MSCI Reports Financial Results for First Quarter 2023
MSCI Inc. (NYSE: MSCI) reported its financial results for Q1 2023, showing operating revenues of $592.2 million, a 5.8% increase year-over-year. The company achieved organic operating revenue growth of 7.2%, driven by an 11.4% rise in recurring subscription revenues. The operating margin improved to 53.1%, while net income rose 4.5% to $238.7 million, translating to a diluted EPS of $2.97. MSCI declared a dividend of $1.38 per share for Q2 2023 and maintained a solid retention rate of 95.2%. However, asset-based fees declined by 8.2%, reflecting market challenges, particularly in ESG and Real Estate.
- Operating revenues increased by 5.8% year-over-year to $592.2 million.
- Organic operating revenue growth reached 7.2%.
- Recurring subscription revenues rose by 11.4%.
- Operating margin improved to 53.1%.
- Net income grew by 4.5% to $238.7 million.
- Diluted EPS increased by 6.8% to $2.97.
- Strong growth in ESG and Climate segment with 28.9% revenue increase.
- Asset-based fees fell by 8.2%, indicating market challenges.
- Retention rate decreased slightly from 95.9% to 95.2%.
Financial and Operational Highlights for First Quarter 2023
(Note: Unless otherwise noted, percentage and other changes are relative to the three months ended
-
Operating revenues of
, up$592.2 million 5.8% ; Organic operating revenue growth of7.2% -
Recurring subscription revenues up
11.4% ; Asset-based fees down8.2% -
Operating margin of
53.1% ; Adjusted EBITDA margin of58.2% -
Diluted EPS of
, up$2.97 6.8% ; Adjusted EPS of , up$3.14 5.4% -
Organic recurring subscription
Run Rate growth of12.1% ; Retention Rate of95.2% -
Approximately
in dividends were paid to shareholders in first quarter 2023; Cash dividend of$110.5 million per share declared by$1.38 MSCI Board of Directors for second quarter 2023
|
|
Three Months Ended |
|||||||||
|
|
|
|
|
|
|
|||||
In thousands, except per share data (unaudited) |
|
|
2023 |
|
|
|
2022 |
|
|
% Change |
|
Operating revenues |
|
$ |
592,218 |
|
|
$ |
559,945 |
|
|
5.8 |
% |
Operating income |
|
$ |
314,602 |
|
|
$ |
288,978 |
|
|
8.9 |
% |
Operating margin % |
|
|
53.1 |
% |
|
|
51.6 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
Net income |
|
$ |
238,728 |
|
|
$ |
228,423 |
|
|
4.5 |
% |
|
|
|
|
|
|
|
|||||
Diluted EPS |
|
$ |
2.97 |
|
|
$ |
2.78 |
|
|
6.8 |
% |
Adjusted EPS |
|
$ |
3.14 |
|
|
$ |
2.98 |
|
|
5.4 |
% |
|
|
|
|
|
|
|
|||||
Adjusted EBITDA |
|
$ |
344,729 |
|
|
$ |
318,544 |
|
|
8.2 |
% |
Adjusted EBITDA margin % |
|
|
58.2 |
% |
|
|
56.9 |
% |
|
|
“MSCI delivered solid first-quarter results in a tough environment, confirming the underlying strengths of our franchise. We posted
“We have not been immune to the market turmoil, which impacted sales in areas such as ESG and Real Estate, but our resilience and leadership in the industry continue to stand out.
First Quarter Consolidated Results
Operating Revenues: Operating revenues were
Expenses: Total operating expenses were
Operating Income: Operating income was
Headcount: As of
Other Expense (Income), Net: Other expense (income), net was
Income Taxes: The effective tax rate was
Net Income: As a result of the factors described above, net income was
Adjusted EBITDA: Adjusted EBITDA was
Index Segment:
Table 1A: Results (unaudited)
|
|
Three Months Ended |
|||||||||
|
|
|
|
|
|
|
|||||
In thousands |
|
|
2023 |
|
|
|
2022 |
|
|
% Change |
|
Operating revenues: |
|
|
|
|
|
|
|||||
Recurring subscriptions |
|
$ |
196,678 |
|
|
$ |
174,498 |
|
|
12.7 |
% |
Asset-based fees |
|
|
133,126 |
|
|
|
145,053 |
|
|
(8.2 |
)% |
Non-recurring |
|
|
9,578 |
|
|
|
11,208 |
|
|
(14.5 |
)% |
Total operating revenues |
|
|
339,382 |
|
|
|
330,759 |
|
|
2.6 |
% |
Adjusted EBITDA expenses |
|
|
85,700 |
|
|
|
84,884 |
|
|
1.0 |
% |
Adjusted EBITDA |
|
$ |
253,682 |
|
|
$ |
245,875 |
|
|
3.2 |
% |
Adjusted EBITDA margin % |
|
|
74.7 |
% |
|
|
74.3 |
% |
|
|
Index operating revenues were
Growth in recurring subscription revenues was primarily driven by strong growth from market-cap weighted and factor, ESG and climate Index products.
The decrease in revenues attributable to asset-based fees primarily reflected a decline in revenues from non-ETF indexed funds linked to
Index
Analytics Segment:
Table 1B: Results (unaudited)
|
|
Three Months Ended |
|||||||||
|
|
|
|
|
|
|
|||||
In thousands |
|
|
2023 |
|
|
|
2022 |
|
|
% Change |
|
Operating revenues: |
|
|
|
|
|
|
|||||
Recurring subscriptions |
|
$ |
144,503 |
|
|
$ |
137,799 |
|
|
4.9 |
% |
Non-recurring |
|
|
2,567 |
|
|
|
1,998 |
|
|
28.5 |
% |
Total operating revenues |
|
|
147,070 |
|
|
|
139,797 |
|
|
5.2 |
% |
Adjusted EBITDA expenses |
|
|
86,290 |
|
|
|
88,908 |
|
|
(2.9 |
)% |
Adjusted EBITDA |
|
$ |
60,780 |
|
|
$ |
50,889 |
|
|
19.4 |
% |
Adjusted EBITDA margin % |
|
|
41.3 |
% |
|
|
36.4 |
% |
|
|
Analytics operating revenues were
Analytics
ESG and Climate Segment:
Table 1C: Results (unaudited)
|
|
Three Months Ended |
|||||||||
|
|
|
|
|
|
|
|||||
In thousands |
|
|
2023 |
|
|
|
2022 |
|
|
% Change |
|
Operating revenues: |
|
|
|
|
|
|
|||||
Recurring subscriptions |
|
$ |
65,732 |
|
|
$ |
50,572 |
|
|
30.0 |
% |
Non-recurring |
|
|
1,326 |
|
|
|
1,457 |
|
|
(9.0 |
)% |
Total operating revenues |
|
|
67,058 |
|
|
|
52,029 |
|
|
28.9 |
% |
Adjusted EBITDA expenses |
|
|
49,182 |
|
|
|
39,937 |
|
|
23.1 |
% |
Adjusted EBITDA |
|
$ |
17,876 |
|
|
$ |
12,092 |
|
|
47.8 |
% |
Adjusted EBITDA margin % |
|
|
26.7 |
% |
|
|
23.2 |
% |
|
|
ESG and Climate operating revenues were
ESG and Climate
All Other – Private Assets Segment:
Table 1D: Results (unaudited)
|
|
Three Months Ended |
|||||||||
|
|
|
|
|
|
|
|||||
In thousands |
|
|
2023 |
|
|
|
2022 |
|
|
% Change |
|
Operating revenues: |
|
|
|
|
|
|
|||||
Recurring subscriptions |
|
$ |
38,334 |
|
|
$ |
36,891 |
|
|
3.9 |
% |
Non-recurring |
|
|
374 |
|
|
|
469 |
|
|
(20.3 |
)% |
Total operating revenues |
|
|
38,708 |
|
|
|
37,360 |
|
|
3.6 |
% |
Adjusted EBITDA expenses |
|
|
26,317 |
|
|
|
27,672 |
|
|
(4.9 |
)% |
Adjusted EBITDA |
|
$ |
12,391 |
|
|
$ |
9,688 |
|
|
27.9 |
% |
Adjusted EBITDA margin % |
|
|
32.0 |
% |
|
|
25.9 |
% |
|
|
All Other –
All Other – Private Assets
Select Balance Sheet Items and Capital Allocation
Cash Balances and Outstanding Debt: Cash and cash equivalents was
Total principal amounts of debt outstanding as of
Capex and Cash Flow: Capex was
Share Count and Share Repurchases: Weighted average diluted shares outstanding were 80.5 million in first quarter 2023, down
Dividends: Approximately
Full-Year 2023 Guidance
MSCI’s guidance for the year ending
Guidance Item |
Current Guidance for Full-Year 2023 |
Operating Expense |
|
Adjusted EBITDA Expense |
|
Interest Expense (including amortization of financing fees) |
|
Depreciation & Amortization Expense |
|
Effective Tax Rate |
|
Capital Expenditures |
|
Net Cash Provided by Operating Activities |
|
Free Cash Flow |
|
The guidance provided above assumes, among other things, that
Conference Call Information
MSCI’s senior management will review the first quarter 2023 results on
About
Forward-Looking Statements
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, MSCI’s Full-Year 2023 guidance. These forward-looking statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond MSCI’s control and that could materially affect actual results, levels of activity, performance or achievements.
Other factors that could materially affect actual results, levels of activity, performance or achievements can be found in MSCI’s Annual Report on Form 10-K for the fiscal year ended
Website and Social Media Disclosure
Notes Regarding the Use of Operating Metrics
Retention Rate is an important metric because subscription cancellations decrease our
The Retention Rate for a non-annual period is calculated by annualizing the cancellations for which we have received a notice of termination or for which we believe there is an intention not to renew or discontinue the subscription during the non-annual period, and we believe that such notice or intention evidences the client’s final decision to terminate or not renew the applicable agreement, even though such notice is not effective until a later date. This annualized cancellation figure is then divided by the subscription
Retention Rate is computed by operating segment on a product/service-by-product/service basis. In general, if a client reduces the number of products or services to which it subscribes within a segment, or switches between products or services within a segment, we treat it as a cancellation for purposes of calculating our Retention Rate except in the case of a product or service switch that management considers to be a replacement product or service. In those replacement cases, only the net change to the client subscription, if a decrease, is reported as a cancel. In the Analytics and the ESG and Climate operating segments, substantially all product or service switches are treated as replacement products or services and netted in this manner, while in our Index and Real Assets operating segments, product or service switches that are treated as replacement products or services and receive netting treatment occur only in certain limited instances. In addition, we treat any reduction in fees resulting from a down-sell of the same product or service as a cancellation to the extent of the reduction. We do not calculate Retention Rate for that portion of our
“Organic recurring subscription
Sales represents the annualized value of products and services clients commit to purchase from
Total gross sales represent the sum of new recurring subscription sales and non-recurring sales. Total net sales represent the total gross sales net of the impact from subscription cancellations.
Notes Regarding the Use of Non-GAAP Financial Measures
“Adjusted EBITDA” is defined as net income before (1) provision for income taxes, (2) other expense (income), net, (3) depreciation and amortization of property, equipment and leasehold improvements, (4) amortization of intangible assets and, at times, (5) certain other transactions or adjustments, including, when applicable, certain non-recurring acquisition-related integration and transaction costs.
“Adjusted EBITDA expenses” is defined as operating expenses less depreciation and amortization of property, equipment and leasehold improvements and amortization of intangible assets and, at times, certain other transactions or adjustments, including, when applicable, certain non-recurring acquisition-related integration and transaction costs.
“Adjusted EBITDA margin” is defined as adjusted EBITDA divided by operating revenues.
“Adjusted net income” and “adjusted EPS” are defined as net income and diluted EPS, respectively, before the after-tax impact of: the amortization of acquired intangible assets, including the amortization of the basis difference between the cost of the equity method investment and MSCI’s share of the net assets of the investee at historical carrying value and, at times, certain other transactions or adjustments, including, when applicable, the impact related to certain non-recurring acquisition-related integration and transaction costs and the impact related to gain from changes in ownership interest of investees.
“Capex” is defined as capital expenditures plus capitalized software development costs.
“Free cash flow” is defined as net cash provided by operating activities, less Capex.
“Organic operating revenue growth” is defined as operating revenue growth compared to the prior year period excluding the impact of acquired businesses, divested businesses and foreign currency exchange rate fluctuations.
Asset-based fees ex-FX does not adjust for the impact from foreign currency exchange rate fluctuations on the underlying assets under management (“AUM”).
We believe adjusted EBITDA, adjusted EBITDA margin and adjusted EBITDA expenses are meaningful measures of the operating performance of
We believe adjusted net income and adjusted EPS are meaningful measures of the performance of
We believe that free cash flow is useful to investors because it relates the operating cash flow of
We believe organic operating revenue growth is a meaningful measure of the operating performance of
We believe that the non-GAAP financial measures presented in this earnings release facilitate meaningful period-to-period comparisons and provide a baseline for the evaluation of future results.
Adjusted EBITDA expenses, adjusted EBITDA margin, adjusted EBITDA, adjusted net income, adjusted EPS, Capex, free cash flow and organic operating revenue growth are not defined in the same manner by all companies and may not be comparable to similarly-titled non-GAAP financial measures of other companies. These measures can differ significantly from company to company depending on, among other things, long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. Accordingly, the Company’s computation of these measures may not be comparable to similarly-titled measures computed by other companies.
Notes Regarding Adjusting for the Impact of Foreign Currency Exchange Rate Fluctuations
Foreign currency exchange rate fluctuations reflect the difference between the current period results as reported compared to the current period results recalculated using the foreign currency exchange rates in effect for the comparable prior period. While operating revenues adjusted for the impact of foreign currency fluctuations includes asset-based fees that have been adjusted for the impact of foreign currency fluctuations, the underlying AUM, which is the primary component of asset-based fees, is not adjusted for foreign currency fluctuations. Approximately three-fifths of the AUM is invested in securities denominated in currencies other than the
Table 2: Condensed Consolidated Statements of Income (unaudited)
|
|
Three Months Ended |
|||||||||
|
|
|
|
|
|
% |
|||||
In thousands, except per share data |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
Operating revenues |
|
$ |
592,218 |
|
|
$ |
559,945 |
|
|
5.8 |
% |
Operating expenses: |
|
|
|
|
|
|
|||||
Cost of revenues (exclusive of depreciation and amortization) |
|
|
108,647 |
|
|
|
102,771 |
|
|
5.7 |
% |
Selling and marketing |
|
|
66,475 |
|
|
|
66,053 |
|
|
0.6 |
% |
Research and development |
|
|
31,323 |
|
|
|
28,322 |
|
|
10.6 |
% |
General and administrative |
|
|
41,044 |
|
|
|
45,567 |
|
|
(9.9 |
)% |
Amortization of intangible assets |
|
|
24,667 |
|
|
|
21,720 |
|
|
13.6 |
% |
Depreciation and amortization of property, |
|||||||||||
equipment and leasehold improvements |
|
|
5,460 |
|
|
|
6,534 |
|
|
(16.4 |
)% |
Total operating expenses(1) |
|
|
277,616 |
|
|
|
270,967 |
|
|
2.5 |
% |
|
|
|
|
|
|
|
|||||
Operating income |
|
|
314,602 |
|
|
|
288,978 |
|
|
8.9 |
% |
|
|
|
|
|
|
|
|||||
Interest income |
|
|
(10,362 |
) |
|
|
(298 |
) |
|
n/m |
|
Interest expense |
|
|
46,206 |
|
|
|
40,714 |
|
|
13.5 |
% |
Other expense (income) |
|
|
2,386 |
|
|
|
(381 |
) |
|
n/m |
|
Other expense (income), net |
|
|
38,230 |
|
|
|
40,035 |
|
|
(4.5 |
)% |
|
|
|
|
|
|
|
|||||
Income before provision for income taxes |
|
|
276,372 |
|
|
|
248,943 |
|
|
11.0 |
% |
|
|
|
|
|
|
|
|||||
Provision for income taxes |
|
|
37,644 |
|
|
|
20,520 |
|
|
83.5 |
% |
Net income |
|
$ |
238,728 |
|
|
$ |
228,423 |
|
|
4.5 |
% |
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
Earnings per basic common share |
|
$ |
2.98 |
|
|
$ |
2.80 |
|
|
6.4 |
% |
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
Earnings per diluted common share |
|
$ |
2.97 |
|
|
$ |
2.78 |
|
|
6.8 |
% |
|
|
|
|
|
|
|
|||||
Weighted average shares outstanding used |
|
|
|
|
|
|
|||||
in computing earnings per share: |
|
|
|
|
|
|
|||||
Basic |
|
|
80,041 |
|
|
|
81,591 |
|
|
(1.9 |
)% |
Diluted |
|
|
80,482 |
|
|
|
82,286 |
|
|
(2.2 |
)% |
|
|
|
|
|
|
|
|||||
n/m: not meaningful. |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
(1) Includes stock-based compensation expense of |
Table 3: Selected Balance Sheet Items (unaudited)
|
|
As of |
||
|
|
|
|
|
In thousands |
|
2023 |
|
2022 |
Cash and cash equivalents (1) |
|
|
|
|
Accounts receivable, net of allowances |
|
|
|
|
|
|
|
|
|
Current deferred revenue |
|
|
|
|
Current portion of long-term debt (2) |
|
|
|
|
Long-term debt (3) |
|
|
|
|
|
|
|
|
|
(1) Includes restricted cash of |
||||
(2) Consists of gross current portion of long-term debt, net of deferred financing fees. Gross current portion of long-term debt was |
||||
(3) Consists of gross long-term debt, net of deferred financing fees. Gross long-term debt was |
Table 4: Selected Cash Flow Items (unaudited)
|
|
Three Months Ended |
|||||||||
|
|
|
|
|
|
% |
|||||
In thousands |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
Net cash provided by operating activities |
|
$ |
264,141 |
|
|
$ |
244,184 |
|
|
8.2 |
% |
Net cash used in investing activities |
|
|
(21,762 |
) |
|
|
(15,310 |
) |
|
(42.1 |
)% |
Net cash (used in) provided by financing activities |
|
|
(158,293 |
) |
|
|
(966,117 |
) |
|
83.6 |
% |
Effect of exchange rate changes |
|
|
2,958 |
|
|
|
(4,891 |
) |
|
160.5 |
% |
Net (decrease) increase in cash, cash equivalents and restricted cash |
|
$ |
87,044 |
|
|
$ |
(742,134 |
) |
|
111.7 |
% |
Table 5: Operating Results by Segment and Revenue Type (unaudited)
Index |
|
Three Months Ended |
|||||||||
|
|
|
|
|
|
% |
|||||
In thousands |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
Operating revenues: |
|
|
|
|
|
|
|||||
Recurring subscriptions |
|
$ |
196,678 |
|
|
$ |
174,498 |
|
|
12.7 |
% |
Asset-based fees |
|
|
133,126 |
|
|
|
145,053 |
|
|
(8.2 |
)% |
Non-recurring |
|
|
9,578 |
|
|
|
11,208 |
|
|
(14.5 |
)% |
Total operating revenues |
|
|
339,382 |
|
|
|
330,759 |
|
|
2.6 |
% |
Adjusted EBITDA expenses |
|
|
85,700 |
|
|
|
84,884 |
|
|
1.0 |
% |
Adjusted EBITDA |
|
$ |
253,682 |
|
|
$ |
245,875 |
|
|
3.2 |
% |
Adjusted EBITDA margin % |
|
|
74.7 |
% |
|
|
74.3 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
Analytics |
|
Three Months Ended |
|||||||||
|
|
|
|
|
|
% |
|||||
In thousands |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
Operating revenues: |
|
|
|
|
|
|
|||||
Recurring subscriptions |
|
$ |
144,503 |
|
|
$ |
137,799 |
|
|
4.9 |
% |
Non-recurring |
|
|
2,567 |
|
|
|
1,998 |
|
|
28.5 |
% |
Total operating revenues |
|
|
147,070 |
|
|
|
139,797 |
|
|
5.2 |
% |
Adjusted EBITDA expenses |
|
|
86,290 |
|
|
|
88,908 |
|
|
(2.9 |
)% |
Adjusted EBITDA |
|
$ |
60,780 |
|
|
$ |
50,889 |
|
|
19.4 |
% |
Adjusted EBITDA margin % |
|
|
41.3 |
% |
|
|
36.4 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
ESG and Climate |
|
Three Months Ended |
|||||||||
|
|
|
|
|
|
% |
|||||
In thousands |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
Operating revenues: |
|
|
|
|
|
|
|||||
Recurring subscriptions |
|
$ |
65,732 |
|
|
$ |
50,572 |
|
|
30.0 |
% |
Non-recurring |
|
|
1,326 |
|
|
|
1,457 |
|
|
(9.0 |
)% |
Total operating revenues |
|
|
67,058 |
|
|
|
52,029 |
|
|
28.9 |
% |
Adjusted EBITDA expenses |
|
|
49,182 |
|
|
|
39,937 |
|
|
23.1 |
% |
Adjusted EBITDA |
|
$ |
17,876 |
|
|
$ |
12,092 |
|
|
47.8 |
% |
Adjusted EBITDA margin % |
|
|
26.7 |
% |
|
|
23.2 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
All Other - |
|
Three Months Ended |
|||||||||
|
|
|
|
|
|
% |
|||||
In thousands |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
Operating revenues: |
|
|
|
|
|
|
|||||
Recurring subscriptions |
|
$ |
38,334 |
|
|
$ |
36,891 |
|
|
3.9 |
% |
Non-recurring |
|
|
374 |
|
|
|
469 |
|
|
(20.3 |
)% |
Total operating revenues |
|
|
38,708 |
|
|
|
37,360 |
|
|
3.6 |
% |
Adjusted EBITDA expenses |
|
|
26,317 |
|
|
|
27,672 |
|
|
(4.9 |
)% |
Adjusted EBITDA |
|
$ |
12,391 |
|
|
$ |
9,688 |
|
|
27.9 |
% |
Adjusted EBITDA margin % |
|
|
32.0 |
% |
|
|
25.9 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
Consolidated |
|
Three Months Ended |
|||||||||
|
|
|
|
|
|
% |
|||||
In thousands |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
Operating revenues: |
|
|
|
|
|
|
|||||
Recurring subscriptions |
|
$ |
445,247 |
|
|
$ |
399,760 |
|
|
11.4 |
% |
Asset-based fees |
|
|
133,126 |
|
|
|
145,053 |
|
|
(8.2 |
)% |
Non-recurring |
|
|
13,845 |
|
|
|
15,132 |
|
|
(8.5 |
)% |
Operating revenues total |
|
|
592,218 |
|
|
|
559,945 |
|
|
5.8 |
% |
Adjusted EBITDA expenses |
|
|
247,489 |
|
|
|
241,401 |
|
|
2.5 |
% |
Adjusted EBITDA |
|
$ |
344,729 |
|
|
$ |
318,544 |
|
|
8.2 |
% |
Operating margin % |
|
|
53.1 |
% |
|
|
51.6 |
% |
|
|
|
Adjusted EBITDA margin % |
|
|
58.2 |
% |
|
|
56.9 |
% |
|
|
Table 6: Sales and Retention Rate by Segment (unaudited)(1)
|
|
Three Months Ended |
||||||
|
|
|
|
|
||||
In thousands |
|
|
2023 |
|
|
|
2022 |
|
Index |
|
|
|
|
||||
New recurring subscription sales |
|
$ |
25,090 |
|
|
$ |
22,417 |
|
Subscription cancellations |
|
|
(7,082 |
) |
|
|
(5,920 |
) |
Net new recurring subscription sales |
|
$ |
18,008 |
|
|
$ |
16,497 |
|
Non-recurring sales |
|
$ |
12,782 |
|
|
$ |
13,715 |
|
Total gross sales |
|
$ |
37,872 |
|
|
$ |
36,132 |
|
Total Index net sales |
|
$ |
30,790 |
|
|
$ |
30,212 |
|
|
|
|
|
|
||||
Index Retention Rate |
|
|
96.4 |
% |
|
|
96.6 |
% |
|
|
|
|
|
||||
Analytics |
|
|
|
|
||||
New recurring subscription sales |
|
$ |
13,674 |
|
|
$ |
14,069 |
|
Subscription cancellations |
|
|
(9,183 |
) |
|
|
(8,128 |
) |
Net new recurring subscription sales |
|
$ |
4,491 |
|
|
$ |
5,941 |
|
Non-recurring sales |
|
$ |
1,370 |
|
|
$ |
3,489 |
|
Total gross sales |
|
$ |
15,044 |
|
|
$ |
17,558 |
|
Total Analytics net sales |
|
$ |
5,861 |
|
|
$ |
9,430 |
|
|
|
|
|
|
||||
Analytics Retention Rate |
|
|
94.0 |
% |
|
|
94.4 |
% |
|
|
|
|
|
||||
ESG and Climate |
|
|
|
|
||||
New recurring subscription sales |
|
$ |
12,486 |
|
|
$ |
19,142 |
|
Subscription cancellations |
|
|
(2,635 |
) |
|
|
(643 |
) |
Net new recurring subscription sales |
|
$ |
9,851 |
|
|
$ |
18,499 |
|
Non-recurring sales |
|
$ |
1,219 |
|
|
$ |
1,308 |
|
Total gross sales |
|
$ |
13,705 |
|
|
$ |
20,450 |
|
Total ESG and Climate net sales |
|
$ |
11,070 |
|
|
$ |
19,807 |
|
|
|
|
|
|
||||
ESG and Climate Retention Rate |
|
|
96.1 |
% |
|
|
98.7 |
% |
|
|
|
|
|
||||
All Other - |
|
|
|
|
||||
New recurring subscription sales |
|
$ |
5,143 |
|
|
$ |
5,559 |
|
Subscription cancellations |
|
|
(2,856 |
) |
|
|
(1,978 |
) |
Net new recurring subscription sales |
|
$ |
2,287 |
|
|
$ |
3,581 |
|
Non-recurring sales |
|
$ |
213 |
|
|
$ |
152 |
|
Total gross sales |
|
$ |
5,356 |
|
|
$ |
5,711 |
|
Total All Other - |
|
$ |
2,500 |
|
|
$ |
3,733 |
|
|
|
|
|
|
||||
All Other - Private Assets Retention Rate |
|
|
92.1 |
% |
|
|
94.1 |
% |
|
|
|
|
|
||||
Consolidated |
|
|
|
|
||||
New recurring subscription sales |
|
$ |
56,393 |
|
|
$ |
61,187 |
|
Subscription cancellations |
|
|
(21,756 |
) |
|
|
(16,669 |
) |
Net new recurring subscription sales |
|
$ |
34,637 |
|
|
$ |
44,518 |
|
Non-recurring sales |
|
$ |
15,584 |
|
|
$ |
18,664 |
|
Total gross sales |
|
$ |
71,977 |
|
|
$ |
79,851 |
|
Total net sales |
|
$ |
50,221 |
|
|
$ |
63,182 |
|
|
|
|
|
|
||||
Total Retention Rate |
|
|
95.2 |
% |
|
|
95.9 |
% |
|
|
|
|
|
||||
(1) See "Notes Regarding the Use of Operating Metrics" for details regarding the definition of new recurring subscription sales, subscription cancellations, net new recurring subscription sales, non-recurring sales, total gross sales, total net sales and Retention Rate. |
Table 7: AUM in ETFs Linked to
|
|
Three Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
In billions |
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
2022 |
|
2023 |
||
Beginning Period AUM in ETFs linked to |
||||||||||||||||||
|
|
$ |
1,451.6 |
|
|
$ |
1,389.3 |
|
|
$ |
1,189.5 |
|
|
$ |
1,081.2 |
|
$ |
1,222.9 |
Market Appreciation/(Depreciation) |
|
|
(89.7 |
) |
|
|
(207.3 |
) |
|
|
(105.7 |
) |
|
|
118.8 |
|
|
75.1 |
Cash Inflows |
|
|
27.4 |
|
|
|
7.5 |
|
|
|
(2.6 |
) |
|
|
22.9 |
|
|
7.4 |
Period-End AUM in ETFs linked to |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
$ |
1,389.3 |
|
|
$ |
1,189.5 |
|
|
$ |
1,081.2 |
|
|
$ |
1,222.9 |
|
$ |
1,305.4 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Period Average AUM in ETFs linked to |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
$ |
1,392.5 |
|
|
$ |
1,285.4 |
|
|
$ |
1,208.9 |
|
|
$ |
1,182.1 |
|
$ |
1,287.5 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Period-End Basis Point Fee(3) |
|
|
2.51 |
|
|
|
2.52 |
|
|
|
2.52 |
|
|
|
2.54 |
|
|
2.53 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
(1) The historical values of the AUM in ETFs linked to our equity indexes as of the last day of the month and the monthly average balance can be found under the link “AUM in ETFs Linked to |
||||||||||||||||||
(2) The value of AUM in ETFs linked to |
||||||||||||||||||
(3) Based on period-end |
Table 8:
|
|
As of |
|
|
|||||
|
|
|
|
|
|
% |
|||
In thousands |
|
2023 |
|
2022 |
|
Change |
|||
Index |
|
|
|
|
|
|
|||
Recurring subscriptions |
|
$ |
795,621 |
|
$ |
711,113 |
|
11.9 |
% |
Asset-based fees |
|
|
534,491 |
|
|
576,234 |
|
(7.2 |
)% |
Index |
|
|
1,330,112 |
|
|
1,287,347 |
|
3.3 |
% |
|
|
|
|
|
|
|
|||
Analytics |
|
|
621,611 |
|
|
588,447 |
|
5.6 |
% |
|
|
|
|
|
|
|
|||
ESG and Climate |
|
|
278,947 |
|
|
216,197 |
|
29.0 |
% |
|
|
|
|
|
|
|
|||
All Other - Private Assets |
|
|
148,440 |
|
|
137,532 |
|
7.9 |
% |
|
|
|
|
|
|
|
|||
Total |
|
$ |
2,379,110 |
|
$ |
2,229,523 |
|
6.7 |
% |
|
|
|
|
|
|
|
|||
Total recurring subscriptions |
|
$ |
1,844,619 |
|
$ |
1,653,289 |
|
11.6 |
% |
Total asset-based fees |
|
|
534,491 |
|
|
576,234 |
|
(7.2 |
)% |
Total |
|
$ |
2,379,110 |
|
$ |
2,229,523 |
|
6.7 |
% |
|
|
|
|
|
|
|
|||
(1) See "Notes Regarding the Use of Operating Metrics" for details regarding the definition of |
Table 9: Reconciliation of Net Income to Adjusted EBITDA (unaudited)
|
|
Three Months Ended |
||||
|
|
|
|
|
||
In thousands |
|
2023 |
|
2022 |
||
Net income |
|
$ |
238,728 |
|
$ |
228,423 |
Provision for income taxes |
|
|
37,644 |
|
|
20,520 |
Other expense (income), net |
|
|
38,230 |
|
|
40,035 |
Operating income |
|
|
314,602 |
|
|
288,978 |
Amortization of intangible assets |
|
|
24,667 |
|
|
21,720 |
Depreciation and amortization of property, |
||||||
equipment and leasehold improvements |
|
|
5,460 |
|
|
6,534 |
Acquisition-related integration and transaction costs(1) |
|
|
— |
|
|
1,312 |
Consolidated adjusted EBITDA |
|
$ |
344,729 |
|
$ |
318,544 |
|
|
|
|
|
||
Index adjusted EBITDA |
|
$ |
253,682 |
|
$ |
245,875 |
Analytics adjusted EBITDA |
|
|
60,780 |
|
|
50,889 |
ESG and Climate adjusted EBITDA |
|
|
17,876 |
|
|
12,092 |
All Other - |
|
|
12,391 |
|
|
9,688 |
Consolidated adjusted EBITDA |
|
$ |
344,729 |
|
$ |
318,544 |
|
|
|
|
|
||
(1) Incremental and non-recurring costs attributable to acquisitions directly related to the execution of the transaction and integration of the acquired business that have occurred no later than 12 months after the close of the transaction. |
Table 10: Reconciliation of Net Income and Diluted EPS to Adjusted Net Income and Adjusted EPS (unaudited)
|
|
Three Months Ended |
||||||
|
|
|
|
|
||||
In thousands, except per share data |
|
|
2023 |
|
|
|
2022 |
|
Net income |
|
$ |
238,728 |
|
|
$ |
228,423 |
|
Plus: Amortization of acquired intangible assets and |
|
|
|
|
||||
equity method investment basis difference |
|
|
16,809 |
|
|
|
16,899 |
|
Plus: Acquisition-related integration and transaction costs(1) |
|
|
— |
|
|
|
1,385 |
|
Less: Gain from changes in ownership interest of investees |
|
|
(447 |
) |
|
|
— |
|
Less: Income tax effect |
|
|
(2,196 |
) |
|
|
(1,507 |
) |
Adjusted net income |
|
$ |
252,894 |
|
|
$ |
245,200 |
|
|
|
|
|
|
||||
Diluted EPS |
|
$ |
2.97 |
|
|
$ |
2.78 |
|
Plus: Amortization of acquired intangible assets and |
|
|
|
|
||||
equity method investment basis difference |
|
|
0.21 |
|
|
|
0.21 |
|
Plus: Acquisition-related integration and transaction costs(1) |
|
|
— |
|
|
|
0.02 |
|
Less: Gain from changes in ownership interest of investees |
|
|
(0.01 |
) |
|
|
— |
|
Less: Income tax effect |
|
|
(0.03 |
) |
|
|
(0.03 |
) |
Adjusted EPS |
|
$ |
3.14 |
|
|
$ |
2.98 |
|
|
|
|
|
|
||||
(1) Incremental and non-recurring costs attributable to acquisitions directly related to the execution of the transaction and integration of the acquired business that have occurred no later than 12 months after the close of the transaction. |
Table 11: Reconciliation of Operating Expenses to Adjusted EBITDA Expenses (unaudited)
|
|
Three Months Ended |
|
Full-Year |
||||
|
|
|
|
|
|
2023 |
||
In thousands |
|
2023 |
|
2022 |
|
Guidance(1) |
||
Total operating expenses |
|
$ |
277,616 |
|
$ |
270,967 |
|
|
Amortization of intangible assets |
|
|
24,667 |
|
|
21,720 |
|
|
Depreciation and amortization of property, |
|
|
|
|
|
|
||
equipment and leasehold improvements |
|
|
5,460 |
|
|
6,534 |
|
|
Acquisition-related integration and transaction costs(2) |
|
|
— |
|
|
1,312 |
|
|
Consolidated adjusted EBITDA expenses |
|
$ |
247,489 |
|
$ |
241,401 |
|
|
|
|
|
|
|
|
|
||
Index adjusted EBITDA expenses |
|
$ |
85,700 |
|
$ |
84,884 |
|
|
Analytics adjusted EBITDA expenses |
|
|
86,290 |
|
|
88,908 |
|
|
ESG and Climate adjusted EBITDA expenses |
|
|
49,182 |
|
|
39,937 |
|
|
All Other - |
|
|
26,317 |
|
|
27,672 |
|
|
Consolidated adjusted EBITDA expenses |
|
$ |
247,489 |
|
$ |
241,401 |
|
|
|
|
|
|
|
|
|
||
(1) We have not provided a full line-item reconciliation for total operating expenses to adjusted EBITDA expenses for this future period because we believe such a reconciliation would imply a degree of precision and certainty that could be confusing to investors and we are unable to reasonably predict certain items contained in the GAAP measure without unreasonable efforts. This is due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred and are out of the Company's control or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures. See “Forward-Looking Statements” above. |
||||||||
(2) Incremental and non-recurring costs attributable to acquisitions directly related to the execution of the transaction and integration of the acquired business that have occurred no later than 12 months after the close of the transaction. |
Table 12: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (unaudited)
|
|
Three Months Ended |
|
Full-Year |
||||||
|
|
|
|
|
|
2023 |
||||
In thousands |
|
|
2023 |
|
|
|
2022 |
|
|
Guidance(1) |
Net cash provided by operating activities |
|
$ |
264,141 |
|
|
$ |
244,184 |
|
|
|
Capital expenditures |
|
|
(6,225 |
) |
|
|
(1,254 |
) |
|
|
Capitalized software development costs |
|
|
(15,351 |
) |
|
|
(14,084 |
) |
|
|
Capex |
|
|
(21,576 |
) |
|
|
(15,338 |
) |
|
( |
Free cash flow |
|
$ |
242,565 |
|
|
$ |
228,846 |
|
|
|
|
|
|
|
|
|
|
||||
(1) We have not provided a line-item reconciliation for free cash flow to net cash provided by operating activities for this future period because we believe such a reconciliation would imply a degree of precision and certainty that could be confusing to investors and we are unable to reasonably predict certain items contained in the GAAP measure without unreasonable efforts. This is due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred and are out of the Company's control or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures. See “Forward-Looking Statements” above. |
Table 13: First Quarter 2023 Reconciliation of Operating Revenue Growth to Organic Operating Revenue Growth (unaudited)
Comparison of the Three Months Ended |
|||||||
|
Total |
|
Recurring Subscription |
|
Asset-Based Fees |
|
Non-Recurring Revenues |
Index |
Change Percentage |
|
Change Percentage |
|
Change Percentage |
|
Change Percentage |
Operating revenue growth |
2.6 % |
|
12.7 % |
|
(8.2) % |
|
(14.5) % |
Impact of acquisitions and divestitures |
— % |
|
— % |
|
— % |
|
— % |
Impact of foreign currency exchange rate fluctuations |
0.3 % |
|
0.4 % |
|
0.1 % |
|
— % |
Organic operating revenue growth |
2.9 % |
|
13.1 % |
|
(8.1) % |
|
(14.5) % |
|
|
|
|
|
|
|
|
|
Total |
|
Recurring Subscription |
|
Asset-Based Fees |
|
Non-Recurring Revenues |
Analytics |
Change Percentage |
|
Change Percentage |
|
Change Percentage |
|
Change Percentage |
Operating revenue growth |
5.2 % |
|
4.9 % |
|
— % |
|
28.5 % |
Impact of acquisitions and divestitures |
— % |
|
— % |
|
— % |
|
— % |
Impact of foreign currency exchange rate fluctuations |
0.7 % |
|
0.6 % |
|
— % |
|
2.8 % |
Organic operating revenue growth |
5.9 % |
|
5.5 % |
|
— % |
|
31.3 % |
|
|
|
|
|
|
|
|
|
Total |
|
Recurring Subscription |
|
Asset-Based Fees |
|
Non-Recurring Revenues |
ESG and Climate |
Change Percentage |
|
Change Percentage |
|
Change Percentage |
|
Change Percentage |
Operating revenue growth |
28.9 % |
|
30.0 % |
|
— % |
|
(9.0) % |
Impact of acquisitions and divestitures |
— % |
|
— % |
|
— % |
|
— % |
Impact of foreign currency exchange rate fluctuations |
8.7 % |
|
8.9 % |
|
— % |
|
2.4 % |
Organic operating revenue growth |
37.6 % |
|
38.9 % |
|
— % |
|
(6.6) % |
|
|
|
|
|
|
|
|
|
Total |
|
Recurring Subscription |
|
Asset-Based Fees |
|
Non-Recurring Revenues |
All Other - |
Change Percentage |
|
Change Percentage |
|
Change Percentage |
|
Change Percentage |
Operating revenue growth |
3.6 % |
|
3.9 % |
|
— % |
|
(20.3) % |
Impact of acquisitions and divestitures |
— % |
|
— % |
|
— % |
|
— % |
Impact of foreign currency exchange rate fluctuations |
4.4 % |
|
4.4 % |
|
— % |
|
1.3 % |
Organic operating revenue growth |
8.0 % |
|
8.3 % |
|
— % |
|
(19.0) % |
|
|
|
|
|
|
|
|
|
Total |
|
Recurring Subscription |
|
Asset-Based Fees |
|
Non-Recurring Revenues |
Consolidated |
Change Percentage |
|
Change Percentage |
|
Change Percentage |
|
Change Percentage |
Operating revenue growth |
5.8 % |
|
11.4 % |
|
(8.2) % |
|
(8.5) % |
Impact of acquisitions and divestitures |
— % |
|
— % |
|
— % |
|
— % |
Impact of foreign currency exchange rate fluctuations |
1.4 % |
|
1.9 % |
|
0.1 % |
|
0.7 % |
Organic operating revenue growth |
7.2 % |
|
13.3 % |
|
(8.1) % |
|
(7.8) % |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230425005147/en/
Investor Inquiries
jeremy.ulan@msci.com
Jeremy Ulan +1 646 778 4184
jisoo.suh@msci.com
Media Inquiries
PR@msci.com
Source:
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