Financial Data and Key Metrics Changes - MSCI reported revenue growth of over 9% in Q2 2025, adjusted EBITDA growth of over 10%, and adjusted earnings per share growth of almost 15% [6][24] - Free cash flow exceeded $300 million year-to-date, with $286 million worth of shares repurchased at an average price of $557 per share [6][24] - Total run rate growth was 11%, driven by record AUM levels in ETF products linked to MSCI indices, and asset-based fee run rate growth was 17% [6][24] Business Line Data and Key Metrics Changes - Subscription run rate growth was double-digit across various client segments, including 10% for banks and broker dealers, 12% for hedge funds, and 17% for wealth managers [14][19] - The index and asset-based fee franchise was identified as a key growth engine, with strong ABF run rate growth reflecting the importance of MSCI indices in global investing [7][24] - Private assets saw a run rate growth of nearly 13%, with significant product launches enhancing capabilities [10][11] Market Data and Key Metrics Changes - Total equity index ETF AUM linked to MSCI indices surpassed $2 trillion for the first time, driving total AUM balances to $6 trillion [8][24] - Equity ETFs linked to MSCI indexes experienced $49 billion of inflows during Q2, capturing 29% of all inflows into indexed equity ETFs [24] - Indexed equity ETFs linked to MSCI Developed Markets ex U.S. Indexes captured $32 billion, representing over 50% of all flows into DM ex U.S. indexed equity ETFs [24] Company Strategy and Development Direction - MSCI is focused on expanding its capabilities in private capital solutions and enhancing its product offerings to drive adoption across the investment community [10][11] - The company aims to leverage its integrated franchise to create powerful network effects for clients, particularly in sustainability and climate solutions [12][13] - MSCI is adapting its tools to capture new opportunities in the sustainability space despite current cyclical slowdowns [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the company, emphasizing the importance of asset-based fees and the transformation towards non-active asset management client segments [60][62] - The current dynamics in the market are expected to persist for the next several quarters, with a focus on maintaining and enhancing retention rates across client segments [28][51] - Management highlighted the ongoing demand for climate solutions and the need for banks and insurance companies to understand climate risks [92][94] Other Important Information - MSCI's retention rate for private assets remained stable at slightly over 91% [28] - The company completed its largest deal ever for MSCI Wealth Manager during the quarter, indicating strong demand for unified solutions [19][24] - MSCI is seeing promising growth potential among insurance companies, particularly for products supporting index-linked annuities and climate tools [21][22] Q&A Session Summary Question: Potential help from asset flows into international markets - Management noted that the rotation of assets from the U.S. to international markets is a significant boost for the asset-based fee business, with $6 trillion of client assets indexed to MSCI indices [34] Question: Accelerating growth for asset managers - Management indicated that to accelerate total subscription run rate, non-active asset managers need to grow faster, and they are focusing on creating new products and enhancing sales efforts [39][40] Question: Impact of consolidation on results - Management acknowledged ongoing consolidation in the industry but does not expect it to significantly impact results in the near term [45] Question: Retention rates and outlook - Management explained that retention rates can be lumpy, with recent lower retention in analytics and sustainability due to client events and budget pressures [50][51] Question: Sales environment and outlook - Management characterized the sales environment as consistent with recent quarters, with a healthy pipeline of products and sustained favorable market dynamics [55][56] Question: Demand for custom indexes - Management remains confident in the growth opportunity for custom indexes, despite slight fluctuations in quarterly numbers [66] Question: Active ETFs and market positioning - Management highlighted significant growth opportunities in active ETFs, with ongoing dialogues with active asset managers [72][73] Question: Cost guidance and market assumptions - Management reiterated that expense guidance remains unchanged, with AUM levels expected to influence costs towards the middle of the guidance range [78][79] Question: Growth opportunities in fixed income and wealth management - Management expressed confidence in sustaining growth rates in fixed income and wealth management, with ongoing investments in capabilities [82][83] Question: Deceleration in hedge fund subscription growth - Management noted that the hedge fund segment is inherently lumpy, and recent deceleration is not indicative of long-term trends [86][87] Question: Acceleration of non-active subscription growth - Management indicated that significant opportunities exist in the fast money segment and wealth management, with ongoing efforts to prioritize and build up these areas [90][92]

Financial Data and Key Metrics Changes - MSCI reported organic revenue growth of 10%, adjusted EBITDA growth of 11%, and adjusted earnings per share growth of almost 14% in Q1 2025 [5][6] - The company repurchased $275 million worth of shares during Q1 and through April 21, reflecting confidence in the stock's value [6][24] - The retention rate was over 95%, with organic subscription run rate growth of 8% and asset-based fee revenue growth of 18% [6][20] Business Line Data and Key Metrics Changes - Among client segments, hedge funds achieved a 14% subscription run rate growth, while banks and broker dealers saw over 9% growth [11][12] - Wealth managers experienced a 15% subscription run rate growth, driven by index solutions and sustainability initiatives [13] - Asset owners delivered a 12% subscription run rate growth, with notable strength in analytics and private capital solutions [15] - The subscription run rate for analytics grew by 7%, while sustainability and climate solutions saw almost 10% growth [22] Market Data and Key Metrics Changes - Non-ETF AUM linked to MSCI indexes grew by 20% year-over-year, reaching nearly $3.9 trillion [20][70] - MSCI linked equity ETFs had an ending balance of $1.78 trillion, attracting nearly $42 billion of inflows [20] - The company captured approximately 45% of all inflows into products linked to MSCI DM ex US, EM, and all country exposures [21] Company Strategy and Development Direction - MSCI is focusing on enhancing its product offerings, particularly in custom indices and private capital solutions, to meet evolving client needs [8][16] - The company is integrating the Foxbury F9 platform to support custom indices, which is expected to drive further growth [7] - A partnership with Moody's was announced to develop independent credit risk assessments for private credit, enhancing MSCI's capabilities in this area [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver consistent financial results amid current market turmoil [10][24] - There is a noted shift in client sentiment towards international markets, which may benefit MSCI's asset-based fees [46][47] - The company is preparing for a range of possible market outcomes and has various levers to manage expenses based on market conditions [36][39] Other Important Information - The effective tax rate for Q1 was 12.8%, with expectations for the remainder of the year to be in the range of 19% to 21% [25][26] - The company continues to face headwinds in the Real Assets segment due to client consolidation [23] Q&A Session Summary Question: Selling environment and new sales - Management noted that there is currently no evidence of a change in purchasing habits or pipeline despite market volatility, with some deals expected to close in Q2 [29][30] Question: Downturn playbook and expense management - Management discussed their ability to adjust expenses based on market performance, with various levers available to manage costs effectively [36][39] Question: International investing trends - Management confirmed a marked change in client sentiment towards international markets, which could positively impact subscription sales [44][46] Question: Pricing trends for renewals and new sales - Pricing increases for new recurring sales were in line with previous years, with enhancements to existing solutions factored into pricing strategies [55][56] Question: Retention rates and future expectations - Retention rates remained strong, with a healthy rebound noted among hedge funds and banks, though caution was advised for the remainder of the year due to potential market volatility [78][80] Question: Growth expectations for analytics - Management indicated that while Q1 was not a period of significant turmoil, the need for analytics is expected to grow as clients seek more data and transparency [84][88] Question: Sustainability and climate segment growth - Management acknowledged a cyclical headwind in sustainability but remains optimistic about long-term growth driven by changing client demands and regulatory burdens [91][92]