MSCI (MSCI) 29 Jan 252024 Q4 Earnings call transcript

Company Profile

Participants

Jeremy Ulan	executive
Henry Fernandez	executive
C. Pettit	executive
Andrew Wiechmann	executive
Toni Kaplan	analyst
Manav Patnaik	analyst
Alex Kramm	analyst
Ashish Sabadra	analyst
Alexander EM Hess	analyst
Kwun Sum Lau	analyst
Kelsey Zhu	analyst
Scott Wurtzel	analyst
Craig Huber	analyst
Faiza Alwy	analyst
Keen Fai Tong	analyst
Russell Quelch	analyst
Audey Ashkar	analyst
David Motemaden	analyst
Gregory Simpson	analyst

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to the MSCI Fourth Quarter 2024 Earnings Conference Call.

As a reminder, this call is being recorded. [Operator Instructions] I would now like to turn the call over to Jeremy Ulan, Head of Investor Relations and Treasurer.

You may begin.

Jeremy Ulan

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

language this slide second of presentation. you Let forward-looking which the me that remind are on statements, contains call governed by the today's

the not to expectations speak place undue on forward-looking forward-looking made, on are which materially of conditions and and current cautioned reliance only are risks statements, are as these cause may statements. from subject to are that actual date economic on differ they results which the to in You based uncertainties results and current anticipated

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

results also of addition basis presented in the call, to today's refer to During on we non-GAAP GAAP, U.S. measures.

reconciliation a measures the GAAP in of non-GAAP find You'll equivalent of presentation. the earnings to measures appendix the our

operating available such presentation. We as discuss operating rate such retention rate, our use metrics, information earnings also as of metrics, and run run retention or rate. in will the Important are rate regarding

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

now let me Fernandez. call over the that, turn With Instructions] [Operator Henry Henry? to

Henry Fernandez

our for and and ecosystem. you that everyone, Good joining XXXX, the demonstrated you, Thank financial day, servicing global leadership a scale thank metrics MSCI us. In Jeremy. once again, in investment delivered strong

and per adjusted of growth growth revenue of share XX%. organic XX%, achieved we year, flow full growth XX.X% of cash the earnings free For almost

MSCI million $XXX the worth repurchased for year. shares also We of full

rate a $XXX XX%. shareholder-centric FX organic of growth allocation operating through run fee yesterday, on included fourth million reported metrics our rate and our shares, retention In subscription MSCI and quarter over headwinds the in of growth X%, run policy. capital excluding the basis, During quarter, alignment asset-based of with XX% worth fourth repurchased X% we a of and rate

rate by more cash ABF indices, into to driven end was client at wealth billion. Among XXXX, hedge excluding higher FX. by quarterly linked equity as our highest MSCI AUM, ETFs strong firm-wide aided we Our of inflows we than a run since growth average respectively, the run quarter by XX%, XX with also funds USD XX% had managers, segments, subscription rate growth and and grew the

cyclical with growth While active and rate, excluding asset retention to subscription XX% X% this in face segment. rate pressures, managers run posted continue FX, we a

manager custom fully among effect highlights systems ] platform, that This our integrated frameworks foxfX is of fueled I demonstrate ETF investing. our global indices increasingly demand record-breaking linked [ areas, ceded focus established today, climate-related of my asset ecosystem we our QX, products. Clients of our Foxberry MSCI the one Last Income. In has month, particular, And Index clients Fixed from the to demand including being the for large of number in aligning X suite. remarks MSCI's linked construction the one on in while methodologies a rules-based portfolio investment clients. product has saw into and the of classification (sic) of network specialized products, the clients that our MSCI our pension for investment an prominence This standards. index for remains central strategy: tools, capabilities, fund $X.X and with launched MSCI will Wealth In climate FX which the indices, large a to new Index, example, success milestones. with a index continuing billion won and now to

rate in QX, growth with Baer with also the of subscription We run will discuss shortly. In top run million. a subscription excluding Wealth achieved large deals rate of banks, investment managers, which $XXX total X wealth completed FX, segment with index XX% world's Wealth the we

Indices to on personalized direct managers We brand, based by attract to increased saw and a enabling MSCI XX% AUM helping them nearly build AUM $XXX Wealth, indexing by outcome-oriented is scalable, also wealth MSCI portfolios. a billion. new MSCI

client now we evolving wealth the ever, deal our investments, higher growth across firsthand X-figure data XX% in a notably, reflects income and asset with we benefits levels a quarter, drove seen during managers focus incumbent of month. over major in I as and U.S.-based Our large have run lines, engagement fixed now Wealth income meetings also our provider. across technology, fourth with in including client of portfolio $XXX the are is long-term needs. In fixed products, past laser progress on Europe Income the than a of completed manager rate Most a Fixed million. analytics product which displacing all our management MSCI's

MSCI we and our turn over federal will understand We us and including analytics thanks depth, across these help risk years the with Both of it huge growth client and believe technology. cycles. And asset have benefit We alike, securities. Putting extent supportive, securitized this client the all can from agency which from and data, newer work Baer. resilience this support our product expand to active use security also market To we the contract, in wins manager our and advantages established and budgets diversification to of our well done call let secured increasingly fund performance across levels to remain fixed the and capabilities, market believe and segments mortgage-backed to better this in these assets MSCI a to together, first-of-its-kind positioned the of inflows hard income year. is stemmed footprint government like drive products client the mortgage-backed will market. to the our model Baer? our enhance to client, investing compounding among continues revenue base. models that, me

C. Pettit

everyone. Thank Greetings, you, Henry.

quarter, the run strength where the highlighted our us broad growth on start like with run all-weather our rate $XXX and have will in to significant segment use Given with wealth build recent wealth to managers, I XX% excluding firm-wide reach rate focus growth, the subscription that MSCI's among our million. franchise. fourth our lines. In which bringing segment achieved review of of to across underlying of opportunity progress client I'd this total investments product FX, subscription QX, helped our momentum managers, solutions we

We XX% $XX excluding wealth also delivered subscription totals growth now rate managers analytics, over and among run which FX, million.

which platform, Wealth home construction office has range addition, including In the us Manager of deal Climate. a account Manager large a Wealth wide which achieved we cases, management recurring and growth We rate known monitoring. among Fabric. MSCI climate ESG $X XX% among These closed Climate that we and use as managers, In cases for wealth extend to support run and growth $X model million. and enterprise to million. a positioned totaled QX, XX% portfolio use was segment, MSCI sales generation, proposal ESG formerly drove

as with liquidity products. hedge of FX, completed subscription in growth, hedge recurring recurring excluding as rate of XX% large deals conversions float our a by funds, sales including growing MSCI our conversions several value into driven multi-strategy hedge growth well sales, to We achieved ever index. among run index-linked products best onetime Turning including subscription QX the We These data the showcase funds funds. of XX% deals. recurring sales

in for in wins, We banks recurring million the from notable strength Americas. XX%. Moving X% Index, pair and segment particular large investment expanded our of sales banks was rate broker-dealers. run the on with with FX, almost excluding where relationships Index growth, of over X QX, subscription across new our lines, $X business In delivered most to growing a product we

alpha strategies. If of QX As MSCI research, OTC achieved part confirm including that of desks recurring growth and we these use data look deals, for enhance and the management subscription their derivatives risk products increasingly asset among structured Index MSCI XX% market to are use Delta and Such X content XX% support rate owners, bank's trading origination at participants cases. growth, owners will to using generation sales almost in excluding and our their run index. FX, asset examples

is continued been a climate owners won among capabilities with along index has asset capital owners Meanwhile, of among Climate in growing billion to $XX after million $XX MSCI to also rate Index. an private with now Private our run large QX. climate, asset strengthened a benchmark in asset U.K.-based which by is recently expected mandate in of the result importance solutions position XX% and owner, Assets. We AUM Our burdening our

to we launched Assets, increase data Private support a their recently asset credit. As to their in interest allocations private set new owners growing

than Our new data funds needs. more portfolio private holdings credit to credit transparency diligence terms private than conditions XXX,XXX private and and on support due X,XXX more various and management set credit provides

in manager to large Americas by we for asset solution, deal headwinds, while multiyear of XX%. subscription income tools. in finally have deal FX income our X%, our portfolio franchise. rate our new excluding Analytics, investments run firm-wide factor grew rate a a our landed the and retention an achieving made with by asset Insights AI endorses In We Turning attribution portfolio managers. income enabled fixed fixed risk This it we fixed and further the was

use and a data performance in came management managed asset with MSCI's manager analytics. large win client expanded who key existing of Another Europe, their and enterprise services, risk

tools transition. tools We Climate the line. manager for and low asset we nature clients among analysis nearly in and our of and for scenario delivered and managers a asset numerous deals Europe, solutions. sustainability for to Globally, product for also testing XX% support biodiversity and rate our carbon our retention regulatory With ESG with managers continue asset landed large-ticket climate stress we

the data are helping with a across clients expand see, our you capital range technology and product, our of markets ecosystem. As footprint investments to can us

line Andy? that, me to deliver of call ability attractive turn the growth this top Andy. with to over our All and supports profitability. And let

Andrew Wiechmann

run and we're Thanks, rate nearly versus segments of continue subscription and our client and encouraged with rate. X% comprise hedge XX%, subscription asset resilience Baer, respectively. rate broker-dealers, and last fourth be asset almost seeing growth quarter. drove year. subscription to indexes X% managers special index Index we the our XX% results the Among and across I respectively, packages run index and run Custom by product grew owners the funds These in XX% everyone. and growth, really was of momentum X% hi, areas.

products markets These of cash of factors. linked organic inflows quarterly factor few global cash Income inflows to driven reached Analytics climate $XX our in accounted ETFs cash QX linked and growth the into developed billion, flows outside owners. and ETFs and ESG quarter. AUM products inflows and These Analytics, by highest quarterly the growth X% with almost rate by and asset ETF inflows fourth into the second since Climate ETF equity inflows fees, first mentioned. the to non-ETF by Fixed quarter ESG products inflows more excluding than the and with X%, billion since subscription linked $XX XX% of highest MSCI the XX% indexes Wealth key ETF Indexes and Climate supported into had in XXXX. subscription were growth into nearly previously in our large inflows last to a packages. inflows was $X retention we quarter, XX%, with into and a custom and quarter. were was value impact growth a rate currency approximately retention XXXX. In linked particular cash special and was from strong linked mid-teens, ETFs rate mandates overall the global the Within was index Factor MSCI MSCI grew quality, XX% indexes and indexes equity while category, MSCI momentum asset-based wins An managers. Within with Meanwhile, mandate U.S., of products equity in index-linked foreign was to almost from inflows Climate was nearly ETF run MSCI contribution of asset index the into revenue rate factors. solid ETF for lower the strength to run quarter billion, year, ESG from

of the compare from we growth our growth ESG term, revenue related implementations Near below revenue reportable slightly concentrations continue by timing to of period year rate The as implementation can the indicated, ago. In to was segment, rate revenues period. be compared recurring subscription and related excludes and ago. which will previously higher expect impact we revenues periods XX%, will to growth a run of a As impacted with to Climate year these release subscription fluctuate revenues to run we the be of lumpy FX. was rates growth

growth the Excluding rate Europe, Asia XX% FX the run for in Americas. X% the headwinds, in segment XX% subscription and was in

up in we laser-focused over strong cycles Real across free some geospatial, EBITDA, like agents. XXXX, the segment client remained solutions same supported the on quality recent create for to with disciplined improvement made although biodiversity, most a rate down reflecting we capabilities, XX% value had of The regulatory QX, and had We nature, multiyear retention Assets, strong client be retention new and Our rate subscription was large recurring cancels sales year, of outright not in and of investments and to over and new terminations. in wins. the growth continue our content we've data developers, with data to last products XX% with continuing securities of from XXXX large benefiting leverage XX%. and some Climate Capital across the interoperability In and had franchise, general, across classes capital gross our flow cash quality, through particularly ESG events XX% offering, and we period and we Private was coverage asset in vendor breadth comprehensive and Solutions, rate are our frameworks. In the run X.Xx capital MSCI and consolidation, allocation. related cancels brokers improved, collection sales very and position among In

XXXX Turning earlier which guidance, morning. to this our published we

increasing outlook and year back growth efficiencies. we levels fuel Our into to expense and throughout the assumes gradually ongoing future make business reflects market the our reinvestments

we've expenses be compensation EBITDA higher to driven adjusted As QX of years, XXXX, XXXX, sequentially compared we to mostly million QX expect $XX elevated expenses. in previous in by benefits-related and seen about

guidance across cash cash business. flow the which development during some our CapEx most deferred XXXX. of reflects in we parts Free guidance software higher tax QX, reflects in payments of Our investments

payments of in tax our million which flow As resulting XXXX. elevated XXXX timing cash is reminder, in reflected a $XX about free impacts, cash

expense assumes guidance debt assume our interest levels does not additional and current financings. Our

tax discrete items. rate expect include effective QX to benefit We our a from

exciting we ahead. effective expect Beyond QX, tax XX%. We're year XX% a rate quarterly an forward to operating of to looking

investments Our financial us growth XXXX provide for a in from further strong to and XXXX. success foundation drive

on. have that poised capitalize to large we numerous opportunities are We

line questions. And with that, the operator, open for please

Operator

of the Instructions] Kaplan Our [Operator line Stanley. Morgan comes from Toni first question with

Toni Kaplan

thinking on Henry, to about than ESG I on Climate, question ask ex wanted ABF side. a side the more how subscription about you're the

Are factors are period how of the term? of potential rate that about it happens of long Just we normal? accelerates? are for you this is key thinking the what in sort Or would And what growth sort challenging new cyclical sort the and from the here? business a dictate

Henry Fernandez

in XX or so. Thank I've Toni. visited weeks various and in X spent X X traveling last cities you, the Europe, clients X some over through cities countries weeks in

obviously in see describe they a live the one look the they to are material, topic their up almost clients, of I of and whether I And so at read to I've these a European for have not without themselves prepare way And clients, they or way wealth institutions this world. managers the many these critical had managers, a let they any of chance I insurance as to asset very commitment way of to discuss their these exception, banks, sustainability. Obviously, companies all lot in And themselves. position, the the seen financial any likes. strategy, any -- positioning sustainable each

product a little line, a ratings there presents to set people therefore, that becomes to cetera. their underlying of investment products. that on grain the the our principles. With to to the They're products. But process, of with or for needs from respect the to it'd very investors, pause that institutional and a from line the And away their of habits whether new materiality issue So lot signals according report of simply sustainability move information, their underlying evolve investors, investing will ESG the data, new to. ratings bit European product that adjusting be et of is have respect that regulations hard been believe in to been there's rebranding retail a launching Europe,

therefore, and lot regulators -- transform of institutions part still European, line here, of also that is compliance heavy international the and of And The but that only very institutions that is but there. not any have a other demand of and I demand. European requirements we regulatory Europe. is downturn but in a operate with obviously, the demand So these they're see cyclical global -- our financial hiatus don't meet that to any product evolve to disclosures

So a beginning We're I'm to with the of a to cetera. in early days, a there. Asia see of lot lot Pacific in see opportunity on we're Kong, pretty Japan, of regulations new this Hong lot beginning this, in bullish in but in et Singapore, Australia,

So that's have how we climate. And important. obviously, that, on is In not obviously, focused, see sustainability. to not evolves. that the think new U.S., It's on I the administration therefore, focused

importantly, But of and secular A come is clients United here trend. United have stay President portfolio or of is person is lot the that the view States of B sustainability and a is in the in States. to Whether to President impact the our climate their States a United Person

in sectors, So the belong will United materiality their in to move a States lot I portfolio where factors that people to this these should of sector in portfolio. governmental of and from the at think looking private the the their begin with, it

think but back it and may will the I take will there. time, So come it be demand

as been course, those our point know be target. at -- yet putting we been at the we in our reevaluating a throughout our obviously, of year, long-term disclosures, in but don't targets. targets, be little a during marketplace, we what some the we because, that Of will noted point, bit some hopefully, have have has moving this And

Operator

with Our Barclays. comes next from question Patnaik Manav

Manav Patnaik

ahead. Andy, bit contextualize follow was just on environment. on you wanted a that I I up could to And comment your exciting year just the hoping the with

then talked year, clients. about period your cancels and lower for elevated budgets of kind this market a weak following So last time large you

you are please? And do at how the new where what you the today, on hearing environment, So you like look from budget stand cancels?

Andrew Wiechmann

Yes. Sure.

notably both general, for sales levels rising seen confidence the momentum The constructive some innovations we U.S., make. and of my we've to continue have excitement we've buying in encouraging seen to we in so talked signs. On market areas, equity are cancels markets and the overall certain clients, in about, front. is is and behaviors markets the of coming as from that, the all supportive on sustainability in in top So

are so climate. analytics, solutions solutions indexes, areas areas traction of getting front-office, Private analytics our custom many in And and in key insights, Assets in across we

spots. take in very a And speaking, is are there. Generally environment continue constructive, excited where pipeline be the to in the do about see pressure so to in see pressures pickup lingering some particularly some we We are the the somewhat some more spots it active overall, fully still we But we shift and and seeing rebound. Europe. outlook in time dynamic. will on managers, seeing a There we're

cancels. of point the On

from don't you first As same a in expect here We of year, did know level to concentration cancels client the ago. quarter big related a last cancels as events. have we some of the year

see still on As I somewhat I've we shouldn't supportive constructive environment for and lingering and as And mentioned, and rising should will lumpiness before, seeing areas. know, focus mentioned But noise. some you you encouraging any too in and signs many much is markets overall, clients, we're market areas as be across the one quarter.

Operator

question UBS. next Our with from Alex Kramm comes

Alex Kramm

Just a better. as maybe should that you be years, bit couple pretty should talk the been to environment Obviously, of year? this there, little maybe the conversations continue and aggressive. you said, And in Can topic. to same stay competitors you've how impact pricing your softer on but be be about last

maybe a can because does you basis on pricing some market as seem bit you in and more has more segment ESG, to this a maybe it like talk So also clearly. have matured about opportunities little

Andrew Wiechmann

sure. Sure,

the across to than was company to as the the Alex, increases contribution price you from in in So sales contribution XXXX. XXXX, less slightly alluded

It moderate increases keep alluded that price in to you not price As mind did we in spots. important are like-for-like. certain increases just is to,

clients in which oftentimes products, are broader continually increase. through We we access, with capture addition usage price broader to providing our enhancing

to value offering, best-in-class, we and specifically. clients. face health, get value to growth us we're based positioned them partners will or on mentioned, pricing competitors, relative to But help do and clients we we that environment, on competitors. enable dynamics the in our our at the interoperability And as of the take on to increases calibrate strong input clients. capture with color And strong value to capturing from here. health think have to of we continue the so tools much the too to our I coverage we have, as client important I something clients. and we value And to, We position based over pricing to which tools, money, using a well quality generating pricing the ecosystem dimension, we're well environment and our client overall and we think standpoint. trying you an on that that very are, many to price into our look focused value alluded as linking But our the you very depth a segment we're dynamics to us to time. From from seeing. is very well to the off drivers and add know, that coverage a them It's as don't want monitor know, But to be to as of breadth areas, of an closely long-term against the as based the offering raise are are our you approach continue of the all continually things we on drive value our ability proposition

think As are to positioned well you think organization, But competitive alluded as we to well. the we in well and relative some places we're seen competitors we across wins, like have there. ESG, we positioned

Operator

Our next RBC. from comes Sabadra with question Ashish

Ashish Sabadra

you Index elongated but the on about innovation the down the on comment could also front? comment seen further down you've cycles I how drill Andy, seeing if if there? improving you are on a if obviously on your just were Wanted Those drill constructive trending, just any shortening further on, And talked pipeline you that sales and indices, was the front, on was wondering trends environment. last custom year. you're could to

Andrew Wiechmann

Sure.

markets by They're for constructive through translating AUM clients, are revenue as places, confidence. higher levels that's nuanced constructive geography, buying So by to the and elevated many say very I'd to, alluded asset and and behavior. in segment. to by budgets to, are managers, dynamics I

Although improvement those -- to continues cycles, there, in sales there see to in but do long. work sales be and terms many we it of through things ultimately the some areas,

dynamics to between As different I and slightly earlier, the U.S. are the alluded Europe.

overall, constructive in we the But are seeing trends in particular. in U.S., general and

seeing, are to, across you We as as alluded segments momentum client other well.

And like are like hedge wealth managers, so areas solid where funds, asset delivered areas and these grown we've quarter. owners, all growth areas the at solid current rates growth in rates

the can that those generating. to are many of dynamics different and I'd are continues I it's the slightly think areas. so And innovations capitalizing say be that on we something in evolve, we

to the As about subscription line, was growth within I that index index the side, indexes in custom alluded you on asked custom mid-teens. custom and

you ETF strong very We flows, the were custom on on continue strong which in weighted beyond But we've the what's cap visibility strong passive, look ETF well. see traction going quite see front to non-ETF on progress index into into very can as in if non-market the seen you even in ABF side flows Obviously, products. quarter.

figures, in overall indexes. the XX% So non-market AUM saw and ESG linked factor cap including to roughly in non-ETF indexes, XX% category indexes, these non-ETF AUM, are rough close to to compares custom and that and within Climate XX% our growth we in but

direct in an And that's passive, trend so something indexing. important in for it's us helpful institutional obviously,

on front and derivatives. products structured with within over-the-counter We it also banks see the

excited the is with front, that an we the capabilities there on we're position clients, harnessing where positioned our leader the this custom it. to uniquely with side standards we our index a have together are be across index for on organization, the area and so And out

Operator

Alexander Hess question next JPMorgan. comes from Our with

Alexander EM Hess

of back sort go of subscription to in trends the the the overall discussion business. to Just the

its us stands, a that in the about hasn't As it of organic quarters at X% Can growth to to quarter, Obviously, cycle level. you rate reacceleration? mention might about history. How When of couple been subscription we that X% close how help potential we MSCI of do growth run reinflection inflection in you -- to grower when just occur? would how that thinking are that get are turn?

Andrew Wiechmann

Sure, Alex.

a of you As last through the environment over gone we've couple know, dynamic years.

of We And see there's areas asset Sitting dynamics of both into wide I standpoint of run a over from as as client fed a pressures in client worked content lingering have competing in going the through segments, outflows system. But continue some are seeing couple as we sales to well strong areas, opportunities growth management be noise, the traction product have subscription bit here, a front the from growth. seen segment as to the client last I we've like across I quarter events overall so areas standpoint. alluded some continue years. can as of that for impacts some momentum. the that see And the In us as a be, looking key the standpoint. in range here, those from working all have from recurring and impacts alluded recurring net elevated index, about you to, mentioned, see area there forward, of in that new system. we rate see Obviously, to, been the lingering us. a to of some through term we excited of short We across

small combined help space that, general Fixed that growth and attractive think areas and the value we've areas on higher and in Private of some like but there have on areas as so today, with the the will opportunities well fuel proposition And Analytics us relatively of as we're a think at the opportunities, were like management, then Asset got and to us like growing Income in capitalize we PCS rate growth differentiated side, secular future. healthy in wealth which positioned a in front well big we in

Operator

next comes Oppenheimer. question Lau with from Owen Our

Kwun Sum Lau

the bit you rate like Could little outlook bit about how from your that? I subscription going a forward? run came please expand little see about last more on in remarks. looks a little little segment? driver quarter. But think And could you your It down the talk the you please a revenue bit more Analytics And talked do the prepared timing of a of bit you

Andrew Wiechmann

a Sure. Owen, it's Yes. question. good

take consistent actually it the exclude One, was in focus X relatively I'll me from run growth, subscription let So rate prior FX, which, parts. if the you on quarter.

So around fourth around the rate in I organic think third both so The quarter, it was X.X% stated X%. quarter, the in growth run number was subscription lower. X.X%

look meaningful immediately. So but it did rate as driven impacts on dropped, a adjust impact that the rate, you run was like by know, the which FX it FX run

to drop areas in appreciation the like euro to rate. translate the in through a U.S. relative the stated dollar So pound the run the and

alluded doors in their as been for fixed organic adding and continue out open helping see the insights as to offering value. steady, areas to, additional called we improve But and It's clients be and help to we scale our upsell our opportunities. rate the wealth, more has we like, run momentum good income, bring and continues experience, efficient to them large complex create within to us customer new workflows relatively and

So we in continue in key the growth to these be we're momentum areas Analytics. excited seeing about

lumpiness can As some quarter-to-quarter. be always, there

Analytics. overall, in to noise other to seen that segments we And company of did in bit a the Analytics. we we've by some That's in be see a be momentum expected encouraged we've as pickup seen you saw hitting so cancels. across the is But the continue of

related the On alluded as revenue impacted was as prior mentioned, we to, by the timing you revenues. revenue, front, quarters of the implementation in

ago, period rate was expected. below related is from in result this implementation revenue. a growth implementation-related below in revenue slightly amount The a contribution In lower run was slightly was of a large growth. revenue the revenue the what the which a of have we rate line with quarter, we year as run So releases, did comparable and growth

periods, the those lower. will this We to short growth the term compare continue. bit do rate that very we expect here a in when looks So

we revenue in the So we as growth rate expect sense be the growth and But the the would to the there. on I And run growth run direction as slightly generally below next excited as of segment. focus to to trajectory I mentioned, more continue rate be a the quarter.

Operator

next question Kelsey Autonomous. from with Zhu Our comes

Kelsey Zhu

you the if net I I can this in new Assets provide Private a rates think retention that? on was more I bit Capital sales. in colors seen So the on accelerating wondering quarter, declines Solutions, know growth both XX%. and think we've from prepared to And I Private teens you mid- high in the to revenue talked remarks. you acquisition, touched that for of time at about

wondering time that just line the target? was achieve I So to what's

Andrew Wiechmann

Sure. Sure, Kelsey.

PCS the -- and XX%. The when look different, are I'll PCS from where Assets and see see offering offering. Burgiss to, and although we Real recurring PCS, new not together new them first you here, in the MSCI yes segment, EMEA and having cancels opportunities the at bringing dissecting the the because owners growth think, owners the or good in but so quarter, both in we volatile, X quarter run clients it's softness as So see separately maybe in slight to logos as landing slowdown know. And net pretty worth good we've is dynamics of we're can And with a And this in and reporting alluded bit asset the bit are seeing the a we did did be with we at to is, asset sales subscription large and fully traction a good individually. On that are leveraging APAC. momentum you and some I rate, traction managers. are continued steady organizations MSCI

we for space. the last are indexes you Index there. Things about And the like opportunities PCS, see a we of real year, middle benchmarks know, so wide the the in range overall, and in Private we leased Asset side, and encouraged were still as opportunity of

be to encouraged the last been AI for overall overall, But that will about are little be have are over host and I But -- whole releasing additional there's robust opportunities that of new to a around an indexes. did and of volatile be were content not we've broadly. the more that, lead been things it dynamics of data also awareness opportunity quarter-to-quarter. PCS. In those into for indexes, we of same sets We content aggressively within the Assets, leveraging around only creating sales And innovations our which time, as both see sales seeing can we're credit us. those that but our continue adoption Real unlock said, around driving we additional a several insights, cancels bit will quarters. And private

been real impacted So by feeling down that sale client large pressure. we were a has with one

to alluded our brokers We translating also felt as through and remarks prepared and That's some agents. products. pressure, I in to with softness the property data in Intel

insights. momentum gives seeing Intel, We market Index still decent are our which like in areas

what that Americas And we through hope to institutional start seen sign seeing we back some in, outsized fourth continuation at have Europe, a started or to of cancels that in capital a is in expect coming point see traction come of in to an contribution couple we and items. quarter, and saw But of some very pickup just in early early that, the of probably signs and of we've activity. really trends and from activity coming the transaction in improved into we the big would space back see future just money a the the with an

Operator

from Wurtzel Scott Research. Our next Wolfe question with comes

Scott Wurtzel

And I kind if as pretty are throughout segment. Wealth been map wanted strong to run elevated wanted growth the that rate your share to road on XXXX, of just you there. sort see priorities potentially and opportunity move we that what to ask The maintain can of for strategic try has growth? to

C. Pettit

Sure.

there's opportunity I lines. our product an So all across clearly of think

wealth with and think of more use the control opposite indexes of those insight are the we I think much in balancing an construction across portfolios standard act of -- data in significant actionable And just risk tools. of have in as fact, Henry directions. and advisers in and Atlantic to opportunities the benchmarking used But central with there's even other process. some enormous and existing investment and there. And portfolio crossed Henry the opportunity scaling we our And giving of help cases in of we

and the of a New legacy both need product my And significant the tools CIO weeks a improvement lot there's And So for the lot advisers. the the And would say, I analytical of of spent is a the center few place better at for I environment York. players. with in, office for for in last control wealth or large were that. there groups systems that meetings in stand

including that So discussion And moving there's content, we of Asset there Private And into opportunity enormous more the now have think opportunity across an we products daily enormous and our amount we generalized think all have all there's we of of Wealth I also originating to segment. news that, action the about read. as incorporate of clients often LPs private all in where as of them some on the Private of as Asset are clearly largest behalf analytics the well the their segment, some -- GPs managers that wealth enacting markets. we even had significant of also into a Wealth

those opportunities So both of create for us.

deals look And will important that we data solutions, player forward rates. some us the the really, attractive content see, So with I've ourselves more great say wealth, of a have players, high significant have engagement. what point we'll which to myself. key and of is for deliver. I more think meetings think I wealth and as we And that really as think of a very all in would virtuous we into our that some establish where to as hope as and I quite this our is see a and larger we start get -- believe, be segment, credibility provider our we with managers. deal, earned I confident a Wealth solutions we that been I think this of and capabilities I'm will levels we a I those in we've becomes XXXX, plan, will to But traction, year to credibility as in got growth get continue both circle, serious the

Operator

question comes Huber next with Partners. Craig from Research Huber Our

Craig Huber

side? Can can for some a the few Maybe examples AI about on guys particularly on be I'd excited concrete you focus where AI you minutes. you're us can help you give curious where if here major cost you will help And pricing us charge on to of revenue the think side, AI-enhanced the of enhanced long term, do able things beneficiaries you that on products. products? some examples for more also you give side efficiency

C. Pettit

Sure.

me take those in order. let So

cost So leading our the acquisition. scale demand our area, to I efficiency we of get seen charge would to would past. say up is growing new already point still the business that where data had view, -- very operations we But of less data a cost significantly than we've the we I are think ability significantly of much able have because in of in to the also to reduce lot from the importantly, ability are categories with with data

hand. the of product look you that so certain the in, areas, So at story transformation is and if tied also in efficiency hand then kind go

lot on -- which using data hired for have had embarked would example, time. private hire a sort We would first mapping more scalable humans. of taken a a simply have to more AI, we've all, us, credit at of So present, of lot

products We're a of also to generally, -- importantly, efficiencies that measurably cost of be market. And budgets. of lowering in XXXX the to a AI. extremely both it's and much software back more be So analytics our data quickly. Clearly on engineering, are And more into we've able speed number to acquisition. there built in to those we're going quite had the build attractive with

I side. the will view, important year XXXX think that shoots product of point be we've product a from on So an that green very and got some interesting transformative

it to we continue the area So us. we've for AI mentioned which is will analytics deepen and insights, important an

AI controversies, gathering cetera. the quality our areas of product we've worked the to and would example in will major which in driver Index, AI, -- we thematic ESG will discovery data confluence had for Geospatial is a out had acquisition significant year. Again, be we'll the of with data But has of which which positive terms and beta. -- out one intelligence, climate in of some coming market data later some both we scaling at clients, in that the index be addition Google currently it's feedback which We We've in and in very notably currently component. innovation et very on like using in asset control and scale insights brought from and be rolling -- shortly versions area, a some

in XXXX So I of an for of new be terms AI product delivery. will in development, both efficiencies that terms and extremely our important year think

power a topic. of -- think that has out, pricing still power. the a it's whether creates it pricing I then inherently don't is I think jury raw it kind

it's I strict engine, thing, be of interesting and think more of entirely a us will clear new a efficiency But should sales it's an not power that massive and topic, it's pricing exciting think it's but creation and innovation help I growth. and think a if it products. sense I drive

Operator

Bank. Faiza question with next Deutsche from Alwy Our comes

Faiza Alwy

some So around geography bifurcation in you've from to the terms clients in your seeing you're alluded what of U.S. outside versus U.S. the

separately, U.S.? And color where then a on So from here might you housekeeping if finer put question. internationally I a that, some versus share think on can the wondering sneak if just you things in I'm point can go

You some conversions of subscription. onetime about into talked data

but -- if I of course an business, outsized was curious if normal at level? that curious that's that know So

Andrew Wiechmann

Sure, sure, Faiza.

geographic the dynamic it's as differences here, on earlier, a I alluded very picture. to So listen, and nuanced

sales bit But and does we're seen it segment -- in a So firm something have we vary to to on client is pressure asset segment, cancel managers seeing linger that is more the here. side. Europe. And that firm client the even I both on think

same overall the managers can trends I just there be general, think, do, asset follow there. in the they lags that

many And managers. period outflows so of where significant several we you years in out saw asset for a coming as from Americas, know, the we're

to the sustained see change. to bit -- there And momentum, a least we are starting are encouraging. out to And are continuing there we see that EMEA, levels same on. thing some I think is could well, in know, some up, expect large impacts over But happen hopefully, in as keeping you as potential eyes see we start lingering the that we market confidence, we the of the do with although near overall, term. which at think mergers environment mergers our time

different going in I segments impact paces at regions just here. think different it's different to

had, was Faiza, clarification topic? what the the question Sorry, second on you on

the with follow Oh, Well, her. apologies item. we free housekeeping I'll the up Faiza, data for lost you, that. think Yes, float I sales. on

Oftentimes, free a on package data they float time, how it So ongoing it, sell yes, to to value will we from And convert a do our we subscription. business. derive from time when our on the onetime will and clients part basis. get have, handle a to and they use of can it it's

prior part part as quarter. our quarter. And and saw item call in and we get of so wouldn't in I clients, the our it ongoing I door we And the that of the think and sampling significant the are that relationship. a model have It's something business can where is here. in we it well, an data quarters as seen with in there it's data into offerings number a we turn trend something that have then out of

So out I the that. wouldn't quarter call from impact any in outsized

Operator

question George from with Sachs. next comes Our Goldman Tong

Keen Fai Tong

sales subscription and new to cancellation back go to wanted I trends.

You on had inflect positive the expected with that areas the you on improve And in in elaborate Can cancellation may sales to the to new sales? net or upside when basis. trends downside quarter normalize also to you quarter subscription year-over-year a and cancels have growth? fourth and respect surprised new expect the recurring

Andrew Wiechmann

do say I any sales a both alluded pretty the inflection earlier touched on the earlier, on quarter or we trajectories be I of too on seeing a and lot want about are other are sure. specific this to than there you I highlight see, and and to cancel that I front, just index dramatic don't as encouraging points, wouldn't Yes, to surprises. strong subscription mean side. Listen, signs,

client we elevated budget of cancels see came what expecting. QX I in level in line with think and were in We events do and mentioned generally lingering we had impacts, what constraints.

and we've which expected. Assets, in were You can Real areas cancels elevated see there like been seeing

That like advisers. we And corporates its and in You XX%. ESG Climate, was pretty just consistent prior in ESG saw but there Climate Analytics, given and be the fourth tends -- retention and ESG renewals. certain over pretty quarter, areas above we just cancels or stabilized cancels are have by the where nature, in in quarter, oftentimes lumpy, client rate elevated to and solid corporate to some elevated with seen just have do

the some seen. cancels lingering continue that be say and dynamics pretty the impacts outlook, line I'd with degree expect so we've noise expected, And we from the what encouraged in probably by we some but of were and to elevated and we much factors saw

Operator

Our Atlantic. Russell comes next Quelch Redburn with from question

Russell Quelch

data on access you're product question of seeing I segment. already capabilities have you to this increase the the sales on ESG an you're Moody's a opportunities? doing private ask partnership? where to opportunity now given new is you side, scope the to wanted is Just their and growth about on what Orbis impact in something Wonder the an this talked with the with wondered, database, there also partnership

Henry Fernandez

Yes.

had think, the So announcement I components it. that to last we made, X summer,

would sell package Moody's The them banks rating Services, agencies, -- their first their lot be that be to the with the are not it to of companies. Investor a ESG clients, Analytics, data it are Moody's lot which subscribing and of and able analytics, to to a was insurance products our component the Moody's

part one announcement, that of So have and lot was a already started we are that. -- the we of doing

was sitting ESG that that announcement entered with the their a we Moody's Bureau in use data, a Bureau van of we former The create second part scores that the had will of Dijk contract that on to van Dijk database. into database large number entities are

over I products probably be, combined their think million with again, to entities scores that going be it's can XXX and products. ESG with our

an intention. The was third the of part announcement

X first the The bids, were right. actual

performance intention analysis credit The and and and obviously, private together credit we're announcement was and of strong lot lot Moody's of databases in of risk analysis part of very in probabilities very funds. of work strong, credit. in on to instruments as like. is of And third course, you private default analysis individual the know, a and an a and the And

possibility here working We're with things. still those be some is And X kind of in it of there joining of the forces is will if to So idea that, talking. through the capabilities. Obviously, still course. we're complementary explore agreement due

-- I upswing both with we'll side we a this. associated obviously, synergistic lot more in early that And this, to respect the those it's side. so an report of think revenues see as with So from our their and days

Operator

question Haas with Fargo. next Our comes from Wells Jason

Audey Ashkar

Haas. wanted ask to the for is on expense Audey, guidance. This I on just Jason

towards For run end XXXX, the in we saw despite of low AUM. in the expenses come range the

in. call, ended last where the be might coming towards the have think signaled I of that up we versus you would gravitating high range guys end we

as year? gas was do I'm may you you're little environment the be to offsetting some something just savings seeing in bit more? And keeping the the Is on or that why just so with to if case And that's pressing a from curious about you then there what wondering range in guidance gradually you guidance of low of assumption throughout AUM anything can and Push to us to year. AUM end XXXX? outside for on the the either the increasing the puts the that range XXXX, talk expense understand guys levels take takes could or the this high

Andrew Wiechmann

Sure, sure.

Things be QX, like So ultimate can expenses swing just the or to things of expenses a ultimate expenses fluctuate a things that swing on bit, there to severance number like bonus noncomp other levels can and up can a cause accrual the can cause down. items bit.

expenses up the expecting in You on our quarter. in a we that messages pick earlier in are jump first did

QX here. from and is is QX And up causing so I there alluded that expenses main sequential expenses items. pick to And as then, can be some to timing-related to, the driver compensation benefits-related the

key flow In throughout office enhancements in line AI-driven growth investment overall driving solutions. but are our for is guidance to cash we the attractive rules-based our analytics, secular plan increase the say as that drive private to expense guidance gradually profitability trying our growth the our terms top level where of basis. maximize also based has heard, and The really architecture, a front to growth guidance those investing, areas, invest year. approach in year, to changed modern continually is markets markets, embedded the assumption while to our the on the overall you like of consistent on a infrastructure, I'd continue not also

factors, do, only the not performance pace and of at agenda to efficiencies. driving that we importantly, we factors. always on will And that we spend through do whole there see on are the market so continually host a continue out based continually but of focused business have opportunities expense guidance, also calibrate year are on but levels, we as based an we ambitious included invest we -- looking other And to in

expenses. will in no but we approach you change our keep general posted, to So

Operator

comes next ISI. Evercore with Our from David Motemaden question

David Motemaden

had question, follow-up a pricing. a I on

the that So XXXX XXXX. pricing you the mentioned guys lower And captured about you was that think mean XXXX? in the and price -- you you historically? we lower of was same, some guess, took increase about price I lower think that higher guys or that price in Does versus long-term increases sort taken have had of below in increase the guys in the we you price moderated or that XXXX that guys was average being should XXXX, as

Andrew Wiechmann

I -- exact not relative the XXXX. would And the given level environment. just was yes, in to provide sales historical increases too from XXXX, And XXXX price to want overall -- contribution the less it much was would don't in to levels. and I on it be I was not in as to know, detail pricing elevated slightly you clear, than recurring

to approach continues Our remain same. the

are there areas I pricing do power. we think have where

can we're areas and there we delivering we our very clients that be we the thoughtful way although value to constructive to price want a unlock to and to enhance measured and are and are Importantly, our continue where is clients. products that,

areas be sure, but And differ are measured. will so opportunities where those there company, do for dynamics there we and the across are

Operator

Our from Gregory comes with question Simpson BNP Paribas. next

Gregory Simpson

the with neutral it's active I if Do Do opportunity for you fund? MSCI that think the for negative? industry last ask the to started just set vehicle the managers? think year. ETFs ETF mutual the or you managed wanted replace to Actively positive, fastest-growing part changes of eventually

C. Pettit

No, it's definitely a positive.

and beginning myself in of year. of topic a end number extremely focused the we're this on meetings year last been this on and this So of in the

is rules So based. it a -- it form, active is simplified in in more continuation becoming of strategies essence,

as plays and index turn, strength and in extremely and that well analysis. provider an -- MSCI portfolio provider a as to analytics So of both

quite are the are then manage of there rules-based the end we things. portfolio number much take you side of help asset through and that or closer to the where there management construction strategies but is them And can which a side index continuum are to active if managers strategies a can and, portfolios of of So build make reflecting this, -- the we there indexify ways those -- like, help active them. And of more closer them, -- of there's spectrum. index clients them, risk actually also through helping things

huge for now. a focus right is So this us

very Going the U.S., more of to I or regional both on thing to there say, us but discussion we're on and have both and the be the may pricing maybe somewhat new would our been positive trend. it's overall, we're ways sides in focused where back developing development of that definitely going more And capabilities global and a more adding to Atlantic, a definitely for clients. value visibility,

Operator

Alex Our from of last is Hess question JPMorgan.

Alexander EM Hess

of about on in now how rollouts discussion innovation and front you? Obviously, industries, a there's pickup a today's There's on and M&A about your call do side, the of products. a in across inorganic of the product product you maybe lot talk M&A. assess But opportunity lot

seeing Just wanted business to in see with it what you're your specifically?

Henry Fernandez

is in that, Alex. Thanks for The vast organic growth. our MSCI majority of at focus

and sets, of many development. and We closer importantly in many new the cases, client putting use in many the new more And bases, data have already have synergistic, the enormous analysis models create risk to product data together opportunities new analytics of connecting with climate that portfolios from clients and to to so create and so at that can we forth. portfolios on to look ESG Index them Private and in-house of Assets

that's So been moat. primary our

look feel some for rate that everything investigated us to high that But there we for opportunities, is organic of capital have We course, have and we return, returns the order at almost in those in deploy they analyze that it. we inorganic we of Of out investments. for get comparable to it. sale a to

like et the we through you and and is in growth are smaller the Real way companies into on area Capital can side, that Analytics with and times acquisition in like only opportunistic the cetera. there Foxberry, with Of certain our an an predominant course, at are which organic is level did they the But priced right and and Burgiss for get in focus bolt-ons, strategic areas, event us. the come Fabric they

Operator

call session. I'd remarks. closing Fernandez to Henry That like over concludes back turn for the the question-and-answer to

Henry Fernandez

today. you us for again joining thank So

see, As focused we're client operating 'XX. backbone in environment. very results the financial improving can and MSCI in improving on business And strong our the you especially improving budgets metrics, delivered with subscription of

model resilience the demonstrates the our that business of of and All to value provide clients. that we

indicated, top. I the and at MSCI from indicated centricity Baer As client starts

the XX% understanding more with time can So our of solve talking spend them, of their cetera. we level at clients, than we our company top to how needs, understanding et

to to partnership So working segments. innovation. efficiencies -- for We're clients business. and scalability across their we're continuing client with in expand key with driving We're create

with enormous As we and a has we thoughtful compounder, we cannot It creating constructive price are our want on be misused. clients have to clients. long-term long-term our value power, consistent because to and that mentioned, long-term a as compounder increases, partner be to we enormous, we be for a but pricing are

all strength and of gives leadership and of all areas incredible that us our capabilities. data, of and in the technology models So

and time So we today. with for our you look to spent the us all development, forward again that keeping thank you activities we and you abreast of

Operator

your Thank for participation. you

now a day. have Everyone, may great disconnect. You

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