June 30, 2025, Moody’s had total cash, cash equivalents and short-term investments of $2.29 billion, down from $2.97 billion as of Dec. 31, 2024.
The company had $7 billion in outstanding debt and $1.25 billion in additional borrowing capacity under the revolving credit facility.
In the reported quarter, MCO repurchased 0.6 million shares at an average price of $460.76.
2025 Guidance
Given the market volatility and uncertainty and first-half 2025 performance, Moody’s now expects adjusted earnings in the range of $13.50-$14.00 per share, changed from the prior target of the $13.25-$14.00 band.
On a GAAP basis, earnings are now projected between $12.25 and $12.75 per share, changed from the earlier mentioned $12.00-$12.75 range.
Moody’s projects revenues to increase in the mid-single-digit percent range.
Operating expenses are expected to rise in the low-to-mid-single-digit percent range.
Net interest expenses are estimated to be in the range of $220-$240 million. Depreciation and amortization expenses are expected to rise 6%.
Adjusted operating margin is expected to be 49-50%. The operating margin is likely to be 42-43%.
Moody’s expects cash flow from operations in the $2.65-$2.85 billion range. Free cash flow is projected to be in the band of $2.30-$2.50 billion.
The effective tax rate is projected to be 23-25%.
Segment Outlook for 2025
MIS segment revenues are now expected to increase in the low to mid-single-digit range, changed from the previous guidance of stable to mid-single-digit growth.
Adjusted operating margin is expected to be 61-62%.
Coming to the MA segment, Moody’s anticipates revenues to rise in the high-single-digit percentage range.
Adjusted operating margin is expected to be 32-33%. Further, the segment’s organic Annualized Recurring Revenue (ARR) is projected to rise in the high-single-digit percent range.
Medium-Term Targets (Base Year: 2022 and to be Achieved by 2027-end)
Total revenues are projected to rise in the range of high-single to low-double-digit.
Adjusted operating margin is expected to be in the low-50s% range.
Adjusted earnings are expected to grow in the low-to-mid-teens percentage range.
Further, MIS and MS segment revenues are anticipated to jump in the range of high-single to low-double-digit percentages.
Additionally, in December 2024, Moody’s CEO approved a Strategic and Operational Efficiency Restructuring Program aimed at improving efficiency and focusing on growth areas. The initiative is expected to generate annual savings of $250–$300 million by consolidating functions, reducing staff, exiting leased office spaces and retiring legacy software. The program involves $170–$200 million in pre-tax personnel-related restructuring charges and an additional $30–$50 million in non-cash charges. It is projected to strengthen operating margins and support strategic investments, with substantial completion by the end of 2026 and related cash outlays continuing through 2027.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Moody's has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Moody's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Moody's (MCO) Down 0.7% Since Last Earnings Report?

An updated edition of the July 9, 2025 article.
From various sources like online shopping, sensors, social media, videos and more, a massive amount of information is generated daily. These large and complex data sets are known as Big Data, which can be both structured and unstructured.
However, the traditional data processing software is not capable of storing and processing the vast amount of data. But Artificial Intelligence (AI) and advanced machine learning algorithms can now process and analyze huge amounts of data.
With analytics becoming smarter and more useful every day, traders are now executing prompt trades based on instantly generated patterns and trends. To increase client satisfaction, banks and financial institutions are coming up with targeted marketing strategies while employing Big Data and AI on a massive scale. The technology is now helping banks detect fraud in real-time. Insurance companies are capable of detecting false claims while analyzing data from both records and social media.
The finance world has become significantly more secure and efficient, thanks to the widespread utilization of Big Data. This is paving the way for the industry to witness massive growth in the years to come, driven by its widespread acceptance across industries comprising healthcare, finance, retail and manufacturing. According to MarketsandMarkets, the global Big Data market is expected to reach $401.2 billion by 2028.
This surge in demand has given tech companies a significant advantage as they develop the tools and infrastructure needed to harness Big Data’s potential. For instance, NVIDIA NVDA powers Big Data with advanced chips, while Moody’s Corporation MCO has transformed its model from traditional ratings to become a leader in risk analytics.
NVDA is now leading the way in AI, thanks to its new Blackwell technology, powerful software tools and strategic partnerships. The Blackwell GPU architecture — the company’s latest breakthrough — is designed to train advanced AI models and run complex simulations faster and more cost-effectively than ever before. With NVIDIA’s GPUs now a key part of everyday technologies, including chatbots and recommendation systems to self-driving cars and robotics, the company has become central to the Big Data revolution.
On the other hand, while acquiring smaller firms and expanding capabilities, Moody’s has broadened its reach and services by adding new capabilities, thereby offering clients better tools to manage their risks and finances.
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With the rise of Big Data, the business of Palantir Technologies Inc. PLTR has also evolved. Through the development of software, PLTR has been helping companies understand overwhelming amounts of information. It should be noted that merely collecting data is not enough; businesses and governments need effective tools to make sense of it so that they can take necessary decisions. To solve this problem, Palantir built systems that turned scattered information into clear insights. Thus, for example, banks are employing the tools to finish customer checks at a rapid pace, thereby aiding new accounts to get opened in hours instead of days.
The company, carrying a Zacks Rank #2 (Buy), emphasized that AI alone can be unreliable, but when connected to Palantir Technologies’method of organizing data—its ontology —it works in a clear and more dependable way. Thus, the tools of PLTR are now much in demand, spreading across industries, thereby helping automakers streamline production to defense agencies manage complex operations.
From primarily grading bonds to being a data-driven advisor, the business of Moody’s Corporation has thus evolved with the advent of Big Data. The company’s advanced tools can now process and interpret voluminous amounts of financial, economic and company data. Starting from assessing loan risks to monitoring compliance and pricing complex assets, Moody’s can now easily assist banks, insurers and investors in making quicker and more reliable decisions.
The Zacks #2 Ranked Moody’s has combined modern analytics and AI with its long-standing ratings business. This shift means it no longer relies only on one-time fees from rating debt issues. Instead, Big Data has helped Moody’s build steady, subscription-style services where customers pay regularly for insights and tools, making its income more stable and predictable.
Dell Technologies DELL has significantly evolved from just making PCs and traditional servers. One of its main focuses is on building powerful infrastructure capable of handling large amounts of data. The company has already introduced advanced AI servers and a data platform that can support everything from chatbots to smart machines. Just to have an idea of how in demand Dell Technologies’ systems have become, the company has received more than $12 billion in AI server orders in early 2025 alone.
Notably, to aid businesses in the prompt and secure management of data, DELL’s new AI Factory includes smart computers, cutting-edge storage and tools. To support this shift, Dell has joined forces with big tech companies like NVIDIA, thereby making it easier and faster for other businesses to use Big Data and AI. Even internally, the company, with a Zacks Rank of 2, is leveraging AI tools powered by its data to provide improved customer service.
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Top Big Data Stocks Powering the Next Wave of AI and Analytics

Investors interested in Financial - Miscellaneous Services stocks are likely familiar with Virtu Financial (VIRT) and Moody's (MCO). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Virtu Financial is sporting a Zacks Rank of #1 (Strong Buy), while Moody's has a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that VIRT likely has seen a stronger improvement to its earnings outlook than MCO has recently. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
VIRT currently has a forward P/E ratio of 8.80, while MCO has a forward P/E of 37.62. We also note that VIRT has a PEG ratio of 0.51. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MCO currently has a PEG ratio of 3.34.
Another notable valuation metric for VIRT is its P/B ratio of 3.91. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, MCO has a P/B of 22.72.
Based on these metrics and many more, VIRT holds a Value grade of A, while MCO has a Value grade of F.
VIRT stands above MCO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that VIRT is the superior value option right now.
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VIRT or MCO: Which Is the Better Value Stock Right Now?

Key Points
Legendary investor Warren Buffett is stepping down as Berkshire Hathaway CEO at the end of 2025.
Berkshire is down by 11% since Buffett’s surprise announcement.
Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) reached an all-time high in early May. Then, Warren Buffett shocked the investing world at Berkshire's annual meeting by announcing his intention to step down from the CEO role at the end of the year.
Since his announcement, Berkshire stock is down by about 11%. Is this a justified decline because the "Buffett premium" is going away, or does this represent an opportunity to buy shares at a discount? Here's what you need to know.
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Not much is changing
First of all, Warren Buffett will turn 95 years old on Aug. 30. Is it really that much of a surprise that he isn't going to be running Berkshire for much longer? It just seems far-fetched that the market was pricing in a more than 10% premium on the hopes Buffett would continue to defy the odds and work into his late 90s. And to be honest, I feel that there's value in an orderly succession plan like this, as opposed to expecting Buffett to simply stay at the reins until he can't do it anymore.
It's also important to point out that on Jan. 1, 2026, the first day Buffett won't be CEO, not much is going to change from a day-to-day perspective. Berkshire's 60-plus subsidiary businesses largely operate with little or no oversight already. Greg Abel, who will take over as CEO, already oversees all non-insurance operations, and Ajit Jain is Berkshire's insurance head.
The biggest immediate changes will be that different people will be in control of the company's stock portfolio, and Abel will have power over Berkshire's $344 billion cash hoard. However, portfolio managers Ted Weschler and Todd Combs have been managing more of Berkshire's investments as the years have progressed.
If anything, Berkshire should be worth more now
From a business perspective, it's tough to make the argument that Berkshire's intrinsic value is lower than it was on May 1 before Buffett made his announcement.
There are three major components of Berkshire Hathaway's business -- the cash stockpile, the operating businesses, and the stock portfolio.
First, the cash is about $3 billion lower than it was at the end of the first quarter, but that represents about 0.3% of Berkshire's market value. And in the second quarter earnings report, there was no cause for concern about the operating businesses -- in fact, everything besides insurance underwriting profits (which are lumpy over time) grew nicely.
That leaves the stock portfolio. Consider Berkshire's top stock positions and how they've performed in the months since Buffett's announcement:
Company (Ticker Symbol)
Total Return Since May 1
These are all of Berkshire's stock positions with a market value of $10 billion or more and represent nearly three-fourths of the entire stock portfolio. And the average return from this group is positive-12% since Buffett announced his retirement. It's fair to say that since Buffett made his announcement, the stock portfolio has gained tens of billions of dollars in market value.
The bottom line
To be completely fair, there's an argument to be made against buying Berkshire. For one thing, management didn't buy back any shares in the second quarter, despite the plunge after Buffett's announcement, which could suggest leadership still thinks the stock isn't a compelling value.
Plus, Berkshire's operating businesses aren't bad, but they aren't exactly industry standouts in many cases. For example, GEICO recently lost its No. 2 auto insurance market share to Progressive (NYSE: PGR), and Berkshire's management has acknowledged it has fallen behind when it comes to technology.
Having said that, Berkshire is still designed to be an incredible long-term compounding machine, and a new person in the CEO office, who has essentially been Buffett's understudy for years, doesn't change that. Berkshire is already one of my largest investments, and has been for some time, but I'm likely to add shares if this price level persists.
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American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Matt Frankel has positions in American Express, Bank of America, and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, Chevron, Moody's, and Progressive. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Should You Buy Berkshire Hathaway Stock, Even Though It's Down 10% Since Warren Buffett Announced He's Retiring as CEO?

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares U.S. Financials ETF (Symbol: IYF) where we have detected an approximate $203.1 million dollar outflow -- that's a 4.8% decrease week over week (from 34,700,000 to 33,050,000). Among the largest underlying components of IYF, in trading today KKR & CO Inc (Symbol: KKR) is up about 0.1%, Moody's Corp. (Symbol: MCO) is up about 0.9%, and Robinhood Markets Inc (Symbol: HOOD) is lower by about 3.1%. For a complete list of holdings, visit the IYF Holdings page » The chart below shows the one year price performance of IYF, versus its 200 day moving average:
Looking at the chart above, IYF's low point in its 52 week range is $95.34 per share, with $124.56 as the 52 week high point — that compares with a last trade of $123.54. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

IYF, KKR, MCO, HOOD: ETF Outflow Alert

Looking at the universe of stocks we cover at Dividend Channel, on 8/15/25, Jabil Inc (Symbol: JBL), Moody's Corp. (Symbol: MCO), and Federal Signal Corp. (Symbol: FSS) will all trade ex-dividend for their respective upcoming dividends. Jabil Inc will pay its quarterly dividend of $0.08 on 9/3/25, Moody's Corp. will pay its quarterly dividend of $0.94 on 9/5/25, and Federal Signal Corp. will pay its quarterly dividend of $0.14 on 8/28/25. As a percentage of JBL's recent stock price of $230.31, this dividend works out to approximately 0.03%, so look for shares of Jabil Inc to trade 0.03% lower — all else being equal — when JBL shares open for trading on 8/15/25. Similarly, investors should look for MCO to open 0.18% lower in price and for FSS to open 0.11% lower, all else being equal.
Below are dividend history charts for JBL, MCO, and FSS, showing historical dividends prior to the most recent ones declared.
Jabil Inc (Symbol: JBL):
Moody's Corp. (Symbol: MCO):
Federal Signal Corp. (Symbol: FSS):
In general, dividends are not always predictable, following the ups and downs of company profits over time. Therefore, a good first due diligence step in forming an expectation of annual yield going forward, is looking at the history above, for a sense of stability over time. This can help in judging whether the most recent dividends from these companies are likely to continue. If they do continue, the current estimated yields on annualized basis would be 0.14% for Jabil Inc, 0.73% for Moody's Corp., and 0.43% for Federal Signal Corp..
In Wednesday trading, Jabil Inc shares are currently up about 3.4%, Moody's Corp. shares are up about 0.9%, and Federal Signal Corp. shares are up about 2.7% on the day.
Also see:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Ex-Dividend Reminder: Jabil, Moody's and Federal Signal

Runway Growth Finance Corp. RWAY is slated to report second-quarter 2025 results on Aug. 7, after market close. Its revenues are expected to have declined, while earnings are likely to have risen on a year-over-year basis.
In the last reported quarter, RWAY’s earnings beat the Zacks Consensus Estimate. Results were aided by lower expenses and robust portfolio activities. However, lower total investment income acted as a spoilsport.
Runway Growth has a weak earnings surprise history. The company’s earnings lagged the Zacks Consensus Estimate in three of the trailing four quarters and beat it in one.
Runway Growth Finance Corp. Price and EPS Surprise
Earnings & Sales Projections for RWAY’s Q2
The Zacks Consensus Estimate for RWAY’s earnings is pegged at 39 cents, stable over the past seven days. The figure indicates a 5.4% increase from the prior-year quarter.
The consensus estimate for sales is pegged at $34 million, which suggests a marginal fall.
Other Factors to Impact RWAY’s Q2 Earnings
The Federal Reserve kept interest rates unchanged at 4.25-4.5% during the second quarter of 2025, which is likely to have aided Runway Growth’s interest income given higher loan yields.
Runway Growth has been witnessing higher expenses over the past several quarters. As the company has been investing in venture growth stage companies, operating costs are expected to have been elevated in the second quarter.
Earnings Whispers for RWAY
Our quantitative model does not conclusively predict an earnings beat for Runway Growth this time. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Runway Growth has an Earnings ESP of 0.00%.
Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Stocks
Moody's MCO second-quarter 2025 adjusted earnings of $3.56 per share outpaced the Zacks Consensus Estimate of $3.44. The bottom line grew 8.5% from the year-ago quarter figure.
MCO’s results were primarily aided by an improvement in revenues. Steady demand for analytics further supported results. The company’s liquidity position was strong in the quarter. However, an increase in operating expenses posed a headwind.
Moelis & Company MC second-quarter 2025 adjusted earnings of 53 cents per share surpassed the Zacks Consensus Estimate of 32 cents. The bottom line improved significantly from 18 cents per share in the prior-year quarter.
Results benefited from a rise in revenues and other income. Also, the company had a solid liquidity position in the quarter. However, an increase in expenses was a headwind for MC.
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Runway Growth's Q2 Earnings Coming Up: What's in Store?

Investors might want to bet on Moody's (MCO), as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.
The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.
Since a changing earnings picture is a powerful factor influencing near-term stock price movements, the Zacks rating system is very useful for individual investors. They may find it difficult to make decisions based on rating upgrades by Wall Street analysts, as these are mostly driven by subjective factors that are hard to see and measure in real time.
As such, the Zacks rating upgrade for Moody's is essentially a positive comment on its earnings outlook that could have a favorable impact on its stock price.
Most Powerful Force Impacting Stock Prices
The change in a company's future earnings potential, as reflected in earnings estimate revisions, and the near-term price movement of its stock are proven to be strongly correlated. The influence of institutional investors has a partial contribution to this relationship, as these big professionals use earnings and earnings estimates to calculate the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their transaction of large amounts of shares then leads to price movement for the stock.
For Moody's, rising earnings estimates and the consequent rating upgrade fundamentally mean an improvement in the company's underlying business. And investors' appreciation of this improving business trend should push the stock higher.
Harnessing the Power of Earnings Estimate Revisions
As empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, tracking such revisions for making an investment decision could be truly rewarding. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .
Earnings Estimate Revisions for Moody's
This credit ratings agency is expected to earn $13.80 per share for the fiscal year ending December 2025, which represents no year-over-year change.
Analysts have been steadily raising their estimates for Moody's. Over the past three months, the Zacks Consensus Estimate for the company has increased 1.6%.
Bottom Line
Unlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.
The upgrade of Moody's to a Zacks Rank #2 positions it in the top 20% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.
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Moody's (MCO) Upgraded to Buy: What Does It Mean for the Stock?

Key Points
- GAAP revenue of $1.90 billion for Q2 2025 exceeded estimates, with the Moody's Analytics segment leading growth at 11% year-over-year.
- Adjusted earnings per share reached $3.56, beating consensus by 5.0% as profit margins improved.
- The company raised its quarterly dividend by 11% to $0.94 per share, as declared on July 22, 2025, and updated full-year EPS guidance.
Moody's (NYSE:MCO), a leading provider of credit ratings, research, and risk analytics, released its results for the second quarter of fiscal 2025 on July 23, 2025. The company reported GAAP revenue of $1.90 billion, topping analyst expectations of $1.85 billion (GAAP). Adjusted earnings per share (Non-GAAP) came in at $3.56, ahead of the $3.39 consensus forecast (non-GAAP). Moody's also expanded its operating margin and saw strong recurring revenue growth from its analytics business. Overall, the quarter showed positive surprises on both revenue and profits, with clear momentum in analytics and technology-driven products, but also flagged slower growth in core ratings activity.
Metric
Q2 2025
Q2 2025 Estimate
Q2 2024
Y/Y Change
EPS (Non-GAAP)
$3.56
$3.39
$3.28
8.5%
Revenue (GAAP)
$1.90 billion
$1.85 billion
$1.82 billion
4.4%
Operating Margin
43.1%
42.7%
0.4 pp
Adjusted Operating Margin
50.9%
49.6%
1.3 pp
Free Cash Flow (Non-GAAP)
$1.14 billion*
$1.29 billion
(11.6%)
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Key Success Factors
Moody's is a global risk assessment and data analytics firm, best known for its credit rating services. It delivers financial intelligence through two main business segments: Moody's Investors Service, which provides credit ratings and research, and Moody's Analytics, which offers risk management software, data, and financial modeling tools.
The company's recent focus centers on three areas: expanding recurring revenue from analytics, innovating with artificial intelligence (AI) and automation, and maintaining regulatory compliance amid new digital regulations. These areas are central to sustaining growth, building client trust, and managing operational risks as financial regulations and technologies evolve.
Quarter Highlights: Financial and Strategic Developments
The quarter reflected solid growth, particularly in Moody's Analytics, which posted 11% revenue growth, outpacing the group as a whole. This segment benefited from strong demand for recurring risk management products. Notably, recurring revenue made up 96% of Moody's Analytics revenue, and grew by 12% versus the prior-year period
Key product families in analytics include Decision Solutions (risk and compliance software for banking, insurance, and Know Your Customer or KYC verification), Research & Insights (credit research and market analysis), and Data & Information (financial and market data services). Decision Solutions revenue grew 13%, led by KYC at 22% in the second quarter and insurance solutions at 14% in the second quarter. The company also highlighted advances in AI-powered tools, such as the Research Assistant for automating data review and new generative AI agents for KYC screening. These innovations drove a 360 basis point increase in the adjusted operating margin for analytics, reaching 32.1%.
Moody's Investors Service, the credit ratings business, saw stable GAAP revenue compared to the prior year. This decline was offset by a favorable revenue mix. Adjusted operating margin for the MIS segment rose to 64.2%. However, overall ratings revenue growth slowed, with the segment now more reliant on recurring monitoring and non-issuance income streams.
For the company overall, consolidated adjusted operating margin expanded to 50.9%, reflecting ongoing efficiency programs and sharper focus on cost management. Operating expenses rose 4%, driven in part by restructuring charges and recent acquisitions. Free cash flow was $1.14 billion for the first six months of 2025, mostly due to higher tax and compensation expenses.
Moody's continued its track record of returning value to shareholders, repurchasing 0.6 million shares during the quarter. The board approved an 11% increase in the quarterly dividend, raising it to $0.94 per share, as declared on July 22, 2025.
Looking Ahead: Guidance and Key Trends
Moody's provided updated guidance for the full year. It affirmed expectations for consolidated revenue growth in the mid-single-digit percent range, and kept its adjusted operating margin target at 49–50%. The company raised and narrowed its adjusted (non-GAAP) earnings per share estimate to $13.50–$14.00, up from $13.25–$14.00 previously. For the Analytics segment, revenue and annualized recurring revenue (ARR) targets remain in the high-single-digit percent range; for the Investors Service segment, revenue growth expectations were shifted up slightly to low- to mid-single digits, reflecting recent revenue mix improvements despite soft market issuance.
Management's outlook assumes modest economic growth in the U.S. and Europe, persistent but manageable inflation, and a decline in global MIS rated bond issuance volumes in the low- to mid-single-digit percent range for the full year. The company also cited enhanced adoption and customer interest in new AI-driven product features. Investors should watch for further changes in debt issuance activity (a key factor for the ratings business), the rate of recurring revenue gains in analytics, and how structural cost programs affect free cash flow in the quarters ahead. The quarterly dividend was raised 11% to $0.94 per share, as declared on July 22, 2025.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends Moody's. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Moody's Posts 11 Percent Gain in Q2

Key Points
- Adjusted earnings per share surpassed estimates, reaching $3.56 versus the $3.39 consensus.
- Revenue climbed to $1.9 billion, outperforming expectations and up 4.4% from the prior year.
- Moody’s Analytics segment led growth, while operating margins expanded; the quarterly dividend increased by 11% to $0.94 per share.
Moody’s (NYSE:MCO), a major player in credit ratings, research, and risk analytics, released its latest quarterly results on July 23, 2025, for the second quarter of fiscal 2025. The most notable news was a solid beat on both adjusted earnings per share and revenue, with bottom-line performance at $3.56 (Non-GAAP EPS), well ahead of the $3.39 analyst estimate. Revenue reached $1.9 billion, exceeding consensus and rising from $1.82 billion a year earlier. These numbers reflect strong execution in Moody's Analytics, cost discipline, and expanding margins. The quarter was marked by resilient top-line growth and an improved operating profile, with management also raising the lower end of their adjusted full-year EPS outlook. Overall, the quarter showed expansion in recurring revenues, strong margin gains, and a continued focus on innovation, but signs of softness in select revenue streams and a dip in free cash flow suggest areas for investors to watch.
Metric
Q2 2025
Q2 2025 Estimate
Q2 2024
Y/Y Change
EPS (Non-GAAP)
$3.56
$3.39
$3.28
8.5%
EPS (GAAP)
$3.21
$3.02
6.3%
Revenue (GAAP)
$1.9 billion
$1.85 billion
$1.82 billion
4.4%
Adjusted Operating Margin
50.9%
49.6%
1.3 pp
Free Cash Flow (Non-GAAP, YTD)
$1.14 billion
$1.29 billion
(11.6%)
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Strategic Focus
Moody’s provides credit ratings, risk analysis, research, and financial analytics to customers including banks, governments, corporations, and investors. Its business model relies on two main segments: Moody’s Analytics, which delivers software and data services, and Moody’s Investors Service, which issues credit ratings and related research.
The company’s recent strategic priorities focus on regulatory compliance, technological innovation such as artificial intelligence, expanding into new markets and industries, and incorporating sustainability into operations and offerings. Key success factors include high recurring revenue, disciplined cost controls, strong technological positioning, and navigating changing regulatory demands. Moody's also places emphasis on recruiting and retaining talent, a factor it sees as critical for ongoing innovation and maintaining its reputation in the financial sector.
Second Quarter Highlights: Segment Details and Financial Performance
During the quarter, Moody’s achieved revenue growth above expectations, supported by notable gains in its Analytics segment. Moody’s Analytics posted 11% revenue growth, with annualized recurring revenue expanding 8% to $3.3 billion. Decision Solutions, a family of workflow and compliance software products, stood out with 13% revenue growth, particularly in Know Your Customer (KYC) solutions, which jumped 22%. Insurance analytics and banking workflow tools also contributed, with 14% and 5% growth, respectively. Overall, recurring revenue made up 96% of Analytics sales, reflecting a high degree of client retention and stability.
Operating margins continued to improve. The adjusted margin reached 50.9%, rising from 49.6% the previous year, while Moody's Analytics margin grew 3.6 percentage points to 32.1%. Moody’s Investors Service posted a 1 percentage point improvement in margin to 64.2%, underscoring the effect of cost efficiency programs and technology-enabled productivity gains across the company. These margin expansions occurred even as total operating expenses rose 4%, a result of restructuring costs and acquisition spending offset by productivity improvements.
In Moody's Investors Service, revenue remained flat compared to a year earlier at $1.01 billion, despite a 12% dip in rated debt issuance, which is the process of assigning credit ratings to newly issued bonds. The segment benefited from favorable revenue mix, with more profitable investment grade bond ratings offsetting weakness in other areas such as bank loan activity and financial institutions. Public finance and structured finance ratings provided additional support as some asset classes maintained healthy demand.
Technology investment remains front and center, with management highlighting advancements in generative AI -- a subfield of artificial intelligence that uses data patterns to automate tasks and enhance insights. These tools reduced support workloads, accelerated product development, and powered new offerings in research, insurance, and compliance. Regulatory compliance remained a key area, particularly as requirements for artificial intelligence and financial data oversight intensify in the U.S. and Europe. Despite a minor drag from government and environmental, social, and governance (ESG) contract attrition, the overall sales pipeline for Analytics remains robust. The company also noted an 11% year-over-year increase in the quarterly dividend, now at $0.94 per share.
Looking Ahead: Guidance and Considerations for Investors
Management updated its outlook for fiscal 2025. Adjusted EPS guidance tightened at the lower end to a range of $13.50 to $14.00, implying roughly 10% growth at the midpoint. Revenue growth is projected in the mid-single digits, with Moody’s Analytics expected to continue delivering high-single-digit expansion. Moody's Investors Service revenue guidance now calls for an increase in the low- to mid-single-digit range, slightly higher than its earlier expectation of flat to mid-single-digit.
Free cash flow guidance remains at $2.3–$2.5 billion for the year, with planned share repurchases of at least $1.3 billion. The adjusted operating margin is expected to remain between 49% and 50%. Management recognized that uncertainties around macroeconomics, regulatory changes, and contracting dynamics in some government and ESG lines could influence performance in the second half of the year. Investors may want to watch for developments in debt capital markets and recurring revenue trends, as well as the effectiveness of ongoing cost management programs.
The quarterly dividend was raised 11% to $0.94 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
Where to invest $1,000 right now
When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,034%* — a market-crushing outperformance compared to 180% for the S&P 500.
They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.
*Stock Advisor returns as of July 21, 2025
JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends Moody's. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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