MSCI Clocks 22% Revenue Growth In Q3, Beats Consensus, Cuts FY21 Cash Flow Outlook

MSCI Inc MSCI reported third-quarter FY21 revenue growth of 21.6% year-on-year to $517.1 million, surpassing the consensus of $506.7 million.
The total run-rate at September 30, 2021, rose 21.9% Y/Y to $2.1 billion. The organic subscription run rate was 11.8%. The retention rate remained steady at 94.5% in Q3.
Index operating revenues rose 25.7% Y/Y to $321.5 million, aided by higher asset-based fees and recurring subscription revenues.
Analytics operating revenues increased 6.2% Y/Y to $136.3 million, driven by higher recurring subscription revenues from Equity and Multi-Asset Class Analytics products.
ESG and Climate operating revenues grew 53% Y/Y to $43.7 million from solid growth from Ratings, Screening, and Climate products.
All Other – Private Assets operating revenues improved 22.4% Y/Y to $15.6 million.
Margin: The operating margin expanded 70 basis points to 54.2%. The adjusted EBITDA margin expanded 70 basis points to 59.3%.
The adjusted EPS of $2.53 beat the consensus of $2.41.
MSCI generated $215.9 million in operating cash flow and held $1.3 billion in cash and equivalents.
The board declared a quarterly cash dividend of $1.04 per share for Q4 2021, payable on November 30 to shareholders of record on November 12.
Outlook: MSCI lowered the FY21 operating cash flow guidance from $900 million -$940 million to $800 million - $840 million.
Price Action: MSCI shares traded higher by 0.55% at $655.59 on the last check Tuesday.

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