MOODY’S CORPORATION REPORTS RESULTS
- October 21, 2026 - Moody's Corporation (NYSE: MCO) today announced results for the third quarter 2026 and reaffirmed guidance for full year 2026.
“Moody’s delivered another quarter of strong profitability and earnings growth, with disciplined execution and healthy cash generation amidst an increasingly complex operating environment. It’s in markets like these that our customers truly value our independent insights and connected intelligence.” — Rob Fauber, President and Chief Executive Officer, Moody’s Corporation
• MCO revenue of $2.0 billion increased 1% from the prior-year period and 3% on an organic constant currency 1 basis.
• MCO’s operating margin was 44.8% and MCO’s Adjusted Operating Margin 1 was 52.6%.
• Diluted EPS and Adjusted Diluted EPS 1 increased 18% and 6%, respectively, from the prior-year period.
• Year-to-date, operating cash flow was $2,471 million, up 21%, and Free Cash Flow 1 was $2,200 million, up 22%.
• Returned approximately $3.1 billion to shareholders year-to-date, including $2.6 billion of shares repurchased.
• Reaffirmed guidance 2 for full-year 2026, including Diluted EPS range of $16.00 to $16.50 and Adjusted Diluted EPS 1 range of $16.50 to $17.00.
The following table summarizes the key financial performance measures for the third quarter of 2026.
1Refer to the tables at the end of this earnings release for reconciliations of the non-GAAP adjusted and organic constant currency measures to U.S. GAAP. 2Guidance as of October 21, 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. 3Refer to Table 10 at the end of this press release for the definition of and further information on the Annualized Recurring Revenue (ARR) metric. ──────────────────────────────────────────────────────────────────────────────
• Revenue increased 3% compared to the prior-year period, or 8% on an organic constant currency 1 basis.
• Recurring revenue increased 6% year-over-year, or 9% on an organic constant currency 1 basis, and represented 99% of total MA revenue.
• Transaction revenue declined 76% year-over-year, primarily reflecting the Learning Solutions divestiture and a continued shift toward recurring revenue.
• ARR 3 increased 8% year-over-year to $3.7 billion, led by Decision Solutions, which increased 10% year-over-year.
The following table summarizes MA revenue, revenue growth and organic constant currency 1 revenue growth by line of business, and recurring revenue for the third quarter of 2026.
The following table summarizes MA ARR 3 and ARR growth by line of business as of September 30, 2026.
• MIS delivered $1.1 billion in revenue, down 1% year-over-year against a record prior-year comparison, primarily reflecting lower Leveraged Finance issuance.
• Investment Grade revenue growth of 18% year-over-year was supported by strong large corporate financing activity, particularly in the technology sector, including issuance associated with AI-related financing and hyperscaler investments.
• Financial Institutions revenue growth reflected recurring revenue growth in banking, while continued momentum in private markets contributed to higher funds & asset management activity, partially offset by lower transactional revenue in banking and insurance.
• Structured Finance revenue growth was primarily supported by higher issuance in ABS, RMBS and Covered Bonds.
The following table summarizes MIS revenue and revenue growth by line of business and the split between recurring and transaction revenue for the third quarter of 2026.
The following table summarizes changes in MIS revenue, transaction revenue and rated issuance volume for the third quarter of 2026.
4Recurring revenue attributable to Investment Grade, High Yield and Leveraged Loans is aggregated within Corporate Finance.
• Operating expenses increased 2% versus the prior-year period, as investments to support growth and higher incentive compensation were partially offset by recent business divestitures and continued cost discipline.
• MA adjusted operating margin was 35.3%, up 100 bps from the prior-year period, reflecting strong revenue growth and continued investment in the business.
• Foreign currency translation had an immaterial impact on MCO operating and adjusted operating margins 1 .
• Moody’s returned approximately $3.1 billion to shareholders year-to-date, consisting of approximately $2.6 billion in share repurchases and $543 million in dividends.
• On October 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 December 11, 2026, to shareholders of record at the close of business on November 20, 2026. 4
Moody’s outlook for full year 2026, as of October 21, 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 October 21, 2026 ────────────────────────────────────────────────────────────────────────────── Moody's Corporation (MCO) Last Publicly Disclosed Current Guidance Guidance Increase in the Revenue high-single-digit percent NC range Increase in the Operating Expenses mid-single-digit percent NC range Operating Margin 44% to 45% NC Adjusted Operating 52% to 53% NC Margin(1) Interest Expense, Net $220 to $240 million NC Non-operating $70 to $90 million NC (Expense)/Income(2) Effective Tax Rate 23% to 25% NC Diluted EPS $16.00 to $16.50 NC Adjusted Diluted EPS(1) $16.50 to $17.00 NC Operating Cash Flow $3.15 to $3.35 billion NC Free Cash Flow(1) $2.7 to $2.9 billion NC Up to $3.0 billion (subject to available cash, Share Repurchases market conditions, M&A NC opportunities and other ongoing capital allocation decisions) Moody's Analytics (MA) Last Publicly Disclosed Current Guidance Guidance Increase in the MA Revenue mid-single-digit percent NC range MA Organic Constant Increase in the Currency Revenue(3) high-single-digit percent NC range Increase in the ARR(4) high-single-digit percent NC range MA Adjusted Operating 34% to 35% NC Margin Moody's Investors Service Last Publicly Disclosed Current Guidance (MIS) Guidance Increase in the MIS Revenue high-single-digit percent NC range MIS Adjusted Operating Approximately 65% NC Margin 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 October 21, 2026. (1)These metrics are adjusted measures. See below for reconciliation of these measures to their comparable U.S. GAAP measure. (2)Non-operating expense includes net interest expense. Also includes the pre-tax gain on the divestiture of the MA Regulatory Solutions business recorded during the nine months ended September 30, 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 44% to 45% Depreciation and amortization Approximately 6% Restructuring Approximately 1.5% Reserve for international non-income tax Approximately 0.5% obligation Duplicate rent - NY HQ(5) Negligible Adjusted Operating Margin guidance 52% to 53% Projected for the Year Ended December 31, 2026 Operating cash flow guidance $3.15 to $3.35 billion Less: Capital expenditures(6) Approximately $450 million Free Cash Flow guidance $2.7 to $2.9 billion Projected for the Year Ended December 31, 2026 Diluted EPS guidance $16.00 to $16.50 Acquisition-related intangible Approximately $0.91 amortization Restructuring Approximately $0.45 Reserve for international non-income tax Approximately $0.25 obligation Duplicate rent - NY HQ(5) Approximately $0.07 Gain on business divestitures Approximately ($1.18) Adjusted Diluted EPS guidance $16.50 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 Approximately 4% divestitures(7) FX impact Approximately (0.5)% MA Organic Constant Currency Increase in the high-single-digit Revenue percent range
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 Approximately 1% Compensation Depreciation and Amortization Approximately 1% Reserve for international non-income tax Approximately 1% obligation and duplicate rent Restructuring Charges Approximately 0.5% Acquired and Divested Companies Approximately (1.5)%
(5)Reflects duplicate rent expense related to the transition to Moody’s new global headquarters. Relocations of Moody’s global headquarters have been infrequent, and accordingly, this duplicate rent does not reflect the Company’s ongoing operating cost structure. (6)Approximately $75-to-$100 million in incremental capital expenditures is associated with office relocations in New York and London. (7)Primarily relates to the impact from the divestitures of MA’s Learning and Regulatory Solutions businesses.
Moody’s outlook for full year 2026, as of October 21, 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 October 21, 2026 ────────────────────────────────────────────────────────────────────────────── Forecasted Item Last Publicly Disclosed Current Assumption Assumption U.S. GDP(1)growth 1.5% - 2.5%(2) NC Euro area GDP(1)growth 0.5% - 1.5% NC Global GDP(1)growth 2.0% - 3.0%(2) NC Central banks will Central banks will maintain a tightening maintain a tightening Global policy rates bias, with one U.S. Fed bias, with the U.S. Fed rate increase and a and the ECB each likely further ECB hike likely to raise rates once in 2026 more by the end of 2026 To widen to around 330 To widen to around 300 U.S. high yield bps in the coming 2 bps in the coming spreads quarters, below the quarter, below the historical average of historical average of around 500 bps around 500 bps U.S. inflation rate 2.5% - 3.5%(3) NC Euro area inflation 2.0% - 3.0%(3) NC rate U.S. unemployment rate 4.0% to 5.0% during NC 2026 Global speculative To finish at around 3% To finish at around grade default rate by year-end 3.8% by year-end Increase in the Global MIS rated mid-single-digit NC issuance percent range GBP/USD exchange rate $1.33 for the remainder NC of the year EUR/USD exchange rate $1.14 for the remainder NC 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 October 21, 2026. (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.
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
(1)The Effective Tax Rate (ETR) was 24.0%, lower than 25.4% reported in the prior-year period, reflecting tax benefits recognized pursuant to the lapse of a statute of limitations related to tax exposures assumed in a prior-year M&A transaction, coupled with non-U.S.-related tax benefits.
Amounts in September 30, December 31, millions 2026 2025 ────────────────────────────────────────────────────────────────────────────── ASSETS Current assets: Cash and cash $ 1,513 $ 2,384 equivalents Short-term 108 64 investments Accounts receivable, net of allowance for credit 1,830 2,024 losses of $29 in 2026 and $29 in 2025 Other current 773 714 assets Total current 4,224 5,186 assets Property and equipment, net of accumulated 782 722 depreciation of $1,650 in 2026 and $1,572 in 2025 Operating lease right-of-use 507 282 assets Goodwill 6,304 6,368 Intangible 1,694 1,866 assets, net Deferred tax 236 305 assets, net Other assets 1,083 1,101 Total assets $ 14,830 $ 15,830 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and $ 1,219 $ 1,304 accrued liabilities Current portion of operating 93 95 lease liabilities Current portion of long-term 568 — debt Deferred 1,402 1,582 revenue Total current 3,282 2,981 liabilities Non-current portion of 53 56 deferred revenue Long-term debt 6,343 6,994 Deferred tax liabilities, 340 315 net Uncertain tax 167 158 positions Operating lease 488 262 liabilities Other 745 859 liabilities Total 11,418 11,625 liabilities Total Moody's shareholders' 3,268 4,054 equity Noncontrolling 144 151 interests Total shareholders' 3,412 4,205 equity Total liabilities, noncontrolling $ 14,830 $ 15,830 interests and shareholders' equity
Amounts in millions Nine Months Ended Cash flows from operating September 30, activities 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net income $ 2,276 $ 1,851 Reconciliation of net income to net cash provided by operating activities: Depreciation and amortization 372 356 Stock-based compensation 175 174 Deferred income taxes 50 40 Non-cash restructuring and 3 8 abandonment-related charges Provision for credit losses on accounts 9 11 receivable Gain on business divestitures -296 — Net changes in other operating assets -118 -397 and liabilities Net cash provided by operating 2,471 2,043 activities Cash flows from investing activities Capital additions -271 -245 Purchases of investments -165 -158 Sales and maturities of 133 656 investments Purchases of investments in -4 -14 non-consolidated affiliates Receipts from settlements of net — 32 investment hedges Cash paid for acquisitions, net of cash -23 -227 acquired Cash received upon business divestitures, net of cash 200 — transferred to purchaser Net cash (used in) provided by investing -130 44 activities Cash flows from financing activities Repayment of notes — -700 Proceeds from stock-based compensation 34 44 plans Repurchase of shares related to stock-based compensation and -125 -92 excise tax payments on share repurchases Treasury shares -2,553 -1,170 Dividends -543 -534 Dividends to noncontrolling -3 -2 interests Net cash used in financing -3,190 -2,454 activities Effect of exchange rate changes on cash -22 140 and cash equivalents Decrease in cash and cash -871 -227 equivalents Cash and cash equivalents, beginning of 2,384 2,408 period Cash and cash equivalents, end $ 1,513 $ 2,181 of period
(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.
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.
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.
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) a reserve for an international non- income tax obligation; iv) duplicate rent expense incurred during the build-out and transition to the Company's new New York City headquarters; and v) charges related to asset abandonment. Depreciation and amortization are excluded because companies utilize productive assets of different estimated useful lives and use different methods of acquiring and depreciating productive assets. Restructuring charges/adjustments and charges related to asset abandonment, which the Company believes are not reflective of its ongoing operating cost structure, are excluded as the frequency and magnitude of these charges may vary widely across periods and companies. The reserve for an international non-income tax obligation is excluded because the Company believes it is not indicative of its ongoing operating cost structure. Duplicate rent expense incurred during the build-out and transition to the Company's new New York City headquarters is excluded because it relates to an infrequent corporate headquarters relocation and is not indicative of the Company's ongoing operating cost structure.
Management believes that the exclusion of the aforementioned items, as detailed in the reconciliation below, allows for an additional perspective on the Company’s operating results from period to period and across companies. The Company defines Adjusted Operating Margin as Adjusted Operating Income divided by revenue.
Below is a reconciliation of these measures to their most directly comparable U.S. GAAP measures:
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:
The increase in both operating cash flow and Free Cash Flow1was primarily driven by higher operating income in both segments.
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)
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.
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.
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) a reserve for an international non-income tax obligation and related interest and penalties; iv) charges related to asset abandonment; v) duplicate rent expense incurred during the build-out and transition to the Company's new New York City headquarters; and vi) gain on business divestitures. The Company excludes the impact of amortization of acquired intangible assets as companies utilize intangible assets with different estimated useful lives and have different methods of acquiring and amortizing intangible assets. These intangible assets were recorded as part of acquisition accounting and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. Furthermore, the timing and magnitude of business combination transactions are not predictable and the purchase price allocated to amortizable intangible assets and the related amortization period are unique to each acquisition and can vary significantly from period to period and across companies. Restructuring charges/adjustments and charges related to asset abandonment, which the Company believes are not reflective of its ongoing operating cost structure, are excluded as the frequency and magnitude of these items may vary widely across periods and companies. The reserve for an international non-income tax obligation and related interest and penalties are excluded because the Company believes they are not indicative of its ongoing operating cost structure. Duplicate rent expense incurred during the build-out and transition to the Company's new New York City headquarters is excluded because it relates to an infrequent corporate headquarters relocation and is not indicative of the Company's ongoing operating cost structure. Gain on business divestitures are excluded due to their infrequent nature and because they do not reflect the Company's ongoing operations. The Company excludes the aforementioned items to provide additional perspective when comparing net income and diluted EPS from period to period and across companies as the frequency and magnitude of similar transactions may vary widely across periods.
Below is a reconciliation of these measures to their most directly comparable U.S. GAAP measures:
Note: The tax impacts in the tables above were calculated using tax rates in effect in the jurisdiction for which the item relates.
October 21, 2026, at 9:00 a.m. Eastern Date and Time Time (ET). ────────────────────────────────────────────────────────────────────────────── The webcast and its replay can be Webcast accessed through Moody’s Investor Relations website,ir.moodys.com, within “Events & Presentations.” Dial In U.S. and Canada ‘+1-833-461-5787 Other callers ‘+1-626-884-3620 Passcode ‘706 179 185 A replay of the webcast will be Webcast Replay available immediately after the call on October 21, 2026.
Full text with the tables
MOODY’S CORPORATION REPORTS RESULTS
FOR THIRD QUARTER 2026
NEW YORK, NY
- October 21, 2026 - Moody's Corporation (NYSE: MCO) today announced results for
the third quarter 2026 and reaffirmed guidance for full year 2026.
“Moody’s delivered another quarter of strong profitability and earnings growth,
with disciplined execution and healthy cash generation amidst an increasingly
complex operating environment. It’s in markets like these that our customers
truly value our independent insights and connected intelligence.”
— Rob Fauber, President and Chief Executive Officer, Moody’s Corporation
Third Quarter 2026 Highlights
• MCO revenue of $2.0 billion increased 1% from the prior-year period and 3% on
an organic constant currency 1 basis.
• MCO’s operating margin was 44.8% and MCO’s Adjusted Operating Margin 1 was
52.6%.
• Diluted EPS and Adjusted Diluted EPS 1 increased 18% and 6%, respectively,
from the prior-year period.
• Year-to-date, operating cash flow was $2,471 million, up 21%, and Free Cash
Flow 1 was $2,200 million, up 22%.
• Returned approximately $3.1 billion to shareholders year-to-date, including
$2.6 billion of shares repurchased.
• Reaffirmed guidance 2 for full-year 2026, including Diluted EPS range of
$16.00 to $16.50 and Adjusted Diluted EPS 1 range of $16.50 to $17.00.
Third Quarter 2026 Financial Results
The following table summarizes the key financial performance measures for the
third quarter of 2026.
Amounts
in
millio…
except
percen… Three
and Months
per Ended
share Septem… %
amounts 30, 2026 2025 Change
──────────────────────────────────────────────────────────────────────────────
MCO $ 2,023 $ 2,007 1 %
Reven…
MCO (90)
Opera… 44.8 % 45.7 % bps
Margin
MCO
Adjus… 52.6 % 52.9 % (30)
Opera… bps
Margi…
MCO
Dilut… $ 4.24 $ 3.60 18 %
EPS
MCO
Adjus… $ 4.14 $ 3.92 6 %
Dilut…
EPS1
MA $ 936 $ 909 3 %
Reven…
MA
Organ…
Const… $ 938 $ 867 8 %
Curre…
Reven…
MA $ 3,688 $ 3,418 8 %
ARR3
MA
Adjus… 35.3 % 34.3 % 100 bps
Opera…
Margin
MIS $ 1,087 $ 1,098 -1 %
Reven…
MIS
Trans… $ 714 $ 753 -5 %
Reven…
MIS
Adjus… 64.4 % 65.2 % (80)
Opera… bps
Margin
1Refer to the tables at the end of this earnings release for reconciliations
of the non-GAAP adjusted and organic constant currency measures to U.S.
GAAP.
2Guidance as of October 21, 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.
3Refer 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
THIRD QUARTER 2026 SEGMENT RESULTS
Moody’s Analytics (MA)
• Revenue increased 3% compared to the prior-year period, or 8% on an organic
constant currency 1 basis.
• Recurring revenue increased 6% year-over-year, or 9% on an organic constant
currency 1 basis, and represented 99% of total MA revenue.
• Transaction revenue declined 76% year-over-year, primarily reflecting the
Learning Solutions divestiture and a continued shift toward recurring revenue.
• ARR 3 increased 8% year-over-year to $3.7 billion, led by Decision Solutions,
which increased 10% year-over-year.
The following table summarizes MA revenue, revenue growth and organic constant
currency 1 revenue growth by line of business, and recurring revenue for the
third quarter of 2026.
Amoun…
in Three
milli… Months
except Ended
perce… Septem… % Organic
Decis… 30, Change Consta…
Solut… 2026 2025 Revenue Curren…
──────────────────────────────────────────────────────────────────────────────
Banki… $ 118 $ 140 -16 % 19 %
Insur… $ 186 $ 171 9 % 10 %
KYC $ 122 $ 113 8 % 8 %
Total
Decis… $ 426 $ 424 — % 12 %
Solut…
Resea…
and $ 260 $ 252 3 % 3 %
Insig…
Data
and $ 250 $ 233 7 % 8 %
Infor…
Total
MA $ 936 $ 909 3 % 8 %
Reven…
Total
MA $ 928 $ 875 6 % 9 %
Recur…
Reven…
The following table summarizes MA ARR 3 and ARR growth by line of business as of
September 30, 2026.
Amounts in
millions, September
except September 30,
percentages 30, 2026 2025 Growth
──────────────────────────────────────────────────────────────────────────────
Decision
Solutions
Banking $ 412 $ 382 8 %
Insurance $ 736 $ 671 10 %
KYC $ 489 $ 435 12 %
Total
Decision $ 1,637 $ 1,488 10 %
Solutions
Research
and $ 1,043 $ 988 6 %
Insights
Data and $ 1,008 $ 942 7 %
Information
Total MA $ 3,688 $ 3,418 8 %
ARR
2
Moody’s Investors Service (MIS)
• MIS delivered $1.1 billion in revenue, down 1% year-over-year against a record
prior-year comparison, primarily reflecting lower Leveraged Finance issuance.
• Investment Grade revenue growth of 18% year-over-year was supported by strong
large corporate financing activity, particularly in the technology sector,
including issuance associated with AI-related financing and hyperscaler
investments.
• Public, Project and Infrastructure Finance revenue growth was driven by U.S.
Public Finance, Sovereign and data center-related financing.
• Financial Institutions revenue growth reflected recurring revenue growth in
banking, while continued momentum in private markets contributed to higher funds
& asset management activity, partially offset by lower transactional revenue in
banking and insurance.
• Structured Finance revenue growth was primarily supported by higher issuance
in ABS, RMBS and Covered Bonds.
The following table summarizes MIS revenue and revenue growth by line of
business and the split between recurring and transaction revenue for the third
quarter of 2026.
Amounts in
millions, Three Months
except Ended
percentages September 30, 2026 2025 % Change
──────────────────────────────────────────────────────────────────────────────
Corporate $ 530 $ 576 -8 %
Finance
Structured $ 153 $ 146 5 %
Finance
Financial $ 213 $ 208 2 %
Institutio…
Public,
Project and $ 179 $ 161 11 %
Infrastruc…
Finance
Total
ratings $ 1,075 $ 1,091 -1 %
revenue
MIS Other $ 12 $ 7 71 %
Total MIS $ 1,087 $ 1,098 -1 %
Total MIS
Recurring $ 373 $ 345 8 %
Revenue
Total MIS
Transaction $ 714 $ 753 -5 %
Revenue
The following table summarizes changes in MIS revenue, transaction revenue and
rated issuance volume for the third quarter of 2026.
Three
Months
Ended
September
30, 2026
──────────────────────────────────────────────────────────────────────────────
Transacti… Rated
% Change Revenue4 Revenue Issuance
Volume
Investme… 18 % 16 %
Grade
High -40 % -21 %
Yield
Leveraged -27 % -35 %
Loans
Corporate -8 % -14 % -16 %
Finance
Structur… 5 % 2 % 16 %
Finance
Financial 2 % -1 % 8 %
Institut…
Public,
Project
and 11 % 14 % 16 %
Infrastr…
Finance
Total MIS -1 % -5 % -2 %
4Recurring revenue attributable to Investment
Grade, High Yield and Leveraged Loans is
aggregated within Corporate Finance.
3
THIRD QUARTER 2026 OPERATING EXPENSES AND MARGIN
• Operating expenses increased 2% versus the prior-year period, as investments
to support growth and higher incentive compensation were partially offset by
recent business divestitures and continued cost discipline.
• MCO operating margin was 44.8%; MCO adjusted operating margin 1 was 52.6%.
• MA adjusted operating margin was 35.3%, up 100 bps from the prior-year period,
reflecting strong revenue growth and continued investment in the business.
• MIS adjusted operating margin was 64.4%.
• Foreign currency translation had an immaterial impact on MCO operating and
adjusted operating margins 1 .
CAPITAL RETURN
• Moody’s returned approximately $3.1 billion to shareholders year-to-date,
consisting of approximately $2.6 billion in share repurchases and $543 million
in dividends.
• On October 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 December 11, 2026, to shareholders of record at the close of business
on November 20, 2026.
4
OUTLOOK
Moody’s outlook for full year 2026, as of October 21, 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 October
21, 2026
──────────────────────────────────────────────────────────────────────────────
Moody's Corporation (MCO) Last Publicly Disclosed Current Guidance
Guidance
Increase in the
Revenue high-single-digit percent NC
range
Increase in the
Operating Expenses mid-single-digit percent NC
range
Operating Margin 44% to 45% NC
Adjusted Operating 52% to 53% NC
Margin(1)
Interest Expense, Net $220 to $240 million NC
Non-operating $70 to $90 million NC
(Expense)/Income(2)
Effective Tax Rate 23% to 25% NC
Diluted EPS $16.00 to $16.50 NC
Adjusted Diluted EPS(1) $16.50 to $17.00 NC
Operating Cash Flow $3.15 to $3.35 billion NC
Free Cash Flow(1) $2.7 to $2.9 billion NC
Up to $3.0 billion
(subject to available cash,
Share Repurchases market conditions, M&A NC
opportunities
and other ongoing capital
allocation decisions)
Moody's Analytics (MA) Last Publicly Disclosed Current Guidance
Guidance
Increase in the
MA Revenue mid-single-digit percent NC
range
MA Organic Constant Increase in the
Currency Revenue(3) high-single-digit percent NC
range
Increase in the
ARR(4) high-single-digit percent NC
range
MA Adjusted Operating 34% to 35% NC
Margin
Moody's Investors Service Last Publicly Disclosed Current Guidance
(MIS) Guidance
Increase in the
MIS Revenue high-single-digit percent NC
range
MIS Adjusted Operating Approximately 65% NC
Margin
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 October
21, 2026.
(1)These metrics are
adjusted measures. See
below for reconciliation
of these measures to
their comparable U.S.
GAAP measure.
(2)Non-operating expense
includes net interest
expense. Also includes
the pre-tax gain on the
divestiture of the MA
Regulatory Solutions
business recorded during
the nine months ended
September 30, 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 44% to 45%
Depreciation and amortization Approximately 6%
Restructuring Approximately 1.5%
Reserve for international non-income
tax Approximately 0.5%
obligation
Duplicate rent - NY HQ(5) Negligible
Adjusted Operating Margin guidance 52% to 53%
Projected for the Year Ended
December 31, 2026
Operating cash flow guidance $3.15 to $3.35 billion
Less: Capital expenditures(6) Approximately $450 million
Free Cash Flow guidance $2.7 to $2.9 billion
Projected for the Year Ended
December 31, 2026
Diluted EPS guidance $16.00 to $16.50
Acquisition-related intangible Approximately $0.91
amortization
Restructuring Approximately $0.45
Reserve for international non-income
tax Approximately $0.25
obligation
Duplicate rent - NY HQ(5) Approximately $0.07
Gain on business divestitures Approximately ($1.18)
Adjusted Diluted EPS guidance $16.50 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 Approximately 4%
divestitures(7)
FX impact Approximately (0.5)%
MA Organic Constant Currency Increase in the high-single-digit
Revenue 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 Approximately 1%
Compensation
Depreciation and Amortization Approximately 1%
Reserve for international non-income
tax Approximately 1%
obligation and duplicate rent
Restructuring Charges Approximately 0.5%
Acquired and Divested Companies Approximately (1.5)%
(5)Reflects duplicate rent expense related to the transition to Moody’s new
global headquarters. Relocations of Moody’s global headquarters have been
infrequent, and accordingly, this duplicate rent does not reflect the
Company’s ongoing operating cost structure.
(6)Approximately $75-to-$100 million in incremental capital expenditures is
associated with office relocations in New York and London.
(7)Primarily relates to the impact from the divestitures of MA’s Learning
and Regulatory Solutions businesses.
6
ASSUMPTIONS
Moody’s outlook for full year 2026, as of October 21, 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 October
21, 2026
──────────────────────────────────────────────────────────────────────────────
Forecasted Item Last Publicly Disclosed Current Assumption
Assumption
U.S. GDP(1)growth 1.5% - 2.5%(2) NC
Euro area GDP(1)growth 0.5% - 1.5% NC
Global GDP(1)growth 2.0% - 3.0%(2) NC
Central banks will Central banks will
maintain a tightening maintain a tightening
Global policy rates bias, with one U.S. Fed bias, with the U.S. Fed
rate increase and a and the ECB each likely
further ECB hike likely to raise rates once
in 2026 more by the end of 2026
To widen to around 330 To widen to around 300
U.S. high yield bps in the coming 2 bps in the coming
spreads quarters, below the quarter, below the
historical average of historical average of
around 500 bps around 500 bps
U.S. inflation rate 2.5% - 3.5%(3) NC
Euro area inflation 2.0% - 3.0%(3) NC
rate
U.S. unemployment rate 4.0% to 5.0% during NC
2026
Global speculative To finish at around 3% To finish at around
grade default rate by year-end 3.8% by year-end
Increase in the
Global MIS rated mid-single-digit NC
issuance percent
range
GBP/USD exchange rate $1.33 for the remainder NC
of the year
EUR/USD exchange rate $1.14 for the remainder NC
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
October 21, 2026.
(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)
Amou…
in
mill… Three Nine
exce… Months Months
per Ended Ended
share Septe… Septe…
amou… 2026 30, 2025 30, 2026 2025
──────────────────────────────────────────────────────────────────────────────
Reve… $ 2,023 $ 2,007 $ 6,287 $ 5,829
Expe…
Oper… 524 492 1,573 1,472
Sell…
gene… 442 453 1,382 1,335
and
admi…
Depr…
and 124 123 372 356
amor…
Rest… 27 21 86 81
Char…
rela…
to — 1 — 4
asset
aban…
Total 1,117 1,090 3,413 3,248
expe…
Oper… 906 917 2,874 2,581
inco…
Non-…
inco…
(exp…
net
Inte…
expe… -54 -58 -178 -180
net
Other
non-… 1 8 17 42
inco…
net
Gain
on 115 — 296 —
busi…
dive…
Total
non-…
inco… 62 -50 135 -138
(exp…
net
Inco…
befo…
prov… 968 867 3,009 2,443
for
inco…
taxes
Prov…
for 232 220 733 592
inco…
taxe…
Net 736 647 2,276 1,851
inco…
Less:
Net
inco…
attr… 2 1 3 2
to
nonc…
inte…
Net
inco…
attr… $ 734 $ 646 $ 2,273 $ 1,849
to
Mood…
Earn…
per
share
attr…
to
Mood…
comm…
shar…
Basic $ 4.25 $ 3.61 $ 13.02 $ 10.30
Dilu… $ 4.24 $ 3.60 $ 12.98 $ 10.26
Weig…
aver…
numb…
of
shar…
outs…
Basic 172.8 178.9 174.6 179.5
Dilu… 173.3 179.6 175.1 180.2
(1)The Effective Tax Rate (ETR) was 24.0%, lower
than 25.4% reported in the prior-year period,
reflecting tax benefits recognized pursuant to the
lapse of a statute of limitations related to tax
exposures assumed in a prior-year M&A transaction,
coupled with non-U.S.-related tax benefits.
9
Table 2 - Condensed Consolidated Balance Sheet Data (Unaudited)
Amounts in September 30, December 31,
millions 2026 2025
──────────────────────────────────────────────────────────────────────────────
ASSETS
Current assets:
Cash and cash $ 1,513 $ 2,384
equivalents
Short-term 108 64
investments
Accounts
receivable, net
of allowance
for credit 1,830 2,024
losses of $29
in 2026 and $29
in 2025
Other current 773 714
assets
Total current 4,224 5,186
assets
Property and
equipment, net
of
accumulated 782 722
depreciation of
$1,650 in
2026 and $1,572
in 2025
Operating lease
right-of-use 507 282
assets
Goodwill 6,304 6,368
Intangible 1,694 1,866
assets, net
Deferred tax 236 305
assets, net
Other assets 1,083 1,101
Total assets $ 14,830 $ 15,830
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current
liabilities:
Accounts
payable and $ 1,219 $ 1,304
accrued
liabilities
Current portion
of operating 93 95
lease
liabilities
Current portion
of long-term 568 —
debt
Deferred 1,402 1,582
revenue
Total current 3,282 2,981
liabilities
Non-current
portion of 53 56
deferred
revenue
Long-term debt 6,343 6,994
Deferred tax
liabilities, 340 315
net
Uncertain tax 167 158
positions
Operating lease 488 262
liabilities
Other 745 859
liabilities
Total 11,418 11,625
liabilities
Total Moody's
shareholders' 3,268 4,054
equity
Noncontrolling 144 151
interests
Total
shareholders' 3,412 4,205
equity
Total
liabilities,
noncontrolling $ 14,830 $ 15,830
interests and
shareholders'
equity
10
Table 3 - Condensed Consolidated Statements of Cash Flows (Unaudited)
Amounts in millions Nine Months Ended
Cash flows from operating September 30,
activities 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net income $ 2,276 $ 1,851
Reconciliation of net income to
net cash
provided by operating
activities:
Depreciation and amortization 372 356
Stock-based compensation 175 174
Deferred income taxes 50 40
Non-cash restructuring and 3 8
abandonment-related charges
Provision for credit losses on
accounts 9 11
receivable
Gain on business divestitures -296 —
Net changes in other operating
assets -118 -397
and liabilities
Net cash provided by operating 2,471 2,043
activities
Cash flows from investing
activities
Capital additions -271 -245
Purchases of investments -165 -158
Sales and maturities of 133 656
investments
Purchases of investments in -4 -14
non-consolidated affiliates
Receipts from settlements of
net — 32
investment hedges
Cash paid for acquisitions, net
of cash -23 -227
acquired
Cash received upon business
divestitures, net of cash 200 —
transferred to
purchaser
Net cash (used in) provided by
investing -130 44
activities
Cash flows from financing
activities
Repayment of notes — -700
Proceeds from stock-based
compensation 34 44
plans
Repurchase of shares related to
stock-based compensation and -125 -92
excise tax
payments on share repurchases
Treasury shares -2,553 -1,170
Dividends -543 -534
Dividends to noncontrolling -3 -2
interests
Net cash used in financing -3,190 -2,454
activities
Effect of exchange rate changes
on cash -22 140
and cash equivalents
Decrease in cash and cash -871 -227
equivalents
Cash and cash equivalents,
beginning of 2,384 2,408
period
Cash and cash equivalents, end $ 1,513 $ 2,181
of period
11
Table 4 - Non-Operating (Expense) Income, Net (Unaudited)
Three Nine
Months Months
Amounts Ended Ended
in September September
millions 30, 30,
Interest: 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Income $ 9 $ 14 $ 30 $ 51
Expense
on -55 -59 -165 -193
borrowin…
Expense
on UTPs
and other -1 -6 -22 -17
tax
related
liabilit…
Net
periodic
pension -7 -7 -21 -21
costs -
interest
component
Interest
expense, $ -54 $ -58 $ -178 $ -180
net
Other
non-oper…
income,
net:
FX losses $ -2 $ -7 $ -17 $ -10
Net
periodic
pension
income -
non-serv… 10 9 29 27
and
non-inte…
cost
componen…
Income
from
investme… 4 4 18 18
in
non-cons…
affiliat…
Gain on — 3 7 8
investme…
Other -11 -1 -20 -1
Other
non-oper… $ 1 $ 8 $ 17 $ 42
income,
net
Gain on
business 115 — 296 —
divestit…
Total
non-oper…
income $ 62 $ -50 $ 135 $ -138
(expense…
net
(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.
…
…
…
…
…
…
… … … … …
──────────────────────────────────────────────────────────────────────────────
$ … $ $ $ … $ — …
3 3 … —
… … … …
… … — …
… … — …
… … … —
… … … …
$ … $ $ $ … $ — …
… % % … % …
… … — …
… … — …
3 — — —
— 1 — 1
$ …
% …
…
$ …
…
…
…
…
…
…
… … … … …
──────────────────────────────────────────────────────────────────────────────
$ … $ $ $ … $ — …
9 9 … —
… … … …
… … — …
… … — …
… … … —
… … … …
$ … $ $ $ … $ — …
… % % … % …
… … — …
… … — …
… — — —
4 — — —
— 4 — 4
$ …
% …
…
$ …
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.
T…
M…
… E…
… S…
… 3…
… 2… …
… T… R… T… … … …
──────────────────────────────────────────────────────────────────────────────
… $ 3 $ 1… $ 1… $ 25 $ 1… $ 1…
3 % 97 % 1… % 18 % 82 % 1… %
… $ 2 $ 1… $ 1… $ 3 $ 1… $ 1…
1 % 99 % 1… % 2 % 98 % 1… %
… $ — $ 1… $ 1… $ 1 $ 1… $ 1…
— % 1… % 1… % 1 % 99 % 1… %
…
… $ 5 $ 4… $ 4… $ 29 $ 3… $ 4…
…
1 % 99 % 1… % 7 % 93 % 1… %
…
& $ 2 $ 2… $ 2… $ 3 $ 2… $ 2…
…
1 % 99 % 1… % 1 % 99 % 1… %
…
& $ 1 $ 2… $ 2… $ 2 $ 2… $ 2…
…
— % 1… % 1… % 1 % 99 % 1… %
… $ 8 $ 9… $ 9… $ 34 $ 8… $ 9…
…
1 % 99 % 1… % 4 % 96 % 1… %
… $ 3… $ 1… $ 5… $ 4… $ 1… $ 5…
…
71 % 29 % 1… % 75 % 25 % 1… %
… $ 88 $ 65 $ 1… $ 86 $ 60 $ 1…
…
58 % 42 % 1… % 59 % 41 % 1… %
… $ 1… $ 91 $ 2… $ 1… $ 85 $ 2…
…
57 % 43 % 1… % 59 % 41 % 1… %
…
…
… $ 1… $ 53 $ 1… $ 1… $ 50 $ 1…
…
…
70 % 30 % 1… % 69 % 31 % 1… %
… $ 4 $ 8 $ 12 $ — $ 7 $ 7
…
33 % 67 % 1… % — % 1… % 1… %
… $ 7… $ 3… $ 1… $ 7… $ 3… $ 1…
…
66 % 34 % 1… % 69 % 31 % 1… %
…
… $ 7… $ 1… $ 2… $ 7… $ 1… $ 2…
…
36 % 64 % 1… % 39 % 61 % 1… %
14
Table 6 - Transaction and Recurring Revenue (Unaudited) Continued
N…
M…
… E…
… S…
… 3…
… 2… …
… T… R… T… … … …
──────────────────────────────────────────────────────────────────────────────
… $ 12 $ 3… $ 3… $ 76 $ 3… $ 4…
3 % 97 % 1… % 18 % 82 % 1… %
… $ 9 $ 5… $ 5… $ 15 $ 4… $ 5…
2 % 98 % 1… % 3 % 97 % 1… %
… $ 1 $ 3… $ 3… $ 1 $ 3… $ 3…
— % 1… % 1… % — % 1… % 1… %
…
… $ 22 $ 1… $ 1… $ 92 $ 1… $ 1…
…
2 % 98 % 1… % 7 % 93 % 1… %
…
& $ 7 $ 7… $ 7… $ 9 $ 7… $ 7…
…
1 % 99 % 1… % 1 % 99 % 1… %
…
& $ 6 $ 7… $ 7… $ 6 $ 6… $ 6…
…
1 % 99 % 1… % 1 % 99 % 1… %
… $ 35 $ 2… $ 2… $ 1… $ 2… $ 2…
…
1 % 99 % 1… % 4 % 96 % 1… %
… $ 1… $ 4… $ 1… $ 1… $ 4… $ 1…
…
75 % 25 % 1… % 74 % 26 % 1… %
… $ 2… $ 1… $ 4… $ 2… $ 1… $ 4…
…
57 % 43 % 1… % 57 % 43 % 1… %
… $ 3… $ 2… $ 6… $ 3… $ 2… $ 5…
…
58 % 42 % 1… % 58 % 42 % 1… %
…
…
… $ 4… $ 1… $ 5… $ 3… $ 1… $ 4…
…
…
73 % 27 % 1… % 70 % 30 % 1… %
… $ 9 $ 28 $ 37 $ 5 $ 21 $ 26
…
24 % 76 % 1… % 19 % 81 % 1… %
… $ 2… $ 1… $ 3… $ 2… $ 1… $ 3…
…
68 % 32 % 1… % 68 % 32 % 1… %
…
… $ 2… $ 3… $ 6… $ 2… $ 3… $ 5…
…
39 % 61 % 1… % 39 % 61 % 1… %
15
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) a reserve for an international non-
income tax obligation; iv) duplicate rent expense incurred during the build-out
and transition to the Company's new New York City headquarters; and v) charges
related to asset abandonment. Depreciation and amortization are excluded because
companies utilize productive assets of different estimated useful lives and use
different methods of acquiring and depreciating productive assets. Restructuring
charges/adjustments and charges related to asset abandonment, which the Company
believes are not reflective of its ongoing operating cost structure, are
excluded as the frequency and magnitude of these charges may vary widely across
periods and companies. The reserve for an international non-income tax
obligation is excluded because the Company believes it is not indicative of its
ongoing operating cost structure. Duplicate rent expense incurred during the
build-out and transition to the Company's new New York City headquarters is
excluded because it relates to an infrequent corporate headquarters relocation
and is not indicative of the Company's ongoing operating cost structure.
Management believes that the exclusion of the aforementioned items, as detailed
in the reconciliation below, allows for an additional perspective on the
Company’s operating results from period to period and across companies. The
Company defines Adjusted Operating Margin as Adjusted Operating Income divided
by revenue.
Below is a reconciliation of these measures to their most directly comparable
U.S. GAAP measures:
Three Nine
Mont… Mont…
Amo… Ended Ended
in Sept… Sept…
mil… 2026 30, 2025 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Ope… $ 906 $ 917 $ 2,874 $ 2,581
inc…
Dep…
and 124 123 372 356
amo…
Res… 27 21 86 81
Res…
for
int… — — 36 —
non…
tax
obl…
Dup… 7 — 9 —
rent
Cha…
rel…
to — 1 — 4
ass…
aba…
Adj…
Ope… $ 1,064 $ 1,062 $ 3,377 $ 3,022
Inc…
Ope… 44.8 % 45.7 % 45.7 % 44.3 %
mar…
Adj…
Ope… 52.6 % 52.9 % 53.7 % 51.8 %
Mar…
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:
Amounts in Nine Months Ended
millions September 30, 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net cash
provided by $ 2,471 $ 2,043
operating
activities
Capital -271 -245
additions
Free Cash Flow $ 2,200 $ 1,798
Net cash (used
in) provided by $ -130 $ 44
investing
activities
Net cash used in
financing $ -3,190 $ -2,454
activities
The increase in both operating cash flow and Free
Cash Flow1was primarily driven by higher operating
income in both segments.
16
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:
T… Ni…
M… Mo…
… E… En…
… S… Se…
… 2… 3… 2… C… G… 2… 30, 2… C… G…
──────────────────────────────────────────────────────────────────────────────
… $ 2… $ 2… $ 16 1% $ 6,… $ 5,… $ 458 8%
…
… 5 — 5 -51 — -51
…
…
… -6 — -6 -17 — -17
…
…
… — -… 42 — -92 92
…
…
… $ 2… $ 1… $ 57 3% $ 6,… $ 5,… $ 482 8%
…
…
… $ 9… $ 9… $ 27 3% $ 2,… $ 2,… $ 131 5%
…
… 2 — 2 -28 — -28
…
…
… — — — -2 — -2
…
…
… — -… 42 — -92 92
…
…
… $ 9… $ 8… $ 71 8% $ 2,… $ 2,… $ 193 8%
…
…
…
… $ 4… $ 4… $ 2 —% $ 1,… $ 1,… $ 39 3%
…
… 1 — 1 -11 — -11
…
…
… — — — -2 — -2
…
…
… — -… 42 — -92 92
…
…
… $ 4… $ 3… $ 45 1… $ 1,… $ 1,… $ 118 1…
…
…
…
… $ 1… $ 1… $ -… (… $ 370 $ 419 $ -49 (…
…
… — — — -2 — -2
…
… — -… 41 — -91 91
…
…
… $ 1… $ 99 $ 19 1… $ 368 $ 328 $ 40 1…
…
…
… $ 1… $ 1… $ 15 9% $ 550 $ 502 $ 48 1…
…
… 1 — 1 -1 — -1
…
…
… — — — -2 — -2
…
…
… — -1 1 — -1 1
…
…
… $ 1… $ 1… $ 17 1… $ 547 $ 501 $ 46 9%
…
…
… $ 1… $ 1… $ 9 8% $ 361 $ 321 $ 40 1…
…
… — — — -8 — -8
…
…
… $ 1… $ 1… $ 9 8% $ 353 $ 321 $ 32 1…
…
…
…
… $ 2… $ 2… $ 8 3% $ 771 $ 737 $ 34 5%
…
…
… — — — -5 — -5
…
…
…
… $ 2… $ 2… $ 8 3% $ 766 $ 737 $ 29 4%
…
…
…
…
… $ 2… $ 2… $ 17 7% $ 735 $ 677 $ 58 9%
…
…
… 1 — 1 -12 — -12
…
…
…
… $ 2… $ 2… $ 18 8% $ 723 $ 677 $ 46 7%
…
…
…
17
T… Ni…
M… Mo…
… E… En…
… S… Se…
… 2… 3… 2… C… G… 2… 30, 2… C… G…
──────────────────────────────────────────────────────────────────────────────
…
… $ 9… $ 8… $ 53 6% $ 2,… $ 2,… $ 203 8%
…
… 2 — 2 -28 — -28
…
…
…
… — — — -2 — -2
…
…
… — -… 22 — -40 40
…
…
… $ 9… $ 8… $ 77 9% $ 2,… $ 2,… $ 213 8%
…
…
…
…
… $ 4… $ 3… $ 26 7% $ 1,… $ 1,… $ 109 9%
…
…
… 1 — 1 -11 — -11
…
…
…
… — — — -2 — -2
…
…
… — -… 22 — -40 40
…
…
…
… $ 4… $ 3… $ 49 1… $ 1,… $ 1,… $ 136 1…
…
…
…
…
… $ 1… $ 1… $ — —% $ 358 $ 343 $ 15 4%
…
… — — — -2 — -2
…
… — -… 21 — -39 39
…
…
… $ 1… $ 94 $ 21 2… $ 356 $ 304 $ 52 1…
…
…
…
…
… $ 1… $ 1… $ 16 1… $ 541 $ 487 $ 54 1…
…
… 1 — 1 -1 — -1
…
…
…
… — — — -2 — -2
…
…
… — -1 1 — -1 1
…
…
… $ 1… $ 1… $ 18 1… $ 538 $ 486 $ 52 1…
…
…
…
…
… $ 1… $ 1… $ 10 9% $ 360 $ 320 $ 40 1…
…
… — — — -8 — -8
…
…
…
… $ 1… $ 1… $ 10 9% $ 352 $ 320 $ 32 1…
…
…
…
&
… $ 2… $ 2… $ 9 4% $ 764 $ 728 $ 36 5%
…
…
… — — — -5 — -5
…
…
…
…
& $ 2… $ 2… $ 9 4% $ 759 $ 728 $ 31 4%
…
…
…
…
&
… $ 2… $ 2… $ 18 8% $ 729 $ 671 $ 58 9%
…
…
… 1 — 1 -12 — -12
…
…
…
…
& $ 2… $ 2… $ 19 8% $ 717 $ 671 $ 46 7%
…
…
…
… $ 1… $ 1… $ -… (… $ 3,… $ 3,… $ 327 1…
…
… 3 — 3 -23 — -23
…
…
… -6 — -6 -15 — -15
…
…
…
…
… $ 1… $ 1… $ -… (… $ 3,… $ 3,… $ 289 9%
…
…
…
… $ 5… $ 5… $ -… (… $ 1,… $ 1,… $ 162 1…
…
… 2 — 2 -11 — -11
…
…
… — — — -1 — -1
…
…
…
…
… $ 5… $ 5… $ -… (… $ 1,… $ 1,… $ 150 9%
…
…
…
…
… $ 1… $ 1… $ 7 5% $ 441 $ 419 $ 22 5%
…
… — — — -4 — -4
…
…
… -3 — -3 -4 — -4
…
…
…
…
… $ 1… $ 1… $ 4 3% $ 433 $ 419 $ 14 3%
…
…
…
18
T… N…
M… M…
… E… E…
… S… S…
… 2… 3… 2… C… G… 20… 3… 20… Ch… G…
──────────────────────────────────────────────────────────────────────────────
…
… $ 2… $ 2… $ 5 2% $ 6… $ 5… $ 39 7%
…
… — — — -5 — -5
…
…
… — — — -1 — -1
…
…
…
…
… $ 2… $ 2… $ 5 2% $ 6… $ 5… $ 33 6%
…
…
…
… $ 1… $ 1… $ 18 1… $ 5… $ 4… $ 93 1…
…
… — — — -5 — -5
…
…
… $ 1… $ 1… $ 18 1… $ 5… $ 4… $ 88 1…
…
…
19
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.
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 September September
millions 30, 2026 30, 2025 Change
──────────────────────────────────────────────────────────────────────────────
MA ARR
Banking $ 412 $ 382 $ 30 8%
Insurance 736 671 65 10%
KYC 489 435 54 12%
Total
Decision $ 1,637 $ 1,488 $ 149 10%
Solutions
Research
and 1,043 988 55 6%
Insights
Data and 1,008 942 66 7%
Informati…
Total MA $ 3,688 $ 3,418 $ 270 8%
ARR
20
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) a reserve for an
international non-income tax obligation and related interest and penalties; iv)
charges related to asset abandonment; v) duplicate rent expense incurred during
the build-out and transition to the Company's new New York City headquarters;
and vi) gain on business divestitures. The Company excludes the impact of
amortization of acquired intangible assets as companies utilize intangible
assets with different estimated useful lives and have different methods of
acquiring and amortizing intangible assets. These intangible assets were
recorded as part of acquisition accounting and contribute to revenue generation.
The amortization of intangible assets related to acquisitions will recur in
future periods until such intangible assets have been fully amortized.
Furthermore, the timing and magnitude of business combination transactions are
not predictable and the purchase price allocated to amortizable intangible
assets and the related amortization period are unique to each acquisition and
can vary significantly from period to period and across companies. Restructuring
charges/adjustments and charges related to asset abandonment, which the Company
believes are not reflective of its ongoing operating cost structure, are
excluded as the frequency and magnitude of these items may vary widely across
periods and companies. The reserve for an international non-income tax
obligation and related interest and penalties are excluded because the Company
believes they are not indicative of its ongoing operating cost structure.
Duplicate rent expense incurred during the build-out and transition to the
Company's new New York City headquarters is excluded because it relates to an
infrequent corporate headquarters relocation and is not indicative of the
Company's ongoing operating cost structure. Gain on business divestitures are
excluded due to their infrequent nature and because they do not reflect the
Company's ongoing operations. The Company excludes the aforementioned items to
provide additional perspective when comparing net income and diluted EPS from
period to period and across companies as the frequency and magnitude of similar
transactions may vary widely across periods.
Below is a reconciliation of these measures to their most directly comparable
U.S. GAAP measures:
T… N…
M… M…
… E… E…
… S… S…
… 2… 3… 2… 2… 3… 2…
──────────────────────────────────────────────────────────────────────────────
…
…
…
… $ 7… $ 6… $ 2… $ 1…
…
…
…
…
… $ 51 $ 55 $ 1… $ …
…
…
…
…
… -… -… -… …
…
…
…
… 39 41 1… 1…
…
…
… $ 27 $ 21 $ 86 $ …
…
…
… -7 -5 -… …
…
… 20 16 64 61
…
…
…
…
…
…
… $ — $ — $ 52 $ —
…
…
…
…
…
…
…
…
…
…
…
…
… — — -8 —
…
…
…
…
…
…
…
…
…
…
…
… — — 44 —
…
…
…
…
…
…
…
…
… $ — $ 1 $ — $ 4
…
…
…
…
…
…
… — — — …
…
…
…
…
…
… — 1 — 3
…
…
…
…
… $ 7 — $ 9 —
…
…
… -2 — -2 —
…
…
…
…
… 5 — 7 —
…
…
…
…
…
…
… $ -… — $ -… —
…
…
…
…
…
…
…
… $ — $ — $ -2 $ —
…
…
…
…
…
…
… 34 — 89 —
…
…
…
…
…
… -… — -… —
…
…
…
… $ 7… $ 7… $ 2… $ 2…
…
21
T… N…
M… M…
E… E…
S… S…
2… 3… 2… 2… 3… 2…
──────────────────────────────────────────────────────────────────────────────
…
…
…
…
… $ 4… $ 3… $ 1… $ …
…
…
…
…
…
… $ 0… $ 0… $ 0… $ 0…
…
…
…
…
… -… -… -… -…
…
…
…
… 0… 0… 0… …
…
…
… $ 0… $ 0… $ 0… $ 0…
…
…
… -… -… -… -…
…
… 0… 0… 0… …
…
…
…
…
…
…
… $ — $ — $ 0… $ —
…
…
…
…
…
…
…
…
…
…
…
…
… — — -… —
…
…
…
…
…
…
…
…
…
…
…
… — — 0… —
…
…
…
…
…
…
…
…
… $ — $ 0… $ — $ 0…
…
…
…
…
…
…
… — — — —
…
…
…
…
…
… — 0… — …
…
…
…
…
…
… $ 0… $ — $ 0… $ —
…
…
…
…
…
…
… -… — -… —
…
…
…
…
…
… 0… — 0… —
…
…
…
…
…
…
… $ -… $ — $ -… $ —
…
…
…
…
…
…
…
… — — -… —
…
…
…
…
…
…
… 0… — 0… —
…
…
…
…
…
… -… — -… —
…
…
…
… $ 4… $ 3… $ 1… $ …
…
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
October 21, 2026, at 9:00 a.m. Eastern
Date and Time Time (ET).
──────────────────────────────────────────────────────────────────────────────
The webcast and its replay can be
Webcast accessed through Moody’s Investor
Relations website,ir.moodys.com,
within “Events & Presentations.”
Dial In U.S. and Canada ‘+1-833-461-5787
Other callers ‘+1-626-884-3620
Passcode ‘706 179 185
A replay of the webcast will be
Webcast Replay available immediately after the call
on October 21, 2026.
22