Q4 2025 Moody's Corp Earnings Call Transcript
Key Points
- Moodys Corp (MCO) achieved a record year in 2025 with total revenue exceeding $7.7 billion, up 9% year-over-year.
- The company expanded its adjusted operating margin to 51.1%, up 300 basis points, demonstrating strong operating leverage.
- Adjusted diluted EPS reached a record $14.94, up 20% year-over-year, representing a 70% earnings growth over the past three years.
- Moodys Corp (MCO) was named Best Credit Rating Agency in the US by Extel for the 14th consecutive year.
- The company is well-positioned for 2026 with a focus on AI-enabled solutions and decision-grade data analytics, driving customer engagement and retention.
- There were some headwinds in the KYC segment, impacted by related cancellations across several US government agencies.
- The divestiture of the Learning Solutions business and the upcoming sale of the Regulatory Reporting business may impact revenue growth.
- The company faces challenges in maintaining growth momentum in certain segments, such as insurance and KYC.
- There is investor concern about the potential impact of AI firms replicating parts of Moodys Corp (MCO)'s operations.
- The company anticipates a $100 million increase in CapEx for the build-out of its New York headquarters and London office space, impacting free cash flow.
Good day, everyone, and welcome to the Moody's Corporation fourth quarter and full year 2025 earnings call. At this time, I would like to inform you that this conference is being recorded. (Operator Instructions)
I will now turn the call over to Shivani Kak, Head of Investor Relations. Please go ahead.
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Thank you. Good morning, and thank you for joining us today. I'm Shivani Kak, Head of Investor Relations. This morning, Moody's released its results for the fourth quarter and full year of 2025 as well as our guidance for 2026. The earnings press release and the presentation to accompany this teleconference are both available on our website at ir.moodys.com.
During this call, we will also be presenting non-GAAP or adjusted figures. Please refer to the tables at the end of our earnings press release filed this morning for reconciliations between all adjusted measures referenced during this call in US GAAP.
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