Moody’s third quarter results topped analyst expectations, supported by robust revenue growth across both its credit ratings and analytics segments. Management pointed to a surge in debt issuance activity, particularly in leveraged finance and private credit, as a key driver. CEO Rob Fauber noted, “Markets closed with the busiest September on record, and Moody’s notched a new record of our own.” The company also benefited from tight credit spreads and heightened demand in specialty areas like data center financing and emerging market debt. Strong execution on cost control and operating leverage led to a meaningful margin expansion, while investments in technology and analytics helped Moody’s capture opportunities in evolving capital markets.
Is now the time to buy MCO? Find out in our full research report (it’s free for active Edge members).
Moody's (MCO) Q3 CY2025 Highlights:
- Revenue: $2.01 billion vs analyst estimates of $1.96 billion (10.7% year-on-year growth, 2.4% beat)
- Adjusted EPS: $3.92 vs analyst estimates of $3.68 (6.4% beat)
- Adjusted EBITDA: $1.06 billion vs analyst estimates of $972.7 million (52.9% margin, 9.2% beat)
- Adjusted EPS guidance for the full year is $14.63 at the midpoint, beating analyst estimates by 3.6%
- Operating Margin: 45.7%, up from 40.7% in the same quarter last year
- Market Capitalization: $87.55 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Moody's’s Q3 Earnings Call
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Brendan (Barclays): Asked about the impact of AI on analytics contracts and customer adoption. CEO Rob Fauber clarified that Moody’s contracts aren’t seat-based and AI is being embedded across a growing range of workflow solutions, with monetization opportunities both through direct offerings and partner integrations.
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Peter Knutson (Evercore): Inquired if record issuance in Q3 reflected pull-forward activity and how this might affect future volumes, especially CLOs. Fauber explained pull-forward was in line with recent years, concentrated in speculative-grade, and that investment-grade maturities remain healthy.
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Jason Haas (Wells Fargo): Sought clarification on the uniqueness of Moody’s KYC datasets and competitive positioning with AI adoption. Fauber detailed proprietary data assets, including Orbis and politically exposed persons databases, and emphasized the value of integrated, curated datasets over simple web-scraped data.
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Alexander Kramm (UBS): Probed whether Moody’s Analytics’ growth trajectory had moderated relative to earlier expectations. CFO Noemie Heuland responded that Q3 was in line with plans and that full-year guidance reflects high single-digit growth, with strong execution in lending and KYC.
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Scott Darren Wurtzel (Wolfe Research): Asked about the health of the private credit market and related risks. Fauber said that market stress can actually boost demand for Moody’s credit risk analysis and noted that some private debt is flowing back into public markets, where Moody’s is well positioned.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will monitor (1) the pace and composition of global debt issuance, especially in speculative-grade and M&A-driven categories; (2) the adoption and monetization of Moody’s AI-powered analytics products across banking, insurance, and non-financial sectors; and (3) execution on portfolio optimization, including progress in emerging markets and margin expansion. Potential impacts from macroeconomic and regulatory developments will also be key indicators.
Moody's currently trades at $490.76, up from $484.91 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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