Contradictions in Moody's Analytics: Diverging Views on Growth, AI Impact, and Investment Strategies

Revenue and Earnings Growth:
- Moody's Corporation reported a 4% year-over-year increase in revenue to $1.9 billion for Q2 2025, despite a tough comparison to Q2 2024 when revenue grew by 22%.
- The growth was driven by disciplined expense management, resulting in an adjusted operating margin of 50.9%, up 130 basis points from the previous year.

Moody's Analytics Performance:
- Moody's Analytics achieved 11% revenue growth and 12% growth in recurring revenue for Q2 2025.
- This growth was attributed to a 10% increase in Decision Solutions and margin expansion, resulting in an adjusted operating margin of 32.1%, a 360 basis point improvement year-over-year.

Private Credit Expansion:
- Private credit-related transactions accounted for nearly 25% of Moody's new first-time mandates in Q2 2025, marking a 50% year-over-year increase.
- The growth in private credit was driven by its increasing importance in sectors such as AI, data center investment, and transition finance, creating demand for Ratings as a means of enhancing transparency and comparability.

AI and GenAI Integration:
- Approximately 40% of Moody's products measured by ARR now include some form of GenAI enablement, with total relationships with customers who have purchased or upgraded to stand-alone GenAI offerings reaching $200 million ARR, growing at twice the rate of Moody's Analytics overall.
- This integration is enhancing customer engagement and driving innovation, creating deeper relationships with adopters and positioning Moody's as a leader in AI-driven solutions.