Moody’s Corporation demonstrated strong margin expansion in 2024, driven by revenue growth, cost efficiency measures, and disciplined execution. The company’s operating margin increased from 36.1% in 2023 to 40.6% in 2024, reflecting higher revenue across both Moody’s Investors Service (MIS) and Moody’s Analytics (MA). Adjusted operating margin saw an even stronger improvement, rising from 43.9% to 48.1% during the same period, highlighting operational efficiency and strategic investments in high-margin business segments.
The margin expansion was primarily fueled by higher transactional revenue at MIS, where strong issuance activity in corporate finance and structured finance led to a 33% revenue increase. This growth, coupled with cost discipline and operational leverage, pushed the MIS adjusted operating margin from 54.5% in 2023 to 60.1% in 2024. The high-margin nature of credit rating services, particularly in leveraged finance and CLO markets, significantly contributed to this improvement.
In Moody’s Analytics, margin performance was also positive, though at a more moderate pace. The adjusted operating margin increased from 30.5% to 30.7%, reflecting a balance between growth investments and cost efficiency. Recurring revenue, which accounts for 95% of MA’s total revenue, continued to grow, supporting stable and predictable margins.
Looking ahead to 2025, Moody’s projects an operating margin of approximately 43% and an adjusted operating margin of around 50%, maintaining the trajectory of improvement. Operating expenses are expected to rise in the low-to-mid-single-digit range, driven by continued investments in technology, data analytics, and regulatory compliance solutions. However, cost efficiency measures and revenue growth are expected to offset these increases, allowing Moody’s to sustain high profitability levels.
Overall, Moody’s strong margin performance in 2024 and its positive 2025 outlook underscore the company’s ability to drive profitability through strategic revenue expansion and disciplined cost management. With favorable market conditions, continued demand for credit ratings, and an expanding analytics business, Moody’s remains well-positioned to maintain and further enhance its margins in the coming year.
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