MSCI Inc. ("MSCI" or the "Company") (NYSE: MSCI), a leading
provider of critical decision support tools and services for the
global investment community, announced today the financial results
for the three months ended December 31, 2019 (“fourth quarter
2019”) and twelve months ended December 31, 2019 (“full-year
2019”).
Financial and Operational Highlights for Fourth Quarter
2019 (Note: Percentage and other changes refer to the three
months ended December 31, 2018 (“fourth quarter 2018”) unless
otherwise noted).
- Operating revenues up 12.4%
- Recurring subscription revenues up 8.4%, asset-based fees up
18.3%, non-recurring revenues up 83.0%
- Operating margin of 49.0%; Adjusted EBITDA margin of
54.2%
- Diluted EPS of $1.44, down 15.3%; Adjusted EPS of $1.67, up
27.5%
- Organic subscription Run Rate growth at 10.6% (Index at
11.3%, Analytics at 7.2%, All Other at 21.3%)
- All-time high assets under management in equity ETFs linked
to MSCI indexes of $934.4 billion as of December 31, 2019, up 34.3%
versus the prior year
- Issued $1.0 billion of 4.000% senior unsecured notes due
2029 in November 2019, of which approximately $500.0 million was
used to partially redeem MSCI’s 5.250% senior unsecured notes due
2024; as of December 31, 2019, total debt to net income ratio of
5.5x and total debt to adjusted EBITDA ratio of 3.6x
Three Months Ended
Year Ended
Dec. 31,
Dec. 31,
YoY %
Dec. 31,
Dec. 31,
YoY %
In thousands, except per share
data
2019
2018
Change
2019
2018
Change
Operating revenues
$
406,606
$
361,688
12.4
%
$
1,557,796
$
1,433,984
8.6
%
Operating income
$
199,429
$
169,818
17.4
%
$
755,701
$
686,898
10.0
%
Operating margin %
49.0
%
47.0
%
48.5
%
47.9
%
Net income
$
122,783
$
152,132
(19.3
%)
$
563,648
$
507,885
11.0
%
Diluted EPS
$
1.44
$
1.70
(15.3
%)
$
6.59
$
5.66
16.4
%
Adjusted EPS
$
1.67
$
1.31
27.5
%
$
6.44
$
5.35
20.4
%
Adjusted EBITDA
$
220,207
$
189,762
16.0
%
$
850,499
$
772,433
10.1
%
Adjusted EBITDA margin %
54.2
%
52.5
%
54.6
%
53.9
%
“The fourth quarter was a continuation of our exceptional
performance in 2019. We reported double-digit organic operating
revenue growth, while also expanding our margins. Our
client-centric business model continues to drive recurring
subscription sales growth across all regions,” commented Henry A.
Fernandez, Chairman and CEO of MSCI.
“As we enter a new decade in 2020, I remain confident we will
continue to see growth across our current offerings, our in-flight
initiatives and our next wave of opportunities. We are very excited
about the significant minority investment we made in The Burgiss
Group, LLC and the strategic relationship we have developed, which
we believe will considerably expand MSCI’s capabilities in private
assets. Our keen focus remains on strongly driving shareholder
value creation,” added Mr. Fernandez.
Fourth Quarter 2019 Consolidated
Results
Operating Revenues:
Operating revenues were $406.6 million, up 12.4%. The $44.9 million
increase was driven by a $22.8 million increase in recurring
subscription revenues, a $14.9 million increase in asset-based fees
and a $7.2 million increase in non-recurring revenues. Organic
operating revenue growth was 12.5%, with organic recurring
subscription revenue growth of 8.5%, organic asset-based fee growth
of 18.3% and organic non-recurring revenue growth of 82.3%.
Run Rate: Total Run Rate at
December 31, 2019 was $1,634.5 million, up 14.2%. The $203.2
million increase was driven by a $118.9 million increase in
recurring subscription Run Rate and an $84.2 million increase in
asset-based fees Run Rate. Organic subscription Run Rate growth was
10.6%, driven by strong growth across all three reporting segments.
Retention Rate was 92.9% in both fourth quarter 2019 and fourth
quarter 2018.
Non-Recurring Sales: Total
non-recurring sales were $17.4 million, up 53.7%, primarily driven
by increased sales in BarraOne and RiskManager product offerings
and the timing of client implementations in Analytics, as well as
derivative product offerings in Index.
Expenses: Total operating
expenses were $207.2 million, up 8.0%, primarily reflecting higher
compensation and benefits costs. Adjusted EBITDA expenses were
$186.4 million, up 8.4%. Total operating expenses excluding the
impact of foreign currency exchange rate fluctuations (“ex-FX”) and
adjusted EBITDA expenses ex-FX increased 8.2% and 8.7%,
respectively.
Headcount: As of December
31, 2019, headcount was 3,396 employees, with approximately 37% and
approximately 63% of employees located in developed market and
emerging market centers, respectively.
Other Expense (Income), Net:
Other expense (income), net increased $70.4 million to an expense
of $52.9 million, primarily driven by the absence of the gain from
the divestiture of Investor Force Holdings, Inc. (“InvestorForce”),
which occurred in October 2018, as well as the debt extinguishment
costs associated with the partial pre-maturity redemption of $500.0
million aggregate principal amount of the Company’s $800.0 million
aggregate principal amount of 5.250% senior unsecured notes due
2024 (the “2024 Senior Notes Redemption”). Fourth quarter 2019
other expense (income), net also reflected higher interest expense
associated with the private offering of $1,000.0 million aggregate
principal amount of 4.000% senior unsecured notes due 2029
completed during fourth quarter 2019 (the “2029 Notes Offering”).
The debt extinguishment costs associated with the 2024 Senior Notes
Redemption were excluded from adjusted net income and adjusted EPS
for the fourth quarter and full-year 2019.
Income Taxes: The effective
tax rate was 16.2%, a decrease of 2.6 percentage points compared to
fourth quarter 2018, primarily as a result of a more favorable
geographic mix of earnings as well as lower U.S. taxable income.
The lower U.S. taxable income was mainly due to the debt
extinguishment costs associated with the 2024 Senior Notes
Redemption and higher interest expense associated with the 2029
Notes Offering, both completed during fourth quarter 2019.
Net Income: As a result of
the factors described above, net income was $122.8 million, down
19.3%.
Adjusted EBITDA: Adjusted
EBITDA was $220.2 million, up 16.0%. Adjusted EBITDA margin
increased 170 basis points to 54.2%.
Full-Year 2019 Consolidated
Results (Note: Percentage and other changes refer to the
full-year ended December 31, 2018 (“full-year 2018”)).
Operating Revenues:
Operating revenues for full-year 2019 were $1,557.8 million, up
8.6%. The $123.8 million increase was driven by an $87.5 million
increase in recurring subscription revenues, a $25.4 million
increase in asset-based fees and a $10.9 million increase in
non-recurring revenues. Organic operating revenue growth was 10.3%,
with organic recurring subscriptions revenue growth of 10.3%,
organic asset-based fee growth of 7.6% and organic non-recurring
revenue growth of 38.2%.
Expenses: Total operating
expenses were $802.1 million, up 7.4%. Adjusted EBITDA expenses
were $707.3 million, up 6.9%. Total operating expenses ex-FX and
adjusted EBITDA expenses ex-FX for full-year 2019 increased 9.0%
and 11.0%, respectively.
Amortization and Depreciation
Expenses: Total amortization and depreciation expenses
of $79.4 million were down 7.2%, reflecting the absence in
full-year 2019 of both the amortization related to a write-off of a
trade name and the divestiture of InvestorForce, partially offset
by higher amortization of internally-developed software.
Other Expense (Income), Net:
Other expense (income), net increased $95.4 million to $152.4
million, primarily driven by the absence of the gains realized from
the InvestorForce and Financial Engineering Associates, Inc.
(“FEA”) divestitures, both of which occurred in full-year 2018. The
increase was also driven by the debt extinguishment costs
associated with the 2024 Senior Notes Redemption. In addition,
full-year 2019 other expense (income), net reflected higher
interest expense associated with higher outstanding debt and higher
foreign currency exchange losses.
Income Taxes: The effective tax rate was 6.6%, a
decrease of 12.8 percentage points compared to full-year 2018. The
lower effective tax rate was driven by the income tax benefit (the
“PSU windfall benefit”) related to the vesting of multi-year
restricted stock units granted in 2016 (“Multi-Year PSUs”), other
discrete items and a beneficial geographic mix of earnings in
full-year 2019, partially offset by the absence of the release of
the valuation allowance relating to the October 2018 divestiture of
InvestorForce and the true-up of Tax Reform items. The PSU windfall
benefit total of $66.6 million was recorded in the three months
ended March 31, 2019 and is excluded from both the adjusted net
income and adjusted EPS measures for full-year 2019.
Net Income: As a result of
the factors described above, net income was $563.6 million, up
11.0%.
Adjusted EBITDA: Adjusted
EBITDA was $850.5 million, up 10.1%, and adjusted EBITDA margin
increased 70 basis points to 54.6%.
Index Segment:
Table 1A: Results (unaudited)
Three Months Ended
Year Ended
Dec. 31,
Dec. 31,
YoY %
Dec. 31,
Dec. 31,
YoY %
In thousands
2019
2018
Change
2019
2018
Change
Operating revenues:
Recurring subscriptions
$137,746
$123,496
11.5%
$530,968
$477,612
11.2%
Asset-based fees
96,373
81,439
18.3%
361,927
336,565
7.5%
Non-recurring
9,068
5,498
64.9%
28,042
21,298
31.7%
Total operating revenues
243,187
210,433
15.6%
920,937
835,475
10.2%
Adjusted EBITDA expenses
66,805
60,503
10.4%
250,749
227,622
10.2%
Adjusted EBITDA
$176,382
$149,930
17.6%
$670,188
$607,853
10.3%
Adjusted EBITDA margin %
72.5%
71.2%
72.8%
72.8%
Index operating revenues for fourth quarter 2019 were $243.2
million, up 15.6%. The $32.8 million increase was driven by a $14.9
million increase in asset-based fees, a $14.3 million increase in
recurring subscription revenues and a $3.6 million increase in
non-recurring revenues. The increase in recurring subscription
revenues was driven by strong growth in developed market modules
and growth in factor, ESG and custom index products.
Growth in asset-based fees consisted of increases of $9.3
million from exchange traded funds (“ETFs”) linked to MSCI indexes,
$2.9 million from non-ETF passive funds linked to MSCI indexes and
$2.8 million from exchange traded futures and options contracts
based on MSCI indexes. The increase in revenues from ETFs linked to
MSCI indexes was driven by a 21.2% increase in average assets under
management (“AUM”), partially offset by a 0.10 basis points decline
in average basis point fees.
Index Run Rate as of December 31, 2019 was $955.4 million, up
17.3% compared to December 31, 2018. The $140.8 million increase
was driven by a $84.2 million increase in asset-based fees Run Rate
and a $56.6 million increase in recurring subscription Run Rate.
Index recurring subscription Run Rate increased 11.3%, primarily
driven by strong growth in core developed and emerging market
modules, and factor, ESG and custom index products, with strong
growth across our asset management clients and growth across our
banking, hedge fund, wealth management and asset owner clients. The
increase in asset-based fees Run Rate was primarily driven by
higher AUM in ETFs linked to MSCI indexes as well as continued
growth in AUM in non-ETF passive funds also linked to MSCI indexes
and futures and options contracts based on MSCI indexes.
Analytics Segment:
Table 1B: Results (unaudited)
Three Months Ended
Year Ended
Dec. 31,
Dec. 31,
YoY %
Dec. 31,
Dec. 31,
YoY %
In thousands
2019
2018
Change
2019
2018
Change
Operating revenues:
Recurring subscriptions
$122,353
$119,705
2.2%
$486,282
$474,334
2.5%
Non-recurring
5,853
2,230
162.5%
10,643
5,605
89.9%
Total operating revenues
128,206
121,935
5.1%
496,925
479,939
3.5%
Adjusted EBITDA expenses
89,359
85,256
4.8%
344,812
336,294
2.5%
Adjusted EBITDA
$38,847
$36,679
5.9%
$152,113
$143,645
5.9%
Adjusted EBITDA margin %
30.3%
30.1%
30.6%
29.9%
Analytics operating revenues for fourth quarter 2019 were $128.2
million, up 5.1%. The $6.3 million increase was driven by higher
non-recurring revenue from client implementations, as well as
higher recurring subscription revenue primarily from Multi-Asset
Class Analytics products. Organic operating revenue growth was
5.4%.
Analytics Run Rate as of December 31, 2019 was $526.8 million,
up 7.1% compared to December 31, 2018. The increase of $35.0
million was primarily driven by strong growth in Multi-Asset Class
Analytics products, with particular regional strength in Europe and
Asia, and in Equity Analytics products. Analytics organic
subscription Run Rate growth was 7.2% compared to December 31,
2018.
All Other Segment:
Table 1C: Results (unaudited)
Three Months Ended
Year Ended
Dec. 31,
Dec. 31,
YoY %
Dec. 31,
Dec. 31,
YoY %
In thousands
2019
2018
Change
2019
2018
Change
Operating revenues:
Recurring subscriptions
$34,320
$28,405
20.8%
$136,790
$114,590
19.4%
Non-recurring
893
915
(2.4%)
3,144
3,980
(21.0%)
Total operating revenues
35,213
29,320
20.1%
139,934
118,570
18.0%
Adjusted EBITDA expenses
30,235
26,167
15.5%
111,736
97,635
14.4%
Adjusted EBITDA
$4,978
$3,153
57.9%
$28,198
$20,935
34.7%
Adjusted EBITDA margin %
14.1%
10.8%
20.2%
17.7%
All Other operating revenues for fourth quarter 2019 were $35.2
million, up 20.1%. The $5.9 million increase predominantly
reflected growth in ESG operating revenues, driven by strong growth
across ESG Ratings and ESG Screening products. Real Estate
operating revenues were relatively flat. Fourth quarter 2019 All
Other organic operating revenue growth was 19.9%, with ESG organic
operating revenue growth of 29.8% and Real Estate organic operating
revenue growth of 1.3%.
All Other Run Rate as of December 31, 2019 was $152.2 million,
up 21.9% compared to December 31, 2018. The $27.4 million increase
was driven by a $21.9 million increase in ESG Run Rate, primarily
driven by strong growth in ESG Ratings and ESG Screening products.
Real Estate Run Rate increased $5.4 million, primarily driven by
growth in Market Information products. All Other organic
subscription Run Rate growth was 21.3%, with organic ESG Run Rate
growth of 26.9% and organic Real Estate Run Rate growth of 11.3%,
each compared to December 31, 2018.
Capital Position and
Allocation
Cash Balances and Outstanding
Debt: Cash and cash equivalents was $1.5 billion as of
December 31, 2019. MSCI seeks to maintain minimum cash balances
globally of approximately $200.0 million to $250.0 million for
general operating purposes.
Total outstanding debt as of December 31, 2019 was $3.1 billion.
The total debt to net income ratio (based on trailing twelve months
net income) was 5.5x. The total debt to adjusted EBITDA ratio
(based on trailing twelve months adjusted EBITDA) was 3.6x. MSCI
seeks to maintain a gross leverage to adjusted EBITDA target range
of 3.0x to 3.5x.
Capex and Cash Flow: For
full-year 2019, Capex was $53.8 million, cash provided by operating
activities was $709.5 million and free cash flow was $655.8
million.
Share Count and Capital
Return: Weighted average diluted shares outstanding were
85.5 million in fourth quarter 2019, down 4.4% from fourth quarter
2018. In full-year 2019, a total of 0.7 million shares were
repurchased at an average price of $147.97 per share for a total
value of $102.1 million, with no repurchases in fourth quarter
2019. Total shares outstanding as of December 31, 2019 were 84.8
million.
On January 29, 2020, the MSCI Board of Directors (the “Board”)
declared a cash dividend of $0.68 per share for first quarter 2020,
payable on March 6, 2020 to shareholders of record as of the close
of trading on February 21, 2020.
Full-Year 2020 Guidance
MSCI's guidance for 2020 is based on assumptions about a number
of macroeconomic and capital market factors, in particular related
to equity markets. These assumptions are subject to uncertainty,
and actual results for the year could differ materially from our
current guidance.
- Operating expense is expected to be in the range of $840
million to $860 million.
- Adjusted EBITDA expense is expected to be in the range of $750
million to $770 million.
- Interest expense, including the amortization of financing fees,
is expected to be approximately $158 million.
- Depreciation and amortization expense is expected to be
approximately $90 million.
- The effective tax rate is expected to be in the range of 19% to
22%.
- Capex is expected to be in the range of $60 million to $70
million.
- Net cash provided by operating activities and free cash flow
are expected to be in the ranges of $650 million to $700 million
and $580 million to $640 million, respectively.
On January 29, 2020, the Board authorized the Company to
opportunistically explore financing options, the proceeds of which
could be used to refinance existing debt. Such a financing could
marginally increase the Company's leverage ratio and interest
expense. Any potential financing is subject to market and other
conditions, and there can be no assurance as to the timing or
certainty of a transaction.
Conference Call Information
MSCI's senior management will review its fourth quarter and full
year 2019 results on Thursday, January 30, 2020 at 11:00 AM Eastern
Time. To listen to the live event, visit the events and
presentations section of MSCI's Investor Relations homepage,
http://ir.msci.com/events.cfm, or dial 1-877-376-9931 conference
ID: 4480318 within the United States. International callers dial
1-720-405-2251 conference ID: 4480318. The teleconference will also
be webcast with an accompanying slide presentation which can be
accessed through MSCI's Investor Relations website.
An audio recording of the conference call will be available in
the events and presentations section of MSCI's Investor Relations
website, http://ir.msci.com/events.cfm, beginning approximately two
hours after the conclusion of the live event for 12 months after
the call. Through February 6, 2020, the recording will also be
available by dialing 1-855-859-2056 conference ID: 4480318 within
the United States or 1-404-537-3406 conference ID: 4480318 for
international callers.
-Ends-
About MSCI Inc.
MSCI is a leading provider of critical decision support tools
and services for the global investment community. With over 45
years of expertise in research, data and technology, we power
better investment decisions by enabling clients to understand and
analyze key drivers of risk and return and confidently build more
effective portfolios. We create industry-leading, research-enhanced
solutions that clients use to gain insight into and improve
transparency across the investment process.
To learn more, please visit www.msci.com. MSCI#IR
Forward-Looking Statements
This earnings release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including without limitation, MSCI’s full-year 2020 guidance.
These forward-looking statements relate to future events or to
future financial performance and involve known and unknown risks,
uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance
or achievements expressed or implied by these statements. In some
cases, you can identify forward-looking statements by the use of
words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,”
“anticipate,” “believe,” “estimate,” “predict,” “potential” or
“continue,” or the negative of these terms or other comparable
terminology. You should not place undue reliance on forward-looking
statements because they involve known and unknown risks,
uncertainties and other factors that are, in some cases, beyond
MSCI’s control and that could materially affect actual results,
levels of activity, performance or achievements.
Other factors that could materially affect actual results,
levels of activity, performance or achievements can be found in
MSCI’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2018 filed with the Securities and Exchange Commission
(“SEC”) on February 22, 2019 and in quarterly reports on Form 10-Q
and current reports on Form 8-K filed or furnished with the SEC. If
any of these risks or uncertainties materialize, or if MSCI’s
underlying assumptions prove to be incorrect, actual results may
vary significantly from what MSCI projected. Any forward-looking
statement in this earnings release reflects MSCI’s current views
with respect to future events and is subject to these and other
risks, uncertainties and assumptions relating to MSCI’s operations,
results of operations, growth strategy and liquidity. MSCI assumes
no obligation to publicly update or revise these forward-looking
statements for any reason, whether as a result of new information,
future events, or otherwise, except as required by law.
Website and Social Media Disclosure
MSCI uses its website, including its quarterly updates, blog,
podcasts and social media channels, including its corporate Twitter
account (@MSCI_Inc), as channels of distribution of company
information. The information MSCI posts through these channels may
be deemed material. Accordingly, investors should monitor these
channels, in addition to following MSCI’s press releases, quarterly
SEC filings and public conference calls and webcasts. In addition,
you may automatically receive email alerts and other information
about MSCI when you enroll your email address by visiting the
“Email Alerts Subscription” section of MSCI’s Investor Relations
homepage at http://ir.msci.com/email-alerts. The contents of MSCI’s
website, including its quarterly updates, blog, podcasts and social
media channels are not, however, incorporated by reference into
this earnings release.
Notes Regarding the Use of Operating Metrics
MSCI has presented supplemental key operating metrics as part of
this earnings release, including Run Rate, subscription sales and
cancellations, non-recurring sales and Retention Rate.
Retention Rate is an important metric because subscription
cancellations decrease our Run Rate and ultimately our operating
revenues over time. The annual Retention Rate represents the
retained subscription Run Rate (subscription Run Rate at the
beginning of the fiscal year less actual cancels during the year)
as a percentage of the subscription Run Rate at the beginning of
the fiscal year.
The Retention Rate for a non-annual period is calculated by
annualizing the cancellations for which we have received a notice
of termination or for which we believe there is an intention not to
renew during the non-annual period, and we believe that such notice
or intention evidences the client’s final decision to terminate or
not renew the applicable agreement, even though such notice is not
effective until a later date. This annualized cancellation figure
is then divided by the subscription Run Rate at the beginning of
the fiscal year to calculate a cancellation rate. This cancellation
rate is then subtracted from 100% to derive the annualized
Retention Rate for the period.
Retention Rate is computed by operating segment on a
product/service-by-product/service basis. In general, if a client
reduces the number of products or services to which it subscribes
within a segment, or switches between products or services within a
segment, we treat it as a cancellation for purposes of calculating
our Retention Rate except in the case of a product or service
switch that management considers to be a replacement product or
service. In those replacement cases, only the net change to the
client subscription, if a decrease, is reported as a cancel. In the
Analytics and the ESG segments, substantially all product or
service switches are treated as replacement products or services
and netted in this manner, while in our Index and Real Estate
segments, product or service switches that are treated as
replacement products or services and receive netting treatment
occur only in certain limited instances. In addition, we treat any
reduction in fees resulting from a down-sale of the same product or
service as a cancellation to the extent of the reduction. We do not
calculate Retention Rate for that portion of our Run Rate
attributable to assets in index-linked investment products or
futures and options contracts, in each case, linked to our
indexes.
Run Rate estimates at a particular point in time the annualized
value of the recurring revenues under our client license agreements
(“Client Contracts”) for the next 12 months, assuming all Client
Contracts that come up for renewal are renewed and assuming
then-current currency exchange rates, subject to the adjustments
and exclusions described below. For any Client Contract where fees
are linked to an investment product’s assets or trading
volume/fees, the Run Rate calculation reflects, for ETFs, the
market value on the last trading day of the period, for futures and
options, the most recent quarterly volumes and/or reported exchange
fees, and for other non-ETF products, the most recent
client-reported assets. Run Rate does not include fees associated
with “one-time” and other non-recurring transactions. In addition,
we add to Run Rate the annualized fee value of recurring new sales,
whether to existing or new clients, when we execute Client
Contracts, even though the license start date, and associated
revenue recognition, may not be effective until a later date. We
remove from Run Rate the annualized fee value associated with
products or services under any Client Contract with respect to
which we have received a notice of termination or non-renewal
during the period and have determined that such notice evidences
the client’s final decision to terminate or not renew the
applicable products or services, even though such notice is not
effective until a later date.
“Organic subscription Run Rate growth” is defined as the period
over period Run Rate growth, excluding the impact of changes in
foreign currency and the first year impact of any acquisitions. It
is also adjusted for divestitures. Changes in foreign currency are
calculated by applying the currency exchange rate from the
comparable prior period to current period foreign currency
denominated Run Rate.
Notes Regarding the Use of Non-GAAP Financial
Measures
MSCI has presented supplemental non-GAAP financial measures as
part of this earnings release. Reconciliations are provided in
Tables 9 through 15 below that reconcile each non-GAAP financial
measure with the most comparable GAAP measure. The non-GAAP
financial measures presented in this earnings release should not be
considered as alternative measures for the most directly comparable
GAAP financial measures. The non-GAAP financial measures presented
in this earnings release are used by management to monitor the
financial performance of the business, inform business
decision-making and forecast future results.
“Adjusted EBITDA” is defined as net income before (1) provision
for income taxes, (2) other expense (income), net, (3) depreciation
and amortization of property, equipment and leasehold improvements,
(4) amortization of intangible assets and, at times, (5) certain
other transactions or adjustments, including the impact related to
the vesting of the Multi-Year PSUs.
“Adjusted EBITDA expenses” is defined as operating expenses less
depreciation and amortization of property, equipment and leasehold
improvements and amortization of intangible assets and, at times,
certain other transactions or adjustments, including the impact
related to the vesting of the Multi-Year PSUs.
“Adjusted net income” and “adjusted EPS” are defined as net
income and diluted EPS, respectively, before the after-tax impact
of the amortization of acquired intangible assets, the impact of
divestitures, the impact of adjustments for the Tax Cuts and Jobs
Act that was enacted on December 22, 2017 (“Tax Reform”), except
for amounts associated with active tax planning implemented as a
result of Tax Reform, and, at times, certain other transactions or
adjustments, including the impact related to the vesting of the
Multi-Year PSUs and costs associated with debt extinguishment.
“Adjusted tax rate” is defined as the effective tax rate
excluding the impact of Tax Reform adjustments (except for amounts
associated with active tax planning implemented as a result of Tax
Reform) and the impact related to the vesting of the Multi-Year
PSUs.
“Capex” is defined as capital expenditures plus capitalized
software development costs.
“Free cash flow” is defined as net cash provided by operating
activities, less Capex.
“Organic operating revenue growth” is defined as operating
revenue growth compared to the prior year period excluding the
impact of acquired businesses, divested businesses and foreign
currency exchange rate fluctuations.
Asset-based fees ex-FX does not adjust for the impact from
foreign currency exchange rate fluctuations on the underlying
AUM.
We believe adjusted EBITDA and adjusted EBITDA expenses are
meaningful measures of the operating performance of MSCI because
they adjust for significant one-time, unusual or non-recurring
items as well as eliminate the accounting effects of certain
capital spending and acquisitions that do not directly affect what
management considers to be our core operating performance in the
period.
We believe adjusted net income and adjusted EPS are meaningful
measures of the performance of MSCI because they adjust for the
after-tax impact of significant one-time, unusual or non-recurring
items as well as eliminate the impact of any transactions that do
not directly affect what management considers to be our core
performance in the period.
We believe that adjusted tax rate is useful to investors because
it increases the comparability of period-to-period results by
adjusting for the estimated net impact of Tax Reform and the impact
related to the vesting of the Multi-Year PSUs.
We believe that free cash flow is useful to investors because it
relates the operating cash flow of MSCI to the capital that is
spent to continue and improve business operations, such as
investment in MSCI’s existing products. Further, free cash flow
indicates our ability to strengthen MSCI’s balance sheet, repay our
debt obligations, pay cash dividends and repurchase shares of our
common stock.
We believe organic operating revenue growth is a meaningful
measure of the operating performance of MSCI because it adjusts for
the impact of foreign currency exchange rate fluctuations and
excludes the impact of operating revenues attributable to acquired
and divested businesses for the comparable prior year period,
providing insight into our core operating performance for the
period(s) presented.
We believe that the non-GAAP financial measures presented in
this earnings release facilitate meaningful period-to-period
comparisons and provide a baseline for the evaluation of future
results.
Adjusted EBITDA expenses, adjusted EBITDA, adjusted net income,
adjusted EPS, adjusted tax rate, Capex, free cash flow and organic
operating revenue growth are not defined in the same manner by all
companies and may not be comparable to similarly-titled non-GAAP
financial measures of other companies. These measures can differ
significantly from company to company depending on, among other
things, long-term strategic decisions regarding capital structure,
the tax jurisdictions in which companies operate and capital
investments. Accordingly, the Company’s computation of these
measures may not be comparable to similarly titled measures
computed by other companies.
Notes Regarding Adjusting for the Impact of Foreign Currency
Exchange Rate Fluctuations
Foreign currency exchange rate fluctuations reflect the
difference between the current period results as reported compared
to the current period results recalculated using the foreign
currency exchange rates in effect for the comparable prior period.
While operating revenues adjusted for the impact of foreign
currency fluctuations includes asset-based fees that have been
adjusted for the impact of foreign currency fluctuations, the
underlying AUM, which is the primary component of asset-based fees,
is not adjusted for foreign currency fluctuations. Approximately
two-thirds of the AUM are invested in securities denominated in
currencies other than the U.S. dollar, and accordingly, any such
impact is excluded from the disclosed foreign currency-adjusted
variances.
Table 2: Condensed Consolidated Statements of Income
(unaudited)
Three Months Ended
Year Ended
Dec. 31,
Dec. 31,
YoY %
Dec. 31,
Dec. 31,
YoY %
In thousands, except per share
data
2019
2018
Change
2019
2018
Change
Operating revenues
$
406,606
$
361,688
12.4
%
$
1,557,796
$
1,433,984
8.6
%
Operating expenses:
Cost of revenues
70,154
73,757
(4.9
%)
294,961
287,335
2.7
%
Selling and marketing
59,486
52,949
12.3
%
219,298
192,923
13.7
%
Research and development
27,100
20,312
33.4
%
98,334
81,411
20.8
%
General and administrative
29,659
24,908
19.1
%
110,093
99,882
10.2
%
Amortization of intangible assets
13,243
11,633
13.8
%
49,410
54,189
(8.8
%)
Depreciation and amortization of
property,
equipment and leasehold improvements
7,535
8,311
(9.3
%)
29,999
31,346
(4.3
%)
Total operating expenses(1)
207,177
191,870
8.0
%
802,095
747,086
7.4
%
Operating income
199,429
169,818
17.4
%
755,701
686,898
10.0
%
Interest income
(5,299
)
(6,096
)
(13.1
%)
(16,403
)
(19,669
)
(16.6
%)
Interest expense
40,289
35,891
12.3
%
148,041
133,114
11.2
%
Other expense (income)
17,906
(47,266
)
137.9
%
20,745
(56,443
)
136.8
%
Other expenses (income), net
52,896
(17,471
)
nm
152,383
57,002
167.3
%
Income before provision for income
taxes
146,533
187,289
(21.8
%)
603,318
629,896
(4.2
%)
Provision for income taxes
23,750
35,157
(32.4
%)
39,670
122,011
(67.5
%)
Net income
122,783
152,132
(19.3
%)
563,648
507,885
11.0
%
Earnings per basic common share
$
1.45
$
1.75
(17.1
%)
$
6.66
$
5.83
14.2
%
Earnings per diluted common share
$
1.44
$
1.70
(15.3
%)
$
6.59
$
5.66
16.4
%
Weighted average shares outstanding
used
in computing earnings per share:
Basic
84,802
86,968
(2.5
%)
84,644
87,179
(2.9
%)
Diluted
85,546
89,495
(4.4
%)
85,536
89,701
(4.6
%)
nm: not meaningful
(1) Includes stock-based compensation expense of $11.5 million
and $10.5 million for the three months ended Dec. 31, 2019 and Dec.
31, 2018, respectively, and $44.1 million and $40.6 million for the
years ended Dec. 31, 2019 and Dec. 31, 2018, respectively.
Table 3: Selected Balance Sheet Items (unaudited)
As of
Dec. 31,
Dec. 31,
In thousands
2019
2018
Cash and cash equivalents
$1,506,567
$904,176
Accounts receivable, net of allowances
$499,268
$473,433
Deferred revenue
$574,656
$537,977
Long-term debt(1)
$3,071,926
$2,575,502
(1) Consists of gross long-term debt, net of deferred financing
fees. Gross long-term debt was $3,100.0 million at Dec 31, 2019 and
$2,600.0 million at Dec. 31, 2018.
Table 4: Selected Cash Flow Items (unaudited)
Three Months Ended
Year Ended
Dec. 31,
Dec. 31,
YoY %
Dec. 31,
Dec. 31,
YoY %
In thousands
2019
2018
Change
2019
2018
Change
Net cash provided by operating
activities
$
243,643
$
173,175
40.7
%
$
709,523
$
612,762
15.8
%
Net cash (used in) provided by investing
activities
(36,645
)
40,038
(191.5
%)
(71,937
)
34,874
nm
Net cash provided by (used in) financing
activities
413,648
(707,083
)
158.5
%
(36,667
)
(626,483
)
94.1
%
Effect of exchange rate changes
4,771
(352
)
nm
1,472
(6,479
)
122.7
%
Net increase (decrease) in cash and
cash
equivalents
$
625,417
$
(494,222
)
226.5
%
$
602,391
$
14,674
nm
nm: not meaningful
Table 5: Operating Results by Segment and Revenue Type
(unaudited)
Index
Three Months Ended
Year Ended
Dec. 31,
Dec. 31,
YoY %
Dec. 31,
Dec. 31,
YoY %
In thousands
2019
2018
Change
2019
2018
Change
Operating revenues:
Recurring subscriptions
$
137,746
$
123,496
11.5
%
$
530,968
$
477,612
11.2
%
Asset-based fees
96,373
81,439
18.3
%
361,927
336,565
7.5
%
Non-recurring
9,068
5,498
64.9
%
28,042
21,298
31.7
%
Total operating revenues
243,187
210,433
15.6
%
920,937
835,475
10.2
%
Adjusted EBITDA expenses
66,805
60,503
10.4
%
250,749
227,622
10.2
%
Adjusted EBITDA
$
176,382
$
149,930
17.6
%
$
670,188
$
607,853
10.3
%
Adjusted EBITDA margin %
72.5
%
71.2
%
72.8
%
72.8
%
Analytics
Three Months Ended
Year Ended
Dec. 31,
Dec. 31,
YoY %
Dec. 31,
Dec. 31,
YoY %
In thousands
2019
2018
Change
2019
2018
Change
Operating revenues:
Recurring subscriptions
$
122,353
$
119,705
2.2
%
$
486,282
$
474,334
2.5
%
Non-recurring
5,853
2,230
162.5
%
10,643
5,605
89.9
%
Total operating revenues
128,206
121,935
5.1
%
496,925
479,939
3.5
%
Adjusted EBITDA expenses
89,359
85,256
4.8
%
344,812
336,294
2.5
%
Adjusted EBITDA
$
38,847
$
36,679
5.9
%
$
152,113
$
143,645
5.9
%
Adjusted EBITDA margin %
30.3
%
30.1
%
30.6
%
29.9
%
All Other
Three Months Ended
Year Ended
Dec. 31,
Dec. 31,
YoY %
Dec. 31,
Dec. 31,
YoY %
In thousands
2019
2018
Change
2019
2018
Change
Operating revenues:
Recurring subscriptions
$
34,320
$
28,405
20.8
%
$
136,790
$
114,590
19.4
%
Non-recurring
893
915
(2.4
%)
3,144
3,980
(21.0
%)
Total operating revenues
35,213
29,320
20.1
%
139,934
118,570
18.0
%
Adjusted EBITDA expenses
30,235
26,167
15.5
%
111,736
97,635
14.4
%
Adjusted EBITDA
$
4,978
$
3,153
57.9
%
$
28,198
$
20,935
34.7
%
Adjusted EBITDA margin %
14.1
%
10.8
%
20.2
%
17.7
%
Consolidated
Three Months Ended
Year Ended
Dec. 31,
Dec. 31,
YoY %
Dec. 31,
Dec. 31,
YoY %
In thousands
2019
2018
Change
2019
2018
Change
Operating revenues:
Recurring subscriptions
$
294,419
$
271,606
8.4
%
$
1,154,040
$
1,066,536
8.2
%
Asset-based fees
96,373
81,439
18.3
%
361,927
336,565
7.5
%
Non-recurring
15,814
8,643
83.0
%
41,829
30,883
35.4
%
Operating revenues total
406,606
361,688
12.4
%
1,557,796
1,433,984
8.6
%
Adjusted EBITDA expenses
186,399
171,926
8.4
%
707,297
661,551
6.9
%
Adjusted EBITDA
$
220,207
$
189,762
16.0
%
$
850,499
$
772,433
10.1
%
Adjusted EBITDA margin %
54.2
%
52.5
%
54.6
%
53.9
%
Operating margin %
49.0
%
47.0
%
48.5
%
47.9
%
Table 6: Sales and Retention Rate by Segment
(unaudited)
Three Months Ended
Year Ended
Dec. 31,
Sep. 30,
June 30,
Mar. 31,
Dec. 31,
Dec. 31,
Dec. 31,
In thousands
2019
2019
2019
2019
2018
2019
2018
Index
New recurring subscription sales
$
23,917
$
17,553
$
19,526
$
17,329
$
21,013
$
78,325
$
72,660
Subscription cancellations
(8,734
)
(5,066
)
(3,601
)
(4,366
)
(7,699
)
(21,767
)
(20,819
)
Net new recurring subscription sales
$
15,183
$
12,487
$
15,925
$
12,963
$
13,314
$
56,558
$
51,841
Non-recurring sales
$
10,170
$
9,029
$
5,982
$
5,081
$
6,845
$
30,262
$
22,729
Total gross sales(1)
$
34,087
$
26,582
$
25,508
$
22,410
$
27,858
$
108,587
$
95,389
Total Index net sales
$
25,353
$
21,516
$
21,907
$
18,044
$
20,159
$
86,820
$
74,570
Index Retention Rate(2)
93.0
%
96.0
%
97.1
%
96.5
%
93.2
%
95.7
%
95.4
%
Analytics
New recurring subscription sales
$
25,287
$
15,285
$
13,669
$
12,751
$
19,438
$
66,992
$
64,986
Subscription cancellations
(8,903
)
(7,854
)
(7,102
)
(7,764
)
(8,524
)
(31,623
)
(33,671
)
Net new recurring subscription sales
$
16,384
$
7,431
$
6,567
$
4,987
$
10,914
$
35,369
$
31,315
Non-recurring sales
$
5,863
$
4,876
$
2,631
$
2,577
$
3,249
$
15,947
$
10,209
Total gross sales(1)
$
31,150
$
20,161
$
16,300
$
15,328
$
22,687
$
82,939
$
75,195
Total Analytics net sales
$
22,247
$
12,307
$
9,198
$
7,564
$
14,163
$
51,316
$
41,524
Analytics Retention Rate(2)
92.8
%
93.6
%
94.2
%
93.7
%
92.7
%
93.6
%
93.0
%
All Other
New recurring subscription sales
$
9,828
$
7,495
$
8,014
$
7,215
$
7,596
$
32,552
$
26,201
Subscription cancellations
(2,289
)
(1,002
)
(1,902
)
(1,275
)
(1,959
)
(6,468
)
(6,421
)
Net new recurring subscription sales
$
7,539
$
6,493
$
6,112
$
5,940
$
5,637
$
26,084
$
19,780
Non-recurring sales
$
1,319
$
487
$
630
$
454
$
1,194
$
2,890
$
3,438
Total gross sales(1)
$
11,147
$
7,982
$
8,644
$
7,669
$
8,790
$
35,442
$
29,639
Total All Other net sales
$
8,858
$
6,980
$
6,742
$
6,394
$
6,831
$
28,974
$
23,218
All Other Retention Rate(2)
92.7
%
96.8
%
93.9
%
95.9
%
92.8
%
94.8
%
94.1
%
Consolidated
New recurring subscription sales
$
59,032
$
40,333
$
41,209
$
37,295
$
48,047
$
177,869
$
163,847
Subscription cancellations
(19,926
)
(13,922
)
(12,605
)
(13,405
)
(18,182
)
(59,858
)
(60,911
)
Net new recurring subscription sales
$
39,106
$
26,411
$
28,604
$
23,890
$
29,865
$
118,011
$
102,936
Non-recurring sales
$
17,352
$
14,392
$
9,243
$
8,112
$
11,288
$
49,099
$
36,376
Total gross sales(1)
$
76,384
$
54,725
$
50,452
$
45,407
$
59,335
$
226,968
$
200,223
Total net sales
$
56,458
$
40,803
$
37,847
$
32,002
$
41,153
$
167,110
$
139,312
Total Retention Rate(2)
92.9
%
95.0
%
95.5
%
95.2
%
92.9
%
94.7
%
94.1
%
(1) Total gross sales equal new recurring subscription sales
plus non-recurring sales.
(2) See "Notes Regarding the Use of Operating Metrics" for
details regarding the definition of Retention Rate.
Table 7: AUM in ETFs Linked to MSCI Indexes
(unaudited)(1)(2)(3)
Three Months Ended
Year Ended
Dec. 31,
Sep. 30,
June 30,
Mar. 31,
Dec. 31,
Dec. 31,
Dec. 31,
In billions
2019
2019
2019
2019
2018
2019
2018
Beginning Period AUM in ETFs linked to
MSCI Indexes
$
815.0
$
819.3
$
802.2
$
695.6
$
765.5
$
695.6
$
744.3
Market Appreciation/(Depreciation)
63.5
(9.2
)
14.9
78.3
(94.7
)
147.5
(110.2
)
Cash Inflows
55.9
4.9
2.2
28.3
24.8
91.3
61.5
Period-End AUM in ETFs linked to
MSCI Indexes
$
934.4
$
815.0
$
819.3
$
802.2
$
695.6
$
934.4
$
695.6
Period Average AUM in ETFs linked to
MSCI Indexes
$
869.1
$
810.9
$
811.4
$
766.0
$
717.1
$
814.4
$
757.2
Avg. Basis Point Fee(4)
2.82
2.81
2.85
2.88
2.92
2.82
2.92
(1) The historical values of the AUM in ETFs linked to our
indexes as of the last day of the month and the monthly average
balance can be found under the link “AUM in ETFs Linked to MSCI
Indexes” on our Investor Relations homepage at http://ir.msci.com.
Information contained on our website is not incorporated by
reference into this Earnings Release or any other report filed with
the SEC. The AUM in ETFs numbers also include AUM in Exchange
Traded Notes, the value of which is less than 1.0% of the AUM
amounts presented.
(2) The values for periods prior to April 26, 2019 were based on
data from Bloomberg and MSCI, while the values for periods on or
after April 26, 2019 were based on data from Refinitiv and MSCI. De
minimis amounts of data are reported on a delayed basis.
(3) The value of AUM in ETFs linked to MSCI indexes is
calculated by multiplying the ETF net asset value by the number of
shares outstanding.
(4) Based on period-end Run Rate for ETFs linked to MSCI indexes
using period-end AUM.
Table 8: Run Rate by Segment and Type (unaudited)(1)
As of
Dec. 31,
Dec. 31,
YoY %
In thousands
2019
2018
Change
Index
Recurring subscriptions
$
559,257
$
502,665
11.3
%
Asset-based fees
396,140
311,908
27.0
%
Index Run Rate
955,397
814,573
17.3
%
Analytics Run Rate
526,845
491,861
7.1
%
All Other Run Rate
152,247
124,886
21.9
%
Total Run Rate
$
1,634,489
$
1,431,320
14.2
%
Total recurring subscriptions
$
1,238,349
$
1,119,412
10.6
%
Total asset-based fees
396,140
311,908
27.0
%
Total Run Rate
$
1,634,489
$
1,431,320
14.2
%
(1) See "Notes Regarding the Use of Operating Metrics" for
details regarding the definition of Run Rate.
Table 9: Reconciliation of Adjusted EBITDA to Net Income
(unaudited)
Three Months Ended
Year Ended
Dec. 31,
Dec. 31,
Dec. 31,
Dec. 31,
In thousands
2019
2018
2019
2018
Index adjusted EBITDA
$
176,382
$
149,930
$
670,188
$
607,853
Analytics adjusted EBITDA
38,847
36,679
152,113
143,645
All Other adjusted EBITDA
4,978
3,153
28,198
20,935
Consolidated adjusted EBITDA
220,207
189,762
850,499
772,433
Multi-Year PSU payroll tax expense
—
—
15,389
—
Amortization of intangible assets
13,243
11,633
49,410
54,189
Depreciation and amortization of
property,
equipment and leasehold improvements
7,535
8,311
29,999
31,346
Operating income
199,429
169,818
755,701
686,898
Other expense (income), net
52,896
(17,471
)
152,383
57,002
Provision for income taxes
23,750
35,157
39,670
122,011
Net income
$
122,783
$
152,132
$
563,648
$
507,885
Table 10: Reconciliation of Net Income and Diluted EPS to
Adjusted Net Income and Adjusted EPS (unaudited)
Three Months Ended
Year Ended
Dec. 31,
Dec. 31,
Dec. 31,
Dec. 31,
In thousands, except per share
data
2019
2018
2019
2018
Net income
$
122,783
$
152,132
$
563,648
$
507,885
Plus: Amortization of acquired intangible
assets
8,778
8,746
34,773
43,981
Plus: Multi-Year PSU payroll tax
expense
—
—
15,389
—
Less: Discrete excess tax benefit
related
to Multi-Year PSU vesting
—
—
(66,581
)
—
Plus: Debt extinguishment costs associated
with the 2024
Senior Notes Redemption
16,794
—
16,794
—
Less: Gain on sale of FEA (not tax
effected)
—
—
—
(10,646
)
Less: Gain on sale of InvestorForce
—
(46,595
)
—
(46,595
)
Less: Valuation Allowance released related
to
InvestorForce disposition
—
—
—
(7,758
)
Less: Tax Reform adjustments
—
(6,671
)
—
(8,272
)
Less: Income tax effect
(5,752
)
9,390
(13,226
)
1,678
Adjusted net income
$
142,603
$
117,002
$
550,797
$
480,273
Diluted EPS
$
1.44
$
1.70
$
6.59
$
5.66
Plus: Amortization of acquired intangible
assets
0.10
0.10
0.41
0.49
Plus: Multi-Year PSU payroll tax
expense
—
—
0.18
—
Less: Discrete excess tax benefit
related
to Multi-Year PSU vesting
—
—
(0.78
)
—
Plus: Debt extinguishment costs associated
with the 2024
Senior Notes Redemption
0.20
—
0.20
—
Less: Gain on sale of FEA (not tax
effected)
—
—
—
(0.12
)
Less: Gain on sale of InvestorForce
—
(0.52
)
—
(0.52
)
Less: Valuation Allowance released related
to
InvestorForce disposition
—
—
—
(0.09
)
Plus: Tax Reform adjustments
—
(0.07
)
—
(0.09
)
Less: Income tax effect
(0.07
)
0.10
(0.16
)
0.02
Adjusted EPS
$
1.67
$
1.31
$
6.44
$
5.35
Table 11: Reconciliation of Adjusted EBITDA Expenses to
Operating Expenses (unaudited)
Three Months Ended
Year Ended
Full-Year
Dec. 31,
Dec. 31,
Dec. 31,
Dec. 31,
2020
In thousands
2019
2018
2019
2018
Outlook(1)
Index adjusted EBITDA expenses
$
66,805
$
60,503
$
250,749
$
227,622
Analytics adjusted EBITDA expenses
89,359
85,256
344,812
336,294
All Other adjusted EBITDA expenses
30,235
26,167
111,736
97,635
Consolidated adjusted EBITDA
expenses
186,399
171,926
707,297
661,551
$750,000 - $770,000
Multi-Year PSU payroll tax expense
—
—
15,389
—
—
Amortization of intangible assets
13,243
11,633
49,410
54,189
Depreciation and amortization of
property,
~$90,000
equipment and leasehold improvements
7,535
8,311
29,999
31,346
Total operating expenses
$
207,177
$
191,870
$
802,095
$
747,086
$840,000 - $860,000
(1) We have not provided a full line-item reconciliation for
adjusted EBITDA expenses to total operating expenses for this
future period because we do not provide guidance on the individual
reconciling items between total operating expenses and adjusted
EBITDA expenses.
Table 12: Reconciliation of Net Cash Provided by Operating
Activities to Free Cash Flow (unaudited)
Three Months Ended
Year Ended
Full-Year
Dec. 31,
Dec. 31,
Dec. 31,
Dec. 31,
2020
In thousands
2019
2018
2019
2018
Outlook(1)
Net cash provided by operating
activities
$
243,643
$
173,175
$
709,523
$
612,762
$650,000 - $700,000
Capital expenditures
(11,900
)
(17,188
)
(29,116
)
(30,257
)
Capitalized software development costs
(6,568
)
(5,589
)
(24,654
)
(18,704
)
Capex
(18,468
)
(22,777
)
(53,770
)
(48,961
)
(70,000 - 60,000)
Free cash flow
$
225,175
$
150,398
$
655,753
$
563,801
$580,000 - $640,000
(1) We have not provided a line-item reconciliation for free
cash flow to net cash from operating activities for this future
period because we do not provide guidance on the individual
reconciling items between net cash from operating activities and
free cash flow.
Table 13: Reconciliation of Effective Tax Rate to Adjusted
Tax Rate (unaudited)
Three Months Ended
Year Ended
Dec. 31,
Dec. 31,
Dec. 31,
Dec. 31,
2019
2018
2019
2018
Effective tax rate
16.2%
18.8%
6.6%
19.4%
Tax Reform impact on effective tax
rate
—%
3.6%
—%
1.3%
Multi-Year PSU impact on effective tax
rate
—%
—%
11.0%
—%
Adjusted tax rate
16.2%
22.3%
17.6%
20.7%
Table 14: Fourth Quarter 2019 Reconciliation of Operating
Revenue Growth to Organic Operating Revenue Growth
(unaudited)
Comparison of the Three Months
Ended December 31, 2019 and 2018
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Index
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
15.6%
11.5%
18.3%
64.9%
Impact of acquisitions and
divestitures
—%
—%
—%
—%
Impact of foreign currency exchange rate
fluctuations
(0.1%)
(0.1%)
—%
—%
Organic operating revenue growth
15.5%
11.4%
18.3%
64.9%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Analytics
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
5.1%
2.2%
—%
162.5%
Impact of acquisitions and
divestitures
0.5%
0.5%
—%
1.3%
Impact of foreign currency exchange rate
fluctuations
(0.2%)
(0.2%)
—%
(1.0%)
Organic operating revenue growth
5.4%
2.5%
—%
162.8%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
All Other
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
20.1%
20.8%
—%
(2.4%)
Impact of acquisitions and
divestitures
(0.5%)
(0.3%)
—%
(6.7%)
Impact of foreign currency exchange rate
fluctuations
0.3%
0.3%
—%
0.5%
Organic operating revenue growth
19.9%
20.8%
—%
(8.6%)
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Consolidated
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
12.4%
8.4%
18.3%
83.0%
Impact of acquisitions and
divestitures
0.1%
0.2%
—%
(0.5%)
Impact of foreign currency exchange rate
fluctuations
—%
(0.1%)
—%
(0.2%)
Organic operating revenue growth
12.5%
8.5%
18.3%
82.3%
Table 15: Full-Year 2019 Reconciliation of Operating Revenue
Growth to Organic Operating Revenue Growth (unaudited)
Comparison of the Years Ended
December 31, 2019 and 2018
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Index
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
10.2%
11.2%
7.5%
31.7%
Impact of acquisitions and
divestitures
—%
—%
—%
—%
Impact of foreign currency exchange rate
fluctuations
—%
(0.1%)
0.1%
—%
Organic operating revenue growth
10.2%
11.1%
7.6%
31.7%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Analytics
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
3.5%
2.5%
—%
89.9%
Impact of acquisitions and
divestitures
4.0%
3.9%
—%
21.3%
Impact of foreign currency exchange rate
fluctuations
—%
(0.1%)
—%
0.2%
Organic operating revenue growth
7.5%
6.3%
—%
111.4%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
All Other
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
18.0%
19.4%
—%
(21.0%)
Impact of acquisitions and
divestitures
(0.1%)
(0.1%)
—%
(1.5%)
Impact of foreign currency exchange rate
fluctuations
3.6%
3.6%
—%
2.8%
Organic operating revenue growth
21.5%
22.9%
—%
(19.7%)
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Consolidated
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
8.6%
8.2%
7.5%
35.4%
Impact of acquisitions and
divestitures
1.4%
1.8%
—%
2.4%
Impact of foreign currency exchange rate
fluctuations
0.3%
0.3%
0.1%
0.4%
Organic operating revenue growth
10.3%
10.3%
7.6%
38.2%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200130005408/en/
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