Moody’s Corporation (NYSE:MCO) delivered a strong quarter, driven by broad-based momentum across its business lines.

• What’s ahead for MCO stock?

Quarterly Metrics

The company reported second-quarter adjusted earnings per share of $4.68, beating the analyst consensus estimate of $4.24.

Quarterly sales of $2.185 billion (up 15% from the prior-year period) outpaced the Street view of $2.077 billion.

Moody’s Analytics revenue rose 4%, led by 2% growth in Decision Solutions, 3% in Research & Insights and 9% in Data and Information.

Moody’s Investors Service revenue climbed 25%, driven by broad-based strength across all lines of business.

Quarterly operating income increased to $1.05 billion, compared with $818 million a year ago.

Operating margin improved to about 47.9% in the quarter from roughly 43.1% in the year-ago period.

The adjusted operating margin expanded 440 bps to 55.3%.

Cash flow from operations was $779 million, and free cash flow was $688 million.

As of June 30, 2026, Moody’s had $6.4 billion of outstanding debt.

Dividend

On July 21, 2026, the Moody’s board declared a regular quarterly dividend of $1.03 per share payable on Sept. 4, 2026.

Buyback

Moody’s raised its share buyback guidance from $2.5 billion to $3.0 billion.

Moody’s Corporation executives pointed to strong issuance activity, recurring analytics growth, AI-driven workflow demand and disciplined execution as key drivers behind the company’s outlook.

Ratings Growth and Capital Markets

CEO Rob Fauber said Moody’s Investor Service benefited from a rebound in market activity and rated more than $2 trillion of debt for the second consecutive quarter. He attributed the strength to several funding drivers, including refinancing, AI-related investment, private credit, digital finance, energy transition and emerging markets.

Fauber said AI and data center financing remain important growth drivers, but he emphasized that issuance also stayed diversified across other sectors. He said private credit transactions, digital finance activity and emerging-market mandates continue to support Moody’s broader capital formation opportunity.

Analytics and Partnerships

Fauber said Moody’s Analytics continues to grow as customers embed the company’s intelligence into lending, underwriting, compliance and other high-stakes workflows.

He highlighted partnerships with Amazon.com Inc (NASDAQ:AMZN) and Microsoft Corp (NASDAQ:MSFT) as examples of Moody’s expanding access to its intelligence. Through Amazon QuickSight, AWS customers can access Moody’s ratings, research and data inside Amazon’s AI experience.

With Microsoft, Moody’s launched its first AI skill on Microsoft 365 Copilot, enabling agents to apply Moody’s analytical frameworks and subject-matter expertise.

Fauber also pointed to growing customer use of Moody’s MCP and Smart API connections, saying they show demand for trusted intelligence delivered through AI platforms.

Outlook and Capital Returns

CFO Noémie Heuland said Moody’s Analytics delivered healthy recurring growth, disciplined investment and operating leverage. She said recurring revenue now represents 99% of Moody’s Analytics revenue, while Decision Solutions remains its main growth engine.

Heuland said Moody’s raised its issuance outlook from low to mid-single-digit growth while maintaining high-single-digit revenue guidance for MIS and high-single-digit ARR guidance for MA.

Outlook

Moody’s raised its fiscal 2026 adjusted EPS to $16.50-$17 (up from prior range of  $16.40-$17), versus the $16.76 analyst consensus estimate.

The firm expects fiscal 2026 GAAP EPS of $16-$16.50 (down from a prior forecast of $16-$16.60), compared with an analyst estimate of $15.66.

The company targeted a return of ~95% (down from prior range of ~110%) of free cash flow to shareholders.

MCO Price Action: Moody’s Corporation shares are trading down by 0.10% to $490.27 at publication on Wednesday.

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