Key financial results
- Moody's topped $2 billion in revenue for the third straight quarter, delivering adjusted operating margin of 52.6% and adjusted diluted EPS growth of 6%.
- Moody's Analytics delivered 3% reported revenue growth and 8% on an organic constant currency basis, with recurring organic constant currency revenue growing 9%.
Moody's Analytics delivered 3% reported revenue growth versus last year, and that's 8% on an organic constant currency basis.
- Moody's Analytics ended the quarter with $3.7 billion in annualized recurring revenue, up approximately 8% year-over-year, and retention was very strong at 95%.
We ended the quarter with $3.7 billion in annualized recurring revenue, ARR and that's up approximately 8% year-over-year
- Moody's Investors Service revenue was $1.1 billion, down 1% against a tough comparison from the prior year, while transaction revenue declined 5% and issuance declined 2%.
MIS revenue was $1.1 billion, down 1% in the third quarter -- against this tough compare in the third quarter last year.
- Moody's Analytics adjusted operating margin was 35.3%, up 100 basis points year-over-year, and MIS adjusted operating margin was 64.4%, down approximately 80 basis points year-over-year.
MA adjusted operating margin was 35.3% and that's up 100 basis points year-over-year.
Business segment results
- Decision Solutions: Decision Solutions ARR grew 10% and represents about 44% of MA ARR, driven by KYC ARR growth of 12% and insurance ARR growth of nearly 10%.
Decision Solutions ARR grew 10% and that's very consistent with the prior quarter, and that represents about 44% of MA ARnR.
- Banking: Banking ARR grew 8%, with lending up 12% versus last year and leading performance.
Banking ARR grew 8% and with strategic growth areas such as lending, up 12% versus last year and leading performance.
- Research & Insights: Research & Insights reported revenue growth of 3% and ARR growth of about 6%, supported by Moody's OneView.
Research & Insights reported revenue growth of 3% reflects a tough Q3 comparison as the prior year period benefited from revenue recognition
- Data & Information: Data & Information ARR grew 7%, reflecting demand for ratings data feeds and the data estate, including Orbis.
Data & Information ARR grew 7%, reflecting demand for ratings data feeds and the data estate, including Orbis.
- Corporate Finance: Investment-grade revenue increased 18% on 16% issuance growth, while high yield and bank loan revenue declined 40% and 27%, respectively.
investment-grade revenue increased 18% on 16% issuance growth.
- Financial Institutions and PPIF: Financial institutions issuance came predominantly from banking issuers on frequent issuer pricing contracts, and PPIF grew across projects, infrastructure, and U.S. public finance.
There was a similar mix dynamics in the financial institutions group where issuance came predominantly from banking issuers
- Structured Finance: Structured finance benefited from ABS, RMBS, and CMBS, which was partially offset by lower CLO activity.
structured finance benefited from ABS, RMBS and CMBS that was partially offset by lower CLO activity.
Capital allocation
- Year-to-date, Moody's repurchased approximately $2.6 billion worth of shares and continues to expect up to $3 billion of repurchases for the full year.
Year-to-date, we have repurchased approximately $2.6 billion worth of shares and continue to expect up to $3 billion of repurchases for the full year.
- Free cash flow was $2.2 billion year-to-date, up 22% year-over-year, and the company remains on track to return more than 130% of free cash flow to shareholders this year.
Free cash flow was $2.2 billion year-to-date. That's up 22% year-over-year, and we remain on track to return more than 130% of free cash flow to shareholders this year.
- Capital allocation priorities remain investing to support growth, driving sustainable margin expansion, preserving balance sheet flexibility, and returning excess capital to shareholders.
Our capital allocation priorities remain unchanged, investing to support growth, driving sustainable margin expansion, preserving balance sheet flexibility and returning excess capital to shareholders.
Industry trends and dynamics
- Overall rated issuance declined 2% to approximately $1.7 trillion, while credit spreads remained relatively stable before widening by approximately 10% towards the end of September.
At approximately $1.7 trillion, issuance was down 2% year-over-year against a very strong comparison
- Financing activity tied to AI infrastructure remained very strong, with issuance increasing approximately fourfold from the third quarter of last year.
financing activity tied to AI infrastructure remained very strong in the quarter while on the other hand, leverage finance activity moderated
- Over the next 4 years, refinancing needs across the U.S. and EMEA topped $5 trillion for the second straight year.
Over the next 4 years, refinancing needs across the U.S. and EMEA topped $5 trillion for the second straight year.
Competitive landscape
- Moody's was named #1 in the Chartis RiskTech100 for the fifth consecutive year with a record 18 category wins across credit, insurance data, and AI.
We were pleased to be named #1 in the Chartis RiskTech100 for the fifth consecutive year with a record 18 category wins across credit, insurance data and AI.
- First-time rating mandates increased 40% in the third quarter, marking the highest quarterly total in 5 years.
First-time mandates increased 40% in the third quarter. That's the highest quarterly total in 5 years.
Macroeconomic environment
- Management noted an increasingly complex and uneven operating environment with rising macro and policy uncertainty.
Moody's delivered another quarter of strong profitability and earnings growth with disciplined execution and healthy cash generation amidst an increasingly complex operating environment.
Growth opportunities and strategies
- Moody's is acquiring a minority stake in PhilRatings to secure a leading position in the Philippines, where more than $100 billion of infrastructure investment is planned by 2030.
in emerging markets, we're acquiring a minority stake in PhilRatings. That's our sixth domestic credit rating agency affiliate in Asia Pac.
- Moody's Analytics is expanding its offerings in insurance, banking, KYC, and AI-enabled solutions, including new partnerships with SAP and Lloyd's of London.
MA ARR grew approximately 8%. That was in line with our high single-digit outlook driven by healthy retention and strong recurring revenue growth
Financial guidance and outlook
- Moody's reaffirmed its full year guidance metrics, expecting high single-digit percent revenue growth, adjusted operating margin of 52% to 53%, and adjusted diluted EPS of $16.50 to $17.
- For MIS, full year revenue growth is expected in the high single-digit percent range, with fourth quarter issuance expected to decline in the mid-teens percent versus the prior year.
For MIS, we continue to expect full year revenue growth in the high single-digit percent range
- For MA, full year ARR growth is expected in the high single-digit percent range with an adjusted operating margin of 34% to 35%.
For MA, we continue to expect ARR growth in the high single-digit percent range and adjusted operating margin of 34% to 35%.
- Full year first-time mandate outlook was raised to a range of 900 to 950.
given our performance to date and visibility into our pipeline, we're raising our full year first-time mandate outlook to a range of [ 900 to 950 ].
- Management expects mid-single-digit percent expense growth for the full year.
And we continue to expect mid-single-digit percent expense growth for the full year.
Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Revenue | Exceeded $2 billion | Third straight quarter |
| Adjusted Operating Margin (MCO) | 52.6% | Not stated |
| Adjusted Diluted EPS Growth | 6% | Not stated |
| MA Annualized Recurring Revenue (ARR) | $3.7 billion | Up approximately 8% year-over-year |
| MIS Adjusted Operating Margin | 64.4% | Down approximately 80 basis points year-over-year |
| MA Adjusted Operating Margin | 35.3% | Up 100 basis points year-over-year |
How management sounded
Balanced (+25 on our -100 to +100 scale). Management highlighted robust profitability, strong recurring revenue growth, and durable long-term funding needs despite uneven market conditions and issuance volatility. Management sounded more upbeat than on 6% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Read the analyst Q&A summary and guidance and outlook for this call.
What to watch before the next call
- Macroeconomic volatility, wider credit spreads, and potential geopolitical or policy headwinds affecting issuance windows.
- Execution of fourth-quarter MA sales and renewals during the largest selling period of the year.
- Adoption rates and monetization progress for AI-enabled tools, MCP interfaces, and agentic workflows.
Earlier calls
- Q2 2026 (Jul 22, 2026), tone Balanced: Moody's reported a strong second quarter with 15% revenue growth and raised select full year guidance metrics.
