MSCI(US:MSCI)2026-01-28 11:46Financial Performance - Operating revenues for Q4 2025 were $822.5 million, an increase of 10.6% compared to Q4 2024[5] - Adjusted EPS for Q4 2025 was $4.66, up 11.5% year-over-year, while diluted EPS decreased by 2.3% to $3.81[5] - Operating income for Q4 2025 was $463.6 million, up 14.4%, with an operating margin of 56.4%[9] - Adjusted EBITDA for Q4 2025 was $512.0 million, a 13.2% increase, with an adjusted EBITDA margin of 62.2%[13] - Net income for Q4 2025 was $284,669,000, a decrease of 6.8% from $305,515,000 in Q4 2024[72] - Total operating revenues for Q4 2025 reached $822,528,000, reflecting a 10.6% increase from $743,509,000 in Q4 2024[74] - Adjusted EBITDA for Q4 2025 was $512,002,000, up 13.2% from $452,254,000 in Q4 2024[74] - Net income for the year ended December 31, 2025, was $1,202,305, compared to $1,109,128 in 2024, reflecting an increase of about 8.4%[70] - Free cash flow for the year ended December 31, 2025, was $1.458585 billion, an increase from $1.386509 billion in 2024, with a forecast of $1.470 billion to $1.530 billion for 2026[87] Revenue Breakdown - Recurring subscription revenues increased by 7.5%, and asset-based fees rose by 20.7% in Q4 2025[5] - New recurring subscription sales grew by 11.7%, with an organic recurring subscription Run Rate growth of 7.7%[5] - Sustainability and Climate segment revenues were $90.3 million, up 5.9%, driven by growth in recurring subscriptions related to Ratings and Climate products[22] - The Index segment's operating revenues reached $479.1 million, a 14.0% increase, with organic operating revenue growth also at 14.0%[15] - Total operating revenues for All Other – Private Assets reached $70.9 million, an increase of 8.4% year-over-year, driven by growth in recurring subscriptions[23] - Recurring subscriptions contributed $70.3 million to operating revenues, up 9.4% from the previous year, with organic operating revenue growth at 6.6%[23] Cash and Debt Management - Cash and cash equivalents stood at $515.3 million, with a target minimum cash balance of $225.0 million to $275.0 million for operational purposes[26] - Total outstanding debt was $6.2 billion, with a total debt to adjusted EBITDA ratio of 3.3x, within the target range of 3.0x to 3.5x[27] - Capital expenditures (Capex) for the quarter were $36.3 million, while net cash provided by operating activities increased by 16.4% to $501.1 million[29] - The company declared a cash dividend of $2.05 per share for Q1 2026, with approximately $134.7 million in dividends paid in Q4 2025[31] Future Guidance - Full-Year 2026 guidance includes operating expenses of $1,490 to $1,530 million and free cash flow of $1,470 to $1,530 million[34] - The company anticipates consolidated adjusted EBITDA expenses for 2026 to be between $1.305 billion and $1.335 billion[85] Customer Metrics - The annualized retention rate is derived by subtracting the cancellation rate from 100%, providing insight into customer loyalty and subscription stability[55] - The total retention rate improved to 93.4% for the three months ended December 31, 2025, up from 93.1% in 2024[79] Asset Management - Total assets as of December 31, 2025, amounted to $5,702,459, an increase from $5,445,439 in 2024, showing a growth of approximately 4.7%[71] - Long-term debt increased to $6,202,286 as of December 31, 2025, compared to $4,510,816 in 2024, indicating a significant rise in leverage[71] - Deferred revenue as of December 31, 2025, was $1,231,776, up from $1,123,423 in 2024, indicating growth in future revenue recognition[71] - Approximately three-fifths of the assets under management (AUM) are invested in securities denominated in currencies other than the U.S. dollar, which may impact revenue due to foreign currency fluctuations[68] Capital Expenditures - Total capital expenditures for the year ended December 31, 2025, were $129.861 million, with capitalized software development costs at $90.542 million[87]