MCO Q4 Earnings Beat on Rising Analytics Demand & High Issuance Volume

Moody's MCO reported fourth-quarter 2025 adjusted earnings of $3.64 per share, which outpaced the Zacks Consensus Estimate of $3.46. The bottom line grew 39% from the year-ago quarter.

The results primarily benefited from an improvement in revenues. Steady demand for analytics and the robust performance of the Moody’s Investors Service segment supported the results. The company’s liquidity position was strong in the quarter. A modest increase in operating expenses posed a headwind.

After considering certain non-recurring items, net income attributable to Moody's was $610 million or $3.41 per share, up from $395 million or $2.17 per share in the prior-year quarter.

For 2025, adjusted earnings per share of $14.94 grew 20% and beat the consensus estimate of $14.78. Net income attributable to Moody's (GAAP) was $2.46 billion or $13.67 per share, up from $2.06 billion or $11.26 per share in the prior-year quarter.

MCO’s Revenues Improve, Costs Rise

Quarterly revenues were $1.89 billion, which surpassed the Zacks Consensus Estimate of $1.88 billion. The top line rose 13% year over year. Foreign currency translation favorably impacted revenues by 2%.

For 2025, revenues increased 9% to $7.72 billion. The top line was in line with the consensus estimate. Foreign currency translation favorably impacted revenues by 1%.

Total expenses were $1.12 billion, up almost 1% year over year.

Adjusted operating income of $920 million rose 26% year over year. The adjusted operating margin was 48.7%, up from 43.8% a year ago.

Moody's Quarterly Segment Performance Strong

Moody’s Investors Service revenues increased 17% year over year to $946 million. The rise was driven by strength in Corporate Finance, Financial Institutions, Structured Finance, and Public, Project and Infrastructure Finance revenues.

Moody’s Analytics revenues rose 9% year over year to $943 million. The increase was driven by 12% growth in Decision Solutions, a 6% rise in Research and Insights, and an 8% jump in Data & Information.

MCO’s Solid Balance Sheet

As of Dec. 31, 2025, Moody’s had total cash, cash equivalents and short-term investments of $2.45 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.

Moody's Share Repurchase Update

In the quarter, MCO repurchased 0.9 million shares at an average price of $485.55.

As of Dec. 31, 2025, $4 billion of share repurchase authorization was available.

MCO’s 2026 Guidance

Moody’s expects adjusted earnings in the range of $16.40-$17.00 per share and GAAP earnings in the band of $15.00-$15.60 per share. 

Moody’s projects revenues to increase in the high-single-digit percent range.

Operating expenses are expected to be in the mid-single-digit range.

Our Take on MCO

Moody’s remains well-positioned for growth driven by a solid market position, strength in diverse operations and strategic acquisitions. Elevated operating expenses, and geopolitical and macroeconomic concerns are likely to hurt its financials.
 

Moody's Corporation Price, Consensus and EPS Surprise

Moody's Corporation price-consensus-eps-surprise-chart | Moody's Corporation Quote

Currently, Moody’s carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of MCO’s Peers

S&P Global Inc. SPGI reported mixed fourth-quarter 2025 results, wherein earnings missed the Zacks Consensus Estimate, whereas revenues beat the same.

SPGI’s adjusted earnings per share of $4.30 lagged the consensus mark by 0.5% and rose 14.1% year over year. Revenues of $3.92 billion topped the consensus estimate by 0.5% and grew 9% year over year.

Accenture plc ACN reported impressive first-quarter fiscal 2026 results.

ACN’s earnings were $3.94 per share, beating the Zacks Consensus Estimate by 5.6%. The metric increased 9.8% from the year-ago quarter. Total revenues of $18.7 billion outpaced the consensus estimate by 1% and rose 6% on a year-over-year basis.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research