Morningstar(MORN) - 2024 Q2 - Quarterly Results

Revenue Growth - Reported revenue increased 13.2% to $1.1 billion compared to the prior-year period; organic revenue grew 13.3%[26] - Morningstar reported revenue increased by 13.3% to $571.9 million compared to the prior-year period, with organic revenue growth of 13.6%[36] - Consolidated revenue for Q2 2024 reached $571.9 million, a 13.3% increase from $504.7 million in Q2 2023[85] - Total reportable segments revenue for the first half of 2024 was $1,014.1 million, reflecting a 12.9% increase from $898.0 million in the first half of 2023[85] Profitability - Diluted net income per share increased 90.5% to $1.60; adjusted diluted net income per share increased 54.6% to $2.01[25] - Adjusted operating income increased 87.9% to $108.5 million[2] - Adjusted operating income rose by 99.0%, reaching $201.1 million, while reported operating income increased by 203.8%[38] - Consolidated net income for the three months ended June 30, 2024, was $69.1 million, compared to $36.1 million for the same period in 2023, representing an increase of 91.6%[60] Cash Flow - Cash provided by operating activities increased 414.2% to $246.3 million; free cash flow increased to $180.3 million compared to negative $11.9 million in the prior-year period[27] - Cash provided by operating activities increased to $152.7 million from $24.5 million in the prior-year period, reflecting a strong operational performance[37] - Free cash flow improved significantly to $120.8 million from a negative $5.8 million in the prior-year period, marking an increase of 110.8% when excluding prior-year negative impacts[37] Segment Performance - Morningstar Data and Analytics contributed $196.9 million to consolidated revenue, with revenue increasing 5.9% in the second quarter versus the prior-year period[31] - PitchBook contributed $151.7 million to consolidated revenue, with revenue increasing 10.9% on a reported and organic basis[32] - Morningstar Wealth contributed $62.6 million to consolidated revenue, with revenue increasing 12.2% in the second quarter versus the prior-year period[33] - Morningstar Retirement contributed $33.3 million to consolidated revenue, with a revenue increase of 21.5% in the second quarter compared to the prior-year period[47] - Morningstar Credit revenue increased by 43.2% in the second quarter versus the prior-year period, contributing $77.6 million to consolidated revenue[70] - Morningstar Indexes revenue increased by 22.3% to $207.6 billion, driven by higher investable product revenue and net inflows[72] Operating Metrics - Average AUMA increased 18.2% to $304.9 billion[22] - The second-quarter operating margin improved to 19.0%, up from 8.3% in the prior-year period, while adjusted operating margin was 22.9% compared to 13.8%[39] - Adjusted operating margin improved to 22.9% in Q2 2024, compared to 13.8% in Q2 2023, reflecting a 9.1 percentage point increase[85] Expenses and Liabilities - Unallocated corporate expenses increased to $46.1 million in Q2 2024 from $38.9 million in Q2 2023[9] - Operating expenses were relatively flat at $463.4 million, with a 1.4% increase when excluding M&A-related expenses[63] - Total liabilities decreased to $1,969.8 million as of June 30, 2024, from $2,075.6 million as of December 31, 2023[82] Tax and Other Financials - The Company's effective tax rate was 21.7% in the second quarter of 2024[30] - Total assets remained stable at $3,403.5 million compared to $3,403.4 million in the prior period[59] - Cash and cash equivalents totaled $439.2 million as of June 30, 2024, compared to $389.0 million at the end of 2023[74] - The impact of Corporate and All Other on consolidated adjusted operating income improved to negative $46.6 million from negative $53.7 million in the prior-year period[73] Severance and Other Costs - The company recorded $3.3 million in severance expenses related to the expected sale of assets from the Morningstar Wealth Turnkey Asset Management Platform[34]