UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~ September 30, 2023


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from____________to____________

Commission file number 001-33812

MSCI INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware						13-4038723
(State or other jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification Number)

7 World Trade Center 250 Greenwich Street, 49th Floor New York, New York						10007
(Address of Principal Executive Offices)						(Zip Code)

Registrant’s telephone number, including area code: (212) 804-3900

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.01 per share

MSCI

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of ~~April 18,~~October 24, 2023, there were ~~80,063,402~~79,091,190 shares of the registrant’s common stock, par value $0.01, outstanding.

Table of Contents

FOR THE QUARTER ENDED ~~MARCH 31,~~SEPTEMBER 30, 2023

TABLE OF CONTENTS


		Page
	Part I – Financial Information
Item 1.	Financial Statements	4
	Condensed Consolidated Statements of Financial Condition as of September 30, 2023 and December 31, 2022	4
	Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2023 and 2022	5
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2023 and 2022	6
	Condensed Consolidated Statements of Shareholders’ Equity (Deficit) for the three and nine months ended September 30, 2023 and 2022	7
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2123
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3842
Item 4.	Controls and Procedures	3942

	Part II – Other Information
Item 1.	Legal Proceedings	4043
Item 1A.	Risk Factors	4043
Item 2.	Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds , and Issuer Purchases of Equity Securities	4043
Item 5.	O ther Information	43
Item 6.	Exhibits	4144

Table of Contents

AVAILABLE INFORMATION

Our corporate headquarters is located at 7 World Trade Center, 250 Greenwich Street, 49th Floor, New York, New York, 10007, and our telephone number is (212) 804-3900. We maintain a website on the internet at www.msci.com. The contents of our website are not a part of or incorporated by reference in this Quarterly Report on Form 10-Q.

We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). The SEC maintains a website that contains reports, proxy and information statements and other information that we file electronically with the SEC at www.sec.gov. We also make available free of charge, on or through our website, these reports, proxy statements and other information as soon as reasonably practicable following the time they are electronically filed with or furnished to the SEC. To access these, click on the “SEC Filings” link under the “Financial Information” tab found on our Investor Relations homepage (http://ir.msci.com).

We also use our Investor Relations homepage, Corporate Responsibility homepage and corporate ~~Twitter~~X (formerly Twitter) account (@MSCI_Inc) as channels of distribution of Company information. The information we post through these channels may be deemed material.

Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about us when you enroll your email address by visiting the “Email Alerts” section of our Investor Relations homepage at https://ir.msci.com/email-alerts. The contents of our website, including our Investor Relations homepage and Corporate Responsibility homepage, and our social media channels are not, however, a part of or incorporated by reference in this Quarterly Report on Form 10-Q.

FORWARD-LOOKING STATEMENTS

We have included in this Quarterly Report on Form 10-Q, and from time to time may make in our public filings, press releases or other public statements, certain statements that constitute forward-looking statements. In addition, our management may make forward-looking statements to analysts, investors, representatives of the media and others. These forward-looking statements are not historical facts and represent only MSCI’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and beyond our control. These forward-looking statements 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. Statements concerning our financial position, business strategy and plans or objectives for future operations are forward-looking statements. 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 our control and that could materially affect our actual results, levels of activity, performance or achievements. Such risks and uncertainties include those set forth under “Risk Factors” in Part I, Item 1A of the 2022 Annual Report on Form 10-K filed with the SEC on February 10, 2023. If any of these risks or uncertainties materialize, or if MSCI’s underlying assumptions prove to be incorrect, actual results may vary significantly from what MSCI projected. Any forward-looking statement reflects our current views with respect to future events, levels of activity, performance or achievements and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. The forward-looking statements in this report speak only as of the time they are made and do not necessarily reflect our outlook at any other point in time. MSCI assumes no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise, except as required by law. Therefore, readers should carefully review the risk factors set forth in the Annual Report on Form 10-K and in other reports or documents we file from time to time with the SEC.

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except per share and share data)


		As of					As of
		March 31,		December 31,			September 30,		December 31,
(unaudited)	(unaudited)	2023		2022		(unaudited)	2023		2022
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents (includes restricted cash of $3,871 and $368 at March 31, 2023 and December 31, 2022, respectively)		$	1,080,608	$	993,564
Accounts receivable, net of allowances		641,584		663,236
Cash and cash equivalents (includes restricted cash of $3,839 and $368 at September 30, 2023 and December 31, 2022, respectively)						Cash and cash equivalents (includes restricted cash of $3,839 and $368 at September 30, 2023 and December 31, 2022, respectively)	$	928,552	$	993,564
Accounts receivable (net of allowances of $3,030 and $2,652 at September 30, 2023 and December 31, 2022, respectively)						Accounts receivable (net of allowances of $3,030 and $2,652 at September 30, 2023 and December 31, 2022, respectively)	603,266		663,236
Prepaid income taxes	Prepaid income taxes	33,487		36,654		Prepaid income taxes	54,544		36,654
Prepaid and other assets	Prepaid and other assets	54,888		54,520		Prepaid and other assets	52,967		54,520
Total current assets	Total current assets	1,810,567		1,747,974		Total current assets	1,639,329		1,747,974

Property, equipment and leasehold improvements, net	Property, equipment and leasehold improvements, net	58,839		53,853		Property, equipment and leasehold improvements, net	58,036		53,853
Right of use assets	Right of use assets	125,596		126,584		Right of use assets	117,533		126,584
Goodwill	Goodwill	2,231,037		2,229,670		Goodwill	2,230,389		2,229,670
Intangible assets, net	Intangible assets, net	551,012		558,517		Intangible assets, net	536,129		558,517
Equity method investment	Equity method investment	211,924		214,389		Equity method investment	210,657		214,389
Deferred tax assets	Deferred tax assets	28,857		29,207		Deferred tax assets	34,790		29,207
Other non-current assets	Other non-current assets	40,868		37,341		Other non-current assets	38,631		37,341
Total assets	Total assets	$	5,058,700	$	4,997,535	Total assets	$	4,865,494	$	4,997,535

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)	LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)					LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	10,746	$	15,039	Accounts payable	$	10,224	$	15,039
Income taxes payable	Income taxes payable	27,481		8,058		Income taxes payable	19,536		8,058
Accrued compensation and related benefits	Accrued compensation and related benefits	75,553		182,370		Accrued compensation and related benefits	157,227		182,370
Current portion of long-term debt	Current portion of long-term debt	8,715		8,713		Current portion of long-term debt	8,719		8,713
Other accrued liabilities	Other accrued liabilities	165,840		153,461		Other accrued liabilities	171,458		153,461
Deferred revenue	Deferred revenue	920,255		882,886		Deferred revenue	837,479		882,886
Total current liabilities	Total current liabilities	1,208,590		1,250,527		Total current liabilities	1,204,643		1,250,527

Long-term debt	Long-term debt	4,502,176		4,503,233		Long-term debt	4,500,063		4,503,233
Long-term operating lease liabilities	Long-term operating lease liabilities	130,571		131,575		Long-term operating lease liabilities	121,941		131,575
Deferred tax liabilities	Deferred tax liabilities	27,433		29,098		Deferred tax liabilities	4,220		29,098
Other non-current liabilities	Other non-current liabilities	91,294		91,027		Other non-current liabilities	83,723		91,027
Total liabilities	Total liabilities	5,960,064		6,005,460		Total liabilities	5,914,590		6,005,460

Commitments and Contingencies (see Note 7)	Commitments and Contingencies (see Note 7)					Commitments and Contingencies (see Note 7)

Shareholders’ equity (deficit):	Shareholders’ equity (deficit):					Shareholders’ equity (deficit):
Preferred stock (par value $0.01, 100,000,000 shares authorized; no shares issued)		—		—
Common stock (par value $0.01; 750,000,000 common shares authorized; 133,804,962 and 133,623,005 common shares issued and 80,063,044 and 79,959,989 common shares outstanding at March 31, 2023 and December 31, 2022, respectively)		1,338		1,336
Treasury shares, at cost (53,741,918 and 53,663,016 common shares held at March 31, 2023 and December 31, 2022, respectively)		(5,982,106)		(5,938,116)
Preferred stock (par value $0.01; 100,000,000 shares authorized; no shares issued)						Preferred stock (par value $0.01; 100,000,000 shares authorized; no shares issued)	—		—
Common stock (par value $0.01; 750,000,000 common shares authorized; 133,817,103 and 133,623,005 common shares issued and 79,091,098 and 79,959,989 common shares outstanding at September 30, 2023 and December 31, 2022, respectively)						Common stock (par value $0.01; 750,000,000 common shares authorized; 133,817,103 and 133,623,005 common shares issued and 79,091,098 and 79,959,989 common shares outstanding at September 30, 2023 and December 31, 2022, respectively)	1,338		1,336
Treasury shares, at cost (54,726,005 and 53,663,016 common shares held at September 30, 2023 and December 31, 2022, respectively)						Treasury shares, at cost (54,726,005 and 53,663,016 common shares held at September 30, 2023 and December 31, 2022, respectively)	(6,447,042)		(5,938,116)
Additional paid in capital	Additional paid in capital	1,536,906		1,515,874		Additional paid in capital	1,571,442		1,515,874
Retained earnings	Retained earnings	3,599,934		3,473,192		Retained earnings	3,886,188		3,473,192
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(57,436)		(60,211)		Accumulated other comprehensive loss	(61,022)		(60,211)
Total shareholders’ equity (deficit)	Total shareholders’ equity (deficit)	(901,364)		(1,007,925)		Total shareholders’ equity (deficit)	(1,049,096)		(1,007,925)

Total liabilities and shareholders’ equity (deficit)	Total liabilities and shareholders’ equity (deficit)	$	5,058,700	$	4,997,535	Total liabilities and shareholders’ equity (deficit)	$	4,865,494	$	4,997,535

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
(unaudited)	(unaudited)	2023		2022		(unaudited)	2023		2022		2023		2022
Operating revenues	Operating revenues	$	592,218	$	559,945	Operating revenues	$	625,439	$	560,639	$	1,838,814	$	1,672,390

Operating expenses:	Operating expenses:					Operating expenses:
Cost of revenues (exclusive of depreciation and amortization)	Cost of revenues (exclusive of depreciation and amortization)	108,647		102,771		Cost of revenues (exclusive of depreciation and amortization)	105,311		98,418		324,024		301,957
Selling and marketing	Selling and marketing	66,475		66,053		Selling and marketing	66,581		65,545		201,044		192,671
Research and development	Research and development	31,323		28,322		Research and development	31,438		25,941		92,901		78,179
General and administrative	General and administrative	41,044		45,567		General and administrative	36,826		30,702		113,527		112,993
Amortization of intangible assets	Amortization of intangible assets	24,667		21,720		Amortization of intangible assets	26,722		23,375		77,543		67,274
Depreciation and amortization of property, equipment and leasehold improvements	Depreciation and amortization of property, equipment and leasehold improvements	5,460		6,534		Depreciation and amortization of property, equipment and leasehold improvements	5,252		7,127		15,911		20,426
Total operating expenses	Total operating expenses	277,616		270,967		Total operating expenses	272,130		251,108		824,950		773,500

Operating income	Operating income	314,602		288,978		Operating income	353,309		309,531		1,013,864		898,890

Interest income	Interest income	(10,362)		(298)		Interest income	(10,314)		(3,938)		(31,079)		(5,160)
Interest expense	Interest expense	46,206		40,714		Interest expense	46,902		44,162		139,725		125,961
Other expense (income)	Other expense (income)	2,386		(381)		Other expense (income)	(935)		103		4,032		(90)

Other expense (income), net	Other expense (income), net	38,230		40,035		Other expense (income), net	35,653		40,327		112,678		120,711

Income before provision for income taxes	Income before provision for income taxes	276,372		248,943		Income before provision for income taxes	317,656		269,204		901,186		778,179
Provision for income taxes	Provision for income taxes	37,644		20,520		Provision for income taxes	57,997		52,612		155,974		122,577
Net income	Net income	$	238,728	$	228,423	Net income	$	259,659	$	216,592	$	745,212	$	655,602

Earnings per share:	Earnings per share:					Earnings per share:
Basic	Basic	$	2.98	$	2.80	Basic	$	3.28	$	2.69	$	9.36	$	8.09
Diluted	Diluted	$	2.97	$	2.78	Diluted	$	3.27	$	2.68	$	9.32	$	8.05

Weighted average shares outstanding:	Weighted average shares outstanding:					Weighted average shares outstanding:
Basic	Basic	80,041		81,591		Basic	79,116		80,500		79,580		81,001
Diluted	Diluted	80,482		82,286		Diluted	79,500		80,874		79,959		81,481

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
(unaudited)	(unaudited)	2023		2022		(unaudited)	2023		2022		2023		2022
Net income	Net income	$	238,728	$	228,423	Net income	$	259,659	$	216,592	$	745,212	$	655,602
Other comprehensive income (loss):	Other comprehensive income (loss):					Other comprehensive income (loss):
Foreign currency translation adjustments	Foreign currency translation adjustments	4,362		(2,950)		Foreign currency translation adjustments	(5,832)		(10,978)		1,046		(25,724)
Income tax effect	Income tax effect	(1,108)		862		Income tax effect	771		1,453		(660)		3,921
Foreign currency translation adjustments, net	Foreign currency translation adjustments, net	3,254		(2,088)		Foreign currency translation adjustments, net	(5,061)		(9,525)		386		(21,803)

Pension and other post-retirement adjustments	Pension and other post-retirement adjustments	(513)		110		Pension and other post-retirement adjustments	756		293		(1,338)		7,779
Income tax effect	Income tax effect	34		(44)		Income tax effect	(72)		(79)		141		(1,193)
Pension and other post-retirement adjustments, net	Pension and other post-retirement adjustments, net	(479)		66		Pension and other post-retirement adjustments, net	684		214		(1,197)		6,586

Other comprehensive (loss) income, net of tax	Other comprehensive (loss) income, net of tax	2,775		(2,022)		Other comprehensive (loss) income, net of tax	(4,377)		(9,311)		(811)		(15,217)

Comprehensive income	Comprehensive income	$	241,503	$	226,401	Comprehensive income	$	255,282	$	207,281	$	744,401	$	640,385

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

(in thousands)
(unaudited) Common
Stock Treasury
Stock Additional
Paid in
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Total
Balance at December 31, 2022 $ 1,336 $ (5,938,116) $ 1,515,874 $ 3,473,192 $ (60,211) $ (1,007,925)
Net income 238,728 238,728
Dividends declared ($1.38 per common share) (111,986) (111,986)
Dividends paid in shares 44 44
Other comprehensive income (loss), net of tax 2,775 2,775
Common stock issued 2 2
Shares withheld for tax withholding (43,960) (43,960)
Compensation payable in common stock 20,988 20,988
Common stock repurchased and held in treasury —
Common stock issued to Directors and
(held in)/released from treasury
(30) (30)
Balance at March 31, 2023 $ 1,338 $ (5,982,106) $ 1,536,906 $ 3,599,934 $ (57,436) $ (901,364)
Balance at December 31, 2021 $ 1,332 $ (4,540,144) $ 1,457,623 $ 2,976,517 $ (58,795) $ (163,467)
Net income 228,423 228,423
Dividends declared ($1.04 per common share) (87,280) (87,280)
Dividends paid in shares 77 77
Other comprehensive income (loss), net of tax (2,022) (2,022)
Common stock issued 4 4
Shares withheld for tax withholding (105,000) (105,000)
Compensation payable in common stock 22,754 22,754
Common stock repurchased and held in treasury (772,657) (772,657)
Common stock issued to Directors and
(held in)/released from treasury
(21) (21)
Balance at March 31, 2022 $ 1,336 $ (5,417,822) $ 1,480,454 $ 3,117,660 $ (60,817) $ (879,189)


(unaudited)	Common Stock		Treasury Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance at December 31, 2022	$	1,336	$	(5,938,116)	$	1,515,874	$	3,473,192	$	(60,211)	$	(1,007,925)
Net income							238,728				238,728
Dividends declared ($1.38 per common share)							(111,986)				(111,986)
Dividends paid in shares					44						44
Other comprehensive income (loss), net of tax									2,775		2,775
Common stock issued	2										2
Shares withheld for tax withholding			(43,960)								(43,960)
Compensation payable in common stock					20,988						20,988
Common stock repurchased and held in treasury											—
Common stock issued to Directors and (held in)/released from treasury			(30)								(30)
Balance at March 31, 2023	1,338		(5,982,106)		1,536,906		3,599,934		(57,436)		(901,364)

Net income							246,825				246,825
Dividends declared ($1.38 per common share)							(110,383)				(110,383)
Dividends paid in shares					33						33
Other comprehensive income (loss), net of tax									791		791
Common stock issued											—
Shares withheld for tax withholding			(611)								(611)
Compensation payable in common stock					16,426						16,426
Common stock repurchased and held in treasury			(444,655)								(444,655)
Common stock issued to Directors and (held in)/released from treasury			(730)								(730)
Balance at June 30, 2023	1,338		(6,428,102)		1,553,365		3,736,376		(56,645)		(1,193,668)

Net income							259,659				259,659
Dividends declared ($1.38 per common share)							(109,847)				(109,847)
Dividends paid in shares					30						30
Other comprehensive income (loss), net of tax									(4,377)		(4,377)
Common stock issued											—
Shares withheld for tax withholding and exercises			(871)								(871)
Compensation payable in common stock					18,047						18,047
Common stock repurchased and held in treasury			(18,039)								(18,039)
Common stock issued to Directors and (held in)/released from treasury			(30)								(30)
Balance at September 30, 2023	$	1,338	$	(6,447,042)	$	1,571,442	$	3,886,188	$	(61,022)	$	(1,049,096)

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~SHAREHOLDERS’ EQUITY (DEFICIT)

(in thousands)

Three Months Ended
March 31,
(unaudited) 2023 2022
Cash flows from operating activities
Net income $ 238,728 $ 228,423
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets 24,667 21,720
Stock-based compensation expense 21,088 22,857
Depreciation and amortization of property, equipment and leasehold improvements 5,460 6,534
Amortization of right of use assets 5,782 6,292
Amortization of debt origination fees 1,264 1,403
Deferred taxes (2,254) (12,961)
Other adjustments 3,906 933
Changes in assets and liabilities:
Accounts receivable 22,489 70,417
Prepaid income taxes 3,396 (7,170)
Prepaid and other assets (1,194) 3,062
Other non-current assets (2,333) (5,005)
Accounts payable (6,327) (2,060)
Income taxes payable 19,179 24,257
Accrued compensation and related benefits (108,252) (135,148)
Other accrued liabilities 8,305 15,161
Deferred revenue 34,427 10,932
Long-term operating lease liabilities (5,047) (5,542)
Other non-current liabilities 941 1,695
Other (84) (1,616)
Net cash provided by operating activities 264,141 244,184
Cash flows from investing activities
Capitalized software development costs (15,351) (14,084)
Capital expenditures (6,225) (1,254)
Other (186) 28
Net cash used in investing activities (21,762) (15,310)
Cash flows from financing activities
Payment of dividends (112,145) (87,769)
Repurchase of common stock held in treasury (43,960) (877,657)
Repayment of borrowings (2,188) (5,000)
Proceeds from borrowings, inclusive of premium — 5,000
Payment of debt issuance costs in connection with debt — (559)
Payment of contingent consideration — (132)
Net cash (used in) provided by financing activities (158,293) (966,117)
Effect of exchange rate changes 2,958 (4,891)
Net (decrease) increase in cash, cash equivalents and restricted cash 87,044 (742,134)
Cash, cash equivalents and restricted cash, beginning of period 993,564 1,421,449
Cash, cash equivalents and restricted cash, end of period $ 1,080,608 $ 679,315
Supplemental disclosure of cash flow information:
Cash paid for interest $ 33,803 $ 27,776
Cash paid for income taxes, net of refunds received $ 18,965 $ 17,645
Supplemental disclosure of non-cash investing activities
Property, equipment and leasehold improvements in other accrued liabilities $ 5,156 $ 6,118
Supplemental disclosure of non-cash financing activities
Cash dividends declared, but not yet paid $ 511 $ 2,361


(unaudited)	Common Stock		Treasury Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total





































Balance at December 31, 2021	$	1,332	$	(4,540,144)	$	1,457,623	$	2,976,517	$	(58,795)	$	(163,467)
Net income							228,423				228,423
Dividends declared ($1.04 per common share)							(87,280)				(87,280)
Dividends paid in shares					77						77
Other comprehensive income (loss), net of tax									(2,022)		(2,022)
Common stock issued	4										4
Shares withheld for tax withholding and exercises			(105,000)								(105,000)
Compensation payable in common stock					22,754						22,754
Common stock repurchased and held in treasury			(772,657)								(772,657)
Common stock issued to Directors and (held in)/released from treasury			(21)								(21)
Balance at March 31, 2022	1,336		(5,417,822)		1,480,454		3,117,660		(60,817)		(879,189)

Net income							210,587				210,587
Dividends declared ($1.04 per common share)							(84,593)				(84,593)
Dividends paid in shares					22						22
Other comprehensive income (loss), net of tax									(3,884)		(3,884)
Common stock issued											—
Shares withheld for tax withholding and exercises			(3,862)								(3,862)
Compensation payable in common stock					11,858						11,858
Common stock repurchased and held in treasury			(276,994)								(276,994)
Common stock issued to Directors and (held in)/released from treasury			(391)								(391)
Balance at June 30, 2022	1,336		(5,699,069)		1,492,334		3,243,654		(64,701)		(1,026,446)

Net income							216,592				216,592
Dividends declared ($1.25 per common share)							(101,354)				(101,354)
Dividends paid in shares					27						27
Other comprehensive income (loss), net of tax									(9,311)		(9,311)
Common stock issued											—
Shares withheld for tax withholding and exercises			(3,741)								(3,741)
Compensation payable in common stock					11,913						11,913
Common stock repurchased and held in treasury			(165,044)								(165,044)
Common stock issued to Directors and (held in)/released from treasury			(27)								(27)
Balance at September 30, 2022	$	1,336	$	(5,867,881)	$	1,504,274	$	3,358,892	$	(74,012)	$	(1,077,391)

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Nine Months Ended September 30,
(unaudited)	2023		2022
Cash flows from operating activities
Net income	$	745,212	$	655,602
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets	77,543		67,274
Stock-based compensation expense	55,375		46,432
Depreciation and amortization of property, equipment and leasehold improvements	15,911		20,426
Amortization of right of use assets	17,484		18,555
Loss on impairment of right of use assets, net	—		705
Amortization of debt origination fees	3,791		3,868
Deferred taxes	(30,973)		59,324
Other adjustments	1,199		(3,654)
Changes in assets and liabilities:
Accounts receivable	58,132		127,043
Prepaid income taxes	(17,654)		(77,908)
Prepaid and other assets	1,687		(1,678)
Other non-current assets	(4,837)		32,547
Accounts payable	(5,719)		(8,144)
Income taxes payable	11,425		(52,939)
Accrued compensation and related benefits	(25,599)		(58,042)
Other accrued liabilities	15,118		31,297
Deferred revenue	(43,571)		(66,982)
Long-term operating lease liabilities	(16,027)		(19,492)
Other non-current liabilities	(11,195)		6,105
Other	(226)		(397)
Net cash provided by operating activities	847,076		779,942


Cash flows from investing activities
Capitalized software development costs	(50,080)		(44,425)
Capital expenditures	(18,942)		(8,012)
Other	(389)		24
Net cash used in investing activities	(69,411)		(52,413)


Cash flows from financing activities
Repurchase of common stock held in treasury	(504,161)		(1,327,298)
Payment of dividends	(331,640)		(272,759)
Repayment of borrowings	(6,563)		(5,000)
Proceeds from borrowings, inclusive of premium	—		355,000
Payment of debt issuance costs in connection with debt	—		(2,559)
Payment of contingent consideration	—		(211)
Net cash (used in) provided by financing activities	(842,364)		(1,252,827)


Effect of exchange rate changes	(313)		(29,039)

Net (decrease) increase in cash, cash equivalents and restricted cash	(65,012)		(554,337)

Cash, cash equivalents and restricted cash, beginning of period	993,564		1,421,449
Cash, cash equivalents and restricted cash, end of period	$	928,552	$	867,112


Supplemental disclosure of cash flow information:
Cash paid for interest	$	125,068	$	107,162
Cash paid for income taxes, net of refunds received	$	197,746	$	154,725

Supplemental disclosure of non-cash investing activities
Property, equipment and leasehold improvements in other accrued liabilities	$	4,734	$	1,926

Supplemental disclosure of non-cash financing activities
Cash dividends declared, but not yet paid	$	1,453	$	3,270

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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MSCI INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. INTRODUCTION AND BASIS OF PRESENTATION

MSCI Inc., together with its wholly owned subsidiaries (the “Company” or “MSCI”) is a leading provider of critical decision support tools and solutions for the global investment community. Our mission-critical offerings help investors address the challenges of a transforming investment landscape and power better investment decisions. Leveraging our knowledge of the global investment process and our expertise in research, data and technology, we enable our clients to understand and analyze key drivers of risk and return and confidently and efficiently build more effective portfolios. Our products and services include indexes; portfolio construction and risk management tools; environmental, social and governance (“ESG”) and climate solutions; and real estate market and transaction data and analysis.

Basis of Presentation and Use of Estimates

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. If not materially different, certain note disclosures included therein have been omitted from these interim condensed consolidated financial statements.

In the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair statement of the interim consolidated financial statements, have been included. The results of operations for interim periods are not necessarily indicative of results for the entire year.

The Company’s unaudited condensed consolidated financial statements are prepared in accordance with GAAP. The Company makes certain estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the unaudited condensed consolidated financial statements, as well as the reported amounts of operating revenues and expenses during the periods presented. Significant estimates and judgments made by management include such examples as assessment of impairment of goodwill and intangible assets and income taxes. The Company believes that estimates used in the preparation of these unaudited condensed consolidated financial statements are reasonable; however, actual results could differ materially from these estimates. Inter-company balances and transactions are eliminated in consolidation.

Concentrations

For the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, BlackRock, Inc. (“BlackRock”) accounted for ~~10.2%~~10.1% and ~~10.9%~~10.5% of the Company’s consolidated operating revenues, respectively. For the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, BlackRock accounted for ~~17.4%~~17.0% and ~~18.0%~~17.7% of the Index segment’s operating revenues, respectively. No single customer represented 10.0% or more of operating revenues within the Analytics, ESG and Climate or All Other – Private Assets segments for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022.

Restricted Cash

Restricted cash primarily relates to security deposits for certain operating leases that are legally restricted and unavailable for our general operations.

910

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Allowance for Credit Losses

Changes in the allowance for credit losses from December 31, 2021 to ~~March 31,~~September 30, 2023 were as follows:


(in thousands)	Amount
Balance as of December 31, 2021	$	2,337
Addition (reduction) to credit loss expense	910
Write-offs, net of recoveries	(595)
Balance as of December 31, 2022	$	2,652

Addition (reduction) to credit loss expense	~~320~~1,300
Write-offs, net of recoveries	~~(191)~~(922)
Balance as of ~~March 31,~~September 30, 2023	$	~~2,781~~3,030

2. RECENT ACCOUNTING PRONOUNCEMENTS

There are no recently issued accounting standards updates that are currently expected to have a material impact on the Company.

3. REVENUE RECOGNITION

MSCI’s operating revenues are reported by product type, which generally reflects the timing of recognition. The Company’s operating revenue types are recurring subscriptions, asset-based fees and non-recurring revenues. The Company also disaggregates operating revenues by segment.

The tables that follow present the disaggregated operating revenues for the periods indicated:


		For the Three Months Ended March 31, 2023											For the Three Months Ended September 30, 2023
		Segments											Segments
(in thousands)	(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total		(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total
Operating Revenue Types	Operating Revenue Types											Operating Revenue Types
Recurring subscriptions	Recurring subscriptions	$	196,678	$	144,503	$	65,732	$	38,334	$	445,247	Recurring subscriptions	$	206,453	$	151,269	$	71,744	$	35,531	$	464,997
Asset-based fees	Asset-based fees	133,126		—		—		—		133,126		Asset-based fees	141,066		—		—		—		141,066
Non-recurring	Non-recurring	9,578		2,567		1,326		374		13,845		Non-recurring	14,603		2,999		1,294		480		19,376
Total	Total	$	339,382	$	147,070	$	67,058	$	38,708	$	592,218	Total	$	362,122	$	154,268	$	73,038	$	36,011	$	625,439

For the Three Months Ended March 31, 2022
Segments
(in thousands) Index Analytics ESG and Climate All Other - Private Assets Total
Operating Revenue Types
Recurring subscriptions $ 174,498 $ 137,799 $ 50,572 $ 36,891 $ 399,760
Asset-based fees 145,053 — — — 145,053
Non-recurring 11,208 1,998 1,457 469 15,132
Total $ 330,759 $ 139,797 $ 52,029 $ 37,360 $ 559,945


	For the Nine Months Ended September 30, 2023
	Segments
(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total
Operating Revenue Types
Recurring subscriptions	$	603,845	$	443,276	$	207,523	$	111,292	$	1,365,936
Asset-based fees	412,354		—		—		—		412,354
Non-recurring	47,621		7,943		3,792		1,168		60,524
Total	$	1,063,820	$	451,219	$	211,315	$	112,460	$	1,838,814

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	For the Three Months Ended September 30, 2022
	Segments
(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total
Operating Revenue Types
Recurring subscriptions	$	185,531	$	142,751	$	56,353	$	35,581	$	420,216
Asset-based fees	125,620		—		—		—		125,620
Non-recurring	11,089		2,164		1,242		308		14,803
Total	$	322,240	$	144,915	$	57,595	$	35,889	$	560,639


	For the Nine Months Ended September 30, 2022
	Segments
(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total
Operating Revenue Types
Recurring subscriptions	$	539,740	$	420,047	$	160,962	$	106,276	$	1,227,025
Asset-based fees	402,889		—		—		—		402,889
Non-recurring	31,319		6,349		3,790		1,018		42,476
Total	$	973,948	$	426,396	$	164,752	$	107,294	$	1,672,390

The tables that follow present the change in accounts receivable, net of allowances, and current deferred revenue between the dates indicated:


(in thousands)	(in thousands)	Accounts receivable, net of allowances		Deferred revenue		(in thousands)	Accounts receivable, net of allowances		Deferred revenue
Opening (December 31, 2022)	Opening (December 31, 2022)	$	663,236	$	882,886	Opening (December 31, 2022)	$	663,236	$	882,886
Closing (March 31, 2023)		641,584		920,255
Closing (September 30, 2023)						Closing (September 30, 2023)	603,266		837,479
Increase/(decrease)	Increase/(decrease)	$	(21,652)	$	37,369	Increase/(decrease)	$	(59,970)	$	(45,407)


(in thousands)	(in thousands)	Accounts receivable, net of allowances		Deferred revenue		(in thousands)	Accounts receivable, net of allowances		Deferred revenue
Opening (December 31, 2021)	Opening (December 31, 2021)	$	664,511	$	824,912	Opening (December 31, 2021)	$	664,511	$	824,912
Closing (March 31, 2022)		592,326		832,203
Closing (September 30, 2022)						Closing (September 30, 2022)	525,360		735,710
Increase/(decrease)	Increase/(decrease)	$	(72,185)	$	7,291	Increase/(decrease)	$	(139,151)	$	(89,202)

The amounts of revenues recognized in the periods that were included in the opening current deferred revenue, which reflects contract liability amounts, were ~~$356.6~~$171.8 million and ~~$339.7~~$798.0 million for the three and nine months ended ~~March 31,~~September 30, 2023, respectively and $149.4 million and $722.0 million for the three and nine months ended September 30, 2022, respectively. The difference between the opening and closing balances of the Company’s deferred revenue ~~was~~is primarily driven by an increase in ~~billings,~~the amortization of deferred revenue to operating revenues, partially offset by an increase in ~~amortization of deferred revenue to operating revenues.~~billings. As of ~~March 31,~~September 30, 2023 and December 31, 2022, the Company carried a long-term deferred revenue balance of ~~$30.0~~$28.0 million and $29.4 million, respectively, in “Other non-current liabilities” on the Unaudited Condensed Consolidated Statement of Financial Condition.

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For contracts that have a duration of one year or less, the Company has not disclosed either the remaining performance obligation as of the end of the reporting period or when the Company expects to recognize the revenue. The remaining performance obligations for contracts that have a duration of greater than one year and the periods in which they are expected to be recognized are as follows:


	As of
	~~March 31,~~September 30,
(in thousands)	2023
First 12-month period	$	~~673,206~~695,027
Second 12-month period	~~408,154~~420,056
Third 12-month period	~~188,184~~182,375
Periods thereafter	~~126,279~~135,442
Total	$	~~1,395,823~~1,432,900

4. EARNINGS PER COMMON SHARE

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the assumed conversion of all dilutive securities, including, when applicable, restricted stock units (“RSUs”), performance stock units (“PSUs”) and performance stock options (“PSOs”).

~~Table of Contents~~

The following table presents the computation of basic and diluted EPS:


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)	(in thousands, except per share data)	2023		2022		(in thousands, except per share data)	2023		2022		2023		2022
Net income	Net income	$	238,728	$	228,423	Net income	$	259,659	$	216,592	$	745,212	$	655,602

Basic weighted average common shares outstanding	Basic weighted average common shares outstanding	80,041		81,591		Basic weighted average common shares outstanding	79,116		80,500		79,580		81,001
Effect of dilutive securities:	Effect of dilutive securities:					Effect of dilutive securities:
PSUs, RSUs and PSOs	PSUs, RSUs and PSOs	441		695		PSUs, RSUs and PSOs	384		374		379		480
Diluted weighted average common shares outstanding	Diluted weighted average common shares outstanding	80,482		82,286		Diluted weighted average common shares outstanding	79,500		80,874		79,959		81,481

Earnings per common share:	Earnings per common share:					Earnings per common share:
Basic	Basic	$	2.98	$	2.80	Basic	$	3.28	$	2.69	$	9.36	$	8.09
Diluted	Diluted	$	2.97	$	2.78	Diluted	$	3.27	$	2.68	$	9.32	$	8.05

5. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

Property, equipment and leasehold improvements, net consisted of the following as of the dates indicated:


		As of					As of
		March 31,		December 31,			September 30,		December 31,
(in thousands)	(in thousands)	2023		2022		(in thousands)	2023		2022
Computer & related equipment	Computer & related equipment	$	183,739	$	181,710	Computer & related equipment	$	193,113	$	181,710
Furniture & fixtures	Furniture & fixtures	14,429		14,078		Furniture & fixtures	15,643		14,078
Leasehold improvements	Leasehold improvements	54,662		54,040		Leasehold improvements	58,019		54,040
Work-in-process	Work-in-process	9,409		2,373		Work-in-process	860		2,373
Subtotal	Subtotal	262,239		252,201		Subtotal	267,635		252,201

Accumulated depreciation and amortization	Accumulated depreciation and amortization	(203,400)		(198,348)		Accumulated depreciation and amortization	(209,599)		(198,348)
Property, equipment and leasehold improvements, net	Property, equipment and leasehold improvements, net	$	58,839	$	53,853	Property, equipment and leasehold improvements, net	$	58,036	$	53,853

Depreciation and amortization expense of property, equipment and leasehold improvements was ~~$5.5~~$5.3 million and ~~$6.5~~$7.1 million for the three months ended ~~March 31,~~September 30, 2023 and 2022, respectively.

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Depreciation and amortization expense of property, equipment and leasehold improvements was $15.9 million and $20.4 million for the nine months ended September 30, 2023 and 2022, respectively.

6. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

The following table presents goodwill by reportable segment:


(in thousands)	(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total		(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total
Goodwill at December 31, 2022	Goodwill at December 31, 2022	$	1,201,622	$	290,976	$	48,047	$	689,025	$	2,229,670	Goodwill at December 31, 2022	$	1,201,622	$	290,976	$	48,047	$	689,025	$	2,229,670
Foreign exchange translation adjustment												Foreign exchange translation adjustment	445		—		—		274		719
Goodwill at September 30, 2023												Goodwill at September 30, 2023	$	1,202,067	$	290,976	$	48,047	$	689,299	$	2,230,389

Foreign exchange translation adjustment		846		—		—		521		1,367
Goodwill at March 31, 2023		$	1,202,468	$	290,976	$	48,047	$	689,546	$	2,231,037

~~Table~~The Company completed its annual goodwill impairment test as of ~~Contents~~

July 1, 2023 on its Index, Analytics, ESG and Climate, and Real Assets reporting units, which are also four of the Company’s operating segments, and no impairments were noted. The Company determined that it was not more likely than not that the fair value of its reporting units is less than their respective carrying values. See Note 11, “Segment Information,” for further descriptions of the Company’s operating segments.

Intangible Assets, Net

The following table presents the amount of amortization expense related to intangible assets by category for the periods indicated:


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	(in thousands)	2023		2022		(in thousands)	2023		2022		2023		2022
Amortization expense of acquired intangible assets	Amortization expense of acquired intangible assets	$	15,831	$	15,898	Amortization expense of acquired intangible assets	$	15,748	$	15,810	$	47,430	$	47,562
Amortization expense of internally developed capitalized software	Amortization expense of internally developed capitalized software	8,836		5,822		Amortization expense of internally developed capitalized software	10,974		7,565		30,113		19,712

Total amortization of intangible assets expense	Total amortization of intangible assets expense	$	24,667	$	21,720	Total amortization of intangible assets expense	$	26,722	$	23,375	$	77,543	$	67,274

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The gross carrying and accumulated amortization amounts related to the Company’s intangible assets were as follows:

As of
March 31, December 31,
(in thousands) 2023 2022
Gross intangible assets:
Customer relationships $ 532,500 $ 532,500
Proprietary data 220,778 220,778
Acquired technology and software 209,220 209,220
Trademarks 208,190 208,190
Internally developed capitalized software 182,400 165,928
Subtotal 1,353,088 1,336,616
Foreign exchange translation adjustment (11,550) (13,214)
Total gross intangible assets $ 1,341,538 $ 1,323,402
Accumulated amortization:
Customer relationships $ (316,078) $ (308,437)
Proprietary data (46,550) (41,783)
Acquired technology and software (180,862) (179,833)
Trademarks (164,438) (162,044)
Internally developed capitalized software (86,095) (77,259)
Subtotal (794,023) (769,356)
Foreign exchange translation adjustment 3,497 4,471
Total accumulated amortization $ (790,526) $ (764,885)
Net intangible assets:
Customer relationships $ 216,422 $ 224,063
Proprietary data 174,228 178,995
Acquired technology and software 28,358 29,387
Trademarks 43,752 46,146
Internally developed capitalized software 96,305 88,670
Subtotal 559,065 567,260
Foreign exchange translation adjustment (8,053) (8,743)
Total net intangible assets $ 551,012 $ 558,517

~~Table of Contents~~


	As of
	September 30,		December 31,
(in thousands)	2023		2022
Gross intangible assets:
Customer relationships	$	532,500	$	532,500
Proprietary data	220,778		220,778
Acquired technology and software	209,220		209,220
Trademarks	208,190		208,190
Internally developed capitalized software	220,251		165,928
Subtotal	1,390,939		1,336,616

Foreign exchange translation adjustment	(12,478)		(13,214)
Total gross intangible assets	$	1,378,461	$	1,323,402

Accumulated amortization:
Customer relationships	$	(331,275)	$	(308,437)
Proprietary data	(56,125)		(41,783)
Acquired technology and software	(182,920)		(179,833)
Trademarks	(169,207)		(162,044)
Internally developed capitalized software	(106,888)		(77,259)
Subtotal	(846,415)		(769,356)

Foreign exchange translation adjustment	4,083		4,471
Total accumulated amortization	$	(842,332)	$	(764,885)

Net intangible assets:
Customer relationships	$	201,225	$	224,063

Proprietary data	164,653		178,995

Acquired technology and software	26,300		29,387

Trademarks	38,983		46,146

Internally developed capitalized software	113,363		88,670

Subtotal	544,524		567,260

Foreign exchange translation adjustment	(8,395)		(8,743)
Total net intangible assets	$	536,129	$	558,517

The following table presents the estimated amortization expense for the remainder of the year ending December 31, 2023 and succeeding years:


Years Ending December 31, (in thousands)	Years Ending December 31, (in thousands)	Amortization Expense		Years Ending December 31, (in thousands)	Amortization Expense
Remainder of 2023	Remainder of 2023	$	78,701	Remainder of 2023	$	28,555
2024	2024	97,591		2024	109,796
2025	2025	72,243		2025	84,575
2026	2026	39,846		2026	49,965
2027	2027	36,275		2027	36,755
Thereafter	Thereafter	226,356		Thereafter	226,483
Total	Total	$	551,012	Total	$	536,129

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7. COMMITMENTS AND CONTINGENCIES

As of ~~March 31,~~September 30, 2023, the Company had outstanding an aggregate of $4,200.0 million in senior unsecured notes (collectively, the “Senior Notes”) and an aggregate of ~~$345.6~~$341.3 million in senior unsecured tranche A term loans (the “Tranche A Term Loans”) under the term loan A facility (the “TLA Facility”), as presented in the table below:


			Principal Amount Outstanding at		Carrying Value at		Carrying Value at		Fair Value at		Fair Value at				Principal Amount Outstanding at		Carrying Value at		Carrying Value at		Fair Value at		Fair Value at
(in thousands)	(in thousands)	Maturity Date	March 31, 2023		March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022		(in thousands)	Maturity Date	September 30, 2023		September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Debt	Debt												Debt
4.000% senior unsecured notes due 2029	4.000% senior unsecured notes due 2029	November 15, 2029	$	1,000,000	$	992,818	$	992,546	$	913,500	$	876,240	4.000% senior unsecured notes due 2029	November 15, 2029	$	1,000,000	$	993,364	$	992,546	$	872,670	$	876,240
3.625% senior unsecured notes due 2030	3.625% senior unsecured notes due 2030	September 1, 2030	900,000		895,091		894,925		783,216		751,113		3.625% senior unsecured notes due 2030	September 1, 2030	900,000		895,421		894,925		755,433		751,113
3.875% senior unsecured notes due 2031	3.875% senior unsecured notes due 2031	February 15, 2031	1,000,000		991,340		991,067		891,050		833,130		3.875% senior unsecured notes due 2031	February 15, 2031	1,000,000		991,887		991,067		867,600		833,130
3.625% senior unsecured notes due 2031	3.625% senior unsecured notes due 2031	November 1, 2031	600,000		594,359		594,195		514,356		500,880		3.625% senior unsecured notes due 2031	November 1, 2031	600,000		594,688		594,195		491,928		500,880
3.250% senior unsecured notes due 2033	3.250% senior unsecured notes due 2033	August 15, 2033	700,000		693,030		692,862		576,072		542,696		3.250% senior unsecured notes due 2033	August 15, 2033	700,000		693,364		692,862		537,551		542,696
Variable rate Tranche A Term Loans due 2027	Variable rate Tranche A Term Loans due 2027	February 16, 2027	345,625		344,253		346,352		343,897		346,073		Variable rate Tranche A Term Loans due 2027	February 16, 2027	341,250		340,057		346,352		339,544		346,073
Total debt(1)	Total debt(1)		$	4,545,625	$	4,510,891	$	4,511,947	$	4,022,091	$	3,850,132	Total debt(1)		$	4,541,250	$	4,508,781	$	4,511,947	$	3,864,726	$	3,850,132

___________________________
(1) Includes $8.7 million of current-portion of long-term debt.

Maturities of the Company’s principal debt payments as of ~~March 31,~~September 30, 2023 are as follows:

Maturity of Principal Debt Payments
(in thousands) Amounts
Remainder of 2023 $ 6,562
2024 10,938
2025 19,687
2026 26,250
2027 282,188
Thereafter 4,200,000
Total debt $ 4,545,625

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Maturity of Principal Debt Payments (in thousands)	Amounts
Remainder of 2023	$	2,187
2024	10,938
2025	19,687
2026	26,250
2027	282,188
Thereafter	4,200,000
Total debt	$	4,541,250

Interest payments attributable to the Company’s outstanding indebtedness are due as presented in the following table:

Interest payment frequency

First interest
payment date

Senior Notes and Tranche A Term Loans

4.000% senior unsecured notes due 2029

Semi-Annual

May 15

3.625% senior unsecured notes due 2030

Semi-Annual

March 1

3.875% senior unsecured notes due 2031

Semi-Annual

June 1

3.625% senior unsecured notes due 2031

Semi-Annual

May 1

3.250% senior unsecured notes due 2033

Semi-Annual

February 15

Variable rate Tranche A Term Loans due 2027

Variable

July 11

The fair market value of the Company’s debt obligations represent Level 2 valuations. The Company utilized the market approach and obtained security pricing from a vendor who used broker quotes and third-party pricing services to determine fair values.

Credit Agreement. Since November 20, 2014, the Company has maintained a revolving credit agreement with a syndicate of banks. On June 9, 2022, the Company, the guarantors party thereto and the lenders and agents party thereto, entered into an Amended and Restated Credit Agreement (the “Credit Agreement”), amending and restating in its entirety the Company’s prior revolving credit agreement (the “Prior Revolving Credit Agreement”). The Credit Agreement makes available to the Company an aggregate of $500.0 million of revolving loan commitments, which may be drawn until February 16, 2027, and the TLA Facility. At ~~March 31,~~September 30, 2023, the revolving loan commitments were undrawn. As noted above, at ~~March 31,~~September 30, 2023, the commitments under the TLA Facility were drawn in full, and the resulting Tranche A Term Loans mature on February 16, 2027. The obligations under the Credit Agreement are general unsecured obligations of the Company and the guarantors.

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Interest on the Tranche A Term Loans under the TLA Facility accrues, at a variable rate, based on the secured overnight funding rate (“SOFR”) or the alternate base rate (“Base Rate”), plus, in each case, an applicable margin and will be due on each Interest Payment Date (as defined in the Credit Agreement). The applicable margin is calculated by reference to the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement) and ranges between 1.50% to 2.00% for SOFR loans, and 0.50% to 1.00% for Base Rate loans. At ~~March 31,~~September 30, 2023, the interest rate on the TLA Facility was ~~6.84%~~7.42%.

In connection with the closings of the Senior Notes offerings, entry into the Prior Revolving Credit Agreement and the subsequent amendments thereto and entry into the Credit Agreement, the Company paid certain financing fees which, together with the existing fees related to prior credit facilities, are being amortized over their related lives. At ~~March 31,~~September 30, 2023, ~~$36.8~~$34.2 million of the deferred financing fees and premium remain unamortized, $0.5 million of which is included in “Prepaid and other assets,” ~~$1.5~~$1.2 million of which is included in “Other non-current assets” and ~~$34.8~~$32.5 million of which is included in “Long-term debt” on the Unaudited Condensed Consolidated Statement of Financial Condition.

8. LEASES

The ~~Company recognized $7.1 million and $7.7 million~~components of ~~operating~~ lease ~~expenses for the three months ended March 31, 2023 and 2022, respectively. The amounts associated with variable lease costs, short-term lease costs and sublease income were not material for any~~expense (income) of the ~~three months ended March 31, 2023 and 2022.~~Company’s operating leases are as follows:

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	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Operating lease expenses	$	7,278	$	7,308	$	21,570	$	22,439
Variable lease costs	1,022		808		2,843		2,411
Short-term lease costs	108		123		547		333
Sublease income	(1,276)		$	(1,251)	$	(3,827)	$	(3,354)
Total lease costs	$	7,132	$	6,988	$	21,133	$	21,829

Maturities of the Company’s operating lease liabilities as of ~~March 31,~~September 30, 2023 are as follows:


Maturity of Lease Liabilities	Maturity of Lease Liabilities	Operating		Maturity of Lease Liabilities	Operating
(in thousands)	(in thousands)	Leases		(in thousands)	Leases
Remainder of 2023	Remainder of 2023	$	21,258	Remainder of 2023	$	6,098
2024	2024	25,085		2024	27,182
2025	2025	23,817		2025	24,202
2026	2026	22,133		2026	22,408
2027	2027	17,288		2027	17,691
Thereafter	Thereafter	66,535		Thereafter	67,096
Total lease payments	Total lease payments	$	176,116	Total lease payments	$	164,677

Less: Interest	Less: Interest	(22,725)		Less: Interest	(20,632)
Present value of lease liabilities	Present value of lease liabilities	$	153,391	Present value of lease liabilities	$	144,045

Other accrued liabilities	Other accrued liabilities	$	22,820	Other accrued liabilities	$	22,104
Long-term operating lease liabilities	Long-term operating lease liabilities	$	130,571	Long-term operating lease liabilities	$	121,941

Weighted-average remaining lease term and discount rate for the Company’s operating leases are as follows:


		As of					As of
		March 31,		December 31,			September 30,		December 31,
Lease Term and Discount Rate	Lease Term and Discount Rate	2023		2022		Lease Term and Discount Rate	2023		2022
Weighted-average remaining lease term (years)	Weighted-average remaining lease term (years)	7.66		7.86		Weighted-average remaining lease term (years)	7.30		7.86
Weighted-average discount rate	Weighted-average discount rate	3.45	%	3.40	%	Weighted-average discount rate	3.58	%	3.40	%

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Other information related to the Company’s operating leases are as follows:


Other Information	Other Information	Three Months Ended March 31,				Other Information	Nine Months Ended September 30,
(in thousands)	(in thousands)	2023		2022		(in thousands)	2023		2022
Operating cash flows used for operating leases	Operating cash flows used for operating leases	$	7,408	$	7,152	Operating cash flows used for operating leases	$	22,918	$	22,025
Right of use assets obtained in exchange for new operating lease liabilities	Right of use assets obtained in exchange for new operating lease liabilities	$	3,432	$	—	Right of use assets obtained in exchange for new operating lease liabilities	$	8,896	$	14,929

9. SHAREHOLDERS’ EQUITY (DEFICIT)

Return of capital

On July 28, 2022, the Board of Directors authorized a stock repurchase program (the “2022 Repurchase Program”) for the purchase of up to $1,000.0 million worth of shares of MSCI’s common stock in addition to the $539.1 million of authorization then remaining under a previously existing share repurchase program that was replaced by, and incorporated into, the 2022 Repurchase Program for a total of $1,539.1 million of stock repurchase authorization available under the 2022 Repurchase Program.

Share repurchases made pursuant to the 2022 Repurchase Program may take place in the open market or in privately negotiated transactions from time to time based on market and other conditions. This authorization may be modified, suspended or terminated by the Board of Directors at any time without prior notice. As of ~~March 31,~~September 30, 2023, there was ~~$1,304.4~~$845.7 million of available authorization remaining under the 2022 Repurchase Program.

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The following table provides information with respect to repurchases of the Company’s common stock made on the open market:

Three Months Ended
(in thousands, except per share data) Average
Price
Paid Per
Share Total
Number of
Shares
Repurchased Dollar
Value of
Shares
Repurchased
March 31, 2023 $ — — $ —
March 31, 2022 $ 515.74 1,498 $ 772,657


Nine months ended (in thousands, except per share data)	Average Price Paid Per Share		Total Number of Shares Repurchased	Dollar Value of Shares Repurchased(1)
September 30, 2023	$	468.26	980	$	458,721
September 30, 2022	$	473.26	2,567	$	1,214,695

___________________________

(1) As of January 1, 2023, the Company’s share repurchases in excess of issuances are subject to a 1% excise tax enacted by the Inflation Reduction Act. The values in this column exclude the 1% excise tax incurred on share repurchases. Any excise tax incurred is recognized as part of the cost of the shares acquired in the Unaudited Condensed Consolidated Statement of Shareholders’ Equity (Deficit)

The following table presents dividends declared per common share as well as total amounts declared, distributed and deferred for the periods indicated:

Dividends

(in thousands, except per share data) Per Share Declared Distributed (Released)/Deferred
Three Months Ended March 31, 2023 $ 1.38 $ 111,986 $ 112,189 $ (203)
Three Months Ended March 31, 2022 $ 1.04 $ 87,280 $ 87,846 $ (566)


	Dividends
(in thousands, except per share data)	Per Share		Declared		Distributed		(Released)/Deferred
2023
Three Months Ended March 31,	$	1.38	$	111,986	$	112,189	$	(203)
Three Months Ended June 30,	1.38		110,383		110,147		236
Three Months Ended September 30,	1.38		109,847		109,408		439

Total	$	4.14	$	332,216	$	331,744	$	472

2022
Three Months Ended March 31,	$	1.04	$	87,280	$	87,846	$	(566)
Three Months Ended June 30,	1.04		84,593		84,189		404
Three Months Ended September 30,	1.25		101,354		100,849		505

Total	$	3.33	$	273,227	$	272,884	$	343

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Common ~~Stock.~~Stock

The following table presents activity related to shares of common stock issued and repurchased during the ~~three~~nine months ended ~~March 31,~~September 30, 2023:


		Common Stock	Treasury	Common Stock		Common Stock	Treasury	Common Stock
		Issued	Stock	Outstanding		Issued	Stock	Outstanding
Balance at December 31, 2022	Balance at December 31, 2022	133,623,005	(53,663,016)	79,959,989	Balance at December 31, 2022	133,623,005	(53,663,016)	79,959,989
Dividend payable/paid	Dividend payable/paid	24	—	24	Dividend payable/paid	24	—	24
Common stock issued	Common stock issued	181,875	—	181,875	Common stock issued	181,875	—	181,875
Shares withheld for tax withholding	Shares withheld for tax withholding	—	(78,844)	(78,844)	Shares withheld for tax withholding	—	(78,844)	(78,844)
Shares repurchased under stock repurchase programs	Shares repurchased under stock repurchase programs	—	—	—	Shares repurchased under stock repurchase programs	—	—	—
Shares issued to directors	Shares issued to directors	58	(58)	—	Shares issued to directors	58	(58)	—
Balance at March 31, 2023	Balance at March 31, 2023	133,804,962	(53,741,918)	80,063,044	Balance at March 31, 2023	133,804,962	(53,741,918)	80,063,044

Dividend payable/paid					Dividend payable/paid	—	—	—
Common stock issued					Common stock issued	2,698	—	2,698
Shares withheld for tax withholding					Shares withheld for tax withholding	—	(1,270)	(1,270)
Shares repurchased under stock repurchase programs					Shares repurchased under stock repurchase programs	—	(941,360)	(941,360)
Shares issued to directors					Shares issued to directors	5,306	(1,515)	3,791
Balance at June 30, 2023					Balance at June 30, 2023	133,812,966	(54,686,063)	79,126,903

Dividend payable/paid					Dividend payable/paid	—	—	—
Common stock issued					Common stock issued	4,081	—	4,081
Shares withheld for tax withholding					Shares withheld for tax withholding	—	(1,623)	(1,623)
Shares repurchased under stock repurchase programs					Shares repurchased under stock repurchase programs	—	(38,263)	(38,263)
Shares issued to directors					Shares issued to directors	56	(56)	—
Balance at September 30, 2023					Balance at September 30, 2023	133,817,103	(54,726,005)	79,091,098

10. INCOME TAXES

The Company’s provision for income taxes was ~~$37.6~~$156.0 million and ~~$20.5~~$122.6 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, respectively.

The effective tax rate of ~~13.6%~~17.3% for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling ~~$16.5~~$19.8 million, ~~primarily~~ related to ~~$11.1~~$11.4 million of excess tax benefits recognized on share-based compensation vested during the period and ~~$4.6~~$8.4 million ~~of tax benefits~~ related to ~~the resolution of prior year~~prior-year items.

The effective tax rate of ~~8.2%~~15.8% for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling ~~$28.1~~$28.2 million, primarily related to ~~$28.3~~$28.4 million of excess tax benefits recognized on share-based compensation vested during the period.

The Company is under or open to examination by the IRS and other tax authorities in certain jurisdictions, including foreign jurisdictions, such as the United Kingdom, Switzerland and India, and states in the United States in which the Company has significant operations, such as New York and California. The tax years currently under or open to examination vary by jurisdiction but include years from 2008 onwards.

The Company regularly assesses the likelihood of additional assessments in each of the taxing jurisdictions in which it files income tax returns. The Company has established unrecognized tax benefits that the Company believes are adequate in relation to the potential for additional assessments. Once established, the Company adjusts unrecognized tax benefits only when more information is

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available or when an event occurs necessitating a change. Based on the current status of income tax audits, the Company believes it is reasonably possible that the total amount of unrecognized benefits may decrease by approximately ~~$24.0~~$22.9 million in the next twelve months as a result of the resolution of ~~prior year~~prior-year items.

During the three and nine months ended ~~March 31,~~September 30, 2023, the ~~Company's~~Company’s unrecognized tax benefits increased $0.4 million and decreased ~~by $3.8~~$4.4 million, respectively, principally due to the resolution of ~~prior year~~prior-year items.

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11. SEGMENT INFORMATION

The Company has five operating segments: Index, Analytics, ESG and Climate, Real Assets and The Burgiss Group, LLC (“Burgiss”), which are presented as the following four reportable segments: Index, Analytics, ESG and Climate and All Other – Private Assets.

The Index operating segment offers equity and fixed income indexes. The indexes are used in many areas of the investment process, including for developing indexed financial products (e.g., Exchange Traded Funds (“ETFs”), mutual funds, annuities, futures, options, structured products and over-the-counter derivatives), performance benchmarking, portfolio construction and rebalancing, and asset allocation.

The Analytics operating segment offers risk management, performance attribution and portfolio management content, applications and services that provide clients with an integrated view of risk and return and tools for analyzing market, credit, liquidity, counterparty and climate risk across all major asset classes, spanning short-, medium- and long-term time horizons. Clients access Analytics tools and content through MSCI’s proprietary applications and application programming interfaces, third-party applications or directly through their own platforms. Additionally, the Analytics operating segment also provides various managed services to help clients operate more efficiently, including consolidation of client portfolio data from various sources, review and reconciliation of input data and results, and customized reporting.

The ESG and Climate operating segment offers products and services that help institutional investors understand how ESG and climate considerations can impact the long-term risk and return of their portfolio and individual security-level investments. In addition, the ESG and Climate operating segment provides data, ratings, research and tools to help investors navigate increasing regulation, meet new client demands and better integrate ESG and climate elements into their investment processes.

The Real Assets operating segment offers data, benchmarks, return-analytics, climate assessments and market insights for tangible assets such as real estate and infrastructure. In addition, Real Assets performance and risk analytics range from enterprise-wide to property-specific analysis. The Real Assets operating segment also provides business intelligence products to real estate owners, managers, developers and brokers worldwide.

~~The~~As of September 30, 2023, the Burgiss operating segment represents the Company’s equity method investment in Burgiss, a global provider of investment decision support tools for private capital. See Note 12, “Subsequent Events” for additional information on the Company’s acquisition of the remaining interest in Burgiss.

The Chief Operating Decision Maker (“CODM”) measures and evaluates reportable segments based on segment operating revenues as well as Adjusted EBITDA and other measures. The Company excludes the following items from segment Adjusted EBITDA: provision for income taxes, other expense (income), net, depreciation and amortization of property, equipment and leasehold improvements, amortization of intangible assets and, at times, certain other transactions or adjustments, including certain non-recurring acquisition-related integration and transaction costs, that the CODM does not consider for the purposes of making decisions to allocate resources among segments or to assess segment performance. Although these amounts are excluded from segment Adjusted EBITDA, they are included in reported consolidated net income and are included in the reconciliation that follows.

The following table presents operating revenues by reportable segment for the periods indicated:


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	(in thousands)	2023		2022		(in thousands)	2023		2022		2023		2022
Operating revenues	Operating revenues					Operating revenues
Index	Index	$	339,382	$	330,759	Index	$	362,122	$	322,240	$	1,063,820	$	973,948
Analytics	Analytics	147,070		139,797		Analytics	154,268		144,915		451,219		426,396
ESG and Climate	ESG and Climate	67,058		52,029		ESG and Climate	73,038		57,595		211,315		164,752
All Other - Private Assets	All Other - Private Assets	38,708		37,360		All Other - Private Assets	36,011		35,889		112,460		107,294
Total	Total	$	592,218	$	559,945	Total	$	625,439	$	560,639	$	1,838,814	$	1,672,390

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The following table presents segment profitability and a reconciliation to net income for the periods indicated:


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	(in thousands)	2023		2022		(in thousands)	2023		2022		2023		2022
Index Adjusted EBITDA	Index Adjusted EBITDA	$	253,682	$	245,875	Index Adjusted EBITDA	$	277,672	$	245,967	$	808,424	$	737,012
Analytics Adjusted EBITDA	Analytics Adjusted EBITDA	60,780		50,889		Analytics Adjusted EBITDA	71,781		67,634		197,710		181,484
ESG and Climate Adjusted EBITDA	ESG and Climate Adjusted EBITDA	17,876		12,092		ESG and Climate Adjusted EBITDA	25,440		15,910		66,114		42,334
All Other - Private Assets Adjusted EBITDA	All Other - Private Assets Adjusted EBITDA	12,391		9,688		All Other - Private Assets Adjusted EBITDA	11,396		11,450		36,076		29,819
Total operating segment profitability	Total operating segment profitability	344,729		318,544		Total operating segment profitability	386,289		340,961		1,108,324		990,649

Amortization of intangible assets	Amortization of intangible assets	24,667		21,720		Amortization of intangible assets	26,722		23,375		77,543		67,274
Depreciation and amortization of property, equipment and leasehold improvements	Depreciation and amortization of property, equipment and leasehold improvements	5,460		6,534		Depreciation and amortization of property, equipment and leasehold improvements	5,252		7,127		15,911		20,426
Acquisition-related integration and transaction costs(1)	Acquisition-related integration and transaction costs(1)	—		1,312		Acquisition-related integration and transaction costs(1)	1,006		928		1,006		4,059
Operating income	Operating income	314,602		288,978		Operating income	353,309		309,531		1,013,864		898,890

Other expense (income), net	Other expense (income), net	38,230		40,035		Other expense (income), net	35,653		40,327		112,678		120,711
Provision for income taxes	Provision for income taxes	37,644		20,520		Provision for income taxes	57,997		52,612		155,974		122,577
Net income	Net income	$	238,728	$	228,423	Net income	$	259,659	$	216,592	$	745,212	$	655,602

___________________________

(1)~~Incremental~~Represents transaction expenses and ~~non-recurring~~other costs ~~attributable to acquisitions~~ directly related to the ~~execution of the transaction~~acquisition and integration of ~~the~~ acquired ~~business~~businesses, including professional fees, severance expenses, regulatory filing fees and other costs, in each case that ~~have occurred~~are incurred no later than 12 months after the close of the ~~transaction.~~relevant acquisition.

Operating revenues by geography are primarily based on the shipping address of the ultimate customer utilizing the product. The following table presents operating revenues by geographic area for the periods indicated:


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	(in thousands)	2023		2022		(in thousands)	2023		2022		2023		2022
Operating revenues	Operating revenues					Operating revenues
Americas:	Americas:					Americas:
United States	United States	$	238,416	$	233,356	United States	$	246,089	$	233,196	$	740,939	$	696,284
Other	Other	27,536		22,467		Other	28,243		24,450		83,353		70,559
Total Americas	Total Americas	265,952		255,823		Total Americas	274,332		257,646		824,292		766,843

Europe, the Middle East and Africa (“EMEA”):
Europe, the Middle East and Africa ("EMEA"):						Europe, the Middle East and Africa ("EMEA"):
United Kingdom	United Kingdom	91,660		86,986		United Kingdom	105,036		88,681		296,388		264,854
Other	Other	138,319		131,573		Other	142,826		125,607		420,996		379,695
Total EMEA	Total EMEA	229,979		218,559		Total EMEA	247,862		214,288		717,384		644,549

Asia & Australia:	Asia & Australia:					Asia & Australia:
Japan	Japan	26,017		23,190		Japan	24,956		21,784		75,258		67,817
Other	Other	70,270		62,373		Other	78,289		66,921		221,880		193,181
Total Asia & Australia	Total Asia & Australia	96,287		85,563		Total Asia & Australia	103,245		88,705		297,138		260,998

Total	Total	$	592,218	$	559,945	Total	$	625,439	$	560,639	$	1,838,814	$	1,672,390

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Long-lived assets consist of property, equipment and leasehold improvements, right of use assets and internally developed capitalized software, net of accumulated depreciation and amortization. The following table presents long-lived assets by geographic area on the dates indicated:


		As of					As of
		March 31,		December 31,			September 30,		December 31,
(in thousands)	(in thousands)	2023		2022		(in thousands)	2023		2022
Long-lived assets	Long-lived assets					Long-lived assets
Americas:	Americas:					Americas:
United States	United States	$	189,687	$	179,453	United States	$	201,309	$	179,453
Other	Other	12,132		11,971		Other	11,974		11,971
Total Americas	Total Americas	201,819		191,424		Total Americas	213,283		191,424

EMEA:	EMEA:					EMEA:
United Kingdom	United Kingdom	19,270		19,674		United Kingdom	18,346		19,674
Other	Other	22,764		23,099		Other	21,808		23,099
Total EMEA	Total EMEA	42,034		42,773		Total EMEA	40,154		42,773

Asia & Australia:	Asia & Australia:					Asia & Australia:
Japan	Japan	1,585		652		Japan	1,268		652
Other	Other	34,282		32,962		Other	33,017		32,962
Total Asia & Australia	Total Asia & Australia	35,867		33,614		Total Asia & Australia	34,285		33,614

Total	Total	$	279,720	$	267,811	Total	$	287,722	$	267,811

12. SUBSEQUENT EVENTS

On ~~April 24,~~October 30, 2023, the Board of Directors declared a quarterly cash dividend of $1.38 per share for the three months ending ~~June 30,~~December 31, 2023 (“~~second~~fourth quarter 2023”). The ~~second~~fourth quarter 2023 dividend is payable on ~~May 31,~~November 30, 2023 to shareholders of record as of the close of trading on ~~May 12,~~November 9, 2023.

On October 2, 2023, the Company acquired the remaining 66.4% interest in Burgiss for $696.8 million in cash. The Company’s existing 33.6% interest had a fair value at acquisition date of $353.2 million which resulted non-taxable gain of approximately $140 million, to be recorded during the three months ending December 31, 2023. The results of Burgiss will be included in the Company’s All Other - Private Assets reportable segment.

The acquisition of Burgiss will provide the Company with comprehensive data and deep expertise in all private assets, enabling investors to evaluate fundamental information, measure and compare performance, understand exposures, manage risk, and conduct robust analytics. The acquisition will also expand the Company’s robust suite of multi-asset class technology solutions with the industry leading Burgiss Caissa Platform, developed exclusively for institutional investors and providing a comprehensive view of the drivers of performance and risk in both public and private investments in total portfolios.

Due to the proximity of the closing date of the acquisition of the remaining interest in Burgiss to the date of this filing, the initial accounting for the business combination is incomplete. As a result, the Company is unable to disclose certain information including the provisional fair value estimates of the identifiable net assets acquired and goodwill at this time.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “Form 10-K”). This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in “Item 1A.—Risk Factors,” in our Form 10-K.

Except as the context otherwise indicates, the terms “MSCI,” the “Company,” “we,” “our” and “us” refer to MSCI Inc., together with its subsidiaries.

Overview

We are a leading provider of critical decision support tools and solutions for the global investment community. Our mission-critical offerings help investors address the challenges of a transforming investment landscape and power better investment decisions. Leveraging our knowledge of the global investment process and our expertise in research, data and technology, we enable our clients to understand and analyze key drivers of risk and return and confidently and efficiently build more effective portfolios. We operate in four reportable segments as follows: Index, Analytics, ESG and Climate, and All Other – Private Assets. The operating segments of Real Assets and The Burgiss Group, LLC (“Burgiss”) do not individually meet the segment reporting thresholds and have been combined and presented as part of the All Other – Private Assets reportable segment.

Our growth strategy includes: (a) extending leadership in research-enhanced content across asset classes, (b) leading the enablement of ESG and climate investment integration, (c) enhancing distribution and content-enabling technology, (d) expanding solutions that empower client customization, (e) strengthening client relationships and growing into strategic partnerships with clients and (f) executing strategic relationships and acquisitions with complementary content and technology companies. For more information about our Company’s operations, see “Item 1: Business” in our Form 10-K.

As of ~~March 31,~~September 30, 2023, we served approximately ~~6,600~~6,5001 clients in more than 95 countries.

Our principal business model is generally to license annual, recurring subscriptions for the majority of our Index, Analytics and ESG and Climate products and services for a fee due in advance of the service period. Real Assets products are also licensed annually through subscriptions, which are generally recurring, for a fee which is paid in advance when products are generally delivered ratably over the subscription period or in arrears after the product is delivered. A portion of our fees comes from clients who use our indexes as the basis for index-linked investment products. Such fees are primarily based on a client’s assets under management (“AUM”), trading volumes and fee levels.

In evaluating our financial performance, we focus on revenue and profit growth, including results accounted for under generally accepted accounting principles in the United States (“GAAP”) as well as non-GAAP measures, for the Company as a whole and by operating segment.

We present revenues disaggregated by types and by segments, which represent our major product lines. We also review expenses by activity, which provides more transparency into how resources are being deployed. In addition, we utilize operating metrics including Run Rate, subscription sales and Retention Rate to manage and assess performance and to provide deeper insights into the recurring portion of our business.

In the discussion that follows, we provide certain variances excluding the impact of foreign currency exchange rate fluctuations and acquisitions. 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 U.S. dollar, and accordingly, any such impact is excluded from the disclosed foreign currency-adjusted variances.

For the ~~three~~nine months ended ~~March 31,~~September 30, 2023, our largest client organization by revenue, BlackRock, accounted for ~~10.2%~~10.1% of our consolidated operating revenues, with ~~95.3%~~95.4% of the operating revenues from BlackRock coming from fees based on the assets in BlackRock’s ETFs and non-ETFs that are based on our indexes.

1 Represents the aggregate of all related clients under their respective parent entity.

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The discussion of our results of operations for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 are presented below. The results of operations for interim periods may not be indicative of future results.

Recent Developments

Burgiss Acquisition

On October 2, 2023, MSCI acquired the remaining 66.4% interest in Burgiss for $696.8 million in cash. Prior to the acquisition, we held a 33.6% interest in Burgiss and accounted for Burgiss as an equity-method investment. The acquisition of Burgiss will provide MSCI with comprehensive data and deep expertise in all private assets, enabling investors to evaluate fundamental information, measure and compare performance, understand exposures, manage risk, and conduct robust analytics. The acquisition will also expand MSCI’s robust suite of multi-asset class technology solutions with the industry leading Burgiss Caissa Platform, developed exclusively for institutional investors and providing a comprehensive view of the drivers of performance and risk in both public and private investments in total portfolios.

Our existing 33.6% interest had a fair value at acquisition date of $353.2 million which resulted in a pre-tax gain of approximately $140 million, to be recorded during the three months ending December 31, 2023. We used available cash to fund the acquisition of the remaining interest in Burgiss. The results of Burgiss will be included in our All Other - Private Assets reportable segment.

Results of Operations

Operating Revenues

Our operating revenues are grouped by the following types: recurring subscriptions, asset-based fees and non-recurring. We also group operating revenues by major product or reportable segment as follows: Index, Analytics, ESG and Climate and All Other – Private Assets, which includes the Real Assets operating segment.

The following table presents operating revenues by type for the periods indicated:


		Three Months Ended March 31,				% Change			Three Months Ended September 30,				% Change				Nine Months Ended September 30,								% Change
(in thousands)	(in thousands)	2023		2022				(in thousands)	2023		2022				2023				2022
Recurring subscriptions	Recurring subscriptions	$	445,247	$	399,760	11.4	%	Recurring subscriptions	$	464,997	$	420,216			10.7	%			$	1,365,936			$	1,227,025			11.3	%
Asset-based fees	Asset-based fees	133,126		145,053		(8.2	%)	Asset-based fees	141,066		125,620		12.3	%			412,354				402,889				2.3	%
Non-recurring	Non-recurring	13,845		15,132		(8.5	%)	Non-recurring	19,376		14,803		30.9	%			60,524				42,476				42.5	%
Total operating revenues	Total operating revenues	$	592,218	$	559,945	5.8	%	Total operating revenues	$	625,439	$	560,639	11.6	%			$	1,838,814			$	1,672,390			10.0	%

Total operating revenues increased ~~5.8%.~~11.6% for the three months ended September 30, 2023. Adjusting for the impact of foreign currency exchange rate fluctuations, total operating revenues would have increased ~~7.2%~~10.9%.

Operating revenues from recurring subscriptions increased ~~11.4%,~~10.7% for the three months ended September 30, 2023, primarily driven by strong growth in Index products, which increased ~~$22.2~~$20.9 million, or ~~12.7%~~11.3%, ESG and Climate products, which increased ~~$15.2~~$15.4 million, or ~~30.0%~~27.3%, and Analytics products, which increased ~~$6.7~~$8.5 million, or ~~4.9%~~6.0%. Adjusting for the impact of foreign currency exchange rate fluctuations, operating revenues from recurring subscriptions would have increased ~~13.3%~~9.8%.

Operating revenues from asset-based fees ~~decreased 8.2%,~~increased 12.3% for the three months ended September 30, 2023, mainly driven by ~~a decline~~growth in revenues from ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes, partially offset by a decrease in revenues from exchange traded futures and options contracts linked to MSCI indexes. Operating revenues from ETFs linked to MSCI equity ~~indexes.~~indexes increased by 15.3%, primarily driven by increases in average AUM. Operating revenues from non-ETF indexed funds linked to MSCI indexes ~~decreased~~increased by ~~21.9%~~16.3%, primarily driven by ~~decreases~~increases in average AUM and in average basis point fees. Operating revenues from exchange traded futures and options contracts linked to MSCI indexes decreased by 12.1%, driven by volume decreases.

Total operating revenues increased 10.0% for the nine months ended September 30, 2023. Adjusting for the impact of foreign currency exchange rate fluctuations, total operating revenues would have increased 10.3%.

Operating revenues from recurring subscriptions increased 11.3% for the nine months ended September 30, 2023, primarily driven by strong growth in Index products, which increased $64.1 million, or 11.9%, ESG and Climate products, which increased

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$46.6 million, or 28.9%, and Analytics products, which increased $23.2 million, or 5.5%. Adjusting for the impact of foreign currency exchange rate fluctuations, operating revenues from recurring subscriptions would have increased 11.7%.

Operating revenues from asset-based fees increased 2.3% for the nine months ended September 30, 2023, mainly driven by growth in revenues from ETFs linked to MSCI equity indexes, partially offset by a decrease in revenues from exchange traded futures and options contracts linked to MSCI indexes. Operating revenues from ETFs linked to MSCI equity indexes ~~decreased~~increased by ~~3.6%~~5.0%, primarily driven by ~~a decrease~~increases in average AUM ~~partially offset by an increase in~~and average basis point fees. Operating revenues from exchange traded futures and options contracts linked to MSCI indexes decreased by 9.3%, driven by volume decreases.

Operating revenues from non-recurring revenues increased 42.5% for the nine months ended September 30, 2023, primarily driven by one-time license fees related to prior periods, as well as non-recurring licensed data products.

The following table presents the value of AUM in ETFs linked to MSCI equity indexes and the sequential change of such assets as of the end of each of the periods indicated:

Period Ended
2022 2023
(in billions) March
31, June
30, September
30, December
31, March
31,
AUM in ETFs linked to MSCI equity indexes(1), (2)
$ 1,389.3 $ 1,189.5 $ 1,081.2 $ 1,222.9 $ 1,305.4
Sequential Change in Value
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
Total Change $ (62.3) $ (199.8) $ (108.3) $ 141.7 $ 82.5

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	Period Ended
	2022								2023
(in billions)	March 31,		June 30,		September 30,		December 31,		March 31,		June 30,		September 30,
AUM in ETFs linked to MSCI equity indexes(1), (2)	$	1,389.3	$	1,189.5	$	1,081.2	$	1,222.9	$	1,305.4	$	1,372.5	$	1,322.8
Sequential Change in Value
Market Appreciation/(Depreciation)	$	(89.7)	$	(207.3)	$	(105.7)	$	118.8	$	75.1	$	48.4	$	(56.1)
Cash Inflows	27.4		7.5		(2.6)		22.9		7.4		18.7		6.4
Total Change	$	(62.3)	$	(199.8)	$	(108.3)	$	141.7	$	82.5	$	67.1	$	(49.7)

The following table presents the average value of AUM in ETFs linked to MSCI equity indexes for the periods indicated:


		2022								2023			2022								2023
(in billions)	(in billions)	March		June		September		December		March		(in billions)	March		June		September		December		March		June		September
AUM in ETFs linked to MSCI equity indexes(1), (2)	AUM in ETFs linked to MSCI equity indexes(1), (2)											AUM in ETFs linked to MSCI equity indexes(1), (2)
Quarterly average	Quarterly average	$	1,392.5	$	1,285.4	$	1,208.9	$	1,182.1	$	1,287.5	Quarterly average	$	1,392.5	$	1,285.4	$	1,208.9	$	1,182.1	$	1,287.5	$	1,333.8	$	1,376.5
Year-to-date average	Year-to-date average	$	1,392.5	$	1,338.9	$	1,295.6	$	1,267.2	$	1,287.5	Year-to-date average	$	1,392.5	$	1,338.9	$	1,295.6	$	1,267.2	$	1,287.5	$	1,310.7	$	1,332.6

___________________________

(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 MSCI Equity Indexes” on our Investor Relations homepage at http://ir.msci.com. This information is updated mid-month each month. Information contained on our website is not deemed part of or incorporated by reference into this Quarterly Report on Form 10-Q or any other report filed with the SEC. The AUM in ETFs also includes AUM in Exchange Traded Notes, the value of which is less than 1.0% of the AUM amounts presented.

(2)The value of AUM in ETFs linked to MSCI equity indexes is calculated by multiplying the equity ETF net asset value by the number of shares outstanding.

The average value of AUM in ETFs linked to MSCI equity indexes for the three months ended ~~March 31,~~September 30, 2023, was ~~down $105.0~~up $167.6 billion, or ~~7.5%, compared to~~13.9%. For the ~~three~~nine months ended ~~March 31, 2022.~~September 30, 2023, it was up $37.0 billion, or 2.9%.

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The following table presents operating revenues by reportable segment and revenue type for the periods indicated:


		Three Months Ended March 31,				% Change			Three Months Ended September 30,				% Change			Nine Months Ended September 30,					% Change
(in thousands)	(in thousands)	2023		2022				(in thousands)	2023		2022				2023			2022
Operating revenues:	Operating revenues:							Operating revenues:
Index	Index							Index
Recurring subscriptions	Recurring subscriptions	$	196,678	$	174,498	12.7	%	Recurring subscriptions	$	206,453	$	185,531	11.3	%		$	603,845		$	539,740	11.9	%
Asset-based fees	Asset-based fees	133,126		145,053		(8.2	%)	Asset-based fees	141,066		125,620		12.3	%		412,354			402,889		2.3	%
Non-recurring	Non-recurring	9,578		11,208		(14.5	%)	Non-recurring	14,603		11,089		31.7	%		47,621			31,319		52.1	%
Index total	Index total	339,382		330,759		2.6	%	Index total	362,122		322,240		12.4	%		1,063,820			973,948		9.2	%

Analytics	Analytics							Analytics
Recurring subscriptions	Recurring subscriptions	144,503		137,799		4.9	%	Recurring subscriptions	151,269		142,751		6.0	%		443,276			420,047		5.5	%
Non-recurring	Non-recurring	2,567		1,998		28.5	%	Non-recurring	2,999		2,164		38.6	%		7,943			6,349		25.1	%
Analytics total	Analytics total	147,070		139,797		5.2	%	Analytics total	154,268		144,915		6.5	%		451,219			426,396		5.8	%

ESG and Climate	ESG and Climate							ESG and Climate
Recurring subscriptions	Recurring subscriptions	65,732		50,572		30.0	%	Recurring subscriptions	71,744		56,353		27.3	%		207,523			160,962		28.9	%
Non-recurring	Non-recurring	1,326		1,457		(9.0	%)	Non-recurring	1,294		1,242		4.2	%		3,792			3,790		0.1	%
ESG and Climate total	ESG and Climate total	67,058		52,029		28.9	%	ESG and Climate total	73,038		57,595		26.8	%		211,315			164,752		28.3	%

All Other - Private Assets	All Other - Private Assets							All Other - Private Assets
Recurring subscriptions	Recurring subscriptions	38,334		36,891		3.9	%	Recurring subscriptions	35,531		35,581		(0.1	%)		111,292			106,276		4.7	%
Non-recurring	Non-recurring	374		469		(20.3	%)	Non-recurring	480		308		55.8	%		1,168			1,018		14.7	%
All Other - Private Assets total	All Other - Private Assets total	38,708		37,360		3.6	%	All Other - Private Assets total	36,011		35,889		0.3	%		112,460			107,294		4.8	%

Total operating revenues	Total operating revenues	$	592,218	$	559,945	5.8	%	Total operating revenues	$	625,439	$	560,639	11.6	%		$	1,838,814		$	1,672,390	10.0	%

Refer to the section titled “Segment Results” that follows for further discussion of segment revenues.

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Operating Expenses

We group our operating expenses into the following activity categories:

•Cost of revenues;

•Selling and marketing;

•Research and development (“R&D”);

•General and administrative (“G&A”);

•Amortization of intangible assets; and

•Depreciation and amortization of property, equipment and leasehold improvements.

Costs are assigned to these activity categories based on the nature of the expense or, when not directly attributable, an estimated allocation based on the type of effort involved. Cost of revenues, selling and marketing, R&D and G&A all include both compensation as well as non-compensation related expenses.

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The following table presents operating expenses by activity category for the periods indicated:


		Three Months Ended March 31,				% Change			Three Months Ended September 30,				% Change			Nine Months Ended September 30,					% Change
(in thousands)	(in thousands)	2023		2022				(in thousands)	2023		2022				2023			2022
Operating expenses:	Operating expenses:							Operating expenses:
Cost of revenues	Cost of revenues	$	108,647	$	102,771	5.7	%	Cost of revenues	$	105,311	$	98,418	7.0	%		$	324,024		$	301,957	7.3	%
Selling and marketing	Selling and marketing	66,475		66,053		0.6	%	Selling and marketing	66,581		65,545		1.6	%		201,044			192,671		4.3	%
Research and development	Research and development	31,323		28,322		10.6	%	Research and development	31,438		25,941		21.2	%		92,901			78,179		18.8	%
General and administrative	General and administrative	41,044		45,567		(9.9	%)	General and administrative	36,826		30,702		19.9	%		113,527			112,993		0.5	%
Amortization of intangible assets	Amortization of intangible assets	24,667		21,720		13.6	%	Amortization of intangible assets	26,722		23,375		14.3	%		77,543			67,274		15.3	%
Depreciation and amortization of property, equipment and leasehold improvements	Depreciation and amortization of property, equipment and leasehold improvements	5,460		6,534		(16.4	%)	Depreciation and amortization of property, equipment and leasehold improvements	5,252		7,127		(26.3	%)		15,911			20,426		(22.1	%)
Total operating expenses	Total operating expenses	$	277,616	$	270,967	2.5	%	Total operating expenses	$	272,130	$	251,108	8.4	%		$	824,950		$	773,500	6.7	%

Total operating expenses increased ~~2.5%, and adjusting~~8.4% for the three months ended September 30, 2023. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been ~~5.4%~~6.4%.

Total operating expenses increased 6.7% for the nine months ended September 30, 2023. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 7.1%.

Cost of Revenues

Cost of revenues expenses consist of costs related to the production and servicing of our products and services and primarily includes related information technology costs, including data center, cloud service, platform and infrastructure costs; costs to acquire, produce and maintain market data information; costs of research to support and maintain existing products; costs of product management teams; costs of client service and consultant teams to support customer needs; as well as other support costs directly attributable to the cost of revenues including certain human resources, finance and legal costs.

Cost of revenues increased ~~5.7%,~~7.0% for the three months ended September 30, 2023, primarily reflecting increases across the ~~Index, ESG~~Analytics and ~~Climate and Analytics~~Index reportable segments, partially offset by decreases in the All Other – Private Assets reportable segment. The change was driven by increases in ~~non-compensation~~compensation and benefits costs, primarily relating to higher ~~market data costs, as well as higher~~wages and salaries, incentive compensation and ~~benefit~~benefits costs.

Cost of revenues increased 7.3% for the nine months ended September 30, 2023, reflecting increases across the Index, Analytics and ESG and Climate reportable segments, partially offset by decreases in the All Other – Private Assets reportable segment. The change was driven by increases in compensation and benefits costs, primarily ~~reflecting~~relating to higher wages and salaries and incentive compensation, ~~partially offset by lower benefits~~as well as increases in non-compensation costs, primarily reflecting higher market data and recruiting costs.

Selling and Marketing

Selling and marketing expenses consist of costs associated with acquiring new clients or selling new products or product renewals to existing clients and primarily includes the costs of our sales and marketing teams, as well as costs incurred in other departments associated with acquiring new business, including product management, research, technology and sales operations.

Selling and marketing expenses increased ~~0.6%,~~1.6% for the three months ended September 30, 2023, reflecting increases inacross the Analytics, ESG and Climate ~~reportable segment, partially offset by decreases across the Index,~~and All Other – Private Assets reportable segments, partially offset by decreases in the Index reportable segment. The change was driven by increases in compensation and ~~Analytics~~benefits costs, primarily relating to higher incentive compensation and wages and salaries, partially offset by lower benefits costs.

Selling and marketing expenses increased 4.3% for the nine months ended September 30, 2023, reflecting increases across all reportable segments. The change was driven by increases in ~~non-compensation~~compensation and benefits costs, primarily relating to higher wages and salaries and incentive compensation costs, partially offset by lower benefits costs, as well as increases in non-compensation costs, primarily reflecting increased marketing costs and travel and entertainment ~~expenses, partially offset by lower compensation and benefit costs, primarily relating to lower benefits costs.~~expenses.

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Research and Development

R&D expenses consist of costs to develop new or ~~enhance existing,~~enhanced products and the costs to develop new or enhanced technologies and service platforms for the delivery of our products and services and primarily include the costs of development, research, product management, project management and the technology support directly associated with these activities.

R&D expenses increased ~~10.6%,~~21.2% for the three months ended September 30, 2023, reflecting increases across the ESG and Climate, Index and All Other - Private Assets ~~and Index~~ reportable segments, partially offset by decreases in the Analytics reportable segment. The change was driven by increases in compensation and benefits costs, primarily relating to higher wages and salaries and incentive compensation costs, partially offset by increased capitalization of costs related to internally developed software projects. The change was also driven by increases in non-compensation costs, primarily relating to higher information technology costs.

R&D expenses increased 18.8% for the nine months ended September 30, 2023, reflecting increases across the ESG and Climate, Index and All Other - Private Assets reportable segments, partially offset by decreases in the Analytics reportable segment. The change was driven by increases in compensation and benefits costs, primarily relating to higher wages and salaries and incentive compensation costs, partially offset by increased capitalization of costs related to internally developed software projects. The change was also driven by increases in non-compensation costs, primarily relating to higher information technology costs.

General and Administrative

G&A expenses consist of costs primarily related to finance operations, human resources, office of the CEO, legal, corporate technology, corporate development and certain other administrative costs that are not directly attributed, ~~to a product or service,~~ but are instead allocated, to ~~G&A expenses.~~a product or service.

G&A expenses ~~decreased 9.9%,~~increased 19.9% for the three months ended September 30, 2023, reflecting ~~decreases~~increases across the ~~All Other - Private Assets,~~ Index, ESG and Climate and Analytics reportable segments, partially offset by ~~increases~~decreases in the ~~ESG and Climate~~All Other - Private Assets reportable segment. The change was driven by ~~lower~~increases in compensation and benefits costs primarily related to higher incentive compensation and wages and salaries. The change was also driven by higher non-compensation costs, primarily relating to ~~lower~~higher non-income tax expenses due to the absence of favorable settlements reached in the prior period, partially offset by a decrease in professional ~~fees~~fees.

G&A expenses increased 0.5% for the nine months ended September 30, 2023, primarily reflecting increases across the ESG and Climate and Index reportable segments, partially offset by decreases in the All Other - Private Assets reportable segment. The change was primarily driven by increases in compensation and benefits costs, primarily relating to higher incentive compensation and wages and salaries. The change was offset by the absence of non-recurring transaction and integration costs related to the September 2021 acquisition of Real Capital Analytics, Inc. (“RCA”). ~~The change was also driven by decreases in compensation and benefit costs, primarily relating to lower incentive compensation and benefits costs.~~

The following table presents operating expenses using compensation and non-compensation categories, rather than using activity categories, for the periods indicated:


		Three Months Ended March 31,				% Change			Three Months Ended September 30,				% Change				Nine Months Ended September 30,								% Change
(in thousands)	(in thousands)	2023		2022				(in thousands)	2023		2022				2023				2022
Compensation and benefits	Compensation and benefits	$	181,579	$	179,838	1.0	%	Compensation and benefits	$	171,815	$	155,447			10.5	%			$	527,566			$	489,527			7.8	%
Non-compensation expenses	Non-compensation expenses	65,910		62,875		4.8	%	Non-compensation expenses	68,341		65,159		4.9	%			203,930				196,273				3.9	%
Amortization of intangible assets	Amortization of intangible assets	24,667		21,720		13.6	%	Amortization of intangible assets	26,722		23,375		14.3	%			77,543				67,274				15.3	%
Depreciation and amortization of property, equipment and leasehold improvements	Depreciation and amortization of property, equipment and leasehold improvements	5,460		6,534		(16.4	%)	Depreciation and amortization of property, equipment and leasehold improvements	5,252		7,127		(26.3	%)			15,911				20,426				(22.1	%)
Total operating expenses	Total operating expenses	$	277,616	$	270,967	2.5	%	Total operating expenses	$	272,130	$	251,108	8.4	%			$	824,950			$	773,500			6.7	%

Compensation and Benefits

A significant portion of the incentive compensation component of operating expenses is based on the achievement of a number of financial and operating metrics. In a scenario where operating revenue growth and profitability moderate, incentive compensation would be expected to decrease accordingly.

We had ~~4,846~~5,005 employees as of ~~March 31,~~September 30, 2023, compared to ~~4,361~~4,767 employees as of ~~March 31,~~September 30, 2022, reflecting a ~~11.1% increase~~5.0% growth in the number of employees. Continued growth of our emerging market centers around the world is an important factor in our ability to manage and control the growth of our compensation and benefits costs. As of ~~March 31,~~September 30, 2023, ~~65.4%~~66.5% of our employees were located in emerging market centers compared to ~~63.8%~~65.0% as of ~~March 31,~~September 30, 2022.

Table of Contents

Compensation and benefits costs increased ~~1.0%~~10.5% and 7.8%, ~~primarily~~for the three and nine months ended September 30, 2023, respectively, driven by an increase in wages and salaries and incentive compensation ~~due to headcount growth,~~costs, partially offset by ~~decreased benefits costs.~~increased capitalization of expenses related to internally developed software projects. Adjusting for the impact of foreign currency exchange rate fluctuations, compensation and benefits costs would have increased by ~~5.0%.~~7.9% and 8.5%, respectively, for the three and nine months ended September 30, 2023.

Non-Compensation Expenses

Fixed costs constitute a significant portion of the non-compensation component of operating expenses. The discretionary non-compensation component of operating expenses could, however, be reduced in the near-term in a scenario where operating revenue growth moderates.

Non-compensation expenses increased ~~4.8%,~~4.9% for the three months ended September 30, 2023, primarily driven by higher non-income tax expenses due to the absence of favorable settlements reached in the prior period and higher information technology costs and market data costs, partially offset by a decrease in professional fees.

Non-compensation expenses increased 3.9% for the nine months ended September 30, 2023, primarily driven by higher information technology ~~and~~costs, market data ~~costs.~~costs, non-income tax expenses due to the absence of favorable settlements reached in the prior period, and marketing costs, partially offset by lower professional fees and by the absence of non-recurring transaction and integration costs related to the September 2021 acquisition of RCA.

~~Table of Contents~~

Amortization of Intangible Assets

Amortization of intangible assets expense relates to definite-lived intangible assets arising from past acquisitions and capitalization of internally developed software projects recognized over their estimated useful lives.

Amortization of intangible assets expense increased ~~13.6%,~~14.3% and 15.3% for the three and nine months ended September 30, 2023, respectively, primarily driven by higher amortization of internal use software.

Depreciation and Amortization of Property, Equipment and Leasehold Improvements

Depreciation and amortization of property, equipment and leasehold improvements consists of expenses related to depreciating or amortizing the cost of computer and related equipment, leasehold improvements, software and furniture and fixtures over the estimated useful life of the assets.

Depreciation and amortization of property, equipment and leasehold improvements decreased ~~16.4%,~~26.3% and 22.1% for the three and nine months ended September 30, 2023, respectively, primarily driven by lower depreciation on computer and related equipment.

Total Other Expense (Income), Net

The following table shows our other expense (income), net for the periods indicated:


		Three Months Ended March 31,				% Change			Three Months Ended September 30,				% Change				Nine Months Ended September 30,								% Change
(in thousands)	(in thousands)	2023		2022				(in thousands)	2023		2022				2023				2022
Interest income	Interest income	$	(10,362)	$	(298)	3377.2	%	Interest income	$	(10,314)	$	(3,938)			161.9	%			$	(31,079)			$	(5,160)			502.3	%
Interest expense	Interest expense	46,206		40,714		13.5	%	Interest expense	46,902		44,162		6.2	%			139,725				125,961				10.9	%
Other expense (income)	Other expense (income)	2,386		(381)		(726.2	%)	Other expense (income)	(935)		103		(1007.8	%)			4,032				(90)				(4580.0	%)
Total other expense (income), net	Total other expense (income), net	$	38,230	$	40,035	(4.5	%)	Total other expense (income), net	$	35,653	$	40,327	(11.6	%)			$	112,678			$	120,711			(6.7	%)

Total other expense (income), net decreased ~~4.5%,~~11.6% for the three months ended September 30, 2023, primarily driven by higher interest income, reflecting higher yields, and the impact of favorable foreign currency exchange rate fluctuations, partially offset by higher interest expense due to higher interest rates.

Total other expense (income), net decreased 6.7% for the nine months ended September 30, 2023, primarily driven by higher interest income, reflecting higher yields and ~~higher~~ cash balances, partially offset by higher interest expense, ~~associated with~~due to higher ~~average outstanding~~ debt ~~balances~~levels and byinterest rates, and the impact of unfavorable foreign currency exchange rate ~~losses.~~fluctuations.

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Income Taxes

The following table shows our income tax provision and effective tax rate for the periods indicated:

Three Months Ended
March 31, % Change
(in thousands) 2023 2022
Provision for income taxes 37,644 20,520 83.5 %
Effective tax rate 13.6 % 8.2 % 65.9 %


	Three Months Ended September 30,						% Change		Nine Months Ended September 30,						% Change
(in thousands)	2023			2022					2023			2022
Provision for income taxes	$	57,997		$	52,612		10.2	%	$	155,974		$	122,577		27.2	%
Effective tax rate	18.3		%	19.5		%	(6.2)	%	17.3		%	15.8		%	9.5	%

The effective tax rate of ~~13.6%~~18.3% for the three months ended ~~March 31,~~September 30, 2023 reflects the ~~Company's~~Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling ~~$16.5~~$3.4 million, primarily related to ~~$11.1~~$3.2 million of ~~excess tax benefits recognized on share-based compensation vested during the period and $4.6 million of tax benefits related to the resolution of prior year~~prior-year items.

The effective tax rate of ~~8.2%~~19.5% for the three months ended ~~March 31,~~September 30, 2022 reflects the ~~Company's~~Company’s estimate of the effective tax rate for the period. The level of discrete items was not impactful to the effective tax rate for the period.

The effective tax rate of 17.3% for the nine months ended September 30, 2023 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling ~~$28.1~~$19.8 million, related to $11.4 million of excess tax benefits recognized on share-based compensation vested during the period and $8.4 million related to prior-year items.

The effective tax rate of 15.8% for the nine months ended September 30, 2022 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling $28.2 million, primarily related to ~~$28.3~~$28.4 million of excess tax benefits recognized on share-based compensation vested during the period.

~~Table of Contents~~

Net Income

The following table shows our net income for the periods indicated:


		Three Months Ended March 31,				% Change			Three Months Ended September 30,				% Change			Nine Months Ended September 30,					% Change
(in thousands)	(in thousands)	2023		2022				(in thousands)	2023		2022			2023			2022
Net income	Net income	$	238,728	$	228,423	4.5	%	Net income	$	259,659	$	216,592		19.9	%		$	745,212	$	655,602		13.7	%

As a result of the factors described above, net income increased ~~4.5%.~~19.9% for the three months ended September 30, 2023, and increased 13.7% for the nine months ended September 30, 2023.

Weighted Average Shares and Common Shares Outstanding

The following table shows our weighted average shares outstanding for the periods indicated:


		Three Months Ended March 31,		% Change			Three Months Ended September 30,		% Change			Nine Months Ended September 30,			% Change
(in thousands)	(in thousands)	2023	2022			(in thousands)	2023	2022			2023		2022
Weighted average shares outstanding:	Weighted average shares outstanding:					Weighted average shares outstanding:
Basic	Basic	80,041	81,591	(1.9	%)	Basic	79,116	80,500	(1.7	%)		79,580		81,001	(1.8	%)
Diluted	Diluted	80,482	82,286	(2.2	%)	Diluted	79,500	80,874	(1.7	%)		79,959		81,481	(1.9	%)

The following table shows our common shares outstanding for the periods indicated:

As of

% Change

As of

% Change

(in thousands)

March 31,
2023

December 31,
2022

(in thousands)

September 30,
2023

December 31,
2022

Common shares outstanding

80,063

79,960

0.1

Common shares outstanding

79,091

79,960

(1.1

The decrease in weighted average shares and common shares outstanding for the three and nine months ended September 30, 2023 primarily reflects the impact of share repurchases made pursuant to the Company’s stock repurchase ~~program during the twelve months ended December 31, 2022. The increase in common shares outstanding primarily reflects the vesting~~program.

Table of ~~certain share-based awards during the three months ended March 31, 2023.~~Contents

Adjusted EBITDA

“Adjusted EBITDA,” a non-GAAP measure used by management to assess operating performance, 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,” a non-GAAP measure used by management to assess operating performance, 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 EBITDA, Adjusted EBITDA margin and Adjusted EBITDA expenses are believed to be meaningful measures for management to assess the operating performance of the Company because they adjust for significant one-time, unusual or non-recurring items as well as eliminate the accounting effects of certain capital spending and acquisitions that do not directly affect what management considers to be the Company’s ongoing operating performance in the period. All companies do not calculate adjusted EBITDA, adjusted EBITDA margin and adjusted EBITDA expenses in the same way. 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 the Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EBITDA expenses measures may not be comparable to similarly titled measures computed by other companies.

~~Table of Contents~~

The following table presents non-GAAP Adjusted EBITDA for the periods indicated:


		Three Months Ended March 31,						% Change			Three Months Ended September 30,						% Change				Nine Months Ended September 30,										% Change
(in thousands)	(in thousands)	2023			2022					(in thousands)	2023			2022					2023					2022
Operating revenues	Operating revenues	$	592,218		$	559,945		5.8	%	Operating revenues	$	625,439		$	560,639				11.6	%				$	1,838,814				$	1,672,390			10.0	%
Adjusted EBITDA expenses	Adjusted EBITDA expenses	247,489			241,401			2.5	%	Adjusted EBITDA expenses	239,150			219,678			8.9	%			730,490					681,741					7.2	%
Adjusted EBITDA	Adjusted EBITDA	$	344,729		$	318,544		8.2	%	Adjusted EBITDA	$	386,289		$	340,961		13.3	%			$	1,108,324				$	990,649				11.9	%

Operating margin %	Operating margin %	53.1		%	51.6		%			Operating margin %	56.5		%	55.2		%					55.1		%			53.7		%
Adjusted EBITDA margin %	Adjusted EBITDA margin %	58.2		%	56.9		%			Adjusted EBITDA margin %	61.8		%	60.8		%					60.3		%			59.2		%

The change in Adjusted EBITDA margin reflects changes in the rate of growth of Adjusted EBITDA expenses as compared to the rate of growth of operating revenues, driven by the factors previously described.

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Reconciliation of Net Income to Adjusted EBITDA and Operating Expenses to Adjusted EBITDA Expenses

The following table presents the reconciliation of net income to Adjusted EBITDA for the periods indicated:


		Three Months Ended March 31,				% Change			Three Months Ended September 30,				% Change				Nine Months Ended September 30,								% Change
(in thousands)	(in thousands)	2023		2022				(in thousands)	2023		2022				2023				2022
Net income	Net income	$	238,728	$	228,423	4.5	%	Net income	$	259,659	$	216,592			19.9	%			$	745,212			$	655,602			13.7	%
Provision for income taxes	Provision for income taxes	37,644		20,520		83.5	%	Provision for income taxes	57,997		52,612		10.2	%			155,974				122,577				27.2	%
Other expense (income), net	Other expense (income), net	38,230		40,035		(4.5	%)	Other expense (income), net	35,653		40,327		(11.6	%)			112,678				120,711				(6.7	%)
Operating income	Operating income	314,602		288,978		8.9	%	Operating income	353,309		309,531		14.1	%			1,013,864				898,890				12.8	%

Amortization of intangible assets	Amortization of intangible assets	24,667		21,720		13.6	%	Amortization of intangible assets	26,722		23,375		14.3	%			77,543				67,274				15.3	%
Depreciation and amortization of property, equipment and leasehold improvements	Depreciation and amortization of property, equipment and leasehold improvements	5,460		6,534		(16.4	%)	Depreciation and amortization of property, equipment and leasehold improvements	5,252		7,127		(26.3	%)			15,911				20,426				(22.1	%)
Acquisition-related integration and transaction costs (1)	Acquisition-related integration and transaction costs (1)	—		1,312		(100.0	%)	Acquisition-related integration and transaction costs (1)	1,006		928		8.4	%			1,006				4,059				(75.2	%)
Consolidated Adjusted EBITDA	Consolidated Adjusted EBITDA	344,729		318,544		8.2	%	Consolidated Adjusted EBITDA	$	386,289	$	340,961	13.3	%			$	1,108,324			$	990,649			11.9	%

Index Adjusted EBITDA	Index Adjusted EBITDA	$	253,682	$	245,875	3.2	%	Index Adjusted EBITDA	277,672		245,967		12.9	%			808,424				737,012				9.7	%
Analytics Adjusted EBITDA	Analytics Adjusted EBITDA	60,780		50,889		19.4	%	Analytics Adjusted EBITDA	71,781		67,634		6.1	%			197,710				181,484				8.9	%
ESG and Climate Adjusted EBITDA	ESG and Climate Adjusted EBITDA	17,876		12,092		47.8	%	ESG and Climate Adjusted EBITDA	25,440		15,910		59.9	%			66,114				42,334				56.2	%
All Other - Private Assets Adjusted EBITDA	All Other - Private Assets Adjusted EBITDA	12,391		9,688		27.9	%	All Other - Private Assets Adjusted EBITDA	11,396		11,450		(0.5	%)			36,076				29,819				21.0	%
Consolidated Adjusted EBITDA	Consolidated Adjusted EBITDA	344,729		318,544		8.2	%	Consolidated Adjusted EBITDA	$	386,289	$	340,961	13.3	%			$	1,108,324			$	990,649			11.9	%

___________________________

~~Table of Contents~~

The following table presents the reconciliation of operating expenses to Adjusted EBITDA expenses for the periods indicated:


		Three Months Ended March 31,				% Change			Three Months Ended September 30,				% Change				Nine Months Ended September 30,								% Change
(in thousands)	(in thousands)	2023		2022				(in thousands)	2023		2022				2023				2022
Total operating expenses	Total operating expenses	$	277,616	$	270,967	2.5	%	Total operating expenses	$	272,130	$	251,108			8.4	%			$	824,950			$	773,500			6.7	%
Amortization of intangible assets	Amortization of intangible assets	24,667		21,720		13.6	%	Amortization of intangible assets	26,722		23,375		14.3	%			77,543				67,274				15.3	%
Depreciation and amortization of property, equipment and leasehold improvements	Depreciation and amortization of property, equipment and leasehold improvements	5,460		6,534		(16.4	%)	Depreciation and amortization of property, equipment and leasehold improvements	5,252		7,127		(26.3	%)			15,911				20,426				(22.1	%)
Acquisition-related integration and transaction costs (1)	Acquisition-related integration and transaction costs (1)	—		1,312		(100.0	%)	Acquisition-related integration and transaction costs (1)	1,006		928		8.4	%			1,006				4,059				(75.2	%)
Consolidated Adjusted EBITDA expenses	Consolidated Adjusted EBITDA expenses	247,489		241,401		2.5	%	Consolidated Adjusted EBITDA expenses	$	239,150	$	219,678	8.9	%			$	730,490			$	681,741			7.2	%

Index Adjusted EBITDA expenses	Index Adjusted EBITDA expenses	$	85,700	$	84,884	1.0	%	Index Adjusted EBITDA expenses	84,450		76,273		10.7	%			255,396				236,936				7.8	%
Analytics Adjusted EBITDA expenses	Analytics Adjusted EBITDA expenses	86,290		88,908		(2.9	%)	Analytics Adjusted EBITDA expenses	82,487		77,281		6.7	%			253,509				244,912				3.5	%
ESG and Climate Adjusted EBITDA expenses	ESG and Climate Adjusted EBITDA expenses	49,182		39,937		23.1	%	ESG and Climate Adjusted EBITDA expenses	47,598		41,685		14.2	%			145,201				122,418				18.6	%
All Other - Private Assets Adjusted EBITDA expenses	All Other - Private Assets Adjusted EBITDA expenses	26,317		27,672		(4.9	%)	All Other - Private Assets Adjusted EBITDA expenses	24,615		24,439		0.7	%			76,384				77,475				(1.4	%)
Consolidated Adjusted EBITDA expenses	Consolidated Adjusted EBITDA expenses	$	247,489	$	241,401	2.5	%	Consolidated Adjusted EBITDA expenses	$	239,150	$	219,678	8.9	%			$	730,490			$	681,741			7.2	%

___________________________

The discussion of the segment results is presented below.

Table of Contents

Segment Results

Index Segment

The following table presents the results for the Index segment for the periods indicated:


		Three Months Ended March 31,						% Change			Three Months Ended September 30,						% Change			Nine Months Ended September 30,							% Change
(in thousands)	(in thousands)	2023			2022					(in thousands)	2023			2022					2023				2022
Operating revenues:	Operating revenues:									Operating revenues:
Recurring subscriptions	Recurring subscriptions	$	196,678		$	174,498		12.7	%	Recurring subscriptions	$	206,453		$	185,531		11.3	%		$	603,845			$	539,740		11.9	%
Asset-based fees	Asset-based fees	133,126			145,053			(8.2	%)	Asset-based fees	141,066			125,620			12.3	%		412,354				402,889			2.3	%
Non-recurring	Non-recurring	9,578			11,208			(14.5	%)	Non-recurring	14,603			11,089			31.7	%		47,621				31,319			52.1	%
Operating revenues total	Operating revenues total	339,382			330,759			2.6	%	Operating revenues total	362,122			322,240			12.4	%		1,063,820				973,948			9.2	%

Adjusted EBITDA expenses	Adjusted EBITDA expenses	85,700			84,884			1.0	%	Adjusted EBITDA expenses	84,450			76,273			10.7	%		255,396				236,936			7.8	%
Adjusted EBITDA	Adjusted EBITDA	$	253,682		$	245,875		3.2	%	Adjusted EBITDA	$	277,672		$	245,967		12.9	%		$	808,424			$	737,012		9.7	%

Adjusted EBITDA margin %	Adjusted EBITDA margin %	74.7		%	74.3		%			Adjusted EBITDA margin %	76.7		%	76.3		%				76.0		%		75.7		%

Index operating revenues increased ~~2.6%,~~12.4% for the three months ended September 30, 2023, primarily driven by strong growth from both recurring subscriptions and asset-based fees. Adjusting for the impact of foreign currency exchange rate fluctuations, Index operating revenues would have increased 12.5%.

Operating revenues from recurring subscriptions increased 11.3% for the three months ended September 30, 2023, primarily driven by strong growth from market cap-weighted Index products.

Operating revenues from asset-based fees increased 12.3% for the three months ended September 30, 2023, mainly driven by growth in revenues from ~~recurring subscriptions,~~ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes, partially offset by a ~~decline~~decrease in ~~asset-based fees~~revenues from exchange traded futures and options contracts linked to MSCI indexes. Operating revenues from ETFs linked to MSCI equity indexes increased by 15.3%, primarily driven by an increase in average AUM. Operating revenues from non-ETF indexed funds linked to MSCI indexes increased by 16.3%, primarily driven by increases in average AUM and average basis point fees. Operating revenues from exchange traded futures and options contracts linked to MSCI indexes decreased by 12.1%, driven by volume decreases.

Index segment Adjusted EBITDA expenses increased 10.7% for the three months ended September 30, 2023, primarily driven by higher compensation expenses across all expense categories. The increase reflects higher incentive compensation and wages and salaries. Adjusting for the impact of foreign currency exchange rate fluctuations, Index segment Adjusted EBITDA expenses would have increased by 8.4%.

Index operating revenues increased 9.2% for the nine months ended September 30, 2023, primarily driven by strong growth from both recurring subscriptions and non-recurring revenues. Adjusting for the impact of foreign currency exchange rate fluctuations, Index operating revenues would have increased ~~2.9%~~9.4%.

Operating revenues from recurring subscriptions increased ~~12.7%,~~11.9% for the nine months ended September 30, 2023, primarily driven by strong growth from both market cap-weighted and factor, ESG and climate Index products.

Operating revenues from asset-based fees ~~decreased 8.2%, primarily~~increased 2.3% for the nine months ended September 30, 2023, mainly driven by ~~a decline~~growth in revenues from ~~non-ETF indexed funds linked to MSCI indexes and~~ ETFs linked to MSCI equity ~~indexes. Operating~~indexes, partially offset by a decrease in revenues from ~~non-ETF indexed funds~~exchange traded futures and options contracts linked to MSCI ~~indexes decreased by 21.9%, primarily driven by decreases in average AUM.~~indexes. Operating revenues from ETFs linked to MSCI equity indexes ~~decreased~~increased by ~~3.6%~~5.0%, primarily driven by ~~a decrease~~increases in average AUM ~~partially offset by an increase in~~and average basis point fees. Operating revenues from exchange traded futures and options contracts linked to MSCI indexes decreased by 9.3%, driven by volume decreases.

~~Table of Contents~~

Operating revenues from non-recurring revenues increased 52.1% for the nine months ended September 30, 2023, primarily driven by one-time license fees related to prior periods, as well as non-recurring licensed data products.

Index segment Adjusted EBITDA expenses increased ~~1.0%,~~7.8% for the nine months ended September 30, 2023, driven by higher compensation and non-compensation expenses across ~~the cost of revenues~~all expense categories. The increase reflects higher wages and ~~selling~~salaries and ~~marketing expense activity categories, primarily relating to higher market data~~incentive compensation costs, partially offset by lower benefits costs. Adjusting for the impact of foreign currency exchange rate fluctuations, Index segment Adjusted EBITDA expenses would have increased by ~~4.2%~~8.2%.

Table of Contents

Analytics Segment

The following table presents the results for the Analytics segment for the periods indicated:


		Three Months Ended March 31,						% Change			Three Months Ended September 30,						% Change			Nine Months Ended September 30,							% Change
(in thousands)	(in thousands)	2023			2022					(in thousands)	2023			2022					2023				2022
Operating revenues:	Operating revenues:									Operating revenues:
Recurring subscriptions	Recurring subscriptions	$	144,503		$	137,799		4.9	%	Recurring subscriptions	$	151,269		$	142,751		6.0	%		$	443,276			$	420,047		5.5	%
Non-recurring	Non-recurring	2,567			1,998			28.5	%	Non-recurring	2,999			2,164			38.6	%		7,943				6,349			25.1	%
Operating revenues total	Operating revenues total	147,070			139,797			5.2	%	Operating revenues total	154,268			144,915			6.5	%		451,219				426,396			5.8	%

Adjusted EBITDA expenses	Adjusted EBITDA expenses	86,290			88,908			(2.9	%)	Adjusted EBITDA expenses	82,487			77,281			6.7	%		253,509				244,912			3.5	%
Adjusted EBITDA	Adjusted EBITDA	$	60,780		$	50,889		19.4	%	Adjusted EBITDA	$	71,781		$	67,634		6.1	%		$	197,710			$	181,484		8.9	%

Adjusted EBITDA margin %	Adjusted EBITDA margin %	41.3		%	36.4		%			Adjusted EBITDA margin %	46.5		%	46.7		%				43.8		%		42.6		%

Analytics operating revenues increased ~~5.2%,~~6.5% for the three months ended September 30, 2023, primarily driven by growth from recurring subscriptions related to both Equity Analytics and Multi-Asset Class products. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics operating revenues would have increased ~~5.9%~~6.6%.

Analytics segment Adjusted EBITDA expenses ~~decreased 2.9%,~~increased 6.7% for the three months ended September 30, 2023, primarily driven by higher compensation expenses across the cost of revenues, G&A and selling and marketing expense activity categories, partially offset by lower compensation expenses ~~across all~~in the R&D expense activity ~~categories, as a result of lower benefits costs~~category. The increase reflects higher incentive compensation and ~~increased capitalization of expenses related to internally developed software projects.~~wages and salaries. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics segment Adjusted EBITDA expenses would have ~~decreased 0.2%~~increased 4.7%.

Analytics operating revenues increased 5.8% for the nine months ended September 30, 2023, primarily driven by growth from recurring subscriptions related to both Equity Analytics and Multi-Asset Class products. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics operating revenues would have increased 6.2%.

Analytics segment Adjusted EBITDA expenses increased 3.5% for the nine months ended September 30, 2023, primarily driven by higher compensation expenses across the cost of revenues, selling and marketing and G&A expense activity categories, partially offset by lower compensation expenses in the R&D expense activity category. The increase reflects higher incentive compensation and wages and salaries. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics segment Adjusted EBITDA expenses would have increased 3.8%.

ESG and Climate Segment

The following table presents the results for the ESG and Climate segment for the periods indicated:


		Three Months Ended March 31,						% Change			Three Months Ended September 30,						% Change			Nine Months Ended September 30,							% Change
(in thousands)	(in thousands)	2023			2022					(in thousands)	2023			2022					2023				2022
Operating revenues:	Operating revenues:									Operating revenues:
Recurring subscriptions	Recurring subscriptions	$	65,732		$	50,572		30.0	%	Recurring subscriptions	$	71,744		$	56,353		27.3	%		$	207,523			$	160,962		28.9	%
Non-recurring	Non-recurring	1,326			1,457			(9.0	%)	Non-recurring	1,294			1,242			4.2	%		3,792				3,790			0.1	%
Operating revenues total	Operating revenues total	67,058			52,029			28.9	%	Operating revenues total	73,038			57,595			26.8	%		211,315				164,752			28.3	%

Adjusted EBITDA expenses	Adjusted EBITDA expenses	49,182			39,937			23.1	%	Adjusted EBITDA expenses	47,598			41,685			14.2	%		145,201				122,418			18.6	%
Adjusted EBITDA	Adjusted EBITDA	$	17,876		$	12,092		47.8	%	Adjusted EBITDA	$	25,440		$	15,910		59.9	%		$	66,114			$	42,334		56.2	%

Adjusted EBITDA margin %	Adjusted EBITDA margin %	26.7		%	23.2		%			Adjusted EBITDA margin %	34.8		%	27.6		%				31.3		%		25.7		%

ESG and Climate operating revenues increased ~~28.9%,~~26.8% for the three months ended September 30, 2023, primarily driven by strong growth from recurring subscriptions related to Ratings, Climate and Screening products. Adjusting for the impact of foreign currency exchange rate fluctuations, ESG and Climate operating revenues would have increased ~~37.6%~~20.3%.

ESG and Climate segment Adjusted EBITDA expenses increased ~~23.1%,~~14.2% for the three months ended September 30, 2023, primarily driven by higher compensation expenses across all expense activity ~~categories as a result~~categories. The increase reflects higher wages and

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salaries and incentive compensation. The increase was partially offset by increased ~~wages and salaries, incentive compensation and benefits costs. The change was also driven by higher non-compensation~~capitalization of expenses ~~across all expense activity categories, primarily due~~related to ~~higher information technology costs and professional fees.~~internally developed software projects. Adjusting for the impact of foreign currency exchange rate fluctuations, ESG and Climate segment Adjusted EBITDA expenses would have increased ~~27.4%~~12.1%.

ESG and Climate operating revenues increased 28.3% for the nine months ended September 30,

2023, primarily driven by strong growth from recurring subscriptions related to Ratings, Climate and Screening products. Adjusting for the impact of foreign currency exchange rate fluctuations, ESG and Climate operating revenues would have increased 28.8%.

~~Table~~ESG and Climate segment Adjusted EBITDA expenses increased 18.6% for the nine months ended September 30, 2023, primarily driven by higher compensation and non-compensation expenses across all expense activity categories. The increase reflects higher wages and salaries, incentive compensation, benefits and information technology costs. The increase was partially offset by increased capitalization of ~~Contents~~expenses related to internally developed software projects. Adjusting for the impact of foreign currency exchange rate fluctuations, ESG and Climate segment Adjusted EBITDA expenses would have increased 19.5%.

All Other – Private Assets Segment

The following table presents the results for the All Other – Private Assets segment for the periods indicated:


		Three Months Ended March 31,						% Change			Three Months Ended September 30,						% Change			Nine Months Ended September 30,							% Change
(in thousands)	(in thousands)	2023			2022					(in thousands)	2023			2022					2023				2022
Operating revenues:	Operating revenues:									Operating revenues:
Recurring subscriptions	Recurring subscriptions	$	38,334		$	36,891		3.9	%	Recurring subscriptions	$	35,531		$	35,581		(0.1	%)		$	111,292			$	106,276		4.7	%
Non-recurring	Non-recurring	374			469			(20.3	%)	Non-recurring	480			308			55.8	%		1,168				1,018			14.7	%
Operating revenues total	Operating revenues total	38,708			37,360			3.6	%	Operating revenues total	36,011			35,889			0.3	%		112,460				107,294			4.8	%

Adjusted EBITDA expenses	Adjusted EBITDA expenses	26,317			27,672			(4.9	%)	Adjusted EBITDA expenses	24,615			24,439			0.7	%		76,384				77,475			(1.4	%)
Adjusted EBITDA	Adjusted EBITDA	$	12,391		$	9,688		27.9	%	Adjusted EBITDA	$	11,396		$	11,450		(0.5	%)		$	36,076			$	29,819		21.0	%

Adjusted EBITDA margin %	Adjusted EBITDA margin %	32.0		%	25.9		%			Adjusted EBITDA margin %	31.6		%	31.9		%				32.1		%		27.8		%

All Other – Private Assets operating revenues increased ~~3.6%,~~0.3% for the three months ended September 30, 2023, primarily driven by growth from recurring subscriptions related to ~~growth from RCA, Datscha, Global~~Index Intel, Property Intel and Climate ~~Value-at-Risk~~Insights products, as well as favorable foreign currency exchange rate fluctuations, offset by a one-time revenue catch-up in the prior period. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other – Private Assets operating revenues would have decreased 1.3%.

All Other – Private Assets segment Adjusted EBITDA expenses were relatively flat across expense activity categories for the three months ended September 30, 2023. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other - Private Assets segment Adjusted EBITDA expenses would have decreased 1.1%.

All Other – Private Assets operating revenues increased 4.8% for the nine months ended September 30, 2023, primarily driven by growth from recurring subscriptions related to Index Intel, Property Intel and Climate Insights products, partially offset by a one-time revenue catch-up in the prior period and unfavorable foreign currency exchange rate fluctuations. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other – Private Assets operating revenues would have increased ~~8.0%~~6.2%.

All Other – Private Assets segment Adjusted EBITDA expenses decreased ~~4.9%, reflecting lower expenses across~~1.4% for the ~~G&A, selling and marketing and cost of revenues expense activity categories. This change was~~nine months ended September 30, 2023, primarily driven by lower compensation expenses across the cost of revenues and ~~benefits costs, primarily relating~~G&A expense activity categories, partially offset by higher compensation expenses in the R&D expense activity category. The decrease reflects higher capitalization of expenses related to internally developed software projects and lower incentive compensation and wages and salaries. Non-compensation expenses increased, mainly driven by higher expenses in the R&D expense activity category, partially offset by lower expenses in the G&A expense activity category. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other - Private Assets segment Adjusted EBITDA expenses would have decreased ~~0.7%~~0.1%.

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Operating Metrics

Run Rate

“Run Rate” estimates at a particular point in time the annualized value of the recurring revenues under our client license agreements (“Client Contracts”) for the next 12 months, assuming all Client Contracts that come up for renewal, or reach the end of the committed subscription period, are renewed and assuming then-current currency exchange rates, subject to the adjustments and exclusions described below. For any Client Contract where fees are linked to an investment product’s assets or trading volume/fees, the Run Rate calculation reflects, for ETFs, the market value on the last trading day of the period, for futures and options, the most recent quarterly volumes and/or reported exchange fees, and for other non-ETF products, the most recent client-reported assets. Run Rate does not include fees associated with “one-time” and other non-recurring transactions. In addition, we add to Run Rate the annualized fee value of recurring new sales, whether to existing or new clients, when we execute Client Contracts, even though the license start date, and associated revenue recognition, may not be effective until a later date. We remove from Run Rate the annualized fee value associated with products or services under any Client Contract with respect to which we have received a notice of termination, non-renewal or an indication the client does not intend to continue their subscription during the period and have determined that such notice evidences the client’s final decision to terminate or not renew the applicable products or services, even though such notice is not effective until a later date.

Changes in our recurring revenues typically lag changes in Run Rate. The actual amount of recurring revenues we will realize over the following 12 months will differ from Run Rate for numerous reasons, including:

•fluctuations in revenues associated with new recurring sales;

•modifications, cancellations and non-renewals of existing Client Contracts, subject to specified notice requirements;

•differences between the recurring license start date and the date the Client Contract is executed due to, for example, contracts with onboarding periods or fee waiver periods;

•fluctuations in asset-based fees, which may result from changes in certain investment products’ total expense ratios, market movements, including foreign currency exchange rates, or from investment inflows into and outflows from investment products linked to our indexes;

•fluctuations in fees based on trading volumes of futures and options contracts linked to our indexes;

•price changes or discounts;

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•revenue recognition differences under U.S. GAAP, including those related to the timing of implementation and report deliveries for certain of our products and services;

•fluctuations in the number of hedge funds for which we provide investment information and risk analysis to hedge fund investors;

•fluctuations in foreign currency exchange rates; and

•the impact of acquisitions and divestitures.

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The following table presents Run Rates by reportable segment as of the dates indicated and the growth percentages over the periods indicated:


		As of				% Change			As of				% Change
(in thousands)	(in thousands)	March 31, 2023		March 31, 2022				(in thousands)	September 30, 2023		September 30, 2022
Index:	Index:							Index:
Recurring subscriptions	Recurring subscriptions	$	795,621	$	711,113	11.9	%	Recurring subscriptions	$	835,334	$	750,818	11.3	%
Asset-based fees	Asset-based fees	534,491		576,234		(7.2	%)	Asset-based fees	545,548		479,399		13.8	%
Index total	Index total	1,330,112		1,287,347		3.3	%	Index total	1,380,882		1,230,217		12.2	%

Analytics	Analytics	621,611		588,447		5.6	%	Analytics	639,462		597,752		7.0	%

ESG and Climate	ESG and Climate	278,947		216,197		29.0	%	ESG and Climate	297,297		237,930		25.0	%

All Other - Private Assets	All Other - Private Assets	148,440		137,532		7.9	%	All Other - Private Assets	150,749		137,401		9.7	%

Total Run Rate	Total Run Rate	$	2,379,110	$	2,229,523	6.7	%	Total Run Rate	$	2,468,390	$	2,203,300	12.0	%

Recurring subscriptions total	Recurring subscriptions total	$	1,844,619	$	1,653,289	11.6	%	Recurring subscriptions total	$	1,922,842	$	1,723,901	11.5	%
Asset-based fees	Asset-based fees	534,491		576,234		(7.2	%)	Asset-based fees	545,548		479,399		13.8	%
Total Run Rate	Total Run Rate	$	2,379,110	$	2,229,523	6.7	%	Total Run Rate	$	2,468,390	$	2,203,300	12.0	%

Total Run Rate increased ~~6.7%~~12.0%, driven by an ~~11.6%~~11.5% increase from recurring subscriptions ~~partially offset by~~and a ~~7.2% decrease~~13.8% increase from asset-based fees. Adjusting for the impact of foreign currency exchange rate fluctuations, recurring subscriptions Run Rate would have increased ~~12.1%~~10.7%.

Run Rate from Index recurring subscriptions increased ~~11.9%~~11.3%, primarily driven by ~~strong~~ growth from market cap-weighted products and custom Index products and special ~~packages, and factor, ESG and climate products.~~packages. The increase reflected growth across all regions and client segments.

Run Rate from Index asset-based fees ~~decreased 7.2%~~increased 13.8%, ~~primarily~~ driven by ~~lower~~higher AUM in ~~non-ETF indexed funds linked to MSCI indexes and~~ ETFs linked to MSCI equity indexes.

Run Rate from Analytics products increased ~~5.6%~~7.0%, primarily driven by ~~strong growth in Equity Analytics products as well as~~ growth in Multi-Asset Class and Equity Analytics products, and reflected growth across all regions. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics Run Rate would have increased ~~6.3%~~6.2%.

Run Rate from ESG and Climate products increased ~~29.0%~~25.0%, driven by strong growth in Ratings, Climate and Screening ~~products with contributions across all regions and client segments.~~products. Adjusting for the impact of foreign currency exchange rate fluctuations, ESG and Climate Run Rate would have increased ~~29.9%~~21.9%.

Run Rate from All Other - Private Assets increased ~~7.9%~~9.7%, primarily driven by growth in Index Intel, RCA ~~Global Intel, Enterprise Analytics, Datscha~~ and ~~Climate Value-at-Risk~~Performance Insights products, ~~partially offset by unfavorable foreign currency exchange rate fluctuations.~~and reflected growth across all regions. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other - Private Assets Run Rate would have increased ~~10.4%~~7.5%.

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Sales

Sales represents the annualized value of products and services clients commit to purchase from MSCI and will result in additional operating revenues. Non-recurring sales represent the actual value of the customer agreements entered into during the period and are not a component of Run Rate. New recurring subscription sales represent additional selling activities, such as new customer agreements, additions to existing agreements or increases in price that occurred during the period and are additions to Run Rate. Subscription cancellations reflect client activities during the period, such as discontinuing products and services and/or reductions in price, resulting in reductions to Run Rate. Net new recurring subscription sales represent the amount of new recurring subscription sales net of subscription cancellations during the period, which reflects the net impact to Run Rate during the period.

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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.

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The following table presents our recurring subscription sales, cancellations and non-recurring sales by reportable segment for the periods indicated:


		Three Months Ended				% Change			Three Months Ended				% Change			Nine Months Ended					% Change
(in thousands)	(in thousands)	March 31, 2023		March 31, 2022				(in thousands)	September 30, 2023		September 30, 2022				September 30, 2023			September 30, 2022
New recurring subscription sales	New recurring subscription sales							New recurring subscription sales
Index	Index	$	25,090	$	22,417	11.9	%	Index	$	23,978	$	24,130	(0.6	%)		$	80,156		$	74,493	7.6	%
Analytics	Analytics	13,674		14,069		(2.8	%)	Analytics	18,787		17,568		6.9	%		50,751			50,391		0.7	%
ESG and Climate	ESG and Climate	12,486		19,142		(34.8	%)	ESG and Climate	12,124		14,270		(15.0	%)		38,497			55,617		(30.8	%)
All Other - Private Assets	All Other - Private Assets	5,143		5,559		(7.5	%)	All Other - Private Assets	4,788		5,218		(8.2	%)		14,746			16,490		(10.6	%)
New recurring subscription sales total	New recurring subscription sales total	56,393		61,187		(7.8	%)	New recurring subscription sales total	59,677		61,186		(2.5	%)		184,150			196,991		(6.5	%)

Subscription cancellations	Subscription cancellations							Subscription cancellations
Index	Index	(7,082)		(5,920)		19.6	%	Index	(7,402)		(5,388)		37.4	%		(22,617)			(18,468)		22.5	%
Analytics	Analytics	(9,183)		(8,128)		13.0	%	Analytics	(7,543)		(6,029)		25.1	%		(24,094)			(22,523)		7.0	%
ESG and Climate	ESG and Climate	(2,635)		(643)		309.8	%	ESG and Climate	(2,639)		(1,303)		102.5	%		(7,331)			(3,315)		121.1	%
All Other - Private Assets	All Other - Private Assets	(2,856)		(1,978)		44.4	%	All Other - Private Assets	(3,153)		(1,744)		80.8	%		(8,634)			(5,080)		70.0	%
Subscription cancellations total	Subscription cancellations total	(21,756)		(16,669)		30.5	%	Subscription cancellations total	(20,737)		(14,464)		43.4	%		(62,676)			(49,386)		26.9	%

Net new recurring subscription sales	Net new recurring subscription sales							Net new recurring subscription sales
Index	Index	18,008		16,497		9.2	%	Index	16,576		18,742		(11.6	%)		57,539			56,025		2.7	%

Analytics	Analytics	4,491		5,941		(24.4	%)	Analytics	11,244		11,539		(2.6	%)		26,657			27,868		(4.3	%)

ESG and Climate	ESG and Climate	9,851		18,499		(46.7	%)	ESG and Climate	9,485		12,967		(26.9	%)		31,166			52,302		(40.4	%)

All Other - Private Assets	All Other - Private Assets	2,287		3,581		(36.1	%)	All Other - Private Assets	1,635		3,474		(52.9	%)		6,112			11,410		(46.4	%)

Net new recurring subscription sales total	Net new recurring subscription sales total	34,637		44,518		(22.2	%)	Net new recurring subscription sales total	38,940		46,722		(16.7	%)		121,474			147,605		(17.7	%)

Non-recurring sales	Non-recurring sales							Non-recurring sales
Index	Index	12,782		13,715		(6.8	%)	Index	14,679		13,375		9.7	%		54,365			41,357		31.5	%
Analytics	Analytics	1,370		3,489		(60.7	%)	Analytics	3,206		2,505		28.0	%		8,734			8,412		3.8	%
ESG and Climate	ESG and Climate	1,219		1,308		(6.8	%)	ESG and Climate	1,532		1,375		11.4	%		4,066			3,553		14.4	%
All Other - Private Assets	All Other - Private Assets	213		152		40.1	%	All Other - Private Assets	262		83		215.7	%		1,069			690		54.9	%
Non-recurring sales total	Non-recurring sales total	15,584		18,664		(16.5	%)	Non-recurring sales total	19,679		17,338		13.5	%		68,234			54,012		26.3	%

Gross sales	Gross sales							Gross sales
Index	Index	$	37,872	$	36,132	4.8	%	Index	$	38,657	$	37,505	3.1	%		$	134,521		$	115,850	16.1	%

Analytics	Analytics	15,044		17,558		(14.3	%)	Analytics	21,993		20,073		9.6	%		59,485			58,803		1.2	%

ESG and Climate	ESG and Climate	13,705		20,450		(33.0	%)	ESG and Climate	13,656		15,645		(12.7	%)		42,563			59,170		(28.1	%)

All Other - Private Assets	All Other - Private Assets	5,356		5,711		(6.2	%)	All Other - Private Assets	5,050		5,301		(4.7	%)		15,815			17,180		(7.9	%)

Total gross sales	Total gross sales	$	71,977	$	79,851	(9.9	%)	Total gross sales	$	79,356	$	78,524	1.1	%		$	252,384		$	251,003	0.6	%

Net sales	Net sales							Net sales
Index	Index	$	30,790	$	30,212	1.9	%	Index	$	31,255	$	32,117	(2.7	%)		$	111,904		$	97,382	14.9	%

Analytics	Analytics	5,861		9,430		(37.8	%)	Analytics	14,450		14,044		2.9	%		35,391			36,280		(2.5	%)

ESG and Climate	ESG and Climate	11,070		19,807		(44.1	%)	ESG and Climate	11,017		14,342		(23.2	%)		35,232			55,855		(36.9	%)

All Other - Private Assets	All Other - Private Assets	2,500		3,733		(33.0	%)	All Other - Private Assets	1,897		3,557		(46.7	%)		7,181			12,100		(40.7	%)

Total net sales	Total net sales	$	50,221	$	63,182	(20.5	%)	Total net sales	$	58,619	$	64,060	(8.5	%)		$	189,708		$	201,617	(5.9	%)

A significant portion of MSCI's operating revenues are derived from subscriptions or licenses of products and services, which are provided over contractually-agreed periods of time that are subject to renewal or cancellation at the end of current contract terms.

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Retention Rate

The following table presents our Retention Rate by reportable segment for the periods indicated:


		Three Months Ended March 31,			Three Months Ended September 30,		Nine Months Ended September 30,
		2023	2022		2023	2022	2023	2022
Index	Index	96.4%	96.6%	Index	96.2%	96.9%	96.1%	96.5%
Analytics	Analytics	94.0%	94.4%	Analytics	95.1%	95.9%	94.8%	94.9%
ESG and Climate	ESG and Climate	96.1%	98.7%	ESG and Climate	96.0%	97.4%	96.3%	97.8%
All Other - Private Assets	All Other - Private Assets	92.1%	94.1%	All Other - Private Assets	91.3%	94.8%	92.1%	95.0%

Total	Total	95.2%	95.9%	Total	95.4%	96.4%	95.4%	95.9%

Retention Rate is an important metric because subscription cancellations decrease our Run Rate and ultimately our future operating revenues over time. The annual Retention Rate represents the retained subscription Run Rate (subscription Run Rate at the beginning of the fiscal year less actual cancels during the year) as a percentage of the subscription Run Rate at the beginning of the fiscal year.

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 Run Rate at the beginning of the fiscal year to calculate a cancellation rate. This cancellation rate is then subtracted from 100% to derive the annualized Retention Rate for the period.

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 Run Rate attributable to assets in index-linked investment products or futures and options contracts, in each case, linked to our indexes.

Retention Rate is generally higher during the first three quarters and lower in the fourth quarter, as the fourth quarter is traditionally the largest renewal period in the year.

Critical Accounting Policies and Estimates

We describe our significant accounting policies in Note 1, “Introduction and Basis of Presentation,” of the Notes to Consolidated Financial Statements included in our Form 10-K. There have been no significant changes in our accounting policies since the end of the fiscal year ended December 31, 2022 or critical accounting estimates applied in the fiscal year ended December 31, 2022.

Liquidity and Capital Resources

We require capital to fund ongoing operations, internal growth initiatives and acquisitions. Our primary sources of liquidity are cash flows generated from our operations, existing cash and cash equivalents and credit capacity under our existing credit facility. In addition, we believe we have access to additional funding in the public and private markets. We intend to use these sources of liquidity to, among other things, service our existing and future debt obligations, fund our working capital requirements for capital expenditures, investments, acquisitions and dividend payments, and make repurchases of our common stock. In connection with our business strategy, we regularly evaluate acquisition and strategic partnership ~~opportunities.~~opportunities, including our acquisition of Burgiss on October 2, 2023. The Company used available cash to fund the acquisition of the remaining interest in Burgiss. We believe our liquidity, along with other financing alternatives, will provide the necessary capital to fund these transactions and achieve our planned growth.

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Senior Notes and Credit Agreement

As of ~~March 31,~~September 30, 2023, we had an aggregate of $4,200.0 million in Senior Notes outstanding. In addition, under the Credit Agreement, we had as of ~~March 31,~~September 30, 2023: (i) an aggregate of ~~$345.6~~$341.3 million in Tranche A Term Loans outstanding under the TLA Facility and (ii) $500 million of undrawn borrowing capacity under the revolving credit facility. See Note 7, “Commitments and Contingencies,” of the Notes to Condensed Consolidated Financial Statements (Unaudited) included herein for additional information on our outstanding indebtedness and revolving credit facility.

The Senior Notes and the Credit Agreement are fully and unconditionally, and jointly and severally, guaranteed by our direct or indirect wholly owned domestic subsidiaries that account for more than 5% of our and our subsidiaries’ consolidated assets, other than certain excluded subsidiaries (the “subsidiary guarantors”). Amounts due under the Credit Agreement are our and the subsidiary guarantors’ senior unsecured obligations and rank equally with the Senior Notes and any of our other unsecured, unsubordinated debt, senior to any of our subordinated debt and effectively subordinated to our secured debt to the extent of the assets securing such debt.

The indentures governing our Senior Notes (the “Indentures”) among us, each of the subsidiary guarantors, and Computershare, National Association, as trustee and successor to Wells Fargo Bank, National Association, contain covenants that limit our and ~~certain of~~ our subsidiaries’ ability to, among other things, incur liens, enter into sale/leaseback transactions and consolidate, merge or sell all or substantially all of our assets. In addition, the Indentures restrict our non-guarantor subsidiaries’ ability to create, assume, incur or guarantee additional indebtedness without such non-guarantor subsidiaries guaranteeing the Senior Notes on a pari passu basis.

The Credit Agreement ~~contains affirmative~~governing the TLA Facility and ~~restrictive~~the revolving credit facility also contains covenants that limit our and our subsidiaries’ ability to, among other things, ~~limit our ability and/or the ability of our existing or future subsidiaries to:~~

•~~incur liens and further negative pledges;~~

•incur additional indebtedness, ~~or prepay, redeem or repurchase indebtedness;~~

•~~make loans or hold investments;~~

•~~merge, dissolve, liquidate, consolidate with or into another person;~~

•~~enter into acquisition transactions;~~

•~~enter into sale/leaseback transactions;~~

•~~issue disqualified capital stock;~~

•incur liens, pay dividends or make other distributions in respect of ~~our~~ capital stock or engage in certain types of stock repurchases, redemptions and other restricted ~~payments;~~

•~~create new subsidiaries;~~

•~~permit certain restrictions affecting our subsidiaries;~~

•~~change the nature~~payments, enter into sale/leaseback transactions and consolidate, merge or sell all or substantially all of our ~~business, accounting policies or fiscal periods;~~

•~~enter into any transactions with affiliates other than on an arm’s-length basis; and~~

•~~amend our organizational documents or amend, modify or change the terms of certain agreements relating to our indebtedness.~~assets.

The Credit Agreement and the Indentures also contain customary events of default, including those relating to non-payment, breach of representations, warranties or covenants, cross-default and cross-acceleration, and bankruptcy and insolvency events, and, in the case of the Credit Agreement, invalidity or impairment of loan documentation, change of control and customary ERISA defaults in addition to the foregoing. None of the restrictions detailed above are expected to impact our ability to effectively operate the business.

The Credit Agreement also requires us and our subsidiaries to achieve financial and operating results sufficient to maintain compliance with the following financial ratios on a consolidated basis through the termination of the Credit Agreement: (1) the maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) measured quarterly on a rolling four-quarter basis not to exceed 4.25:1.00 (or 4.50:1.00 for two fiscal quarters following a material acquisition) and (2) the minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) measured quarterly on a rolling four-quarter basis of at least 4.00:1.00. As of ~~March 31,~~September 30, 2023, our Consolidated Leverage Ratio was ~~3.00:~~2.77:1.00 and our Consolidated Interest Coverage Ratio was ~~8.36:~~8.46:1.00.

Our non-guarantor subsidiaries under the Senior Notes and the Credit Agreement consist of: (i) domestic subsidiaries of the Company that account for 5% or less of consolidated assets of the Company and its subsidiaries and (ii) any foreign or domestic subsidiary of the Company that is deemed to be a controlled foreign corporation within the meaning of Section 957 of the Internal

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Revenue Code of 1986, as amended. Our non-guarantor subsidiaries accounted for approximately ~~$1,391.0~~$1,498.8 million, or ~~61.0%~~62.1%, of our total revenue for the trailing 12 months ended ~~March 31,~~September 30, 2023, approximately ~~$561.0~~$656.6 million, or ~~45.5%~~49.6%, of our consolidated operating income for the trailing 12 months ended ~~March 31,~~September 30, 2023, and approximately ~~$963.6~~$853.5 million, or ~~19.0%~~17.5%, of our consolidated total assets (excluding intercompany assets) and ~~$835.8~~$848.9 million, or ~~14.0%~~14.4%, of our consolidated total liabilities, in each case as of ~~March 31,~~September 30, 2023.

Share Repurchases

The following table provides information with respect to repurchases of the Company’s common stock pursuant to open market repurchases:

Three Months Ended
(in thousands except per share data)
Average
Price
Paid Per
Share Total
Number of
Shares
Repurchased Dollar
Value of
Shares
Repurchased
March 31, 2023 $ — — $ —
March 31, 2022 $ 515.74 1,498 $ 772,657


Nine months ended (in thousands except per share data)	Average Price Paid Per Share		Total Number of Shares Repurchased	Dollar Value of Shares Repurchased(1)
September 30, 2023	$	468.26	980	$	458,721
September 30, 2022	$	473.26	2,567	$	1,214,695

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As of ~~March 31,~~September 30, 2023, there was ~~$1,304.4~~$845.7 million of available authorization remaining under the 2022 Repurchase Program. This authorization may be modified, suspended or terminated by the Board of Directors at any time without prior notice.

Cash Dividends

On ~~April 24,~~October 30, 2023, the Board of Directors declared a quarterly cash dividend of $1.38 per share for the three months ending ~~June 30,~~December 31, 2023. The ~~second~~fourth quarter 2023 dividend is payable on ~~May 31,~~November 30, 2023 to shareholders of record as of the close of trading on ~~May 12,~~November 9, 2023.

Cash Flows

The following table presents the Company’s cash and cash equivalents, including restricted cash, as of the dates indicated:


		As of					As of
(in thousands)	(in thousands)	March 31, 2023		December 31, 2022		(in thousands)	September 30, 2023		December 31, 2022
Cash and cash equivalents (includes restricted cash of $3,871 and $368 at March 31, 2023 and December 31, 2022, respectively)		$	1,080,608	$	993,564
Cash and cash equivalents (includes restricted cash of $3,839 and $368 at September 30, 2023 and December 31, 2022, respectively)						Cash and cash equivalents (includes restricted cash of $3,839 and $368 at September 30, 2023 and December 31, 2022, respectively)	$	928,552	$	993,564

We typically seek to maintain minimum cash balances globally of approximately $225.0 million to $275.0 million for general operating purposes. As of ~~March 31,~~September 30, 2023 and December 31, 2022, ~~$278.9~~$181.8 million and $344.5 million, respectively, of the Company’s cash and cash equivalents were held by foreign subsidiaries. Repatriation of some foreign cash may be subject to certain withholding taxes in local jurisdictions and other distribution restrictions. We believe the global cash and cash equivalent balances that are maintained will be available to meet our global needs whether for general corporate purposes or other needs, including acquisitions or expansion of our products.

We believe that global cash flows from operations, together with existing cash and cash equivalents and funds available under our existing revolving credit facility and our ability to access bank debt, private debt and the capital markets for additional funds, will continue to be sufficient to fund our global operating activities and cash commitments for investing and financing activities, such as material capital expenditures and share repurchases, for at least the next 12 months and for the foreseeable future thereafter. In addition, we expect that foreign cash flows from operations, together with existing cash and cash equivalents, will continue to be sufficient to fund our foreign operating activities and cash commitments for investing activities, such as material capital expenditures, for at least the next 12 months and for the foreseeable future thereafter.

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Net Cash Provided by (Used In) Operating, Investing and Financing Activities


		Three Months Ended March 31,					Nine Months Ended September 30,
(in thousands)	(in thousands)	2023		2022		(in thousands)	2023		2022
Net cash provided by operating activities	Net cash provided by operating activities	$	264,141	$	244,184	Net cash provided by operating activities	$	847,076	$	779,942
Net cash (used in) investing activities	Net cash (used in) investing activities	(21,762)		(15,310)		Net cash (used in) investing activities	(69,411)		(52,413)
Net cash (used in) provided by financing activities	Net cash (used in) provided by financing activities	(158,293)		(966,117)		Net cash (used in) provided by financing activities	(842,364)		(1,252,827)
Effect of exchange rate changes	Effect of exchange rate changes	2,958		(4,891)		Effect of exchange rate changes	(313)		(29,039)
Net (decrease) increase in cash, cash equivalents and restricted cash	Net (decrease) increase in cash, cash equivalents and restricted cash	$	87,044	$	(742,134)	Net (decrease) increase in cash, cash equivalents and restricted cash	$	(65,012)	$	(554,337)

Cash Flows From Operating Activities

Cash flows from operating activities consist of net income adjusted for certain non-cash items and changes in assets and liabilities. The year-over-year change was primarily driven by ~~lower payments for cash expenses as well as~~ higher cash collections from customers, partially offset by higher ~~payments for interest expense.~~income tax payments.

Our primary uses of cash from operating activities ~~are~~are for the payment of cash compensation expenses, income taxes, interest expenses, ~~income taxes,~~ technology costs, professional fees, market data costs and office rent. Historically, the payment of cash for compensation and benefits is at its highest level in the first quarter when we pay discretionary employee compensation related to the previous fiscal year.

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Cash Flows From Investing Activities

The year-over-year change was primarily driven by higher capital expenditures and capitalized software development costs.

Cash Flows From Financing Activities

The year-over-year change was primarily driven by ~~the impact of~~ lower share repurchases, partially offset by the absence of proceeds from borrowings and by higher dividend ~~payments.~~payments..

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Foreign Currency Risk

We are subject to foreign currency exchange fluctuation risk. Exchange rate movements can impact the U.S. dollar-reported value of our revenues, expenses, assets and liabilities denominated in non-U.S. dollar currencies or where the currency of such items is different than the functional currency of the entity where these items were recorded.

We generally invoice our clients in U.S. dollars; however, we invoice a portion of our clients in Euros, British pounds sterling, Japanese yen and a limited number of other non-U.S. dollar currencies. For the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, ~~17.2%~~17.0% and ~~16.2%~~15.8%, respectively, of our revenues are subject to foreign currency exchange rate risk and primarily included clients billed in foreign currency as well as U.S. dollar exposures on non-U.S. dollar foreign operating entities. Of the ~~17.2%~~17.0% of non-U.S. dollar exposure for the ~~three~~nine months ended ~~March 31,~~September 30, 2023, ~~41.2%~~41.7% was in Euros, ~~31.3%~~32.5% was in British pounds sterling and ~~18.2%~~17.6% was in Japanese yen. Of the ~~16.2%~~15.8% of non-U.S. dollar exposure for the ~~three~~nine months ended ~~March 31,~~September 30, 2022, ~~40.2%~~40.8% was in Euros, ~~28.3%~~30.2% was in British pounds sterling and ~~19.8%~~19.2% was in Japanese yen.

Revenues from asset-based fees represented ~~22.5%~~22.4% and ~~25.9%~~24.1% of operating revenues for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, respectively. While a substantial portion of our asset-based fees are invoiced in U.S. dollars, the fees are based on the assets in investment products, of which approximately three-fifths are invested in securities denominated in currencies other than the U.S. dollar. Accordingly, declines in such other currencies against the U.S. dollar will decrease the fees payable to us under such licenses. In addition, declines in such currencies against the U.S. dollar could impact the attractiveness of such investment products resulting in net fund outflows, which would further reduce the fees payable under such licenses.

We are exposed to additional foreign currency risk in certain of our operating costs. Approximately ~~43.5%~~43.4% and ~~44.2%~~42.9% of our operating expenses for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, respectively, were denominated in foreign currencies, the significant majority of which were denominated in British pounds sterling, Indian rupees, Euros, Hungarian forints, Mexican pesos and Swiss francs.

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We have certain monetary assets and liabilities denominated in currencies other than local functional amounts and when these balances are remeasured into their local functional currency, either a gain or a loss results from the change of the value of the functional currency as compared to the originating currencies. We manage foreign currency exchange rate risk, in part, through the use of derivative financial instruments comprised principally of forward contracts on foreign currency which are not designated as hedging instruments for accounting purposes. The objective of the derivative instruments is to minimize the impact on the income statement of the volatility of amounts denominated in certain foreign currencies. We recognized total foreign currency exchange losses of ~~$2.3~~$2.9 million and gains of ~~$1.4~~$2.7 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, respectively.

Item 4. Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have evaluated our disclosure controls and procedures, as defined in Rule 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), as of ~~March 31,~~September 30, 2023, and have concluded that these disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time specified in the SEC’s rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended ~~March 31,~~September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Various lawsuits, claims and proceedings have been or may be instituted or asserted against the Company in the ordinary course of business. While the amounts claimed could be substantial, the ultimate liability cannot now be determined because of the considerable uncertainties that exist. Therefore, it is possible that MSCI’s business, operating results, financial condition or cash flows in a particular period could be materially affected by certain contingencies. However, based on facts currently available, management believes that the disposition of matters that are currently pending or asserted will not, individually or in the aggregate, have a material effect on MSCI’s business, operating results, financial condition or cash flows.

Item 1A. Risk Factors

For a discussion of the risk factors affecting the Company, see “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for fiscal year ended December 31, 2022.

There have been no material changes to the risk factors and uncertainties known to the Company and disclosed in the Company’s Form 10-K for the fiscal year ended December 31, 2022, that, if they were to materialize or occur, would, individually or in the aggregate, have a material effect on MSCI’s business, operating results, financial condition or cash flows.

Item 2. Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities

There were no unregistered sales of equity securities during the three months ended ~~March 31,~~September 30, 2023.

The table below presents information with respect to purchases made by or on behalf of the Company of its shares of common stock during the three months ended ~~March 31,~~September 30, 2023.

Issuer Purchases of Equity Securities

Period
Total
Number of
Shares
Purchased(1)
Average Price
Paid
Per Share Total
Number of
Shares
Purchased
As Part of
Publicly
Announced
Plans
or Programs
Approximate
Dollar
Value of Shares
that May Yet
Be
Purchased
Under
the Plans or
Programs(2)
January 1, 2023-January 31, 2023 — $ — — $ 1,304,379,000
February 1, 2023-February 28, 2023 78,902 $ 557.53 — $ 1,304,379,000
March 1, 2023-March 31, 2023 — $ — — $ 1,304,379,000
Total 78,902 $ 557.53 — $ 1,304,379,000


Period	Total Number of Shares Purchased(1)	Average Price Paid Per Share(2)		Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(3)
July 1, 2023 - July 31, 2023	39,178	$	468.65	38,263	$	845,668,000
August 1, 2023 - August 31, 2023	487	$	544.39	—	$	845,668,000
September 1, 2023 - September 30, 2023	277	$	535.25	—	$	845,668,000
Total	39,942	$	470.04	38,263	$	845,668,000

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(1)Includes, when applicable, (i) shares purchased by the Company on the open market under the stock repurchase program; (ii) shares withheld to satisfy tax withholding obligations on behalf of employees that occur upon vesting and delivery of outstanding shares underlying restricted stock units; and (iii) shares held in treasury under the MSCI Inc. Non-Employee Directors Deferral Plan. The value of shares withheld to satisfy tax withholding obligations was determined using the fair market value of the Company’s common stock on the date of withholding, using a valuation methodology established by the Company.

(2)Excludes 1% excise tax incurred on share repurchases.

(3)See Note 9, “Shareholders’ Equity (Deficit),” of the Notes to the Unaudited Condensed Consolidated Financial Statements included herein for further information regarding our stock repurchase program.

Item 5. Other Information

During the three months ended September 30, 2023, none of the Company’s directors or officers, as defined in Section 16 of the Exchange Act, adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K of the Exchange Act.

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Item 6. Exhibits

EXHIBIT INDEX


	Exhibit Number	Description

	3.1	Third Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to the Company’s Form 10-Q (File No. 001-33812), filed with the SEC on May 4, 2012 and incorporated by reference herein)

	3.2	Amended and Restated Bylaws (filed as Exhibit 3.1 to the Company’s Form 8-K (File No. 001-33812), filed with the SEC on January 11, 2021 and incorporated by reference herein)

*	31.1	Rule 13a-14(a) Certification of the Chief Executive Officer

*	31.2	Rule 13a-14(a) Certification of the Chief Financial Officer

**	32.1	Section 1350 Certification of the Chief Executive Officer and the Chief Financial Officer

*	101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

*	101.SCH	Inline XBRL Taxonomy Extension Schema Document

*	101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document

*	101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document

*	101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

*	101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document

*	104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

___________________________

*Filed herewith.

**Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: ~~April 25,~~October 31, 2023


			MSCI INC. (Registrant)

			By:			/s/ Andrew C. Wiechmann
						Andrew C. Wiechmann Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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Period	Total Number of Shares Purchased(1)	Average Price Paid Per Share		Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(2)
January 1, 2023-January 31, 2023	—	$	—	—	$	1,304,379,000
February 1, 2023-February 28, 2023	78,902	$	557.53	—	$	1,304,379,000
March 1, 2023-March 31, 2023	—	$	—	—	$	1,304,379,000
Total	78,902	$	557.53	—	$	1,304,379,000