Moody's Holds 2026 Guidance as Organic Revenue Rises 3% From a Year Earlier and Buybacks Help Lift Adjusted EPS 6%

Moody's Corporation left its full-year 2026 guidance unchanged on October 21, even as third-quarter revenue grew 1% from a year earlier to $2.02 billion, or 3% on an organic constant-currency basis to $2.02 billion after divestitures reduced the prior-year comparative by $42 million, and a weaker corporate-finance ratings market offset growth in analytics. GAAP diluted EPS rose 18% from a year earlier to $4.24, helped by a $115 million pre-tax gain on the divestiture of MA Regulatory Solutions, while adjusted diluted EPS rose 6% to $4.14.

Ratings revenue slips as corporate issuance cools

Moody's Investors Service revenue fell 1% to $1.09 billion from $1.1 billion a year earlier, against what the release calls a record prior-year comparison, "primarily reflecting lower Leveraged Finance issuance." Corporate Finance revenue dropped 8% to $530 million, with investment-grade revenue up 18% while high-yield and leveraged-loan revenue fell as issuance in those markets weakened; rated issuance volume across MIS fell 2%. Recurring MIS revenue rose 8% to $373 million from a year earlier while transaction revenue fell 5% to $714 million. The segment's adjusted operating margin narrowed to 64.4% from 65.2%, so the ratings business now carries a thinner cushion than a year ago even after a mix shift toward subscription-like monitoring fees.

Buybacks do most of the work on adjusted EPS

Adjusted operating income was essentially flat at $1.06 billion against $1.06 billion a year earlier, and adjusted operating margin slipped to 52.6% from 52.9% as reported operating margin narrowed to 44.8% from 45.7%. Adjusted net income rose to $717 million from $704 million. Diluted weighted-average shares fell to 173.3 million in the quarter, compared with 179.6 million a year earlier, which means the 6% adjusted EPS gain came mostly from a smaller share count rather than operating leverage. Moody's spent approximately $2.6 billion repurchasing shares in the first nine months, part of roughly $3.1 billion returned to shareholders. Moody's Analytics revenue rose 3% to $936 million, or 8% to $938 million on an organic constant-currency basis, while recurring revenue rose 6% and annualized recurring revenue rose 8% to $3.69 billion.

Guidance held as default assumptions darken

Every financial line in the full-year 2026 outlook is marked "NC" — no change from the last publicly disclosed guidance — including revenue growth in the high-single-digit percent range, operating margin of 44% to 45%, diluted EPS of $16.00 to $16.50 and adjusted diluted EPS of $16.50 to $17.00. The macro assumptions behind that outlook did move: the assumed global speculative-grade default rate now finishes at around 3.8% by year-end, versus around 3% previously, and U.S. high-yield spreads are now expected to widen to around 300 bps in the coming quarter, against around 330 bps over the coming two quarters. Moody's still assumes the Federal Reserve and the European Central Bank each raise rates once more by the end of 2026, and still expects mid-single-digit growth in global rated issuance.

Cash conversion and the fourth-quarter bar

Nine-month operating cash flow rose 21% to $2.47 billion and free cash flow rose 22% to $2.2 billion from $1.8 billion, after $271 million of capital additions. Nine-month diluted EPS of $12.98 and adjusted diluted EPS of $13.14 leave $3.02 to $3.52 of GAAP EPS and $3.36 to $3.86 of adjusted EPS for the fourth quarter to reach the reaffirmed ranges. The GAAP bar sits below the adjusted bar even though nine-month GAAP EPS includes about $1.18 per share of net gains on business divestitures, a gain the full-year reconciliation removes to reach the adjusted measure; the $0.34 gap between the two fourth-quarter bars instead reflects the quarterly amortization and restructuring add-backs. The board declared a quarterly dividend of $1.03 per share on October 20, payable December 11 to holders of record November 20. The release offers no quarterly guidance and no consensus comparison, so whether the quarter beat or missed analyst estimates cannot be established from the filing. Moody's scheduled a results call for 9:00 a.m. Eastern Time on October 21, 2026, the filing date, and the Form 8-K carries Items 2.02, 7.01 and 9.01; the release gives no date for the full-year 2026 results filing.