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October 24, 2025 • 4 min read
Moody's Corporation, a cornerstone of the global financial infrastructure, provides the credit ratings, data, and analytical tools that help investors and organizations make better decisions. The company just released its third-quarter 2025 financial results, and we're diving into the 10-Q filing to see what the numbers tell us about its performance and trajectory.
Overall, Moody's delivered a very strong quarter, showcasing double-digit growth in both revenue and earnings, with both of its major business segments firing on all cylinders.
For the third quarter ended September 30, 2025, Moody's reported impressive top- and bottom-line growth compared to the same period last year:
A key highlight was the significant margin expansion. The company's operating margin jumped to 45.7% from 40.7% in Q3 2024. This improvement points to strong revenue growth combined with what the company calls "disciplined cost management."
To help visualize how Moody's generates its profit, the following flow diagram breaks down the company's revenues and expenses for the third quarter of 2025.
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Moody's operates through two primary segments, and both performed well this quarter.
The MIS segment, the company's well-known credit rating agency, was a standout performer. Revenue grew 12% to $1.1 billion, fueled by favorable conditions in the credit markets.
The MIS segment is a profit machine, boasting an adjusted operating margin of an impressive 65.2% for the quarter.
The Moody's Analytics segment, which provides financial intelligence and analytical tools, continued its steady growth trajectory, with revenue up 9% to $909 million. This segment's strength lies in its recurring revenue streams.
A crucial metric for MA is Annualized Recurring Revenue (ARR), which represents the annualized value of its subscription-based contracts. Total MA ARR grew by 8% to $3.4 billion, signaling a healthy and predictable future revenue base.
Moody's continues to generate substantial cash. For the first nine months of 2025, the company produced $1.8 billion in Free Cash Flow (net cash from operations less capital expenditures).
The company actively returns this cash to its shareholders. In the third quarter alone, Moody's:
Moody's third-quarter results paint a picture of a company executing effectively across the board. Its legacy ratings business (MIS) is adept at capitalizing on favorable market conditions, while its analytics segment (MA) provides a stable, growing, and increasingly vital source of diversified revenue. The combination of strong top-line growth and margin expansion demonstrates a potent business model, allowing the company to invest in growth while generously rewarding its shareholders.
Last updated: October 24, 2025