Moody's Corporation stock research
FY2025 Q1
Moody's (MCO) Gross Margin — Quarter Ended Mar 31, 2025
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue decreased sequentially but increased year over year. Gross margin improved relative to both periods, reflecting a favorable relationship between revenue growth and cost changes.
Gross margin takeaway
Quarter ended Mar 31, 2025 · FY2025 Q1
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue decreased sequentially but increased year over year. Gross margin improved relative to both periods, reflecting a favorable relationship between revenue growth and cost changes.
- The sequential decrease in cost of revenue alongside higher revenue was the strongest observable driver of gross margin improvement, as it directly widened the spread between revenue and cost. Year over year, revenue growth outpaced cost growth, further supporting margin expansion.
- Compared to the immediately preceding quarter, gross margin was higher, driven by higher revenue and lower cost of revenue. Compared to the same quarter one year earlier, gross margin was also higher, with revenue increasing more than cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
74.5%
Gross profit
$1.4B
Revenue
$1.9B
Cost of revenue
$491.0M
Quarter-over-quarter change
+4.2 pts
Year-over-year change
+0.6 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Jun 30, 2024 | $1.8B | $1.3B | $469.0M | 74.2% |
| Sep 30, 2024 | $1.8B | $1.3B | $512.0M | 71.8% |
| Dec 31, 2024 | $1.7B | $1.2B | $497.0M | 70.3% |
| Mar 31, 2025 | $1.9B | $1.4B | $491.0M | 74.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2024
+4.2 pts
Year-over-year change
Mar 31, 2024
+0.6 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The sequential decrease in cost of revenue alongside higher revenue was the strongest observable driver of gross margin improvement, as it directly widened the spread between revenue and cost. Year over year, revenue growth outpaced cost growth, further supporting margin expansion.
Compared to the immediately preceding quarter, gross margin was higher, driven by higher revenue and lower cost of revenue. Compared to the same quarter one year earlier, gross margin was also higher, with revenue increasing more than cost of revenue.
Monitor cost of revenue trends, as it decreased sequentially but increased year over year, indicating potential variability in cost management.