Financial Trends — 8/10
High-quality financial profile in the upper half of the rubric. Adjusted operating margin is expanding
well beyond the 100bps bar (every recent quarter +100 to +510bps YoY; FY adj OM up ~300bps to 51.1%,
~860bps off the 2022 trough), the diluted share count declines every year (~4% cumulative), and free
cash flow is positive and growing to a record $2,575M. Moody's reports no gross-profit line (services
model), so operating margin is the relevant profitability metric. The one element holding the score
below a 10 is revenue trajectory: rather than cleanly accelerating, quarterly YoY has settled into a
stable high-single-to-low-teens band (latest +8.1%). No penalty modifiers apply.
Weight: 25%
Adj Op Margin
53.2%
+150 bps YoY | Expanding
FCF
$2.58B
Record FY2025 | Growing
Share Count
Declining
~4% over 5yr | No dilution
Quarterly Revenue Trajectory ($M)
Revenue stable in a high-single-to-low-teens band.
The 2024 prints (+21-23%) lapped the depressed 2023 debt-issuance trough; once that comp
distortion is excluded, growth normalized to a steady high-single-to-low-teens range and the
latest +8.1% matches management's high-single-digit FY2026 guide. Neither cleanly accelerating
nor decelerating — a stable engine, not a re-acceleration story.
Segment Revenue ($M, quarterly)
A two-speed engine. MA (recurring, subscription) is the
steady compounder — every quarter +7.5% to +10.7% YoY, ARR +8% at Q1'26. MIS (ratings) is
cyclical and issuance-driven, swinging from +7.9% to -0.5% to +16.9% to +8.3% with no durable
trend. The recurring engine's trajectory is cleaner than the blended headline suggests.
Adjusted Operating Margin & Adjusted EPS
Adjusted operating margin is clearly expanding.
Every one of the last five quarters posted positive YoY bps (+100 to +510), and FY adjusted
operating margin rose from 48.1% (2024) to 51.1% (2025). Adjusted EPS grew double digits in the
most recent quarter (+13.1% YoY to $4.33). This is the textbook 10-level element of the profile.
Annual Financial Summary (FY ends December)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Total Revenue ($M) | $6,218 | $5,468 | $5,916 | $7,088 | $7,718 |
| Rev YoY | — | -12.1% | +8.2% | +19.8% | +8.9% |
| Adj EPS | $12.29 | $8.57 | $9.90 | $12.47 | $14.94 |
| Adj EPS YoY | — | -30.3% | +15.5% | +26.0% | +19.8% |
| GAAP Op Margin | 45.7% | 34.4% | 36.1% | 40.6% | 43.4% |
| Adj Op Margin | 49.9% | 42.6% | 43.9% | 48.1% | 51.1% |
| Free Cash Flow ($M) | $1,866 | $1,191 | $1,880 | $2,521 | $2,575 |
| Diluted Shares (M) | 187.9 | 184.7 | 184.0 | 182.7 | 179.9 |
Key trends
- Revenue re-based off the 2022 rate-shock trough: $6.22B (2021) dipped to $5.47B (2022) as debt issuance collapsed, then recovered to a record $7.72B (2025); underlying run-rate is high-single-digit
- Adj EPS compounding ~20% since 2022: from $8.57 (2022 trough) to $14.94 (2025), +19.8% in the latest year
- Adjusted operating margin +~860bps off the trough: 42.6% (2022) to 51.1% (2025), and +300bps in the last year alone
- Share count declining every year: 187.9M (2021) to 179.9M (2025), ~4% cumulative, buyback raised to ~$2.5B for FY26; total debt flat-to-down (~$7.0-7.4B), not growing faster than revenue
Segment Revenue ($M, Annual)
MIS (~53% of revenue) is the higher-margin ratings franchise (~65% segment adjusted operating
margin); MA (~47%) is the steady recurring compounder with ARR +8% YoY. Both segments grew ~9%
in FY2025.
Free Cash Flow ($M)
FCF positive and growing to a record $2,575M. The annual
line barely grew in FY2025 (+2.1%) off the strong FY2024 recovery, but the most recent two quarters
re-accelerated hard — Q4'25 FCF +29.5% and Q1'26 +25.6% YoY (Q1'26 FCF $844M). Quarterly FCF is
lumpy on working-capital timing; the trough-to-recent trajectory is clearly upward. Composite FCF
gate: a clear YES.
Penalty modifier check
| Modifier | Detail | Penalty |
|---|---|---|
| Negative FCF | FCF positive and growing every year to a record $2,575M | None |
| Share dilution >10% YoY | Shares are declining (~4% cumulative over 5yr) — a positive, not a penalty | None |
| Revenue up, op income down | Adj operating income grew every year; +22% YoY in Q1'26 | None |
| Debt > revenue growth 3+ qtrs | Total debt flat-to-down (~$7.0-7.4B); not growing faster than revenue | None |
No penalty modifiers apply. All four penalty checks
come back clean — FCF positive and growing, share count declining, operating income growing, and
debt not outrunning revenue.
Score Rationale
Score of 8/10 reflects a high-quality financial profile in the upper half of the rubric. No penalty modifiers applied.
Supports the score:
- Adjusted operating margin expanding well beyond the 100bps bar (every recent quarter +100 to +510bps YoY; FY adj OM 51.1%, +300bps YoY, ~860bps off the 2022 trough)
- Share count declining ~4% over five years, buyback raised to ~$2.5B
- Free cash flow positive and growing to a record $2,575M; last two quarters +29.5% and +25.6% YoY — composite FCF gate is a clear YES
- Adjusted EPS compounding ~20% since 2022, +13.1% YoY in Q1'26
- MA (recurring) a steady ~8-10% compounder every quarter; MIS margins ~65%
What holds it below a 10:
- Revenue trajectory is stable rather than cleanly accelerating — quarterly YoY has settled into a high-single-to-low-teens band (latest +8.1%)
- Headline strength is split between a steady recurring MA engine and a cyclical, issuance-dependent MIS line that swings quarter to quarter
Net: margins expanding, share count declining, FCF growing — but revenue stable, not accelerating → 8/10.
Data sourced from Daloopa (company_id: 490). Fiscal year ends December 31. All financials in USD. No gross-profit line (services model); operating margin is the profitability metric.