Moodys — Income Statement, Cash Flows & Balance Sheet
Is Moody's profitable?
Moody's delivered its strongest profit in at least three years, with revenue and earnings both accelerating sharply.
| Metric | 2023 | 2024 | 2025 | Change (2024→2025) |
|---|---|---|---|---|
| Revenue ($M) | $5,916 | $7,088 | $7,718 | +9% |
| Operating Income ($M) | $2,137 | $2,875 | $3,351 | +17% |
| Operating Margin | 36.1% | 40.6% | 43.4% | +2.8 pp |
| Net Income attributable to Moody's ($M) | $1,607 | $2,058 | $2,459 | +20% |
| Diluted EPS | $8.73 | $11.26 | $13.67 | +21% |
Revenue grew solidly, but profits grew faster — a sign that Moody's is getting more efficient as the business scales. The operating margin expanded to over 43%, which is exceptional for any industry.
A few one-time items are worth flagging, though they largely offset each other.
| Item | 2025 ($M) |
|---|---|
| Restructuring charges | $108 |
| Charges related to asset abandonment | $3 |
| Gain on divestiture of business | $23 |
| Release of indemnification asset (offset by tax benefit) | $(79) net |
The restructuring charge is part of a cost-cutting program announced in late 2024 targeting $250–$300M in annualized savings. The indemnification asset release looks large but was fully offset by a related tax benefit, so it had zero net impact on income.
Where does Moody's revenue come from?
Moody's runs two very different businesses — ratings (MIS) and analytics (MA) — and both grew meaningfully in 2025.
| Segment | 2023 | 2024 | 2025 | Change (2024→2025) |
|---|---|---|---|---|
| MIS (Credit Ratings) | $2,860 | $3,793 | $4,119 | +9% |
| MA (Analytics & Data) | $3,056 | $3,295 | $3,599 | +9% |
| Total | $5,916 | $7,088 | $7,718 | +9% |
MIS generates most of its revenue when companies issue new debt, so it is more sensitive to interest rate cycles. The strong 2025 result reflects a healthy debt issuance market. MA, by contrast, is predominantly subscription-based (96% recurring revenue), making it a more predictable and growing counterweight.
Within MA, Decision Solutions — the fastest-growing unit — is driving the segment forward.
| MA Business Line | 2023 | 2024 | 2025 | Change |
|---|---|---|---|---|
| Decision Solutions | $1,383 | $1,516 | $1,692 | +12% |
| Research & Insights | $884 | $926 | $995 | +7% |
| Data & Information | $789 | $853 | $912 | +7% |
Decision Solutions — which covers banking, insurance, and KYC (know-your-customer compliance) software — is growing faster than the rest of MA, suggesting Moody's is successfully expanding beyond its traditional ratings and research roots.
Does Moody's generate cash?
Moody's is a cash-generation machine, converting nearly all of its net income into operating cash flow.
| Metric | 2023 | 2024 | 2025 | Change |
|---|---|---|---|---|
| Operating Cash Flow ($M) | $2,151 | $2,838 | $2,901 | +2% |
| Capital Expenditures ($M) | $(271) | $(317) | $(326) | +3% |
| Free Cash Flow (GAAP operating CF minus capex) ($M) | $1,880 | $2,521 | $2,575 | +2% |
Free cash flow (what's left after investing in the business) comfortably covered both the dividend and the buyback program. Capital spending is modest relative to earnings, reflecting Moody's asset-light model.
Moody's returned substantial capital to shareholders while keeping its cash balance stable.
| Use of Cash | 2025 ($M) |
|---|---|
| Share buybacks | $1,607 |
| Dividends paid | $701 |
| Total returned to shareholders | $2,308 |
| Ending cash balance | $2,384 |
Cash returned to shareholders slightly exceeded free cash flow, funded in part by the maturity and net refinancing of debt. The dividend per share rose from $3.40 to $3.76, and the Board subsequently raised it again to $4.12 annualised in early 2026.
How strong is Moody's balance sheet?
Moody's carries significant long-term debt, but its earnings power makes it very manageable.
| Metric | 2024 | 2025 | Change |
|---|---|---|---|
| Long-term debt ($M) | $6,731 | $6,994 | +4% |
| Cash & equivalents ($M) | $2,408 | $2,384 | -1% |
| Net debt (debt minus cash) ($M) | ~$4,323 | ~$4,610 | +7% |
| Operating income ($M) | $2,875 | $3,351 | +17% |
The debt load is meaningful — roughly two years of operating income — but Moody's generates enough cash that it repaid a $700M bond in early 2025 without difficulty, and no further debt matures until 2027. There is also an undrawn $1.25B revolving credit line for added flexibility.
Goodwill and intangibles make up a large portion of assets, reflecting Moody's acquisition history.
| Asset | 2024 ($M) | 2025 ($M) | Change |
|---|---|---|---|
| Goodwill | $5,994 | $6,368 | +6% |
| Intangible assets, net | $1,890 | $1,866 | -1% |
| Total assets | $15,505 | $15,830 | +2% |
Together, goodwill and intangibles represent over half of total assets. This is common for data and analytics businesses where acquisitions bring customer relationships and proprietary technology rather than physical assets. No impairment charges were recorded in 2025.