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Moody's sells opinions about how risky it is to lend money to companies and governments, plus software that helps banks check who they're doing business with.
Moody's does two big jobs, and they're pretty different. The first and most famous is credit ratings. When a company, city, or country wants to borrow money, lenders want to know how likely it is to pay them back. Moody's analysts study the borrower and give it a grade — like a report card — ranging from super safe to very risky. Big investors worldwide use those grades to decide where to put their money, and Moody's gets paid for the opinion. This is most of the business, split roughly between ratings and its fast-growing analytics arm. The second job is selling data and software, mostly to banks. That includes tools that help banks screen customers for money laundering and check whether they're doing business with sanctioned people or companies.
Think of it as a referee at a giant lending game. Nobody forces players to listen to the ref, but the whole stadium does anyway, because the ref's calls are consistent, respected, and quoted everywhere. That trust is the whole business. It's why the company is so profitable and why new competitors struggle to break in — a rating only matters if everyone agrees it matters. A smaller but important piece is Moody's Analytics, which sells software and data subscriptions. That part grows steadily, brings in recurring revenue, and is less tied to whether markets are hot or cold. The ratings side swings more with the economy: when dealmaking and borrowing are busy, revenue jumps; when markets freeze, it dips.
Moody's is based in New York and traces back to 1909, when John Moody started publishing manuals of railroad statistics — the ratings business grew out of that. For decades it was part of Dun & Bradstreet before spinning off on its own in 2000. Today it's one of the two dominant ratings agencies alongside S&P Global. Its spare cash mostly goes back to shareholders through dividends and share buybacks. The big risks are regulatory: after the 2008 financial crisis, watchdogs scrutinized whether rating agencies were too cozy with the banks paying them, and new rules could always change how the game is played.
Saved answer · last researched 16 Oct 2026