MSCI Q4 Earnings: Beats EPS Estimates, Boosts Dividend 12.5%, ESG And Index Revenues Drive Growth, Higher Margins, $1.4 Billion+ Free Cash Flow Projection

Zinger Key Points

MSCI Q4 revenue grew 7.7% to $743.5M, missing estimates, but EPS beat at $4.18 vs. $3.95 expected.
MSCI raised its dividend by 12.5% as ESG, climate and index revenues saw strong growth, stock up 14% in 12 months.
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MSCI Inc (NYSE: MSCI) reported fiscal 2024 fourth-quarter revenue growth of 7.7% year-on-year to $743.5 million, missing the analyst consensus estimate of $744.8 million.

The adjusted EPS of $4.18 beat the analyst consensus estimate of $3.95.

The total run rate on December 31, 2024, rose 8.8% Y/Y to $2.92 billion.

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The organic recurring subscription run rate growth was 7.9%. The retention rate was 93.1% compared to 93.6% last year.

The investment research firm’s index operating revenues rose 8.3% year over year to $420.2 million, aided by higher recurring subscription revenues and asset-based fees.

Analytics operating revenues increased 4.9% Y/Y to $172.8 million, driven by higher recurring subscription revenues from equity and multi-asset class analytics products.

ESG and climate operating revenues grew 11.8% year over year to $85.2 million, driven by solid growth in ratings, screening and climate products.

All Other – private assets operating revenues improved 6.9% Y/Y to $65.3 million.

Margin: The operating margin improved from 53.7% to 54.5%. The adjusted EBITDA margin improved from 60.1% to 60.8%.

MSCI generated $394.68 million in free cash flow and held $409.4 million in cash and equivalents as of December 31, 2024.

Dividend: The board declared a dividend per share of $1.80 for the first quarter, marking a growth of 12.5%.

Chair and CEO Henry A. Fernandez said fourth-quarter highlights included its best-ever recurring sales in Index, 15% fixed income run-rate growth across its product lines, and 15% asset-based fees run-rate growth.

FY25 Outlook: MSCI projected operating expenses of $1.405 billion– $1.445 billion, capex of $115–$125 million, and free cash flow of $1.400 billion–$1.460 billion.

MSCI stock surged over 14% in the last 12 months.

Price Action: MSCI stock traded lower by 1.33% at $619.99 premarket at last check Wednesday.

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