Moody's Corporation 8-K
PositiveEarningsGuidance lowered
MIS ratings transactions drove revenue growth; management lowered cash-flow guidance while raising the buyback ceiling.
Filed 2026-07-22 06:59 ET
- 2.02 Results of Operations
- 7.01 Regulation FD Disclosure
- 9.01 Financial Statements and Exhibits
Summary
Q2 2026 results with updated FY2026 guidance. Revenue rose 15% Y/Y, led by 25% growth at Moody’s Investors Service (MIS), while adjusted operating margin expanded 440 bp. Moody’s reaffirmed its full-year revenue-growth outlook, narrowed adjusted diluted EPS guidance, lowered cash-flow guidance and raised its share-repurchase ceiling.
Key Figures
| Metric | Q2 2026 | Q2 2025 | Y/Y |
|---|---|---|---|
| Revenue | $2.19B | $1.90B | 15% |
| Operating income | $1.05B | $818M | 27.9% |
| Net income attributable to Moody’s | $878M | $578M | 51.9% |
| Diluted EPS | $5.03 | $3.21 | 57% |
| Adjusted diluted EPS, non-GAAP | $4.68 | $3.56 | 31% |
| Operating margin | 47.9% | 43.1% | +480 bp |
| Adjusted operating margin, non-GAAP | 55.3% | 50.9% | +440 bp |
- MIS revenue increased 25%, with transaction revenue up 34% amid strength across rating lines; Moody’s Analytics revenue increased 4% reported and 8% on an organic constant currency basis. Analytics annualized recurring revenue rose 9% to $3.66B; recurring revenue was 99% of Analytics revenue.
- First-half operating cash flow was $1.72B (+32%) and free cash flow was $1.53B (+34%), primarily reflecting higher operating income in both segments. Moody’s repurchased approximately $2.2B of shares and paid $365M in dividends; the diluted weighted-average share count fell 3.2% Y/Y in Q2.
- GAAP results included a $181M pre-tax gain on business divestitures. At 6/30/2026, cash and cash equivalents were $1.47B and debt totaled $6.95B.
Guidance
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| MCO revenue growth | FY2026 | High-single-digit percent increase | High-single-digit percent increase | Reaffirmed |
| Operating expenses | FY2026 | Mid-single-digit percent increase | Mid-single-digit percent increase | Reaffirmed |
| Operating margin | FY2026 | 44%–45% | ≈45% | — |
| Adjusted operating margin, non-GAAP | FY2026 | 52%–53% | 52%–53% | Reaffirmed |
| Net interest expense | FY2026 | $220M–$240M | $220M–$240M | Reaffirmed |
| Non-operating income (expense) | FY2026 | $70M–$90M | $70M–$90M | Reaffirmed |
| Effective tax rate | FY2026 | 23%–25% | 23%–25% | Reaffirmed |
| Diluted EPS | FY2026 | $16.00–$16.50 | $16.00–$16.60 | Lowered |
| Adjusted diluted EPS, non-GAAP | FY2026 | $16.50–$17.00 | $16.40–$17.00 | Narrowed |
| Operating cash flow | FY2026 | $3.15B–$3.35B | $3.25B–$3.45B | Lowered |
| Free cash flow | FY2026 | $2.7B–$2.9B | $2.8B–$3.0B | Lowered |
| Share repurchases | FY2026 | Up to $3.0B | ≈$2.5B | Raised |
| Moody’s Analytics revenue growth | FY2026 | Mid-single-digit percent increase | Mid-single-digit percent increase | Reaffirmed |
| Moody’s Analytics organic constant currency revenue growth | FY2026 | High-single-digit percent increase | High-single-digit percent increase | Reaffirmed |
| Moody’s Analytics annualized recurring revenue growth | FY2026 | High-single-digit percent increase | High-single-digit percent increase | Reaffirmed |
| Moody’s Analytics adjusted operating margin | FY2026 | 34%–35% | 34%–35% | Reaffirmed |
| MIS revenue growth | FY2026 | High-single-digit percent increase | High-single-digit percent increase | Reaffirmed |
| MIS adjusted operating margin | FY2026 | ≈65% | ≈65% | Reaffirmed |
Investor Takeaways
- Track FY2026 results against the revised EPS and cash-flow ranges; revenue growth guidance remains high-single-digit.
- Watch whether Moody’s reaches its increased share-repurchase ceiling of up to $3.0B for the year.
The summary is written by an AI model reading the filing.
Model 005 · prompt 01d34d48e3