Core Points - MSCI Inc. has announced the commencement of an offering of senior unsecured notes in a registered public offering [1] - The proposed offering is subject to market and other conditions [1] - The net proceeds from the offering will be used for general corporate purposes, which may include potential repurchases [1]

Core Insights - MSCI Inc. will announce the results of the November 2025 Index Review for various MSCI Equity Indexes on November 5, 2025, with changes effective as of the close of November 24, 2025 [1][2] Index Review Announcement - The announcement will include results for MSCI Global Standard, MSCI Global Small Cap, MSCI Micro Cap, MSCI Global Value and Growth, MSCI Frontier Markets, MSCI US Equity Indexes, MSCI US REIT Index, and MSCI China indexes [1] - The list of additions and deletions from the indexes will be posted on MSCI's website shortly after the announcement [2] Client Access and Information - Detailed rebalancing information will be available to clients immediately after the summary announcement appears on Bloomberg and Reuters [3] - Clients can access the subscriber section of each index for more detailed information [3] Company Overview - MSCI Inc. provides critical decision support tools and services for the global investment community, helping clients understand risks and opportunities [4] - The company serves a diverse range of clients, including asset managers, hedge funds, banks, and corporates [4]

Core Insights - MSCI's third-quarter 2025 adjusted earnings were $4.47 per share, exceeding the Zacks Consensus Estimate by 2.29% and reflecting a year-over-year increase of 15.8% [1][10] - Revenues for MSCI rose 9.5% year over year to $793.4 million, although this fell short of the consensus estimate by 0.72% [1][10] - The growth in revenues was primarily driven by strong performance in recurring subscription revenues and asset-based fees, with organic operating revenues growing by 9% year over year [1][2] Revenue Breakdown - Recurring subscriptions amounted to $579.1 million, up 7.9% year over year, contributing 73% to total revenues [2] - Asset-based fees reached $197.5 million, a 17.1% increase year over year, contributing 24.9% to total revenues [2] - Non-recurring revenues decreased to $16.9 million, down 13.4% year over year, contributing 2.1% to total revenues [2] Segment Performance - Index revenues were $451.2 million, increasing 11.4% year over year, with recurring subscriptions and asset-based fees rising by 8.3% and 17.1%, respectively [4] - Analytics operating revenues were $182.2 million, a 5.7% year-over-year increase, with recurring subscriptions up 6% [5] - The Sustainability and Climate segment reported revenues of $90.1 million, a 7.7% increase year over year, with recurring subscriptions rising 8.8% [6] - Private Assets operating revenues were $70 million, up 9.7% year over year, with organic growth of 8.3% [7] Operating Metrics - Adjusted EBITDA increased by 9.7% year over year to $494.4 million, with an adjusted EBITDA margin of 62.3% [8][10] - Total operating expenses rose 6.9% year over year to $345.7 million, driven by higher compensation costs due to a 2.2% increase in headcount [9][10] - Operating income improved by 11.6% year over year to $447.7 million, with an operating margin expansion of 100 basis points to 56.4% [11][10] Balance Sheet and Cash Flow - As of September 30, 2025, total cash and cash equivalents were $400.1 million, up from $347.3 million as of June 30, 2025 [12] - Total debt increased to $5.6 billion from $4.5 billion, with a debt-to-adjusted EBITDA ratio of 3 times [12] - Free cash flow was reported at $423.3 million, a 7.4% increase year over year [13] Guidance - For 2025, MSCI expects total operating expenses to be between $1.415 billion and $1.445 billion, with adjusted EBITDA expenses anticipated between $1.230 billion and $1.250 billion [14]

Revenue Growth - Total operating revenues increased by 9.5% for the three months ended September 30, 2025, reaching $793.4 million, compared to $724.7 million in the same period of 2024[110]. - For the nine months ended September 30, 2025, total operating revenues increased by 9.4%, amounting to $2.31 billion, up from $2.11 billion in the prior year[111]. - Recurring subscriptions for Index products grew by 8.3% to $242.6 million in Q3 2025, while asset-based fees increased by 17.1% to $197.5 million[110]. - The Sustainability and Climate segment reported a 7.7% increase in total revenues for Q3 2025, totaling $90.1 million compared to $83.6 million in Q3 2024[110]. - Operating revenues from Analytics products increased by 5.7% in Q3 2025, reaching $182.2 million, up from $172.4 million in the same quarter of 2024[110]. - The Index segment's operating revenues increased by 11.4% to $451,160 thousand for the three months ended September 30, 2025, driven by growth in asset-based fees and recurring subscriptions[144]. - Recurring subscription revenues rose by 8.3% to $242,569 thousand for the three months ended September 30, 2025, primarily due to growth from market cap-weighted Index products[145]. - Asset-based fees increased by 17.1% to $197,515 thousand for the three months ended September 30, 2025, mainly driven by revenues from ETFs linked to MSCI equity indexes[146]. - The average value of AUM in ETFs linked to MSCI equity indexes increased by $431.4 billion, or 25.7%, for the three months ended September 30, 2025[150]. - For the nine months ended September 30, 2025, operating revenues reached $2,311,931 thousand, up from $2,112,619 thousand in 2024, marking a growth of 9.4%[140]. Expenses and Costs - Total operating expenses increased by 6.9% for the three months ended September 30, 2025, and by 7.3% for the nine months ended September 30, 2025[115]. - Cost of revenues rose by 5.0% and 6.3% for the three and nine months ended September 30, 2025, primarily due to increased compensation and benefits costs[116]. - Selling and marketing expenses increased by 12.8% for the three months and 10.4% for the nine months ended September 30, 2025, driven by higher headcount and severance costs[118]. - Research and development expenses grew by 16.1% for the three months and 13.6% for the nine months ended September 30, 2025, influenced by increased headcount and IT costs[120]. - General and administrative expenses increased by 0.6% for the three months but decreased by 0.5% for the nine months ended September 30, 2025, due to lower transaction costs[122]. - Compensation and benefits costs rose by 10.5% for the three months and 8.7% for the nine months ended September 30, 2025, mainly from increased headcount[124]. Profitability - Net income increased by 15.8% for the three months and 14.2% for the nine months ended September 30, 2025, reaching $325,386 thousand and $917,636 thousand respectively[134]. - Adjusted EBITDA for the three months ended September 30, 2025, was $494,430 thousand, compared to $450,702 thousand in 2024, reflecting an increase of 9.7%[140]. - The operating margin for the three months ended September 30, 2025, was 56.4%, up from 55.4% in the same period of 2024[140]. - The consolidated Adjusted EBITDA for the nine months ended September 30, 2025, was $1,394,450 thousand, compared to $1,264,230 thousand in 2024, reflecting an increase of 10.3%[140]. Client and Market Information - The largest client, BlackRock, accounted for 10.6% of consolidated operating revenues, with 96.4% of these revenues derived from fees based on assets in BlackRock's ETFs and non-ETF products[100]. - The company served approximately 6,900 clients across more than 95 countries as of September 30, 2025[94]. - Total recurring subscriptions across all segments increased by 7.9% in Q3 2025, totaling $579.1 million compared to $536.6 million in Q3 2024[110]. Cash Flow and Financial Position - As of September 30, 2025, the company had $5.5 billion in Senior Notes outstanding and $0.1 billion in borrowings under the Revolving Credit Facility[189]. - The company declared a quarterly cash dividend of $1.80 per share for the three months ending September 30, 2025[197]. - The average price paid per share for stock repurchases in the nine months ended September 30, 2025, was $559.44, totaling 2,703 shares repurchased[196]. - The company authorized a new stock repurchase program for up to $3.0 billion worth of shares, replacing the previous program[196]. - As of September 30, 2025, the company's cash and cash equivalents totaled $400,089,000, a decrease from $409,351,000 as of December 31, 2024[198]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $1,087,316,000, compared to $1,070,994,000 for the same period in 2024, reflecting an increase in cash collections from customers[202]. - The company reported net cash used in investing activities of $(93,614,000) for the nine months ended September 30, 2025, an improvement from $(107,522,000) in 2024[202]. - Net cash used in financing activities increased to $(1,012,200,000) for the nine months ended September 30, 2025, compared to $(926,125,000) in 2024, primarily due to higher share repurchases and dividend payments[202]. Foreign Currency and Risk Management - Approximately 17% of the company's revenues for the nine months ended September 30, 2025, were subject to foreign currency exchange rate risk, consistent with the previous year[208]. - The company recognized total foreign currency exchange losses of $6.4 million for the nine months ended September 30, 2025, compared to $5.0 million in 2024[211]. - Revenues from asset-based fees accounted for 24% of operating revenues for the nine months ended September 30, 2025, up from 23% in 2024[209]. Employee Information - The company had 6,253 employees as of September 30, 2025, reflecting a 2.2% increase from the previous year, with 70% located in emerging market centers[123].

Financial Data and Key Metrics Changes - MSCI reported organic revenue growth of 9%, adjusted EBITDA growth of 10%, and adjusted earnings per share growth of over 15% in Q3 2025 [6] - The company repurchased $1.25 billion worth of shares in Q3, bringing year-to-date repurchases to over $1.5 billion, with an additional $3 billion authorized for future repurchases [6] Business Line Data and Key Metrics Changes - The Index franchise achieved recurrent net new subscription sales growth of 27%, with 43% growth in the Americas [7] - Total AUM in investment products linked to MSCI indices reached $6.4 trillion, including $2.2 trillion in ETFs and $4.2 trillion in non-ETFs [7] - Analytics saw recurrent net new sales growth of 16%, driven by strong adoption of risk tools and equity models by hedge funds [8] - Subscription run rate growth was 9% for asset owners, 11% for wealth managers, and 9% for banks and broker dealers [10][12][14] Market Data and Key Metrics Changes - MSCI's ETF run rate hit a record high of nearly $800 million, driven by record AUM levels in both ETF and non-ETF products linked to MSCI indices [6][7] - Equity ETFs linked to MSCI indexes captured $46 billion of inflows during Q3 [17] Company Strategy and Development Direction - MSCI is focusing on expanding its presence in newer client segments while deepening penetration in established segments [9] - The company is leveraging AI to enhance existing products and develop new capabilities, aiming to unlock significant value for clients and shareholders [9][41] - MSCI is committed to becoming a leading provider of transparency tools in the private credit space, with a focus on innovation and product development [25][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term opportunities and growth potential from recent innovations and investments [16] - The company is optimistic about the recovery of the active asset management industry and aims to help clients develop new products [31][60] - Management acknowledged challenges in the sustainability and climate segment but emphasized ongoing efforts to monetize climate-related indices [53][55] Other Important Information - MSCI launched a Private Credit Factor Model and a new global taxonomy for private assets, enhancing transparency and standardization in private markets [8][9] - The retention rate for sustainability and climate solutions was nearly 94%, reflecting the essential nature of MSCI's tools [20] Q&A Session Summary Question: Strategy around private credit - Management is bullish on private credit, emphasizing the need for transparency tools and credit assessments to attract institutional capital [24][25][28] Question: New products and marketing efforts - The strategy includes helping the active asset management industry create new products, particularly in the active ETF space [31][60] Question: AI opportunities and cost savings - AI is expected to dramatically increase margins by enabling faster product development and reducing operational costs [63][64] Question: Pipeline and sales cycle for Q4 - The overall environment is stable, with a healthy product pipeline supporting strong client engagement [46][48] Question: Non-ETF and fixed income business performance - Non-ETF revenue growth can be affected by lumpiness, while fixed income AUM is around $90 billion, with ongoing focus on innovation [52][55] Question: Active ETFs economics and competitive advantages - Active ETFs are seen as a new revenue opportunity, with significant growth potential without cannibalizing existing business [58][60] Question: Competitive moat against new entrants - MSCI's proprietary data and trusted reputation create significant barriers to entry for potential competitors [72][75] Question: Performance of net new sales in EMEA - There was a decline in net new sales in EMEA, with ongoing product innovation aimed at addressing client needs [78]

Financial Data and Key Metrics Changes - MSCI reported organic revenue growth of 9%, adjusted EBITDA growth of 10%, and adjusted earnings per share growth of over 15% in Q3 2025 [6] - The company repurchased $1.25 billion worth of shares in Q3, bringing year-to-date repurchases to over $1.5 billion, with an additional $3 billion authorized for future repurchases [6] Business Line Data and Key Metrics Changes - The index franchise achieved recurrent net new subscription sales growth of 27%, with 43% growth in the Americas [7] - Total AUM in investment products linked to MSCI indices reached $6.4 trillion, including $2.2 trillion in ETFs and $4.2 trillion in non-ETFs [7] - Analytics delivered recurrent net new sales growth of 16%, driven by strong adoption of risk tools and equity models by hedge funds [8] - Subscription run rate growth for wealth managers was nearly 11%, while asset owners posted 9% growth [12][14] - Subscription run rate growth for banks and broker dealers was 9%, with a record level of recurring sales [15] Market Data and Key Metrics Changes - Equity ETFs linked to MSCI indexes captured $46 billion of inflows during Q3 2025 [17] - The index retention rate remained durable at nearly 96% [17] - Sustainability and climate solutions saw an 8% subscription run rate growth, with climate solutions growing at 16% [19] Company Strategy and Development Direction - MSCI is focusing on expanding its presence in private credit and enhancing its client segmentation strategy [10][25] - The company is leveraging AI to enhance existing products and develop new capabilities, aiming for significant value creation for shareholders [9][41] - MSCI is committed to helping the active asset management industry recover by creating new products, particularly in the active ETF space [31][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term opportunities and the ability to drive growth from recent innovations [16] - The company is seeing solid momentum in delivering new products and capabilities, translating into tangible results [21] - Management acknowledged challenges in the sustainability and climate segment but emphasized the potential for monetization through indices [54] Other Important Information - MSCI launched a private credit factor model and a new global taxonomy for private assets, enhancing transparency and standardization [8][9] - The company is actively developing datasets and products for market makers and broker dealers to fuel liquidity [33] Q&A Session Summary Question: Strategy around private credit - Management is bullish on private credit, emphasizing the need for transparency tools for private credit funds to attract investors [24][25] Question: New products and marketing efforts - The strategy includes creating new products for the active asset management industry and expanding into other client segments [31][35] Question: AI opportunities and cost savings - AI is expected to dramatically increase margins by creating new products and reducing operational costs [63][64] Question: Sales momentum in asset management - The sales momentum is attributed to upselling additional content and services to existing clients, particularly in index [68] Question: Competitive moat against new entrants - MSCI's proprietary data and trusted brand create significant barriers to entry for competitors [72][75] Question: Performance of net new sales in EMEA - There was a decline in net new sales in EMEA, with management noting the need for further product innovation in that region [78]

Financial Data and Key Metrics Changes - MSCI reported organic revenue growth of 9%, adjusted EBITDA growth of 10%, and adjusted earnings per share growth of over 15% in Q3 2025 [4] - The company repurchased $1.25 billion worth of shares in Q3, bringing year-to-date repurchases to over $1.5 billion, with an additional $3 billion authorized for future buybacks [4] Business Line Data and Key Metrics Changes - The index franchise achieved recurrent net new subscription sales growth of 27%, with 43% growth in the Americas, and total AUM in investment products linked to MSCI indices reached $6.4 trillion [5] - Analytics delivered recurrent net new sales growth of 16%, driven by strong adoption of risk tools and equity models by multi-strategy hedge funds [6] - Subscription run rate growth for wealth managers was nearly 11%, while asset owners posted 9% growth, and banks and broker dealers achieved 9% growth [11][12][13] Market Data and Key Metrics Changes - Equity ETFs linked to MSCI indices captured $46 billion of inflows during Q3, with strong demand for MSCI Developed Markets ex U.S. and MSCI Emerging Markets Indexes [16] - The retention rate for sustainability and climate solutions was almost 94%, reflecting the essential nature of these tools [18] Company Strategy and Development Direction - MSCI is focusing on expanding its presence in private credit and enhancing its client segmentation strategy to deepen penetration in existing segments while targeting new client segments [9][10] - The company is leveraging AI to enhance product offerings and operational efficiency, with a goal to significantly increase the scale of datasets and improve margins [39][61] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term opportunities and the ability to drive growth from recent innovations and investments, particularly in private assets and wealth management [15][34] - The company noted a stable market environment with consistent dynamics, particularly in the Americas, and highlighted a healthy product pipeline supporting strong client engagement [45][46] Other Important Information - MSCI launched a private credit factor model and a new global taxonomy for private assets, aiming to provide consistent standards and improve transparency in private markets [7][8] - The company is seeing strong momentum in new product development, particularly in AI-driven solutions, which are expected to enhance revenue growth and operational efficiency [40][42] Q&A Session Summary Question: Strategy around private credit - Management is bullish on private credit, emphasizing the need for tools to demonstrate creditworthiness and market risk, and highlighted innovations in credit assessments and private credit indices [22][23][24][26] Question: New products and marketing efforts - The strategy includes helping the active asset management industry create new products, particularly in active ETFs, and expanding into new client segments [28][29][30][32][34] Question: AI opportunities and cost savings - AI is expected to dramatically increase margins by enabling faster product creation and reducing operational costs, with significant investments in AI projects [37][61] Question: Pipeline and sales cycle for Q4 - The overall environment is stable, with a healthy product pipeline and strong client engagement, particularly in index and analytics [44][45] Question: Non-ETF and fixed income business performance - Non-ETF revenue growth can be affected by lumpiness, while fixed income AUM is around $90 billion, with ongoing focus on driving adoption and innovation [49][51] Question: Active ETFs economics and competitive advantages - Active ETFs are seen as a growing category, providing new revenue opportunities without cannibalizing existing business [56][58] Question: Competitive moat against new entrants - MSCI's proprietary data, trusted models, and established client relationships create significant barriers to entry for potential competitors [70][74][76] Question: Performance in EMEA region - There has been sluggishness in EMEA, but product development efforts are global, and innovations are expected to drive growth in the region [78]

Third Quarter 2025 Earnings Presentation October 28, 2025 © 2025 MSCI Inc. All rights reserved. Introduction → Forward-Looking Statements 3 → Foreign currency exchange rate fluctuations reflect the difference between the current period results as reported compared to the current period results recalculated using the foreign currency exchange rates in effect for the comparable prior period. While operating revenues adjusted for the impact of foreign currency fluctuations includes asset-based fees that have b ...

Core Insights - MSCI reported quarterly earnings of $4.47 per share, exceeding the Zacks Consensus Estimate of $4.37 per share, and up from $3.86 per share a year ago [1] - The earnings surprise was +2.29%, and the company has surpassed consensus EPS estimates in all four of the last quarters [2] - Revenues for the quarter were $793.43 million, slightly missing the Zacks Consensus Estimate by 0.72%, but up from $724.71 million year-over-year [3] Earnings Performance - The company has consistently outperformed EPS estimates, achieving a surprise of +0.24% in the previous quarter [2] - The current consensus EPS estimate for the upcoming quarter is $4.58, with expected revenues of $822.99 million, and for the current fiscal year, the EPS estimate is $17.10 on revenues of $3.14 billion [8] Stock Performance and Outlook - MSCI shares have declined approximately 8.9% year-to-date, contrasting with the S&P 500's gain of 16.9% [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7] Industry Context - The Financial - Investment Management industry, to which MSCI belongs, is currently ranked in the top 21% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9] - Another company in the same industry, GCM Grosvenor Inc., is expected to report earnings soon, with a projected EPS of $0.17, reflecting a year-over-year increase of +6.3% [10]

Group 1 - MSCI reported a profit increase in Q3, driven by higher client spending and demand for index products and analytical services [1] - The company's profit for the quarter ending September 30 was $325.4 million, or $4.25 per share, compared to $280.9 million, or $3.57 per share, in the same period last year [1] - The index segment's recurring subscription revenue grew by 8.3% year-over-year to $242.6 million, supported by the growth of market-cap weighted index products [1] Group 2 - MSCI's total revenue increased by nearly 9.5% to $793.4 million, aided by rising fee income based on asset size [1] - The company's operating expenses rose by 7% year-over-year, primarily due to increased investments in employee compensation and information technology [2] - The current U.S. market is experiencing upward volatility, with lower interest rates and optimism in the AI sector alleviating investor concerns despite worries about the labor market and tariff issues [2]