Question-and-Answer SessionAppreciate it, as always. So Andy, maybe let's just start off with your 8-K update this morning on the interest expense guidance and beyond, obviously, just the technicalities of these numbers. Just help us with the framework on the debt raise that you did, why now and what the use of proceeds there are?Andrew WiechmannChief Financial Officer Sure, sure. So I know many slowed down a bit in August. I know many of you don't, and we definitely don't at MSCI. But we did a $1.25 billio ...

MSCI FY Conference Summary Company Overview - **Company**: MSCI Inc. (NYSE: MSCI) - **Date of Conference**: September 08, 2025 Key Points Financial Performance and Debt Management - MSCI executed a **$1.25 billion financing transaction** in August 2025 to optimize its capital structure and take advantage of favorable market conditions [4][9] - The company expects **interest expense** for Q3 2025 to be between **$54 to $55 million**, and for the full year, it is updated to **$205 to $209 million** [4][5] - MSCI's targeted leverage range is **3 to 3.5 times gross debt to trailing EBITDA**; prior to the financing, the leverage was **2.5 times**, which is below the target range [7][10] - The financing was well-received in the market, marking MSCI's **inaugural investment-grade offering** [9] Capital Allocation Strategy - The majority of the proceeds from the debt raise will be used for **share repurchases**, reflecting MSCI's confidence in its stock [5][11] - MSCI is focused on **organic growth** opportunities, particularly in areas like **custom indexes**, **private asset investing**, and **climate transition** [11][12] - The company is pursuing **M&A opportunities** that align with its strategic focus, particularly in private assets and custom indexing [12][14] M&A and Partnerships - MSCI's M&A strategy is centered on **bolt-on acquisitions** that enhance existing capabilities rather than diversifying into new segments [12][15] - Recent acquisitions include **Burgiss** and **Fabric**, which have strengthened MSCI's offerings in private capital solutions and wealth management [13][16] - The partnership with **Moody's** aims to enhance credit insights and standardization in private credit portfolios, leveraging MSCI's data capabilities [22][25] Private Credit Strategy - Private credit is currently a modest revenue stream for MSCI, primarily integrated within analytics [18][19] - The company is expanding its capabilities in private credit through partnerships and developing tools to help investors understand risks and performance [22][23] - MSCI is actively engaging with industry participants to evolve the private credit space, which is experiencing significant growth [24][35] Market Environment and Client Dynamics - MSCI operates in a **global market** with varying dynamics across client segments and geographies [38] - The company is seeing growth in areas like **wealth management** and the **trading ecosystem**, while also facing challenges in traditional asset management segments [39][40] - The subscription business, particularly in index and analytics, is experiencing a **6% growth rate** among asset managers, with a focus on customization and active ETFs [41][42] ESG and Sustainability - MSCI acknowledges a decline in growth within its **ESG index module**, which has dropped from nearly **60% growth** to single digits [49][56] - The company remains committed to the long-term potential of the ESG market, despite short-term challenges [56][57] Conclusion - MSCI is strategically positioned to leverage its strong cash generation and market opportunities while maintaining a disciplined approach to capital allocation and M&A [6][14] - The company is focused on enhancing its product offerings and client relationships to drive future growth, particularly in the evolving landscape of private credit and sustainability [35][56]

Core Viewpoint - MSCI's recent earnings report shows strong performance with adjusted earnings and revenue growth, but estimates have been trending downward since the release, indicating potential challenges ahead [2][14]. Financial Performance - MSCI's Q2 2025 adjusted earnings were $4.17 per share, beating estimates by 0.24% and increasing 14.6% year over year [2]. - Revenues rose 9.1% year over year to $772.68 million, slightly missing consensus estimates by 0.12% [2]. - Recurring subscription revenues were $562.8 million, up 7.9% year over year, contributing 72.8% to total revenues [3]. - Asset-based fees increased 12.7% year over year to $184.1 million, contributing 23.8% to revenues [3]. - Adjusted EBITDA increased 10.3% year over year to $474.3 million, with an adjusted EBITDA margin of 61.4% [8]. Segment Performance - Index revenues were $434.8 million, up 9.5% year over year, driven by market-cap-weighted Index products and ETFs [4]. - Analytics operating revenues increased 7.1% year over year to $177.7 million, with non-recurring revenues rising significantly by 104.9% [5]. - The Sustainability and Climate segment's revenues were $88.9 million, up 11.3% year over year [6]. - Private Assets operating revenues were $71.2 million, reflecting a 9.7% year-over-year increase [7]. Balance Sheet and Cash Flow - As of June 30, 2025, total cash and cash equivalents were $347.3 million, down from $360.7 million as of March 31, 2025 [11]. - Total debt remained stable at $4.5 billion, with a debt-to-adjusted EBITDA ratio of 2.5 times, below the management target [11]. - Free cash flow was $301.6 million, down 6.3% year over year [12]. Guidance and Outlook - MSCI maintains its 2025 guidance for total operating expenses between $1.405 billion and $1.445 billion [13]. - Despite strong earnings, estimates have been trending downward, leading to a Zacks Rank 3 (Hold) for the stock [16].

Group 1 - MSCI announced the addition of 42 new constituents to its global index while removing 56 constituents [1] - The changes reflect ongoing adjustments in the global market landscape [1] - The rebalancing of the index is part of MSCI's regular review process to ensure the index accurately represents the market [1]

Group 1 - MSCI Inc. has launched two new data and analytics solutions: Private Asset and Deal Metrics, and Real Capital Analytics Funds [1] - These tools aim to provide General Partners (GPs) with deeper industry insights, enhance investor communication, and support capital strategy decisions in private assets and commercial real estate markets [1]

Core Insights - Insider buying activity from CEOs of MSCI, Charter Communications, and Healthpeak Properties indicates confidence in long-term growth despite short-term challenges [1][4][10] Group 1: MSCI - MSCI provides investment decision support tools, including indexes, portfolio construction, risk management products, and ESG research [2] - CEO Henry Fernandez purchased approximately 12,500 shares for about $6.7 million, coinciding with a dip in share price, reflecting confidence in positive EPS and long-term outlook [3][4] - The stock currently holds a Zacks Rank 2 (Buy) due to positive EPS revisions [2] Group 2: Charter Communications - Charter Communications is the second-largest cable operator in the U.S., providing video, internet, and voice services [6] - CEO Christopher Winfrey bought around 3,600 shares for just over $1 million, aligning with a decline in share price [6] - Analysts have lowered EPS outlooks, indicating potential short-term challenges, but the CEO's long holding period may provide an advantage [7] Group 3: Healthpeak Properties - Healthpeak Properties is a REIT focused on healthcare real estate [8] - CEO Scott Brinker purchased approximately 6,000 shares for about $100,000, increasing his total ownership to over 210,000 shares [8] - The stock is currently rated Zacks Rank 4 (Sell) due to negative earnings estimate revisions, suggesting continued weak performance in the near term [9]

Group 1 - The MSCI Nordic Countries Index has declined by 1.5%, marking its fifth consecutive trading day of losses, closing at 330.27 points, which is the lowest closing level since April 22 [1] - Among the 10 sectors, the Nordic industrial sector performed the worst [1] - The rock wool manufacturer, Rockwool, which produces insulation, fireproof, soundproof, and seismic products, saw a decline of 4.7%, leading the losses among constituent stocks [1]

Core Viewpoint - The MSCI Nordic Countries Index has declined by 1.4%, closing at 335.73 points, marking the lowest close since April 29 [1] Company Performance - The healthcare sector in the Nordic region led the decline, with Novo Nordisk experiencing a drop of 3.2%, contributing significantly to the overall market downturn [1] - DSV A/S saw a notable decline of 4.8%, making it the worst performer among the index constituents [1]

Core Viewpoint - The MSCI Nordic Countries Index has declined by 1%, marking its third consecutive day of losses and closing at 339.73 points, the lowest since April 29 [1] Group 1: Index Performance - The MSCI Nordic Countries Index has reached a new closing low since April 29, indicating a downward trend in the market [1] - The decline of 1% reflects broader market challenges faced by the Nordic region [1] Group 2: Sector Performance - The healthcare sector in the Nordic region has led the decline among the 10 sectors [1] - Demant A/S, a hearing aid supplier, experienced a significant drop of 8.8%, contributing to the overall sector weakness [1]

Core Points - MSCI Nordic Countries Index declined by 4.3%, marking the worst single-day performance since April 4, when it fell by 6.4%, closing at 343.08 points [1] - Among the 10 sectors, the Nordic healthcare sector performed the worst [1] - Novo Nordisk dropped by 23.1%, leading the decline among constituent stocks [1]