Morningstar, Inc. · NASDAQ:MORN
Morningstar — Q1 2021 Earnings Presentation
22 slides from Morningstar's earnings presentation, Apr 29, 2021
Slide 1: First Quarter 2021 Supplemental Presentation
First Quarter 2021 Supplemental Presentation April 28, 2021
Slide 2: Forward-looking statements
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on our current expectations about future events or future financial performance. Forward-looking statements by their nature address matters that
Slide 3: Q1 2021 Financial Performance
Q1 2021 Financial Performance ($mil) $ 67.2 $44.5 21 20 $92.3 ＋21.2% ＋51.0% ＋50.3% 21 20 $392.8 $324.0 21 20 $61.4 $41.5 ＋23.5% 21 20 $33.6 Adjusted operating income excludes intangible amortization expense and all mergers and acquisitions (M&A)-related expenses from operating income. Free cash flow
Slide 4: Q1 2021 Revenue Walk
Q1 2021 Revenue Walk *Organic revenue excludes revenue from acquisitions for a period of 12 months upon completion of the acquisition, and the effect of foreign currency translations. 21.2% Reported Revenue Growth Impact of M&A and Currency 13.0% 8.2% Contributors of Organic Revenue Growth License-Ba
Slide 5: Quarterly Revenue Growth Trend
Quarterly Revenue Growth Trend ($mil) Bars represent reported revenue. Percentages represent YOY organic revenue growth, which is a non-GAAP measure. 11.8% 10.7% 11.1% 10.5% 10.8% 10.1% 10.0% 10.6% 12.1% -2.5% 9.2% 8.6% 10.8% 18.0% -0.9% 1.3% 6.0% 5.8% 3.7% 5.6% -6.8% -15.2% -17.2% -46.3% 6.8% 0.7%
Slide 6: Q1 2021 Revenue Drivers: License-Based Revenue Growth
Q1 2021 Revenue Drivers: License-Based Revenue Growth ($mil) +23.2% Reported +12.1% Organic 21 20 License-Based Revenue Drivers: PitchBook (+36.0%), Morningstar Data (+10.2%), and Morningstar Direct (+6.9%) were the primary contributors to license-based organic revenue growth in Q1 2021. Sustainalyt
Slide 7: License-Based Quarterly Trends: PitchBook and Morningstar Direct
License-Based Quarterly Trends PitchBook ($mil) 47.5% 53.0% 42.9% 40.2% 36.8% 32.6% 33.6% 36.0% 61.8% 61.4% 59.7% 67.5% 53.2% 48.3% 42.5% 38.5% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% $0.0 $15.0 $30.0 $45.0 $60.0 $75.0 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 PitchBook Revenue YO
Slide 8: License-Based Quarterly Trends: Advisor Workstation and Morningstar Data
License-Based Quarterly Trends Advisor Workstation ($mil) -4.3% -1.7% 3.2% -2.4% -1.3% -1.7% 3.2% 3.9% -5.0% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Advisor Workstation Revenue YOY Organic Revenue Growth
Slide 9: Q1 2021 Revenue Drivers: Asset-Based Revenue Growth
Q1 2021 Revenue Drivers: Asset-Based Revenue Growth ($mil) Bars represent reported revenue. Organic revenue growth is a non-GAAP measure. Asset-Based Revenue Drivers: Workplace Solutions (+18.9%) and Morningstar Indexes (+20.0%) were the primary contributors to asset-based organic revenue growth in
Slide 10: Asset-Based Quarterly Trends: Investment Management
Asset-Based Quarterly Trends: Investment Management ($bil) Investment Management Q1 2021 AUM/A: Investment Management assets increased 9.9% year over year in aggregate, primarily driven by market performance in Morningstar Managed Portfolios. The drop from Q4 2019 to Q1 2020 in Managed Portfolios—No
Slide 11: Asset-Based Quarterly Trends: Workplace Solutions
Asset-Based Quarterly Trends: Workplace Solutions ($bil) Workplace Solutions Q1 2021 AUM/A: Workplace Solutions Assets grew 44.7% year over year, driven by market performance and further penetration of our Managed Accounts offerings. Within Managed Accounts, Morningstar Retirement Manager was the pri
Slide 12: Q1 2021 Revenue Drivers: Transaction-Based Revenue Growth
Q1 2021 Revenue Drivers: Transaction-Based Revenue Growth ($mil) Bars represent reported revenue. Organic revenue growth is a non-GAAP measure. Transaction-Based Revenue Drivers: DBRS Morningstar (+23.5%) experienced broad-based growth across geographies, driven by a recovery in structured credit ma
Slide 13: DBRS Morningstar Revenue Growth by Geography
Quarterly Transaction-Based Trends: DBRS Morningstar Revenue Growth by Geography ($mil) 5.1% 6.7% 17.6% 15.4% 34.6% 29.4% 3.3% --16.6% 52.0% $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 EMEA Canada USA DBRS Morningstar Q1 Revenue Drivers: DBRS Morningstar
Slide 14: DBRS Morningstar Revenue by Asset Class
Quarterly Transaction-Based Trends: DBRS Morningstar Revenue by Asset Class ($mil) DBRS Morningstar Q1 2021 Revenue Drivers: Category mix in Q1 2021 was 64% Structured Finance vs 36% Fundamental Ratings. Continued momentum in Canadian corporate debt issuance and demand for global financial institutio
Slide 15: Q1 2021 Operating Margins
Q1 2021 Operating Margins Adjusted Operating Margin Operating Margin 21 20 ＋17.1% ＋23.6% 21 20 Adjusted operating margin is a non-GAAP financial measure. ＋13.7% ＋18.9% Operating Margin Drivers: Higher revenue across product areas with leverage in license-based and transaction-based areas. Revenue gro
Slide 16: Quarterly Operating Margin Trends
Quarterly Operating Margin Trends Adjusted operating margin is a non-GAAP financial measure. 19.1% 18.5% 15.8% 11.9% 13.7% 18.7% 12.4% 17.1% 17.1% 21.1% 21.0% 20.4% 17.1% 18.9% 24.3% 25.6% 22.3% 23.6% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Operat
Slide 17: Q1 2021 Cash Flow and Capital Allocation
Q1 2021 Cash Flow and Capital Allocation ($mil) 2 ($mil) Debt Repayment 45.0 CapEx 22.7 Dividends 13.5 Equity Method Investments 5.2 Q1 21 Q1 21 $64.2 $41.5 Operating Cash Flow Free Cash Flow Capital Allocation Total capital deployed in Q1 2021 is higher than operating cash flow due to use of excess
Slide 18: Reconciliation from Reported to Organic Revenue Growth
Reconciliation from Reported to Organic Revenue Growth *License-based revenue grew 9.9% in Q3 2019 when excluding a $10.5 million non-recurring revenue benefit from prior period results.
Slide 19: Reconciliation from Reported to Organic Revenue Growth
Reconciliation from Reported to Organic Revenue Growth
Slide 20: Reconciliation from Reported to Organic Revenue Growth
Reconciliation from Reported to Organic Revenue Growth
Slide 21: Reconciliation from Operating to Adjusted Operating Margin
Reconciliation from Operating to Adjusted Operating Margin
Slide 22: Morningstar
MORNINGSTAR