Moodys 2025 Q2 Earnings Revenue Grows 4.5% as Net Income Rises 4.7%

Moody's (MCO), ranking 164th by market capitalization, reported its fiscal 2025 Q2 earnings on Jul 22nd, 2025. Moody's Q2 2025 earnings surpassed expectations, showing strong revenue growth across its segments. The firm adjusted its annual guidance, narrowing its EPS range due to strategic initiatives aligning with market trends. Despite global volatility, Moody's remains confident in sustaining growth. Analysts noted the firm’s robust performance, underscoring Moody’s commitment to innovation and cost discipline in navigating complex market dynamics.

Revenue
Moody's reported a total revenue increase of 4.5% to $1.90 billion for 2025 Q2, up from $1.82 billion in the same quarter of the previous year. Moody’s Analytics contributed $888 million, while Decision Solutions added $413 million, followed by Research & Insights with $249 million. The Data & Information segment brought in $226 million. Moody’s Investors Service led with $1.01 billion, including $512 million from Corporate Finance, $135 million from Structured Finance, $191 million from Financial Institutions, and $162 million from Public, Project and Infrastructure Finance, with MIS Other contributing $10 million.

Earnings/Net Income
Moody's EPS rose 6.3% to $3.22 in 2025 Q2 from $3.03 in 2024 Q2, demonstrating continued earnings growth. The company saw strengthened profitability with a net income of $579 million, marking a 4.7% growth from the $553 million recorded in the same period last year. This sustained profitability highlights Moody's operational resilience, and with EPS growth aligning with expectations, the outlook remains favorable.

Price Action
The stock price of Moody's edged down 0.00% during the latest trading day, rose 0.78% over the most recent full trading week, and climbed 6.08% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing Moody's (MCO) shares following a quarter-over-quarter revenue increase on the earnings release date and holding for 30 days provided moderate returns but underperformed the broader market. The strategy's compound annual growth rate (CAGR) was 10.20%, trailing the benchmark by 26.41%. With a maximum drawdown of 0.00% and a Sharpe ratio of 0.39, the strategy exhibited low risk but only modest returns, making it suitable for investors seeking stability. Despite the strategic approach's conservative nature, it highlighted the importance of carefully weighing returns against market performance benchmarks.

CEO Commentary
Moody's Corporation's President and CEO, Rob Fauber, highlighted a 4% increase in second-quarter revenues, driven by robust performances across both business segments. He emphasized the importance of insights and expertise in navigating a complex global landscape while underlining the company's commitment to innovation and cost discipline. Fauber noted that the expansion in adjusted operating margins reflects the success of their strategic initiatives aimed at enhancing the earnings engine, reinforcing a positive outlook on recurring revenue growth amidst ongoing market demands.

Guidance
The company updated its expectations for Moody's Investors Service (MIS) issuance and revenue growth, narrowing its full-year adjusted diluted EPS guidance by $0.25 to a range of $13.50 to $14.00. This midpoint represents a projected 10% growth compared to the prior year. The adjustments are based on the company's recent performance and current market trends, indicating confidence in sustaining growth amid evolving market conditions.

Additional News
In recent non-earnings related developments, Moody's announced plans to expand its global footprint through strategic acquisitions, aiming to enhance its data analytics capabilities. The company also appointed a new Chief Financial Officer, emphasizing its commitment to strengthening financial governance and strategic oversight. Additionally, Moody's declared a substantial share repurchase program, underscoring its focus on delivering shareholder value and optimizing capital structure amidst evolving market conditions. These moves reflect Moody's proactive approach to leveraging opportunities in a dynamic financial landscape.