Moody’s Delivers in Q2 — But Familiar Questions Linger

Moody’s Corporation posted a strong financial performance in the second quarter of 2025, continuing its momentum amid a complex and often volatile macroeconomic landscape. The company reported a 4% increase in revenue compared to the same quarter last year, with adjusted operating margin rising by 130 basis points to 50.9%. Adjusted diluted EPS also grew by 9%, reaching $3.56.

Moody’s Investors Service (MIS), the firm’s core credit rating division, achieved its second-highest Q2 revenue on record. With over $1 billion in revenue for the second consecutive quarter, the segment posted an adjusted operating margin of 64.2%, up from 63.2% in Q2 2024. MIS revenue growth exceeded issuance volume by approximately 12%, reflecting strength particularly in private credit-related transactions.

Guidance for the full year 2025 remains optimistic. The company expects mid-single-digit percentage revenue growth and raised the lower end of its adjusted EPS guidance to $13.50–$14.00. Free cash flow for the year is forecasted between $2.3 and $2.5 billion, and Moody’s aims to repurchase at least $1.3 billion in shares.

Yet, the positive headline figures also invite scrutiny. As in previous years, Moody’s quarterly reporting raises recurring questions about its dual role as both a provider of ratings and an entity exposed to cyclical financial market activity. One issue concerns the disconnect between revenue growth and actual bond issuance volumes: while global issuance declined or remained flat in several categories, Moody’s still managed to grow MIS revenues, prompting questions about fee structures, market power, and potential overreliance on private credit—a segment with limited transparency and rising regulatory interest.

Additionally, the continued use of adjusted (non-GAAP) figures, such as “adjusted operating margin” and “adjusted EPS”, while standard in earnings presentations, can obscure the real costs of restructuring and intangible amortization. For instance, Moody’s reported $27 million in restructuring charges and $1 million in asset abandonment costs in Q2 2025, which were excluded from its adjusted income metrics.

Critics may also note that revenue growth is increasingly tied to recurring data subscriptions and analytics, which—while more stable—depend on continued demand from financial institutions undergoing their own transformation and consolidation. There’s also heightened geopolitical and regulatory risk, particularly in global jurisdictions where Moody’s operates both rating and data businesses, which could impact its ability to maintain growth trajectories.

Still, the company maintains a strong balance sheet, solid free cash flow, and a disciplined capital allocation strategy that includes both share repurchases and dividend payouts. With ongoing investments in AI-driven productivity, climate risk analytics, and workflow integration, Moody’s appears well-positioned—but not without challenges.

In a financial world growing ever more complex, Moody’s strong Q2 performance underscores its resilience, while reminding investors and regulators alike that even the most profitable rating agencies operate in a delicate balance of influence, accountability, and market dependency.