MSCI Q2 Earnings Impress Investors, CEO Emphasizes On Robust Client Base and Execution

MSCI Inc MSCI reported fiscal 2024 second-quarter revenue growth of 14.0% year-on-year to $707.95 million, beating the analyst consensus estimate of $696.37 million. 

The adjusted EPS of $3.64 beat the analyst consensus estimate of $3.55. The stock price gained after the results.

The total run-rate at June 30, 2024, rose 14.6% Y/Y to $2.81 billion. The organic recurring subscription run rate growth was 8.6%. The retention rate was 94.8% compared to 95.5% last year.

The investment research firm’s index operating revenues rose 9.6% year over year to $397.2 million, aided by higher recurring subscription revenues and asset-based fees.

Analytics operating revenues increased 10.8% Y/Y to $166.0 million, driven by higher recurring subscription revenues from Equity and Multi-Asset Class Analytics products.

ESG and Climate operating revenues grew 12.1% year over year to $79.9 million, driven by solid growth in Ratings, Screening, and Climate products.

All Other – Private Assets operating revenues improved 72.0% Y/Y to $64.9 million.

Margin: The operating margin declined from 55.7% to 54.0%. The adjusted EBITDA margin was stable at 60.7%.

MSCI generated $321.9 million in free cash flow and held $451.4 million in cash and equivalents as of June 30, 2024.

Dividend: The board declared a dividend per share of $1.60 for the third quarter.

“MSCI’s second quarter results demonstrate the strength of our all-weather franchise, our blue-chip client base, our wide range of solutions, and our relentless focus on execution,” said Henry A. Fernandez, Chairman and CEO of MSCI.

FY24 Outlook: MSCI expects operating expense of $1.305 billion – $1.345 billion (prior $1.30 billion – $1.34 billion), reiterated capex of $95 million – $105 million, and free cash flow of $1.225 billion – $1.285 billion.

The fiscal revenue and adjusted EPS consensus are $2.83 billion and $14.70.

Price Action: MSCI shares traded higher by 7.46% at $543.77 at the last check on Tuesday.