MSCI(US:MSCI)2023-10-31 16:35Financial Data and Key Metrics Changes - MSCI achieved adjusted EPS growth of over 21% and total revenue growth of 12% in Q3 2023, with a recurring subscription run rate growth of 12% and a retention rate of 95.4% [35][36][55] - The company returned $459 million to shareholders through share repurchases and over $329 million in dividends during the first nine months of the year [36] Business Line Data and Key Metrics Changes - In the Index segment, MSCI posted 11% subscription run rate growth, marking the 39th consecutive quarter of double-digit growth [62] - ESG delivered a 21% run rate growth, reaching $387 million, while Climate achieved a 49% run rate growth, totaling $98 million [63][64] - Equity analytics grew by 11% to nearly $200 million in run rate [63] Market Data and Key Metrics Changes - The Americas saw a subscription run rate growth in ESG and Climate of around 15%, while EMEA experienced a growth rate of 35% and APAC at 22% [102] - In APAC, real assets achieved a 15% run rate growth, reflecting strong sales with asset owners [65] Company Strategy and Development Direction - The acquisition of Burgiss is expected to enhance MSCI's capabilities in private assets, providing a strong foundation for developing investment tools and analytics [5][39] - The company aims to integrate data and analytics from Burgiss and Trove to enhance offerings in private assets and climate solutions [40][52] - MSCI is focused on maintaining high profitability while pursuing strategic acquisitions and investments in high-growth areas [12][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain operating environment but expressed confidence in the company's diversified business model and strong client engagement [2][35] - The company is committed to high levels of profitability and is prepared to implement cost-cutting measures if necessary in response to market downturns [22][35] Other Important Information - MSCI expects Burgiss to generate slightly above $90 million in revenue for the full year 2023, with a standalone adjusted EBITDA margin of around 15% [84] - The company plans to report financial results for Burgiss in the "all other private assets" segment starting in Q4 [83] Q&A Session Summary Question: Early traction from the Burgiss acquisition - Management indicated that the Burgiss acquisition provides a strong foundation for developing private asset classes and enhancing investment tools [5] Question: Capital allocation strategy post-Burgiss acquisition - Management emphasized the importance of disciplined capital allocation, focusing on organic investments and opportunistic acquisitions while managing share buybacks [12][17] Question: Expense growth in ESG and Climate - Management noted that expense growth in ESG and Climate remains aligned with long-term targets, despite some fluctuations [44][79] Question: Impact of market conditions on cost management - Management confirmed the ability to implement cost-cutting measures if necessary, maintaining a focus on profitability [22] Question: Pricing trends and client pushback - Management reported successful price increases contributing to new recurring sales, while being mindful of client pressures in the current environment [126]