MSCI Inc. (“MSCI” or the “Company”) (NYSE: MSCI), a leading
provider of critical decision support tools and services for the
global investment community, today announced its financial results
for the three months ended September 30, 2022 (“third quarter
2022”) and nine months ended September 30, 2022 (“nine months
2022”).
Financial and Operational Highlights for Third Quarter
2022 (Note: Unless otherwise noted, percentage and other
changes are relative to the three months ended September 30, 2021
(“third quarter 2021”) and Run Rate percentage changes are relative
to September 30, 2021).
- Operating revenues of $560.6 million, up 8.4%; Organic
operating revenue growth of 7.2%
- Recurring subscription revenues up 17.5%; Asset-based fees
down 11.4%
- Operating margin of 55.2%; Adjusted EBITDA margin of
60.8%
- Diluted EPS of $2.68, up 32.0%; Adjusted EPS of $2.85, up
12.6%
- New recurring subscription sales growth of 10.8%; Organic
recurring subscription Run Rate growth of 14.2%; Retention Rate of
96.4%
- In nine months 2022 and through trade date of October 24,
2022, a total of $1.3 billion or 2,729,715 shares were repurchased
at an average repurchase price of $470.68
- Approximately $100.7 million in dividends were paid to
shareholders in third quarter 2022; Cash dividend of $1.25 per
share declared by MSCI Board of Directors for fourth quarter
2022
Three Months Ended
Nine Months Ended
In thousands,
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
except per share data
(unaudited)
2022
2021
% Change
2022
2021
% Change
Operating revenues
$
560,639
$
517,099
8.4
%
$
1,672,390
$
1,493,702
12.0
%
Operating income
$
309,531
$
280,230
10.5
%
$
898,890
$
792,138
13.5
%
Operating margin %
55.2
%
54.2
%
53.7
%
53.0
%
Net income
$
216,592
$
169,876
27.5
%
$
655,602
$
532,118
23.2
%
Diluted EPS
$
2.68
$
2.03
32.0
%
$
8.05
$
6.38
26.2
%
Adjusted EPS
$
2.85
$
2.53
12.6
%
$
8.61
$
7.44
15.7
%
Adjusted EBITDA
$
340,961
$
306,595
11.2
%
$
990,649
$
878,130
12.8
%
Adjusted EBITDA margin %
60.8
%
59.3
%
59.2
%
58.8
%
“In the face of significant market turmoil, MSCI once again
delivered strong results, including our best third quarter ever of
recurring net new sales. Among other achievements, we posted our
highest Index subscription run rate growth in a decade at 12.6%,
grew our Climate business subscription run rate by 86.0% and posted
our highest Analytics retention rate ever at 95.9%,” said Henry A.
Fernandez, Chairman and CEO of MSCI.
“We did this even as global headwinds grew stronger,
demonstrating the resilience and adaptability of our all-weather
franchise. While the macro environment has created challenges for
companies across industries, MSCI continues to benefit from our
mission-critical solutions, our diversified client base and our
commitment to financial discipline,” added Mr. Fernandez.
Third Quarter Consolidated
Results
Operating Revenues:
Operating revenues were $560.6 million, up 8.4%. Organic operating
revenue growth was 7.2%. The $43.5 million increase was the result
of $62.6 million in higher recurring subscription revenues offset
by a $16.1 million decrease in asset-based fees, and a $3.0 million
decrease in non-recurring revenues.
Run Rate and Retention Rate:
Total Run Rate at September 30, 2022 was $2,203.3 million, up 5.1%.
Recurring subscriptions Run Rate increased by $177.9 million, and
asset-based fees Run Rate decreased by $70.8 million. Organic
recurring subscriptions Run Rate growth was 14.2%. Retention Rate
in third quarter 2022 was 96.4%, compared to 94.5% in third quarter
2021.
Expenses: Total operating
expenses were $251.1 million, up 6.0%. Adjusted EBITDA expenses
were $219.7 million, up 4.4%, primarily reflecting higher
non-compensation costs including in the areas of information
technology costs and professional fees. The increase also reflected
higher compensation and benefits costs related to continued
investments to support growth, including increased headcount in
technology, data services and research. Total operating expenses
excluding the impact of foreign currency exchange rate fluctuations
(“ex-FX”) and adjusted EBITDA expenses ex-FX increased 11.5% and
10.3%, respectively.
Headcount: As of September
30, 2022, headcount was 4,767 employees, with approximately 35% and
approximately 65% of employees located in developed market and
emerging market locations, respectively.
Other Expense (Income), Net:
Other expense (income), net was $40.3 million, down 49.3%. The
lower net expenses were primarily driven by the absence of debt
extinguishment costs in third quarter 2022, as well as higher
interest income, partially offset by higher interest expense
associated with higher average outstanding debt balances.
Income Taxes: The effective
tax rate was 19.5% in third quarter 2022 compared to 15.3% in third
quarter 2021. The increase was primarily related to the absence of
the impact of significant discrete tax benefits in third quarter
2022, in relation to pretax income, including the tax impact of
loss on debt extinguishment recognized in third quarter 2021. In
addition, the third quarter of 2021 reflected the tax impact of the
settlement of prior year items.
Net Income: As a result of
the factors described above, net income was $216.6 million, up
27.5%.
Adjusted EBITDA: Adjusted
EBITDA was $341.0 million, up 11.2%. Adjusted EBITDA margin in
third quarter 2022 was 60.8%, compared to 59.3% in third quarter
2021.
Index Segment:
Table 1A: Results (unaudited)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2022
2021
% Change
2022
2021
% Change
Operating revenues:
Recurring subscriptions
$
185,531
$
165,310
12.2
%
$
539,740
$
480,488
12.3
%
Asset-based fees
125,620
141,745
(11.4
)%
402,889
404,593
(0.4
)%
Non-recurring
11,089
14,448
(23.2
)%
31,319
34,876
(10.2
)%
Total operating revenues
322,240
321,503
0.2
%
973,948
919,957
5.9
%
Adjusted EBITDA expenses
76,273
75,916
0.5
%
236,936
221,023
7.2
%
Adjusted EBITDA
$
245,967
$
245,587
0.2
%
$
737,012
$
698,934
5.4
%
Adjusted EBITDA margin %
76.3
%
76.4
%
75.7
%
76.0
%
Index operating revenues were $322.2 million, up 0.2%. The $0.7
million increase was driven by $20.2 million in higher recurring
subscription revenues offset by $16.1 million in lower asset-based
fees and $3.4 million in lower non-recurring revenues.
Growth in recurring subscription revenues was primarily driven
by strong growth from both market-cap weighted and factor, ESG and
climate Index products.
The decrease in revenues attributable to asset-based fees
reflected a decline in revenues from ETFs linked to MSCI equity
indexes and non-ETF indexed funds linked to MSCI indexes, driven by
a decrease in average AUM and average basis point fees. The
decrease in revenues attributable to asset-based fees was partially
offset by an increase in revenues from exchange traded futures and
options contracts linked to MSCI indexes, driven by volume
increases.
Index Run Rate as of September 30, 2022, was $1.2 billion, up
1.1%. The $13.0 million increase was comprised of a $83.8 million
increase in recurring subscription Run Rate offset by a $70.8
million decrease in asset-based fees Run Rate. The increase in
recurring subscription Run Rate was primarily driven by strong
growth from market cap-weighted, factor, ESG and climate, and
custom and specialized Index products, and reflected growth across
all regions and client segments. The decline in asset-based fees
Run Rate primarily reflected lower AUM in ETFs linked to MSCI
equity indexes and non-ETF indexed funds linked to MSCI indexes,
partially offset by higher exchange traded futures and options
volume.
Analytics Segment:
Table 1B: Results (unaudited)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2022
2021
% Change
2022
2021
% Change
Operating revenues:
Recurring subscriptions
$
142,751
$
134,320
6.3
%
$
420,047
$
399,360
5.2
%
Non-recurring
2,164
1,978
9.4
%
6,349
6,857
(7.4
)%
Total operating revenues
144,915
136,298
6.3
%
426,396
406,217
5.0
%
Adjusted EBITDA expenses
77,281
86,007
(10.1
)%
244,912
260,381
(5.9
)%
Adjusted EBITDA
$
67,634
$
50,291
34.5
%
$
181,484
$
145,836
24.4
%
Adjusted EBITDA margin %
46.7
%
36.9
%
42.6
%
35.9
%
Analytics operating revenues were $144.9 million, up 6.3%. The
$8.6 million increase was primarily driven by growth from recurring
subscriptions related to both Multi-Asset Class and Equity
Analytics products. Excluding the impact of foreign currency
exchange rate fluctuations, Analytics operating revenue growth was
7.5%.
Analytics Run Rate as of September 30, 2022, was $597.8 million,
up 5.1%. The increase of $28.8 million was driven by growth in both
Equity Analytics and Multi-Asset Class products. Excluding the
impact of foreign currency exchange rate fluctuations, Analytics
Run Rate growth was 8.1%.
ESG and Climate Segment:
Table 1C: Results (unaudited)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2022
2021
% Change
2022
2021
% Change
Operating revenues:
Recurring subscriptions
$
56,353
$
42,592
32.3
%
$
160,962
$
115,299
39.6
%
Non-recurring
1,242
1,099
13.0
%
3,790
2,450
54.7
%
Total operating revenues
57,595
43,691
31.8
%
164,752
117,749
39.9
%
Adjusted EBITDA expenses
41,685
33,871
23.1
%
122,418
97,164
26.0
%
Adjusted EBITDA
$
15,910
$
9,820
62.0
%
$
42,334
$
20,585
105.7
%
Adjusted EBITDA margin %
27.6
%
22.5
%
25.7
%
17.5
%
ESG and Climate operating revenues were $57.6 million, up 31.8%.
The $13.9 million increase was primarily driven by strong growth
from recurring subscriptions related to Ratings and Climate
products. Excluding the impact of foreign currency exchange rate
fluctuations, ESG and Climate operating revenue growth was
46.2%.
ESG and Climate Run Rate as of September 30, 2022, was $237.9
million, up 33.4%. The $59.5 million increase primarily reflects
strong growth from Ratings, Climate and Screening products with
contributions across all regions. Excluding the impact of foreign
currency exchange rate fluctuations, ESG and Climate Run Rate
growth was 41.7%.
All Other – Private Assets
Segment:
Table 1D: Results (unaudited)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2022
2021
% Change
2022
2021
% Change
Operating revenues:
Recurring subscriptions
$
35,581
$
15,418
130.8
%
$
106,276
$
48,355
119.8
%
Non-recurring
308
189
63.0
%
1,018
1,424
(28.5
)%
Total operating revenues
35,889
15,607
130.0
%
107,294
49,779
115.5
%
Adjusted EBITDA expenses
24,439
14,710
66.1
%
77,475
37,004
109.4
%
Adjusted EBITDA
$
11,450
$
897
n/m
$
29,819
$
12,775
133.4
%
Adjusted EBITDA margin %
31.9
%
5.7
%
27.8
%
25.7
%
n/m: not meaningful.
All Other – Private Assets operating revenues, which reflects
the Real Assets operating segment, were $35.9 million, up 130.0%,
primarily driven by revenues attributable to the acquisition of RCA
as well as growth in Enterprise Analytics, Global Intel and Climate
Value-at-Risk products, partially offset by unfavorable foreign
currency exchange rate fluctuations. Excluding the impact of the
acquisition, All Other – Private Assets operating revenues
increased 13.9%. All Other – Private Assets organic operating
revenues increased by 30.6%.
All Other – Private Assets Run Rate, which reflects the Real
Assets operating segment, was $137.4 million as of September 30,
2022, up 4.3%, driven by growth in the RCA business as well as
growth in Global Intel, Enterprise Analytics and Climate
Value-at-Risk products, partially offset by unfavorable foreign
currency exchange rate fluctuations. Excluding the impact of
foreign currency exchange rate fluctuations, All Other – Private
Assets Run Rate growth was 11.9%.
Select Balance Sheet Items and Capital
Allocation
Cash Balances and Outstanding
Debt: Cash and cash equivalents was $867.1 million as of
September 30, 2022. The Company maintains its existing revolving
credit facility, which was undrawn as of September 30, 2022. MSCI
typically seeks to maintain minimum cash balances globally of
approximately $225.0 million to $275.0 million for general
operating purposes.
Total principal amounts of debt outstanding as of September 30,
2022, were $4.6 billion. The total debt to net income ratio (based
on trailing twelve months net income) was 5.3x. The total debt to
adjusted EBITDA ratio (based on trailing twelve months adjusted
EBITDA) was 3.4x.
MSCI seeks to maintain total debt to adjusted EBITDA in a target
range of 3.0x to 3.5x.
Capex and Cash Flow: Capex
was $18.0 million, and cash provided by operating activities
increased by 49.6% to $323.1 million, primarily reflecting higher
cash collections from customers and lower income tax payments,
partially offset by cash expenses paid in the quarter. Free cash
flow for third quarter 2022 was up 51.7% to $305.1 million.
Share Count and Share
Repurchases: Weighted average diluted shares outstanding
were 80.9 million in third quarter 2022, down 3.2% year-over-year.
Total share repurchases during the quarter were $165.0 million or
382,986 shares at an average repurchase price of $430.94. Total
shares outstanding as of September 30, 2022 were 80.1 million. A
total of approximately $1.3 billion remains on the outstanding
share repurchase authorization as of trade date of October 24,
2022.
Dividends: Approximately
$100.7 million in dividends were paid to shareholders in third
quarter 2022. On October 24, 2022, the MSCI Board of Directors
declared a cash dividend of $1.25 per share for fourth quarter
2022, payable on November 30, 2022, to shareholders of record as of
the close of trading on November 10, 2022.
Full-Year 2022 Guidance
MSCI's guidance for the year ending December 31, 2022
(“Full-Year 2022”) 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, including as a result of ongoing uncertainty
related to the duration, magnitude and impact of the ongoing
COVID-19 pandemic as well as the economic and market impacts of
elevated inflation levels and Russia’s invasion of Ukraine.
Guidance Item
Current Guidance for Full-Year
2022
Prior Guidance for Full-Year
2022
Operating Expense
$1,030 to $1,060 million
$1,045 to $1,085 million
Adjusted EBITDA Expense
$910 to $940 million
$940 to $970 million
Interest Expense
(including amortization of
financing fees)
~$172 million
~$172 million
Depreciation & Amortization
Expense
$110 to $120 million
$105 to $115 million
Effective Tax Rate
16.0% to 17.5%
15.5% to 18.5%
Capital Expenditures
$65 to $75 million
$65 to $75 million
Net Cash Provided by Operating
Activities
$1,100 to $1,140 million
$1,080 to $1,120 million
Free Cash Flow
$1,025 to $1,075 million
$1,005 to $1,055 million
Conference Call Information
MSCI's senior management will review the third quarter 2022
results on Tuesday, October 25, 2022 at 11:00 AM Eastern Time. To
listen to the live event via webcast, visit the events and
presentations section of MSCI's Investor Relations website,
https://ir.msci.com/events-and-presentations or to join via
telephone, please register yourself at
https://ir.msci.com/events-and-presentations. Upon registration,
telephone participants will receive a confirmation email detailing
how to join the conference call, including a dial-in number and a
unique participant pin that can be used to access the call. The
teleconference will also be webcast with an accompanying slide
presentation which can be accessed through MSCI's Investor
Relations website.
About MSCI Inc.
MSCI is a leading provider of critical decision support tools
and services for the global investment community. With over 50
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 2022 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, 2021 filed with the Securities and Exchange Commission
(“SEC”) on February 11, 2022 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 Retention Rate, Run Rate,
subscription sales, subscription cancellations and non-recurring
sales.
Retention Rate is an important metric because subscription
cancellations decrease our Run Rate and ultimately our future
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 or discontinue the subscription 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 and Climate operating 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
Assets operating 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-sell 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, or reach the end of the
committed subscription period, 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, non-renewal or an
indication the client does not intend to continue their
subscription 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,
including the acquisition of RCA completed on September 13, 2021.
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.
Sales represents the annualized value of products and services
clients commit to purchase from MSCI and will result in additional
operating revenues. Non-recurring sales represent the actual value
of the customer agreements entered into during the period and are
not a component of Run Rate. New recurring subscription sales
represent additional selling activities, such as new customer
agreements, additions to existing agreements or increases in price
that occurred during the period and are additions to Run Rate.
Subscription cancellations reflect client activities during the
period, such as discontinuing products and services and/or
reductions in price, resulting in reductions to Run Rate. Net new
recurring subscription sales represent the amount of new recurring
subscription sales net of subscription cancellations during the
period, which reflects the net impact to Run Rate during the
period.
Total gross sales represent the sum of new recurring
subscription sales and non-recurring sales. Total net sales
represent the total gross sales net of the impact from subscription
cancellations.
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 13 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, when applicable,
impairment related to sublease of leased property and certain
non-recurring acquisition-related integration and transaction
costs.
“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, when
applicable, impairment related to sublease of leased property and
certain non-recurring acquisition-related integration and
transaction costs.
“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, including the
amortization of the basis difference between the cost of the equity
method investment and MSCI’s share of the net assets of the
investee at historical carrying value and, at times, certain other
transactions or adjustments, including, when applicable, the impact
related to costs associated with debt extinguishment, the impact
related to certain non-recurring acquisition-related integration
and transaction costs, the impact from impairment related to
sublease of leased property and the impact related to gain from
changes in ownership interest of equity method investee.
“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
assets under management (“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 ongoing 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 ongoing
operating performance in the period. We also exclude the after-tax
impact of the amortization of acquired intangible assets and
amortization of the basis difference between the cost of the equity
method investment and MSCI’s share of the net assets of the
investee at historical carrying value, as these non-cash amounts
are significantly impacted by the timing and size of each
acquisition and therefore not meaningful to the ongoing operating
performance in the period.
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 ongoing 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, 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
three-fifths of the AUM is 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
Nine Months Ended
Sep. 30,
Sep. 30,
%
Sep. 30,
Sep. 30,
%
In thousands, except per share
data
2022
2021
Change
2022
2021
Change
Operating revenues
$
560,639
$
517,099
8.4
%
$
1,672,390
$
1,493,702
12.0
%
Operating expenses:
Cost of revenues (exclusive of
depreciation and amortization)
98,418
89,674
9.8
%
301,957
262,781
14.9
%
Selling and marketing
65,545
59,819
9.6
%
192,671
174,477
10.4
%
Research and development
25,941
28,352
(8.5
)%
78,179
80,745
(3.2
)%
General and administrative
30,702
38,110
(19.4
)%
112,993
103,020
9.7
%
Amortization of intangible assets
23,375
14,105
65.7
%
67,274
59,569
12.9
%
Depreciation and amortization of property,
equipment and leasehold improvements
7,127
6,809
4.7
%
20,426
20,972
(2.6
)%
Total operating expenses(1)
251,108
236,869
6.0
%
773,500
701,564
10.3
%
Operating income
309,531
280,230
10.5
%
898,890
792,138
13.5
%
Interest income
(3,938
)
(396
)
n/m
(5,160
)
(1,129
)
n/m
Interest expense
44,162
42,137
4.8
%
125,961
119,278
5.6
%
Other expense (income)
103
37,839
(99.7
)%
(90
)
61,616
(100.1
)%
Other expense (income), net
40,327
79,580
(49.3
)%
120,711
179,765
(32.9
)%
Income before provision for income
taxes
269,204
200,650
34.2
%
778,179
612,373
27.1
%
Provision for income taxes
52,612
30,774
71.0
%
122,577
80,255
52.7
%
Net income
$
216,592
$
169,876
27.5
%
$
655,602
$
532,118
23.2
%
Earnings per basic common share
$
2.69
$
2.06
30.6
%
$
8.09
$
6.45
25.4
%
Earnings per diluted common share
$
2.68
$
2.03
32.0
%
$
8.05
$
6.38
26.2
%
Weighted average shares outstanding used
in computing earnings per share:
Basic
80,500
82,470
(2.4
)%
81,001
82,521
(1.8
)%
Diluted
80,874
83,554
(3.2
)%
81,481
83,446
(2.4
)%
n/m: not meaningful.
(1) Includes stock-based compensation
expense of $12.0 million and $13.7 million for the three months
ended Sep. 30, 2022 and Sep. 30, 2021, respectively. Includes
stock-based compensation expense of $45.4 million and $46.3 million
for the nine months ended Sep. 30, 2022 and Sep. 30, 2021,
respectively.
Table 3: Selected Balance Sheet Items (unaudited)
As of
Sep. 30,
Dec. 31,
In thousands
2022
2021
Cash and cash equivalents
$867,112
$1,421,449
Accounts receivable, net of allowances
$525,360
$664,511
Current deferred revenue
$735,710
$824,912
Current portion of long-term debt (1)
$8,711
$—
Long-term debt(2)
$4,504,291
$4,161,422
(1) Consists of gross current portion of
long-term debt, net of deferred financing fees. Gross current
portion of long-term debt was $8.8 million at September 30, 2022.
(2) Consists of gross long-term debt, net of deferred financing
fees. Gross long-term debt was $4,541.3 million at September 30,
2022 and $4,200.0 million at December 31, 2021.
Table 4: Selected Cash Flow Items (unaudited)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
%
Sep. 30,
Sep. 30,
%
In thousands
2022
2021
Change
2022
2021
Change
Net cash provided by operating
activities
$
323,069
$
215,891
49.6
%
$
779,942
$
656,405
18.8
%
Net cash used in investing activities
(18,000
)
(963,558
)
98.1
%
(52,413
)
(985,879
)
94.7
%
Net cash (used in) provided by financing
activities
(269,891
)
64,391
n/m
(1,252,827
)
321,249
n/m
Effect of exchange rate changes
(10,366
)
(4,062
)
(155.2
)%
(29,039
)
(7,632
)
(280.5
)%
Net (decrease) increase in cash and
cash equivalents
$
24,812
$
(687,338
)
103.6
%
$
(554,337
)
$
(15,857
)
n/m
n/m: not meaningful.
Table 5: Operating Results by Segment and Revenue Type
(unaudited)
Index
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
%
Sep. 30,
Sep. 30,
%
In thousands
2022
2021
Change
2022
2021
Change
Operating revenues:
Recurring subscriptions
$
185,531
$
165,310
12.2
%
$
539,740
$
480,488
12.3
%
Asset-based fees
125,620
141,745
(11.4
)%
402,889
404,593
(0.4
)%
Non-recurring
11,089
14,448
(23.2
)%
31,319
34,876
(10.2
)%
Total operating revenues
322,240
321,503
0.2
%
973,948
919,957
5.9
%
Adjusted EBITDA expenses
76,273
75,916
0.5
%
236,936
221,023
7.2
%
Adjusted EBITDA
$
245,967
$
245,587
0.2
%
$
737,012
$
698,934
5.4
%
Adjusted EBITDA margin %
76.3
%
76.4
%
75.7
%
76.0
%
Analytics
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
%
Sep. 30,
Sep. 30,
%
In thousands
2022
2021
Change
2022
2021
Change
Operating revenues:
Recurring subscriptions
$
142,751
$
134,320
6.3
%
$
420,047
$
399,360
5.2
%
Non-recurring
2,164
1,978
9.4
%
6,349
6,857
(7.4
)%
Total operating revenues
144,915
136,298
6.3
%
426,396
406,217
5.0
%
Adjusted EBITDA expenses
77,281
86,007
(10.1
)%
244,912
260,381
(5.9
)%
Adjusted EBITDA
$
67,634
$
50,291
34.5
%
$
181,484
$
145,836
24.4
%
Adjusted EBITDA margin %
46.7
%
36.9
%
42.6
%
35.9
%
ESG and Climate
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
%
Sep. 30,
Sep. 30,
%
In thousands
2022
2021
Change
2022
2021
Change
Operating revenues:
Recurring subscriptions
$
56,353
$
42,592
32.3
%
$
160,962
$
115,299
39.6
%
Non-recurring
1,242
1,099
13.0
%
3,790
2,450
54.7
%
Total operating revenues
57,595
43,691
31.8
%
164,752
117,749
39.9
%
Adjusted EBITDA expenses
41,685
33,871
23.1
%
122,418
97,164
26.0
%
Adjusted EBITDA
$
15,910
$
9,820
62.0
%
$
42,334
$
20,585
105.7
%
Adjusted EBITDA margin %
27.6
%
22.5
%
25.7
%
17.5
%
All Other - Private Assets
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
%
Sep. 30,
Sep. 30,
%
In thousands
2022
2021
Change
2022
2021
Change
Operating revenues:
Recurring subscriptions
$
35,581
$
15,418
130.8
%
$
106,276
$
48,355
119.8
%
Non-recurring
308
189
63.0
%
1,018
1,424
(28.5
)%
Total operating revenues
35,889
15,607
130.0
%
107,294
49,779
115.5
%
Adjusted EBITDA expenses
24,439
14,710
66.1
%
77,475
37,004
109.4
%
Adjusted EBITDA
$
11,450
$
897
n/m
$
29,819
$
12,775
133.4
%
Adjusted EBITDA margin %
31.9
%
5.7
%
27.8
%
25.7
%
Consolidated
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
%
Sep. 30,
Sep. 30,
%
In thousands
2022
2021
Change
2022
2021
Change
Operating revenues:
Recurring subscriptions
$
420,216
$
357,640
17.5
%
$
1,227,025
$
1,043,502
17.6
%
Asset-based fees
125,620
141,745
(11.4
)%
402,889
404,593
(0.4
)%
Non-recurring
14,803
17,714
(16.4
)%
42,476
45,607
(6.9
)%
Operating revenues total
560,639
517,099
8.4
%
1,672,390
1,493,702
12.0
%
Adjusted EBITDA expenses
219,678
210,504
4.4
%
681,741
615,572
10.7
%
Adjusted EBITDA
$
340,961
$
306,595
11.2
%
$
990,649
$
878,130
12.8
%
Adjusted EBITDA margin %
60.8
%
59.3
%
59.2
%
58.8
%
Operating margin %
55.2
%
54.2
%
53.7
%
53.0
%
n/m: not meaningful.
Table 6: Sales and Retention Rate by Segment
(unaudited)(1)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2022
2021
2022
2021
Index
New recurring subscription sales
$
24,130
$
19,546
$
74,493
$
66,037
Subscription cancellations
(5,388
)
(6,203
)
(18,468
)
(18,192
)
Net new recurring subscription sales
$
18,742
$
13,343
$
56,025
$
47,845
Non-recurring sales
$
13,375
$
17,366
$
41,357
$
39,340
Total gross sales
$
37,505
$
36,912
$
115,850
$
105,377
Total Index net sales
$
32,117
$
30,709
$
97,382
$
87,185
Index Retention Rate
96.9
%
96.0
%
96.5
%
96.1
%
Analytics
New recurring subscription sales
$
17,568
$
15,889
$
50,391
$
44,381
Subscription cancellations
(6,029
)
(9,213
)
(22,523
)
(25,188
)
Net new recurring subscription sales
$
11,539
$
6,676
$
27,868
$
19,193
Non-recurring sales
$
2,505
$
2,377
$
8,412
$
8,123
Total gross sales
$
20,073
$
18,266
$
58,803
$
52,504
Total Analytics net sales
$
14,044
$
9,053
$
36,280
$
27,316
Analytics Retention Rate
95.9
%
93.4
%
94.9
%
94.0
%
ESG and Climate
New recurring subscription sales
$
14,270
$
17,310
$
55,617
$
46,706
Subscription cancellations
(1,303
)
(1,338
)
(3,315
)
(3,636
)
Net new recurring subscription sales
$
12,967
$
15,972
$
52,302
$
43,070
Non-recurring sales
$
1,375
$
1,090
$
3,553
$
2,927
Total gross sales
$
15,645
$
18,400
$
59,170
$
49,633
Total ESG and Climate net sales
$
14,342
$
17,062
$
55,855
$
45,997
ESG and Climate Retention Rate
97.4
%
96.1
%
97.8
%
96.5
%
All Other - Private Assets
New recurring subscription sales
$
5,218
$
2,479
$
16,490
$
6,023
Subscription cancellations
(1,744
)
(1,296
)
(5,080
)
(2,881
)
Net new recurring subscription sales
$
3,474
$
1,183
$
11,410
$
3,142
Non-recurring sales
$
83
$
130
$
690
$
1,201
Total gross sales
$
5,301
$
2,609
$
17,180
$
7,224
Total All Other - Private Assets net
sales
$
3,557
$
1,313
$
12,100
$
4,343
All Other - Private Assets Retention
Rate(2)
94.8
%
91.0
%
95.0
%
91.2
%
Consolidated
New recurring subscription sales
$
61,186
$
55,224
$
196,991
$
163,147
Subscription cancellations
(14,464
)
(18,050
)
(49,386
)
(49,897
)
Net new recurring subscription sales
$
46,722
$
37,174
$
147,605
$
113,250
Non-recurring sales
$
17,338
$
20,963
$
54,012
$
51,591
Total gross sales
$
78,524
$
76,187
$
251,003
$
214,738
Total net sales
$
64,060
$
58,137
$
201,617
$
164,841
Total Retention Rate
96.4
%
94.5
%
95.9
%
94.9
%
(1) See "Notes Regarding the Use of
Operating Metrics" for details regarding the definition of new
recurring subscription sales, subscription cancellations, net new
recurring subscription sales, non-recurring sales, total gross
sales, total net sales and Retention Rate. (2) Retention rate for
All Other – Private Assets excluding the impact of RCA was 95.7%
and 95.8% for the three and nine months ended September 30, 2022,
respectively.
Table 7: AUM in ETFs Linked to MSCI Equity Indexes
(unaudited)(1)(2)
Three Months Ended
Nine Months Ended
Sep. 30
Dec. 31
Mar. 31
June 30
Sep. 30
Sep. 30
Sep. 30
In billions
2021
2021
2022
2022
2022
2021
2022
Beginning Period AUM in ETFs linked to
$
1,336.2
$
1,336.6
$
1,451.6
$
1,389.3
$
1,189.5
$
1,103.6
$
1,451.6
MSCI equity indexes
Market Appreciation/(Depreciation)
(30.7
)
56.5
(89.7
)
(207.3
)
(105.7
)
86.2
(402.7
)
Cash Inflows
31.1
58.5
27.4
7.5
(2.6
)
146.8
32.3
Period-End AUM in ETFs linked to
MSCI equity indexes
$
1,336.6
$
1,451.6
$
1,389.3
$
1,189.5
$
1,081.2
$
1,336.6
$
1,081.2
Period Average AUM in ETFs linked to
MSCI equity indexes
$
1,361.9
$
1,414.8
$
1,392.5
$
1,285.4
$
1,208.9
$
1,274.5
$
1,295.6
Period-End Basis Point Fee(3)
2.57
2.54
2.51
2.52
2.52
2.57
2.52
(1) The historical values of the AUM in
ETFs linked to our equity 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 Equity Indexes” on our Investor Relations
homepage at http://ir.msci.com. Information contained on our
website is not incorporated by reference into this Press Release or
any other report filed with the SEC. The AUM in ETFs also includes
AUM in Exchange Traded Notes, the value of which is less than 1% of
the AUM amounts presented. (2) The value of AUM in ETFs linked to
MSCI equity indexes is calculated by multiplying the equity ETFs
net asset value by the number of shares outstanding. (3) Based on
period-end Run Rate for ETFs linked to MSCI equity indexes using
period-end AUM.
Table 8: Run Rate by Segment and Type (unaudited)(1)
As of
Sep. 30,
Sep. 30,
%
In thousands
2022
2021
Change
Index
Recurring subscriptions
$
750,818
$
667,023
12.6
%
Asset-based fees
479,399
550,230
(12.9
)%
Index Run Rate
1,230,217
1,217,253
1.1
%
Analytics Run Rate
597,752
568,932
5.1
%
ESG and Climate Run Rate
237,930
178,398
33.4
%
All Other - Private Assets Run
Rate
137,401
131,678
4.3
%
Total Run Rate
$
2,203,300
$
2,096,261
5.1
%
Total recurring subscriptions
$
1,723,901
$
1,546,031
11.5
%
Total asset-based fees
479,399
550,230
(12.9
)%
Total Run Rate
$
2,203,300
$
2,096,261
5.1
%
(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
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2022
2021
2022
2021
Index adjusted EBITDA
$
245,967
$
245,587
$
737,012
$
698,934
Analytics adjusted EBITDA
67,634
50,291
181,484
145,836
ESG and Climate adjusted EBITDA
15,910
9,820
42,334
20,585
All Other - Private Assets adjusted
EBITDA
11,450
897
29,819
12,775
Consolidated adjusted EBITDA
340,961
306,595
990,649
878,130
Amortization of intangible assets
23,375
14,105
67,274
59,569
Depreciation and amortization of property,
equipment and leasehold improvements
7,127
6,809
20,426
20,972
Acquisition-related integration and
transaction costs(1)
928
5,451
4,059
5,451
Operating income
309,531
280,230
898,890
792,138
Other expense (income), net
40,327
79,580
120,711
179,765
Provision for income taxes
52,612
30,774
122,577
80,255
Net income
$
216,592
$
169,876
$
655,602
$
532,118
(1) Incremental and non-recurring costs
attributable to acquisitions directly related to the execution of
the transaction and integration of the acquired business that have
occurred no later than 12 months after the close of the
transaction.
Table 10: Reconciliation of Net Income and Diluted EPS to
Adjusted Net Income and Adjusted EPS (unaudited)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands, except per share
data
2022
2021
2022
2021
Net income
$
216,592
$
169,876
$
655,602
$
532,118
Plus: Amortization of acquired intangible
assets and equity method investment basis difference
16,811
10,792
50,564
29,915
Plus: Acquisition-related integration and
transaction costs(1)(2)
928
5,451
4,220
5,451
Plus: Debt extinguishment costs associated
with the 2025 and 2026 Senior Notes Redemptions
—
37,312
—
59,104
Plus: Write-off of internally developed
capitalized software
—
—
—
16,013
Less: Income tax effect
(3,537
)
(12,143
)
(8,630
)
(21,966
)
Adjusted net income
$
230,794
$
211,288
$
701,756
$
620,635
Diluted EPS
$
2.68
$
2.03
$
8.05
$
6.38
Plus: Amortization of acquired intangible
assets and equity method investment basis difference
0.21
0.13
0.62
0.36
Plus: Acquisition-related integration and
transaction costs(1)(2)
0.01
0.07
0.05
0.07
Plus: Debt extinguishment costs associated
with the 2025 and 2026 Senior Notes Redemptions
—
0.45
—
0.71
Plus: Write-off of internally developed
capitalized software
—
—
—
0.19
Less: Income tax effect
(0.05
)
(0.15
)
(0.11
)
(0.27
)
Adjusted EPS
$
2.85
$
2.53
$
8.61
$
7.44
(1) Acquisition-related integration and
transaction costs of $0.9 million and $4.1 million are presented
within "General and administrative" expenses and $0 million and
$0.2 million are presented within "Depreciation and amortization of
property, equipment and leasehold improvements" expenses for the
three and nine months ended September 30, 2022, respectively. (2)
Incremental and non-recurring costs attributable to acquisitions
directly related to the execution of the transaction and
integration of the acquired business that have occurred no later
than 12 months after the close of the transaction.
Table 11: Reconciliation of Adjusted EBITDA Expenses to
Operating Expenses (unaudited)
Three Months Ended
Nine Months Ended
Full-Year
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
2022
In thousands
2022
2021
2022
2021
Outlook(1)
Index adjusted EBITDA expenses
$
76,273
$
75,916
$
236,936
$
221,023
Analytics adjusted EBITDA expenses
77,281
86,007
244,912
260,381
ESG and Climate adjusted EBITDA
expenses
41,685
33,871
122,418
97,164
All Other - Private Assets adjusted EBITDA
expenses
24,439
14,710
77,475
37,004
Consolidated adjusted EBITDA
expenses
219,678
210,504
681,741
615,572
$910,000 - $940,000
Amortization of intangible assets
23,375
14,105
67,274
59,569
Depreciation and amortization of
property,
$110,000 - $120,000
equipment and leasehold improvements
7,127
6,809
20,426
20,972
Acquisition-related integration and
transaction costs(2)
928
5,451
4,059
5,451
Total operating expenses
$
251,108
$
236,869
$
773,500
$
701,564
$1,030,000 -
$1,060,000
(1) We have not provided a full line-item reconciliation for
adjusted EBITDA expenses to total operating expenses for this
future period because we are not able to provide guidance on the
individual reconciling items between total operating expenses and
adjusted EBITDA expenses. We believe the impact and timing of these
potential future items are inherently uncertain and difficult to
predict and are unavailable without unreasonable efforts.(2)
Incremental and non-recurring costs attributable to acquisitions
directly related to the execution of the transaction and
integration of the acquired business that have occurred no later
than 12 months after the close of the transaction.
Table 12: Reconciliation of Net Cash Provided by Operating
Activities to Free Cash Flow (unaudited)
Three Months Ended
Nine Months Ended
Full-Year
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
2022
In thousands
2022
2021
2022
2021
Outlook(1)
Net cash provided by operating
activities
$
323,069
$
215,891
$
779,942
$
656,405
$1,100,000 -
$1,140,000
Capital expenditures
(3,275
)
(4,646
)
(8,012
)
(7,119
)
Capitalized software development costs
(14,726
)
(10,141
)
(44,425
)
(29,078
)
Capex
(18,001
)
(14,787
)
(52,437
)
(36,197
)
($75,000 - $65,000)
Free cash flow
$
305,068
$
201,104
$
727,505
$
620,208
$1,025,000 -
$1,075,000
(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. We believe the impact and
timing of these potential future items are inherently uncertain and
difficult to predict and are unavailable without unreasonable
efforts.
Table 13: Third Quarter 2022 Reconciliation of Operating
Revenue Growth to Organic Operating Revenue Growth
(unaudited)
Comparison of the Three Months
Ended September 30, 2022 and 2021
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Index
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
0.2
%
12.2
%
(11.4
)%
(23.2
)%
Impact of acquisitions and
divestitures
—
%
—
%
—
%
—
%
Impact of foreign currency exchange rate
fluctuations
0.5
%
0.7
%
0.2
%
(0.2
)%
Organic operating revenue growth
0.7
%
12.9
%
(11.2
)%
(23.4
)%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Analytics
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
6.3
%
6.3
%
—
%
9.4
%
Impact of acquisitions and
divestitures
—
%
—
%
—
%
—
%
Impact of foreign currency exchange rate
fluctuations
1.2
%
1.1
%
—
%
6.4
%
Organic operating revenue growth
7.5
%
7.4
%
—
%
15.8
%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
ESG and Climate
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
31.8
%
32.3
%
—
%
13.0
%
Impact of acquisitions and divestures
—
%
—
%
—
%
—
%
Impact of foreign currency exchange rate
fluctuations
14.4
%
14.6
%
—
%
8.6
%
Organic operating revenue growth
46.2
%
46.9
%
—
%
21.6
%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
All Other - Private Assets
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
130.0
%
130.8
%
—
%
63.0
%
Impact of acquisitions and divestures
(116.1
)%
(117.5
)%
—
%
—
%
Impact of foreign currency exchange rate
fluctuations
16.7
%
16.7
%
—
%
13.7
%
Organic operating revenue growth
30.6
%
30.0
%
—
%
76.7
%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Consolidated
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
8.4
%
17.5
%
(11.4
)%
(16.4
)%
Impact of acquisitions and
divestitures
(3.5
)%
(5.1
)%
—
%
—
%
Impact of foreign currency exchange rate
fluctuations
2.3
%
3.2
%
0.2
%
1.3
%
Organic operating revenue growth
7.2
%
15.6
%
(11.2
)%
(15.1
)%
Table 14: Nine Months 2022 Reconciliation of Operating
Revenue Growth to Organic Operating Revenue Growth
(unaudited)
Comparison of the Nine Months
Ended September 30, 2022 and 2021
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Index
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
5.9
%
12.3
%
(0.4
)%
(10.2
)%
Impact of acquisitions and
divestitures
—
%
—
%
—
%
—
%
Impact of foreign currency exchange rate
fluctuations
0.3
%
0.5
%
0.2
%
—
%
Organic operating revenue growth
6.2
%
12.8
%
(0.2
)%
(10.2
)%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Analytics
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
5.0
%
5.2
%
—
%
(7.4
)%
Impact of acquisitions and
divestitures
—
%
—
%
—
%
—
%
Impact of foreign currency exchange rate
fluctuations
0.8
%
0.8
%
—
%
3.7
%
Organic operating revenue growth
5.8
%
6.0
%
—
%
(3.7
)%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
ESG and Climate
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
39.9
%
39.6
%
—
%
54.7
%
Impact of acquisitions and divestures
—
%
—
%
—
%
—
%
Impact of foreign currency exchange rate
fluctuations
9.5
%
9.5
%
—
%
7.6
%
Organic operating revenue growth
49.4
%
49.1
%
—
%
62.3
%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
All Other - Private Assets
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
115.5
%
119.8
%
—
%
(28.5
)%
Impact of acquisitions and divestures
(115.8
)%
(119.3
)%
—
%
—
%
Impact of foreign currency exchange rate
fluctuations
12.0
%
12.2
%
—
%
4.4
%
Organic operating revenue growth
11.7
%
12.7
%
—
%
(24.1
)%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Consolidated
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
12.0
%
17.6
%
(0.4
)%
(6.9
)%
Impact of acquisitions and
divestitures
(3.9
)%
(5.5
)%
—
%
—
%
Impact of foreign currency exchange rate
fluctuations
1.6
%
2.1
%
0.2
%
1.1
%
Organic operating revenue growth
9.7
%
14.2
%
(0.2
)%
(5.8
)%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221025005173/en/
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