Management’s Discussion and Analysis of Financial Condition and Results of Operations
Mergers and acquisitions
MIS
Moody’s Investors Service - a reportable segment of MCO; consists of five LOBs - CFG; SFG; FIG; PPIF; and MIS Other
MIS Other
Consists of financial instruments pricing services in the Asia-Pacific region, ICRA non-ratings revenue, and revenue from professional services. These businesses are components of MIS; MIS Other is an LOB of MIS
MNPI
Material non-public information
Moody’s
Moody’s Corporation and its subsidiaries; MCO; the Company
Moody's Local
A ratings platform focused on providing credit rating services in Latin American capital markets
MSS
Moody's Shared Services; primarily consists of information technology and support staff such as finance, human resources and legal that support both MA and MIS
NAV
Net asset value
Net Income
Net income attributable to Moody’s Corporation, which excludes net income from consolidated noncontrolling interests belonging to the minority interest holder
Net Zero Assessments
An independent assessment of an entity’s carbon transition plan relative to a global net zero pathway, consistent with the goals of the 2015 Paris Agreement on climate change
NIST
The National Institute of Standards and Technology
NIST Framework
NIST Cybersecurity Framework; a set of cybersecurity best practices and recommendations from the NIST
Percentage change is not meaningful
Non-compensation expense
Non-compensation expenses include costs incurred that are not related to employee compensation. This includes, but is not limited to, consulting and professional service fees, hosting and licensing expenses, rent, and marketing expenses. These expenses are charged to income as incurred
Non-GAAP
A financial measure not in accordance with GAAP; these measures, when read in conjunction with the Company’s reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company’s performance, facilitate comparisons to competitors’ operating results and to provide greater transparency to investors of supplemental information used by management in its financial and operational decision making
NRSRO
Nationally Recognized Statistical Rating Organization, which is a credit rating agency registered with the SEC
Numerated
A provider of commercial lending platforms; the Company acquired Numerated in November 2024
OBBBA
The “One Big Beautiful Bill Act” enacted into U.S. law on July 4, 2025
OCI(L)
Other comprehensive income (loss); includes gains and losses on cash flow and net investment hedges, certain gains and losses relating to pension and other retirement benefit obligations and foreign currency translation adjustments
OECD
Organization for Economic Co-operation and Development
Operating segment
Term defined in the ASC relating to segment reporting; the ASC defines an operating segment as a component of a business entity that has each of the three following characteristics: i) the component engages in business activities from which it may recognize revenue and incur expenses; ii) the operating results of the component are regularly reviewed by the entity’s chief operating decision maker; and iii) discrete financial information about the component is available
MOODY'S 2025 10-K 7
Table of Contents
TERM
DEFINITION
Other Retirement Plans
Moody's Postretirement Medical and Life Insurance Plan
PCS
Post-Contract Customer Support
Pillar II
Tax model issued by the OECD in 2023; also referred to as the "Global Anti-Base Erosion" or "GLoBE" rules
PPIF
Public, project and infrastructure finance; an LOB of MIS
Praedicat
A provider of casualty insurance analytics; the Company acquired a controlling financial interest in Praedicat in September 2024; the Company previously accounted for Praedicat as an equity method investment
Profit Participation Plan
Defined contribution profit participation plan that covers substantially all U.S. employees of the Company
Recurring Revenue
For MA, represents subscription-based revenue and software maintenance revenue. For MIS, represents recurring monitoring fees of a rated debt obligation and/or entities that issue such obligations, as well as revenue from programs such as commercial paper, medium-term notes and shelf registrations. For MIS Other, represents financial instrument pricing services.
Reform Act
Credit Rating Agency Reform Act of 2006
Reporting unit
The level at which Moody’s evaluates its goodwill for impairment under U.S. GAAP; defined as an operating segment or one level below an operating segment
Research and Insights (R&I)
LOB within MA that provides models, scores, insights and commentary. This LOB includes credit research; credit models and analytics; economics data and models; and structured finance solutions
Retirement Plans
Moody’s funded and unfunded pension plans, the healthcare plans and life insurance plans
RMBS
Residential mortgage-backed securities; an asset class within SFG
RMS
A global provider of climate and natural disaster risk modeling and analytics; acquired by the Company in September 2021
ROU Asset
Assets which represent the Company’s right to use an underlying asset for the term of a lease
SEC
U.S. Securities and Exchange Commission
Second Party Opinions
An independent assessment of how debt instruments or financing frameworks align to sustainability principles and the extent to which they are expected to contribute to long-term sustainable development
Securities Act
Securities Act of 1933, as amended
SFG
Structured finance group; an LOB of MIS
Selling, general and administrative expenses
SGD
Singapore dollar
SOC 1
An examination of controls at a service organization that are likely to be relevant to user entities’ internal control over financial reporting, as defined by the American Institute of Certified Public Accountants
SOC 2
A report on controls at a service organization relevant to security, availability, processing integrity, confidentiality, or privacy, as defined by the American Institute of Certified Public Accountants
SOFR
Secured Overnight Financing Rate
SSP
Standalone selling price
Strategic and Operational Efficiency Restructuring Program
Multi-year restructuring program approved by the CEO of Moody’s on December 19, 2024 relating to the Company's strategy to realign the business toward high priority growth areas and to consolidate certain functions to simplify the organizational structure to enable efficiency and improved operating leverage; includes a reduction in staff, the rationalization and exit of certain real estate leases and incremental amortization of certain software
Time-and-Material
Tax Act
The “Tax Cuts and Jobs Act” enacted into U.S. law on December 22, 2017, which significantly amended the tax code in the U.S.
8 MOODY'S 2025 10-K
Table of Contents
TERM
DEFINITION
TCRC
The Tech and Cyber Risk Committee
Transaction Revenue
For MA, represents perpetual software license fees and revenue from software implementation services, risk management advisory projects, and training and certification services. For MIS (excluding MIS Other), represents the initial rating of a new debt issuance as well as other one-time fees. For MIS Other, represents revenue from professional services
United Kingdom
United States
USD
U.S. dollar
UTPs
Uncertain tax positions
WACC
Weighted Average Cost of Capital
2022 - 2023 Geolocation Restructuring Program
Restructuring program approved by the CEO of Moody’s on June 30, 2022 relating to the Company's post-COVID-19 geolocation strategy and other strategic initiatives; includes the rationalization and exit of certain real estate leases and a reduction in staff, including the relocation of certain job functions from their current locations
MOODY'S 2025 10-K 9
Table of Contents
PART I
ITEM 1. BUSINESS
Background
As used in this report, except where the context indicates otherwise, the terms “Moody’s” or the “Company” refer to Moody’s Corporation, a Delaware corporation, and its subsidiaries. The Company’s executive offices are located at 7 World Trade Center at 250 Greenwich Street, New York, NY 10007 and its telephone number is (212) 553-0300.
THE COMPANY
Company Overview
In a world shaped by increasingly interconnected risks, Moody's data, insights, and innovative technologies help customers develop a holistic view of their world and unlock opportunities. Moody’s offerings are distinguished by our vast proprietary and curated data and validated analytical models, which provide the trusted foundation that enable our customers to navigate an increasingly complex risk landscape. Moody’s solutions enable the transformation of information into decision-grade intelligence, which is deeply interconnected across risk domains. Moody's also offers valuable insights into financial stability and creditworthiness for organizations, debt instruments, and securities, serving a key role in bringing transparency to the global debt markets. With a rich history of experience in global markets and a diverse workforce of approximately 16,000 across more than 40 countries, Moody's gives customers the comprehensive perspective needed to act with confidence and thrive in a dynamic global environment.
Moody's is helping customers accelerate value creation in an era of exponential risk by embedding our decision-grade intelligence directly into customer workflows
Moody's
Ratings
Research & Insights
Data & Information
Decision Solutions
Banking
Insurance
KYC
Agency of Choice
Premier fixed income research business
Unparalleled, decision-grade intelligence
Serving mission critical workflows across lending, underwriting, and KYC
Enabling Banks, Insurers, Investors, Corporations and Governments to...
What do
Issue, Originate, Select, Underwrite
Identify, Measure,
Monitor & Manage Risk
Verify, Comply, Plan
& Report
Leveraging AI, decision-grade data, analytics & domain expertise across...
How do we
do this?
Credit
Companies
Properties
Securities
People
Economies
Climate
ESG
Moody’s has two reportable segments: MA and MIS.
Moody's Analytics
Moody's Investors Service
MA provides curated data, intelligence and analytical tools to help business and financial leaders make confident decisions.
For more than 115 years, MIS has been a leading provider of credit ratings, research, and risk analysis helping businesses, governments, and other entities around the globe.
Financial information and operating results of these segments, including revenue, expenses and Adjusted Operating Income, are included in Part II, Item 8. Financial Statements of this annual report and are herein incorporated by reference.
10 MOODY'S 2025 10-K
Table of Contents
Moody's Analytics Overview
MA empowers financial services, corporate and public sector customers to anticipate risks, adapt and thrive in a new era of exponential risk. MA's curated data and analytics transform information into decision-grade intelligence and power its AI-enabled cloud-based workflow tools, helping customers start business relationships, monitor and manage risk, and comply and report based on global laws, rules and regulations.
MA is comprised of: i) a premier fixed income and economic research business (Research & Insights); ii) a data business powered by the world’s largest database on companies and credit (Data & Information); and iii) three cloud-based subscription businesses serving banking, insurance and KYC workflows (Decision Solutions), enabling customers to integrate Moody's proprietary data and analytics through a number of delivery channels.
Moody's Investors Service Overview
MIS is a leading global provider of credit ratings, research, and risk analysis. A rating from Moody’s enables issuers to create timely, go-to-market debt strategies with the ability to capture wider investor focus and provides investors with a comprehensive view of global debt markets through our credit ratings and research. Moody’s trusted insights can help decision-makers navigate the safest path through market turmoil and volatility.
MIS publishes credit ratings and provides assessment services on a wide range of debt obligations, programs and facilities, and the entities that issue such obligations in markets worldwide, including various corporate, financial institution and governmental obligations, and structured finance securities.
MIS also generates revenue from certain non-ratings-related operations, which primarily consist of financial instruments pricing services in the Asia-Pacific region, revenue from Second Party Opinions and Net Zero Assessments and revenue from ICRA's non-ratings operations. The revenue from these operations is included in the MIS Other LOB and is not material to the results of the MIS segment.
Sustainability
Moody's manages its business with the goal of delivering value to all of its stakeholders, including its customers, employees, business partners, local communities, and stockholders. Moody's considers sustainability-related factors throughout our operations, value chain, products, and services. We use our expertise, technology tools, and research and analytical services to help other organizations evaluate sustainability-related risk and make better risk mitigation and planning decisions.
The Company provides updated information on its sustainability strategy and progress via its sustainability website, and discloses information frequently requested by investors via its sustainability-related disclosures website.
The Board oversees sustainability matters via the Audit, Governance & Nominating, and Compensation & Human Resources Committees, as part of its oversight of management and the Company’s overall strategy. The Audit Committee oversees financial, risk and other disclosures made in the Company’s annual and quarterly reports related to sustainability. The Governance & Nominating Committee oversees sustainability matters, including significant issues of corporate social and environmental responsibility, as they pertain to the Company’s business and to long-term value creation for the Company and its stockholders, and makes recommendations to the Board regarding these issues. Finally, the Compensation & Human Resources Committee oversees inclusion of sustainability-related performance goals for determining compensation of certain senior executives. Together, these committee functions support the development of a robust sustainability-related strategy and disclosure framework for the Company. The Board also oversees Moody’s policies for assessing and managing the Company's exposure to risk, including climate-related risks such as business continuity disruption and reputational or credibility concerns stemming from incorporation of climate-related risks into our credit rating methodologies and credit ratings of Moody's Ratings.
HUMAN CAPITAL
Our employees are vital to Moody’s continued success, and we seek to create an environment that attracts, develops and sustains a highly skilled, performance-oriented and engaged workforce. Our approach is oriented around the following pillars:
– providing market-competitive compensation, benefits and wellness programs as part of our Total Rewards program;
– implementing a robust talent management, employee engagement and retention strategy; and
– fostering an inclusive environment where all employees have a sense of belonging and are given the opportunity to perform their best.
Total Rewards
Moody's Total Rewards programs are designed to attract and maintain a high-performing, engaged and motivated global workforce. The Company's compensation packages include market-competitive salaries, performance-based annual bonuses, and equity grants aligned to our long-term performance for certain employees.
The Company's industry leading benefits programs offer comprehensive resources to support physical, mental and financial well-being. We invest in AI powered technologies in order to provide our employees with a world-class experience accessing and managing their benefits. We continuously evaluate our market benchmarks and employee feedback so that our benefits are competitive and support the attraction of the best talent. For example, in recent years we implemented a global paid parental leave policy to give parents time off to care for and bond with a new child and updated our tuition reimbursement program.
MOODY'S 2025 10-K 11
Table of Contents
The Company also promotes flexible work arrangements, which support the Company's efforts to create a work atmosphere in which people feel valued and inspired to give their best. The Company has implemented a "PurposeFirst" framework, which fosters purpose-driven decisions relating to how and where Moody's teams work.
Talent Management, Employee Engagement and Retention
Moody’s believes that our long-term success depends on our ability to attract, develop and retain a high-performing workforce. Our goal is to create an environment where colleagues can thrive personally and professionally and can maximize their potential. Our culture is one of continuous learning, which we believe is crucial for colleagues to thrive as part of our organization and to feel a sense of accomplishment and purpose, and our leaders are key in reinforcing this at Moody’s.
Moody's talent strategy helps us create integrated, cohesive talent activities that support the growth and success of our employees and the business. This strategy informs all of our talent programs, guiding our efforts to attract, develop and retain top talent. It also helps us remain aligned with Moody’s overall business objectives and values while designing programs to meet the evolving needs of our organization.
Moody’s offers various talent development programs and resources through Moody’s University that are focused on building professional, technical and leadership skills to support employees' goals and objectives. Moody’s also places significant emphasis on our high-potential and high-performance programs, which are designed to identify and nurture emerging leaders within the organization. These programs provide tailored development opportunities, mentorship and the chance to work on strategic projects that drive our business forward.
Moody's Employee Experience function conducts listening sessions with our employees and creates targeted plans to act on the feedback provided. We measure employee engagement via multiple channels, including the BES for employees to provide anonymous and candid feedback to management. This periodic survey helps Moody's management understand our employees' level of engagement in critical areas, which include, but are not limited to, purpose, leadership, managerial effectiveness, connection, enablement and empowerment and well-being. Managers are accountable for identifying opportunity areas and taking targeted actions based on survey results. The feedback received through the BES is used as a vital input into making decisions to improve employee experience and retention. As we strive to make Moody’s a place people want to come and grow, management also carefully monitors local and global employee turnover rates.
Inclusion and Belonging
Moody's believes that a workforce comprised of individuals with varied thoughts, backgrounds and experiences fosters an environment that makes our opinions stronger, our products more innovative, our workplace more welcoming and improves how we relate and respond to our customers. We are committed to cultivating a culture where every individual feels a sense of belonging and has an equal opportunity to succeed.
Our Inclusion Operating and Governance Model turns our inclusion strategy into reality by providing a functional framework to guide how our People team, councils, sponsors, BRGs and committees work together. The Global Inclusion Council, composed of senior leaders, is charged with oversight of our global inclusion strategy and its progress. The members of the council meet quarterly.
Our governance model also includes three Regional Inclusion Councils tasked with overseeing the inclusion strategy within their respective regions. Each council meets on a quarterly basis.
Our operating model includes 11 active BRGs which represent 51 chapters. These groups are open to all Moody's employees, with more than 5,300 employees participating globally as of December 31, 2025.
12 MOODY'S 2025 10-K
Table of Contents
Workforce Overview
As of December 31, 2025 and 2024, the number of Moody’s employees was as follows:
December 31,
Change
Non-U.S.
Total
MIS
Non-U.S.
Total
MSS
Non-U.S.
Total
Total MCO
Non-U.S.
Total (1)
(1) Includes approximately 2,000 employees of majority-owned MIS affiliates for both 2025 and 2024.
– MA’s employee population primarily consists of software engineers, product managers and strategists, data and operations analysts, advisory and implementation teams and economists, as well as sales, business development, and sales support professionals.
– The MIS employee population primarily consists of credit analysts, data and operations analysts, credit strategy and methodology professionals, software engineers, sales and sales operations, and international strategy teams.
– The MSS employee population primarily consists of information technology professionals and other professional staff such as finance, human resources, compliance, and legal that support both MA and MIS.
CLIMATE CHANGE
While Moody’s operations have a limited direct environmental impact, the Company is taking steps to reduce emissions across its operations and value chain in accordance with its decarbonization strategy.
Our decarbonization plan outlines tangible strategies for realizing our climate goals, including the procurement of 100% of renewable electricity in the Company’s office spaces and optimizing efficiencies in its operations through its hybrid work program. The costs associated with the implementation of the decarbonization plan are not expected to be material.
We have integrated RMS’ climate capabilities into our existing offerings and as a result we are providing analysts and researchers with streamlined access to consistent and high-quality climate insights. We are investing to maintain a highly competitive offering in this evolving field and are working with customers across all industries to better understand, manage, mitigate and report on their climate related risk exposures. Additionally, we have launched a Net Zero Assessment framework to provide an independent and comparable evaluation of the strength of an entity’s carbon transition plan.
MOODY'S 2025 10-K 13
Table of Contents
MOODY’S STRATEGY
Moody’s is a global integrated risk assessment firm that empowers organizations to anticipate, adapt and thrive in a new era of exponential risk. Our solutions incorporate decades of financial and risk expertise and domain knowledge into integrated, decision-grade intelligence that can be embedded into our customers' mission-critical workflows through a variety of channels. Our data, analytical solutions and insights help decision-makers identify opportunities and manage the risks of doing business with others.
Mission
Our mission is to be the leading source of relevant insights on exponential risk
Growth Strategy
Invest with intent to grow and scale
Invest with intent to grow and strengthen our core business with a foundation of credibility, transparency, technology, data and analytics and decision enablement
Invest in integrated solutions to allow customers to manage multiple risks, bringing the best of Moody's capabilities
Invest to successfully scale in priority growth markets with highly differentiated products and services
Execution Priorities
How we will get it done
Customer first
Develop our people and culture
Collaborate, modernize and innovate
Moody’s invests in initiatives to implement the Company’s strategy, including internally-led organic development and targeted acquisitions. Illustrative examples include:
Enhancements to ratings quality and product extensions
Expansion in emerging markets
New products, services, proprietary data and technology capabilities, including Gen AI and Agentic AI offerings, to help customers attain competitive advantage and improve internal productivity
Investments that extend ownership and participation in joint ventures as well as acquisitions and strategic partnerships that accelerate the ability to scale and grow Moody’s businesses
In this era of exponential risk, we know that risks are interconnected, and organizations want a complete view of risk. This includes having a greater breadth and depth of understanding around how risks connect.
Our integrated approach provides stakeholders with a more comprehensive view of risk, helping them to make better decisions and unlock opportunities. Moody’s brings together vast amounts of curated data, creates proprietary linkages and develops risk analysis solutions that help our customers to assess multiple risk factors concurrently (e.g., supply chain failures; cyberattacks; geopolitical tensions; sanctions and security issues; and extreme weather events).
14 MOODY'S 2025 10-K
Table of Contents
PROSPECTS FOR GROWTH
Moody’s believes that the overall long-term outlook remains favorable for continued growth from the offerings of both of our reportable segments.
Moody’s growth is influenced by a number of trends that impact the market for our products, including:
Enablement of Gen AI and Agentic AI
Health of the world’s major economies
Debt capital markets activity, including Private Credit
Disintermediation of credit markets
Fiscal and monetary policy of governments
Expansion of market for integrated data and analytics solutions
Business investment spending, including mergers and acquisitions
In an environment of increasing financial complexity and exponential risk, Moody’s is well positioned to benefit from continued growth in global fixed-income market activity and more widespread use of credit ratings and integrated risk solutions. Moreover, pricing opportunities aligned with customer value creation and advances in technology present growth opportunities for Moody’s.
Over the last decade, Moody’s has leveraged the power of AI and ML to better serve our customer base. As an early adopter of Gen AI and agentic AI, which Moody's believes will help our customers make better decisions by unlocking deeper, more integrated perspectives on risk, we believe Moody's has positioned itself to benefit from the capabilities of this technology and harness the proprietary insights resulting from being embedded in customer workflows. Through enablement of Gen AI and agentic AI, both through internal innovations and certain strategic partnerships, we are evolving how Moody's delivers insights on exponential risk to our customers with the potential to reimagine knowledge-intensive workflows, activate deeper insights and empower confident, intelligent decision-making for organizations globally.
Moody’s operations are subject to various risks, as more fully described in Part I, Item 1A “Risk Factors,” inherent in conducting business on a global basis.
MA Prospects for Growth
MA provides insights on the evolving risks of our customers and supports their ability to capitalize on related opportunities. Growth in MA is likely to be driven by landing new customers and expanding customer relationships across use cases over time. We believe our trusted and curated proprietary data, as well as our domain expertise, are crucial in an environment that is increasingly using Gen AI and agentic AI. The integration of AI and agentic solutions across our platforms, grounded in and informed by our vast proprietary and curated data, enables our customers to increase their efficiency and productivity, ultimately transforming how organizations work and manage risk to make decisions.
Strategic growth drivers :
STRONG CUSTOMER RETENTION RATES
CROSS-SELLING, UPSELLING & PRICING
EXPANDING AND FORTIFYING OUR DATA ESTATE
INNOVATION AND NEW PRODUCT DEVELOPMENT
NEW DISTRIBUTION CHANNELS
STRATEGIC PARTNERSHIPS
MOODY'S 2025 10-K 15
Table of Contents
Market growth drivers :
Customers need to understand a large range of interconnected and emerging risks. Our comprehensive solutions help to provide clarity in a complex world by supporting the transformation underway across various industries due to:
Operational and reputational risks
Digitization & Artificial Intelligence
Evolving regulatory environment
Fluctuations in credit and financial markets
Extreme weather impacts
Geopolitical risks
MIS Prospects for Growth
Strong secular trends should continue to provide long-term growth opportunities in MIS. Key growth drivers include:
Long-term Revenue Growth Algorithm
Economic Expansion
Value Proposition
Developing Capital Markets and Evolving Risks
• GDP growth drives demand for debt capital to fund business investments
• Refinancing needs support future supply
• Proven rating accuracy and deeply experienced analysts
• Mix of issuers and opportunistic issuance
• Bank system capacity remains constrained
• Deepening participation in developing markets
• Meeting customers’ evolving risk assessment demands, including across Private Credit, Cybersecurity, and Sustainable and Transition Finance
In addition to the factors noted above, growth in global fixed income markets in a given year is dependent on many macroeconomic and capital market factors including:
Interest rates
Business investment spending
Corporate refinancing needs
Merger and acquisition activity
Issuer financial health
Consumer borrowing levels
Securitization activity
Expansion of ratings coverage
Expansion into emerging markets
Rating fees paid by debt issuers account for most of the revenue of MIS. Therefore, a substantial portion of MIS’s revenue is dependent upon the dollar-equivalent volume and number of ratable debt securities issued in the global capital markets. However, annual fee arrangements with frequent debt issuers, annual fees from debt monitoring, commercial paper and medium-term note programs, bank deposit ratings, insurance company financial strength ratings, mutual fund ratings, and other areas partially mitigate MIS’s dependence on the volume or number of new debt securities issued in the global fixed-income markets.
Within MIS, we remain firmly committed to ratings quality, timely and insightful AI-elevated research, and engagement with issuers and investors. In the past year, we have enhanced our footprint in domestic markets by expanding in Latin American markets through Moody's Local domestic rating business, including the acquisition of ICR Chile. This strategic expansion has enhanced the capacity and reach of our domestic rating agency.
Competition
MA competes broadly in the financial information and enterprise risk software industries against various diversified competitors. MA’s main competitors within DS are providers of software and analytic solutions. In R&I, MA faces competition from providers of economic data, financial research and analysis. MA's main competitors within D&I are providers of commercial and financial data.
MIS competes with other CRAs and with investment banks and brokerage firms that offer credit opinions and research. Many users of MIS’s ratings also have in-house credit research capabilities.
16 MOODY'S 2025 10-K
Table of Contents
Regulation
MIS, certain of the Company's credit rating affiliates, and many of the issuers and/or securities that MIS and the affiliates rate, are subject to extensive regulation in the U.S. (including by state and local authorities), EU, U.K. and in other countries. In addition, some of the services offered by MA and its affiliates are subject to regulation in a number of countries. MA also derives a significant amount of its sales from banks, insurers and other financial services providers who are subject to regulatory oversight and who are required to conduct due diligence and pass through certain regulatory requirements to key suppliers such as MA by contract. Existing and proposed laws and regulations can impact the Company’s operations, products and the markets in which the Company operates. Additional laws and regulations have been proposed or are being considered. Each of the existing, adopted, proposed and potential laws and regulations can increase the costs and legal risk associated with the Company’s operations, including the issuance of credit ratings, and may negatively impact the Company’s profitability and ability to compete, or result in changes in the demand for the Company's products and services, in the manner in which the Company's products and services are utilized, and in the manner in which the Company operates.
In the U.S., CRAs are subject to extensive regulation primarily pursuant to Section 15E of the Exchange Act and rules thereunder. MIS is registered with the SEC as an NRSRO and is subject to the SEC's oversight and examination authority.
In the EU, the CRA industry is registered and supervised through a pan-EU regulatory framework. ESMA has direct supervisory responsibility for registered CRAs throughout the EU. MIS’s EU CRA subsidiaries are registered with ESMA and are subject to its ongoing supervision. EU CRAs are also subject to DORA, which imposes a range of requirements in relation to the management of ICT risk, regulatory reporting, testing and the management of risks related to ICT services provided by third-parties. DORA also establishes an EU-wide oversight framework for ICT service providers who are designated by the EU supervisory authorities as CTPPs. MIS is not an ICT service provider. MA is an ICT service provider but has not been designated as a CTPP.
In November 2024, the EU published in the EU Official Journal a new Regulation on ESG Rating Activities. This new regulation will become applicable in July 2026 and will subject ESG rating and/or score providers to a number of substantive and procedural requirements and formal supervision by ESMA. Certain products currently offered by MIS may fall in scope of the Regulation and we continue to assess and prepare for the implications. We do not currently expect MA products to fall into scope.
The EU AI Act was published in the EU Official Journal in July 2024, though elements of the Act have different implementation periods and further grace periods have been proposed. The impact of the Regulation remains uncertain as it is currently being reviewed by the EU Institutions; however, it could increase the Company's costs and expose it to the risk of penalties over time.
In the U.K., MIS U.K. is registered with and regulated by the FCA.
The U.K. Parliament has now passed legislation to authorize the FCA to regulate ESG ratings. Certain products currently offered by MIS may fall into scope of the legislation. The FCA has begun consulting on rules for the U.K. ESG ratings framework. We continue to assess the implications for the Company.
Intellectual Property
Moody’s and its affiliates own and control a variety of intellectual property, including but not limited to:
Proprietary information
Publications
Databases
Trademarks and Patents
Cloud-based and other software tools and applications
Domain names
Research
Models and methodologies
Other proprietary materials that, in the aggregate, are of material importance to Moody’s business
Management of Moody’s believes that the trademarks and related corporate names, marks and logos relating to its businesses, including those containing the term “Moody’s”, are of material importance to the Company.
The Company, primarily through MA and its affiliates, provides access to certain of its databases, cloud-based, AI, and other software applications, credit, catastrophe, and other risk models, assessments, research and other publications and services that contain intellectual property to its customers. These licenses are provided pursuant to standard agreements containing customary restrictions and intellectual property protections.
MOODY'S 2025 10-K 17
Table of Contents
In addition, Moody’s licenses from third parties certain technology, data and other intellectual property rights. For example, Moody’s obtains licenses from third parties to use financial information (such as market and index data, financial statement data, research data, default data and security identifiers) as well as AI software and software development tools and libraries. In addition, certain of the Company’s affiliates obtain from third-party information providers certain financial, credit risk, compliance, firmographic, management, ownership, news and/or other data worldwide, which are distributed through Moody's information products. The Company obtains such technology and intellectual property rights from generally available commercial sources. The Company also utilizes generally available open-source software and libraries subject to appropriately permissive open-source licenses, to carry out routine functions in certain of the Company’s software products. Most of such technology and intellectual property is available from a variety of sources. Although certain financial information (particularly security identifiers, certain pricing or index data, and company financial data in selected geographic markets) is available from a limited number of sources, Moody’s does not believe it is dependent on any one data source for a material aspect of its business.
The names of Moody’s products and services referred to herein are trademarks, service marks or registered trademarks or service marks owned by or licensed to Moody’s or one or more of its affiliates. The Company owns patents (including granted, allowed and pending patents). None of the Company's intellectual property is subject to a specific expiration date, except to the extent that the patents and the copyright in items that the Company holds (such as credit reports, research, software, and other written opinions) expire pursuant to relevant law.
The Company considers its intellectual property to be proprietary, and Moody’s relies on a combination of copyright, trademark, trade secret, patent, non-disclosure and other contractual and technological safeguards for protection. Moody’s also pursues instances of third-party infringement of its intellectual property in order to protect the Company’s rights.
Available Information
Moody’s investor relations internet website is https://ir.moodys.com/. Under the “SEC Filings” tab at this website, the Company makes available free of charge its annual reports on Form 10-K, proxy and other information statements, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after they are filed with, or furnished to, the SEC.
The SEC maintains an internet website that contains annual, quarterly and current reports, proxy and other information statements that the Company files electronically with the SEC. The SEC’s internet website is https://www.sec.gov/.
Information About Our Executive Officers
Name, Age, Position and Biographical Data
Robert Fauber, 55
President and Chief Executive Officer
Mr. Fauber has served as the Company’s President and Chief Executive Officer since January 2021. Mr. Fauber joined the Board of Directors in October 2020 and he currently serves on the Executive Committee of the Board of Directors. Prior to serving as CEO, Mr. Fauber served as Chief Operating Officer from November 2019 to December 2020, as President of MIS from June 2016 to October 2019, as Senior Vice President—Corporate & Commercial Development of Moody’s Corporation from April 2014 to May 2016, and was Head of the MIS Commercial Group from January 2013 to May 2016.
Noémie Heuland, 48
Senior Vice President and Chief Financial Officer
Ms. Heuland has served as the Company’s Senior Vice President and Chief Financial Officer since April 2024. She joined the Company most recently from Ceridian HCM Holding Inc. (which changed its name to Dayforce, Inc. on January 1, 2024), a global leader of human capital management technology, where she served as Executive Vice President, Chief Financial Officer from September 2020 to December 2023. From April 2018 to September 2020, Ms. Heuland held the position of Senior Vice President, Chief Financial Officer at SAP Latin America and Caribbean region, and held various other finance leadership roles in Europe and the Americas at SAP beginning in 2008. Prior to joining SAP, a global software company, Ms. Heuland spent eight years at PricewaterhouseCoopers. Ms. Heuland is a certified public accountant.
18 MOODY'S 2025 10-K
Table of Contents
Name, Age, Position and Biographical Data
Richard Steele, 56
Senior Vice President and General Counsel
Mr. Steele has served as the Company’s Senior Vice President and General Counsel since September 2023. Mr. Steele joined Moody’s KMV Company in 2006 as its Chief Legal Officer, and was named General Counsel of Moody’s Analytics in January 2008. Prior to joining the Company, Mr. Steele was a corporate lawyer at Wilson Sonsini Goodrich & Rosati, and also held senior legal positions at several firms in financial technology, software and venture capital.
Michael West, 57
President, Moody’s Investors Service
Mr. West has served as President of Moody’s Investors Service, Inc. since November 2019. Mr. West served as Managing Director—Head of MIS Ratings and Research from June 2016 to October 2019. Previously, Mr. West served as Managing Director—Head of Global Structured Finance from February 2014 to May 2016 and Managing Director—Head of Global Corporate Finance from January 2010 to January 2014. Earlier in his career, he was also responsible for the research strategy for the ratings businesses and before that led Corporate Finance for the EMEA Region, European Corporates and the EMEA leveraged finance business.
MOODY'S 2025 10-K 19
Table of Contents
ITEM 1A. RISK FACTORS
Please carefully consider the following discussion of significant factors, events and uncertainties that make an investment in the Company’s securities risky and provide important information for the understanding of the “forward-looking” statements discussed in Item 7 of this Form 10-K and elsewhere. These risk factors should be read in conjunction with the other information in this annual report on Form 10-K.
The events and consequences discussed in these risk factors could, in circumstances the Company may not be able to accurately predict, recognize, or control, have a material adverse effect on Moody’s business, financial condition, operating results (including components of the Company’s financial results such as sales and profits), cash flows and stock price. These risk factors do not identify all risks that Moody’s faces. The Company could also be affected by factors, events, or uncertainties that are not presently known to the Company or that the Company currently does not consider to present significant risks. Some of the factors, events and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past and instead reflect our beliefs and opinions as to the factors, events or contingencies that could materially and adversely affect us in the future. In addition to the effects of general economic conditions, including inflation and related monetary policy actions in response to inflation, changes in international conditions, including the impact of ongoing or new developments in the Russia-Ukraine military conflict and the military conflicts in the Middle East, and resulting global on our business and operations discussed in Item 7 of this Form 10-K and in the risk factors below, additional or effects from the global economic climate may give rise to or amplify many of these risks discussed below.
A. Legal and Regulatory Risks
Moody’s Faces Risks Related to Laws and Regulations that Affect the Financial Industry, Including the Credit Rating Industry, Moody's Businesses and Moody’s Customers.
Moody’s is subject to extensive regulation by federal, state and local authorities in the U.S. and by foreign jurisdictions. These regulations, the most important of which are discussed in further detail below, are complex, continually evolving and have tended to become more stringent over time. Additionally, in the U.S., changes in the Presidential administration, changes in Congress, and recent judicial actions may increase the uncertainty with regard to potential changes in these laws and regulations and the enforcement of any new or existing legislation or directives by government authorities. See “Regulation” in Part I, Item 1 of this annual report on Form 10-K for more information.
Speculation concerning the impact of legislative, regulatory and government initiatives, including initiatives related to the emerging technology of AI systems, operational resilience, data privacy and climate-related risks, among others, that our products and services incorporate, and the increased uncertainty over potential liability and adverse legal or judicial determinations may negatively affect Moody's stock price, affect demand for our products and services, increase our costs of operations and impact our future business plans. Further, the Company's compliance and efforts to reduce the risk of fines, penalties or other sanctions can result in significant expenses. Legal proceedings that are increasingly lengthy can result in uncertainty over and exposure to liability.
Moody's Investors Service. MIS operates in a highly regulated industry. The current U.S. laws and regulations relating to MIS, including the Reform Act and the Dodd-Frank Act:
– seek to encourage, and may result in, increased competition among CRAs and in the credit rating business;
– may result in alternatives to credit ratings, changes in the pricing of credit ratings, and/or diminished intellectual property protection relating to credit ratings and related research produced by MIS;
– restrict the use of information in the development or maintenance of credit ratings;
– increase regulatory oversight of the credit markets and CRA operations;
– provide the SEC with direct jurisdiction over CRAs that seek NRSRO status, and grant authority to the SEC to inspect the operations of CRAs; and
– provide for enhanced oversight standards and specialized pleading standards, which may result in increases in the number of legal proceedings claiming liability for losses suffered by investors on rated securities and aggregate legal defense costs.
In addition to the extensive and evolving U.S. laws and regulations governing the credit rating industry, foreign jurisdictions have taken measures to regulate CRAs and the markets for credit ratings that significantly impact the operations and the markets for the Company's ratings-related products and services. In particular, the EU has adopted a common regulatory framework for CRAs operating in the EU, continues to monitor the credit rating industry and analyzes approaches that may strengthen existing regulation. The U.K. also has adopted a regulatory framework for CRAs that is based on the EU version. Credit ratings emanating from outside the EU are subject to ESMA's oversight if they are endorsed into the EU, and ratings endorsed into the U.K. are similarly subject to oversight of the FCA. Additionally, other foreign jurisdictions, such as Australia and Hong Kong and China, have taken measures to increase regulation of CRAs and markets for credit ratings. A failure to comply with these procedural and substantive requirements also exposes MIS to the risk of regulatory enforcement action, which could result in financial penalties or, in serious cases, affect its ability to conduct credit rating activities in certain jurisdictions. For example:
20 MOODY'S 2025 10-K
Table of Contents
– MIS is subject to formal regulation and periodic or other inspections in the EU and other foreign jurisdictions, such as, but not limited to, the U.K., Australia, Singapore, Japan, and Hong Kong, where it operates through registered subsidiaries.
– In the EU and the U.K., applicable rules include procedural requirements with respect to credit ratings of sovereign issuers, liability for intentional or grossly negligent failure to abide by applicable regulations, mandatory analyst rotation requirements, and restrictions on CRAs or their shareholders if certain ownership thresholds are crossed. Additional procedural and substantive requirements include conditions for the issuance of credit ratings, rules regarding the organization of CRAs, restrictions on activities deemed to create a conflict of interest, including requirements that fees be based on costs and non-discriminatory, special requirements for credit ratings of structured finance instruments. Certain products currently offered by MIS may fall into scope of the EU Regulation on ESG Rating Activities, which could impose new substantive and procedural requirements on MIS relating to those products similar to those applicable to credit ratings. In addition, EU CRAs are also subject to DORA, which imposes a range of requirements in relation to the management of ICT risk, regulatory reporting, testing and the management of risks related to ICT services provided by third-parties.
– In Hong Kong, applicable rules include liability for the intentional or negligent dissemination of false and misleading information and procedural requirements for the notification of certain matters to regulators. In addition, MIS Hong Kong is subject to a code of conduct applicable to CRAs that imposes procedural and substantive requirements on the preparation and issuance of credit ratings, restrictions on activities deemed to create a conflict of interest including the disclosure of its compensation arrangements with rated entities and special requirements for credit ratings of structured finance instruments.
– In China, while MIS is not a licensed CRA, it does issue global credit ratings on Chinese issuers from offices outside of China. In addition, the Company holds a 30% investment in CCXI, a domestic CRA licensed in China. China has laws applicable to domestic CRAs as well as foreign investment in such entities and entities in general (including national security review).
– In Australia, unless an exemption applies, CRAs are required to hold an Australian financial services license (AFSL) if they carry on a business of providing credit ratings in Australia. MIS Australia holds an AFSL authorizing it to provide general advice to wholesale clients only by issuing a credit rating. It is therefore required to comply with obligations as an AFSL holder including the requirement to provide financial services efficiently, honestly, and fairly, to manage conflicts of interest, and to comply with the conditions of its AFSL (which conditions include specific conditions about credit ratings).
Future laws and regulations could extend to products and services not currently regulated. These regulations could:
– affect the need for debt securities to be rated;
– expand supervisory remits to include credit ratings issued outside the home jurisdiction;
– increase the level of competition for credit ratings, including the distribution of credit ratings;
– establish criteria for credit ratings or limit the entities authorized to provide credit ratings;
– restrict the collection, use, accuracy, correction and sharing of information by CRAs; or
– regulate pricing (for example, to require fees that are based on costs and are non-discriminatory) on products and services provided by MA such as those products that incorporate credit ratings and research originated by MIS.
In turn, such developments may affect MIS’s communications with issuers as part of the rating assignment process, alter the manner in which MIS’s credit ratings are developed, assigned and communicated, affect the manner in which MIS or its customers or users of credit ratings operate, impact the demand for MIS’s credit ratings or alter the economics of the credit ratings business, including by restricting or mandating business models for CRAs. It is difficult to accurately assess the future impact of legislative and regulatory requirements on MIS’s business and its customers’ businesses. If these laws and regulations, and any future rulemaking or court rulings, reduce demand for credit ratings or increase costs, MIS may be unable to pass such costs through to customers. Additionally, legislative and regulatory initiatives that apply to CRAs and credit markets generally may affect Moody’s in a disproportionate manner. Each of these developments increases the costs and legal risk associated with the issuance of credit ratings and can have a material adverse effect on Moody’s operations, profitability and competitiveness, the demand for credit ratings and the manner in which such ratings are utilized.
Moody's Analytics. Certain of MA’s subscription products contain credit ratings data and related research produced by MIS, and often are used by MA customers for regulatory compliance purposes, including determination of capital charges and regulatory reporting.
Regulations concerning the issuance of credit ratings and the activities of CRAs, including the dissemination of ratings data, are likely to continue to be considered in the future, including, for example, provisions regarding fair and reasonable availability of ratings data, the terms and conditions associated with such data feeds, remuneration for data and the nature of the information to be included in credit opinions. Other laws, regulations and rules that are being considered or are likely to be considered in the future may impact MA products and services, for example, by requiring certain information to be provided free of charge.
MOODY'S 2025 10-K 21
Table of Contents
MA’s other products and services, in particular its offering of products and services relating to sanctions, KYC and financial crime, are potentially subject to various laws and regulations affecting the collection, processing and sale of data-driven solutions. These laws and regulations generally are designed to protect information relating to individuals and small businesses, including information used for consumer credit reporting purposes, the data rights of individuals, and to prevent the unauthorized collection, access to and use of personal or confidential information available in the marketplace and prohibit certain deceptive and unfair acts. Additionally, refer to the risk factor entitled “ The Company Is Exposed to Risks Related to Protection of Confidential and Personal Information .”
New laws and regulations are likely to be enacted and existing laws and regulations may change or be interpreted and applied differently over time and from jurisdiction to jurisdiction, and it is possible they will be interpreted and applied in ways that will materially and adversely affect our business. As a result of current and future laws and regulations, our customers’ and other third parties’ use of our products and services, as well as our use of information supplied by our suppliers and other third parties, can lead to regulatory inquiries or actions or related private litigation against us. The application of current and future laws relating to data access and portability may also require changes in the way that we contract for certain of our hosted data services and provide our customers of such services with the ability to terminate their relationships with us and port their data to alternative providers, and changes in the applicability of laws and regulations could require MA to modify its data processing practices and policies and restrict or dictate how MA collects, maintains, combines and disseminates information, which could have a material adverse effect on Moody’s business, financial condition or results of operations. In the future, the Company may be subject to significant additional expense to ensure continued compliance with laws and regulations applicable to MA and to , or remedy actual or . Additionally, refer to the risk factor entitled “ The Company Is to Risks Related to Protection of Confidential and Personal Information .”
Further, MA’s bank and financial services customers are subject to additional regulatory oversight. For example:
– U.S. banking regulators, including the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau, as well as many state agencies, have issued guidance to insured depository institutions and other providers of financial services on assessing and managing risks associated with third-party relationships, which include all business arrangements between a financial services provider and another entity, by contract or otherwise, and generally requires banks and financial services providers to exercise comprehensive oversight throughout each phase of a bank or financial service provider’s business arrangement with third-party service providers, and instructs banks and financial service providers to adopt risk management processes commensurate with the level of risk and complexity of their third-party relationships. This guidance requires more rigorous oversight of third-party relationships that involve certain "critical activities."
– Regulators in Europe and other foreign markets in which MA is active have issued guidance similar to that issued in the U.S. relating to financial institutions' assessment and management of risks associated with third-party relationships. For example, DORA requires EU financial institutions to have a comprehensive governance and control framework of the management of ICT risks, including risks relating to third-party providers of technology and data such as MA. In light of this, MA’s existing or potential bank and financial services customers subject to this guidance have sought to and may further revise their third-party risk management policies and processes and the terms on which they do business with MA.
– In China, MA is licensed to provide subscriptions to credit research and ratings data and other information relevant to the financial markets. China has laws applicable to Moody’s that are broadly crafted, and the implementation, interpretation and enforcement of such laws are subject to the broad discretion of Chinese regulators, which could affect the Company’s ability to conduct business in China.
The EU AI Act has introduced a risk-based framework for regulating AI systems which applies different obligations to various participants in the AI supply chain. Compliance with the regulation, in its current form, could increase the Company’s costs and expose it to the risk of penalties or fines for noncompliance; however, the ultimate impact of the EU AI Act on the Company remains uncertain, as the European Commission has proposed measures intended to reduce the regulatory burden on businesses. In addition, numerous other foreign jurisdictions and U.S. states have proposed or enacted legislation relating to the development and use of GenAI.
Legal and regulatory developments can result in delayed or reduced sales to MA’s customers, adversely affect MA’s relationship with such customers, increase the costs of doing business with such customers and/or result in MA assuming greater financial and legal risk under its agreements with such customers.
The Company Faces Exposure to Litigation and Government Regulatory Proceedings, Investigations and Inquiries (Including Competition Market Studies) Related to Rating Opinions, Analytics Services and Other Business Practices.
Moody’s faces exposure to litigation and government and regulatory proceedings, investigations and inquiries (including market studies) related to MIS’s ratings actions, as well as other business practices and products within both MIS and MA. When the market value of credit-dependent instruments has declined or defaults have occurred, whether as a result of difficult economic times, rapid changes in interest rates, decreased liquidity, turbulent markets or otherwise, the number of investigations and legal proceedings that Moody’s has faced has increased significantly. Parties who invest in securities rated by MIS or issued by MIS-rated entities have pursued claims against MIS or Moody’s for losses they faced in their portfolios. For instance, Moody’s faced numerous class action lawsuits and other litigation, government investigations and inquiries (including market studies) concerning events linked to the U.S. subprime residential mortgage sector and broader in the credit markets during and after the financial of 2007-2008. Moody's may face additional government and inquiries related to the private credit
22 MOODY'S 2025 10-K
Table of Contents
market, where there has been increased regulatory attention relating to the rapid growth of private credit, new financing structures, and CRA ratings for private credit-related instruments, issuers, and credit facilities. Evolving and/or inconsistent expectations regarding climate-risk and other sustainability disclosures and reporting could also result in increased regulatory scrutiny and new regulatory actions at a corporate and business unit level. MA’s offering of products and services relating to sanctions, KYC and financial crime, as well as climate, default, and other risks may result in increased regulatory scrutiny and could expose the Company to increased risk of litigation from companies, data subjects, property owners and other third-parties, including due to potential inaccuracies in the products and services we offer, as well as regulatory recordkeeping requirements associated with our services. Additionally Moody’s development of new technologies, including Gen AI and agentic AI product offerings may introduce new risks. Large language models, agentic workflows and related AI-technologies licensed by or developed by the Company, and the data used to train or power them may be or , our Gen AI or agentic AI products or platforms may result in impacts to our business operations or reputation and increased regulatory and exposure to . Legal proceedings and regulatory inquiries and impose additional expenses on the Company and require the attention of senior management to an extent that may significantly reduce their ability to devote time to addressing other business issues, and any of these proceedings, or inquiries (including market studies) could ultimately result in judgments, , , or activity restrictions. Risks relating to legal proceedings are heightened in foreign jurisdictions that the legal protections or liability standards comparable to those that exist in the U.S. In addition, new laws and regulations have been and may continue to be enacted that establish lower liability standards, shift the of proof or relax requirements, thereby increasing the risk of in the U.S. and in foreign jurisdictions. These risks are often to assess or quantify. Moody’s may not have adequate insurance or reserves to cover these risks, and the existence and magnitude of these risks often remain unknown for substantial periods of time. Furthermore, when Moody’s is to at an early stage and matters proceed to trial, the aggregate legal defense costs incurred by Moody’s increase substantially, as does the risk of an outcome.
Additionally, as litigation or the process to resolve pending matters progress, Moody’s will continue to review the latest information available and may change its accounting estimates, which could require Moody’s to record or increase liabilities in the consolidated financial statements in future periods. See Note 19 to the consolidated financial statements for more information regarding ongoing investigations and civil litigation that the Company currently faces. Due to the potential number of these proceedings and the significant amount of damages that could be sought, there is a risk that Moody’s will be subject to judgments, settlements, fines, penalties or other adverse results that have a material adverse effect on its business, operating results and financial condition.
The Company Is Exposed to Risks Related to Its Compliance and Risk Management Programs.
Moody’s operates in a number of countries, and as a result the Company is required to comply with and quickly adapt to numerous international and U.S. federal, state and local laws and regulations. The Company’s ability to comply with applicable laws and regulations, including anti-corruption, antitrust, economic and trade sanctions, and securities trading laws, the Reform Act, the Dodd-Frank Act and regulations thereunder, is largely dependent on its establishment and maintenance of compliance, review and reporting systems, as well as its ability to attract and retain qualified compliance and risk management personnel. Moody’s policies and procedures to identify, evaluate and manage the Company’s risks, including risks resulting from acquisitions and from Gen AI developments (such as maintaining the quality and integrity of data of Gen AI product offerings), may not be fully effective, and Moody’s employees or agents may engage in misconduct, fraud or other errors. It is not always possible to deter such errors, and the precautions the Company takes to prevent and detect this activity may not be in all cases. If Moody’s employees its policies or if the Company’s risk management methods are not , the Company may be subject to and civil liability, the of the Company’s employees, , , regulatory sanctions, injunctive relief, exclusion from certain markets or other , and may to its reputation, financial condition and operating results.
Moody’s Faces Risks Related to Intellectual Property Rights.
Moody’s considers many aspects of its products and services to be proprietary. Failure to protect the Company’s intellectual property adequately could harm its reputation and affect the Company’s ability to compete effectively. Businesses the Company acquires also involve intellectual property portfolios, which increase the challenges the Company faces in protecting its strategic advantage. In addition, the Company’s operating results can be adversely affected by inadequate or changing legal and technological protections for intellectual property and proprietary rights in some jurisdictions and markets, including if and how rights in these markets evolve to address unauthorized or unintended use of intellectual property from new technologies like Gen AI. The lack of strong legal and technological intellectual property protections in foreign jurisdictions in which we operate may increase our vulnerability and may pose risks to our business. From time to time, laws are passed that require publication of certain information, in some cases at no cost, that the Company considers to be its intellectual property and that it currently sells or licenses for a fee, which could result in revenue.
We also incorporate third-party software, including open-source software components, in certain of our products and services. Our reliance on third-party and open-source software exposes us to risks of non-compliance, including potential audits, litigation, injunctions, and the forced disclosure of our proprietary intellectual property, which could materially impact our financial results and operations. Unauthorized third parties may also try to obtain and use technology or other information that the Company regards as proprietary. It is also possible that Moody’s competitors or other entities could obtain patents or other intellectual property rights related to the types of products and services that Moody’s offers, and attempt to require Moody’s to stop developing or marketing the products or services, to modify or redesign the products or services to avoid infringing, or to obtain licenses from the holders of the intellectual property in order to continue developing and marketing the products and services. Even if Moody’s attempts to assert or protect its intellectual property rights through litigation, it may require considerable cost, time and resources to do so, and there is no guarantee that the Company will be . The Company’s ability to establish, maintain and protect its intellectual
MOODY'S 2025 10-K 23
Table of Contents
property and proprietary rights against theft, misappropriation or infringement could be materially and adversely affected by insufficient and/or changing proprietary rights and intellectual property legal protections in some jurisdictions and markets. These risks, and the cost, time and resources needed to address them, may increase as the Company’s business grows and its profile rises in countries with intellectual property regimes that are less protective than the rules and regulations applied in the United States.
Moody’s Faces Risks Related to Tax Matters, Including Changes in Tax Rates or Tax Rules.
As a global company, Moody’s is subject to taxation in the United States and various other countries and jurisdictions. As a result, our effective tax rate is determined based on the taxable income and applicable tax rates in the various jurisdictions in which the Company operates. Moody’s future tax rates could be affected by changes in the composition of earnings in countries or states with differing tax rates or other factors, including by increased earnings in jurisdictions where Moody’s faces higher tax rates, losses incurred in jurisdictions for which Moody’s is not able to realize the related tax benefit, or changes in foreign currency exchange rates. Changes in the tax, accounting and other laws, treaties, regulations, policies and administrative practices, or changes to their interpretation or enforcement, including changes applicable to multinational corporations such as the Base Erosion Profit Shifting initiative being led by the OECD, which requires companies to disclose more information to tax authorities on operations around the world, and the EU’s state aid rulings, could have a material adverse effect on the Company’s effective tax rate, results of operations and financial condition and may lead to audit of profits earned in various countries.
In addition, Moody’s is subject to regular examination of its income tax returns by the IRS and other tax authorities around the world. Moody’s regularly assesses the likelihood of favorable or unfavorable outcomes resulting from these examinations to determine the adequacy of its provision for income taxes, including unrecognized tax benefits; however, developments in an audit or litigation could materially and adversely affect the Company. Although the Company believes its tax estimates and accruals are reasonable, there can be no assurance that any final determination will not be materially different than the treatment reflected in its income tax provisions, accruals and unrecognized tax benefits, which could materially and adversely affect the Company’s business, operating results, cash flows and financial condition.
During 2023, multiple foreign jurisdictions in which the Company operates have enacted legislation to adopt a minimum tax rate described in the GloBE or Pillar II, tax model rules issued by the OECD. A minimum ETR of 15% would apply to multinational companies with consolidated revenue above €750 million with an effective date beginning in 2024. Under the GloBE rules, a company would be required to determine a combined ETR for all entities located in a jurisdiction. If the jurisdictional tax rate is less than 15%, an additional tax will be due to bring the jurisdictional effective tax rate up to 15%. While the Pillar II minimum tax requirement is not currently anticipated to have a material impact on the Company’s results of operations or financial position, management is evaluating and will continue to monitor the potential impact of the Pillar II global minimum tax proposals on our consolidated financial statements and related disclosures. On July 4, 2025, President Trump signed into law the legislation commonly referred to as the OBBBA. The OBBBA includes various provisions, such as the permanent extension of certain expiring provisions of the Tax Act of 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. Additional regulatory guidance interpreting or clarifying the OBBBA may affect our expected future effective tax rates and tax assets and liabilities which could have a material effect on Moody’s business, results of operations, cash flows and financial condition.
B. Risks Related to our Business
The Company is Exposed to Legal, Economic, Operational and Regulatory Risks of Operating in Multiple Jurisdictions.
Moody’s conducts operations in various countries outside the U.S. and derives a significant portion of its revenue from foreign sources. Changes in the economic condition of the various foreign economies in which the Company operates have an impact on the Company’s business. For example, global economic uncertainty, including in the Eurozone, affects the number of securities offerings undertaken within those particular areas. In addition to the risks addressed elsewhere in this section, operations abroad expose Moody’s to a number of legal, economic and regulatory risks such as:
– economic and geopolitical events and market conditions in countries where we have large employee populations, such as the ongoing tensions between India and Pakistan, and conflicts such as the Russia-Ukraine military conflict and the military conflicts in the Middle East, including the effect of these events and conditions on customers, customer retention and demands for our products and services;
– fluctuations in interest rates and credit spreads, and exposure to exchange rate movements between foreign currencies and USD;
– restrictions on the ability to convert local currency into USD and the costs, including the tax impact, of repatriating cash held by entities outside the U.S.;
– U.S. laws affecting overseas operations, including domestic and foreign export and import restrictions, tariffs and other trade barriers and restrictions, such as those related to the U.S.’s relationship with China and embargoes and sanctions laws with respect to Russia, including the Russia-Ukraine military conflict. For example, U.S. economic sanctions have increasingly targeted Chinese persons. In response, China issued a blocking statute that establishes a framework for limiting the effect of foreign sanctions on Chinese persons. Blocking statutes typically create conflicts of law. An entity that is subject to conflicting laws in multiple jurisdictions may need to determine a means to comply with such laws. Such conflicts could eventually affect the ability of entities to adhere to applicable laws or continue to operate in certain jurisdictions;
24 MOODY'S 2025 10-K
Table of Contents
– differing and potentially conflicting legal or civil liability, compliance and regulatory standards;
– current and future regulations relating to the imposition of mandatory rotation requirements on CRAs hired by issuers of securities;
– uncertain, evolving and new laws and regulations, including employment laws, various proposed and enacted data laws including those relating to data sharing, portability of data services, cybersecurity rules, and laws and regulations applicable to the financial services industries, such as the EU’s implementation of DORA in January 2025, and to the protection of intellectual property and to the emergence of LLMs in the context of Gen AI and other technologies, such as the EU AI Act and other AI legislation, including the effect of these laws and regulations on our customers and on the products and services that we offer;
– uncertainty regarding the future relationship and increasing tensions between the U.S. and China, which may result in further restrictions or actions by the U.S. government with respect to doing business in China and/or by the Chinese government with respect to business conducted by foreign entities in China;
– restrictive actions of governmental authorities in the jurisdictions in which we operate which may affect trade, cross-border data transfer, and foreign investment, especially during periods of heightened tension between governmental authorities in such jurisdictions, including protective measures such as export restrictions and customs duties and tariffs, government intervention favoring local competitors, data localization efforts, and restrictions on the level of foreign ownership;
– competition with CRAs that have greater familiarity, longer operating histories and/or support from local governments or other institutions;
– uncertainties in obtaining reliable data and creating products and services relevant to particular geographic markets;
– longer payment cycles and possible problems in collecting receivables;
– differing accounting principles and standards;
– difficulties in staffing and managing foreign operations;
– difficulties and delays in translating documentation into foreign languages; and
– potentially adverse tax consequences.
Additionally, Moody’s is subject to complex U.S., foreign and other local laws and regulations that are applicable to its operations abroad, such as laws and regulations governing economic and trade sanctions, tariffs, embargoes, and anti-corruption including the Foreign Corrupt Practices Act of 1977, the U.K. Bribery Act of 2010 and other similar local laws. The internal controls, policies and procedures and employee training and compliance programs to deter prohibited practices the Company has implemented may not be effective in preventing employees, contractors or agents from violating or circumventing such internal policies or from material violations of applicable laws and regulations. Compliance with international and U.S. laws and regulations that apply to the Company’s international operations increases the cost of doing business in foreign jurisdictions. Violations or allegations, even if , that the Company has such laws and regulations may result in and , sanctions, administrative remedies and restrictions on business conduct and could have a material effect on Moody’s reputation, its ability to attract and retain employees, its business, operating results and financial condition.
Moody’s Operations are Exposed to Risks from Infrastructure Malfunctions or Failures.
Moody’s ability to conduct business may be materially and adversely impacted by a disruption in the infrastructure that supports its businesses and the communities in which Moody’s has large employee populations, including: (i) New York City, the location of Moody’s headquarters, (ii) India, (iii) major cities worldwide in which Moody’s has offices, and (iv) locations that may be affected by the Russia-Ukraine military conflict and the military conflicts in the Middle East. This may include a disruption involving physical or technological infrastructure (whether or not controlled by the Company), including the Company’s electronic delivery systems, the Company's data center facilities, or the Internet, used by the Company or third parties with or through whom Moody’s conducts business. Many of the Company’s products and services are delivered electronically and the Company’s customers depend on the Company’s ability to receive, store, process, transmit and otherwise rapidly handle very substantial quantities of data and transactions on computer-based networks. Some of Moody’s operations require complex processes and the Company’s extensive controls to reduce the risk of error inherent in our operations cannot eliminate such risk completely. To the extent the Company grows through acquisitions, newly acquired businesses may not have invested in technological infrastructure and recovery to the same extent as Moody's has. As their systems are integrated into Moody's, a could be introduced, which could impact platforms across the Company. The Company’s customers also depend on the continued capacity, reliability and security of the Company’s telecommunications, data centers, networks and other electronic delivery systems, including its websites and connections to the Internet. The Company’s employees also depend on these systems for internal use. Any significant , compromise, cyber-, or a significant of operations of the Company’s infrastructure, whether due to human , capacity constraints, hardware or , weather (including climate-related risks), natural , fire, power , telecommunication , -ins, , acts of , acts of terrorism, political , pandemic, war or otherwise, may the Company’s ability to deliver its products and services. Additionally, refer to the risk factor below entitled " The Company Is to Risks Related to Cybersecurity and Protection of Confidential Information. "
MOODY'S 2025 10-K 25
Table of Contents
Moody’s efforts to secure and plan for potential disruptions of its major operating systems may not be successful. The Company also relies on third-party providers, including, increasingly, cloud-based service providers, to provide certain essential services. While the Company believes that such providers are generally reliable, the Company has limited control over the performance of such providers. To the extent any of the Company’s third-party providers ceases to provide these services in an efficient, cost-effective manner or fails to adequately expand its services to meet the Company’s needs and the needs of the Company’s customers, the Company could experience lower revenues and higher costs. Additionally, refer to the risk factor entitled “ The Company Is Dependent on the Use of Third-Party Software, Data, Hosted Solutions, Data Centers, Cloud and Network Infrastructure (Together, the “Third-Party Technology”), and Any Reduction in Third-Party Product Quality or Service Offerings, Could Have a Material Adverse Effect on the Company’s Business, Financial Condition or Results of Operation s.”
Additionally, although the Company maintains processes to prevent, detect and recover from a disruption, the Company also does not have fully redundant systems for most of its smaller office locations and low-risk systems, and its disaster recovery plan does not include restoration of non-essential services. If a disruption occurs in one of Moody’s locations or systems and its personnel in those locations or those who rely on such systems are unable to utilize other systems or communicate with or travel to other locations, such persons’ ability to service and interact with Moody’s customers will suffer. The Company cannot predict with certainty all of the adverse effects that could result from the Company’s failure, or the failure of a third party, to efficiently address and resolve these delays and interruptions. A to Moody’s operations or infrastructure may have a material effect on its reputation, business, operating results and financial condition.
The Economics of the Company’s Business is Dependent on the Volume of Debt Securities Issued in Domestic and/or Global Capital Markets. Recent Financial Market Conditions, Including Decreased Asset Levels and Flows into Investment Vehicles, Increases in Interest Rates and Other Volatility Has Had, and May Continue to Have, a Material Adverse Impact on the Volume of Debt Securities Issued.
Moody’s business is impacted by general economic conditions and volatility in world financial markets. Furthermore, issuers of debt securities have increasingly elected to issue securities without ratings or securities which are rated or evaluated by non-traditional parties such as financial advisors, rather than traditional CRAs, such as MIS. Companies are also increasingly accessing alternative sources of financing, such as loans and debt financing from non-bank lenders that do not involve a CRA-issued credit rating. A majority of Moody’s credit-rating-based revenue is transaction-based, and therefore it is especially dependent on the number and dollar volume of debt securities issued in the capital markets. Conditions that reduce issuers’ ability or willingness to issue debt securities, such as interest rate and market volatility, declining growth, currency devaluations, changes in laws (including tax-related laws) or other adverse economic trends, reduce the number and dollar-equivalent volume of debt issuances for which MIS provides ratings services and thereby adversely affect the fees Moody’s earns in its ratings business.
Current market, economic and government factors could negatively impact the volume of debt securities issued in global capital markets and the demand for credit ratings, which could materially and adversely affect the Company’s business, operating results and financial condition. These factors include increases in or uncertainty around interest rates (as well as related monetary policy by governments in the response to factors such as inflation, inflationary pressures, increases or volatility in mortgage rates, widening credit spreads, regulatory and political developments (including evolving government policies in the U.S. and abroad, the enactment of the OBBBA, and geopolitical uncertainty in various jurisdictions where Moody's operates), difficult economic conditions, growth in the use of alternative sources of credit, and defaults by significant issuers. Further declines or other changes in the markets for debt securities may materially and adversely affect the Company’s business, operating results, financial condition, cash flows and prospects.
Moody’s initiatives to reduce costs to counteract a decline in its business may not be sufficient. Cost reductions may be difficult or impossible to obtain in the short term, due in part to rent, technology, compliance, compensation and other fixed costs associated with some of the Company’s operations as well as the need to monitor outstanding ratings. Further, cost-reduction initiatives, including those under-taken to date, could make it difficult for the Company to rapidly expand operations in order to accommodate any unexpected increase in the demand for ratings. Further volatility in the financial markets, including decreases in the volumes of debt securities, increases in interest rates, and fluctuations in credit spreads, may have a material adverse effect on the business, operating results and financial condition, which the Company may not be able to successfully offset with cost reductions.
The Introduction of Competing Products, Technologies or Services by Other Companies Can Negatively Impact the Nature and Economics of the Company’s Business.
The markets for credit ratings, research, credit risk management services, business intelligence and analytical services are highly competitive and characterized by rapid technological change, including change based on our Gen AI offerings, disruption by the Gen AI offerings of others, changes in customer and investor demands, and evolving regulatory requirements, industry standards and market preferences. The ability to develop, successfully launch and maintain innovative products, technologies and services that anticipate customers’ and investors’ changing requirements and utilize emerging technological trends in a timely and cost-effective manner is a key factor in maintaining a competitive market position. Moody’s competitors include both established companies with significant financial resources, brand recognition, market experience and technological expertise, and smaller companies which may be more agile and better poised to quickly adopt new or emerging technologies or respond to customer requirements. Competitors may develop quantitative methodologies or related services, including services based on Gen AI or utilizing agentic AI workflows, for assessing credit or climate risk that customers and market participants may deem preferable, more cost-effective or more valuable than the risk assessment methods currently employed by Moody’s. Moody’s also competes indirectly consulting firms and technology and information providers, some of whom are also suppliers to Moody’s; these indirect competitors could in the future choose to compete directly with Moody’s, doing business with Moody’s or change the terms under which they do business with Moody’s in a way that could impact our business. In addition, customers or
26 MOODY'S 2025 10-K
Table of Contents
others may develop alternative, proprietary systems for assessing risk, including credit and climate risk. Such developments could affect demand for Moody’s products and services and its growth prospects. Further, the increased availability in recent years of free or relatively inexpensive information, online and through the use of Gen AI, may reduce the demand for Moody’s products and services. Moody’s growth prospects and operating margins also could be adversely affected by Moody’s failure to make necessary or optimal capital infrastructure expenditures and improvements and the inability of its information technologies to provide adequate capacity and capabilities to meet increased demands of producing quality ratings and research products at levels achieved by competitors. Any inability of Moody’s to compete successfully may have a material adverse effect on its business, operating results and financial condition.
The Company Faces Increased Pricing Pressure from Competitors and/or Customers.
There is price competition in the credit rating, research, and credit risk management segments, as well as in the segment for research, business intelligence and analytical services offered by MA. Moody’s faces competition globally from other CRAs and from investment banks and brokerage firms that offer credit opinions in research, as well as from in-house research operations. Competition for customers and market share has spurred more aggressive tactics by some competitors in areas such as pricing and services, as well as increased competition from non-NRSROs that evaluate debt risk for issuers or investors. In addition, the emergence of Gen AI and other technologies may further intensify these pressures, as the Company's competitors may use these tools to deliver solutions at lower prices, or these tools may be used in a way that significantly increases access to publicly available information. At the same time, a challenging business environment and consolidation among both competitors and customers, particularly those involved in structured finance products and commercial real estate, and other factors affecting demand may enhance the market power of competitors and reduce the Company’s customer base. Competitive pricing pressures have intensified, which may result in customers’ use of free or lower-cost information that is increasingly becoming available from alternative sources or their development of alternative, proprietary systems for assessing credit risk that replace the products currently purchased from Moody’s. While Moody’s seeks to compete primarily on the basis of the quality of its products and services, it can market share when its pricing is not sufficiently competitive. In addition, the Reform Act was designed to encourage competition among rating agencies. The formation of additional NRSROs may increase pricing and competitive pressures. Furthermore, in some of the countries in which Moody’s operates, governments may provide financial or other support to local rating agencies. Any of Moody’s to compete with respect to the pricing of its products and services will have a material impact on its business, operating results and financial condition.
The Company Is Exposed to Reputation and Credibility Concerns.
Moody’s reputation and the strength of its brand are key competitive strengths. To the extent that the credit rating business as a whole or Moody's, relative to its competitors, suffers a loss in credibility, Moody’s business will be significantly impacted. Factors that may have already affected credibility and could potentially continue to have an impact include the appearance of conflicts of interest, the performance of securities relative to the ratings assigned to such securities, the timing and nature of changes in ratings and rating methodologies, a major compliance failure, security breaches or cyber-attacks (including those impacting our third-party vendors or other service providers), accuracy and timelines of our data, analytics, AI models and outputs, negative perceptions or publicity and increased criticism by users of ratings and other Company products and services, regulators, media influencers, and legislative bodies, including as to the ratings process, or the Company’s recent sustainability strategies and our incorporation of climate and other sustainability-related risks in the Company's rating process or other product and service offerings, and , representation of our products and services by our partners or agents, of our products and services by third parties, or of Moody’s products and services in advertising materials, public relations information, social media or other external communications. Operational , including calculation or methodological , or in software, data or outputs from our AI-supported products, whether by Moody’s or a Moody’s competitor, could also the reputation of the Company or the industries in which the Company operates. Additionally, as Moody's develops its Gen AI product offerings, the Company may incur risks or in its adoption, such as falling behind market expectations for the performance and cost savings related to these offerings, as well as for Moody's perceived expertise regarding these offerings, that could lead to reputational . to reputation and credibility could have a material impact on Moody’s business, operating results and financial condition, as well as on the Company’s ability to find suitable candidates for acquisition.
Our Reputation or Business Could Be Negatively Impacted by Sustainability Matters and Our Reporting of Such Matters
Over the past several years, both in the United States and internationally, regulators, certain investors and other stakeholders have focused on various sustainability matters, including environmental impact, human capital, and human rights. We communicate our goals and initiatives related to these matters via various public disclosures available on our website, in our filings with the SEC, and elsewhere. Failure to achieve these goals or complete initiatives could result in scrutiny, criticism or claims from certain stakeholders, including governmental authorities, regulators, shareholders and customers that could negatively impact our business or reputation. Furthermore, MIS incorporates climate and other sustainability-related risks in its rating process, which also could cause reputational risk or could lead to regulatory action or litigation. Several regulatory oversight regimes for ESG ratings providers which may impose new regulatory requirements on Moody’s include the EU regulation on the transparency and integrity of ESG rating activities, adopted by the European Parliament and Council in November 2024 and published in the Official Journal of the EU in December 2024, or draft legislation published by the United Kingdom in 2024 to the FCA to supervise ESG rating providers. The Company could to , or be perceived to to , our sustainability-related initiatives, goals or commitments. Furthermore, we could be for the timing, scope or nature of these initiatives, goals or commitments, or for any changes to them. To the extent that our required and voluntary disclosures about such sustainability matters increase, we could be for the accuracy, sufficiency or completeness of such disclosures. We could be subject to or regulatory enforcement actions regarding the accuracy, sufficiency or completeness of our sustainability-related disclosures. Our pursuit of, or
MOODY'S 2025 10-K 27
Table of Contents
actual or perceived failure to achieve our sustainability-related initiatives, goals or commitments could negatively impact our reputation or otherwise materially harm our business.
In addition, there has been a recent increase in “anti-ESG” sentiment in the United States by certain activists, institutions and governmental entities criticizing ESG or climate-focused products and services. We may face scrutiny, reputational risk, lawsuits or heightened scrutiny from these parties regarding our sustainability initiatives, goals and commitments, even where such initiatives, goals and commitments are expected or required in other jurisdictions outside the United States. To the extent we continue to make disclosures about our sustainability initiatives, goals and commitments, we could be criticized for such matters, which could negatively impact our reputation or otherwise materially harm our business.
Moody’s Is Exposed to Risks Related to Loss of Skilled Employees and Related Compensation Cost Pressures.
Moody’s success depends upon its ability to recruit, retain and motivate highly skilled, experienced professionals, including financial analysts, data scientists and software engineers. Competition for skilled individuals in the financial services and technology industries is intense, and Moody’s ability to attract high-quality employees could be impaired if it is unable to offer competitive compensation and other incentives or if the regulatory environment mandates restrictions on or disclosures about individual employees that would not be necessary in competing industries. Rising expenses including wage inflation, and global labor shortages could adversely affect Moody’s ability to attract and retain high-quality employees. As greater focus has been placed on executive compensation at public companies, in the future, Moody’s may be required to alter its compensation practices in ways that adversely affect its ability to attract and retain talented employees. Competitors and other companies may seek to attract analyst talent by providing more favorable working conditions or offering significantly more attractive compensation packages than Moody’s. Moody’s also may not be to identify and hire the appropriate qualified employees in some markets outside the U.S. with the required experience or skills to perform sophisticated credit analysis. We could also to effectively respond to evolving perceptions and goals of those in our workforce or whom we might seek to hire, including with respect to flexible or remote working arrangements or other matters. Also, the emergence and adoption Gen AI technologies and towards digitalization of the global economy has required and will continue to require upskilling and additional training of Moody's employees, making retention and training increasingly important, particularly in roles where demand for experienced individuals with the right skill set may exceed supply in the labor market. There is a risk that even when the Company invests significant resources in attempting to attract, train and retain qualified personnel, it will not in its efforts, and its business could be . Further, employee expectations in areas such as ESG have been evolving. A to meet employee expectations may result in an to attract and retain talented employees.
Moody’s is highly dependent on the continued services of Robert Fauber, the Company's President and Chief Executive Officer, and other senior officers and key employees. The loss of the services of skilled personnel for any reason and Moody’s inability to replace them with suitable candidates quickly or at all, as well as any negative market perception resulting from such loss, could have a material adverse effect on Moody’s business, operating results and financial condition.
Moody’s Acquisitions, Dispositions and Other Strategic Transactions, Partnerships or Investments May Not Produce Anticipated Results Exposing the Company to Future Significant Impairment Charges Relating to Its Goodwill, Intangible Assets or Property and Equipment.
Moody’s regularly evaluates and enters into acquisitions, dispositions or other strategic transactions, partnerships and investments to strengthen its business and grow the Company. Such transactions and investments present significant challenges and risks. The Company faces intense competition for acquisition targets, especially in light of industry consolidation, which may affect Moody’s ability to complete such transactions on favorable terms or at all. Additionally, the Company makes significant investments in technology, including software for internal use, which can be expensive, time-intensive and complex to develop and implement.
The anticipated growth, synergies and other strategic objectives of completed transactions may not be fully realized, and a variety of factors may adversely affect any anticipated benefits from such transactions. Any strategic transaction involves a number of risks, including unanticipated challenges regarding integration of operations, technologies and new employees; the existence of liabilities or contingencies not disclosed to or otherwise known by the Company prior to closing a transaction; unexpected regulatory and operating difficulties and expenditures; scrutiny from competition and antitrust authorities; failure to retain key personnel of the acquired business; future developments that impair the value of purchased goodwill or intangible assets; diversion of management’s focus from other business operations; failure to implement or remediate controls, procedures and policies appropriate for a larger public company at acquired companies that prior to the acquisition such controls, procedures and policies; or arising out of acquisitions or dispositions; retaining the customers of the acquired business; coordination of product, sales, marketing and program and systems management functions; integration of employees from the acquired business into Moody’s organization; integration of the acquired business’s accounting, information technology, human resources, legal and other administrative systems with Moody’s; risks that acquired systems us to cybersecurity risks; and for foreign transactions, additional risks related to the integration of operations across different cultures and languages, and the economic, political and regulatory risks associated with specific countries. The anticipated benefits from an acquisition or other strategic transaction or investment may not be realized fully, or may take longer to realize than expected. As a result, the of acquisitions, dispositions and other strategic transactions and investments to perform as expected may have a material effect on Moody’s business, operating results and financial condition.
At December 31, 2025, Moody’s had $6,368 million of goodwill and $1,866 million of intangible assets on its balance sheet. Approximately 94% of the goodwill and intangible assets reside in the MA business and are allocated to the MA reporting unit. The remaining 6% of goodwill and intangible assets reside in MIS and primarily relate to ICRA. Failure to achieve business objectives
28 MOODY'S 2025 10-K
Table of Contents
and financial projections in any of these reporting units could result in a significant asset impairment charge, which would result in a non-cash charge to operating expenses. Goodwill and intangible assets are tested for impairment on an annual basis and also when events or changes in circumstances indicate that impairment may have occurred. Determining whether an impairment of goodwill exists can be especially difficult in periods of market or economic uncertainty and turmoil, and requires significant management estimates and judgment. In addition, the potential for goodwill impairment is increased during periods of economic uncertainty. An asset impairment charge could have a material adverse effect on Moody’s business, operating results and financial condition.
Our business could be negatively impacted by physical and transitional climate risks .
As a global company, our employees and offices are subject to physical climate risks. We have offices in locations that are vulnerable to the effects of extreme weather. In addition, continued reliable energy sources are critical for business continuity globally and those sources too can be impacted by extreme weather. The frequency and impact of extreme weather events on critical infrastructure has the potential to disrupt the Company’s ongoing operations, as well as the operations of our vendors and customers, and may result in losses and additional costs to maintain or resume operations.
We are also subject to changes in policies, technologies, or market preferences that are intended to address the effects of climate related risks, as well as ongoing legislative and regulatory uncertainties and changes regarding climate risk management and practices. These considerations could impact us and our customers and result in increased regulatory, compliance or operational costs. Furthermore, a number of states in which we operate have enacted or proposed statutes and regulations addressing climate and sustainability issues, while certain other states and governments in non-U.S. countries where we operate have enacted, or have proposed to enact, divergent and sometimes conflicting statutes, regulations or policies. Our products and services may fail to meet the needs and expectations of our customers in response to future changes in policies, technologies or market preferences, which could adversely impact our business, operating results and financial condition.
C. Technology Risks
The Company Is Exposed to Risks Related to Cybersecurity and Protection of Confidential Information.
The Company’s operations rely on the secure access to and processing, storage and transmission of confidential, sensitive, proprietary and other types of information. Such information relates to its business operations and confidential and sensitive information about its customers and employees in the Company’s computer systems and networks, and in those of its third-party vendors. The Company also often has access to MNPI and other confidential information concerning its customers, including public and private companies, sovereigns, and other third parties, and their customers, suppliers or transaction counterparties. Unauthorized disclosure of the foregoing information could cause our customers to lose faith in our ability to protect their confidential information, affecting the trading of their securities, damage their reputations or competitive positions and therefore cause customers to cease doing business with us, and potentially expose us to risk of litigation or investigations and penalties from data protection or other regulators.
The risks the Company faces range from cyber-attacks common to most industries, to more advanced threats that target the Company because of its prominence in the global marketplace, or due to its ratings of sovereign debt and corporate issuers. The Company and its third-party service providers, including our vendors, regularly experience cyber-attacks and data breaches of varying degrees. Cyber-attacks targeting Moody’s or Moody’s vendors’ technology and systems, whether from circumvention of security systems, exploitation of security vulnerabilities, denial-of-service attacks, ransomware, malware, hacking, social engineering or "phishing" attacks, deepfake attacks, computer viruses, employee or insider threats, malfeasance, supply chain attacks, physical breaches, vendor email compromise, payment fraud or other cyber-attacks some of which may be carried out by state-sponsored actors, may result in unauthorized access, exfiltration, , encryption or of sensitive data, material or in the Company’s or such vendors’ web sites or systems, applications, data processing, or of other business operations. Such events may compromise the confidentiality, , or availability of material information held by the Company (including information about Moody’s business, employees or customers), as well as other sensitive data, including personally identifiable information, the disclosure of which could lead to identity theft. The Company's MNPI concerning customers and clients could be used by authorized or parties, including for insider trading. The Company has implemented administrative, technical, and physical measures to detect, prevent and respond to activity, but such precautions may not be .
As the Company has grown and acquired businesses, IT guidelines have been developed and applied within business units or inherited from legacy organizations, which can result in internal differences in the Company's approach to IT standards until acquired entities are integrated. This creates a risk of developing unintended vulnerabilities and could result in additional costs, difficulty meeting new regulatory standards, or failing to meet customer expectations. The Company may be exposed to additional threats as it migrates its data from legacy systems to cloud-based solutions, and increased dependence on third-parties to store cloud-based data subjects the Company to further cyber risks. Further, many of our employees work remotely, which magnifies the importance of the integrity of our remote access security measures and may expose the Company to additional cyber risks.
MOODY'S 2025 10-K 29
Table of Contents
The Company has invested and continues to invest in risk management and information security measures in order to protect its systems and data, including employee training, disaster and incident response plans, and technical defenses. Although Moody’s devotes significant resources to maintain and regularly update such systems and processes, measures that Moody’s takes to avoid, detect, mitigate or recover from material incidents can be expensive, and may be insufficient, circumvented, or may become ineffective. Further, Moody’s relies on third-party technical subject matter experts to assist in managing its cyber security risk management processes. While Moody’s employs such third parties to assist in strengthening its cybersecurity defenses, there can be no guarantee that any action taken as advised by such third party will be adequate or sufficient to address the evolving threat landscape. Additionally, any measures that Moody’s takes in connection with such third parties to avoid, detect, mitigate or recover from material cyber security threats or can be expensive, and may be , , or may become .
Additionally, Gen AI has contributed to an increase in the prevalence and sophistication of cyber threats, expanding the Company's exposure to potential breaches and systems disruptions. Despite the Company’s best efforts, it is not fully insulated from, and has in the past experienced, security threats and system disruptions. As Gen AI technologies continue to advance, threat actors will develop increasingly sophisticated methods as well as technology and tools to facilitate the commission of cyber-attacks and develop new cyber-crime business models such as Ransomware-as-a-Service (RaaS) or Vulnerabilities-as-a-Service (VaaS). This may include the use of Gen AI to automate and enhance phishing schemes, advance malware, carry out more effective cyber-attacks. As Gen AI technologies advance, these cyber threats will increase in number and may also become more to detect and stop. As a result, the cost and operational consequences of implementing, maintaining and further data or system protection measures could increase significantly to increasingly intense, complex and sophisticated global cyber . Although past have not had a material effect on the Company's operating results, there can be no assurance of a similar result in the future. Because the methods used for these systems are rapidly changing, the Company or its third-party vendors, significant focus and investment, may be to anticipate and/or deploy sufficient protections such . Further, the extent of a particular security and the steps needed to may not be immediately clear, and it may take a significant amount of time before such an can be completed and full and reliable information about the , including the extent of the and how to remediate it, is known. Recent well-publicized security at other companies have led to government and regulatory of the measures taken by companies to protect cyber-attacks, and may in the future result in heightened cybersecurity compliance requirements, including additional regulatory expectations for oversight of third-party vendors and service providers. Cybersecurity , including the , disclosure or dissemination of proprietary information or sensitive or confidential data, could trigger governmental notice requirements and public disclosures, cause reputational , of customers and revenue, , regulatory actions and , sanctions or other statutory , , liability for to safeguard the Company’s customers’ information, or financial that are either not insured or not fully covered through any insurance maintained by the Company. In addition, disclosure or media reports of actual or perceived security to the Company’s systems or those of the Company’s third parties, even if no has been attempted or occurred, could lead to reputational , of customers and revenue, or increased regulatory actions oversight and .
Any of the foregoing may have a material adverse effect on Moody’s business, operating results and financial condition.
The Company Is Exposed to Risks Related to Protection of Confidential and Personal Information
To conduct its operations, the Company regularly moves data across national borders, and consequently is subject to a variety of continuously evolving and developing laws and regulations in the U.S. and abroad regarding privacy, data protection and data security, such as the Federal Trade Commission Act in the U.S., the GDPR in the EU, the GDPR in the U.K., the Cyber Security Law, the Data Security Law, and the Personal Information Protection Law in China and various other international, federal, state and local laws and regulations. The scope of the laws that may be applicable to Moody’s is often uncertain and may be conflicting, particularly with respect to foreign laws. Additionally, other countries have enacted or are enacting data localization laws that require data to stay within their borders. Further, laws such as the California Consumer Privacy Act of 2018 ("CCPA"), require among other things, covered companies to provide disclosures to consumers, and affords consumers the ability to opt-out of certain sales of personal information. A number of U.S. states have passed or enacted data privacy laws, including the California Privacy Rights Act of 2020 (“CPRA”). The effects of non-compliance with the CCPA, CPRA and other similar data privacy laws are significant, and may require the Company to modify its data processing practices and policies and to incur additional costs and expenses. All of these evolving compliance and operational requirements have required or could require in the future, changes to certain business practices, thereby increasing costs, requiring significant management time and attention, and the Company to publicity, as well as remedies that may its business, including , modified demands or orders, the cessation of existing business practices and exposure to , regulatory actions, sanctions or other statutory .
The Company Is Dependent on the Use of Third-Party Software, Data, Hosted Solutions, Data Centers, Cloud and Network Infrastructure (Together, the “Third-Party Technology”), and Any Reduction in Third-Party Product Quality or Service Offerings, Could Have a Material Adverse Effect on the Company’s Business, Financial Condition or Results of Operations.
Moody’s relies on Third-Party Technology in connection with its product development and offerings and operations. The Company depends on the ability of Third-Party Technology providers to deliver and support reliable products, provide sufficient cloud computing capacity to meet demand, enhance their current products, develop new products on a timely and cost-effective basis, provide data necessary to develop and maintain its products and respond to emerging industry standards and other technological changes. The Third-Party Technology Moody’s uses can become obsolete or restrictive, incompatible with future versions of the
30 MOODY'S 2025 10-K
Table of Contents
Company’s products, fail to be comprehensive or accurate, unavailable or fail to operate effectively, and Moody’s business could be adversely affected when the Company is unable to timely or effectively replace such Third-Party Technology. In addition, certain aspects of the Company’s business rely on a concentrated group of vendors, and a cybersecurity breach or event and/or an error caused by one or more of such vendors could have a significant impact on the Company’s operations, as well as the operations of the Company's customers and other Third-Party Technology.
The Company also monitors its use of Third-Party Technology to comply with applicable license and other contractual requirements. Despite the Company’s efforts, the Company cannot ensure that such third parties will permit Moody’s use in the future, resulting in increased Third-Party Technology acquisition costs and loss of rights. In addition, the Company’s operating costs could increase if license or other usage fees for Third-Party Technology increase or the efforts to incorporate enhancements to Third-Party Technology are substantial. Some of these third-party suppliers are also Moody’s competitors, increasing the risks noted above.
In the ordinary course, third-parties, including the Company’s vendors, are subject to various forms of cyber-attacks or security incidents. Vulnerabilities in our vendors' software, system or networks or failure of their safeguards, policies or procedures may cause material interruptions to Moody's or our vendors' websites, applications, or data processing, or could compromise the confidentiality or integrity of the impacted information. Additionally, the Company may be exposed to threats as the Company migrates its data from legacy systems to cloud-based solutions, and becomes increasingly dependent on third parties to store cloud-based data subjects.
If any of these attacks on Moody’s or its vendors are successful, or if any of these risks materialize, they could have a material adverse effect on the Company’s business, financial condition or results of operations.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY AND RISK MANAGEMENT
Governance
Management
The Company maintains a dedicated internal cybersecurity team that interacts with executive management and its business units to identify, assess, manage, and respond to cybersecurity risks and incidents relating to the Company’s information systems and operations. In addition, this internal cybersecurity team is responsible for managing detection, mitigation and remediation of cybersecurity incidents. At December 31, 2025, the Company’s internal cybersecurity team consisted of members located in various countries and time zones across the world, managed by the CISO, who reports to the CAO, who is a member of the executive leadership team. The team has members with experience in governance, risk management and compliance, threat monitoring, threat emulation, penetration testing and cyber incident management. Team members have both individual responsibilities and a team focus, covering areas such as network, endpoint device, and e-mail security engineering as well as operations and threat management, monitoring, and response.
The TCRC, chaired by the CISO, and whose members include the CTSO, CAO and CRRO, as well as other members of senior management and the legal team, is responsible for identifying cybersecurity risks and threats, recommending mitigating actions to strengthen cybersecurity resilience, and meeting risk tolerance thresholds established by senior management. The TCRC also validates that the Company has appropriate people, process and technology capabilities to identify, mitigate and report on cybersecurity risks to the executive leadership team and the Board of Directors. The TCRC meets regularly to allow members of the internal cybersecurity team to present concerns and recommendations for decisions on preventing, identifying, mitigating, and remediating risks and threats. To the extent warranted, the TCRC may additionally be convened on an ad hoc basis. The TCRC makes decisions regarding the reporting of cybersecurity concerns to the executive leadership team, who escalate issues to the Board and/or the Audit Committee as necessary. In the case of incidents that arise, the TCRC, under the direction of the Board and/or executive team when appropriate, works to involve all appropriate personnel with the aim of resolving the , performing any required remediation/reporting, and taking appropriate steps to comply with applicable laws and regulations. The process that the TCRC follows upon emergence of is documented in the Company’s Response Plan. Additionally, cybersecurity risks and the adequacy of associated mitigations are analyzed by senior as part of the enterprise risk assessments that are reported to and discussed by the Board.
The CISO has extensive cybersecurity knowledge and skills, gained from over 20 years’ experience working in regulated industries. The CISO holds a number of cybersecurity related certifications, including the Certified Information Systems Security Professional and Certified Information Security Manager. In addition to the CISO, the CTSO has been a close partner and advocate for cybersecurity at the Company, and is consulted or informed on all decisions or risks that affect the Company's technology systems and/or implicate cybersecurity . The CAO is responsible for overseeing the cybersecurity team at the executive leadership level .
Board of Directors and Audit Committee
The Board provides oversight of management’s efforts to assess and manage cybersecurity risks and respond to cybersecurity incidents and threats. In addition, the Audit Committee of the Board of Directors regularly receives reports from management regarding the Company’s financial and compliance risks, including, but not limited to, risks relating to internal controls and cybersecurity risks.
MOODY'S 2025 10-K 31
Table of Contents
The Board receives regular presentations and updates from the CISO, CRRO and CAO regarding matters related to technology and cybersecurity, including as part of enterprise risk updates that are a recurring Board agenda item. The Company has protocols, as discussed below, by which certain cybersecurity concerns, incidents and threats are escalated within the Company and, where appropriate, reported in a timely manner to the Board.
Risk Management and Strategy
The objective of the Company's comprehensive cybersecurity program is to assess, identify, and manage risks from cybersecurity incidents and threats. The Company's cybersecurity program leverages the NIST Framework and it incorporates training and awareness coupled with ongoing monitoring and assessment. The cybersecurity program is an important part of the Company’s enterprise risk management (ERM), with the head of the Company’s ERM program (the CRRO) sitting on the Cyber Committee, and sets forth a process for escalating certain incidents to the Company’s ERM group integrated into the Company’s Incident Response Plan .
As part of the cybersecurity program, the Company’s cybersecurity environment is monitored by automated tools on an ongoing basis and an internal cybersecurity team that reviews threats, alerts, and incidents. The Company’s Incident Response Plan provides governance and guidance in responding to information security incidents and is tested regularly for calibration against existing and emerging threats. The Incident Response Plan describes the process to be followed by the TCRC in connection with the oversight of the cybersecurity environment and specific events that occur from time to time. The cybersecurity program undergoes periodic internal and external reviews. In addition, the Company's Internal Controls Department performs an independent assessment of the design and operating effectiveness of the Company’s network of cybersecurity controls in accordance with the NIST Framework. The results of the assessment are periodically shared with the TCRC.
The Company’s cybersecurity environment is also subject to routine vulnerability assessment processes. Internal and external teams, including the TCRC, conduct activities such as penetration testing, red teaming, tabletop exercises and phishing drills. Results are measured and assessed for possible improvements. In addition to these ongoing efforts, the Company has a set of third-party risk management tools through which it monitors for cybersecurity risks and threats associated with its third-party service providers. The Incident Response Plan includes processes that define how the Company manages and responds to such risks or threats associated with its third-party service providers.
The Company contracts with reputable third parties to conduct annual external assessments of its cybersecurity program and its components . Government agencies and their contracted agents also conduct periodic reviews in certain jurisdictions where the Company operates. Insurance agents, customers and other market participants routinely assess the Company’s security posture relative to their own standards.
Security Policy and Requirements
The Company has an Information Security Policy and Information Security Standards, which, taken together, describe the standards and minimum requirements that are expected of all business and information security personnel to protect the Company’s information and technology assets. The policy provides a framework guided by security principles designed to address the confidentiality, integrity and availability of the Company’s information assets in the context of internal, external, deliberate and accidental threats, while supporting the Company’s information creation and sharing needs.
The Company is subject to various privacy laws in the jurisdictions where it operates including CCPA and GDPR, as well as U.S. Federal regulation by the FTC, for certain privacy-related aspects of its business, and the Sarbanes-Oxley Act of 2002. The Company is audited in connection with requirements set forth in the Sarbanes-Oxley Act of 2002, and Moody’s Analytics obtains third-party audits in connection with the ISO 27001 certification and SOC 1 and SOC 2 attestation reports, respectively, for certain products. As previously mentioned, the Company also aligns with NIST standards in connection with information security, which it uses to evaluate its cybersecurity readiness and resilience, and is required to make various filings and comply with requirements in certain jurisdictions in which it operates.
The Company’s cybersecurity program also includes an information security training and awareness program for all employees. The program includes annual certification to having read and understood the Company's IT Use Policy, continuing education on phishing awareness, regular communications about cybersecurity best practices, and participation in annual events like Cybersecurity Awareness Month. Employees are expected to complete annual cybersecurity training, and compliance is monitored. The Company uses general and targeted phishing simulations to help employees better recognize and respond to potential threats. The training program is further enhanced by cybersecurity experts speaking at educational events. The Company also offers specialized training modules on emerging cybersecurity threats for its software development teams. The Company’s IT Use Policy outlines a detailed escalation process under which employees are to immediately report any suspected cybersecurity incident.
The cybersecurity threat landscape is dynamic and volatile, and requires significant investment on the part of the Company in terms of talent recruitment and retention, as well as procuring and deploying the correct tools to address threats. Additional information on cybersecurity risks is discussed in Item 1A of Part I, “Risk Factors,” under the heading “Technology Risks,” which should be read in conjunction with the foregoing information.
32 MOODY'S 2025 10-K
Table of Contents
ITEM 2. PROPERTIES
Moody’s corporate headquarters is located at 7 World Trade Center at 250 Greenwich Street, New York, New York 10007. As of December 31, 2025, Moody’s operations were conducted from 24 U.S. offices and 99 non-U.S. office locations, all of which are leased. These properties are geographically distributed to meet operating and sales requirements worldwide. These properties are generally considered to be both suitable and adequate to meet current operating requirements.
ITEM 3. LEGAL PROCEEDINGS
For information regarding legal proceedings, see Part II, Item 8 – “Financial Statements,” Note 19 “Contingencies” in this Form 10-K.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Information in response to this Item is set forth under the captions below.
MOODY’S PURCHASES OF EQUITY SECURITIES
For the three months ended December 31, 2025:
Period
Total Number of Shares Purchased (1)
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Program
Approximate Dollar Value of Shares That May Yet Be Purchased Under The Program (2)
October 1- 31
$4,170 million
November 1- 30
$4,064 million
December 1- 31
$3,960 million
Total
(1) Includes surrender to the Company of 8,137; 3,946; and 2,546 shares of common stock in October, November, and December, respectively, to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees.
(2) As of the last day of each of the months.
On October 21, 2025, the Board authorized $4 billion in share repurchase authority. At December 31, 2025, there was approximately $4.0 billion of share repurchase authority remaining under this authorization. There is no established expiration date for the remaining authorization.
During the fourth quarter of 2025, Moody’s issued a net 48 thousand shares under employee stock-based compensation plans.
COMMON STOCK INFORMATION
The Company’s common stock trades on the New York Stock Exchange under the symbol “MCO”. The number of registered shareholders of record at January 31, 2026 was 1,277. A substantially greater number of the Company’s common stock is held by beneficial holders whose shares of record are held by banks, brokers and other financial institutions.
MOODY'S 2025 10-K 33
Table of Contents
EQUITY COMPENSATION PLAN INFORMATION
The table below sets forth, as of December 31, 2025, certain information regarding the Company’s equity compensation plans.
Plan Category
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (2)
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding Securities Reflected in Column (a))
Equity compensation plans approved by security holders
Equity compensation plans not approved by security holders
Total
(1) Includes 1,693,687 options and unvested restricted stock units outstanding under the Company's 2001 Key Employees' Stock Incentive Plan, 14,467 options and unvested restricted stock units outstanding under the Risk Management Solutions, Inc. 2015 Equity Incentive Plan and 3,659 unvested restricted stock units outstanding under the 1998 Non-Employee Directors' Stock Incentive Plan. This number also includes a maximum of 536,144 performance shares outstanding under the Company's 2001 Key Employees' Stock Incentive Plan, which is the maximum number of shares issuable pursuant to performance share awards assuming the maximum payout of the target award for performance shares granted in 2023, 2024 and 2025. Assuming payout at target, the number of shares to be issued upon the vesting of outstanding performance share awards is 283,070.
(2) Does not reflect unvested restricted stock units or performance share awards included in column (a) because these awards have no exercise price.
(3) Includes 14,855,368 shares available for issuance as under the 2001 Stock Incentive Plan, of which all may be issued as options and 9,291,985 may be issued as awards of unrestricted shares, restricted stock, restricted stock units, performance shares or any other stock-based awards under the 2001 Stock Incentive Plan, 469,868 shares available for issuance as options or restricted stock units under the Risk Management Solutions, Inc. 2015 Equity Incentive Plan, and 856,877 shares available for issuance as options, shares of restricted stock, restricted stock units or performance shares under the 1998 Directors Plan, and 2,369,471 shares available for issuance under the Company’s Employee Stock Purchase Plan.
34 MOODY'S 2025 10-K
Table of Contents
PERFORMANCE GRAPH
The following graph compares the total cumulative shareholder return of the Company to the performance of S&P 500 Composite Index and the Russell 3000 Financial Services Index.
The comparison assumes that $100.00 was invested in the Company’s common stock and in each of the foregoing indices on December 31, 2020. The comparison also assumes the reinvestment of dividends, if any. The total return for the Company's common stock was 83% during the performance period as compared with a total return during the same period of 96% and 116% for the S&P 500 Composite Index and the Russell 3000 Financial Services Index, respectively.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
Among Moody’s Corporation, the Standard & Poor’s 500 Composite Index, and
the Russell 3000 Financial Services Index
Year Ended December 31,
Moody’s Corporation
S&P 500 Composite Index
Russell 3000—Financial Services Index
The comparisons in the graph above are provided in response to disclosure requirements of the SEC and are not intended to forecast or be indicative of future performance of the Company’s common stock.
MOODY'S 2025 10-K 35
Table of Contents
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion and analysis of financial condition and results of operations should be read in conjunction with the Moody’s Corporation consolidated financial statements and notes thereto included elsewhere in this annual report on Form 10-K.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains Forward-Looking Statements. See “Forward-Looking Statements” commencing on page 64 and Item 1A. “Risk Factors” commencing on page 20 for a discussion of uncertainties, risks and other factors associated with these statements.
The Company
Moody’s is a global integrated risk assessment firm that empowers organizations to anticipate, adapt and thrive in a new era of exponential risk. Moody’s reports in two segments: MA and MIS.
MA is a global provider of: i) research and insights; ii) data and information; and iii) decision solutions, which help companies make better and faster decisions. MA leverages its proprietary data and analytics and deep industry knowledge across multiple risks such as credit, market, financial crime, supply chain, catastrophe and climate to deliver integrated risk assessment solutions that enable business leaders to identify, measure and manage the implications of interrelated risks and opportunities.
MIS publishes credit ratings and provides assessment services on a wide range of debt obligations, programs and facilities, and the entities that issue such obligations in markets worldwide, including various corporate, financial institution and governmental obligations, and structured finance securities.
Critical Accounting Estimates
Moody’s discussion and analysis of its financial condition and results of operations are based on the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires Moody’s to make estimates and judgments that affect reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the dates of the financial statements and revenue and expenses during the reporting periods. These estimates are based on historical experience and on other assumptions that are believed to be reasonable under the circumstances. On an ongoing basis, Moody’s evaluates its critical accounting estimates. Actual results may differ from these estimates under different assumptions or conditions. The following accounting estimates are considered critical because they are particularly dependent on management’s judgment about matters that are uncertain at the time the accounting estimates are made and changes to those estimates could have a material impact on the Company’s consolidated results of operations or financial condition.
Goodwill and Other Acquired Intangible Assets
At July 31st of each year, Moody’s evaluates its goodwill for impairment at the reporting unit level, defined as an operating segment (i.e., MA and MIS), or one level below an operating segment (i.e., a component of an operating segment).
The Company evaluates the recoverability of goodwill using a two-step impairment test approach at the reporting unit level. In the first step, the Company assesses various qualitative factors to determine whether the fair value of a reporting unit may be less than its carrying amount. If a determination is made based on the qualitative factors that an impairment does not exist, the Company is not required to perform further testing. If the aforementioned qualitative assessment results in the Company concluding that it is more likely than not that the fair value of a reporting unit may be less than its carrying amount, the fair value of the reporting unit will be quantitatively determined and compared to its carrying value including goodwill. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired, and the Company is not required to perform further testing. If the fair value of the reporting unit is less than the carrying value, the Company will record a goodwill impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value. The Company evaluates its reporting units on an annual basis, or more frequently if there are changes in the reporting structure of the Company due to acquisitions, realignments or if there are indicators of potential . For the reporting units where the Company is consistently to conclude that no exists using only a qualitative approach, the Company’s accounting policy is to perform the second step of the aforementioned goodwill assessment at least once every three years.
The Company last performed quantitative assessments on all reporting units at July 31, 2024. The quantitative assessments performed at July 31, 2024 resulted in fair values that significantly exceeded carrying values for all reporting units.
Determining the fair value of a reporting unit involves the use of significant estimates and assumptions, which are more fully described below. In addition, the Company also makes certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of its reporting units.
Other assets and liabilities, including applicable corporate assets, are allocated to the extent they are related to the operation of respective reporting units.
Prior to 2025, MA's reporting unit structure consisted of two reporting units comprised of businesses that offer: i) data and data-driven analytical solutions; and ii) risk-management software, workflow and CRE solutions. During the first quarter of 2025, MA reorganized its management and reporting structure, which affected the composition of the reporting units within the MA reportable segment. As a result, MA's reporting unit structure now consists of one reporting unit, which is consistent with the segment's current management structure and operating model. This reorganization did not result in a change to the Company's reportable segments. The Company performed assessments of the reporting units impacted by the reorganization immediately before and
36 MOODY'S 2025 10-K
Table of Contents
after the reorganization became effective and determined that it was not more likely than not that the fair value of any reporting unit was less than its carrying amount.
Subsequent to the aforementioned reorganization of the MA reporting unit structure, the Company now has three reporting units: two within the Company’s ratings business (one for the ICRA business and one that encompasses all of Moody’s other ratings operations) and one reporting unit within MA.
At July 31, 2025, the Company performed qualitative assessments for each reporting unit. These qualitative assessments resulted in the Company determining that it was not more likely than not that the fair value of any reporting unit was less than its carrying amount.
Methodologies and significant estimates utilized in determining the fair value of reporting units:
The following is a discussion regarding the Company’s methodology for determining the fair value of its reporting units, excluding ICRA, as of July 31, 2024 (the date of the last quantitative assessment). As ICRA is a publicly traded company in India, the Company was able to observe its fair value based on its market capitalization.
The fair value of each reporting unit, excluding ICRA, was estimated using a discounted cash flow methodology and comparable public company and precedent transaction multiples. The discounted cash flow analysis requires significant estimates, including projections of future operating results and cash flows of each reporting unit that are based on internal budgets and strategic plans, expected long-term growth rates, terminal values, weighted average cost of capital and the effects of external factors and market conditions. Changes in these estimates and assumptions could materially affect the estimated fair value of each reporting unit that could result in an impairment charge to reduce the carrying value of goodwill, which could be material to the Company’s financial position and results of operations. Moody’s allocates newly acquired goodwill to reporting units based on the reporting unit expected to benefit from the acquisition.
The sensitivity analyses on the future cash flows and WACC assumptions are described below. These key assumptions utilized in the discounted cash flow valuation methodology require significant management judgment:
– Future cash flow assumptions - The projections for future cash flows utilized in the models are derived from historical experience and assumptions regarding future growth and profitability of each reporting unit. These projections are consistent with the Company’s operating budget and strategic plan. Cash flows for the five years subsequent to the date of the quantitative goodwill impairment test were utilized in the determination of the fair value of each reporting unit. Beyond five years, a terminal value was determined using a perpetuity growth rate based on inflation and real GDP growth rates. A sensitivity analysis of the revenue growth rates was performed on all reporting units. For each reporting unit analyzed, a 10% reduction in the revenue growth rates used would still result in fair values that significantly exceeded carrying values.
– WACC - The WACC is the rate used to discount each reporting unit’s estimated future cash flows. The WACC is calculated based on the proportionate weighting of the cost of debt and equity. The cost of equity is based on a risk-free interest rate and an equity risk factor, which is derived from public companies similar to the reporting unit and which captures the perceived risks and uncertainties associated with the reporting unit’s cash flows. The cost of debt component is calculated as the weighted average cost associated with all of the Company’s outstanding borrowings as of the date of the impairment test and was immaterial to the computation of the WACC. The cost of debt and equity is weighted based on the debt to market capitalization ratio of publicly traded companies with similarities to the reporting unit being tested. The WACC for all reporting units ranged from 10.0% to 10.5% as of July 31, 2024. Differences in the WACC used between reporting units is primarily due to distinct risks and uncertainties regarding the cash flows of the different reporting units. A sensitivity analysis of the WACC was performed on all reporting units as of July 31, 2024 for each reporting unit. For all reporting units, an increase in the WACC of one percentage point would still result in fair values that significantly exceeded carrying values.
Impairment of Long-lived assets
Long-lived assets, which consist primarily of amortizable intangible assets, internal-use computer software, lease ROU Assets and property and equipment, are reviewed for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
Under the first step of the recoverability assessment, Moody's compares the estimated undiscounted future cash flows attributable to the asset or asset group to its carrying value. If the undiscounted future cash flows are greater than the carrying value, no further assessment is required. If the undiscounted future cash flows are less than the carrying value, Moody's proceeds with step two of the assessment. Under step two of this assessment, Moody's is required to determine the fair value of the asset or asset group and recognize an impairment loss if the carrying amount exceeds its fair value. In performing this assessment, Moody's must include assumptions that market participants would use in their estimates of fair value, including the estimated future cash flows and discount rate. Moody's must apply judgment in developing estimated future cash flows and in the determination of market participant assumptions.
Income Taxes
The Company is subject to income taxes in the U.S. and various foreign jurisdictions. The Company’s tax assets and liabilities are affected by the amounts charged for services provided and expenses incurred as well as other tax matters such as intercompany transactions. The Company accounts for income taxes under the asset and liability method in accordance with ASC Topic 740. Therefore, income tax expense is based on reported income before income taxes, and deferred income taxes reflect the effect of
MOODY'S 2025 10-K 37
Table of Contents
temporary differences between the amounts of assets and liabilities that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes.
The Company is subject to tax audits in the U.S. and various foreign jurisdictions. The Company regularly assesses the likely outcomes of such audits in order to determine the appropriateness of liabilities for UTPs. The Company classifies interest related to income taxes as a component of interest expense in the Company’s consolidated statements of operations and associated penalties, if any, as part of other non-operating expenses.
For UTPs, ASC Topic 740 requires a company to first determine whether it is more-likely-than-not (defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more-likely-than-not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority. As the determination of liabilities related to UTPs and associated interest and penalties requires significant estimates to be made by the Company, there can be no assurance that the Company will accurately predict the outcomes of these audits, and thus the eventual outcomes could have a material impact on the Company’s operating results or financial condition.
Contingencies
Accounting for contingencies, including those matters described in Note 19 to the consolidated financial statements, is highly subjective and requires the use of judgments and estimates in assessing their magnitude and likely outcome. In many cases, the outcomes of such matters will be determined by third parties, including governmental or judicial bodies. The provisions made in the consolidated financial statements, as well as the related disclosures, represent management’s best estimates of the current status of such matters and their potential outcome based on a review of the facts and in consultation with outside legal counsel where deemed appropriate. The Company regularly reviews contingencies and as new information becomes available may, in the future, adjust its associated liabilities.
For claims, litigation and proceedings and governmental investigations and inquiries not related to income taxes, the Company records liabilities in the consolidated financial statements when it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated and periodically adjusts these as appropriate. When the reasonable estimate of the loss is within a range of amounts, the minimum amount of the range is accrued unless some higher amount within the range is a better estimate than another amount within the range. In instances when a loss is reasonably possible but uncertainties exist related to the probable outcome and/or the amount or range of loss, management does not record a liability but discloses the contingency if material. As additional information becomes available, the Company adjusts its assessments and estimates of such matters accordingly. Moody’s also discloses material pending legal proceedings pursuant to SEC rules and other pending matters as it may determine to be appropriate.
In view of the inherent difficulty of assessing the potential outcome of legal proceedings, governmental, regulatory and legislative investigations and inquiries, claims and litigation and similar matters and contingencies, particularly when the claimants seek large or indeterminate damages or assert novel legal theories or the matters involve a large number of parties, the Company often cannot predict what the eventual outcome of the pending matters will be or the timing of any resolution of such matters. The Company also may be unable to predict the impact (if any) that any such matters may have on how its business is conducted, on its competitive position or on its financial position, results of operations or cash flows. As the process to resolve any pending matters progresses, management will continue to review the latest information available and assess its ability to predict the outcome of such matters and the effects, if any, on its operations and financial condition and to accrue for and disclose such matters as and when required. However, because such matters are inherently and developments or resolutions can occur, the ultimate outcome of such matters, including the amount of any , may differ from those estimates.
Pension and Other Retirement Benefits
The expenses, assets and liabilities that Moody’s reports for its Retirement Plans are dependent on many assumptions concerning the outcome of future events and circumstances. These significant assumptions include the following:
– future compensation increases based on the Company’s long-term actual experience and future outlook;
– long-term expected return on pension plan assets based on historical portfolio results and the expected future average annual return for each major asset class within the plan’s portfolio (which is principally comprised of equity and fixed-income investments); and
– discount rates based on current yields on high-grade corporate long-term bonds.
The discount rates used to measure the present value of the Company’s benefit obligation for its Retirement Plans as of December 31, 2025 were derived using a cash flow matching method whereby the Company compares each plan’s projected payment obligations by year with the corresponding yield on the FTSE pension discount curve. The cash flows by plan are then discounted back to present value to determine the discount rate applicable to each plan.
Moody’s major assumptions vary by plan and assumptions used are set forth in Note 13 to the consolidated financial statements. In determining these assumptions, the Company consults with third-party actuaries and other advisors as deemed appropriate. While the Company believes that the assumptions used in its calculations are reasonable, differences in actual experience or changes in assumptions could have a significant effect on the expenses, assets and liabilities related to the Company’s Retirement Plans.
38 MOODY'S 2025 10-K
Table of Contents
When actual plan experience differs from the assumptions used, actuarial gains or losses arise. Excluding differences between the expected long-term rate of return assumption and actual returns on plan assets, the Company amortizes, as a component of annual pension expense, total outstanding actuarial gains or losses over the estimated average future working lifetime of active plan participants to the extent that the gain/loss exceeds 10% of the greater of the beginning-of-year projected benefit obligation or the market-related value of plan assets. For Moody’s Retirement Plans, the total actuarial losses as of December 31, 2025 that have not been recognized in annual expense are $41 million, and Moody’s expects the net periodic expense related to the amortization of net actuarial (losses)/gains will be immaterial in 2026.
For Moody’s funded U.S. pension plan, the differences between the expected long-term rate of return assumption and actual returns could also affect the net periodic pension expense. As permitted under ASC Topic 715, the Company amortizes the impact of asset returns over a five-year period for purposes of calculating the market-related value of assets that is used in determining the expected return on assets’ component of annual expense and in calculating the total unrecognized gain or loss subject to amortization. As of December 31, 2025, the Company has an unrecognized loss of $27 million, of which $20 million will be recognized in the market-related value of assets that is used to calculate the expected return on assets component of 2026 expense.
The table below shows the estimated effect that a one percentage-point decrease in each of these assumptions will have on Moody’s 2026 income before provision for income taxes. These effects have been calculated using the Company’s current projections of 2026 expenses, assets and liabilities related to Moody’s Retirement Plans, which could change as updated data becomes available.
(dollars in millions)
Assumptions Used for 2026
Estimated Impact on 2026 Income before Provision for Income Taxes (Decrease) Increase
Weighted Average Discount Rates (1)
Weighted Average Assumed Compensation Growth Rate
Assumed Long-Term Rate of Return on Pension Assets
(1) Weighted average discount rates of 5.24% and 5.30% for pension plans and Other Retirement Plans, respectively.
Based on current projections, the Company estimates that net periodic expense related to Retirement Plans will be immaterial in 2026.
Investments in Non-consolidated Affiliates
Equity method investments are reviewed for indicators of other-than-temporary impairment on a quarterly basis. These investments are written down to fair value if there is evidence of a loss in value that is other-than-temporary.
For equity investments without a readily determinable fair value for which the Company does not have significant influence, Moody's generally elects to measure these investments at cost, less impairment, adjusted for subsequent observable price changes as of the date that an observable transaction takes place.
The Company performs an assessment on a quarterly basis to determine if there are indicators of impairment for its investments in non-consolidated affiliates. If there are indicators of impairment, the Company estimates the investment’s fair value and records an impairment if the carrying value of the investment exceeds its fair value.
In situations where estimation of fair value is required for investments in non-consolidated affiliates, the Company considers various factors, including: recent observable investee equity transactions, comparable public company/precedent transaction multiples and discounted cash flow models. The estimation of fair value for these investments may involve significant judgment.
Other Estimates
In addition to the critical accounting estimates described above, there are other accounting estimates within Moody’s consolidated financial statements. Management believes the current assumptions and other considerations used to estimate amounts reflected in Moody’s consolidated financial statements are appropriate. However, if actual experience differs from the assumptions and other considerations used in estimating amounts reflected in Moody’s consolidated financial statements, the resulting changes could have a material adverse effect on Moody’s consolidated results of operations or financial condition.
See Note 2 to the consolidated financial statements for further information on significant accounting policies that impact Moody’s.
Reportable Segments
The Company is organized into two reportable segments at December 31, 2025: MA and MIS, which are more fully described in the section entitled “The Company” above and in Note 20 to the consolidated financial statements.
MOODY'S 2025 10-K 39
Table of Contents
Results of Operations
This section of this Form 10-K generally discusses the year ended December 31, 2025 and 2024 financial results and year-to-year comparisons between these years. Discussions related to the year ended December 31, 2024 financial results and year-to-year comparisons between the years ended December 31, 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 .
The following footnotes are applicable throughout the discussion of the Company's results of operations:
(1) Refer to the section entitled "Non-GAAP Financial Measures" of this MD&A for the definition and methodology that the Company utilizes to calculate this metric.
(2) Refer to the section entitled "Key Performance Metrics" of this MD&A for the definition and methodology that the Company utilizes to calculate this metric.
40 MOODY'S 2025 10-K
Table of Contents
Year ended December 31, 2025 compared with year ended December 31, 2024
Executive Summary
The following table provides an executive summary of key operating results for the year ended December 31, 2025. Following this executive summary is a more detailed discussion of the Company’s operating results as well as a discussion of the operating results of the Company’s reportable segments.
Year Ended December 31,
Financial measure:
% Change Favorable (Unfavorable)
Insight and Key Drivers of Change Compared to Prior Year
Moody's total revenue
— reflects strong revenue growth in both segments
MA external revenue
— sustained demand for insurance and KYC offerings; and
— continued demand for credit research and ratings data feed product offerings
— Organic constant currency revenue (1) growth was 7%, and ARR (2) grew 8%
MIS external revenue
— strong investor demand and tight credit spreads supported revenue growth in all ratings LOBs
Total operating and SG&A expenses
— higher salaries and benefits reflecting an increase in headcount, including from acquisitions, and annual salary increases; and
— increases in technology infrastructure costs within the MA segment attributable to operational growth; partially offset by
— a decrease in incentive compensation which aligns with financial and operational performance relative to targets
Depreciation and amortization
— higher amortization of internally developed software, primarily related to the development of MA cloud-based solutions; and
— amortization of recently acquired intangible assets
Restructuring
— relates to the Company's restructuring programs, more fully discussed in Note 9 to the consolidated financial statements
Charges related to asset abandonment
— costs related to the Company's decision to outsource the production of certain sustainability content utilized in our product offerings, which are more fully discussed in Note 22 to the consolidated financial statements
Total non-operating (expense) income, net
— a net expense reflecting the release of an indemnification asset and tax-related interest accruals associated with the resolution of tax exposures assumed in a prior-year M&A transaction. These amounts offset the tax benefit described in the ETR section below, and accordingly, have no impact on diluted or Adjusted Diluted EPS (1) ; partially offset by
— a gain on the divestiture of the MA Learning Solutions business as more fully discussed in Note 22 to the consolidated financial statements.
Operating Margin
280BPS
— Operating margin and Adjusted Operating Margin (1) expansion reflects revenue growth coupled with disciplined cost management
Adjusted Operating Margin (1)
300BPS
ETR
240BPS
— Primarily reflects tax benefits recognized in 2025 pursuant to the lapse of a statute of limitations related to tax exposures assumed in a prior-year M&A transaction, as more fully discussed in Note 15 to the consolidated financial statements. These amounts offset the net expense described in the non-operating (expense) income, net section above, and accordingly, have no impact on diluted or Adjusted Diluted EPS (1)
Diluted EPS
— increase reflects the aforementioned revenue growth and margin expansion
Adjusted Diluted EPS (1)
MOODY'S 2025 10-K 41
Table of Contents
Moody’s Corporation
Year Ended December 31,
% Change Favorable
(Unfavorable)
Revenue:
United States
Non-U.S.:
EMEA
Asia-Pacific
Americas
Total Non-U.S.
Total
Expenses:
Operating
Depreciation and amortization
Restructuring
Charges related to asset abandonment
Total
Operating income
Adjusted Operating Income (1)
Interest expense, net
Other non-operating income, net
Gain on divestiture of business
Non-operating (expense) income, net
Net income attributable to Moody’s
Diluted weighted average shares outstanding
Diluted EPS attributable to Moody’s common shareholders
Adjusted Diluted EPS (1)
Operating margin
Adjusted Operating Margin (1)
ETR
GLOBAL REVENUE
42 MOODY'S 2025 10-K
Table of Contents
Global Revenue ⇑ $630 million
U.S. Revenue ⇑ $335 million
Non-U.S. Revenue ⇑ $295 million
Growth in global revenue reflected increases in both MA and MIS, both in the U.S. and internationally. Refer to the section entitled “Segment Results” of this MD&A for a more fulsome discussion of the Company’s segment revenue.
Operating Expense ⇑ $28 million
Compensation expenses of $1,467 million decreased $2 million, with the most notable drivers reflecting:
Non-compensation expenses of $506 million increased $30 million, with the most notable drivers reflecting:
— a decrease in incentive compensation, which aligns with actual financial and operational performance relative to targets; mostly offset by
— costs associated with recent acquisitions; and
— increases in increases in technology infrastructure costs correlated with operating growth
— growth in salaries and benefits attributable to hiring and salary increases to support continued growth in the business as well as recent acquisitions
MOODY'S 2025 10-K 43
Table of Contents
SG&A Expense ⇑ $68 million
Compensation expenses of $1,107 million increased $37 million, reflecting:
Non-compensation expenses of $696 million increased $31 million, with the most notable driver reflecting:
— growth in salaries and benefits attributable to hiring and salary increases to support continued business growth, coupled with costs from recent acquisitions; partially offset by
— costs to support business growth, including from recent acquisitions
— a decrease in incentive compensation, which aligns with actual financial and operational performance relative to targets
Depreciation and amortization
The increase is driven by the amortization of internally developed software, which is primarily related to the development of MA cloud-based solutions as well as the amortization of recently acquired intangible assets.
Restructuring
The amounts reflect charges and adjustments related to the Company's restructuring programs as more fully discussed in Note 9 to the consolidated financial statements.
Charges related to asset abandonment
Reflects costs related to the Company's decision to outsource the production of certain sustainability content utilized in our product offerings, which are more fully discussed in Note 22 to the consolidated financial statements.
Operating margin 43.4%, up 280 BPS
Adjusted Operating Margin 51.1%, up 300 BPS
Operating margin and Adjusted Operating Margin (1) expansion reflects the 9% increase in revenue, partially offset by growth of 3% in operating and SG&A expenses.
44 MOODY'S 2025 10-K
Table of Contents
Interest Expense ⇓ $24 million
Other non-operating income ⇓ $92 million
The decrease in expense is primarily due to:
The most notable driver of the decrease in income is:
— lower interest expense on borrowings of $49 million, which is primarily attributable to favorable impacts from fixed-to-floating interest rate swaps reflecting a lower interest rate environment compared to the prior year; and
— the release of an indemnification asset of $79 million associated with the lapse of a statute of limitations related to tax exposures assumed in a prior-year M&A transaction (3) , as more fully discussed in Note 15 to the consolidated financial statements.
— a $16 million reduction in tax-related interest expense primarily reflecting the lapse in the statute of limitations related to tax exposures assumed in a prior-year M&A transaction (3) , as more fully discussed in Note 15 to the consolidated financial statements; partially offset by
— lower interest income of $37 million reflecting lower cash and short-term investment balances and lower interest rates
(3) These amounts offset the tax benefit described in the ETR section below, and accordingly, have no impact on diluted or Adjusted Diluted EPS (1)
Gain on divestiture of business ⇑ 23 million
Reflects the gain on divestiture of the MA Learning Solutions business.
ETR ⇓ 240 BPS
Decrease primarily reflects tax benefits recognized in 2025 pursuant to the lapse of a statute of limitations related to tax exposures assumed in a prior-year M&A transaction (3) as more fully discussed in Note 15 to the consolidated financial statements. These tax benefits had no impact on Diluted EPS/Adjusted Diluted EPS (1) as they were offset by the net impact of the reversal of indemnification assets and tax-related interest accruals as further described above.
Diluted EPS ⇑ $2.41
Adjusted Diluted EPS ⇑ $2.47
Both diluted EPS and Adjusted Diluted EPS (1) growth is mostly attributable to the aforementioned growth in operating income/adjusted operating income (2) .
MOODY'S 2025 10-K 45
Table of Contents
Segment Results
Moody’s Analytics
The table below provides a summary of revenue and operating results, followed by further insight and commentary:
Year Ended December 31,
% Change Favorable
(Unfavorable)
Revenue:
Decision Solutions (DS)
Research and Insights (R&I)
Data and Information (D&I)
Total external revenue
Intersegment revenue
Total MA Revenue
Expenses:
Operating and SG&A (external):
Compensation expense
Non-compensation expense
Total Operating and SG&A (external)
Operating and SG&A (intersegment)
Total operating and SG&A expense
Adjusted Operating Income
Adjusted Operating Margin
Depreciation and amortization
Restructuring
Charges related to asset abandonment
MOODY'S ANALYTICS REVENUE
MA: Global Revenue ⇑ $304 million
U.S. Revenue ⇑ $158 million
Non-U.S. Revenue ⇑ $146 million
The 9% increase in global MA revenue reflects growth both in the U.S. (11%) and internationally (8%).
– Organic constant currency revenue (1) growth was 7%.
– Recurring revenue growth and organic constant currency recurring revenue (1) growth was 11% and 8%, respectively.
– ARR (2) increased 8%.
These increases are reflective of growth across all LOBs, as discussed in further detail below.
46 MOODY'S 2025 10-K
Table of Contents
DECISION SOLUTIONS REVENUE
DS: Global Revenue ⇑ $176 million
U.S. Revenue ⇑ $104 million
Non-U.S. Revenue ⇑ $72 million
Global DS revenue for the years ended December 31, 2025 and 2024 was comprised as follows :
Global DS revenue increased 12% driven by growth in both the U.S. (18%) and internationally (8%). DS recurring revenue grew 15%. Organic constant currency revenue (1) and organic constant currency recurring revenue (1) growth for DS was 8% and 11%, respectively, and ARR (2) grew 10%.
The most notable drivers of the growth in Decision Solutions are as follows:
– Insurance revenue grew 15%
– recurring revenue growth of 16% in Insurance was attributable to:
– continued demand resulting in new sales for subscription-based revenue for catastrophe modeling tools; and
– revenue from Praedicat and CAPE Analytics, which the Company acquired in the third quarter of 2024 and first quarter of 2025, respectively
– Organic constant currency revenue (1) and organic constant currency recurring revenue (1) growth was 8% and 9%, respectively
– ARR (2) grew 7%, reflecting the aforementioned continued demand for subscription-based catastrophe modeling tools
– KYC revenue grew 19%
– recurring revenue growth of 21% in KYC reflects strong demand and customer retention for KYC and compliance solutions, driven by increased customer and supplier risk data usage
– Organic constant currency revenue (1) and organic constant currency recurring revenue (1) growth for KYC was 17% and 18%, respectively
– ARR (2) grew 15%, reflecting the aforementioned strong demand for KYC solutions, however trailed organic constant currency recurring revenue (1) growth mainly due to certain isolated customer attrition events in 2025
MOODY'S 2025 10-K 47
Table of Contents
– Banking revenue grew 3%
– recurring revenue growth of 9% within Banking reflected:
– expansion of existing customer relationships into cloud-hosted subscription-based banking offerings, which enable customers' lending, risk management and finance workflows; and
– revenue from Numerated, which the Company acquired in the fourth quarter of 2024;
partially offset by:
– a decline in transaction revenue of 18%, reflecting MA's continued strategic shift to cloud-hosted subscription-based solutions
– Organic constant currency revenue (1) and organic constant currency recurring revenue (1) growth for Banking was 2% and 6%, respectively
– ARR (2) grew 8% reflecting the aforementioned expansion of existing customer relationships into cloud-hosted subscription-based offerings.
RESEARCH AND INSIGHTS REVENUE
R&I: Global Revenue ⇑ $69 million
U.S. Revenue ⇑ $33 million
Non-U.S. Revenue ⇑ $36 million
Global R&I revenue increased 7% compared to 2024 and reflects growth in both the U.S. (6%) and internationally (9%).
The revenue increase was attributable to sales growth for credit research product offerings, which contributed to ARR (2) growth of 8%.
DATA AND INFORMATION REVENUE
D&I: Global Revenue ⇑ $59 million
U.S. Revenue ⇑ $21 million
Non-U.S. Revenue ⇑ $38 million
48 MOODY'S 2025 10-K
Table of Contents
Global D&I revenue increased 7% compared to 2024 and reflects growth in both the U.S. (7%) and internationally (7%). Organic constant currency revenue (1) growth for D&I was 5%.
This growth was mainly driven by continued strong demand for ratings data feeds and company data applications, which contributed to ARR (2) growth of 7% for D&I.
MA: Operating and SG&A Expense ⇑ $116 million
Compensation expenses of $1,438 million increased $68 million, reflecting:
Non-compensation expenses of $779 million increased $48 million, reflecting:
— growth in salaries and benefits driven by recent acquisitions and annual salary increases
— increases in technology infrastructure costs correlated with operating growth; and
— costs associated with recent acquisitions
MA: Adjusted Operating Margin 33.1% ⇑ 240BPS
Adjusted Operating Margin expansion reflects the aforementioned 9% increase in global MA revenue outpacing growth of 6% in operating and SG&A expenses, which was supported by operational efficiency/disciplined cost management and cost savings from the Strategic and Operational Efficiency Restructuring Program.
Depreciation and amortization
The increase in depreciation and amortization expense primarily reflects higher amortization of internally developed software relating to the development of cloud-based solutions as well as the amortization of recently acquired intangible assets.
Restructuring
The restructuring charges relate to the Company's restructuring programs as more fully discussed in Note 9 to the consolidated financial statements.
Charges related to asset abandonment
Reflects costs related to the Company's decision to outsource the production of certain sustainability content utilized in our product offerings, which are more fully discussed in Note 22 to the consolidated financial statements.
MOODY'S 2025 10-K 49
Table of Contents
Moody’s Investors Service
The table below provides a summary of revenue and operating results, followed by further insight and commentary:
Year Ended December 31,
% Change Favorable
(Unfavorable)
Revenue:
Corporate finance (CFG)
Structured finance (SFG)
Financial institutions (FIG)
Public, project and infrastructure finance (PPIF)
Total ratings revenue
MIS Other
Total external revenue
Intersegment royalty
Total
Expenses:
Operating and SG&A (external):
Compensation expense
Non-compensation expense
Total Operating and SG&A (external)
Operating and SG&A (intersegment)
Total operating and SG&A expense
Adjusted Operating Income
Adjusted Operating Margin
Depreciation and amortization
Restructuring
The following chart presents changes in rated issuance volumes compared to 2024. To the extent that changes in rated issuance volumes had a material impact to MIS's revenue compared to the prior year, those impacts are discussed below.
50 MOODY'S 2025 10-K
Table of Contents
MOODY'S INVESTORS SERVICE REVENUE
MIS: Global Revenue ⇑ $326 million
U.S. Revenue ⇑ $177 million
Non-U.S. Revenue ⇑ $149 million
The increase in global MIS revenue reflects growth across all ratings LOBs.
CFG REVENUE
CFG: Global Revenue ⇑ $182 million
U.S. Revenue ⇑ $94 million
Non-U.S. Revenue ⇑ $88 million
Global CFG revenue for the years ended December 31, 2025 and 2024 was comprised as follows :
* Other includes: recurring monitoring fees of a rated debt obligation and/or entities that issue such obligations as well as fees from programs such as commercial paper, medium term notes, and ICRA corporate finance revenue.
MOODY'S 2025 10-K 51
Table of Contents
The increase in CFG revenue of 9% reflects increases in both the U.S (7%) and internationally (14%).
Transaction revenue increased $144 million compared to the prior year, which primarily reflected:
– higher issuance activity for investment-grade bonds, which reflected continued tight credit spreads and investor demand for higher quality credits, and includes the impact of several jumbo transactions in the technology sector; and
– higher issuance activity for high-yield bonds as issuers took advantage of favorable conditions, including tight spreads and lower interest rates, primarily to refinance debt.
Recurring revenue increased $38 million, primarily reflecting the impact of annual price increases and higher monitored credits.
SFG REVENUE
SFG: Global Revenue ⇑ $40 million
U.S. Revenue ⇑ $28 million
Non-U.S. Revenue ⇑ $12 million
Global SFG revenue for the years ended December 31, 2025 and 2024 was comprised as follows:
The increase in SFG revenue of 8% reflects growth in the U.S. (8%) and internationally (8%).
The increase in revenue reflected growth across all asset classes, supported by tight credit spreads and strong investor demand.
52 MOODY'S 2025 10-K
Table of Contents
FIG REVENUE
FIG: Global Revenue ⇑ $32 million
U.S. Revenue ⇓ $2 million
Non-U.S. Revenue ⇑ $34 million
Global FIG revenue for the years ended December 31, 2025 and 2024 was comprised as follows:
** Other includes: monitoring, commercial paper, medium term notes, and ICRA revenue.
The increase in FIG revenue of 4% reflects growth internationally (10%), partially offset by a decline in the U.S. (1%).
Revenue increased $32 million compared to the same period in the prior year, primarily due to:
– strong issuance volumes from infrequent issuers in the banking sector;
partially offset by:
– lower volumes from infrequent issuers in the insurance sector, compared to strong activity in the prior year.
MOODY'S 2025 10-K 53
Table of Contents
PPIF REVENUE
PPIF: Global Revenue ⇑ $71 million
U.S. Revenue ⇑ $57 million
Non-U.S. Revenue ⇑ $14 million
Global PPIF revenue for the years ended December 31, 2025 and 2024 was comprised as follows:
The 13% increase in PPIF revenue reflects increases in both the U.S. (16%) and internationally (7%), reflecting:
– higher issuance in U.S. Public Finance, particularly within the state, regional, and healthcare sectors; and
– higher investment‑grade issuance within U.S. Infrastructure Finance, most notably from the utilities sector, coupled with a favorable issuance mix
54 MOODY'S 2025 10-K
Table of Contents
MIS: Operating and SG&A Expense ⇓ $20 million
Compensation expenses of $1,136 million decreased $33 million, reflecting:
Non-compensation expenses of $423 million increased $13 million, primarily reflecting:
— a decrease in incentive compensation aligned with actual financial and operating performance relative to targets; partially offset by:
— an increase in costs to support operating growth
— growth in salaries and benefits reflecting higher headcount and annual salary increases
MIS: Adjusted Operating Margin of 63.6% ⇑ 350BPS
The MIS Adjusted Operating Margin expansion primarily reflected the aforementioned 9% increase in revenue, supported by the operating leverage of the business, benefits from technology investments and a disciplined approach to expense management.
Restructuring Charges
The restructuring charges relate to the Company's restructuring programs as more fully discussed in Note 9 to the consolidated financial statements.
MOODY'S 2025 10-K 55
Table of Contents
Market Risk
FX risk:
Moody’s maintains a presence in more than 40 countries. In 2025, approximately 39% of the Company’s revenue and approximately 38% of the Company's expenses were denominated in functional currencies other than the U.S. dollar, principally in the British pound and the euro. As such, the Company is exposed to market risk from changes in FX rates. As of December 31, 2025, approximately 52% of Moody’s assets were located outside the U.S., making the Company susceptible to fluctuations in FX rates. The effects of translating assets and liabilities of non-U.S. operations with non-U.S. functional currencies to the U.S. dollar are charged or credited to OCI.
The effects of revaluing assets and liabilities that are denominated in currencies other than a subsidiary’s functional currency are charged to other non-operating income, net in the Company’s consolidated statements of operations. Accordingly, the Company enters into foreign exchange forward contracts to partially mitigate the change in fair value on certain assets and liabilities denominated in currencies other than a subsidiary’s functional currency. The following table shows the impact to the fair value of the forward contracts if currencies being purchased were to weaken by 10%:
Foreign Currency Forwards (1)
Impact on fair value of contract
Sell
Buy
U.S. dollar
British pound
$64 million unfavorable impact
U.S. dollar
Euro
$10 million unfavorable impact
U.S. dollar
Singapore dollar
$4 million unfavorable impact
U.S. dollar
Canadian dollar
$4 million unfavorable impact
U.S. dollar
Japanese yen
$2 million unfavorable impact
U.S. dollar
Indian rupee
$2 million unfavorable impact
Euro
U.S. dollar
$2 million unfavorable impact
$88 million unfavorable impact
(1) Refer to Note 6 to the consolidated financial statements in Item 8 of this Form 10-K for further detail on the forward contracts.
The change in fair value of the foreign exchange forward contracts would be offset by FX revaluation gains or losses on underlying assets and liabilities denominated in currencies other than a subsidiary’s functional currency.
Derivatives and non-derivatives designated as net investment hedges:
The Company designates derivative instruments and foreign currency-denominated debt as hedges of foreign currency risk of net investments in certain foreign subsidiaries (net investment hedges) under ASC Topic 815, Derivatives and Hedging .
Cross-currency swaps
As of December 31, 2025, the Company had cross-currency swaps designated as net investment hedges to mitigate FX exposure related to a portion of the Company's net investment in certain foreign subsidiaries against changes in exchange rates. The notional values and corresponding interest rates are disclosed in Note 6 to the consolidated financial statements located in Item 8 of this Form 10-K.
• If the euro were to strengthen 10% relative to the U.S. dollar, there would be an approximate $430 million unfavorable impact to the fair value of the cross-currency swaps recognized in OCI.
• If the Hong Kong dollar were to strengthen 10% relative to the U.S. dollar, there would be an approximate $50 million unfavorable impact to the fair value of the cross-currency swaps recognized in OCI.
• If the Singapore dollar were to strengthen 10% relative to the Hong Kong dollar, there would be an approximate $30 million unfavorable impact to the fair value of the cross-currency swaps recognized in OCI.
The aforementioned unfavorable impacts recognized within OCI would be offset by favorable currency translation gains on the Company’s hedged net investments in those foreign subsidiaries.
Euro-denominated debt
As of December 31, 2025, the Company has designated €500 million of the 2015 Senior Notes and €750 million of the 2019 Senior Notes as net investment hedges to mitigate FX exposure relating to euro denominated net investments in subsidiaries. If the euro were to strengthen 10% relative to the U.S. dollar, there would be an approximate $150 million unfavorable adjustment to OCI related to these net investment hedges. This adjustment would be offset by favorable currency translation adjustments on the Company’s euro net investment in subsidiaries.
56 MOODY'S 2025 10-K
Table of Contents
Interest rate and credit risk:
Interest rate swaps designated as a fair value hedge:
The Company’s interest rate risk management objectives are to reduce the funding cost and volatility to the Company and to alter the interest rate exposure to a desired risk profile. Moody’s uses interest rate swaps as deemed necessary to assist in accomplishing these objectives. The Company is exposed to interest rate risk on its various outstanding fixed-rate debt for which the fair value of the outstanding fixed rate debt fluctuates based on changes in interest rates. The Company has entered into interest rate swaps to convert the fixed interest rate on certain of its long-term debt to a floating interest rate based on the SOFR. These swaps are adjusted to fair market value based on prevailing interest rates at the end of each reporting period and fluctuations are recorded as a reduction or addition to the carrying value of the borrowing, while net interest payments are recorded as interest expense/income in the Company’s consolidated statements of operations. A hypothetical change of 100 BPS in the SOFR-based swap rate would result in an approximate $130 million change to the fair value of the swaps, which would be offset by the change in fair value of the hedged item.
Additional information on these interest rate swaps is disclosed in Note 6 to the consolidated financial statements located in Item 8 of this Form 10-K.
Moody’s cash equivalents primarily consist of certificates of deposit within and outside the U.S. with maturities of three months or less when purchased. The Company manages its credit risk exposure by allocating its cash equivalents among various money market deposit accounts and certificates of deposit and by limiting the amount it can invest with any single issuer. Short-term investments primarily consist of certificates of deposit.
Liquidity and Capital Resources
Moody's remains committed to using its strong cash flow to create value for shareholders by both investing in the Company's employees and growing the business through targeted organic initiatives and inorganic acquisitions aligned with strategic priorities. Additional excess capital is returned to the Company’s shareholders via a combination of dividends and share repurchases.
Cash Flow
The following is a summary of the changes in the Company’s cash flows followed by a brief discussion of these changes:
Year Ended December 31,
$ Change
Favorable/ (unfavorable)
Net cash provided by operating activities
Net cash provided by (used in) investing activities
Net cash used in financing activities
Free Cash Flow (1)
(1) Free Cash Flow is a non-GAAP measure and is defined by the Company as net cash provided by operating activities minus cash paid for capital additions. Refer to the section entitled “Non-GAAP Financial Measures” of this MD&A for further information on this financial measure.
Net cash provided by operating activities
Net cash flows from operating activities increased by $63 million compared to the prior year, with the most notable drivers reflecting:
– growth in operating income of $476 million, partially offset by various changes in working capital;
partially offset by:
– $212 million in higher income tax payments in the current year; and
– approximately $100 million in higher annual incentive compensation payments in 2025 (based on full-year 2024 financial and operating results) compared to payments made in the prior year (based on full-year 2023 financial and operating results)
Net cash provided by (used in) investing activities
The $1,058 million increase in cash provided by investing activities compared to 2024 primarily reflects:
– a $463 million decrease in purchases of investments, primarily due to the purchase of certificates of deposit in the prior year; and
– a $555 million increase in sales and maturities of investments primarily due to the maturity of certificates of deposit in the first quarter of 2025.
MOODY'S 2025 10-K 57
Table of Contents
Net cash used in financing activities
The $1,617 million increase in cash used in financing activities was primarily attributed to:
– a $700 million repayment of notes payable in 2025;
– a $496 million issuance of notes in the third quarter of 2024; and
– higher cash paid for treasury share repurchases in 2025 of $315 million compared to the prior year.
Cash and cash equivalents and short-term investments
The Company’s aggregate cash and cash equivalents and short-term investments of $2.4 billion at December 31, 2025 included approximately $1.8 billion located outside of the U.S. Approximately 38% of the Company’s aggregate cash and cash equivalents and short-term investments is denominated in EUR and GBP. The Company manages both its U.S. and non-U.S. cash flow to maintain sufficient liquidity in all regions to effectively meet its operating needs.
The Company regularly evaluates which entities it will indefinitely reinvest earnings outside the U.S. The Company has provided deferred taxes for those entities whose earnings are not considered indefinitely reinvested. Accordingly, the Company continues to repatriate a portion of its non-U.S. cash in these subsidiaries and will continue to repatriate certain of its offshore cash in a manner that addresses compliance with local statutory requirements, sufficient offshore working capital and any other factors that may be relevant in certain jurisdictions. Notwithstanding the Tax Act, which generally eliminated federal income tax on future cash repatriation to the U.S., cash repatriation may be subject to state and local taxes or withholding or similar taxes.
Material Cash Requirements
The Company's material cash requirements consist of the following contractual and other obligations:
Financing Arrangements
Indebtedness
At December 31, 2025, Moody’s had $7.2 billion of outstanding debt and approximately $1 billion of additional capacity available under the Company’s CP program, which is backstopped by the $1.25 billion 2024 Credit Facility.
The repayment schedule for the Company’s borrowings outstanding at December 31, 2025 is as follows:
Future interest payments and fees associated with the Company's debt and credit facility are expected to be $3.7 billion. Of this amount, approximately $300 million is expected to be paid in each of the next two years, approximately $200 million in each of the subsequent three years, with the remaining balance expected to be paid thereafter. For additional information on the Company's outstanding debt, CP program and 2024 Credit Facility, refer to Note 16 to the consolidated financial statements.
Management may consider pursuing additional long-term financing when it is appropriate in light of cash requirements for operations, share repurchases and other strategic opportunities, which could result in higher financing costs.
Purchase Obligations
Purchase obligations generally include multi-year agreements with vendors to purchase goods or services and mainly include data center/cloud hosting fees and fees for information technology licensing and maintenance. As of December 31, 2025, these purchase obligations totaled approximately $650 million, of which approximately 60% is expected to be paid in the next twelve months and another approximate 40% expected to be paid over the next two subsequent years, with the remainder to be paid thereafter.
58 MOODY'S 2025 10-K
Table of Contents
Leases
The Company has remaining payments related to its operating leases of $1,031 million at December 31, 2025, primarily related to real estate leases, of which $100 million in payments are expected over the next twelve months. For more information on the expected cash flows relating to the Company's operating leases, refer to Note 18 to the consolidated financial statements.
Pension and Other Retirement Plan Obligations
The Company does not anticipate making significant contributions to its funded pension plan in the next twelve months. This plan is overfunded at December 31, 2025, and accordingly holds sufficient investments to fund future benefit obligations. Payments for the Company's unfunded plans are not expected to be material in either the short or long-term. For further information on the Company's pension and other retirement plan obligations, refer to Note 13 to the consolidated financial statements.
Dividends and share repurchases
On February 10, 2026, the Board approved the declaration of a quarterly dividend of $1.03 per share for Moody’s common stock, payable March 13, 2026 to shareholders of record at the close of business on March 2, 2026. The continued payment of dividends at this rate, or at all, is subject to the discretion of the Board.
On October 21, 2025 the Board authorized $4.0 billion in share repurchase authority. At December 31, 2025, the Company had approximately $4.0 billion of remaining authority under this authorization. There is no established expiration date for the remaining authorization.
Restructuring
As more fully discussed in Note 9 to the consolidated financial statements, the Company is currently in the process of executing the Strategic and Operational Efficiency Restructuring Program. Future cash outlays associated with this program are expected to be between $110 million and $130 million, which are expected to be paid out through 2027.
Sources of Funding to Satisfy Material Cash Requirements
The Company believes that it has the financial resources needed to meet its cash requirements and expects to have positive operating cash flow in 2026. Cash requirements for periods beyond the next twelve months will depend, among other things, on the Company’s profitability and its ability to manage working capital requirements. The Company may also borrow from various sources as described above.
Non-GAAP Financial Measures:
In addition to its reported results, Moody’s has included in this MD&A certain adjusted results that the SEC defines as “Non-GAAP financial measures.” Management believes that such adjusted financial measures, when read in conjunction with the Company’s reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company’s performance, facilitate comparisons to competitors’ operating results and can provide greater transparency to investors of supplemental information used by management in its financial and operational decision-making. These adjusted measures, as defined by the Company, are not necessarily comparable to similarly defined measures of other companies. Furthermore, these adjusted measures should not be viewed in isolation or used as a substitute for other GAAP measures in assessing the operating performance or cash flows of the Company. Below are brief descriptions of the Company’s adjusted financial measures accompanied by a reconciliation of the adjusted measure to its most directly comparable GAAP measure.
Adjusted Operating Income and Adjusted Operating Margin:
The Company presents Adjusted Operating Income and Adjusted Operating Margin because management deems these metrics to be useful measures to provide additional perspective on Moody's operating performance. Adjusted Operating Income excludes the impact of: i) depreciation and amortization; ii) restructuring charges/adjustments; and iii) charges related to asset abandonment. Depreciation and amortization are excluded because companies utilize productive assets of different useful lives and use different methods of acquiring and depreciating productive assets. Restructuring charges/adjustments and charges related to asset abandonment, which the Company believes are not reflective of its ongoing operating cost structure, are excluded as the frequency and magnitude of these charges may vary widely across periods and companies. Refer to Notes 9 and 22 to the consolidated financial statements for further information regarding the nature of the Company’s restructuring programs and asset abandonment, respectively.
Management believes that the exclusion of the aforementioned items, as detailed in the reconciliation below, allows for an additional perspective on the Company’s operating results from period to period and across companies. The Company defines Adjusted Operating Margin as Adjusted Operating Income divided by revenue.
MOODY'S 2025 10-K 59
Table of Contents
Year ended December 31,
Operating income
Adjustments:
Depreciation and amortization
Restructuring
Charges related to asset abandonment
Adjusted Operating Income
Operating margin
Adjusted Operating Margin
Adjusted Net Income and Adjusted Diluted EPS attributable to Moody’s common shareholders:
The Company presents Adjusted Net Income and Adjusted Diluted EPS because management deems these metrics to be useful measures to provide additional perspective on Moody's operating performance. Adjusted Net Income and Adjusted Diluted EPS exclude the impact of: i) amortization of acquired intangible assets; ii) restructuring charges/adjustments; iii) charges related to asset abandonment; iv) gains on previously held equity method investments and v) gain on the divestiture of a business and certain direct costs to transact the divestiture.
The Company excludes the impact of amortization of acquired intangible assets as companies utilize intangible assets with different estimated useful lives and have different methods of acquiring and amortizing intangible assets. These intangible assets were recorded as part of acquisition accounting and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. Furthermore, the timing and magnitude of business combination transactions are not predictable and the purchase price allocated to amortizable intangible assets and the related amortization period are unique to each acquisition and can vary significantly from period to period. The impact of restructuring charges/adjustments and charges related to asset abandonment, which the Company believes are not reflective of its ongoing operating cost structure are also excluded. Similarly, gains on previously held equity method investments and the gain pursuant to the divestiture of the MA Learning Solutions business along with certain related direct costs to transact the divestiture are excluded due to their infrequent nature and because they do not reflect the Company's ongoing operations. The frequency and magnitude of all of the aforementioned items may vary widely across periods and companies.
The Company excludes the aforementioned items to provide additional perspective when comparing net income and diluted EPS from period to period and across companies as the frequency and magnitude of similar transactions may vary widely across periods.
Year ended December 31,
Amounts in millions
Net income attributable to Moody’s common shareholders
Pre-tax Acquisition-Related Intangible Amortization Expenses
Tax on Acquisition-Related Intangible Amortization Expenses
Net Acquisition-Related Intangible Amortization Expenses
Pre-tax restructuring
Tax on restructuring
Net restructuring
Pre-tax charges related to asset abandonment
Tax on charges related to asset abandonment
Net charges related to asset abandonment
Pre-tax gain on previously held equity method investments
Tax on gain on previously held equity method investments
Net gain on previously held equity method investments
Pre-tax gain on divestiture of business
Pre-tax costs to transact divestiture
Tax on gain on divestiture and related costs
Net gain on divestiture of business and related costs
Adjusted Net Income
60 MOODY'S 2025 10-K
Table of Contents
Year ended December 31,
Diluted earnings per share attributable to Moody’s common shareholders
Pre-tax Acquisition-Related Intangible Amortization Expenses
Tax on Acquisition-Related Intangible Amortization Expenses
Net Acquisition-Related Intangible Amortization Expenses
Pre-tax restructuring
Tax on restructuring
Net restructuring
Pre-tax charges related to asset abandonment
Tax on charges related to asset abandonment
Net charges related to asset abandonment
Pre-tax gain on previously held equity method investments
Tax on gain on previously held equity method investments
Net gain on previously held equity method investments
Pre-tax gain on divestiture of business
Pre-tax costs to transact divestiture
Tax on gain on divestiture and related costs
Net gain on divestiture of business and related costs
Adjusted Diluted EPS
Note: the tax impacts in the table above were calculated using tax rates in effect in the jurisdiction for which the item relates.
Free Cash Flow:
The Company defines Free Cash Flow as net cash provided by operating activities minus cash paid for capital additions. Management believes that Free Cash Flow is a useful metric in assessing the Company’s cash flows to service debt, pay dividends and to fund acquisitions and share repurchases. Management deems capital expenditures essential to the Company’s product and service innovations and maintenance of Moody’s operational capabilities. Accordingly, capital expenditures are deemed to be a recurring use of Moody’s cash flow. Below is a reconciliation of the Company’s net cash flows from operating activities to Free Cash Flow:
Year ended December 31,
Net cash provided by operating activities
Capital additions
Free Cash Flow
Net cash provided by (used in) investing activities
Net cash used in financing activities
Organic Constant Currency Revenue Growth:
The Company presents organic constant currency revenue growth as its non-GAAP measure of revenue growth. Management deems this measure to be useful in providing additional perspective in assessing the Company's revenue growth excluding both the inorganic revenue impacts from certain acquisition and divestiture activity completed within the last 12 months and the impacts of changes in foreign exchange rates. The Company calculates the dollar impact of foreign exchange as the difference between the translation of its current period non-USD functional currency results using comparative prior period weighted average foreign exchange translation rates and current year reported results.
Below is a reconciliation of the Company's reported revenue and growth rates to its organic constant currency revenue growth measures:
MOODY'S 2025 10-K 61
Table of Contents
Year ended December 31,
Amounts in millions
Change
Growth
MCO revenue
FX impact
Inorganic revenue from acquisitions
Divestitures
Organic constant currency MCO revenue
MA revenue
FX impact
Inorganic revenue from acquisitions
Divestitures
Organic constant currency MA revenue
Decision Solutions revenue
FX impact
Inorganic revenue from acquisitions
Divestitures
Organic constant currency Decision Solutions revenue
Banking revenue
FX impact
Inorganic revenue from acquisitions
Divestitures
Organic constant currency Banking revenue
Insurance revenue
FX impact
Inorganic revenue from acquisitions
Organic constant currency Insurance revenue
KYC revenue
FX impact
Organic constant currency KYC revenue
Data and Information revenue
FX impact
Constant currency Data and Information revenue
MA recurring revenue
FX impact
Inorganic revenue from acquisitions
Organic constant currency MA recurring revenue
Decision Solutions recurring revenue
FX impact
Inorganic revenue from acquisitions
Organic constant currency Decision Solutions recurring revenue
62 MOODY'S 2025 10-K
Table of Contents
Year ended December 31,
Change
Growth
Banking recurring revenue
FX impact
Inorganic revenue from acquisitions
Organic constant currency Banking recurring revenue
Insurance recurring revenue
FX impact
Inorganic revenue from acquisitions
Organic constant currency Insurance recurring revenue
KYC recurring revenue
FX impact
Organic constant currency KYC recurring revenue
Key Performance Metrics:
The Company presents ARR on an organic constant currency basis for its MA business as a supplemental performance metric to provide additional insight on the estimated value of MA's recurring revenue contracts at a given point in time. The Company uses ARR to manage and monitor performance of its MA operating segment and believes that this metric is a key indicator of the trajectory of MA's recurring revenue base.
The Company calculates ARR by taking the total recurring contract value for each active renewable contract as of the reporting date, divided by the number of days in the contract and multiplied by 365 days to create an annualized value. The Company defines renewable contracts as subscriptions, term licenses, maintenance and renewable services. ARR excludes transaction sales including one-time training, services and perpetual licenses. In order to compare period-over-period ARR excluding the effects of foreign currency translation, the Company bases the calculation on currency rates utilized in its current year operating budget and holds these FX rates constant for the duration of all current and prior periods being reported. Additionally, to provide better perspective in assessing growth, the Company excludes from ARR contracts associated with acquisitions and divestitures completed within the last 12 months.
The Company’s definition of ARR may differ from definitions utilized by other companies reporting similarly named measures, and this metric should be viewed in addition to, and not as a substitute for, financial measures presented in accordance with GAAP.
Amounts in millions
December 31, 2025
December 31, 2024
Change
Growth
MA ARR
Banking
Insurance
KYC
Total Decision Solutions
Research and Insights
Data and Information
Total MA ARR
Recently Issued Accounting Pronouncements
Refer to Note 2 to the consolidated financial statements located in Part II, Item 8 on this Form 10-K for a discussion on the impact to the Company relating to recently issued accounting pronouncements.
Contingencies
Legal proceedings in which the Company is involved also may impact Moody’s liquidity or operating results. No assurance can be provided as to the outcome of such proceedings. In addition, litigation inherently involves significant costs. For information regarding legal proceedings, see Part II, Item 8 – “Financial Statements,” Note 19 “Contingencies” in this Form 10-K.
MOODY'S 2025 10-K 63
Table of Contents
Forward-Looking Statements
Certain statements contained in this annual report on Form 10-K are forward-looking statements and are based on future expectations, plans and prospects for the Company's business and operations that involve a number of risks and uncertainties. Such statements involve estimates, projections, goals, forecasts, assumptions and uncertainties that could cause actual results or outcomes to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements. Those statements appear at various places throughout this annual report on Form 10-K, including in the sections entitled “Contingencies” under Item 7, “MD&A”, commencing on page 36 of this annual report on Form 10-K, under “Legal Proceedings” in Part I, Item 3, of this Form 10-K, and elsewhere in the context of statements containing the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “will,” “predict,” “potential,” “continue,” “strategy,” “aspire,” “target,” “forecast,” “project,” “estimate,” “should,” “could,” “may,” and similar expressions or words and variations thereof relating to the Company’s views on future events, trends and contingencies or otherwise convey the prospective nature of events or outcomes generally indicative of forward-looking statements. Stockholders and investors are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements and other information in this document are made as of the date of this annual report on Form 10-K, and the Company undertakes no obligation (nor does it intend) to publicly supplement, update or revise such statements on a going-forward basis, whether as a result of subsequent developments, changed expectations or otherwise, except as required by applicable law or regulation. In connection with the “safe harbor” provisions of the Private Securities Reform Act of 1995, the Company is identifying certain factors that could cause actual results to differ, perhaps materially, from those indicated by these forward-looking statements.
Those factors, risks and uncertainties include, but are not limited to:
– the uncertain effects of U.S. and foreign government actions affecting international trade and economic policy, including changes and volatility in tariffs and trade policies and retaliatory actions, on credit markets, customers, and customer retention, and demand for our products and services;
– the impact of general economic conditions (including significant government debt and deficit levels and inflation or recessions and related monetary policy actions by governments in response thereto) on worldwide credit markets and on economic activity, including on the level of merger and acquisition activity, and their effects on the volume of debt and other securities issued in domestic and/or global capital markets;
– the uncertain effects of U.S. and foreign government initiatives and monetary policy to respond to the current economic climate, including instability of financial institutions, credit quality concerns, and other potential impacts of volatility in financial and credit markets;
– the impacts of geopolitical events and actions, such as the Russia-Ukraine military conflict, military conflicts in the Middle East, and tensions between India and Pakistan, and of tensions and disputes in political and global relations, on volatility in world financial markets, on general economic conditions and GDP in the U.S. and worldwide and on the Company's own operations and personnel;
– other matters that could affect the volume of debt and other securities issued in domestic and/or global capital markets, including regulation, increased utilization of technologies that have the potential to intensify competition and accelerate disruption and disintermediation in the financial services industry, as well as the number of issuances of securities without ratings or securities which are rated or evaluated by non-traditional parties;
– the level of merger and acquisition activity in the U.S. and abroad;
– the impact of MIS’s withdrawal of its credit ratings on countries or entities within countries and of Moody’s no longer conducting commercial operations in countries where political instability warrants such actions;
– concerns in the marketplace affecting our credibility or otherwise affecting market perceptions of the integrity or utility of independent credit agency ratings;
– the introduction or development of competing and/or emerging technologies and products;
– pricing pressure from competitors and/or customers;
– the level of success of new product development and global expansion;
– the impact of regulation as an NRSRO, the potential for new U.S., state and local legislation and regulations;
– the potential for increased competition and regulation in the jurisdictions in which we operate, including the EU;
– exposure to litigation related to our rating opinions, as well as any other litigation, government and regulatory proceedings, investigations and inquiries to which Moody’s may be subject from time to time;
– provisions in U.S. legislation modifying the pleading standards and EU regulations modifying the liability standards, applicable to CRAs in a manner adverse to CRAs;
– provisions of EU regulations imposing additional procedural and substantive requirements on the pricing of services and the expansion of supervisory remit to include non-EU ratings used for regulatory purposes;
– uncertainty regarding the future relationship between the U.S. and China;
64 MOODY'S 2025 10-K
Table of Contents
– the possible loss of key employees and the impact of the global labor environment;
– failures or malfunctions of our operations and infrastructure;
– any vulnerabilities to cyber threats or other cybersecurity concerns;
– the timing and effectiveness of our restructuring programs;
– currency and foreign exchange volatility;
– the outcome of any review by tax authorities of Moody’s global tax planning initiatives;
– exposure to potential criminal sanctions or civil remedies if Moody’s fails to comply with foreign and U.S. laws and regulations that are applicable in the jurisdictions in which Moody’s operates, including data protection and privacy laws, sanctions laws, anti-corruption laws, and local laws prohibiting corrupt payments to government officials;
– the impact of mergers, acquisitions, or other business combinations and the ability of Moody’s to successfully integrate acquired businesses;
– the level of future cash flows;
– the levels of capital investments; and
– a decline in the demand for credit risk management tools by financial institutions, corporate or government entities.
These factors, risks and uncertainties as well as other risks and uncertainties that could cause Moody’s actual results to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements are described in greater detail under “Risk Factors” in Part I, Item 1A of this annual report on Form 10-K, and in other filings made by the Company from time to time with the SEC or in materials incorporated herein or therein. Stockholders and investors are cautioned that the occurrence of any of these factors, risks and uncertainties may cause the Company’s actual results to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements, which could have a material and adverse effect on the Company’s business, results of operations and financial condition. New factors may emerge from time to time, and it is not possible for the Company to predict new factors, nor can the Company assess the potential effect of any new factors on it. Forward-looking and other statements in this document may also address our corporate responsibility progress, plans, and goals (including sustainability and environmental matters), and the inclusion of such statements is not an indication that these contents are necessarily material to investors or required to be disclosed in the Company’s filings with the Securities and Exchange Commission. In addition, historical, current, and forward-looking sustainability-related statements may be based on standards for measuring that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
