MSCI - Earnings call transcript Q2 2022

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Operator

Good day, and welcome to the MSCI Second Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] As a reminder, please note, this event is being recorded. I would now like to turn the conference over to Jeremy Ulan, Head of Investor Relations and Treasurer. ahead. go Please

Jeremy Ulan

second Good Quarter Vice. we welcome the for to a Thank presentation Earnings under This on will tab. the day, a Conference quarterly Second the results Investor our this XXXX release an morning, XXXX. Call. on MSCI press available as reference update well you, Relations announcing we and quarter Earlier issued are press as our with release, brief along earnings call website, msci.com this

this that you remind contains forward-looking me Let call statements.

You date undue today’s which of on are are reliance on speak only language not to slide cautioned place they presentation. and forward-looking as on made the second statements, of are by the governed the which

factors XX-K statements recent and our most For in and in forward-looking uncertainties, discussion a additional risk risks disclaimer Form of other and SEC our filings. the please see

to EBITDA the period-to-period measures, to call, presented believe adjusted EBITDA, comparisons not today’s operating of During measures insight our but performance. free and and our refer core including, results addition also non-GAAP GAAP, into meaningful non-GAAP flow. facilitate cash U.S. expenses, EPS in We adjusted adjusted we to, provide on basis limited

earnings in You’ll be as of the to a GAAP earnings presentation. uses these information equivalent management explanation appendix how find and the materials meaningful the an why measures of this reconciliation deem well we the to as in measures

time, the we months, SEC of for of variety discuss rate, agreements in subject exclusions a value run point which annualized also and that a will in recurring at adjustments to We XX filings. our our revenues estimates, the next the client detail under particular

undue differ amount months on adjustments revenues run to revenues. and a over will or run caution to We recurring estimate rate As of therefore will rate. the place recurring not we following you of exclusions, forecast the reliance realize those actual XX from result

acquisitions or discuss currency the divestitures. of impact any also impact changes which figures, organic and will in foreign of We growth exclude the

the and Pettit, Chief our President On COO; Baer call and our Wiechmann, Officer. Andy are today Financial

point on morning that let of mode. to to I the be With out members call media this like Baer? turn now Pettit. may over the Finally, call me would Baer in a that, listen-only the

Baer Pettit

you, everyone, wanted Jeremy, say fine. call for today, He Henry won’t bit under joining so I Hey woke go morning forward feeling he on us welcome, as thank today. be and and us normal. and a we’ll you to just thank up weather, this the just joining was is but the

new Since out building formally M&A Relations talk So as before XX growth our a processes. to of our he’s years roles and performance, held planning Jeremy supporting like our variety I Head and Investor and partnerships, forecasting of strategy, about I’d introduce MSCI’s Treasurer. financial joining MSCI ago, while

institutional better experience role. excited and in have His understand We’re him this strategy will to investors and our opportunities. help knowledge

XX% Looking strong external recurring and a headline in back second our quarter of new sales the on second us achievements, sales. difficult results from XX.X% a ago, quarter net second the XX.X%. to achieved in EPS retention of drive adjusted year XXXX. growth XX.X% run up from MSCI up subscription also organic posted helped environment. quarter, levels we MSCI a growth, rate, of subscription This new and XX% total record rate contributed recurring Meanwhile, delivered Among

the billion. $X.X $XXX of total per for at share, year On nearly shares to we bringing another our an price million the front, average worth capital $XXX repurchased of

volatility. share rates acquisitions and and loan, also ahead opportunistic for through We buybacks. term the the raised greater all rising a million us this in against rapidly did We historic interest bolt-on flexibility market inflation, backdrop $XXX months of giving

again, companies franchise. on MSCI are being has this a during bull Time the successful like say, prides Any As MSCI company which market. and Moments appear itself we met an show always all-weather truly challenge. can resilient.

During help are and turbulence. we re-priced navigate well-positioned data of capitalize assets financial to our become periods on Today, research investors relevant. and more even instability,

are focused monitoring well-positioned market We make strategic also right our the is on MSCI to is the team and for accelerators, possibilities. small if opportunities emerge. bolt-on acquisitions

we Even in growth, investing vigilant seen protecting we remain demand environment, the margins. will about Despite profit continue solutions. have as long-term we not slowdown in a macro our our for

and brings experience Bondolowski Hewlett-Packard across see and world-class In fact, us Coca-Cola. as continued brands from Marketing hired such MSCI Cristina work across we deepen our stakeholders with we Cristina even our become relationships help new Board. strength the recently will decades segments most of geographies. client-centric, more Chief as Her at To Officer.

I recognize to we thrives. like drill greater market posed global the down in are these by areas ahead, said the moments Looking Fixed few including a I’d Climate, into Income. and now as challenges earlier, MSCI trends. Analytics But depth, when

market I across turmoil, growth strong to Before important we with have seeing was do to of external I the the lead all continue in client from Despite MSCI so, environment, it thought our clients. view segments. what is

we remains pipeline and is Our have evidence that no it slowing. robust,

can manage MSCI period role of investments. this play understand their our turbulence, financial During in economic helping critical solutions a them clients and that adapt and

performance the and of strength Our our confirms durable diversified quarter franchise. second

Let custom ever of me excluding RCA. business, recorded growth and recurring segments regions, and subscription growth in of new run second of run Climate, best double-digit for hedge all Among run and rate ESG recurring index In increased linked we XX%, in posted management under by banks, managers, assets delivered ETFs and to growth funds growth of subscription with total XX%. rate XX%, subscription spotlight along rate sales where some our especially Index wealth growth. posted ESG indexes Meanwhile, run geographies rate we strong In growth our XX% we total sales. organic the XX%. net quarter of MSCI subscription our

as we This XX% equity sales In well new by XX%. was as a risk analytics robust in by delivered and management terms solutions of cancels. factor services, driven with sales growth specific and increasing products growth reduction net in models

recurring retention of XX%. XX% strong Analytics a growth sales posted also We rate and of for

Futures that of one by listed from trading There’s the Euro volume of increased fastest-growing strong growth parts our World, represents addition, no & and Climate with Options our contracts. franchise. EAFE XX%, In question

discuss Let concrete quarter. few second a milestones the from me

last bonds and also provide partner prominent we MSCI growing helps of climate foot-printing better be to portfolio across their Just our and portfolios. a climate modeling able a MSCI private to securitized analytics with to municipal launched assets. loans, this emissions tool, on analysis tool, total infrastructure products. of general an which lending carbon And With range have institutions and our agreement investment will for month, new measure financial extended completed we the portfolio companies. private provide

Climate continues that manager with a major ESG private deal across gain asset and for Analytics, larger completed and we first The Lab Climate our addition, momentum. Enterprise to assets. Enterprise pipeline Lab cuts In Climate

for models This that the Tool sustainability, with named by illustrates the now both also is efficiency Year aligned temperature different new machine innovative companies quarter of factor we the the update offer the second climate latest one ESG tools temperature quarter, Environmental series Decisions To our pleased growth align with one ESG franchise. second and and is We’re metric most Net was our iteration Insights significant the business. equity our Climate launched of of Assessment launched across in crowding first listed scenarios. Finance. MSCI factors. includes how a milestone, and in components. MSCI of learning XXXX, a to company, In carbon strong including released our models, The rise model driving factor rise Investment Analytics index implied which Zero final cite including tracker, sustainability

will We will available several models including the us Using onboarding accelerate make Snowflake channels, distribution Data these client help Cloud. through process. dramatically Snowflake’s

also enrich capabilities developing our from BarraOne. Manager content by create greatly We’re user results This Risk will and capabilities. even combining an to and experience better analytical

experience Analytics applications. We through applications. are user Investment It iSaaS flexibility for interact gives reducing new while and to with time market our how away in greater legacy our further MSCI’s solutions-as-a-service enhancing products our represents a the services. in they pivot from clients Analytics

reflects client broader on of centricity. focus our All this

clients indexing personalize be continue at investment want As expanding client progress to that we direct to able part make of scale our We their index. focus, to capabilities. to designed help through in strategies

custom were As We of run earlier, basis as asset-based products of second revenue. indexes custom our the I the of in index-linked delivered XX% within traction index MSCI growing fee quarter. subscription growth seeing mentioned rate

also building We’re in momentum Fixed Income.

MarketAxess use all-to-all Meanwhile, XX% innovative in their with In that franchise portfolios. Fixed I just our volatility the Holdings portfolio credibility sustainable pricing over like analytics ratings to financial team continue In solutions. liquid fact, will MarketAxess more this during Income – will run that, during Fixed investing markets, co-branded posted I growth. the developed on rate to to help see growth solutions With Analytics and partnership, MSCI’s turn and to in and with MSCI Indexes. were help ESG second continue our Income reiterate will strong scores. franchise integrate next Andy? Income the demand Portfolio in will including create to and Andy. Income and And would for Through Fixed mind, Indexes call investors we quarter, our level. delighted to liquidity Fixed closing, of period that our Income this reach Fixed MarketAxess, the up by we

Andy Wiechmann

Thanks, everyone. morning, Baer. Good

As strong the our underscores of Baer power all-weather highlighted our franchise. performance the during and momentum the solid quarter

recurring ever rate from subscription highest owners. This managers represents growth, subscription In subscription for hedge XXth subscription respectively run XX% addition and we top index, subscription segments. sales of XX% new we growth. we consecutive digit by and the was double second fueled growth managers growth from to rate nearly growth run quarter run And run healthy with and RCA subscription sales dealers, all increasing which of double wealth experienced RCA. all of growth, XX% rate across In excluding XX% client rate growth asset delivered quarter across and on the acquisition XX% funds regions organic digit year-over-year, XX% excluding the growth, net recurring recorded our asset broker rate run

passive our flows drive more in billion continued coming within shift highlighting and funds linked ex-U.S. to to market helped linked modest flows to by experience exposure revenue into average ETF's in a X.XX. sequentially in basis modest the fees indexes. worth $X.X the net and of end market declines in to from climate mix cash in-flows futures And with options in emerging and by fee the ESG ETF indexes fees that levels, market those point offset with quarter franchise. impacted Asset-based ETF increase developed drew period MCI It's declines also non funds. quarter our and growth

are As updated balances AUM our on from one new we've latest by non-ETF levels reported quarter on passive clients we occurs to which the mentioned receive us a recognized typically revenues When previously, AUM balance lag. or period clients, accrue the reported the accrued the then true that, pricing. and revenue true the in in to on revenue based we effective up down use period by client current the

our from very strong revenue clients see for AUM some accrual area, this the reflects quarter reporting this downs levels began in as as prior current balances, we client balances demand in well lower product Despite period. AUM prior periods, accrued in launches for during as as lower to revenue headwinds this lower As fees. in well the true quarter, on strong new continue resilience reported periods in

in analytics In offset a As the X.X%. XX% new our XX% futures tremendous traded based subscription rate declines, growth highest experiencing saw of with up areas. cancels, we new asset linked run most Outside MCI year-over-year. contracts subscription listed options the we to fees recurring driving recurring revenue nice its growth and net linked to and AUM volumes index, subscription of quarter in also drove indexes a and sales of and growth across XX% organic decline indexes to ever XX% while recorded strength from

$XX million, We year funds, including climate, and and continue In managers, And of half and our strong to a office another run we growth solutions. Roughly see portfolio many front momentum ago. of generated management increase climate ESG to broker wealth as climate insurance in corporates. quarter and delivered companies, from XX% opportunities emerging income exceptional fixed organic which risk and alongside Baer equity close of segments, hedge from XX% rate is client subscription of an new mentioned. our dealers recurring sales reached were ESG

Assets recognition. of the revenues as Real impact of result the revenue from exchange RCA, of impacts and impact year-over-year a foreign down timing some were Excluding

XX.X% business. However, healthy estate rate X% firm, also across our rate all growth highlighting the Across of organic the it's run worth real subscription was very legacy strengths in retention which segments.

when billion appreciating million highlights of $X to proactive FX of allocation lever our EPS all-weather our an flexed by approximately front. a we've Furthermore, the Year-to-date June, more or raised our More million shareholders. yesterday, dividend AUM-based of another support. stock to broadly, of our to U.S. power million. of impacts term-loan and base $X proactive the headwinds actions capital through Our to shares. X.X revenues, on adjusted In of the nimble repurchased increase $X.XX the capital of illustrating XX% franchise. offset remain headwinds. our approximately And we dollars over per growth MSCI's which cents on We to were dollar Further compared approximately $X through provided commitment our board approved than expense on the QX opportunistically XXXX expenses were benefits mitigate our returning capital quarterly borrowings. we $XXX share. to the beginning million of our

remain of which arise on We $XXX well to proceeds, share repurchases we market volatile quarter this these against bolt-on is capitalize MP&A to ended available. opportunities balance with that and positioned million With a continue $XXX may backdrop. readily approximately million cash of the

call Before the year. would the the earlier balance but morning, We our we to which a discuss of outlook for cautious like open constructive view I updated this the Q&A, on for year. reflects published our guidance

continued current levels expect levels improving to the throughout balance flat volatility, we some the we generally gradually expect of from While market year.

our these free have incremental begun and efficient selected earlier, mentioned order flexing, times be to certain business and less we reprioritize in our to the expenses ourselves playbook As a pace of with on areas. downturn more resources moderating push activate dollars. to up investment utilize critical across We in hiring to uncertainty of our focus

decreased expenses. for the operating spend expense expense that market current may down guidance expectation against and expenses as broadly, the levels increased capitalized business adjusted of up of global trajectory our Mainly higher a amortization a the activities We've actions provided our operating modestly and our relatively pace lastly expense, costs borrowing and variable flow rate across expense. expense to of result declines and cash the our environment offset June. payments of for and performance development lowered operating in the term we've of guidance Our the interest and drawn increased EBITDA these cash lower It net by on year. And based loan We as reflecting balance the in operating of outlook. fluctuate flat software of fees higher on as interest capitalized free worth level more asset-based reflects reflect the our noting partially the depreciation the interest guidance products. by range asset-based well is fees,

remains unchanged. guidance tax year Our the for

open We drive see operator, the for please opportunities, high to For line our growth the the And in our executing of is line with with secular we demand protect us. that all-weather we to franchise. focused continue questions. the on target. strategic in the in a growth full of our And opportunities front levels our we business, year, continue financial remain expect will on model but strong for conviction Across XX% on of which basis, we to have long-term margins products. continued consolidated

Operator

Thank from Instructions] question Barclays. Manav first you. comes ahead. [Operator with Patnaik go Please Our

Manav Patnaik

activating Andy, doing you hoping weakness could starting hoping, flush is color I us could I hoping just a layoff perhaps why banks some was just some now? you're hear but in was of specific weakness bit? areas give some this right was was starting downturn or I on on to to to examples, perhaps, seeing hoping of it, like which the you're segments, you're out I understand chatter you're just see that your which just this the some where where it comments playbook. you

Baer Pettit

to of we before here. we shareholders. Andy, playbook to in relates to make I prudent to over and clarifying surprises be downturn to just a negative that I a wanted The actions any that it's our Manav, to more Baer financial point. series provide don't turn it Maybe order ensure take

that in any all how So of of the prepared sort about measure necessarily I'll of in and and negative. that it beta us to view was our just can seeing clearly our that effects be remarks. a reflected measures anything what's affects it's – I in revenues more or market Andy you ABF doesn't that. not not happening. that seen, pipeline a can But bit little to It's turn also taking to and negatives strict sense speak just broadly, we're those But I our we're more over hope financially it particularly think seeing in to be specifically conducive prudent.

Andy Wiechmann

we're downturn that end assumed end this related stayed pullback or at we saw actions the or to of further, drop the time last point, the to mentioned current levels time, the QX, QX taking flat. our at was our as to that in are And AUM deteriorated quarter would fairly revenues. guidance XX%. levels Baer’s ABF likely I the of billion if To the remained We at go AUM markets $XXX playbook mentioned, from we Yeah. about

so And result, downturn to our we're a as turning playbook.

flexing give some you levers on that the of we've here. been color to some Just

We targeted of are pace on a moderating the very growth headcount basis.

And areas investment critical in efficiencies in, investing key we slowing are but We're pace so are we areas areas. our continue to identifying down of less growth. other also the prioritizing

all-weather expenses highlight retention our discretionary the lower our and growth generally FX in flexing non-comp client very with franchise are levels. some selectively Baer's Obviously of to are AUM want that to getting professional it's to important remains rate point, despite then accrual we strong business we diversified healthy, have But original here. And areas keep into it mind ETF, to forecast. are comp a remains that healthy is do subscription I behavior you're global we a buying projecting We benefits, lower slightly noting, areas meaningful aware as feed like which fees. worth well. around the some lower a And down our relative

Manav Patnaik

Okay, got helpful. you you well? sheet, typically down about, That's have your guys balance do, can on a and the maybe accelerating, MP&A some private but guys talk as other maybe you And market it. that strong just valuations just just then, off thoughts in like

Andy Wiechmann

Yeah.

MP&A. $XXX the attractive part on think continue we be front. for to the want mean, also to the dry loan, powder shares opportunities bolt-on get of We give some dry additional million share rationale are repurchase the us to our I but term nimble want So We have values, to for there raising powder. to was

in we haven't so And repricing they to the of see especially started operate, levels say adjusted the public spaces some we've in to generally, would companies. private I companies.

do private we in the could so be of decide to also And continued to think a degree compression related there company new they norm some values. company owners adjusting time, There's sell. before private to

And focused said, we're like investment always In that valuations that market unique strategic assets, quarters, as the Baer some franchise. the want could existing low. And company the so there and think if accelerators, we and income persists fixed our on opportunities our to we this core private on be in be enhance on. remain content focused and areas to as do of ESG volatility public market, will coming capitalize poised areas

Manav Patnaik

you Thank much. very it. Got

Operator

next question The comes ahead. with go from Alex Please Kramm UBS.

Alex Kramm

guys throughout. Yeah. strong was XQ and quarter, deteriorated quarter, queue Hey I the commentary think constructive, pipeline wondering, given that also during just basically this pretty I sales guess the the

sets, fairly or stories? and how progression side. color tale quarter differences the any maybe was by wondering was the see other, maybe quarter Just the again then as as as any went Did many down on consistent all the you was if it of customer a sales any particular

Andy Wiechmann

see into we no turning direction. trending we as mark far the would no terms things today We suggest the direction. had it's things Yeah. really of evidence present, any very we the present haven't Hey end information a the things honestly, to of and closing We've morning. worse end quarter. negative but are strong seen from empirical change, as so, have beginning business. Look, to at quarter started choppy a good as in the we hope that we as environment do have to can sort of could are quarter Look, of in a actually a change of Alex,

Alex Kramm

All right. Great. Fair enough.

think but the which quarters two think remains ago, there. I I it ESG this asked question Second then, out either one and or I noise is on relevant, that's

not year, to negative a it said day issue. into me by election seems turning without in a on this is goes the day, Somebody And ESG. even like a other article partisan

this are it or done but has your So your to I noise is wrapped doesn't demand? impact sales maybe us mean, in, getting pipeline. to clients this is and then matter up having just end conversations wondering the client the on to what really that this an just outside

Baer Pettit

Sure.

well as So we're know, global Alex, first all, franchise. a of you

certain you're not is I more So debate to is really in small other think much part think the that think information in I And which but a information depending geographies. is that where who second all important on. minority parts information they this quotes, and feel to good – think topic right? United that who judgements the have their the to degree they same be and afford is past referring of the facts primarily a happening to ignore point of need make are the the use topic. is the time, States And that the is, and There you made to parties of may on I the to think point, you key then debate, case a I think I board. the that in franchise also us this engage I make in and need debate is is repeatedly cannot benefits this need need that So data in do across on or in people what even not their the are, minority, I

Alex Kramm

All right. very you much. Thank

Operator

Stanley. with Kaplan Toni Please ahead. question Morgan next The go from comes

Toni Kaplan

you. to Thank start the index custom on Wanted side. Terrific.

driver of an a Baer, that or guys growth area. And Are able an sort the for this this a of you've this in that you right business? seen you us size for is to mentioned think structural is it's in smaller because index off I acceleration long-term now? base acceleration growth

Baer Pettit

also we're classes has very strong hope structural as not demand, increasingly plays that indexes for driver The And for my And But first clear which in index term content I'm for pretty different direct school, always is definition of higher is long all, rate But spreading It's healthy. story. the healthy we which that types asset long past but one indexing, had my is complexity growth hope so the pretty was growth coming our even, been such to I we're is a time. a increased, that time, I we're off still management right? always term that comments. seeing of we chiefly in different and So that growth the mentioned out trend. back quarter, as – have seeing wealth in in my of investing demand data a some with strengths. the rate do the base, a been in the more this speaking the going has institutional to notably, custom a of head, it to

lot products general and area we indexing So think the continue provide institutional momentum and demand, will combination the to that a direct wealth to of financial us. this demand for for of demand rising

Toni Kaplan

And in regulator an within ESG the Are parts the there? Terrific. your update index more us well. wanted was you both a or regulation, regulation business hoping give space you update tick-up on and get an of to scrutiny, just of as seeing I could

Baer Pettit

Sure. I'm that. happy to take

in UK. under EU currently the – So the a regulated are FCA through EU just actually the as BMR the we in reminder,

not regulators regulators direction of be up. In come the between historically. familiar for goes, that direction on index regulation. picked that. the initiatives, future but for so the regulated There's those up there continuing of also, have end and of something But prepared that in that a ratings. may in the – whatever and regulation, So may and quality, heavily States. the we're has think commercial, us are from we or a transparency interest with ESG standing, I area speculate it, regulate ESG the reminder, States on And some that of where us. very operate, It editorial the we been always so owns observation, related greater it. in I'm all powers topic on registered a we're I'd an clearly manner the the in has make clearly been confident in things, in United as this LLC ESG that separation has of that the interest there's the the we United that's I will won't – we're investment are well That been U.S., assumption we Europe and not advisor further lot that work same while regulated what also someone the the just

to in that And regulation have. in we of it we we’re comes, mind. the standards well the operating ESG we how of may we invest if from quality highest That’s the our of high quality benefit what what ensure we transparency ratings. foremost continue we’re the do, so and do is our And confident because we if do so,

Toni Kaplan

Thanks a lot. Perfect.

Baer Pettit

Toni. you, Thank

Operator

The ahead. next with go Sachs. Goldman Please question from comes George Tong

George Tong

the XQ for assumes thinking market And believe Can AUM balance and guidance your morning. on assumes of you Good thanks. XQ. a on AUM full between Hi, dropped year over there? your elaborate about levels year. mentioned flat you your the basis? guidance And XX% levels what I

Andy Wiechmann

to Yes. I And they to. make But we you today the levels alluded improve. where flat don’t assumptions prescriptive want commentary be the that we’ve made spending, to and to market remain are more I of the about relatively our I trajectory as that to, slightly in assumed than alluded market.

the guidance. And kind that’s are of then EBITDA spending based that and so operating assumptions we our environment expense feed expense into our

George Tong

year assumes flows? on that basis, a for on AUM and And what full perhaps Right. levels

Andy Wiechmann

Yes.

of there, I bit a six of to happened on. which around what’s don’t color months first the or do don’t fees more want AUM provided. for balances specific assumptions can I seeing the of we that with little typically average or AUM factors, year comment the and yourself, You flows math just just any provide that those

George Tong

it. Got

for a imply expense playbook Are Okay. year? to your hold exercising follow-up, at margins? you’re does margins And What a this with then downturn level for playbook the downturn certain reductions. committing as you your

Andy Wiechmann

Yes.

rate the I in believe We’re quite that or on will other items. targeting The to be can based number a remarks targets. in AUM, a our year one-off not in margins. my we high make margin big the comment are margin for committing including long-term our prepared the moves did factors, fluctuate is FX bit which of aligned with we XXs, fluctuations,

which look So XXs high being guidance, relative QX. and imply it’s target, the QX the but our for we to what not that expense it at we margin the looking year, at picking in in is or guidance are expenses QX a if the slightly are up saw you And worth in does noting.

George Tong

Got you. it. Thank

Operator

next question ahead. with Quelch from comes Russell The Please go Redburn.

Russell Quelch

guys. Thanks, Yes.

So long-term back driving this I just will Or Do quarter. sustainable expansion this slow? customer sort of And business leveraging Alex strong Climate business what products? saying. was Wondered that Is noted the ESG growth subscription on back again And this? the of to I if products? and is to the the what’s want you new that talk the of think how could also in this be? has sales new the to the go been penetration it of current level for business might it of And Thanks. you is the growth? of sort margin of sort margin new target traditional what sales speed upsell

Baer Pettit

he margin a Andy So make comment turn if not. wants few observations, on or look, to then and it to I’ll the over

new question, main sales think line a new the same, think from I to positive were clients the as more this then the in be all regards it’s product that’ll quarter in of clients above as right? the clients, the and last I of our same sense. to firm. XX% look, of the to quarter it’s and new So

we think the types, client looks I terms range what selling, of in the clients, really the of So everything of are both healthy. number new

speculate will occurred quarter. have So rather that than would this what that rate quarter how it we I this a the as long good as – to – what any way done next is it on, say less in quarter, go that previous no that have had the what suggestion will – will no we quarter

we’re with now. would product be case, position if this like communicate line. we’re really just we that the feel And doing to So but it, strong a were I no in well longer

So on all at Andy, comment or... want know if I margin to don’t you the

Andy Wiechmann

top Yes. segment, Climate, margin focus don’t is targets the on margin and driving by that we would I growth, really say line Obviously, our but expansion. not ESG give within

And from so margin for the targeting not to expand we’re current levels.

We’re to to different invest that so trying you’re really across to many asking continue growth about that fuel dimensions.

segment the we class accelerating in to and growth So the really our dimensions massive client going solutions opportunity. Climate, then is really, think a be dimensions, dimensions, the asset which

is It’s now on expansion growth. nature right would longer-term, ESG And so our that Climate do not the segment. and margin the leadership and what is I similar within highlight in goal develop product we – many many different clients we is areas, different different across we across which to many to different do we for what many other IP cases many it sell and applications. use of

does and operating really so but operating in have growth reinvesting leverage, inherently investment. it we’re And attractive that leverage

Russell Quelch

to a respect detail about Thanks. as run sorry, what’s and in just there a bit business, the Analytics you talk pickup. done wondered a X% rate if then Okay. still improve to of In being is Good that. circa never I follow-up. could stuff. And the

Andy Wiechmann

Yes. Actually, sorry, up a little bit. you broke

Baer Pettit

Yes.

Andy Wiechmann

question? Do mind the repeating you

Russell Quelch

Yes, sorry.

rate, business, growth. the a in run about it’s in around the still run Analytics X%. Just growing never There’s pickup at rate the

done that. So I improve Thanks. know to wanted to just what’s being

Andy Wiechmann

Yes. Yes.

be. be as growth, to definitely segment for contracts. a growth is implementations, which was revenue rate run still the recognition on the focused we’re this to related we single-digit us, growth much but growth. around X.X%, around do which revenue some So of where higher We quite tends revenue noise want it timing than not believe is high There to

there the I of us we’ve for thing lumpiness. the focus past, encouraging the is Analytics strategic say would in consistent what with was is Just our the aligned on Analytics. in areas with within discussed strength quarter

digits. So we management portfolio of strong a growth equity saw high-single

around continue ERP, see started the is or the income area And growth we in our which elevated growth continue fixed We that’s management some lower we traction within tools. to to had to portfolio get past. get

is XXf by Lab front. or on Analytics accelerated new got also going effect our highlighted with our the which support reporting a which partially Climate from traction And ISaaS are we traction, in we investments solution within So booked regulation segment. some Enterprise Analytics are within partnership August. booked with as segment approach, our we’ve boost nice sales, a got our the into to getting made we advancements of and We

see want be, It’s would the the gives source to that Analytics the investment I a which momentum, worth has been highlighting to it not also rest it’s the continue to organization, other parts the of be got operating to the company. we right addition will think which also so really quarter, say, leverage, of it lumpy. in And can where the we’ve you this from helping but that we results do strategic and nice although Analytics to strategy in of is hope benefits fund

Russell Quelch

stuff. Thanks, Andy. Yes. Great Okay.

Operator

Our with muted. line if Please next question Craig, from Huber ahead. Huber comes go Craig Research Partners. your

Baer Pettit

back hear Craig, to you Yes. technical be move can’t then the having a Maybe and problem. you, muted. to we next can may Craig. come caller I Craig. He’s

Operator

Okay. All right.

comes on to ahead. question, which the go next O’Shaughnessy So Raymond move from let’s Patrick Please James. with

Patrick O’Shaughnessy

good Hey, Obviously, thinking asset you it’s pricing now? AUM time, are clients pressure. your are but about inflationary their management How at under seeing environment, right power guys the same an morning.

Baer Pettit

Yes.

on to philosophy very I So that clients we would as which we’re try say pricing look, we aggressive. as that giving is consistent, too being without be is that impression our firm our can the always

regular of notably above a that in we’ve not slightly increase of price sort but in put our think sort different. increase, index to it’s I a managed So average

and Climate, right that the we’re the of we as be and here. Analytics, those reflected the focused getting now of a ESG And very some in number numbers ensuring, value right – We’re as have products big out of fairly in clearly years, of on that growth been have young drivers in were. terms we for it could are

And mostly but strength competitive general outset, to economic of with work that we state – conscious said, I clients and your pushing our clients philosophy always products that clients, than we So linked the in new our as rather and are to that. not an observation about price that as in balancing increases. noise a far. would about new coming a negative leading observation – from have, a But say I look we too environment it’s we’re not hearing

Patrick O’Shaughnessy

you. Thank of the then quantify that in can fees? magnitude the spoke Andy, it. true about the Got down you you And non-ETF asset-based passive

Andy Wiechmann

missed Yes. few market it’s magnitude that be folks million It’s on – as to that, what the area the of in dynamic an this with would on would our adjustments on QX are. significant lot how the the dollars, I markets, say, from a balances probably depending mention of QX know or receive it depending could can in play moves happens I clients. with a underestimated. order well, AUM our I similar see we start revenue we at as of

Patrick O’Shaughnessy

Great. Thank you.

Operator

Simpson ahead. Our with Please next Paribas. question go comes from BNP Gregory

Gregory Simpson

product Hi, going had the good contribution beyond segment? equity stage and if But of estate things morning. just with legacy real are more out we a there’s from the color the then the of and and the are at yet work there relationship how side like clients I of on sounds relationships Burgiss. with ask wanted the lot quite you material Just more revenue RCA? kind to private a are on GPs. kind building markets private where any piece It

Andy Wiechmann

Yes. Yes.

the any Burgiss Burgiss specifically, to can within revenue reflection on before know don’t and RCA, than a a which around estate, consolidate on there growth we I if do estate product the So accounting them, Baer, the noise then, some of I touch want real I want minority I as and provide But would say, you FX color continue health. real of I in was investor around to front. comment work – on maybe more it. are the performance, lot the development but comments performance we to of business make we segment. highlight obviously around is

think is within growth see subscription X%. real fine segment. at RCA. RCA, double-digit within you our with I question, strong are see And continue the rate and we legacy growth quite operating estate your organic can to within rate for the metrics And run run retention rate to XX% business

around development, know, And make RCA. Burgiss? do ambitions well continuing when planned starting so our indexes expand want content of only synergies, really climate as suite the And see in to do the that you new we to I the had we acquired operational Baer, solutions to comments make progress don’t company. and synergies as to of the around to are we clients, but any product – we continue to our the execute to cross-selling strategic not

Baer Pettit

be I’ll Look, brief. very

We’ve some work this clearly because a coming that think climate is focus been alluded areas. through working I with we’re of That’s doing. them to the number on of for private clients. increasingly ours, asset we’re big of had from a demand

our So that combined data private we order teams some climate on there’s figure also how work and products benefits doing. general going work we’re the between in ESG beyond in of greater can asset create out to going

more for as get able So you. I the a second the that on half we’ll year, we expand bit into of hope to be

Gregory Simpson

low Great. a Hong maybe is think And going? China the A the as in a XX exchanges the with Kong still product volumes there on takes other for Are on it side, follow-up, any lessons about kind relationship from of little but how term. longer Exchange can long check to opportunity contract perhaps? I how accelerate the really bit the a I volumes big

Baer Pettit

we’re the I Look, of last think been personally very with happy relationship. number them I’ve the in with calls a Yes. quarter. in involved

from that open one think I get another. Futures These our interest a things to aspects other see kind and are and you as circle of volume can of that franchise. virtuous liquidity

with We’ve where we we’re are. got them. with we’re think other discussing some happy that things I

of And across across including lot the upside there’s place. believe in our we’re & partners, our good exchange franchise, all numbers think a I you this looking in Options of our So still a Kong. with which quarter, – Hong broader the that we board saw Futures

Gregory Simpson

Great. Thank you.

Operator

Our go Huber Please Research Partners. Huber with next comes from ahead. question Craig

Craig Huber

and us, I maybe for if you apologize. Income you wealth rate your revenues run your Fixed management Can would, run rate? size also now

Andy Wiechmann

been index income the many process. and index fixed of providers Income direct I which incorporated investment Fixed across a solutions the fixed has ways earlier capability Craig, a Income partnerships we is noting, Fixed heels into to of alluded we’ve other investment worth a And I provided is largely Index of fixed nice metrics in that serves that It use our with Indexes, us our solutions, solutions, multi-asset have are for which major fixed we our say couple the there growth got the meaningful business. I which We’ve providers, don’t Analytics income provide increasingly we that have income being would for those cases. recently. then cut also or class ESG Analytics. those income area Fixed process, Income on to with our are about think Yes. think that

portfolio part enterprise our big risk part fixed class multi-asset of As is our and tools and their clients’ – enterprise-wide of a is our income. performance, obviously, portfolio

And growth have the are the that well. in as and so we critical those supporting businesses to position capabilities there

we fixed parts And process, is seeing very serving front income and so it – the number one dimensions, but cuts it across a of that the strong the – especially are investment office growth.

Baer Pettit

products in and we off-site all we’re across observation particular, operating Fixed really the This in MSCI, the more at And the I’d is more cross-product last team Yes. functions line expertise used we’ve Income, across in the Andy week. This observations. that make team, two have literally in using across one the just MSCI on and And – an firm past. top is additional coalescing said. of phrase had what an how

lot momentum tricky reporting a doing. a And company there’s think we’re I product public So different of behind as what it’s across sometimes lines.

to as you we with there. guys can we’ll as So provide much to continue try transparency

Craig Huber

guys. question, follow-up my then And

Your about FX down private asset segment, organic X.X%. obviously, was

was there. outlook you normalize that, of you rate? there? And underlying some sort Can little talk growth issues talked what if about about for your a onetime the You bit just

Andy Wiechmann

Yes.

there. actually me bit let color little provide So a more

revenue you So large has I the a mentioned firstly, where was assets, to real non-USD noise relatively alluded in some to, exposure on revenue our as there side, currencies.

so to And particularly revenue strong an generated pound, the some dollar, the FX standpoint. relative headwinds from

remember clients good our recognized the when Additionally, business, do good number the a revenue service. would recognized of recognize of been we transitioning revenue evenly deliveries. would our if of quarter, you And in of a the of delivery we’ve in where we be throughout offerings, year where is we to our revenue some a chunk a model past, had estate chunk our within second versus, which for a the revenue real service legacy we upon the

so RCA a year, committed standpoint, through some we’re as at And legacy the high targets to long-term well as be think organization. clients in teens headwinds we’ve comparison you the out that we’ve and more continue business, prospects our business year-over-year across there the as the the subscription to put even many migrated the from combined bullish model I the see level, But we – to generally, about growth. the

Craig Huber

you. Thank Great.

Operator

comes question from last Ashish RBC Our Sabadra Please with Capital Markets. go ahead.

Ashish Sabadra

how based to I related was just launches ESG of seeing moderated product provide a Thanks. performance. the ESG see where growth indices? just and or The to ETF the and for wanted linked my new of ETF I and equity to AUMs bit And Climate in wanted are question. indices. Climate a Slide XX, even moderation. sequentially, and was Thanks the just equity to what there there you it go on taking much you new terms market to launches

Baer Pettit

Yes.

Even ESG in we in key with growth comments, be launching tough new to and Climate continue we’ve Andy many to particularly – market, my this attractive. as look, in will in to conversations But category So we are indexes mentioned or very exact this what mentioned products, before, in clients be direction has about happen – of speculate with of about close the to products. been environment. markets and as I

you of continues And this so numbers know, has what products. suggest So that to we to type there of it nothing Andy, in the is been. of don’t far I or… we think add of to to in have a interest that direction be I if – travel have terms anything lack

Andy Wiechmann

think No, there. the themes key hit No. I you

think right. I that’s

category. feeding Baer and across of within highlighted We see ETFs. to the flows, momentum dynamics into some strong particularly cyclical appetite the continue as are There has

about too something concerned it’s looking we’re not so that And out longer term.

Ashish Sabadra

strategy, the the even should provide there? just and any of Christina Chief was if that I marketing some expect we going execution planned And of follow-up, for approach. color. about initiatives Thanks. of as client-centric about going some the was to new on XXXX? the helpful as appointment focus Officer Or a my the the the think just to very get into year could color the on on wondering, maybe Marketing we I rest That’s or ask as more marketing change new you might strategy the front,

Baer Pettit

Sure. Great question.

inflection outstanding an regard. I joined very markets, footprint client all, strengths that in to our I And would where be point, what call the on probably inflection that out sales happy Christina she of will And and point has MSCI service. an us. So the I’m talk that first of reach needs help we’re beyond her confident leadership our this area, background at broader about Christina direct quarters traditional put to clients us an we’ll in to think has moving and past to And I’m in that ahead. or we’re delighted

Ashish Sabadra

very That’s Thank helpful. you.

Jeremy Ulan

Okay. I believe that was question. the final

Operator

I any Go session. concludes Pettit question-and-answer conference to to ahead. for the would Baer closing This over Okay. our remarks. turn back like

Baer Pettit

in you on joining thank MSCI. interest and continued for all your call So the today us

the all to in excited much. we’re momentum engaging of very have continue front for but demand it’s also to of the and making. remain look months. heard, and seeing not that solutions, the Thank We our you As building the like really times We of underscore MSCI’s about And only you see opportunities resilience are with these in us. all-weather you franchise. we strong tremendous coming we we investments forward

Operator

for presentation. The you now today’s Thank conference concluded. attending has

You may now disconnect.

MSCI (MSCI) 26 Jul 222022 Q2 Earnings call transcript