What happened
Moody's Corporation (NYSE: MCO) reported third-quarter 2026 results on October 21 and kept full-year guidance unchanged. Revenue was $2.0 billion, up 1% from a year earlier and 3% on an organic constant currency basis. Operating margin was 44.8%. Adjusted operating margin was 52.6%. Diluted EPS rose 18% to $4.24, and adjusted diluted EPS rose 6% to $4.14.
Year to date, operating cash flow reached $2.47 billion, free cash flow reached $2.2 billion, and the company returned about $3.1 billion to shareholders, including $2.6 billion of share repurchases.
Moody's Analytics revenue rose 3% to $936 million, and MA ARR rose 8% to $3.69 billion. Moody's Investors Service revenue fell 1% to $1.09 billion, and transactional revenue fell 5% to $714 million.
Key numbers
| Metric | Latest | Change | Source |
|---|---|---|---|
| Revenue | $2.02 billion | from $2.01 billion, +1% | SEC 8-K earnings release |
| Operating margin | 44.8% | from 45.7%, -0.9 percentage points | SEC 8-K earnings release |
| Adjusted operating margin | 52.6% | from 52.9%, -0.3 percentage points | SEC 8-K earnings release |
| Diluted EPS | $4.24 | from $3.60, +18% | SEC 8-K earnings release |
| Operating cash flow | $2.47 billion | from $2.04 billion, +21% | SEC 8-K earnings release |
| Free cash flow | $2.20 billion | from $1.80 billion, +22% | SEC 8-K earnings release |
Read more: Moody's (MCO) stock analysis and investment case
Why it matters
OptimistFi's case is that Moody's is a high-quality toll collector on credit formation, and this filing still shows that toll producing high margins and cash. Operating margin slipped 0.9 percentage points to 44.8%, but it stayed high, and adjusted operating margin held at 52.6%.
The recurring base in Moody's Analytics also grew. MA ARR reached $3.69 billion, up 8% from a year earlier, and recurring revenue was 99% of MA revenue.
The main caution is in Moody's Investors Service. Revenue fell 1% to $1.09 billion, and transactional revenue fell 5% to $714 million. That means the filing shows strength in the recurring base, but not broad-based acceleration across every fee stream.
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What's next
The board declared a regular quarterly dividend of $1.03 per share on October 20, 2026. It will be payable on December 11, 2026, to shareholders of record at the close of business on November 20, 2026.
Full-year 2026 results will be judged against the reaffirmed ranges for revenue growth, margins, diluted EPS, adjusted diluted EPS, operating cash flow and free cash flow. Holding margins near current levels and staying within those cash flow ranges would support the case. Weaker MIS revenue or cash generation would weaken it.
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Sources
- SEC 8-K earnings release — Third-quarter 2026 results, guidance reaffirmation and dividend declaration.
- SEC filing
Read the full OptimistFi thesis on Moody's Corporation: https://optimistfi.com/stocks/MCO
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The full Moody's Corporation investment case, its status and the next test to watch live on the Moody's Corporation thesis page.
Originally published on OptimistFi, evidence-first equity research. More at optimistfi.com.
