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]

Group 1 - MSCI Nordic Countries Index remained relatively flat, closing at 358.55 points [1] - Saab, a defense contractor, saw a decline of 3.8%, leading the losses among constituent stocks [1] - The Nordic industrial sector was the worst-performing among the 10 sectors [1]