Morningstar(MORN) - 2025 Q3 - Quarterly Results

Revenue Growth - Reported revenue increased 8.4% to $617.4 million, with organic revenue growth of 9.0% compared to the prior-year period[4] - Morningstar Credit revenue grew 28.5% to $91.1 million, driven by strong performance across asset classes and regions[17] - Morningstar Direct Platform contributed $211.1 million to revenue, with a 6.3% increase compared to the prior-year period[12] - PitchBook revenue increased 7.9% to $169.0 million, supported by growth in core investor and advisor client segments[14] - Morningstar's consolidated revenue for Q3 2025 was $617.4 million, an increase of 8.4% compared to $569.4 million in Q3 2024[39] - The total revenue for the nine months ended September 30, 2025, reached $1,804.4 million, reflecting a 7.1% growth from $1,684.1 million in the same period of 2024[39] - Morningstar Direct Platform revenue increased by 6.3% to $211.1 million in Q3 2025, with a nine-month revenue of $619.5 million, up 4.6% year-over-year[39] - PitchBook revenue grew by 7.9% to $169.0 million in Q3 2025, with a nine-month total of $499.2 million, representing a 9.5% increase[39] - Morningstar Credit reported a significant revenue increase of 28.5% to $91.1 million in Q3 2025, with a nine-month revenue of $249.1 million, up 19.3%[39] Income and Earnings - Operating income rose 10.6% to $127.8 million, while adjusted operating income increased 15.6% to $150.6 million[8] - Diluted net income per share decreased 21.7% to $2.17, but adjusted diluted net income per share increased 27.5% to $2.55[9] - Consolidated net income decreased by 23.5% to $91.6 million in Q3 2025, down from $119.7 million in Q3 2024[36] - Basic net income per share was $2.18, a decline of 21.9% from $2.79 in the same quarter last year[36] - Adjusted operating income for Q3 2025 was $150.6 million, a 15.6% increase from $130.3 million in Q3 2024[47] - Adjusted diluted net income per share increased by 27.5% to $2.55 for the three months ended September 30, 2025, compared to $2.00 in 2024[49] Cash Flow and Expenditures - Cash provided by operating activities increased 2.0% to $195.7 million, while free cash flow rose 2.8% to $160.1 million[29] - Cash provided by operating activities for Q3 2025 was $195.7 million, compared to $191.9 million in Q3 2024[38] - Free cash flow for the three months ended September 30, 2025, was $160.1 million, a 2.8% increase from $155.8 million in 2024[49] - Year-to-date free cash flow decreased by 16.3% to $281.3 million in 2025, down from $336.1 million in 2024[49] - Year-to-date cash provided by operating activities decreased by 12.0% to $385.7 million in 2025, compared to $438.2 million in 2024[49] - Capital expenditures decreased slightly by 1.4% to $35.6 million for the three months ended September 30, 2025, from $36.1 million in 2024[49] Assets and Liabilities - Assets under management and advisement (AUMA) increased 11.1% to $70.8 billion, primarily driven by market performance[21] - Total assets as of September 30, 2025, were $3,557.6 million, slightly up from $3,548.9 million at the end of 2024[37] - Total liabilities increased to $2,043.6 million as of September 30, 2025, compared to $1,930.3 million at the end of 2024[37] - The total current liabilities were $945.5 million as of September 30, 2025, down from $967.3 million at the end of 2024[37] Share Repurchase and Tax - The company completed a $500 million share repurchase program, with a new three-year program approved for up to $1 billion in share repurchases[2] - The effective tax rate increased to 25.5% from 19.8% in the prior-year period, mainly due to the prior-year gain from the sale of the Commodity and Energy Data business[10] Other Financial Metrics - The average Assets Under Management (AUMA) for Morningstar was approximately $360.4 billion in Q3 2025, an 11.9% increase from $322.2 billion in Q3 2024[41] - Morningstar Retirement's total AUMA reached $297.8 billion, a 12.6% increase from $264.4 billion in the previous year[41] - The adjusted operating margin improved to 24.4% in Q3 2025, compared to 22.9% in Q3 2024, reflecting a 1.5 percentage point increase[47] - The company reported a decrease in interest expense by 21.3% to $7.0 million in Q3 2025 from $8.9 million in Q3 2024[36] - Non-operating gains and losses for the three months ended September 30, 2025, reflected a significant decrease of 98.0% compared to the previous year[49] - Other non-recurring items showed a not meaningful change, with a loss of $0.01 for the three months ended September 30, 2025[49] - Adjusted operating income and margin metrics were not provided in the extracted data but are critical for ongoing performance evaluation[48] - The company continues to focus on organic revenue growth, excluding the effects of acquisitions and foreign currency translations[48]