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Call sheet · Q4'25

Moody's (MCO)

Q4'25 earnings call · held February 18, 2026 · compared with the Q3'25 call · management-credibility review
11/12
Disclosure score
1 medium, 7 low flags
Financial quality
Bottom line
The sleeper story everyone's missing: AI monetization at MCO is already happening, not theoretical. 97% retention rates and 67% pricing uplifts on AI solutions prove this isn't pilot project revenue. The obvious headline is record $7.7B revenue, but the real story is they're successfully transitioning from software vendor to AI context layer provider. The binding constraint? MA's core ARR growth stuck at 8% suggests AI impact is still confined to largest customers - mass market adoption hasn't hit yet. Rob's most revealing quote: 'This is not experimental usage. AI adoption is driving greater consumption of our proprietary data.' My view changes if ARR growth accelerates above 8% next quarter or if they quantify actual AI revenue dollars rather than just customer behavior metrics.

The 30-second version

  • THE SLEEPER STORY: AI revenue is actually happening, not just experimental
  • Record $7.7B revenue up 9% BUT guidance implies deceleration
  • Portfolio pruning accelerates: Two MA divestitures signal focus shift

What changed this quarter

MetricQ3'25Q4'25Change
Total Revenue$5.7B (Q3), +9% YoY$7.7B (FY), +9% YoYMaintained 9% growth but Q4 guide implies deceleration
Adjusted Operating Margin52.8% (Q3)51.1% (FY), up 300bps YoYStrong leverage despite heavy AI investment
Adjusted Diluted EPS$3.92 (Q3), +22% YoY$14.94 (FY), +20% YoY20% CAGR since 2022, 70% growth over 3 years
MIS Revenue Growth12% (Q3)9% (FY), high single-digit 2026 guideModerating despite record issuance environment
MA ARR Growth8% (Q3)8% (Q4), high single-digit 2026 guideFlat despite AI momentum narrative
MA Recurring Revenue %93% (Q3)97% (Q4)+400bps improvement in revenue quality
MA Adjusted Operating Margin34.3% (Q3)35.9% (Q4), up 190bpsSolid execution discipline while investing
Private Credit Revenue Growth60%+ (Q3)60% (FY)Sustained momentum in fastest-growing vertical
KYC ARR Growth16% (Q3)15% (FY)Still mid-to-high teens but slight deceleration
CreditLens GrowthLow-to-mid teens (Q3)Approaching 20% (FY)Accelerating AI-enabled lending flagship

Accountability tracked

7 new promises made4 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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This is a free preview. The full write-up and promise ledger are published to subscribers on Substack.
Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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