MSCI(US:MSCI)2026-01-28 17:02Financial Data and Key Metrics Changes - In Q4 2025, the company achieved organic revenue growth of over 10%, adjusted EBITDA growth of over 13%, and adjusted EPS growth of almost 12% for the quarter and nearly 14% for the full year [6][7] - The total run rate reached over $3.3 billion, growing 13%, with total asset-based fees (ABF) run rate of $852 million, growing 26%, and recurring subscription run rate of over $2.4 billion, growing over 9% [8][9] - The company has delivered 11 consecutive years of double-digit adjusted EPS growth [7] Business Line Data and Key Metrics Changes - The index business had its best quarter ever for new recurring subscription sales, with a growth rate of 18% [8] - In analytics, the company posted its second-best Q4 on record for new subscription sales, with subscription run rate growth of over 8% [19] - Private Capital Solutions saw recurring sales growth of 86%, supported by innovative new products [9][19] Market Data and Key Metrics Changes - Total ETF and non-ETF AUM linked to MSCI indices reached approximately $7 trillion, driven by record inflows into clients' ETF products, particularly in Europe [9] - Equity ETFs linked to MSCI indexes captured a record $67 billion of inflows during Q4, totaling $204 billion for the full year [17] - The company observed significant uptick in activity in Europe and EMEA, with subscription run rate in EMEA now higher than in the Americas [39] Company Strategy and Development Direction - The company is focused on leveraging AI to enhance its capabilities across various product lines, including analytics and custom index creation [10][31] - MSCI aims to have a fully integrated company where each product line benefits from and contributes to every other product line, amplifying financial growth [22] - The company will no longer maintain product line-specific long-term targets to better reflect its focus on integrated growth [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on favorable long-term secular trends and the resilience of its all-weather franchise [6][7] - The company is optimistic about the recovery in Europe and the potential for growth in sustainability and climate solutions, despite current challenges [66][70] - Management highlighted the importance of adapting to emerging risks and opportunities beyond traditional ESG factors, including AI and supply chain disruptions [10][70] Other Important Information - The company repurchased nearly $958 million of its shares at an average price of about $560 per share in Q4 [7] - Baer Pettit, the president, announced his retirement, effective March 1, and will be succeeded by Alvise Munari and Jorge Mina [24][26] Q&A Session Questions and Answers Question: Discussion on AI adoption and its impact on growth - Management highlighted that AI has been integrated into various operations and product lines, with significant projects aimed at enhancing analytics and custom index capabilities [30][31][34] Question: Insights on international flows and pricing opportunities - Management confirmed that there has been a significant uptick in activity in Europe and EMEA, with subscription run rates exceeding those in the Americas, indicating a positive trend in international flows [39][40] Question: Performance of private assets and future trends - Management noted strong sales in Private Capital Solutions, driven by new offerings and a positive outlook for growth in this segment [46][49] Question: Free cash flow dynamics and projections - Management discussed expected increases in cash taxes and interest expenses impacting free cash flow in 2026, but emphasized strong underlying business dynamics [51][54][56] Question: Recovery in ESG market and future expectations - Management indicated that while recovery in Europe is underway, the U.S. market remains challenging, but there is potential for growth in sustainability solutions [66][70]