Moody’s (MCO) Q4 2025 earnings summary

Executive summary

• Achieved record revenue of $7.7 billion in 2025, up 9% year-over-year, with strong performance in both Moody's Analytics (MA) and Moody's Investors Service (MIS) segments.

• Adjusted diluted EPS reached $14.94, up 20% year-over-year, and adjusted operating margin expanded to 51.1%, up 300 basis points.

• Free cash flow for 2025 was $2.6 billion, with guidance for 2026 at $2.8–$3.0 billion.

• Positioned as a leader in AI-enabled data and analytics, with deep integration into customer workflows and high retention among AI solution adopters.

• Introduced 2026 guidance targeting high single-digit revenue growth, double-digit adjusted diluted EPS growth, and significant capital returns to shareholders.

Financial highlights

• FY 2025 revenue: $7.7 billion (+9% YoY); adjusted operating margin: 51.1%.

• Adjusted diluted EPS: $14.94 (+20% YoY); free cash flow: $2.6 billion.

• MIS revenue grew 9% to $4.1 billion; MA revenue grew 9% to $3.6 billion, with ARR at $3.5 billion (+8%).

• MA recurring revenue grew 11% (8% organic constant currency); recurring revenue represented 97% of Q4 MA revenue.

• Effective tax rate for 2025 was 21.3%, down from 23.7% in 2024.

Outlook and guidance

• 2026 revenue expected to grow at a high single-digit percent rate, with adjusted operating margin guidance of 52–53%.

• Adjusted diluted EPS guidance for 2026 is $16.40–$17.00, with free cash flow expected between $2.8–$3.0 billion.

• MIS revenue projected to grow at a high single-digit percent pace, with operating margin around 65%.

• MA organic constant currency recurring revenue expected to grow high single digits.

• Effective tax rate guidance for 2026: 23–25%.