MSCI(US:MSCI)2025-10-28 17:37Revenue 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].