MSCI Q3 Earnings Beat Estimates, Revenues Rise Y/Y, Shares Up

Core Insights - MSCI's third-quarter 2025 adjusted earnings were $4.47 per share, exceeding the Zacks Consensus Estimate by 2.29% and reflecting a year-over-year increase of 15.8% [1][10] - Revenues for MSCI rose 9.5% year over year to $793.4 million, although this fell short of the consensus estimate by 0.72% [1][10] - The growth in revenues was primarily driven by strong performance in recurring subscription revenues and asset-based fees, with organic operating revenues growing by 9% year over year [1][2] Revenue Breakdown - Recurring subscriptions amounted to $579.1 million, up 7.9% year over year, contributing 73% to total revenues [2] - Asset-based fees reached $197.5 million, a 17.1% increase year over year, contributing 24.9% to total revenues [2] - Non-recurring revenues decreased to $16.9 million, down 13.4% year over year, contributing 2.1% to total revenues [2] Segment Performance - Index revenues were $451.2 million, increasing 11.4% year over year, with recurring subscriptions and asset-based fees rising by 8.3% and 17.1%, respectively [4] - Analytics operating revenues were $182.2 million, a 5.7% year-over-year increase, with recurring subscriptions up 6% [5] - The Sustainability and Climate segment reported revenues of $90.1 million, a 7.7% increase year over year, with recurring subscriptions rising 8.8% [6] - Private Assets operating revenues were $70 million, up 9.7% year over year, with organic growth of 8.3% [7] Operating Metrics - Adjusted EBITDA increased by 9.7% year over year to $494.4 million, with an adjusted EBITDA margin of 62.3% [8][10] - Total operating expenses rose 6.9% year over year to $345.7 million, driven by higher compensation costs due to a 2.2% increase in headcount [9][10] - Operating income improved by 11.6% year over year to $447.7 million, with an operating margin expansion of 100 basis points to 56.4% [11][10] Balance Sheet and Cash Flow - As of September 30, 2025, total cash and cash equivalents were $400.1 million, up from $347.3 million as of June 30, 2025 [12] - Total debt increased to $5.6 billion from $4.5 billion, with a debt-to-adjusted EBITDA ratio of 3 times [12] - Free cash flow was reported at $423.3 million, a 7.4% increase year over year [13] Guidance - For 2025, MSCI expects total operating expenses to be between $1.415 billion and $1.445 billion, with adjusted EBITDA expenses anticipated between $1.230 billion and $1.250 billion [14]