Moody's (MCO) Financials

Moody's (NYSE: MCO) has demonstrated consistent financial growth and operational strength over the past four years, based on an analysis of their quarterly financial statements ending Q2 2025. Here are the key takeaways that retail investors should note:

• Steady Growth in Operating Revenue: Moody’s operating revenue increased from approximately $1.47 billion in Q1 2023 to about $1.90 billion by Q2 2025, reflecting a solid upward trend in top-line performance.
• Robust Net Income Performance: The company has seen net income grow from $501 million in Q1 2023 to $579 million in Q2 2025, indicating improving profitability and operational efficiency.
• Improved Operating Cash Flow: Net cash from continuing operating activities was $543 million in Q2 2025, supported by stable net income and effective working capital management despite some fluctuations in operating assets and liability changes.
• Strong Liquidity Position: Cash and equivalents increased from $2.12 billion in Q1 2023 to $2.17 billion in Q2 2025, maintaining a strong liquidity position to support ongoing operations and strategic investments.
• Investment in Growth: Moody’s consistently invested substantial amounts in property, plant, and equipment, averaging between $54 million to $93 million quarterly, as well as acquisitions and investments to bolster their business capabilities.
• Share Repurchase Activity: The company has engaged in sizable common stock repurchases ($284 million in Q2 2025 alone), which can be positive for shareholders by reducing share count but also means cash outflows that need monitoring.
• Dividend Stability: Moody’s pays consistent quarterly dividends of about $0.77 to $0.94 per share over the last few years, providing a steady income stream to shareholders.
• Debt Levels Slightly Increasing: Total liabilities grew modestly from about $11 billion in early 2023 to nearly $11.4 billion by mid-2025, driven primarily by long-term debt around $6.9 to $7 billion; manageable but important to watch for leverage impact.
• Rising Operating Expenses: Total operating expenses have risen in line with revenue, e.g., Q2 2025 expenses were about $590 million, up from approximately $488 million in Q1 2023, which could pressure margins if revenues do not outpace expenses.
• Cash Flow from Financing Activities Negative: Moody's has seen large cash outflows from financing activities in recent quarters (e.g., -$482 million in Q2 2025), driven by debt repayments, share repurchases, and dividend payments, which reduces cash reserves available for other uses.

Summary: Moody's shows solid revenue and net income growth coupled with strong cash from operations and liquidity. The company continues investing in growth and returning capital to shareholders through dividends and buybacks. However, investors should be mindful of rising operating expenses and significant cash outflows from financing activities, alongside stable but elevated debt levels. Overall, Moody's financial health appears strong, with positive momentum heading into 2025.