- Record Revenue Growth: Q3 2025 revenue hit $2.0B, up 11% YoY, with adjusted operating margin at 53% (560 bps expansion for MIS to 65.2%).
- MIS Momentum: Ratings business revenue grew 12%, surpassing $1B quarterly for the third consecutive quarter, with full-year guidance raised to 63-64% adjusted margin.
- Private Credit Expansion: Revenue tied to private credit surged >60% in Q3, driven by robust demand and a $5T+ refinancing pipeline over 4 years (10% CAGR from 2018-2025).
- Strategic Acquisitions & Partnerships: Acquired majority stake in Egyptian ratings agency MIRAS; partnered with Salesforce to integrate GenAI-ready data into AgentForce 360.
- Free Cash Flow & Guidance: Raised full-year free cash flow forecast to $2.5B, with $1.5B+ in share repurchases and high-single-digit revenue growth expected for MCO.
Business Segment Performance
The ratings business, MIS, saw revenue growth across all ratings lines of business, contributing to a 12% increase in revenue. Moody's Analytics delivered 9% year-over-year revenue growth, including 11% in Decision Solutions. ARR is nearly $3.4 billion, up 8% versus last year. The company increased its full-year margin outlook for MA to approximately 33%. Private credit continues to be a growth driver for ratings, with revenue tied to private credit growing over 60% in Q3.
Guidance and Outlook
The company raised its full-year guidance across almost all metrics, citing a robust issuance pipeline and solid demand. Moody's expects mid-single-digit issuance growth for 2025, with notable updates in investment grade, leveraged loan, and high-yield bond issuance. M&A activity is expected to contribute positively, with a forecast of 15-20% growth in M&A issuance. The company now expects MCO revenue to grow in the high single-digit percent range.
Valuation and Growth Prospects
With a P/E Ratio of 37.82 and an EV/EBITDA of 24.82, the market is pricing in significant growth prospects. Analysts estimate next year's revenue growth at 8.5%. The company's ROE is 59.17%, indicating strong profitability. The current levels of growth across the G20 are generally sustainable into next year, and the default rates are expected to continue declining. Moody's is well-positioned to serve investors and issuers, with a massive, mostly proprietary data and analytics estate.
Strategic Developments
The company signed a definitive agreement to acquire a majority interest in MIRAS, deepening Moody's presence in The Middle East and Africa. Additionally, Moody's partnered with Salesforce to make available its proprietary GenAI-ready data and analytics within Salesforce's AgentForce 360. The acquisition of RMS is also showing promising results, with wins with large banks using RMS models to understand physical risk of extreme events.