Moody's Q3 10-Q: Revenue Up 1%, Diluted EPS $4.24 on Divestiture Gain
MCO sits 20% above its 52-week low of $402.28 on elevated volume (2.4× avg).
Summary
Moody's Q3 revenue rose just 1% to $2.02B with adjusted EPS up 6% to $4.14; GAAP EPS of $4.24 was lifted by a $115M divestiture gain. The 10-Q adds full financials, $2.2B of nine-month free cash flow and $2.575B of buybacks behind this morning's headline release.
Key Events · Earnings and Guidance · MCO
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Q3 Revenue Up Only 1%
Revenue of $2.023B vs $2.007B a year ago; MIS fell 1% on weaker leveraged-finance and bank-loan issuance while Moody's Analytics grew 3% (8% organic constant currency).
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GAAP EPS Boosted by Divestiture Gain
Diluted EPS of $4.24 (up 18%) includes a $115M pre-tax gain on the MA Regulatory Solutions sale; adjusted diluted EPS rose 6% to $4.14, aided by a lower share count.
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Margins Compress on Tech and AI Costs
Operating margin fell 90 bps to 44.8% and adjusted operating margin slipped 30 bps to 52.6% as technology infrastructure, AI usage and incentive compensation costs outgrew revenue.
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Strong Cash Generation Funds Buybacks
Nine-month free cash flow of $2.2B (up $402M) supported $2.575B of share repurchases; $1.4B remains on the $4.0B authorization and a $1.03 quarterly dividend was declared October 20, payable December 11, 2026.
Analysis · MCO · Trade & Services
The headline numbers were already out this morning via the 8-K and press release, so the 10-Q's real value is the full detail behind them. Revenue of $2.023B grew just 1% as MIS slipped 1% on weaker leveraged-finance and bank-loan issuance, while Moody's Analytics grew 3% (8% organic constant currency) and ARR rose 8%. GAAP diluted EPS jumped 18% to $4.24 largely because of a $115M gain on the MA Regulatory Solutions divestiture — adjusted EPS rose a more modest 6% to $4.14, helped by a smaller share count from $2.575B of year-to-date buybacks. Operating margin compressed 90 bps to 44.8% as technology and AI costs plus higher incentive compensation outran revenue. Cash generation remains the anchor: $2.2B of free cash flow through nine months, up $402M, funding the buyback and the $1.03 quarterly dividend declared October 20.
How filings like this one have moved
In the 30 days to Oct 21, 2026, 28.9% of the 1511 measured filings Wiseek scored 7 moved their stock by 5% or more by the next session's close. The median move was -0.54%. These are measured outcomes after filings of this importance, not a forecast for this one.
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At the time of this filing, MCO was trading at $481.05 on NYSE in the Trade & Services sector, with a market capitalization of approximately $83.3B. The 52-week trading range was $402.28 to $546.88. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.