Moody's Corporation reported third-quarter 2026 revenue of $2.0 billion, a 1% increase from the prior-year period, while diluted earnings per share rose 18% to $4.24. The company reaffirmed its full-year 2026 guidance, projecting diluted EPS between $16.00 and $16.50.
The credit rating agency and data provider attributed the earnings growth to disciplined execution in a complex operating environment. Rob Fauber, President and Chief Executive Officer of Moody's Corporation, stated that the company delivered strong profitability and healthy cash generation, noting that customers value independent insights during such periods.
Moody's Analytics (MA) revenue increased 3% year-over-year, or 8% on an organic constant currency basis. Annualized Recurring Revenue for the MA segment grew 8% to $3.7 billion. Decision Solutions drove this growth, with ARR increasing 10% year-over-year. Transaction revenue within MA declined 76% due to the Learning Solutions divestiture and a strategic shift toward recurring models.
Moody's Investors Service (MIS) revenue totaled $1.1 billion, down 1% from the prior year. The decline was primarily driven by lower Leveraged Finance issuance. However, Investment Grade revenue grew 18%, supported by large corporate financing activity in the technology sector, including AI-related financing and hyperscaler investments. Public, Project and Infrastructure Finance revenue rose 11%, driven by U.S. Public Finance and data center-related financing.
MIS transaction revenue fell 5%, while recurring revenue increased 8%. Corporate Finance revenue decreased 8%, whereas Structured Finance revenue increased 5% on higher issuance in ABS, RMBS, and Covered Bonds.
Operating expenses rose 2% year-over-year as investments in growth and higher incentive compensation were offset by business divestitures and cost discipline. The company's operating margin was 44.8%, while the adjusted operating margin stood at 52.6%. MA's adjusted operating margin improved by 100 basis points to 35.3%, while MIS's adjusted operating margin decreased to 64.4%.
Year-to-date operating cash flow reached $2,471 million, up 21%, and free cash flow was $2,200 million, up 22%. Moody's returned approximately $3.1 billion to shareholders this year, comprising $2.6 billion in share repurchases and $543 million in dividends.
On October 20, 2026, the board declared a quarterly dividend of $1.03 per share of MCO Common Stock. The payment is scheduled for December 11, 2026, to shareholders of record as of November 20, 2026.