Moody's Stock Gains Traction On Confident Outlook
Following its second-quarter earnings release on Wednesday, Moody’s Corp. (NYSE:MCO) stock saw an uptick.
The financial intelligence company reported a strong 4% year-on-year (Y/Y) increase in revenue, reaching $1.90 billion and comfortably exceeding the analyst consensus of $1.82 billion.
Moody’s also beat profit forecasts, posting adjusted earnings per share of $3.56 compared to the $3.29 estimate.
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Moody’s Investors Service’s (MIS) revenue reached $1.0 billion during the quarter, marking a flat growth rate Y/Y. Moody’s Analytics (MA) revenue grew 11% to $888 million.
Operating expenses grew 4% compared to the prior-year period, including 2% from restructuring charges and 2% related to M&A. The company’s adjusted operating margin was 50.9%, up 130 basis points from the prior-year period.
MA’s adjusted operating margin rose by 360 basis points to 32.1% reflecting strong revenue growth combined with disciplined cost management. MIS’s adjusted operating margin of 64.2% improved 100 basis points.
Cash flow from operations was $543 million, and free cash flow was $468 million.
On July 22, 2025, the Board of Directors approved a quarterly dividend of 94 cents per share, an 11% increase from last year’s 85 cents. This dividend will be paid on September 5, 2025, to shareholders on record as of August 15, 2025.
During the second quarter of 2025, Moody’s repurchased 0.6 million shares at an average of $460.76 per share, while issuing 39 thousand net shares through employee stock-based compensation programs (including shares for payroll taxes).
As of June 30, 2025, Moody’s had 179.4 million shares outstanding and approximately $0.9 billion remaining in its share repurchase authority, with no set expiration.
Moody’s reported $7.0 billion in outstanding debt and an undrawn $1.25 billion revolving credit facility. The company also held approximately $2.174 billion in cash and cash equivalents as of June 30, 2025.
2025 Outlook
Moody’s revised the adjusted EPS outlook to $13.50-$14.00 (from $13.25-$14.00) versus the $13.85 analyst consensus estimate. The company still projects revenues to increase in the mid single-digit percent range. Operating expenses are projected to increase in the low to mid-single-digit percentage range in 2025.
Price Action: Moody’s shares traded higher by 2.40% to $511.12 at last check Wednesday.
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