MCO US S&P 500Russell 1000 Earnings call · transcribed from the recording

Moody's Corporation (MCO) · Q3 2026 results and valuation

Share price: $514.93 · 2026-11-11

Moody's Corporation provides credit ratings, research, and risk analysis for organizations, debt instruments, and securities. The company offers data and analytical tools to help financial institutions, corporations, and government entities manage risk and navigate global debt markets. Source: 10-K annual report (2026-02-18)

Results Q3 2026 vs Q2 2026 · previous quarter · published 21 Oct 2026 and 22 Jul 2026

Net income down 16.4% on the previous quarter. Management sounded about as positive as a typical company call, in its script and in answers to analysts.

1 · Numbers

−16.4%

Net income vs Q2 2026

Outlook given

Net income 734.0M vs 878.0M

Revenue −7.4%

Against the same quarter last year (Q3 2025) it is +13.6%, so the move on last quarter looks seasonal or timing-related rather than a trend.

Why Against the same quarter last year (+13.6%), net income rose primarily because growth in decision solutions, insurance, and data and information segments, combined with disciplined cost management and expanded operating margins, offset the decline in transactional revenue from the learning solutions divestiture.

2 · How management spoke

Typical

More upbeat than 60% of company calls

Answers to analysts: restrained, in line with the script.

Last call it was different: the answers were less upbeat than the script.

3 · What stood out

Moody's Corporation raised its four-year first-time mandate outlook to a range of 900 to 950 due to performance to date and pipeline visibility.

Valuation

Is Moody's Corporation undervalued?

Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.

At 12.2% growth a year (3-year revenue growth), the model's fair value is $375.12 a share — the stock trades 37% above it. Today's price assumes 16.1% growth a year.

Current price

$514.93

close of 2026-11-11

Market implies growth of i

+16.1% for 10 yrs

Fair value / share

$375.12

Buy below

$281.34

Price vs fair value

Overvalued 37%

Price vs buy-below price

Overvalued 83%

FCF growth / yr i Discount rate i Terminal growth i Margin of safety i

Official channels

The company's own website and social media accounts.

Read between the lines

Key theme

The company expects adjusted operating margins of 34 to 35% and high single-digit percent growth in AR for MA.

Source quote
“For MA, we continue to expect AR growth in the high single-digit percent range, and adjusted operating margin of 34 to 35%.”
Figure

Recurring organic constant currency revenue grew 9% and now represents about 99% of total MA revenue, highlighting the scale of recurring revenue in the total mix.

Source quote
“Recurring organic constant currency revenue grew 9%, and that now represents about 99% of total MA revenue.”
Guidance

The company raised its four-year first-time mandate outlook to a range of 900 to 950 due to performance to date and pipeline visibility.
Figure

Growth in the banking sector was driven by the lending suite, which grew ARR by 12% as one of the company's most compelling growth opportunities.

Source quote
“In banking, growth was driven by the lending suite, which grew ARR by 12% and remains one of our most compelling growth opportunities.”
Guidance

The company repurchased $2.6 billion in shares year-to-date and expects up to $3 billion in repurchases for the full year.

4 more

Guidance

The company is reaffirming its full year guidance metrics for the period ending in 2026.
Figure

First-time mandates increased 40% in the third quarter.
Figure

Insurance ARR grew 10% this past quarter.

Source quote
“I'm going to start with insurance, where ARR grew 10% this past quarter.”
Figure

Retention was very strong at 95% on a trailing 12-month basis, reflecting the mission-critical nature of solutions and the durability of customer relationships.

Source quote
“Retention was very strong at 95% on a trailing 12-month basis, and that reflects the mission-critical nature of our solutions and the durability of our customer relationships underpinned by trust and delivery of outcomes.”

Tone

How upbeat the language was, compared with other companiesi. Dot: Q3 2026. Ring: Q2 2026.

Prepared remarks Typical (was upbeat)

Answers to analysts Restrained (was restrained)

Script and answers carried a similar tone, so the script's message held up under questioning.

Sentences that drove the tone

“Banking AR grew 8% with strategic growth areas such as lending up 12% versus last year and leading performance, while more mature parts of the portfolio were growing at a...”

“Durable recurring growth in analytics, strong profitability in ratings, disciplined investments behind our growth priorities, and significant cash generation.”

“In banking, growth was driven by the lending suite, which grew ARR by 12% and remains one of our most compelling growth opportunities.”

Full figures

USD · SEC EDGAR XBRL (10-Q, period end 2026-09-30)

Metric	Q3 2026period end 2026-09-30	Q2 2026period end 2026-06-30	Change	Q3 2025	YoY
Revenue	2.02B	2.19B	−7.4%	2.01B	+0.8%
Gross profit	1.50B	1.67B	−10.1%	1.51B	−1.1%
Operating income	906.0M	1.05B	−13.4%	917.0M	−1.2%
Net income	734.0M	878.0M	−16.4%	646.0M	+13.6%
EPS	4.24	5.03	−15.7%	3.60	+17.8%
P/E today 30.9	27.7	28.7	−1.0	38.3	−10.6

Topics

Most discussed now

Moody's delivered another quarter of strong profitability and earnings growth with disciplined execution and healthy cash generation amidst…
Moody's Analytics delivered 3% reported revenue growth versus last year, and that's 8% on an organic constant currency basis.
It also goes to the value proposition of if you have one or two or three or four or five...

Faded since Q2 2026

Dropped The quarter reflected strong sales execution with proactive contract renewals, robust cross-sell and upsell activity across the portfolio…
Fading Christina brings 3 decades of experience scaling technology and analytics businesses.
Fading MA revenue increased 4% reported or 8% on an organic constant currency basis, following Moody's' recent divestitures that closed in...
Fading Over the past 2 years, adjusted operating margin has expanded by more than 500 basis points, while Moody's has continued...

Latest announcements

Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.

2026-10-21 Results of operations; Regulation FD disclosure · SEC 8-K
Moody's Corporation reported revenue of $2.0 billion for the third quarter of 2026, up 1% from the prior-year period, with diluted EPS increasing 18% to $4.24.
2026-08-12 Director or officer change; Regulation FD disclosure · SEC 8-K
Moody’s Corporation announced the election of Keith Demmings to the Board of Directors effective November 1, 2026, with an annual cash retainer of $120,000 and a restricted stock unit award valued at $230,000.
2026-07-22 Results of operations; Regulation FD disclosure · SEC 8-K
Moody's Corporation announced its financial results for the quarter ended June 30, 2026, and its outlook for 2026.
2026-04-22 Results of operations; Regulation FD disclosure · SEC 8-K
Moody's Corporation announced its financial results for the quarter ended March 31, 2026, and its outlook for 2026.
2026-04-16 Shareholder vote results · SEC 8-K · routine
2026-04-15 Regulation FD disclosure · SEC 8-K
The company announced that Christina Kosmowski will become the Chief Executive Officer of Moody's Analytics in June.
2026-02-18 Results of operations; Regulation FD disclosure · SEC 8-K
Moody's Corporation announced its financial results for the fourth quarter and full year ended December 31, 2025, along with its outlook for 2026.
2026-01-12 Director or officer change; Regulation FD disclosure · SEC 8-K
Moody’s Corporation announced the election of Lisa P. Sawicki to the Board of Directors and Audit and Governance & Nominating Committees, effective March 16, 2026, with an annual cash retainer of $120,000.

Balance sheet & ownership

From SEC filings; short interest is FINRA data via Yahoo. Collected 2026-10-26.

Cash & runway

Cash & equivalents

$1.51B

2026-09-30

Short-term investments

$108.0M

Long-term investments

$92.0M

total liquidity $1.71B

Implied runway

—

operating cash flow positive over the TTM window

Dilution

weighted-average basic shares, per quarter. Change: -3.4% YoY, -0.7% QoQ.

Quarter	Shares
Q1 2025	180.0M
Q2 2025	179.7M
Q3 2025	178.9M
Q1 2026	176.8M
Q2 2026	174.1M
Q3 2026	172.8M

Shares outstanding: 172.4M (2026-09-30)

Insider transactions

Form 4 open-market trades (codes S/P), trailing 12 months. Coverage: newest 50 of 73 filings; 50 filings parsed.

Sold by insiders

24.0K shares

$11.2M · 27 transactions

Bought by insiders

0 shares

0 transactions

Net direction

net selling

Catalyst calendar

management-stated targets — from the latest earnings call; plans, not promises.

by 2030

planned infrastructure investment in the Philippines

Source quote
“It gives us a leading position in the Philippines where more than $100 billion of infrastructure investment is planned by 2030.”
Over the next four years

refinancing needs across the U.S. and EMEA

Source quote
“Over the next four years, refinancing needs across the U.S. and EMEA topped $5 trillion for the second straight year.”
year-to-date

jumbo corporate issuance surpassing the full-year 2025 level

Source quote
“Investment-grade issuance reached a third-quarter record, supported by AI infrastructure and hyperscaler financing, and year-to-date, jumbo corporate issuance has already surpassed the full-year 2025 level.”
full-year

MIS revenue growth

Source quote
“For MIS, we continue to expect full-year revenue growth in the high single-digit percent range, supported by continued AI, data center, and GPU-related financing, with issuance trends varying across lines of businesses.”
fourth quarter

issuance decline

Source quote
“What that means for the fourth quarter is we expect issuance to decline in the mid-teens percent versus the prior year, broadly consistent with the second half cadence we discussed last quarter, following very strong year-to-date activity and reflecting more tempered expectations for leveraged finance.”