MSCI(US:MSCI)2021-07-27 20:13Financial Data and Key Metrics Changes - MSCI achieved total revenue growth of 22%, adjusted EBITDA growth of 25%, and adjusted EPS growth of 38% in Q2 2021 [9][10][31] Business Line Data and Key Metrics Changes - The index subscription run rate grew over 11%, marking the 30th consecutive quarter of double-digit growth [33] - The ESG and climate segment saw over half of subscription sales in the quarter coming from new clients, indicating strong growth [34] - Asset-based fees grew 55% year-over-year, driven by a strong market rally and healthy cash inflows [36] Market Data and Key Metrics Changes - EMEA recorded its best quarter ever for recurring subscription sales, while APAC had its second highest quarter on record [32] - MSCI's climate offerings run rate now totals more than $30 million, up nearly 2.5x year-over-year [25] Company Strategy and Development Direction - MSCI aims to lead in addressing climate change and carbon intensity in investment portfolios, viewing this as a significant opportunity [11][12] - The company is focusing on expanding its technology and data infrastructure to align with client needs, particularly in climate-related solutions [10][18] - MSCI is actively pursuing partnerships and potential acquisitions in strategic growth areas such as ESG, climate, and private equity [65] Management's Comments on Operating Environment and Future Outlook - Management remains encouraged by the global economic recovery and is positioned to capitalize on growth opportunities [20][43] - The company anticipates increased regulatory demands for climate-related disclosures, which will drive growth in its climate solutions [13][54] Other Important Information - MSCI's Board approved a 33% increase in the quarterly dividend to $1.04 per share, reflecting strong financial performance [37] - The company ended the quarter with a cash balance of approximately $1.97 billion, providing flexibility for investments and capital allocation [37] Q&A Session Summary Question: Impact of stopping the Beon initiative on analytics growth - Management believes the current path will lead to stronger results across MSCI, maintaining confidence in analytics growth opportunities [47][49] Question: Sustainability of growth in the climate business - Management emphasizes organic investments as key, while acknowledging that partnerships and M&A will also play a role [50] Question: Influence of new regulations on ESG and climate growth - Management acknowledges that regulatory demands are driving increased transparency and uptake, which will benefit MSCI [54] Question: Capital deployment priorities with a large cash balance - The company continues to prioritize regular dividends, opportunistic share repurchases, and strategic acquisitions in growth areas [62][65] Question: Changes in ETF fee rates - The decline in fee rates is attributed to a mix of geographical factors and contractual changes [68] Question: Addressable market for ESG and climate tools - Management believes the addressable market for ESG and climate tools is rapidly expanding, with every investment decision needing to consider these factors [71][74]