MSCI (MSCI) Q2 2025 Earnings Call July 22, 2025 11:00 AM ET Company ParticipantsJeremy Ulan - Head - IR & TreasurerHenry Fernandez - Chairman & CEOBaer Pettit - President & COOAndrew Wiechmann - CFOAlexander Hess - VP - Equity ResearchFaiza Alwy - MD - US Company ResearchCraig Huber - CEO & MDScott Wurtzel - SVP - Equity ResearchWahid Amin - Equity Research AssociateRussell Quelch - Managing DirectorConference Call ParticipantsAlex Kramm - MD & Senior Equity Research AnalystManav Patnaik - MD & Equity Resea ...

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]

MSCI (MSCI) Q1 2025 Earnings Call April 22, 2025 11:00 AM ET Company Participants Jeremy Ulan - Head of Investor Relations & TreasurerHenry Fernandez - Chairman & CEOBaer Pettit - President & COOAndrew Wiechmann - CFOAlex Kramm - Managing Director - Equity ResearchAlexander Hess - Vice President - Equity ResearchFaiza Alwy - Managing Director, US Company ResearchScott Wurtzel - SVP - Equity ResearchJoshua Dennerlein - Head of Business & Information Services equity researchRussell Quelch - Managing Director ...