MSCI(US:MSCI)2022-04-25 16:00Revenue Growth - Total operating revenues for the three months ended March 31, 2022, increased by 17.0% to $559.9 million from $478.4 million in the same period of 2021[93]. - Recurring subscriptions revenue rose by 18.4% to $399.8 million, driven by strong growth in All Other – Private Assets products, which increased by $20.1 million, or 119.6%[94]. - Asset-based fees increased by 14.5% to $145.1 million, primarily due to growth in index-linked investment products, with ETFs linked to MSCI equity indexes rising by 10.9%[95]. - Operating revenues for the Index segment grew by 13.1% to $330,759,000, driven by increases in recurring subscriptions and asset-based fees[130]. - Operating revenues from recurring subscriptions increased by 12.5%, driven by growth from market cap-weighted index products and strong growth from factor, ESG, and climate index products[131]. - Operating revenues from asset-based fees increased by 14.5%, with a 10.9% increase in ETFs linked to MSCI equity indexes, and a 23.9% increase in non-ETF indexed funds linked to MSCI indexes[132]. - Analytics segment operating revenues increased by 4.3%, primarily due to growth from recurring subscriptions related to Multi-Asset Class and Equity Analytics products[134]. - ESG and Climate segment operating revenues surged by 49.7%, mainly driven by strong growth from recurring subscriptions related to Ratings, Climate, and Screening products[136]. - All Other – Private Assets segment operating revenues increased by 117.7%, primarily due to the acquisition of RCA and increased recurring subscriptions related to Global Intel and Real Estate Climate Value-at-Risk products[138]. - Total Run Rate increased by 17.4%, driven by an 18.4% increase from recurring subscriptions and a 14.5% increase from asset-based fees[143]. - Run Rate from Index recurring subscriptions increased by 12.1%, reflecting growth across all regions and client segments[144]. - Run Rate from ESG and Climate products increased by 46.7%, driven by strong growth in Ratings, Climate, and Screening products[145]. - Run Rate from All Other - Private Assets increased by 141.7%, primarily driven by the acquisition of RCA and growth in Global Intel products[146]. - New recurring subscription sales totaled $61,187,000 for the three months ended March 31, 2022, representing a 31.9% increase from $46,390,000 in the same period of 2021[150]. - Total gross sales amounted to $79,851,000, reflecting a 28.5% increase compared to $62,151,000 in the previous year[150]. Expenses and Costs - Total operating expenses rose by 20.9% to $271.0 million, with significant increases in general and administrative expenses, which grew by 31.2%[101]. - Cost of revenues increased by 19.8%, reflecting higher compensation and benefits costs, as well as increased information technology and market data costs[103]. - G&A expenses rose by 31.2%, primarily due to increased compensation and benefits costs, as well as higher non-compensation costs related to the acquisition of RCA[109][110]. - Total operating expenses increased by 20.9% to $270,967,000, with compensation and benefits costs up by 18.7% and non-compensation expenses up by 25.0%[110]. - R&D expenses increased by 13.9%, driven by higher investments in Index, All Other – Private Assets, and ESG and Climate segments[107]. Net Income and Profitability - Net income for the three months ended March 31, 2022, was $228,423,000, reflecting a 16.1% increase compared to the previous year[120]. - Adjusted EBITDA increased by 15.2% to $318,544,000, with an Adjusted EBITDA margin of 56.9%[126]. - Adjusted EBITDA margin for the Analytics segment improved to 36.4%, up from 34.1%[134]. Client and Market Presence - The company served over 6,400 clients across more than 90 countries as of March 31, 2022[85]. - The growth strategy includes enhancing ESG integration and executing strategic acquisitions to strengthen client relationships and expand market presence[84]. Cash Flow and Financial Position - The company reported cash and cash equivalents of $679,315,000 as of March 31, 2022, a decrease from $1,421,449,000 at the end of 2021[167]. - The company has $4,200,000,000 in Senior Notes outstanding and a $500,000,000 undrawn Revolving Credit Agreement as of March 31, 2022[159]. - Net cash provided by operating activities increased to $244,184,000 for the three months ended March 31, 2022, compared to $215,457,000 in the same period of 2021, reflecting higher cash collections from customers[169]. - Net cash used in investing activities rose to $(15,310,000) in Q1 2022, up from $(10,360,000) in Q1 2021, primarily due to higher capitalized software development costs[172]. - Net cash used in financing activities was $(966,117,000) in Q1 2022, a significant increase from $245,542,000 in Q1 2021, driven by higher share repurchases and increased dividend payments[173]. Foreign Currency Exposure - 16.2% of revenues for Q1 2022 were subject to foreign currency exchange rate risk, compared to 15.0% in Q1 2021, with significant exposure in Euros (40.2%), British pounds (28.3%), and Japanese yen (19.8%) for Q1 2022[175]. - Revenues from asset-based fees accounted for 25.9% of operating revenues in Q1 2022, down from 26.5% in Q1 2021, indicating a potential impact from currency fluctuations on fees payable[176]. - Approximately 44.2% of operating expenses in Q1 2022 were denominated in foreign currencies, compared to 42.7% in Q1 2021, with major currencies including British pounds and Euros[177]. - The company recognized total foreign currency exchange gains of $1.4 million in Q1 2022, compared to losses of $0.6 million in Q1 2021, indicating improved management of foreign currency risks[179]. Shareholder Returns - A quarterly cash dividend of $1.04 per share was declared for the three months ending June 30, 2022[166]. - The company repurchased 1,498 shares at an average price of $515.74 per share, totaling $772,657,000 during the three months ended March 31, 2022[165].