MCO FY2025 Q3 IMPROVING

Moody's Corporation earnings call

Oct 22, 2025 · 05:00 ET NoemiRob FauberShivani Kark

Buzzberg read

Record Q3 revenue and raised full-year guidance

Moody's reported a record Q3 with revenue exceeding $2B, raised full-year guidance across most metrics, and highlighted strong issuance trends, private credit flows, and AI-driven growth in Analytics. Management struck an optimistic tone on 2026 tailwinds including M&A recovery and data center financing. Quarterly revenue exceeded $2B for the first time, up 11% YoY; adjusted EPS of $3.92 (+22% YoY).

Buzzberg read Record Q3 revenue and raised full-year guidance Moody's reported a record Q3 with revenue exceeding $2B, raised full-year guidance across most metrics, and highlighted strong issuance trends, private credit flows, and AI-driven growth in Analytics. Management struck an optimistic tone on 2026 tailwinds including M&A recovery and data center financing. Quarterly revenue exceeded $2B for the first time, up 11% YoY; adjusted EPS of $3.92 (+22% YoY). Read full analysisCollapse analysis

MIS (ratings) revenue grew 12% with record issuance; leveraged finance and structured finance drove activity.
Private credit-related activity surged 60%+ in revenue, with many deals returning to public markets for refinancing.
Moody's Analytics ARR hit nearly $3.4B (+8%); KYC and AI-driven solutions had strong wins with banks and tech firms.

Revenue $2.007B reported

EPS $3.92 reported

Gross margin 69.36% reported

MA op margin 34.3% reported

What changed this quarter

Guidance

Record Q3 revenue and raised full-year guidance

Guidance tone

Demand

Refunding walls projected to surpass $5 trillion over next four years

Management expresses strong conviction in the business momentum, raising guidance across nearly all metrics and highlighting record results and a robust pipeline.

Private Credit

Private credit revenue grew over 60%, deal counts up 70%

MIS (ratings) revenue grew 12% with record issuance; leveraged finance and structured finance drove activity.

AI-driven sales win with Tier 1 U.S. bank

Management is actively monetizing AI through new agentic solutions, smart APIs, and embedding proprietary data into partner platforms like Salesforce. They report tangible momentum with large customer wins (e.g., $3M+ deal with a Tier 1 U.S. bank) and are using AI internally to…

AI, capex & demand read

Platform & monetization

Demand

Bookings & conversion

Refunding walls projected to surpass $5 trillion over next four years. Management expresses strong conviction in the business momentum, raising guidance across nearly all metrics and highlighting record results and a robust pipeline.

Capex

Investment and capacity

Capex was not explicitly discussed. Management references continued investment in AI, data infrastructure, and emerging markets, but no specific capital expenditure figures were provided.

Tone · Confident

Management expresses strong conviction in the business momentum, raising guidance across nearly all metrics and highlighting record results and a robust pipeline.

Supply-chain alpha

Private credit refinancing into public bond markets is creating a 'deferred maturity wall' as unrated direct lending deals migrate to rated BSL markets, with issuers saving 200-400 bps on average.

“we're seeing a growing number of private deals returning to the public debt markets for refinancing... issuers are realizing material savings, on average, something like 200 basis points”

Rob Fauber

Forward guidance

ImprovingGuidance tone

Forward guidance
Metric	Period	Range	Midpoint	Status
EPS	FY2025	$14.50–$14.75	$14.62	RAISED
Free cash flow	FY2025	$2.5B	$2.5B	RAISED
Op margin	FY2025	51%	51%	RAISED
Op marginMA	FY2025	33%	33%	RAISED
Op marginMIS	FY2025	63%–64%	63.5%	RAISED

Guidance credibility

1 / 1met or beat

Guidance credibility
Issued	Metric	Target	Guide	Actual	Outcome
FY2026 Q1	EPS	FY2026 Q2	$4.15–$4.30	$4.68	Met / beat

Company read-throughs

CRM

-4.0%

since call

$263.00→$252.45

Partners

Moody's is deepening its Salesforce partnership by embedding its data into AgentForce 360 and agentic tools, which should drive more sticky revenue for both companies.

“we're expanding our partnership to make available our proprietary GenAI ready data and analytics within Salesforce's AgentForce 360”

Rob Fauber

MSCI

+5.2%

since call

$544.84→$573.00

Partners

Moody's partnership with MSCI addresses credit risk assessment in private credit markets, potentially expanding addressable revenue for both firms.

“we partnered with MSCI to be able to provide investors with that third-party view”

Rob Fauber

Q&A context

MSCI· Partners

Question

Scott WurzelAnalyst, Wolf Research

Hey, good morning, guys, and thank you for taking my question. Just wanted to ask one on private credit. We're starting to see more headlines, hear more concerns about just the health of private credit. I'm wondering if you can talk about how you see that potentially impacting your growth there. Like I think there's potentially a school of thought that if there is more concern around the health there, there could be more demand for understanding of risk and ratings. There could also be more debt, as you said, moving from public or private to public markets. Just wondering if you can kind of tease out some of the potential ramifications of that. Thanks.

Management answer

Rob FauberPresident & Chief Executive Officer, Moody’s Corporation

Yeah, Scott, it's Rob. I think you started to nail it there. We've been talking for a number of these calls about how important it is to have a rigorous third-party independent assessment of credit risk in the private credit market. And that was the driver behind what we did with MSCI. And it's interesting, I mentioned in my prepared remarks, we don't have a lot of rating exposure in the direct lending market. And that's, again, one of the reasons that we partnered with MSCI to be able to provide investors with that third-party view. And I I mentioned that, so I'd say two things, you know, whenever you start to see a little bit of credit stress in the market, and I talked about at least in the public markets, the spec grade default rate is higher than historical averages. So you can imagine that there's some similar, you know, stress in the, in the private credit market that drives more demand for credit insight and research. We see that with the usage of our website and, uh, you know, all sorts of things, the engagement that we have with investors. So, um, I would say that's true. And then second, you're right. I mean, we're now seeing a little bit of a, of a, you know, flow back into the public markets because at the end of the day, um, those coupons that you can get in the public markets are typically, uh, represent a fairly substantial savings versus, you know, funding in the private, private markets. So, you know, I think we could see an ebb and flow, um, you know, between the private and public markets. But, you know, I think we're pretty well positioned to serve the needs of investors and issuers, whether it's, you know, in the private market or the public market. And that's what we've really been working on over the last, you know, call it two years.