Slide 1: Third Quarter 2024 Earnings Presentation
Third Quarter 2024 EARNINGS PRESENTATION October 29, 2024 © 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 2024 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 three months ended September 30, 2024 are unaudited unless otherwise noted
Slide 4: MSCI Third Quarter 2024 Earnings Call Participants
MSCI Third 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: 3Q24 Financial Results Snapshot
3Q24 Financial Results Snapshot Robust earnings growth reflecting all weather franchise As of September 30, 2024 As of September 30, 2024 3Q24 Operating Revenues 3Q24 Operating Revenues Subscription Run Rate Subscription Run Rate (reported) (organic) Growth (reported) Growth (organic) +16% +11% +15%
Slide 7: 3Q24 Regional Performance
3Q24 Regional Performance 3Q24 Recurring Subscription Run Rate by Region Americas EMEA APAC +17% +14% +11% $996M YoY $848M YoY $367M YoY Organic: $905M; +7% YoY Organic: $811M; +9% YoY Organic: $359M; +9% YoY 3Q24 Recurring Net New Subscription Sales by Region Americas EMEA APAC +17% $13M -8% $5M -5
Slide 8: 3Q24 Operating Highlights
3Q24 Operating Highlights (US$ in millions) +12% Organic Total Run Rate +17% • $2.9B of Total Run Rate across MSCI Asset-Based Fees $2,894 Run Rate Private Capital Solutions • Quarterly Retention rate of 94.2% $2,468 +15% • Asset Based Fees delivered Run Rate Organic growth of 25%, driven by all-tim
Slide 9: Significant Recurring Revenue Model with Global Client Base
Significant Recurring Revenue Model with Global Client Base Operating Revenues Mix MSCI Subscription Run Rate MSCI Subscription Run Rate Quarter Ended 09/30/2024 as of 09/30/2024 by Geography as of 09/30/2024 by Client Base by Segment by Type Non-Recurring 3% Wealth All Other – Private F&O transacti
Slide 10: Emerging Growth Opportunities
Emerging Growth Opportunities Run Rate (US$ in millions) $435 09/30/2023 $387 09/30/2024 $269 $151 $130 $112 $92 $99 $98 $100 $98 $85 $53 $59 1 2 5 6 Insurance Climate Fixed Income Futures & Options 3 Wealth Management 4 Private Assets ESG (ex. Climate) Expanding in attractive additional addressable
Slide 11: 3Q24 Summary Financial Results
3Q24 Summary Financial Results (US$ in thousands, except per share data) For the Three Months Ended September 30, 2024 (Unaudited) 2024 2023 YoY% Change Operating revenues $ 724,705 $ 625,439 15.9% Operating income $ 401,334 $ 353,309 13.6% Operating margin % 55.4% 56.5% Net income $ 280,901 $ 259,6
Slide 12: 3Q24 Segment Operating Revenues
3Q24 Segment Operating Revenues (US$ in millions) ESG & Climate All Other – Index Analytics (Reportable Segment) Private Assets 12% +12% +11% +1% Organic Organic Organic Organic 12% $404.9 +12% $362.1 $12.4 +15% $172.4 $83.6 +77% $63.8 $14.6 $154.3 $4.2 $2.1 $73.0 $168.6 $3.0 $0.8 $1.3 $141.1 $36.0
Slide 13: 3Q24 Organic Subscription Run Rate Growth of 8%
3Q24 Organic Subscription Run Rate Growth of 8% (US$ in millions) ESG & Climate All Other – Index Subscription Analytics (Reportable Segment) Private Assets +9% +7% +11% +2% +9% Organic Organic $906.8 Organic Organic $835.3 +8% +16% $104.6 $71.4 +7% $691.3 +78% $98.2 $57.4 $639.5 $134.0 +15% $268.6
Slide 14: Index Segment: Asset-Based Fees Details
Index Segment: Asset-Based Fees Details (US$ 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: 3Q24 QoQ AUM Drivers: MSCI-Linked Equity ETFs
3Q24 QoQ AUM Drivers: MSCI-Linked Equity ETFs (US$ in billions) By Geographic Exposure By Product $111.3 $111.3 U.S. $27.4 Market Cap $79.2 EM Weighted $31.1 $52.8 Factors $12.7 $16.3 $2.1 $0.2 DM ex. U.S. $19.4 $2.0 $0.7 ESG & $ 1,761.8 $15.9 Climate $1,761.8 Cash inflows / (outflows): $18.6 $ 1,63
Slide 16: 3Q24 YoY AUM Drivers: MSCI-Linked Equity ETFs
3Q24 YoY AUM Drivers: MSCI-Linked Equity ETFs (US$ in billions) By Geographic Exposure $355.8 $114.0 U.S. DM ex. $158.9 U.S. $82.9 EM $26.3 $63.9 $(7.1) $ 1,761.8 $1,322.8 Cash inflows / (outflows): $83.1 3Q23 Ending U.S. Developed Markets Emerging Markets Market Change 3Q24 Ending AUM ex. U.S. AUM
Slide 17: Market Movement and Momentum in Cash Flows Continues
Market Movement and Momentum in Cash Flows Continues (US$ 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 29.1 $55.4 $55.7 $53.1 25.2 24.5 24.2 24.7 3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4Q23
Slide 19: Adjusted Earnings Per Share Growth Drivers
Adjusted Earnings Per Share Growth Drivers (US$ in per share amounts) +11.9% Business Growth Capital Activities Tax and FX1 YoY $0.60 ($0.06) ($0.13) (0.40) 1.00 0.04 (0.10) (0.15) $3.86 0.02 $3.45 3Q23 Revenue Expenses Sharecount Net Interest & Tax Rate Net Fx Impact 3Q24 Adjusted EPS Other Expense
Slide 20: Strong Balance Sheet Provides Optionality
Strong Balance Sheet Provides Optionality (US$ in millions, unless otherwise noted) • In 3Q24, returned $324.1M to shareholders through share Cash1 and Debt as of 09/30/2024 repurchases of $198.7M and quarterly dividends of $125.4M. Total Cash $501M • Strong balance sheet provides optionality Total
Slide 21: Full-Year 2024 Guidance
Full-Year 2024 Guidance Full-Year 2024 Guidance Item Previous Guidance Current Guidance Operating Expense $1,305 to $1,345 million $1,305 to $1,345 million Adjusted EBITDA Expense $1,130 to $1,160 million $1,130 to $1,160 million Interest Expense1 $185 to $189 million $183 to $186 million (including
Slide 22: Q&A
Q&A
Slide 23: Additional Information
Additional Information
Slide 24: Continued Resilient Key Operating Metrics
Continued Resilient Key Operating Metrics YoY Recurring Subscription Run Rate Growth (as Reported and Organic) 17% 18% 18% 18% 16% 14% 13% 14% 14% 15% 12% 12% 12% 12% 10% 11% 10% 10% 10% 10% 11% 14% 14% 11% 10% 10% 11% 12% 13% 12% 12% 12% 11% 11% 10% 9% 9% 10% 9% 9% 8% 8% 3Q19 4Q19 1Q20 2Q20 3Q20 4Q
Slide 25: 3Q19 to 3Q24 YoY Segment Run Rate Growth
3Q19 to 3Q24 YoY Segment Run Rate Growth Index 45% 49% 37% 27% 27% 25% 11% 11% 13% 17% 15% 12% 13% 12% 12% 12% 14% 15% 16% 16% 10% 9% 11% 10% 11% 11% 11% 11% 12% 12% 11% 11% 9% 4% 5% 7% 9% 9% -4% -13% -13% -7% 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23
Slide 26: 3Q19 to 3Q24 YoY Segment Run Rate Growth
3Q19 to 3Q24 YoY Segment Run Rate Growth ESG & Climate 46% 47% 50% 47% 42% 44% 42% 36% 37% 28% 31% 30% 26% 28% 24% 46% 44% 47% 26% 25% 39% 42% 41% 20% 33% 33% 34% 15% 14% 16% 29% 24% 27% 23% 27% 26% 24% 22% 16% 13% 13% 11% 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q
Slide 27: Geographic Market Exposures Of MSCI-Linked ETFs Increasingly Diversified
Geographic Market Exposures Of MSCI-Linked ETFs Increasingly Diversified Over Time Mix of MSCI linked equity ETF AUM balance by geographic exposure % US DM Ex US EM 22% 26% 27% 26% 26% 33% 30% 29% 32% 29% 30% 26% 42% 44% 44% 45% 46% 47% 58% 51% 46% 43% 50% 51% 47% 53% 46% 43% 23% 25% 27% 30% 28% 28%
Slide 28: YoY Growth Across ESG and Climate Franchise
YoY Growth Across ESG and Climate Franchise AUM in ETFs Linked to MSCI ESG and Climate Equity ESG & Climate Run Rates Across all Segments1 Indexes ESG Subscription Climate Subscription (US$ in billions) ESG ABF Climate ABF $70.0 U.S. $28.8 +17% $566 $43 +43% DM ex. U.S. $27.2 $485 $30 $88 +29% EM $1
Slide 29: Long-term Targets
Long-term Targets Revenue Adj. EBITDA Expense Adj. EBITDA Adj. EBITDA Growth Rate1 Growth Rate Growth Rate Margin % High Single Digit MSCI Low Double Digit to Low Double Low to Mid Teens High 50s 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 cancellati
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 Nine Months Ended Sep. 30, Sep. 30, Sep. 30, Sep. 30, In thousands 2024 2023 2024 2023 Net income $ 280,901 $ 259,659 $ 803,613 $ 745,212 Provision for income taxes 76,035 57,997 189,210 155,974 Other expense (income), ne
Slide 34: Reconciliation of Net Income and Diluted EPS to Adjusted EPS
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 2024 2023 2024 2023 Net income $ 280,901 $ 259,659 $ 803,613 $ 745,212 Plus: Amortization of a
Slide 35: Reconciliation of Operating Expenses to Adjusted EBITDA Expenses
Reconciliation of Operating Expenses to Adjusted EBITDA Expenses (UNAUDITED) Three Months Ended Nine Months Ended Full-Year Sep. 30, Sep. 30, Sep. 30, Sep. 30, 2024 In thousands 2024 2023 2024 2023 Guidance (1) Total operating expenses $ 323,371 $ 272,130 $ 989,295 $ 824,950 $1,305,000 - $1,345,000
Slide 36: Reconciliation of Operating Cash Flow to Free Cash Flow
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, 2024 In thousands 2024 2023 2024 2023 Guidance (1) Net cash provided by operating activities $ 421,609 $ 291,131 $ 1,070,994 $
Slide 37: Third Quarter 2024 Operating Revenue Growth to Organic Growth
Third Quarter 2024 Reconciliation of Operating Revenue Growth to Organic Operating Revenue Growth (UNAUDITED) Comparison of the Three Months Ended September 30, 2024 and 2023 Recurring Asset-Based Non-Recurring Total Subscription Fees Revenues Change Change Change Change Index Percentage Percentage
Slide 38: Nine Months 2024 Operating Revenue Growth to Organic Growth
Nine Months 2024 Reconciliation of Operating Revenue Growth to Organic Operating Revenue Growth (UNAUDITED) Comparison of the Nine Months Ended September 30, 2024 and 2023 Recurring Asset-Based Non-Recurring Total Subscription Fees Revenues Change Change Change Change Index Percentage Percentage Per