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The latest move bodes well with MSCI's focus on enhancing ESG transparency and expanding private company ESG coverage through leveraging Moody's Orbis database and credit scoring models. In first-quarter 2024, MSCI achieved 10% organic revenue growth, driven by strong performance across various segments, including Analytics, ESG and Index Investments. The company witnessed growth in its ESG and Climate solutions, with organic run rate growth of 13%. MSCI (MSCI) recently announced a partnership with Moody's ...

- First, people have such a wide variety of ways that they like to define and screen for them, and What Makes A Compounder? Why Is MSCI A Compounder? At a base level, in case you're new to MSCI, the company provides data and index products to mostly institutional investors. TradingView 'Compounder' stocks are an interesting breed for a couple of reasons. Many have a view that finding a compounder is a game of 'inputs' - in that, a business that is in the right market, with the right management, and with a h ...

A month has gone by since the last earnings report for MSCI (MSCI) . Shares have added about 8.4% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is MSCI due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. MSCI Q1 Earnings Beat, Recurring Subscriptions Rise Y/Y MSCI's f ...

MSCI (MSCI) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.Over the past month, shares of this maker of software tools to help portfolio managers make investment decisions have returned -15%, compared to the Zacks S&P 500 composite's -0.2% change. During this period, the Zacks Business - Software Services industry, which MSCI falls in, has lost 3.7%. The key question now is: Wh ...

3 Henry Fernandez Chairman & CEO Baer Pettit President & COO 1Q24 Financial Results Snapshot 6 1Q24 Diluted EPS Growth 7 56.4% MSCI (8 1Q24 Net cash provided by operating activities +11% $300M +8% 49.9% 14 1Q24 Recurring Subscription Run Rate by Region Americas $959M +17% YoY 1Q24 Recurring Net New Subscription Sales by Region EMEA $797M +12% YoY APAC $351M +12% YoY Americas $7M -31% YoY EMEA $7M -59% YoY APAC $5M -28% YoY Organic: $875M; +7% YoY Organic : $781M; +9% YoY Organic : $349M; +12% YoY 1Q24 Opera ...

Financial Data and Key Metrics Changes - MSCI achieved organic revenue growth of 10%, adjusted earnings per share growth of 12%, and free cash flow growth of 14% [4] - Non-recurring sales increased by 16% to $18 million, reflecting the lingering impact of market volatility and pressures on investment firms [77] - The effective tax rate for Q1 was 13.5%, benefiting from favorable discrete items and higher excess tax benefits recognized on stock-based compensation [28] Business Line Data and Key Metrics Changes - ABF revenue grew by 13%, driven by record AUM balances in ETFs and non-listed products linked to MSCI indices [4] - Analytics revenue grew by 12%, with recurring sales of the RiskManager tool up by 60% [80] - Index subscription run rate growth was 9.3%, with 12% growth in Asia-Pacific and 24% growth among hedge funds [97] Market Data and Key Metrics Changes - AUM in equity ETF products linked to MSCI indices reached a record high of $1.58 trillion, while AUM in non-listed products hit $3.23 trillion [24] - ESG and Climate segment saw organic run rate growth of 13%, with Europe at nearly 18% and Asia at close to 22% [10] - The Americas experienced 9% growth in the ESG and Climate segment [10] Company Strategy and Development Direction - MSCI is focused on capitalizing on trends such as portfolio customization, indexation, and the growth of private assets [5] - The acquisition of Foxberry aims to enhance custom index production and provide simulation and back-testing capabilities [5] - The company is committed to maintaining high levels of revenue growth and profitability despite external challenges [78] Management's Comments on Operating Environment and Future Outlook - Management noted that elevated cancellations were primarily due to industry consolidation and client events, but do not expect this trend to continue [77][30] - There is confidence in the resilience of the business model, supported by high levels of client engagement across all segments [78] - The company anticipates a gradual rebound in AUM and retention rates in the latter part of the year [28][106] Other Important Information - The company reported a retention rate of 94%, with clients using multiple product lines accounting for 85% of the total subscription run rate [79] - The integration of Burgiss is on track, contributing over $24 million in revenue for the quarter with a retention rate of nearly 96% [83] - MSCI's analytics team is experiencing massive demand for products amid market volatility, with significant growth in risk insights and multi-asset class models [80] Q&A Session Summary Question: What is the outlook on closures and cancellations? - Management confirmed that the elevated cancellations were largely due to a significant client event and do not expect this level to continue [12][85] Question: How is the company addressing the longer sales cycles? - Management acknowledged longer sales cycles due to budget constraints but expressed optimism about converting client engagements into bookings [51][106] Question: What is the growth potential for custom index products? - Custom index products saw a strong run rate growth of 19%, with significant market opportunities identified [57] Question: How does MSCI balance reinvestments with margin performance? - The company aims to maintain high profitability while investing in growth opportunities, focusing on efficiency and strategic investments [128] Question: What is the impact of new regulations on ESG demand? - New regulations in Europe are expected to drive demand for ESG products, while the company remains focused on financial materiality [91]

MSCI Inc.'s (MSCI) first-quarter 2024 adjusted earnings of $3.52 per share beat the Zacks Consensus Estimate by 2.33% and increased 12.1% year over year.Revenues increased 14.8% year over year to $680 million but missed the consensus mark by 0.38%. Organic revenues increased 10.3% year over year.Recurring subscriptions of $513.1 million increased 15.2% year over year and accounted for 75% of revenues.Asset-based fees of $150.3 million increased 12.9% year over year and contributed 21% of revenues.Non-recurr ...

Part I – Financial Information [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents MSCI's unaudited condensed consolidated financial statements for Q1 2024, highlighting a **14.8%** increase in operating revenues to **$680.0 million** and a **7.2%** rise in net income to **$256.0 million** Condensed Consolidated Statements of Income (Q1 2024 vs Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | **Operating revenues** | $679,965 | $592,218 | 14.8% | | **Operating income** | $339,382 | $314,602 | 7.9% | | **Net income** | $255,954 | $238,728 | 7.2% | | **Diluted EPS** | $3.22 | $2.97 | 8.4% | Condensed Consolidated Statements of Financial Condition | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--- | :--- | :--- | | **Total assets** | $5,478,589 | $5,518,219 | | **Total liabilities** | $6,129,106 | $6,257,983 | | **Total shareholders' equity (deficit)** | $(650,517) | $(739,764) | Condensed Consolidated Statements of Cash Flows | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $300,137 | $264,141 | | **Net cash used in investing activities** | $(32,333) | $(21,762) | | **Net cash used in financing activities** | $(207,223) | $(158,293) | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on accounting policies, recent acquisitions, and segment performance, noting BlackRock as a significant customer accounting for **10.0%** of consolidated operating revenues - BlackRock, Inc. accounted for **10.0%** of the Company's consolidated operating revenues for the three months ended March 31, 2024, down slightly from 10.2% in the same period of 2023[36](index=36&type=chunk) Operating Revenues by Segment (Q1 2024) | Segment | Recurring Subscriptions (in thousands) | Asset-based Fees (in thousands) | Non-recurring (in thousands) | Total (in thousands) | | :--- | :--- | :--- | :--- | :--- | | **Index** | $212,952 | $150,259 | $10,661 | $373,872 | | **Analytics** | $160,551 | $— | $3,415 | $163,966 | | **ESG and Climate** | $76,418 | $— | $1,466 | $77,884 | | **All Other - Private Assets** | $63,134 | $— | $1,109 | $64,243 | | **Total** | **$513,055** | **$150,259** | **$16,651** | **$679,965** | - The company completed the acquisition of Fabric RQ, Inc. on January 2, 2024, a wealth technology platform, which is now part of the Analytics segment. The aggregate purchase price was **$16.1 million**, including **$8.1 million** in contingent consideration[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) Segment Profitability (Adjusted EBITDA) | Segment | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | **Index Adjusted EBITDA** | $277,760 | $253,682 | | **Analytics Adjusted EBITDA** | $72,212 | $60,780 | | **ESG and Climate Adjusted EBITDA** | $21,091 | $17,876 | | **All Other - Private Assets Adjusted EBITDA** | $12,510 | $12,391 | | **Total** | **$383,573** | **$344,729** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 financial results, noting a **14.8%** increase in operating revenues and **11.3%** Adjusted EBITDA growth to **$383.6 million**, while the Adjusted EBITDA margin slightly compressed to **56.4%** [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Operating revenues for Q1 2024 increased **14.8%** to **$680.0 million**, driven by recurring subscriptions and asset-based fees, while total operating expenses rose **22.7%** due to higher compensation and amortization, leading to a **7.2%** net income growth Operating Revenues by Type (Q1 2024 vs Q1 2023) | Revenue Type | Q1 2024 (in thousands) | Q1 2023 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | **Recurring subscriptions** | $513,055 | $445,247 | 15.2% | | **Asset-based fees** | $150,259 | $133,126 | 12.9% | | **Non-recurring** | $16,651 | $13,845 | 20.3% | | **Total operating revenues** | **$679,965** | **$592,218** | **14.8%** | - The average value of AUM in ETFs linked to MSCI equity indexes for Q1 2024 was **$1,508.8 billion**, a **17.2%** increase from **$1,287.5 billion** in Q1 2023, driving growth in asset-based fees[119](index=119&type=chunk)[120](index=120&type=chunk) - Total operating expenses increased by **22.7%**, primarily driven by a **22.8%** rise in compensation and benefits costs and a **56.5%** increase in amortization of intangible assets, largely due to recent acquisitions and headcount growth[124](index=124&type=chunk)[134](index=134&type=chunk) - Employee headcount grew **20.9%** to **5,858** as of March 31, 2024, from **4,846** a year prior, primarily due to acquisitions, with emerging market centers increasing to **67.2%**[136](index=136&type=chunk) [Segment Results](index=42&type=section&id=Segment%20Results) All segments reported revenue growth in Q1 2024, with Index growing **10.2%** to **$373.9 million**, Analytics **11.5%** to **$164.0 million**, ESG and Climate **16.1%** to **$77.9 million**, and Private Assets surging **66.0%** to **$64.2 million** due to acquisitions - **Index Segment:** Revenue grew **10.2%** YoY to **$373.9 million**. Asset-based fees increased **12.9%** driven by higher average AUM in linked ETFs. Adjusted EBITDA rose **9.5%** to **$277.8 million**[157](index=157&type=chunk)[159](index=159&type=chunk) - **Analytics Segment:** Revenue increased **11.5%** YoY to **$164.0 million**, driven by growth in both Multi-Asset Class and Equity Analytics products. Adjusted EBITDA grew **18.8%** to **$72.2 million**[161](index=161&type=chunk)[162](index=162&type=chunk) - **ESG and Climate Segment:** Revenue rose **16.1%** YoY to **$77.9 million**, led by growth in Ratings, Climate, and Screening products. Adjusted EBITDA increased **18.0%** to **$21.1 million**[164](index=164&type=chunk) - **All Other – Private Assets Segment:** Revenue surged **66.0%** YoY to **$64.2 million**, primarily due to the Burgiss acquisition. Adjusted EBITDA was nearly flat, up **1.0%** to **$12.5 million**, as expenses also rose significantly post-acquisition[166](index=166&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) [Operating Metrics](index=45&type=section&id=Operating%20Metrics) Total Run Rate grew **14.6%** to **$2.73 billion**, but net new recurring subscription sales decreased **43.5%** to **$19.6 million** due to higher cancellations, leading to an overall Retention Rate decline to **92.8%** Run Rate by Segment (as of March 31) | Segment | 2024 (in thousands) | 2023 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | **Index** | $1,489,362 | $1,330,112 | 12.0% | | **Analytics** | $662,079 | $621,611 | 6.5% | | **ESG and Climate** | $320,611 | $278,947 | 14.9% | | **All Other - Private Assets** | $254,432 | $148,440 | 71.4% | | **Total Run Rate** | **$2,726,484** | **$2,379,110** | **14.6%** | Sales and Cancellations (Q1 2024 vs Q1 2023) | Metric (in thousands) | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | **New recurring subscription sales** | $57,336 | $56,393 | 1.7% | | **Subscription cancellations** | $(37,769) | $(21,756) | 73.6% | | **Net new recurring subscription sales** | **$19,567** | **$34,637** | **(43.5%)** | Retention Rate by Segment (Q1) | Segment | 2024 | 2023 | | :--- | :--- | :--- | | **Index** | 93.2% | 96.4% | | **Analytics** | 93.5% | 94.0% | | **ESG and Climate** | 90.8% | 96.1% | | **All Other - Private Assets** | 92.2% | 92.1% | | **Total** | **92.8%** | **95.2%** | [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains liquidity through cash from operations and a **$1.25 billion** revolving credit facility, remaining in compliance with debt covenants, while declaring a **$1.60** per share dividend and retaining **$845.7 million** for share repurchases - On January 26, 2024, the company entered into a Second Amended and Restated Credit Agreement, providing a **$1.25 billion** revolving credit facility maturing in 2029, with proceeds used to prepay outstanding Tranche A Term Loans[190](index=190&type=chunk) - As of March 31, 2024, the company was in compliance with its financial covenants, with a Consolidated Leverage Ratio of **2.56:1.00** (below the maximum of **4.25:1.00**) and a Consolidated Interest Coverage Ratio of **9.16:1.00** (above the minimum of **4.00:1.00**)[194](index=194&type=chunk) - As of March 31, 2024, **$845.7 million** of authorization remained under the 2022 stock repurchase program, with no open market repurchases made during Q1 2024[195](index=195&type=chunk) - On April 22, 2024, the Board of Directors declared a quarterly cash dividend of **$1.60** per share, payable on May 31, 2024[97](index=97&type=chunk)[196](index=196&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to foreign currency risk, with **16.8%** of Q1 2024 revenues and **41.3%** of operating expenses subject to fluctuations, mitigated by forward contracts - In Q1 2024, **16.8%** of revenues were subject to foreign currency risk, primarily from billings in Euros (**41.3%**), British pounds (**33.3%**), and Japanese yen (**17.3%**)[205](index=205&type=chunk) - Approximately **41.3%** of operating expenses for Q1 2024 were denominated in foreign currencies, with significant exposure to the British pound, Indian rupee, Euro, Hungarian forint, Mexican peso, and Swiss franc[207](index=207&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period[209](index=209&type=chunk) - No changes in internal control over financial reporting occurred during Q1 2024 that have materially affected, or are reasonably likely to materially affect, internal controls[210](index=210&type=chunk) Part II – Other Information [Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, but management believes their outcomes will not materially affect the business, financial condition, or cash flows - Management believes that the disposition of currently pending legal matters will not have a material effect on MSCI's business, operating results, financial condition, or cash flows[212](index=212&type=chunk) [Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's 2023 Annual Report on Form 10-K have been reported - The company reports no material changes to the risk factors previously disclosed in its 2023 Form 10-K[213](index=213&type=chunk)[214](index=214&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company acquired **119,928** shares at an average price of **$583.92** in Q1 2024, primarily for tax obligations on vested restricted stock units, with **$845.7 million** remaining for repurchases Issuer Purchases of Equity Securities (Q1 2024) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Jan 2024 | — | $— | | Feb 2024 | 119,652 | $584.00 | | Mar 2024 | 276 | $551.68 | | **Total** | **119,928** | **$583.92** | - The approximate dollar value of shares that may yet be purchased under the publicly announced plan is **$845.7 million** as of March 31, 2024[218](index=218&type=chunk) [Other Information](index=55&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2024 - No directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q1 2024[218](index=218&type=chunk) [Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate documents, credit agreements, and CEO/CFO certifications

For the quarter ended March 2024, MSCI (MSCI) reported revenue of $679.97 million, up 14.8% over the same period last year. EPS came in at $3.52, compared to $3.14 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $682.53 million, representing a surprise of -0.38%. The company delivered an EPS surprise of +2.33%, with the consensus EPS estimate being $3.44.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they c ...