MSCI(MSCI) - 2025 Q4 - Annual Report

Revenue Breakdown - For the year ended December 31, 2025, 57.0% of the company's revenues were attributable to the Index segment, with asset-based fees accounting for 43.1% of total revenues in this segment[32]. - The Analytics segment contributed 22.8% to the company's total revenues for the year ended December 31, 2025[37]. - The Sustainability and Climate segment accounted for 11.3% of total revenues for the year ended December 31, 2025[43]. - Revenues from private assets offerings represented 8.9% of the company's total revenues for the year ended December 31, 2025[49]. - Revenues from asset-based fees represented 25% and 23% of operating revenues for the years ended December 31, 2025 and 2024, respectively[375]. Technology and Innovation - The company is applying AI to enhance product innovation and accelerate content creation, data processing, and analytics[28]. - The company is developing advanced technology to enhance distribution and client experience, prioritizing open and scalable distribution[28]. - AI Portfolio Insights and GeoSpatial Asset Intelligence are AI-enabled solutions developed to deliver risk and portfolio insights, improving data processing and content quality[53]. - MSCI operates on cloud-native platforms to reduce data center risks and improve client access to content in investment workflows[53]. - The company has developed an AI Upskilling Framework to provide targeted learning opportunities for employees, with participants averaging nine hours of learning in 2025[72]. Strategic Initiatives - The company is expanding solutions for client customization to meet diverse investment strategies and sustainability goals[28]. - The company is actively pursuing strategic partnerships and acquisitions to enhance its offerings and capabilities[28]. - The Sustainability and Climate research team analyzes over 9,000 entities worldwide, with plans to expand coverage to address emerging risks and opportunities[39]. - The company utilizes its sustainability and climate data across various segments, including index products designed for sustainability and climate investment performance[42]. - The Total Plan Manager provides integrated portfolio management and analytics for oversight of investment portfolios across public and private assets[52]. - Private Capital Transparency offers detailed information on underlying fund holdings and exposures of private capital funds, enhancing investment team capabilities[52]. Human Resources - The company employed 6,268 people as of December 31, 2025, with a voluntary turnover rate of 7% and involuntary turnover rate of 5%[65]. Regulatory and Compliance - The company is subject to new EU regulations on ESG rating activities, requiring authorization by ESMA starting July 2, 2026[80]. - MSCI's corporate responsibility practices align with business goals and are overseen by the Governance and Corporate Responsibility Committee[75]. Foreign Currency Exposure - For the years ended December 31, 2025 and 2024, 16% and 17% of the company's revenues were subject to foreign currency exchange rate risk, primarily from clients billed in foreign currencies[374]. - Approximately 42% and 41% of the company's operating expenses for the years ended December 31, 2025 and 2024, respectively, were denominated in foreign currencies[376]. - The company recognized total foreign currency exchange losses of $9.1 million and $4.8 million for the years ended December 31, 2025 and 2024, respectively[377]. - Of the 16% of non-U.S. dollar exposure for the year ended December 31, 2025, 43% was in Euros, 32% in British pounds sterling, and 18% in Japanese yen[374]. - Approximately three-fifths of the assets in investment products are invested in securities denominated in currencies other than the U.S. dollar, impacting asset-based fees[375]. - The company manages foreign currency exchange rate risk through derivative financial instruments, primarily forward contracts on foreign currency[377]. - The significant majority of operating expenses denominated in foreign currencies were in British pounds sterling, Indian rupees, Euros, Hungarian forints, and Mexican pesos[376]. - The company invoices a portion of clients in Euros, British pounds sterling, Japanese yen, and other non-U.S. dollar currencies[374]. - Declines in foreign currencies against the U.S. dollar could lead to net fund outflows, further reducing fees payable under licenses[375].