Msci Inc. · NYSE:MSCI
Msci — Q4 2024 Earnings Presentation
38 slides from Msci's earnings presentation, Jan 29, 2025
Slide 1: Full Year and Fourth Quarter 2024 Earnings presentation
Full Year and Fourth Quarter 2024 Earnings presentation January 29, 2025 © 2024 MSCI Inc. All rights reserved.
Slide 2: Forward-Looking Statements
Forward-Looking Statements • This earnings presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, MSCI’s Full-Year 2025 guidance and MSCI's long-term targets. These forward-looking statements relate t
Slide 3: Other Information
Other Information • Percentage changes and totals in this earnings presentation may not sum due to rounding. • Percentage changes refer to the comparable period in 2023, unless otherwise noted. • All financial figures for the full year and three months ended December 31, 2024 are unaudited unless ot
Slide 4: MSCI Fourth Quarter 2024 Earnings Call Participants
MSCI Fourth Quarter 2024 Earnings Call Participants Henry Fernandez Baer Pettit Andy Wiechmann Jeremy Ulan Chairman & CEO President & COO Chief Financial Officer Head of IR & Treasurer 4
Slide 5: Financial & Strategic Highlights
Financial & Strategic Highlights
Slide 6: 4Q24 Financial Results Snapshot
4Q24 Financial Results Snapshot Robust earnings growth reflecting all weather franchise As of December 31, 2024 As of December 31, 2024 4Q24 Operating Revenues 4Q24 Operating Revenues Subscription Run Rate Subscription Run Rate (reported) (organic) Growth (reported) Growth (organic) +8% +7% +7% +8%
Slide 7: 4Q24 Regional Performance
4Q24 Regional Performance 4Q24 Recurring Subscription Run Rate by Region Americas +7% EMEA +7% APAC +6% $1,022M YoY $851M YoY $369M YoY Organic: $1,021M; +7% YoY Organic: $866M; +9% YoY Organic: $373M; +7% YoY 4Q24 Recurring Net New Subscription Sales by Region Americas EMEA APAC +4% $24M -17% $8M -
Slide 8: 4Q24 Operating Highlights
4Q24 Operating Highlights (US$ in millions) +9% Total Run Rate Organic +9% Asset-Based Fees $2,922 Run Rate • $2.9B of Total Run Rate across MSCI $2,686 +11% • Quarterly Retention rate of 93.1% Organic • Asset Based Fees Run Rate growth of +11% 14.8%, driven by higher ending equity ETF $1,613 and No
Slide 9: Significant Recurring Revenue Model with Global Client Base
Significant Recurring Revenue Model with Global Client Base Operating Revenues Mix Quarter Ended 12/31/2024 MSCI Subscription Run Rate MSCI Subscription Run Rate as of 12/31/2024 by Geography as of 12/31/2024 by Client Base by Product Line by Type Wealth Non-Recurring 3% Management All Other-Private
Slide 10: Emerging Growth Opportunities
Emerging Growth Opportunities Run Rate (US$ in millions) 12/31/2023 $434 12/31/2024 $411 $253 $267 $136 $95 $101 $113 $91 $104 $105 $116 $55 $57 2 3 4 5 6 Insurance Climate 1 Fixed income Futures & options Wealth Management Private Assets ESG (ex.Climate) Expanding in attractive additional addressab
Slide 11: 4Q24 Summary Financial Results
4Q24 Summary Financial Results (US$ in thousands, except per share data) For the Three Months Ended December 31 (Unaudited) 2024 2023 YoY% Change Operating revenues $ 743,509 $ 690,106 7.7% Operating income $ 405,194 $ 370,745 9.3% Operating margin % 54.5% 53.7% Net income $ 305,515 $ 403,380 (24.3%
Slide 12: 4Q24 Operating Revenues
4Q24 Operating Revenues (US$ in millions) Analytics ESG & Climate All Other – Index (Reportable Segment) +8% Private Assets Organic +5% +9% +7% +8% Organic Organic Organic $420.2 +5% $388.0 $16.4 +12% +7% $32.1 $65.3 $172.8 $85.2 $61.1 $1.1 $164.7 $4.7 $5.0 $76.3 $2.3 $1.3 $175.3 $145.1 $1.4 $81.5 $
Slide 13: 4Q24 Organic Subscription Run Rate Growth of 8%
4Q24 Organic Subscription Run Rate Growth of 8% (US$ in millions) ESG & Climate All Other – Index Subscription Analytics (Reportable Segment) Private Assets +8% +8% +10% +7% +7% Organic $934.3 Organic Organic +6% Organic +8% $861.3 +6% $107.4 +7% $100.7 $698.4 $661.9 $266.7 $135.8 +8% $252.7 $125.5
Slide 14: Index Segment: Asset-Based Fees Details
Index Segment: Asset-Based Fees Details (US$ in millions, except AUM in billions and Period-End BPS) Asset-based Fees (ABF) Revenue Quarterly Average AUM and Period-End Basis Point Quarter-End AUM by Market Exposure3 of Fee2 of ETFs linked to MSCI Equity Indexes ETFs linked to MSCI Equity Indexes Fu
Slide 15: 4Q24 QoQ AUM Drivers: MSCI-Linked Equity ETFs
4Q24 QoQ AUM Drivers: MSCI-Linked Equity ETFs (US$ in billions) By Geographic Exposure By Product $(85.3) $(85.3) $1.9 U.S. $11.6 $10.2 $5.8 $(51.2) DM ex. U.S. Market Cap $30.6 $30.8 $(65.5) Weighted $7.4 $(36.1) EM Cash inflows / (outflows): $48.2 $(10.8) ESG & Climate Cash inflows / (outflows): $
Slide 16: 4Q24 YoY AUM Drivers: MSCI-Linked Equity ETFs
4Q24 YoY AUM Drivers: MSCI-Linked Equity ETFs (US$ in billions) By Geographic Exposure $140.0 EM $20.4 DM ex. U.S. $45.5 U.S. $74.1 $32.0 $81.9 $1.9 $1,724.7 Cash inflows / (outflows): $115.8 $1,468.9 4Q23 Ending U.S. Developed Markets Emerging Markets Market Change 4Q24 Ending AUM ex. U.S. AUM 16
Slide 17: Market Movement and Momentum in Cash Flows Continues
Market Movement and Momentum in Cash Flows Continues (US$ in billions) 9M22: MSCI-linked equity ETF AUM 4Q18: MSCI-linked equity ETF balance declined 26% vs Dec-21 amid AUM of ETFs linked to MSCI Equity Indexes AUM balance declined 9% high inflation, interest rate hikes, Total QoQ amid concerns on g
Slide 18: Listed Futures & Options Linked to MSCI Indexes
Listed Futures & Options Linked to MSCI Indexes Run Rate From Listed Futures & Options Futures & Options Volume Linked Linked to MSCI Indexes to MSCI Indexes (US$ in millions) (in millions of contracts traded1) $57.6 $59.0 $57.0 24.5 24.2 24.7 25.2 25.2 $55.4 $55.7 4Q23 1Q24 2Q24 3Q24 4Q24 4Q23 1Q24
Slide 19: Adjusted Earnings Per Share Growth Drivers
Adjusted Earnings Per Share Growth Drivers (US$ in per share amounts) +13.6% Business Growth Capital Activities Tax and FX1 YoY $0.33 $0.10 $0.07 $4.18 $3.68 (0.23) 0.06 0.04 0.03 0.04 0.56 4Q23 Revenue Expenses Sharecount Net Interest & Tax Rate Net Fx Impact 4Q24 Adjusted EPS Other Expenses Adjust
Slide 20: Strong Balance Sheet Provides Optionality
Strong Balance Sheet Provides Optionality (US$ in millions, unless otherwise noted) Cash1 and Debt as of 12/31/2024 • In 4Q24, returned $494.7M to shareholders through share repurchases of $369.9M and quarterly dividends of $124.8M. Total Cash $409M Total Debt2 $4,511M • Strong balance sheet provide
Slide 21: Full-Year 2025 Guidance
Full-Year 2025 Guidance Full-Year 2025 Guidance Item Guidance Operating Expense $1,405 to $1,445 million Adjusted EBITDA Expense $1,220 to $1,250 million Interest Expense1 $182 to $186 million (including amortization of financing fees) Depreciation & Amortization Expense $185 to $195 million Effecti
Slide 22: Q&A
Q&A
Slide 23: Additional Information
Additional Information
Slide 24: Continued Resilient Key Operating Metrics
Continued Resilient Key Operating Metrics YoY Recurring Subscription Run Rate Growth (as Reported and Organic) 17% 18% 18% 18% 16% 14% 13% 14% 14% 15% 11% 10% 10% 10% 10% 11% 12% 12% 12% 12% 14% 14% 8% 11% 10% 10% 11% 12% 13% 12% 12% 12% 11% 11% 9% 9% 10% 10% 9% 9% 7% 8% 4Q19 1Q20 2Q20 3Q20 4Q20 1Q2
Slide 25: 4Q19 to 4Q24 YoY Run Rate Growth
4Q19 to 4Q24 YoY Run Rate Growth Index 45% 49% 27% 37% 27% 17% 15% 15% 16% 16% 25% 15% 11% 10% 13% 12% 13% 12% 12% 12% 14% 11% 4% 5% 10% 11% 11% 11% 11% 12% 12% 7% 11% 11% 9% 9% 9% 8% -4% -13% -13% -7% 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q2
Slide 26: 4Q19 to 4Q24 YoY Run Rate Growth
4Q19 to 4Q24 YoY Run Rate Growth ESG & Climate 44% 46% 47% 50% 47% 36% 42% 42% 37% 28% 28% 31% 30% 26% 25% 24% 20% 46% 44% 47% 15% 14% 16% 10% 39% 42% 41% 27% 27% 33% 33% 34% 29% 23% 26% 24% 22% 16% 13% 13% 11% 8% 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1
Slide 27: Geographic Market Exposures of MSCI-Linked ETFs Increasingly Diversified Over Time
Geographic Market Exposures of MSCI-Linked ETFs Increasingly Diversified Over Time Mix of MSCI linked equity ETF AUM balance by geographic exposure % US DM Ex US EM 22% 26% 26% 27% 26% 25% 33% 30% 29% 32% 29% 30% 42% 44% 58% 44% 45% 46% 47% 51% 51% 46% 43% 50% 47% 53% 46% 43% 25% 27% 30% 28% 28% 28%
Slide 28: YoY Growth Across ESG and Climate Franchise
YoY Growth Across ESG and Climate Franchise AUM in ETFs Linked to MSCI ESG and Climate Equity ESG & Climate Run Rates Across all Segments1 (US$ in billions) Indexes ESG Subscription Climate Subscription ESG ABF Climate ABF $32.9 U.S. $20.0 9% $569 DM ex. U.S. $7.9 $5.1 $523 $46 +34% $8.0 $34 $(8.1)
Slide 29: Long-term Targets
Long-term Targets Revenue Adj. EBITDA Expense Adj. EBITDA Adj. EBITDA Growth Rate1 Growth Rate Growth Rate Margin % MSCI High Single Digit Low Double Digit Low to Mid Teens High 50s to Low Double Digit Index Low Double Digit Low Double Digit Analytics High Single Digit Mid Single Digit ESG & Climate
Slide 30: Appendix
Appendix
Slide 31: Use of Operating Metrics
Use of Operating Metrics • MSCI has presented supplemental key operating metrics as part of this earnings presentation, including Retention Rate, Run Rate, subscription sales, subscription cancellations and non-recurring sales. • Retention Rate is an important metric because subscription cancellatio
Slide 32: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures • MSCI has presented supplemental non-GAAP financial measures as part of this earnings presentation. Reconciliations are provided in subsequent slides that reconcile each non-GAAP financial measure with the most comparable GAAP measure. The non-GAAP financial measu
Slide 33: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA (UNAUDITED) Three Months Ended Year Ended Dec. 31, Dec. 31, Dec. 31, Dec. 31, In thousands 2024 2023 2024 2023 Net income $ 305,515 $ 403,380 $ 1,109,128 $ 1,148,592 Provision for income taxes 57,830 64,495 247,040 220,469 Other expense (income), net 4
Slide 34: Reconciliation of Net Income and Diluted EPS to Adjusted Net Income and Adjusted EPS
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 2024 2023 2024 2023 Net income $ 305,515 $ 403,380 $ 1,109,128 $ 1,148,592 Plus: Amortization of acqu
Slide 35: Reconciliation of Operating Expenses to Adjusted EBITDA Expenses
Reconciliation of Operating Expenses to Adjusted EBITDA Expenses (UNAUDITED) Three Months Ended Year Ended Full-Year Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2025 In thousands 2024 2023 2024 2023 Outlook(1) Total operating expenses $ 338,315 $ 319,361 $ 1,327,610 $ 1,144,311 $1,405,000 - $1,445,000 Amort
Slide 36: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
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, 2025 In thousands 2024 2023 2024 2023 Outlook(1) Net cash provided by operating activities $ 430,633 $ 388,953 $ 1,501,627 $ 1,236,029
Slide 37: Fourth Quarter 2024 Reconciliation of Operating Revenue Growth to Organic
Fourth Quarter 2024 Reconciliation of Operating Revenue Growth to Organic Operating Revenue Growth (UNAUDITED) Comparison of the Three Months Ended December 31, 2024 and 2023 Total Recurring Subscription Asset-Based Fees Non-Recurring Revenues Index Change Percentage Change Percentage Change Percent
Slide 38: Full Year 2024 Reconciliation of Operating Revenue Growth to Organic
Full Year 2024 Reconciliation of Operating Revenue Growth to Organic Operating Revenue Growth (UNAUDITED) Comparison of the Years Ended December 31, 2024 and 2023 Total Recurring Subscription Asset-Based Fees Non-Recurring Revenues Index Change Percentage Change Percentage Change Percentage Change P