Moody’s (NYSE:MCO) reported third-quarter 2026 results marked by continued growth in its analytics unit, strong profitability in ratings and a reaffirmed full-year outlook, even as overall rated issuance declined from a strong prior-year comparison.
President and CEO Rob Fauber said quarterly revenue exceeded $2 billion for the third consecutive quarter. Adjusted operating margin was 52.6%, while adjusted diluted earnings per share rose 6% year over year. The company said its results reflected disciplined cost management and the resilience of its ratings and analytics businesses amid uneven market conditions.
Ratings issuance mixed as AI financing offsets weaker leverage finance
Moody’s Investors Service, or MIS, generated $1.1 billion in revenue, down 1% from a year earlier, as rated issuance declined 2% to approximately $1.7 trillion. Despite the decline, Moody’s said issuance represented the second-highest third-quarter level on record.
The company cited divergent activity among asset classes. Investment-grade revenue rose 18% on 16% issuance growth, supported by AI infrastructure and hyperscaler financing. In contrast, high-yield revenue declined 40% and bank-loan revenue declined 27%, reflecting weaker leveraged-finance issuance and a less favorable revenue mix.
Fauber said issuance tied to AI infrastructure and power investment increased approximately fourfold from the prior-year quarter. He added that AI-related issuance, broadly defined to include data centers and related infrastructure, accounted for more than half of total issuance growth year to date. From a revenue perspective, AI-related financing represented about 40% of growth, he said.
The company said demand for financing remains underpinned by investments in data centers, power generation and transmission, renewable energy, defense, transportation infrastructure and other capital-intensive areas. Fauber also highlighted refinancing needs, saying maturities across the U.S. and Europe, the Middle East and Africa exceed $5 trillion over the next four years for the second consecutive year.
MIS adjusted operating margin was 64.4%, down about 80 basis points from a year earlier. Moody’s said recurring revenue rose 8%, supported by new mandates, value-based pricing and growth in monitored credits. First-time mandates increased 40% year over year to the highest quarterly total in five years, prompting the company to raise its full-year first-time mandate outlook to 900 to 950.
Moody’s also said it is acquiring a minority stake in PhilRatings, a Philippine domestic credit rating agency. The investment would be Moody’s sixth domestic credit rating agency affiliate in Asia-Pacific, according to Fauber.
Analytics ARR rises 8%, led by decision solutions
Moody’s Analytics, or MA, reported revenue growth of 3%, or 8% on an organic constant-currency basis. Annualized recurring revenue, or ARR, increased about 8% to $3.7 billion, while recurring organic constant-currency revenue grew 9%. The company said approximately 99% of MA revenue was recurring.
Trailing 12-month retention was 95%. MA adjusted operating margin expanded 100 basis points year over year to 35.3%, which the company attributed to portfolio simplification, technology-platform consolidation and early efficiency gains from artificial intelligence.
Decision Solutions ARR rose 10% and represented about 44% of MA ARR. Within the segment, KYC ARR increased 12%, insurance ARR grew nearly 10%, and banking ARR rose 8%. Moody’s said lending-suite ARR grew 12%, while growth in more mature banking offerings was more measured.
Research & Insights ARR grew about 6%, while Data & Information ARR rose 7%. The company said it signed a deal with SAP to launch Moody’s Supplier Intelligence for Ariba, embedding Moody’s data into supplier onboarding, assessment and monitoring workflows. It also announced a private-markets data distribution partnership with one of the world’s largest asset managers.
AI adoption expands across customer workflows
Fauber said AI capabilities are being incorporated across Moody’s Analytics products, customer workflows, APIs and Model Context Protocol, or MCP, interfaces. Over the past three months, users of Moody’s research MCPs more than quadrupled and usage increased more than tenfold, he said.
The company said the number of customers paying for MCP access more than doubled during the quarter, although Fauber said the business remains at an early stage and is starting from a small base. About half of the MCP pipeline by value was created after the end of the second quarter, according to Fauber.
Moody’s also cited AI-related adoption in insurance, banking and compliance. Its Risk Data Refinery, used in insurance workflows, converts unstructured submissions into analytics-ready data with around 95% first-pass accuracy, according to the company. Fauber said Moody’s KYC agents are growing nearly three times faster than the broader KYC business, though from a small base.
During the question-and-answer session, Fauber said customers are seeking both efficiency and improved effectiveness from compliance tools, particularly following recent high-profile fines for KYC and anti-money-laundering lapses at financial institutions. He said Moody’s is working to migrate customers from its older Orbis Catalyst product to the Maxsight platform.
Guidance maintained; share repurchases continue
Moody’s maintained its full-year guidance for revenue growth in the high-single-digit percentage range, adjusted operating margin of 52% to 53%, and adjusted diluted EPS of $16.50 to $17.00. The EPS outlook represents 12% growth at the midpoint, the company said.
For MIS, Moody’s continues to expect high-single-digit revenue growth for the full year. The company expects fourth-quarter issuance to decline in the mid-teens percentage range from the prior year, reflecting difficult comparisons and more tempered expectations for leveraged finance. Fourth-quarter MIS revenue is expected to decline sequentially but grow in the low-single-digit percentage range year over year.
For MA, the company reiterated expectations for high-single-digit ARR growth and an adjusted operating margin of 34% to 35%. Moody’s said the fourth quarter is its largest sales and renewal period of the year.
Year-to-date free cash flow rose 22% year over year to $2.2 billion. Moody’s repurchased approximately $2.6 billion of shares through the first nine months and continues to expect up to $3 billion in repurchases for the full year.
About Moody’s (NYSE:MCO)
Moody’s Corporation (NYSE:MCO) is a global provider of credit ratings, research, data, analytics and risk-management solutions. Through Moody’s Investors Service, the company assigns credit ratings and publishes research on corporate, government and structured-finance debt issuers, helping investors and other market participants evaluate credit risk.
Through Moody’s Analytics, the company provides financial intelligence, economic research, data, software and advisory services. Its offerings support credit analysis, lending, portfolio management, enterprise risk management, compliance and related functions across financial institutions, corporations, governments and other organizations.
Moody’s traces its origins to 1909, when John Moody established the company that introduced published credit ratings for bonds.
