AI Takeaway
Moody's Corporation delivered strong FY2025 results with revenue up 8.9% to $7.72B, operating income surging 16.6% to $3.35B, and net income rising 19.5% to $2.46B, reflecting robust margin expansion and disciplined cost management.
Revenue
$7.72B
++8.89% YoY
EPS (Basic)
$13.73
++21.29% YoY
Operating Income
$3.35B
++16.56% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
MCO grew total revenue 8.9% year-over-year to $7.72B in FY2025, up from $7.09B in the prior year, reflecting strong demand across its ratings and analytics segments. Cost of revenue grew only 1.4% to $1.97B, significantly lagging revenue growth and driving meaningful gross profit expansion.
Source: Source: 10-K Income Statement
Operating margin expanded approximately 285 basis points to 43.4% in FY2025 from 40.6% in FY2024, as operating income grew 16.6% to $3.35B. SG&A expenses grew at a modest 3.9% to $1.80B, well below the revenue growth rate, indicating strong operating leverage.
Source: Source: 10-K Income Statement & Key Ratios
Net income increased 19.5% to $2.46B, and diluted EPS rose 21.4% to $13.67 from $11.26 in the prior year. The EPS growth outpacing net income growth reflects the impact of ongoing share repurchase activity, with buybacks totaling $1.61B in FY2025.
Source: Source: 10-K Income Statement & Cash Flow Statement
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Upgrade to unlockMoody's carries $6.99B in long-term debt against stockholders' equity of $4.05B, resulting in a debt-to-equity ratio of approximately 2.87. While the company generates strong cash flows, this leverage level leaves it exposed to interest rate risk and limits financial flexibility in a downturn. Debt has declined 5.8% YoY, but remains elevated relative to equity.
Source: Source: 10-K Balance Sheet & Key Ratios
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $3.64 versus the $3.45 analyst consensus — a +5.4% beat for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $7.72B | $7.09B | +8.89% |
Cost of Revenue | $1.97B | $1.95B | +1.44% |
Operating Income | $3.35B | $2.88B | +16.56% |
Net Income | $2.46B | $2.06B | +19.48% |
EPS (Basic) | $13.73 | $11.32 | +21.29% |
EPS (Diluted) | $13.67 | $11.26 | +21.40% |
SG&A Expense | $1.8B | $1.74B | +3.92% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $15.83B | $15.51B | +2.10% |
Current Assets | $5.19B | $5.29B | -1.97% |
Total Liabilities | $11.63B | $11.78B | -1.30% |
Current Liabilities | $2.98B | $3.6B | -17.13% |
Stockholders' Equity | $4.05B | $3.56B | +13.72% |
Cash & Equivalents | $2.38B | $2.41B | -1.00% |
Long-Term Debt | $6.99B | $7.43B | -5.84% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $2.9B | $2.84B | +2.22% |
Investing Cash Flow | $2M | $-1.06B | +100.19% |
Financing Cash Flow | $-3.06B | $-1.45B | -111.83% |
Share Buybacks | $1.61B | $1.29B | +24.38% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 43.4% | 40.6% | +2.86% |
Net Margin | 31.9% | — | — |
ROE | 60.7% | — | — |
ROA | 15.5% | — | — |
Current Ratio | $1.74 | — | — |
Debt to Equity | $2.868 | — | — |
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Moody's Corporation delivered strong FY2025 results with revenue of $7.72B (up 8.9% YoY), net income of $2.46B (up 19.5%), and diluted EPS of $13.67 (up 21.4%). Operating margin expanded to 43.4% from 40.6% in FY2024, reflecting significant operating leverage across the business.
MCO's 8.9% revenue growth to $7.72B in FY2025 was driven by strong demand for credit ratings and analytics services, with cost of revenue growing only 1.4%, suggesting volume-driven growth with minimal incremental costs. The company's operating leverage was evident as operating income grew 16.6%, well ahead of revenue growth.
Key risks for Moody's include its high financial leverage (debt-to-equity of 2.87 with $6.99B in long-term debt), cyclical exposure to debt issuance volumes in capital markets, and significant regulatory scrutiny as an NRSRO. Competitive pressure in the analytics segment and the sustainability of aggressive share buybacks ($1.61B in FY2025) alongside elevated debt levels are also notable concerns.
Moody's shows strong financial health with a current ratio of 1.74, operating cash flow of $2.90B, and stockholders' equity growing 13.7% to $4.05B. However, the debt-to-equity ratio of 2.87 and $6.99B in long-term debt represent a meaningful leverage risk that investors should monitor, even as the company continues to deleverage.
Moody's returned significant capital to shareholders in FY2025, repurchasing $1.61B in shares, a 24.4% increase from $1.29B in FY2024. Total financing cash outflows were $3.06B, reflecting both buybacks and other capital return activities, underscoring the company's commitment to shareholder returns.