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Moody's reported Q2 adjusted EPS of $3.56, beating estimates and rising 8.5% y/y.
Revenues grew 4.5% to $1.90B, led by 10.5% growth in MA on strong demand for data and insights.
Expenses rose 3.6% y/y and MCO repurchased 0.6M shares at an average price of $460.76.
Moody's (MCO - Free Report) has reported second-quarter 2025 adjusted earnings of $3.56 per share, which outpaced the Zacks Consensus Estimate of $3.44. The bottom line grew 8.5% from the year-ago quarter figure.
The results were primarily aided by an improvement in revenues. Steady demand for analytics further supported results. The company’s liquidity position was strong in the quarter. However, an increase in operating expenses posed a headwind.
After considering certain non-recurring items, net income attributable to Moody's was $578 million or $3.21 per share, up from $552 million or $3.02 per share in the prior-year quarter.
MCO’s Revenues Improve, Costs Rise
Revenues were $1.90 billion, which surpassed the Zacks Consensus Estimate of $1.85 billion. Also, the top line rose 4.5% year over year.
Total expenses were $1.08 billion, up 3.6% year over year.
Adjusted operating income of $966 million rose 7.1% year over year. The adjusted operating margin was 50.9%, rising from 49.6% a year ago.
Moody's Segment Performance Mixed
Moody’s Investors Service (MIS) revenues declined marginally year over year to $1.06 billion. The fall was due to weakness in Corporate Finance and Financial Institutions, partly offset by improvement in Structured Finance revenues.
Moody’s Analytics (MA) revenues rose 10.5% year over year to $891 million. Robust demand for Moody’s proprietary data and unique analytical insights contributed to the rise.
MCO’s Balance Sheet Strong
As of June 30, 2025, Moody’s had total cash, cash equivalents and short-term investments of $2.29 billion, down from $2.97 billion as of Dec. 31, 2024.
The company had $7 billion in outstanding debt and $1.25 billion in additional borrowing capacity under the revolving credit facility.
Moody's Share Repurchases
In the quarter, MCO repurchased 0.6 million shares at an average price of $460.76.
As of June 30, 2025, $0.9 billion of share repurchase authorization was available.
MCO Updated 2025 Guidance
Moody’s expects adjusted earnings of $13.50-$14.00 per share, changed from the prior target of $13.25-$14.00.
On a GAAP basis, earnings are projected to be $12.25-$12.75 per share, changed from the earlier mentioned $12.00-$12.75.
The MIS segment’s revenues are expected to increase in the low to mid-single-digit range, changed from the previous guidance of stable to mid-single-digit growth.
Key Q2 Development for Moody’s
In June, MCO fully acquired ICR Chile, strengthening its presence in Latin America’s domestic credit markets. The terms of the deal were not disclosed and the transaction will not have a material impact on Moody’s 2025 financial results.
The transaction followed MCO’s acquisition of a minority stake in ICR Chile in 2019.
Martin Fernandez-Romero, managing director of Moody’s Local, stated, “Today’s acquisition builds on our successful partnership with ICR and underscores our commitment to Chile’s growing debt capital market. Bringing ICR into Moody’s Local will enhance our ability to provide high quality credit ratings, research, and analytical services to market participants, while contributing to greater transparency in Latin America.”
Our Take on MCO
Moody’s remains well-positioned for growth on the back of a solid market position, strength in diverse operations and strategic acquisitions. However, elevated operating expenses and geopolitical and macroeconomic concerns are likely to hurt its financials.
Moody's Corporation Price, Consensus and EPS Surprise
Ares Capital Corporation (ARCC - Free Report) is scheduled to announce second-quarter 2025 numbers on July 29.
The consensus estimate for Ares Capital’s quarterly earnings has been unchanged at 51 cents over the past week. The figure implies a fall of 16.4% from the prior-year quarter’s reported number.
Hercules Capital, Inc. (HTGC - Free Report) is slated to report second-quarter 2025 results on July 31.
The Zacks Consensus Estimate for Hercules Capital’s quarterly earnings has been unchanged at 44 cents over the past week. The figure implies a decline of 7.8% from the prior-year quarter’s actual.
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Moody's Q2 Earnings Beat Estimates, Revenues & Expenses Rise Y/Y
Key Takeaways
Moody's (MCO - Free Report) has reported second-quarter 2025 adjusted earnings of $3.56 per share, which outpaced the Zacks Consensus Estimate of $3.44. The bottom line grew 8.5% from the year-ago quarter figure.
The results were primarily aided by an improvement in revenues. Steady demand for analytics further supported results. The company’s liquidity position was strong in the quarter. However, an increase in operating expenses posed a headwind.
After considering certain non-recurring items, net income attributable to Moody's was $578 million or $3.21 per share, up from $552 million or $3.02 per share in the prior-year quarter.
MCO’s Revenues Improve, Costs Rise
Revenues were $1.90 billion, which surpassed the Zacks Consensus Estimate of $1.85 billion. Also, the top line rose 4.5% year over year.
Total expenses were $1.08 billion, up 3.6% year over year.
Adjusted operating income of $966 million rose 7.1% year over year. The adjusted operating margin was 50.9%, rising from 49.6% a year ago.
Moody's Segment Performance Mixed
Moody’s Investors Service (MIS) revenues declined marginally year over year to $1.06 billion. The fall was due to weakness in Corporate Finance and Financial Institutions, partly offset by improvement in Structured Finance revenues.
Moody’s Analytics (MA) revenues rose 10.5% year over year to $891 million. Robust demand for Moody’s proprietary data and unique analytical insights contributed to the rise.
MCO’s Balance Sheet Strong
As of June 30, 2025, Moody’s had total cash, cash equivalents and short-term investments of $2.29 billion, down from $2.97 billion as of Dec. 31, 2024.
The company had $7 billion in outstanding debt and $1.25 billion in additional borrowing capacity under the revolving credit facility.
Moody's Share Repurchases
In the quarter, MCO repurchased 0.6 million shares at an average price of $460.76.
As of June 30, 2025, $0.9 billion of share repurchase authorization was available.
MCO Updated 2025 Guidance
Moody’s expects adjusted earnings of $13.50-$14.00 per share, changed from the prior target of $13.25-$14.00.
On a GAAP basis, earnings are projected to be $12.25-$12.75 per share, changed from the earlier mentioned $12.00-$12.75.
The MIS segment’s revenues are expected to increase in the low to mid-single-digit range, changed from the previous guidance of stable to mid-single-digit growth.
Key Q2 Development for Moody’s
In June, MCO fully acquired ICR Chile, strengthening its presence in Latin America’s domestic credit markets. The terms of the deal were not disclosed and the transaction will not have a material impact on Moody’s 2025 financial results.
The transaction followed MCO’s acquisition of a minority stake in ICR Chile in 2019.
Martin Fernandez-Romero, managing director of Moody’s Local, stated, “Today’s acquisition builds on our successful partnership with ICR and underscores our commitment to Chile’s growing debt capital market. Bringing ICR into Moody’s Local will enhance our ability to provide high quality credit ratings, research, and analytical services to market participants, while contributing to greater transparency in Latin America.”
Our Take on MCO
Moody’s remains well-positioned for growth on the back of a solid market position, strength in diverse operations and strategic acquisitions. However, 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 #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Dates of Other Finance Stocks
Ares Capital Corporation (ARCC - Free Report) is scheduled to announce second-quarter 2025 numbers on July 29.
The consensus estimate for Ares Capital’s quarterly earnings has been unchanged at 51 cents over the past week. The figure implies a fall of 16.4% from the prior-year quarter’s reported number.
Hercules Capital, Inc. (HTGC - Free Report) is slated to report second-quarter 2025 results on July 31.
The Zacks Consensus Estimate for Hercules Capital’s quarterly earnings has been unchanged at 44 cents over the past week. The figure implies a decline of 7.8% from the prior-year quarter’s actual.