MSCI Inc. Reports Substantial Growth in Fourth-Quarter Earnings and Revenue
MSCI Inc. reported higher fourth-quarter earnings and revenue, exceeding industry analysts’ expectations. The company’s earnings for the quarter were $3.68 per share, up from $2.84 per share in the same period last year. MSCI’s notable performance demonstrates their ability to capitalize on key trends in the global investment landscape, including the increased demand for customized portfolios. They are adept at adapting to these trends.
The company’s revenue growth was equally noteworthy, with a 19.8% year-over-year increase to $690.1 million, surpassing the consensus mark. Organic revenues experienced a 14.7% rise from the year prior. A substantial segment of the company’s revenue, constituting 73.2%, was attributed to recurring subscriptions, which ascended to $505.4 million, indicating a 16.8% increase. Asset-based fees also experienced a considerable rise, contributing 21% to the total revenues with a 15.9% year-over-year growth. Non-recurring revenues saw an extraordinary surge of 114.4%, totaling $39.6 million and representing 5.7% of the total revenues.
In the Index segment, revenues reached $388 million, a 17.8% increase from the previous year, propelled mainly by robust growth in market-cap-weighted Index products. The company’s exchange-traded funds (ETFs) linked to MSCI equity indexes, supported by an uptick in average assets under management (AUM), were a significant factor in the rise of asset-based fees. The Analytics segment also delivered positive outcomes, with operating revenues of $164.7 million, marking a 10% increase from the prior year. This segment’s growth was driven by recurring subscriptions related to Equity Analytics and Multi-Asset Class products, along with a significant number of completed implementations.
The ESG and Climate segment had operating revenues of $76.3 million, a 20% increase from the previous year. This growth was due to recurring subscriptions for Ratings, Climate, and Screening products. The Trove acquisition also contributed to the segment’s performance. Additionally, the All Other – Private Assets operating revenues, which include the Real Assets segment and the Private Capital Solutions, increased by 81.5% to $61.1 million.
The financial health of MSCI was further demonstrated by its adjusted EBITDA, which escalated by 22.3% to $414.6 million, with an expanded margin of 130 basis points to 60.1%. The company’s total operating expenses also saw an increase, in line with its revenue growth, to $319.4 million.
MSCI Inc’s fourth-quarter performance underscores the company’s substantial growth across various segments, including Index, Analytics, ESG and Climate, and Private Assets. The company’s strategic emphasis on delivering comprehensive tools and services has culminated in significant revenue increases and an expanded adjusted EBITDA margin. The firm’s proficiency in meeting the evolving demands of the global investment community is evident in its robust financial results, reflecting the company’s dedication to innovation and customer service.
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