Morningstar, Inc. Reports Third-Quarter 2024 Financial Results
Morningstar (MORN) reported strong Q3 2024 financial results with revenue increasing 10.5% to $569.4 million and organic revenue growing 10.1%. Operating income surged 65% to $115.5 million, while diluted EPS rose 204.4% to $2.77. The company's performance was driven by strength across most business segments, particularly Morningstar Credit, PitchBook, and Data & Analytics. Operating margin expanded to 20.3% from 13.6% year-over-year. The company also reported improved cash flows, with operating cash flow increasing 46.8% to $191.9 million and free cash flow rising 53.6% to $155.8 million.
Morningstar (MORN) ha riportato risultati finanziari solidi per il terzo trimestre del 2024, con un aumento del fatturato del 10,5% a 569,4 milioni di dollari e una crescita del fatturato organico del 10,1%. L'utile operativo è aumentato del 65% a 115,5 milioni di dollari, mentre l'utile per azione diluito è salito del 204,4% a 2,77 dollari. La performance dell'azienda è stata sostenuta dalla robustezza nella maggior parte dei segmenti di business, in particolare Morningstar Credit, PitchBook e Data & Analytics. Il margine operativo è aumentato al 20,3% rispetto al 13,6% dell'anno precedente. L'azienda ha inoltre riportato flussi di cassa migliorati, con il flusso di cassa operativo che è aumentato del 46,8% a 191,9 milioni di dollari e il flusso di cassa libero che è salito del 53,6% a 155,8 milioni di dollari.
Morningstar (MORN) reportó sólidos resultados financieros para el tercer trimestre de 2024, con un aumento del 10,5% en los ingresos a 569,4 millones de dólares y un crecimiento del 10,1% en los ingresos orgánicos. El ingreso operativo se disparó un 65% a 115,5 millones de dólares, mientras que el EPS diluido subió un 204,4% a 2,77 dólares. El desempeño de la compañía fue impulsado por la fortaleza en la mayoría de los segmentos comerciales, particularmente en Morningstar Credit, PitchBook y Data & Analytics. El margen operativo se expandió al 20,3% desde el 13,6% del año anterior. La compañía también reportó flujos de efectivo mejorados, con el flujo de caja operativo aumentando un 46,8% a 191,9 millones de dólares y el flujo de caja libre creciendo un 53,6% a 155,8 millones de dólares.
Morningstar (MORN)는 2024년 3분기 강력한 재무 결과를 보고하며 매출이 10.5% 증가하여 5억 6천 9백 40만 달러에 도달하고 유기적 매출이 10.1% 성장했습니다. 운영 수익은 65% 증가하여 1억 1천 5백 50만 달러에 이르렀고, 희석 주당 순이익(EPS)은 204.4% 증가하여 2.77달러에 달했습니다. 회사의 성과는 대부분의 사업 부문, 특히 Morningstar Credit, PitchBook 및 Data & Analytics의 강력한 실적에 의해 뒷받침되었습니다. 운영 마진은 전년 대비 13.6%에서 20.3%로 확대되었습니다. 회사는 운영 현금 흐름이 46.8% 증가하여 1억 9천 1백 90만 달러에 이르고, 자유 현금 흐름이 53.6% 상승하여 1억 5천 5백 80만 달러에 이르는 등 개선된 현금 흐름도 보고했습니다.
Morningstar (MORN) a annoncé des résultats financiers solides pour le troisième trimestre 2024, avec une augmentation de 10,5% du chiffre d'affaires pour atteindre 569,4 millions de dollars et une croissance du chiffre d'affaires organique de 10,1%. Le résultat d'exploitation a bondi de 65% à 115,5 millions de dollars, tandis que le BPA dilué a augmenté de 204,4% pour atteindre 2,77 dollars. La performance de l'entreprise a été soutenue par la solidité dans la plupart des segments d'activité, notamment Morningstar Credit, PitchBook et Data & Analytics. La marge opérationnelle est passée de 13,6% à 20,3% d'une année sur l'autre. L'entreprise a également déclaré une amélioration des flux de trésorerie, avec un flux de trésorerie d'exploitation en hausse de 46,8% à 191,9 millions de dollars et un flux de trésorerie libre en hausse de 53,6% à 155,8 millions de dollars.
Morningstar (MORN) berichtete über starke finanzielle Ergebnisse für das dritte Quartal 2024, mit einer Umsatzsteigerung von 10,5% auf 569,4 Millionen Dollar und einem organischen Umsatzwachstum von 10,1%. Das Betriebsergebnis stieg um 65% auf 115,5 Millionen Dollar, während der verwässerte Gewinn pro Aktie um 204,4% auf 2,77 Dollar zulegte. Die Leistung des Unternehmens wurde von der Stärke in den meisten Geschäftsbereichen, insbesondere Morningstar Credit, PitchBook und Data & Analytics, getragen. Die Betriebsmarge erhöhte sich im Jahresvergleich von 13,6% auf 20,3%. Das Unternehmen berichtete auch über verbesserte Cashflows, wobei der operative Cashflow um 46,8% auf 191,9 Millionen Dollar und der freie Cashflow um 53,6% auf 155,8 Millionen Dollar stieg.
- Revenue increased 10.5% to $569.4 million with 10.1% organic growth
- Operating income grew 65% to $115.5 million
- Diluted EPS increased 204.4% to $2.77
- Operating margin expanded to 20.3% from 13.6%
- Free cash flow increased 53.6% to $155.8 million
- PitchBook licensed users grew 19%
- Softness in research distribution due to loss of large client
- Revenue declines in Morningstar Advisor Workstation
- Morningstar Sustainalytics revenues declined due to increased cancellations
- Softness in corporate client segment, especially smaller firms
Insights
Strong quarterly performance with
Strong performance across key business segments signals robust market positioning. Morningstar Credit's exceptional growth in ratings revenue across asset classes indicates recovering market conditions. PitchBook's
“Morningstar Credit led the way in the quarter with additional contributions from across the business supporting revenue and profit growth," said Kunal Kapoor, Morningstar's chief executive officer. "Our diverse portfolio continues to present opportunities for innovation and durable growth, including those arising from the accelerated convergence of public and private markets.”
The Company's quarterly shareholder letter provides more context on its quarterly results and business performance and can be found at shareholders.morningstar.com.
Third-Quarter 2024 Financial Highlights
-
Reported revenue increased
10.5% to$569.4 million 10.1% .
-
Reported operating income increased
65.0% to$115.5 million 41.6% .
-
Diluted net income per share increased
204.4% to$2.77 56.3% to$2.00 $1.05
-
Cash provided by operating activities increased
46.8% to$191.9 million 53.6% to$155.8 million $0.9 million $16.1 million 31.3% and33.4% , respectively.
Year-To-Date Financial Highlights
-
Reported revenue increased
12.3% to$1.7 billion 12.2% .
-
Reported operating income increased
132.5% to$316.6 million 74.3% .
-
Diluted net income per share increased
271.5% to$5.87 83.4% to$5.76 $1.05
-
Cash provided by operating activities increased
145.4% to$438.2 million 275.5% to$336.1 million $0.9 million $90.6 million 63.1% and87.1% , respectively.
Third-Quarter 2024 Results
Revenue increased
Operating expense increased
The largest contributors to the increase in reported operating expense were compensation costs and technology infrastructure costs.
-
Compensation costs increased
$16.2 million
-
Technology infrastructure costs consisting of expenses related to SaaS-based software subscriptions and cloud computing increased
$4.0 million
Third-quarter operating income increased
Net income in the third quarter of 2024 was
The Company's effective tax rate was
Segment Highlights
Morningstar Data and Analytics
Morningstar Data and Analytics contributed
Morningstar Data and Analytics adjusted operating income increased
PitchBook
PitchBook contributed
PitchBook segment adjusted operating income increased
Morningstar Credit
Morningstar Credit contributed
Morningstar Credit adjusted operating income was
Morningstar Wealth
Morningstar Wealth contributed
Reported assets under management and advisement (AUMA) increased
Morningstar Wealth adjusted operating loss was
Morningstar Retirement
Morningstar Retirement contributed
Morningstar Retirement adjusted operating income increased
Corporate and All Other
Revenue attributable to Corporate and All Other contributed
The increase in Morningstar Indexes revenue was primarily due to higher investable product revenue as market performance and net inflows over the trailing 12 months increased asset value linked to Morningstar Indexes by
Morningstar Sustainalytics revenues declined compared to the prior-year period. The decline was largely driven by lower revenues for ESG Risk Ratings, reflecting increased cancellations due to vendor consolidation and softness in parts of the retail asset management and wealth client segments. Revenue was also negatively impacted by further streamlining of licensed-ratings offerings.
The impact of Corporate and All Other on consolidated adjusted operating income was negative
Balance Sheet and Capital Allocation
As of Sept. 30, 2024, the Company had cash, cash equivalents, and investments totaling
Cash provided by operating activities increased to
Use of Non-GAAP Financial Measures
The tables at the end of this press release include a reconciliation of the non-GAAP financial measures used by the Company to comparable GAAP measures and an explanation of why the Company uses them.
Investor Communication
Morningstar encourages all interested parties — including securities analysts, current shareholders, potential shareholders, and others — to submit questions in writing. Investors and others may send questions about Morningstar’s business to investors@morningstar.com. Morningstar will make written responses to selected inquiries available to all investors at the same time in Form 8-Ks furnished to the SEC, periodically.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment insights in
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements as that term is used in 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 are, to different degrees, uncertain, and often contain words such as “consider,” “future,” “maintain,” “may,” “expect,” “potential,” “anticipate,” “believe,” “continue,” “will,” or the negative thereof, and similar expressions. These statements involve known and unknown risks and uncertainties that may cause the events we discuss not to occur or to differ significantly from what we expect. For us, these risks and uncertainties include, among others, failing to maintain and protect our brand, independence, and reputation; failure to prevent and/or mitigate cybersecurity events and the failure to protect confidential information, including personal information about individuals; compliance failures, regulatory action, or changes in laws applicable to our credit ratings operations, investment advisory, environmental, social, and governance, and index businesses; failing to innovate our product and service offerings, or anticipate our clients’ changing needs; the impact of artificial intelligence and related technologies on our business, legal, and regulatory exposure profile and reputation; failing to detect errors in our products or the failure of our products to perform properly due to defects, malfunctions, or similar problems; failing to recruit, develop, and retain qualified employees; prolonged volatility or downturns affecting the financial sector, global financial markets, and the global economy and its effect on our revenue from asset-based fees and our credit ratings business; failing to scale our operations and increase productivity in order to implement our business plans and strategies; liability for any losses that result from errors in our automated advisory tools or errors in the use of the information and data we collect; inadequacy of our operational risk management, business continuity programs and insurance coverage in the event of a material disruptive event; failing to close, or achieve the anticipated economic or other benefits of, a strategic transaction on a timely basis or at all; failing to efficiently integrate and leverage acquisitions and other investments, which may not realize the expected business or financial benefits, to produce the results we anticipate; failing to maintain growth across our businesses in today's fragmented geopolitical, regulatory, and cultural world; liability relating to the information and data we collect, store, use, create, and distribute or the reports that we publish or are produced by our software products; the potential adverse effect of our indebtedness on our cash flows and financial and operational flexibility; challenges in accounting for tax complexities in the global jurisdictions which we operate in and their effect on our tax obligations and tax rates; and failing to protect our intellectual property rights or claims of intellectual property infringement against us. A more complete description of these risks and uncertainties, among others, can be found in our filings with the Securities and Exchange Commission (SEC), including our most recent Reports on Forms 10-K and 10-Q. If any of these risks and uncertainties materialize, our actual future results and other future events may vary significantly from what we expect. We do not undertake to update our forward-looking statements as a result of new information, future events or otherwise, except as may be required by law. You are, however, advised to review any further disclosures we make on related subjects, and about new or additional risks, uncertainties and assumptions in our filings with the SEC on Forms 10-K, 10-Q, and 8-K.
©2024 Morningstar, Inc. All Rights Reserved.
MORN-E
Morningstar, Inc. and Subsidiaries |
||||||||||||||||||||||
Unaudited Condensed Consolidated Statements of Income |
||||||||||||||||||||||
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
||||||||||||||||||
(in millions, except per share amounts) |
|
|
2024 |
|
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
|
2023 |
|
|
Change |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue |
|
$ |
569.4 |
|
|
$ |
515.5 |
|
|
10.5 |
% |
|
$ |
1,684.1 |
|
|
$ |
1,499.9 |
|
|
12.3 |
% |
Operating expense: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenue |
|
|
222.7 |
|
|
|
202.9 |
|
|
9.8 |
% |
|
|
663.5 |
|
|
|
638.1 |
|
|
4.0 |
% |
Sales and marketing |
|
|
107.9 |
|
|
|
106.3 |
|
|
1.5 |
% |
|
|
323.8 |
|
|
|
323.4 |
|
|
0.1 |
% |
General and administrative |
|
|
77.6 |
|
|
|
89.7 |
|
|
(13.5 |
)% |
|
|
238.2 |
|
|
|
263.8 |
|
|
(9.7 |
)% |
Depreciation and amortization |
|
|
45.7 |
|
|
|
46.6 |
|
|
(1.9 |
)% |
|
|
142.0 |
|
|
|
138.4 |
|
|
2.6 |
% |
Total operating expense |
|
|
453.9 |
|
|
|
445.5 |
|
|
1.9 |
% |
|
|
1,367.5 |
|
|
|
1,363.7 |
|
|
0.3 |
% |
Operating income |
|
|
115.5 |
|
|
|
70.0 |
|
|
65.0 |
% |
|
|
316.6 |
|
|
|
136.2 |
|
|
132.5 |
% |
Operating margin |
|
|
20.3 |
% |
|
|
13.6 |
% |
|
6.7 pp |
|
|
18.8 |
% |
|
|
9.1 |
% |
|
9.7 pp |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-operating income (expense), net: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net |
|
|
(8.9 |
) |
|
|
(12.8 |
) |
|
(30.5 |
)% |
|
|
(30.7 |
) |
|
|
(40.2 |
) |
|
(23.6 |
)% |
Gain on sale of business |
|
|
45.3 |
|
|
|
— |
|
|
NMF |
|
|
45.3 |
|
|
|
— |
|
|
NMF |
||
Expense from equity method transaction, net |
|
|
— |
|
|
|
— |
|
|
— |
% |
|
|
— |
|
|
|
(11.8 |
) |
|
NMF |
|
Other income (expense), net |
|
|
— |
|
|
|
0.2 |
|
|
NMF |
|
|
(2.8 |
) |
|
|
7.0 |
|
|
NMF |
||
Non-operating income (expense), net |
|
|
36.4 |
|
|
|
(12.6 |
) |
|
NMF |
|
|
11.8 |
|
|
|
(45.0 |
) |
|
NMF |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes and equity in investments of unconsolidated entities |
|
|
151.9 |
|
|
|
57.4 |
|
|
164.6 |
% |
|
|
328.4 |
|
|
|
91.2 |
|
|
260.1 |
% |
Equity in investments of unconsolidated entities |
|
|
(2.6 |
) |
|
|
(1.6 |
) |
|
62.5 |
% |
|
|
(5.3 |
) |
|
|
(4.7 |
) |
|
12.8 |
% |
Income tax expense |
|
|
29.6 |
|
|
|
16.7 |
|
|
77.2 |
% |
|
|
70.1 |
|
|
|
18.9 |
|
|
270.9 |
% |
Consolidated net income |
|
$ |
119.7 |
|
|
$ |
39.1 |
|
|
206.1 |
% |
|
$ |
253.0 |
|
|
$ |
67.6 |
|
|
274.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
$ |
2.79 |
|
|
$ |
0.92 |
|
|
203.3 |
% |
|
$ |
5.91 |
|
|
$ |
1.59 |
|
|
271.7 |
% |
Diluted |
|
$ |
2.77 |
|
|
$ |
0.91 |
|
|
204.4 |
% |
|
$ |
5.87 |
|
|
$ |
1.58 |
|
|
271.5 |
% |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
|
42.9 |
|
|
|
42.7 |
|
|
|
|
|
42.8 |
|
|
|
42.6 |
|
|
|
||
Diluted |
|
|
43.2 |
|
|
|
42.9 |
|
|
|
|
|
43.1 |
|
|
|
42.8 |
|
|
|
||
NMF - Not meaningful, pp - percentage points |
||||||||||||||||||||||
Morningstar, Inc. and Subsidiaries |
||||||||
Unaudited Condensed Consolidated Balance Sheets |
||||||||
(in millions) |
|
As of September 30, 2024 |
|
As of December 31, 2023 |
||||
|
|
|
|
|
||||
Assets |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
552.9 |
|
$ |
337.9 |
||
Investments |
|
|
48.8 |
|
|
51.1 |
||
Accounts receivable, net |
|
|
328.4 |
|
|
343.9 |
||
Income tax receivable, net |
|
|
— |
|
|
0.6 |
||
Other current assets |
|
|
92.7 |
|
|
82.2 |
||
Total current assets |
|
|
1,022.8 |
|
|
815.7 |
||
|
|
|
|
|
||||
Goodwill |
|
|
1,579.6 |
|
|
1,578.8 |
||
Intangible assets, net |
|
|
432.5 |
|
|
484.4 |
||
Property, equipment, and capitalized software, net |
|
|
212.4 |
|
|
207.7 |
||
Operating lease assets |
|
|
157.5 |
|
|
163.9 |
||
Investments in unconsolidated entities |
|
|
96.0 |
|
|
100.2 |
||
Deferred tax assets, net |
|
|
30.9 |
|
|
14.6 |
||
Other assets |
|
|
34.6 |
|
|
38.1 |
||
Total assets |
|
$ |
3,566.3 |
|
$ |
3,403.4 |
||
|
|
|
|
|
||||
Liabilities and equity |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Deferred revenue |
|
$ |
539.5 |
|
$ |
517.7 |
||
Accrued compensation |
|
|
216.0 |
|
|
214.4 |
||
Accounts payable and accrued liabilities |
|
|
80.4 |
|
|
78.4 |
||
Operating lease liabilities |
|
|
32.2 |
|
|
36.4 |
||
Current portion of long-term debt |
|
|
— |
|
|
32.1 |
||
Other current liabilities |
|
|
27.8 |
|
|
1.8 |
||
Total current liabilities |
|
|
895.9 |
|
|
880.8 |
||
|
|
|
|
|
||||
Operating lease liabilities |
|
|
145.7 |
|
|
151.4 |
||
Accrued compensation |
|
|
21.2 |
|
|
23.7 |
||
Deferred tax liabilities, net |
|
|
29.9 |
|
|
35.6 |
||
Long-term debt |
|
|
864.7 |
|
|
940.3 |
||
Other long-term liabilities |
|
|
43.2 |
|
|
43.8 |
||
Total liabilities |
|
|
2,000.6 |
|
|
2,075.6 |
||
Total equity |
|
|
1,565.7 |
|
|
1,327.8 |
||
Total liabilities and equity |
|
$ |
3,566.3 |
|
$ |
3,403.4 |
||
Morningstar, Inc. and Subsidiaries |
||||||||||||||||
Unaudited Condensed Consolidated Statements of Cash Flows |
||||||||||||||||
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
||||||||||||
(in millions) |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Operating activities |
|
|
|
|
|
|
|
|
||||||||
Consolidated net income |
|
$ |
119.7 |
|
|
$ |
39.1 |
|
|
$ |
253.0 |
|
|
$ |
67.6 |
|
Adjustments to reconcile consolidated net income to net cash flows from operating activities |
|
|
12.2 |
|
|
|
57.9 |
|
|
|
128.9 |
|
|
|
119.3 |
|
Changes in operating assets and liabilities, net |
|
|
60.0 |
|
|
|
33.7 |
|
|
|
56.3 |
|
|
|
(8.3 |
) |
Cash provided by operating activities |
|
|
191.9 |
|
|
|
130.7 |
|
|
|
438.2 |
|
|
|
178.6 |
|
Investing activities |
|
|
|
|
|
|
|
|
||||||||
Capital expenditures |
|
|
(36.1 |
) |
|
|
(29.3 |
) |
|
|
(102.1 |
) |
|
|
(89.1 |
) |
Proceeds from sale of business |
|
|
52.2 |
|
|
|
— |
|
|
|
52.2 |
|
|
|
— |
|
Purchases of investments in unconsolidated entities |
|
|
(3.2 |
) |
|
|
(0.2 |
) |
|
|
(6.8 |
) |
|
|
(1.1 |
) |
Other, net |
|
|
1.2 |
|
|
|
8.2 |
|
|
|
11.3 |
|
|
|
41.1 |
|
Cash provided by (used for) investing activities |
|
|
14.1 |
|
|
|
(21.3 |
) |
|
|
(45.4 |
) |
|
|
(49.1 |
) |
Financing activities |
|
|
|
|
|
|
|
|
||||||||
Common shares repurchased |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1.4 |
) |
Dividends paid |
|
|
(17.4 |
) |
|
|
(16.0 |
) |
|
|
(52.0 |
) |
|
|
(47.9 |
) |
Repayments of debt |
|
|
(35.0 |
) |
|
|
(128.1 |
) |
|
|
(198.1 |
) |
|
|
(314.4 |
) |
Proceeds from debt |
|
|
— |
|
|
|
30.0 |
|
|
|
90.0 |
|
|
|
260.0 |
|
Payment of acquisition-related earn-outs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(45.5 |
) |
Other, net |
|
|
(7.8 |
) |
|
|
(6.0 |
) |
|
|
(25.2 |
) |
|
|
(25.8 |
) |
Cash used for financing activities |
|
|
(60.2 |
) |
|
|
(120.1 |
) |
|
|
(185.3 |
) |
|
|
(175.0 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
15.9 |
|
|
|
(7.6 |
) |
|
|
7.5 |
|
|
|
(6.1 |
) |
Net increase (decrease) in cash and cash equivalents |
|
|
161.7 |
|
|
|
(18.3 |
) |
|
|
215.0 |
|
|
|
(51.6 |
) |
Cash and cash equivalents-beginning of period |
|
|
391.2 |
|
|
|
343.3 |
|
|
|
337.9 |
|
|
|
376.6 |
|
Cash and cash equivalents-end of period |
|
$ |
552.9 |
|
|
$ |
325.0 |
|
|
$ |
552.9 |
|
|
$ |
325.0 |
|
Morningstar, Inc. and Subsidiaries |
||||||||||||||||||||||||||||
Supplemental Data (Unaudited) |
||||||||||||||||||||||||||||
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
||||||||||||||||||||||||
(in millions) |
|
|
2024 |
|
|
|
2023 |
|
|
Change |
|
Organic (1) |
|
|
2024 |
|
|
|
2023 |
|
|
Change |
|
Organic (1) |
||||
Morningstar Data and Analytics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue |
|
$ |
198.5 |
|
|
$ |
188.7 |
|
|
5.2 |
% |
|
4.7 |
% |
|
$ |
592.1 |
|
|
$ |
554.5 |
|
|
6.8 |
% |
|
6.6 |
% |
Adjusted Operating Income |
|
|
91.4 |
|
|
|
88.4 |
|
|
3.4 |
% |
|
|
|
|
269.9 |
|
|
|
249.4 |
|
|
8.2 |
% |
|
|
||
Adjusted Operating Margin |
|
|
46.0 |
% |
|
|
46.8 |
% |
|
(0.8) pp |
|
|
|
|
45.6 |
% |
|
|
45.0 |
% |
|
0.6 pp |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
PitchBook |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue |
|
$ |
156.6 |
|
|
$ |
139.6 |
|
|
12.2 |
% |
|
12.2 |
% |
|
$ |
455.9 |
|
|
$ |
407.5 |
|
|
11.9 |
% |
|
11.9 |
% |
Adjusted Operating Income |
|
|
50.4 |
|
|
|
39.1 |
|
|
28.9 |
% |
|
|
|
|
137.7 |
|
|
|
106.7 |
|
|
29.1 |
% |
|
|
||
Adjusted Operating Margin |
|
|
32.2 |
% |
|
|
28.0 |
% |
|
4.2 pp |
|
|
|
|
30.2 |
% |
|
|
26.2 |
% |
|
4.0 pp |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Morningstar Credit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue |
|
$ |
70.9 |
|
|
$ |
52.9 |
|
|
34.0 |
% |
|
34.0 |
% |
|
$ |
208.8 |
|
|
$ |
153.9 |
|
|
35.7 |
% |
|
35.7 |
% |
Adjusted Operating Income |
|
|
15.2 |
|
|
|
2.8 |
|
|
442.9 |
% |
|
|
|
|
55.4 |
|
|
|
3.8 |
|
|
NMF |
|
|
|||
Adjusted Operating Margin |
|
|
21.4 |
% |
|
|
5.3 |
% |
|
16.1 pp |
|
|
|
|
26.5 |
% |
|
|
2.5 |
% |
|
24.0 pp |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Morningstar Wealth |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue |
|
$ |
61.8 |
|
|
$ |
58.0 |
|
|
6.6 |
% |
|
6.1 |
% |
|
$ |
183.4 |
|
|
$ |
168.7 |
|
|
8.7 |
% |
|
8.7 |
% |
Adjusted Operating Income (Loss) |
|
|
(0.7 |
) |
|
|
(8.2 |
) |
|
NMF |
|
|
|
|
(8.5 |
) |
|
|
(35.1 |
) |
|
NMF |
|
|
||||
Adjusted Operating Margin |
|
|
(1.1 |
)% |
|
|
(14.1 |
)% |
|
13.0 pp |
|
|
|
|
(4.6 |
)% |
|
|
(20.8 |
)% |
|
16.2 pp |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Morningstar Retirement |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue |
|
$ |
31.8 |
|
|
$ |
27.7 |
|
|
14.8 |
% |
|
14.8 |
% |
|
$ |
93.5 |
|
|
$ |
80.3 |
|
|
16.4 |
% |
|
16.4 |
% |
Adjusted Operating Income |
|
|
16.9 |
|
|
|
14.7 |
|
|
15.0 |
% |
|
|
|
|
48.4 |
|
|
|
39.3 |
|
|
23.2 |
% |
|
|
||
Adjusted Operating Margin |
|
|
53.1 |
% |
|
|
53.1 |
% |
|
0.0 pp |
|
|
|
|
51.8 |
% |
|
|
48.9 |
% |
|
2.9 pp |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consolidated Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Reportable Segments |
|
$ |
519.6 |
|
|
$ |
466.9 |
|
|
11.3 |
% |
|
|
|
$ |
1,533.7 |
|
|
$ |
1,364.9 |
|
|
12.4 |
% |
|
|
||
Corporate and All Other (2) |
|
|
49.8 |
|
|
|
48.6 |
|
|
2.5 |
% |
|
|
|
|
150.4 |
|
|
|
135.0 |
|
|
11.4 |
% |
|
|
||
Total Revenue |
|
$ |
569.4 |
|
|
$ |
515.5 |
|
|
10.5 |
% |
|
10.1 |
% |
|
$ |
1,684.1 |
|
|
$ |
1,499.9 |
|
|
12.3 |
% |
|
12.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consolidated Adjusted Operating Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Reportable Segments |
|
$ |
173.2 |
|
|
$ |
136.8 |
|
|
26.6 |
% |
|
|
|
$ |
502.9 |
|
|
$ |
364.1 |
|
|
38.1 |
% |
|
|
||
Less: Corporate and All Other (3) |
|
|
(42.9 |
) |
|
|
(44.8 |
) |
|
(4.2 |
)% |
|
|
|
|
(130.8 |
) |
|
|
(150.6 |
) |
|
(13.1 |
)% |
|
|
||
Adjusted Operating Income |
|
$ |
130.3 |
|
|
$ |
92.0 |
|
|
41.6 |
% |
|
|
|
$ |
372.1 |
|
|
$ |
213.5 |
|
|
74.3 |
% |
|
|
||
Adjusted Operating Margin |
|
|
22.9 |
% |
|
|
17.8 |
% |
|
5.1 pp |
|
|
|
|
22.1 |
% |
|
|
14.3 |
% |
|
7.8 pp |
|
|
||||
(1) Organic revenue is a non-GAAP measure that excludes acquisitions, divestitures, the impacts of the adoption of new accounting standards or revisions to accounting practices, and the effect of foreign currency translations. |
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
(2) Corporate and All Other provides a reconciliation between revenue from the Company's Total Reportable Segments and consolidated revenue amounts. Corporate and All Other includes Morningstar Sustainalytics and Morningstar Indexes as sources of revenues. Revenue from Morningstar Sustainalytics was |
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
(3) Corporate and All Other includes unallocated corporate expenses as well as adjusted operating income (loss) from Morningstar Sustainalytics and Morningstar Indexes. During the third quarter of 2024 and 2023, unallocated corporate expenses were |
||||||||||||||||||||||||||||
Morningstar, Inc. and Subsidiaries |
||||||||||||||||||||||
Supplemental Data (Unaudited) |
||||||||||||||||||||||
|
|
As of September 30, |
|
|
|
|
|
|
||||||||||||||
AUMA (approximate) ($bil) |
|
2024 |
|
2023 |
|
Change |
|
|
|
|
|
|
||||||||||
Morningstar Retirement |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Managed Accounts |
|
$ |
155.1 |
|
$ |
121.1 |
|
28.1 |
% |
|
|
|
|
|
|
|||||||
Fiduciary Services |
|
|
63.0 |
|
|
54.9 |
|
14.8 |
% |
|
|
|
|
|
|
|||||||
Custom Models/CIT |
|
|
46.3 |
|
|
36.9 |
|
25.5 |
% |
|
|
|
|
|
|
|||||||
Morningstar Retirement (total) |
|
$ |
264.4 |
|
$ |
212.9 |
|
24.2 |
% |
|
|
|
|
|
|
|||||||
Investment Management |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Morningstar Managed Portfolios |
|
$ |
44.6 |
|
$ |
35.4 |
|
26.0 |
% |
|
|
|
|
|
|
|||||||
Institutional Asset Management |
|
|
7.3 |
|
|
7.3 |
|
— |
% |
|
|
|
|
|
|
|||||||
Asset Allocation Services |
|
|
11.8 |
|
|
8.0 |
|
47.5 |
% |
|
|
|
|
|
|
|||||||
Investment Management (total) |
|
$ |
63.7 |
|
$ |
50.7 |
|
25.6 |
% |
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset value linked to Morningstar Indexes ($bil) |
|
$ |
228.2 |
|
$ |
166.0 |
|
37.5 |
% |
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
||||||||||||||||||
|
|
2024 |
|
2023 |
|
Change |
|
2024 |
|
2023 |
|
Change |
||||||||||
Average AUMA ($bil) |
|
$ |
322.2 |
|
$ |
263.5 |
|
22.3 |
% |
|
$ |
306.0 |
|
$ |
255.3 |
|
19.9 |
% |
||||
Morningstar, Inc. and Subsidiaries
Reconciliations of Non-GAAP Measures with the Nearest Comparable GAAP Measures (Unaudited)
To supplement Morningstar’s condensed consolidated financial statements presented in accordance with
- consolidated revenue, excluding acquisitions, divestitures, adoption of new accounting standards or revisions to accounting practices (accounting changes), and the effect of foreign currency translations (organic revenue);
-
consolidated operating income, excluding intangible amortization expense, all merger and acquisition-related expenses (related to merger, acquisition, and divestiture activity including severance and earn-outs (M&A-related expenses)), and expenses related to the significant reduction and shift of the Company's operations in
China (adjusted operating income);
-
consolidated operating margin, excluding intangible amortization expense, all M&A-related expenses, and expenses related to the significant reduction and shift of the Company's operations in
China (adjusted operating margin);
-
consolidated diluted net income (loss) per share, excluding intangible amortization expense, all M&A-related expenses, items related to the significant reduction and shift of the Company's operations in
China , and certain non-operating gains/losses and other (adjusted diluted net income per share); and
- cash provided by or used for operating activities less capital expenditures (free cash flow).
These non-GAAP measures may not be comparable to similarly titled measures reported by other companies and should not be considered an alternative to any measure of performance as promulgated under GAAP.
Morningstar presents organic revenue because the Company believes this non-GAAP measure helps investors better compare period-over-period results, and Morningstar’s management team uses this measure to evaluate the performance of the business. Morningstar excludes revenue from acquired businesses from its organic revenue growth calculation for a period of 12 months after it completes the acquisition. For divestitures, Morningstar excludes revenue in the prior-year period for which there is no comparable revenue in the current period.
Morningstar presents adjusted operating income, adjusted operating margin, and adjusted diluted net income per share to show the effect of significant acquisition and divestiture activity, better compare period-over-period results, and improve overall understanding of the underlying performance of the business absent the impact of M&A and the shift of Morningstar's operations in
In addition, Morningstar presents free cash flow solely as supplemental disclosure to help investors better understand how much cash is available after making capital expenditures. Morningstar's management team uses free cash flow to evaluate the health of its business. Free cash flow should not be considered an alternative to any measure required to be reported under GAAP (such as cash provided by (used for) operating, investing, and financing activities).
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
||||||||||||||||||
(in millions) |
|
|
2024 |
|
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
|
2023 |
|
|
Change |
||
Reconciliation from consolidated revenue to organic revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated revenue |
|
$ |
569.4 |
|
|
$ |
515.5 |
|
|
10.5 |
% |
|
$ |
1,684.1 |
|
|
$ |
1,499.9 |
|
|
12.3 |
% |
Less: acquisitions |
|
|
— |
|
|
|
— |
|
|
— |
% |
|
|
— |
|
|
|
— |
|
|
— |
% |
Less: accounting changes |
|
|
— |
|
|
|
— |
|
|
— |
% |
|
|
— |
|
|
|
— |
|
|
— |
% |
Effect of foreign currency translations |
|
|
(1.6 |
) |
|
|
— |
|
|
NMF |
|
|
(1.4 |
) |
|
|
— |
|
|
NMF |
||
Organic revenue |
|
$ |
567.8 |
|
|
$ |
515.5 |
|
|
10.1 |
% |
|
$ |
1,682.7 |
|
|
$ |
1,499.9 |
|
|
12.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation from consolidated operating income to adjusted operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated operating income |
|
$ |
115.5 |
|
|
$ |
70.0 |
|
|
65.0 |
% |
|
$ |
316.6 |
|
|
$ |
136.2 |
|
|
132.5 |
% |
Add: Intangible amortization expense (1) |
|
|
14.7 |
|
|
|
17.7 |
|
|
(16.9 |
)% |
|
|
49.9 |
|
|
|
52.9 |
|
|
(5.7 |
)% |
Add: M&A-related expenses (2) |
|
|
0.1 |
|
|
|
1.7 |
|
|
(94.1 |
)% |
|
|
5.6 |
|
|
|
8.9 |
|
|
(37.1 |
)% |
Add: Severance and personnel expenses (3) |
|
|
— |
|
|
|
1.3 |
|
|
NMF |
|
|
— |
|
|
|
5.4 |
|
|
NMF |
||
Add: Transformation costs (3) |
|
|
— |
|
|
|
0.6 |
|
|
NMF |
|
|
— |
|
|
|
7.0 |
|
|
NMF |
||
Add: Asset impairment costs (3) |
|
|
— |
|
|
|
0.7 |
|
|
NMF |
|
|
— |
|
|
|
3.1 |
|
|
NMF |
||
Adjusted operating income |
|
$ |
130.3 |
|
|
$ |
92.0 |
|
|
41.6 |
% |
|
$ |
372.1 |
|
|
$ |
213.5 |
|
|
74.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation from consolidated operating margin to adjusted operating margin: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated operating margin |
|
|
20.3 |
% |
|
|
13.6 |
% |
|
6.7 pp |
|
|
18.8 |
% |
|
|
9.1 |
% |
|
9.7 pp |
||
Add: Intangible amortization expense (1) |
|
|
2.6 |
% |
|
|
3.4 |
% |
|
(0.8) pp |
|
|
3.0 |
% |
|
|
3.5 |
% |
|
(0.5) pp |
||
Add: M&A-related expenses (2) |
|
|
— |
% |
|
|
0.3 |
% |
|
(0.3) pp |
|
|
0.3 |
% |
|
|
0.6 |
% |
|
(0.3) pp |
||
Add: Severance and personnel expenses (3) |
|
|
— |
% |
|
|
0.3 |
% |
|
(0.3) pp |
|
|
— |
% |
|
|
0.4 |
% |
|
(0.4) pp |
||
Add: Transformation costs (3) |
|
|
— |
% |
|
|
0.1 |
% |
|
(0.1) pp |
|
|
— |
% |
|
|
0.5 |
% |
|
(0.5) pp |
||
Add: Asset impairment costs (3) |
|
|
— |
% |
|
|
0.1 |
% |
|
(0.1) pp |
|
|
— |
% |
|
|
0.2 |
% |
|
(0.2) pp |
||
Adjusted operating margin |
|
|
22.9 |
% |
|
|
17.8 |
% |
|
5.1 pp |
|
|
22.1 |
% |
|
|
14.3 |
% |
|
7.8 pp |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation from consolidated diluted net income per share to adjusted diluted net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated diluted net income per share |
|
$ |
2.77 |
|
|
$ |
0.91 |
|
|
204.4 |
% |
|
$ |
5.87 |
|
|
$ |
1.58 |
|
|
271.5 |
% |
Add: Intangible amortization expense (1) |
|
|
0.25 |
|
|
|
0.31 |
|
|
(19.4 |
)% |
|
|
0.86 |
|
|
|
0.91 |
|
|
(5.5 |
)% |
Add: M&A-related expenses (2) |
|
|
— |
|
|
|
0.03 |
|
|
NMF |
|
|
0.10 |
|
|
|
0.15 |
|
|
(33.3 |
)% |
|
Add: Severance and personnel expenses (3) |
|
|
— |
|
|
|
0.02 |
|
|
NMF |
|
|
— |
|
|
|
0.09 |
|
|
NMF |
||
Add: Transformation costs (3) |
|
|
— |
|
|
|
0.01 |
|
|
NMF |
|
|
— |
|
|
|
0.12 |
|
|
NMF |
||
Add: Asset impairment costs (3) |
|
|
— |
|
|
|
0.01 |
|
|
NMF |
|
|
— |
|
|
|
0.05 |
|
|
NMF |
||
Less: Non-operating (gains) losses and other (4) |
|
|
(1.02 |
) |
|
|
(0.01 |
) |
|
NMF |
|
|
(1.07 |
) |
|
|
0.24 |
|
|
NMF |
||
Adjusted diluted net income per share |
|
$ |
2.00 |
|
|
$ |
1.28 |
|
|
56.3 |
% |
|
$ |
5.76 |
|
|
$ |
3.14 |
|
|
83.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation from cash provided by operating activities to free cash flow: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided by operating activities |
|
$ |
191.9 |
|
|
$ |
130.7 |
|
|
46.8 |
% |
|
$ |
438.2 |
|
|
$ |
178.6 |
|
|
145.4 |
% |
Capital expenditures |
|
|
(36.1 |
) |
|
|
(29.3 |
) |
|
23.2 |
% |
|
|
(102.1 |
) |
|
|
(89.1 |
) |
|
14.6 |
% |
Free cash flow |
|
$ |
155.8 |
|
|
$ |
101.4 |
|
|
53.6 |
% |
|
$ |
336.1 |
|
|
$ |
89.5 |
|
|
275.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NMF - Not meaningful, pp - percentage points |
||||||||||||||||||||||
|
||||||||||||||||||||||
(1) Excludes finance lease amortization expense of |
||||||||||||||||||||||
|
||||||||||||||||||||||
(2) Reflects non-recurring expenses related to merger, acquisition, and divestiture activity including pre-deal due diligence, transaction costs, severance, and post-close integration costs. |
||||||||||||||||||||||
|
||||||||||||||||||||||
(3) Reflects costs associated with the significant reduction of the Company's operations in |
||||||||||||||||||||||
|
||||||||||||||||||||||
Severance and personnel expenses include severance charges, incentive payments related to early signing of severance agreements, transition bonuses, and stock-based compensation related to the accelerated vesting of restricted stock unit and market stock unit awards. In addition, the reversal of accrued sabbatical liabilities is included in this category. |
||||||||||||||||||||||
|
||||||||||||||||||||||
Transformation costs include professional fees and the temporary duplication of headcount. As the Company hired replacement roles in other markets and shifted capabilities, it employed certain |
||||||||||||||||||||||
|
||||||||||||||||||||||
Asset impairment costs include the write-off or accelerated depreciation of fixed assets in the |
||||||||||||||||||||||
|
||||||||||||||||||||||
(4) Reflects realized and unrealized gains and losses on investments in the three and nine months ended Sept. 30, 2024 and Sept. 30, 2023. In addition, for the three and nine months ended Sept. 30, 2024, includes gain on the sale of the Company's Commodity and Energy Data business and an impairment loss on an investment of unconsolidated entities. For the nine months ended Sept. 30, 2023, includes expense from equity method transaction, net. |
||||||||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20241022964051/en/
Media Relations Contact:
Stephanie Lerdall, +1 312-244-7805, stephanie.lerdall@morningstar.com
Investor Relations Contact:
Sarah Bush, +1 312-384-3754, sarah.bush@morningstar.com
Source: Morningstar, Inc.
FAQ
What was Morningstar's (MORN) revenue growth in Q3 2024?
How much did Morningstar's (MORN) EPS increase in Q3 2024?
What was Morningstar's (MORN) operating margin in Q3 2024?
How much did PitchBook's licensed users grow in Q3 2024?
