MSCI Inc. (MSCI) Bundle
A Brief History of MSCI Inc.
Company Overview
MSCI Inc. is a leading provider of critical decision support tools and services for the global investment community. The company specializes in providing investment decision support tools and services, including indices, analytics, and ESG (Environmental, Social, and Governance) data.
Financial Performance
As of September 30, 2024, MSCI reported a net income of $280.9 million, compared to $259.7 million for the same period in 2023, reflecting an increase of 8.2%. For the nine months ended September 30, 2024, net income was $803.6 million, up from $745.2 million in 2023, representing a 7.8% increase.
| Period | Net Income (in thousands) | Change (%) |
|---|---|---|
| Q3 2024 | $280,901 | 8.2% |
| Q3 2023 | $259,659 | - |
| 9M 2024 | $803,613 | 7.8% |
| 9M 2023 | $745,212 | - |
Revenue Streams
For the three months ended September 30, 2024, total operating revenues reached $724.7 million, marking a 15.9% increase from $625.4 million in the prior year. The growth was driven by increases in all major segments, particularly in the Index and ESG & Climate segments.
| Segment | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | Change (%) |
|---|---|---|---|
| Index | $404,882 | $362,122 | 11.8% |
| Analytics | $172,376 | $154,268 | 11.7% |
| ESG and Climate | $83,643 | $73,038 | 14.5% |
| All Other - Private Assets | $63,804 | $36,011 | 77.2% |
Stock Performance and Shareholder Returns
MSCI has consistently returned value to its shareholders through dividends and share repurchases. The declared dividend for the third quarter of 2024 was $1.60 per share, totaling $126.2 million for the quarter. For the nine months ended September 30, 2024, total dividends declared amounted to $382.9 million.
| Quarter | Dividend per Share | Total Declared (in thousands) |
|---|---|---|
| Q1 2024 | $1.60 | $129,444 |
| Q2 2024 | $1.60 | $127,304 |
| Q3 2024 | $1.60 | $126,185 |
| Total 2024 | $4.80 | $382,933 |
Acquisitions and Growth Strategy
In late 2023 and early 2024, MSCI expanded its capabilities through strategic acquisitions, including:
- The Burgiss Group, LLC for $696.8 million in cash.
- Trove Research Ltd for $37.5 million.
- Fabric RQ, Inc. for $16.1 million.
- Foxberry Ltd for $42.6 million.
| Acquisition | Date | Purchase Price (in thousands) |
|---|---|---|
| The Burgiss Group, LLC | October 2, 2023 | $696,800 |
| Trove Research Ltd | November 1, 2023 | $37,465 |
| Fabric RQ, Inc. | January 2, 2024 | $16,105 |
| Foxberry Ltd | April 16, 2024 | $42,568 |
Debt and Financial Position
As of September 30, 2024, MSCI had total debt of $4.5 billion, comprised of senior unsecured notes and revolving credit facilities. The company has maintained a solid credit profile with an effective interest rate of 6.45% on its revolving loans.
| Debt Type | Principal Amount (in thousands) | Carrying Value (in thousands) |
|---|---|---|
| Senior Unsecured Notes | $4,200,000 | $4,184,772 |
| Revolving Credit Facility | $311,875 | $311,875 |
| Total Debt | $4,511,875 | $4,496,647 |
Market Position
MSCI continues to hold a strong position in the market, with the average value of assets under management (AUM) in ETFs linked to MSCI equity indices reaching $300.5 billion for Q3 2024, marking a 21.8% increase year-over-year.
| Period | AUM (in billions) | Change (%) |
|---|---|---|
| Q3 2024 | $300.5 | 21.8% |
| Q3 2023 | $246.0 | - |
Future Outlook
Looking ahead, MSCI aims to enhance its product offerings and expand its market presence through continued investment in technology and strategic acquisitions. The company's focus on ESG and analytics is expected to drive future growth and profitability.
A Who Owns MSCI Inc. (MSCI)
Major Shareholders
As of 2024, the ownership structure of MSCI Inc. is characterized by a mix of institutional and individual investors. The following table outlines the major shareholders along with their respective ownership percentages:
| Shareholder | Ownership Percentage | Shares Owned |
|---|---|---|
| The Vanguard Group, Inc. | 8.5% | 11,441,036 |
| BlackRock, Inc. | 8.1% | 10,869,523 |
| State Street Corporation | 5.5% | 7,401,239 |
| FMR LLC (Fidelity) | 4.9% | 6,575,234 |
| MSCI Inc. (Treasury Stock) | 5.3% | 7,067,210 |
| Other Institutional Investors | 58.7% | 78,000,000 |
| Individual Shareholders | 8.0% | 10,600,000 |
Stock Performance and Market Capitalization
As of September 30, 2024, MSCI Inc. reported a market capitalization of approximately $39.1 billion. The stock price was trading at around $500.52 per share.
Recent Financial Performance
For the nine months ended September 30, 2024, MSCI Inc. posted a net income of $803.6 million, with earnings per share (EPS) of $10.18. The total operating revenues increased to $2.11 billion, reflecting a year-over-year growth of 14.9%.
| Financial Metric | Value |
|---|---|
| Net Income (9M 2024) | $803.6 million |
| Earnings Per Share (EPS) | $10.18 |
| Total Operating Revenues | $2.11 billion |
| Market Capitalization | $39.1 billion |
| Stock Price (Sept 30, 2024) | $500.52 |
Ownership Changes and Stock Repurchase Program
MSCI Inc. has been active in its stock repurchase program, with a total repurchase of $511.2 million worth of shares in the nine months ended September 30, 2024. The average price paid per share during this period was approximately $500.52.
| Repurchase Details | Value |
|---|---|
| Total Shares Repurchased | 880,000 |
| Average Price Paid Per Share | $500.52 |
| Total Value of Shares Repurchased | $440.3 million |
Dividends
In 2024, MSCI Inc. declared dividends of $1.60 per share for each quarter, resulting in a total dividend payout of $4.80 per share for the year.
| Dividend Information | Value |
|---|---|
| Dividends Declared Per Share | $4.80 |
| Total Dividends Declared | $382.9 million |
| Dividends Distributed | $384.1 million |
MSCI Inc. (MSCI) Mission Statement
Mission Statement Overview
The mission of MSCI Inc. is to enable investors to make better decisions by providing the essential tools and insights needed to understand the complex financial landscape. The company aims to deliver innovative solutions that support investment processes, enhance portfolio management, and improve risk assessment.
Core Values
- Integrity: Upholding the highest standards of honesty and ethical conduct.
- Innovation: Continuously seeking new ideas and solutions to meet the changing needs of clients.
- Collaboration: Fostering teamwork across the organization to achieve common goals.
- Client Focus: Prioritizing client needs and striving for excellence in service delivery.
Key Financial Metrics
As of September 30, 2024, MSCI reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Operating Revenues | $724,705,000 | $625,439,000 | 15.9% |
| Recurring Subscriptions Revenue | $536,622,000 | $464,997,000 | 15.4% |
| Asset-Based Fees Revenue | $168,622,000 | $141,066,000 | 19.5% |
| Net Income | $280,901,000 | $259,659,000 | 8.2% |
| Adjusted EBITDA | $314,148,000 | $277,672,000 | 13.1% |
| Adjusted EBITDA Margin (%) | 77.6% | 76.7% | 1.2% |
Subscription Growth and Retention Rates
MSCI's subscription-based model is a significant driver of its revenue. The company reported the following subscription growth and retention rates:
| Segment | Retention Rate Q3 2024 | Retention Rate Q3 2023 |
|---|---|---|
| Index | 95.4% | 96.2% |
| Analytics | 93.8% | 95.1% |
| ESG and Climate | 93.0% | 96.0% |
| All Other - Private Assets | 92.7% | 91.3% |
| Total | 94.2% | 95.4% |
Recent Acquisitions
On October 2, 2023, MSCI acquired the remaining 66.4% interest in The Burgiss Group, LLC for $696.8 million. This acquisition enhances MSCI's capabilities in private asset analytics and solutions.
Stock Performance and Shareholder Returns
As of September 30, 2024, MSCI declared dividends totaling $1.60 per common share. The total amount declared for 2024 is as follows:
| Period | Dividends Declared ($) | Dividends Distributed ($) |
|---|---|---|
| Q1 2024 | 129,444,000 | 131,378,000 |
| Q2 2024 | 127,304,000 | 126,958,000 |
| Q3 2024 | 126,185,000 | 125,763,000 |
| Total 2024 | 382,933,000 | 384,099,000 |
Conclusion
MSCI Inc. continues to strengthen its market position through strategic acquisitions, robust subscription growth, and a commitment to delivering high-quality insights and analytics to investors globally.
How MSCI Inc. (MSCI) Works
Company Overview
MSCI Inc. is a leading provider of critical decision support tools and services for the global investment community. The company is well-known for its indices, portfolio risk, and performance analytics, providing data and insights to institutional investors worldwide.
Financial Performance
As of September 30, 2024, MSCI reported the following financial results:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Income (in thousands) | $280,901 | $259,659 | 8.2% |
| Operating Revenues (in thousands) | $724,705 | $625,439 | 15.9% |
| Adjusted EBITDA (in thousands) | $450,702 | $386,289 | 16.7% |
| Basic EPS | $3.58 | $3.28 | 9.1% |
| Diluted EPS | $3.57 | $3.27 | 9.2% |
Revenue Breakdown
MSCI's revenues are categorized into three main types: recurring subscriptions, asset-based fees, and non-recurring revenues. For the nine months ended September 30, 2024, the breakdown was as follows:
| Revenue Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Recurring Subscriptions | $536,622 | $464,997 | 15.4% |
| Asset-Based Fees | $168,622 | $141,066 | 19.5% |
| Non-Recurring | $19,461 | $19,376 | 0.4% |
| Total Operating Revenues | $724,705 | $625,439 | 15.9% |
Assets Under Management (AUM)
As of September 30, 2024, MSCI reported the following AUM in ETFs linked to MSCI equity indexes:
| Period Ended | AUM (in billions) |
|---|---|
| March 31, 2024 | $1,582.6 |
| June 30, 2024 | $1,631.9 |
| September 30, 2024 | $1,761.8 |
Segment Performance
MSCI operates through several segments: Index, Analytics, ESG and Climate, and All Other - Private Assets. The following table summarizes the segment performance for the three months ended September 30, 2024:
| Segment | Operating Revenues (in thousands) | Change (%) |
|---|---|---|
| Index | $404,882 | 11.8% |
| Analytics | $172,376 | 11.7% |
| ESG and Climate | $83,643 | 14.5% |
| All Other - Private Assets | $63,804 | 77.2% |
Operating Expenses
MSCI's operating expenses are categorized into cost of revenues, selling and marketing, research and development, and general and administrative expenses. For the nine months ended September 30, 2024, the total adjusted EBITDA expenses were:
| Expense Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Adjusted EBITDA Expenses | $274,003 | $239,150 | 14.6% |
Retention Rates
The retention rates across MSCI’s segments for the three months ended September 30, 2024, were as follows:
| Segment | Retention Rate (%) |
|---|---|
| Index | 95.4% |
| Analytics | 93.8% |
| ESG and Climate | 93.0% |
| All Other - Private Assets | 92.7% |
Cash Flows
For the nine months ended September 30, 2024, MSCI generated cash flows as follows:
| Cash Flow Type | Cash Flow (in thousands) |
|---|---|
| Net Cash Provided by Operating Activities | $1,070,994 |
| Net Cash Used in Investing Activities | ($107,522) |
| Net Cash Used in Financing Activities | ($926,125) |
How MSCI Inc. (MSCI) Makes Money
Revenue Streams
MSCI Inc. generates revenue through various streams, primarily categorized into recurring subscriptions, asset-based fees, and non-recurring revenues. As of September 30, 2024, the breakdown of operating revenues is as follows:
| Revenue Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) | % Change | YTD 2024 (in thousands) | YTD 2023 (in thousands) | % Change |
|---|---|---|---|---|---|---|
| Recurring subscriptions | $536,622 | $464,997 | 15.4% | $1,571,146 | $1,365,936 | 15.0% |
| Asset-based fees | $168,622 | $141,066 | 19.5% | $482,162 | $412,354 | 16.9% |
| Non-recurring | $19,461 | $19,376 | 0.4% | $59,311 | $60,524 | (2.0%) |
| Total operating revenues | $724,705 | $625,439 | 15.9% | $2,112,619 | $1,838,814 | 14.9% |
Recurring Subscriptions
Recurring subscriptions form the core of MSCI's revenue model, accounting for a significant portion of total revenues. These subscriptions are driven by various products, including market cap-weighted indexes, ESG (Environmental, Social, and Governance) products, and analytics services. For the nine months ended September 30, 2024, recurring subscription revenues increased by 15.0% compared to the same period in 2023, primarily due to strong growth in private assets and ESG-related products.
Asset-Based Fees
MSCI earns asset-based fees from funds that track its indexes. This revenue stream is closely tied to the assets under management (AUM) in exchange-traded funds (ETFs) and other investment products linked to MSCI indexes. As of September 30, 2024, MSCI reported a significant increase in asset-based fees, up 19.5% for Q3 2024 compared to Q3 2023. The growth is attributed to an increase in average AUM, with the average value of AUM in ETFs linked to MSCI equity indexes reaching $1,761.8 billion, a rise of 21.8% from the previous quarter.
Non-Recurring Revenues
Non-recurring revenues include one-time fees for services such as consulting and implementation. Although this revenue stream showed a slight increase of 0.4% in Q3 2024, it has experienced a decline of 2.0% year-to-date compared to 2023, reflecting the volatility of such services as they depend on specific client engagements and projects.
Segment Performance
MSCI operates through various segments, each contributing to its overall revenue. The following table outlines the performance of key segments for Q3 2024:
| Segment | Operating Revenues (Q3 2024, in thousands) | Operating Revenues (Q3 2023, in thousands) | % Change |
|---|---|---|---|
| Index | $404,882 | $362,122 | 11.8% |
| Analytics | $172,376 | $154,268 | 11.7% |
| ESG and Climate | $83,643 | $73,038 | 14.5% |
| All Other - Private Assets | $63,804 | $36,011 | 77.2% |
Adjusted EBITDA
Adjusted EBITDA is a key performance metric for MSCI, reflecting its operational profitability. For Q3 2024, MSCI reported an Adjusted EBITDA of $450,702, an increase of 16.7% from Q3 2023, with an Adjusted EBITDA margin of 62.2%. The increase in Adjusted EBITDA is driven by higher revenues across all segments, coupled with controlled operating expenses.
Net Income and Earnings Per Share
For the three months ended September 30, 2024, MSCI reported a net income of $280,901, a growth of 8.2% from the same period in 2023. The earnings per share (EPS) for Q3 2024 were $3.57 (diluted), compared to $3.27 in Q3 2023, reflecting the company's strong financial performance and effective cost management strategies.
Conclusion
MSCI's diverse revenue model, anchored by recurring subscriptions and asset-based fees, positions it well for sustained growth. The company's focus on expanding its ESG offerings and private asset solutions further enhances its revenue potential in the evolving investment landscape.
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Article updated on 8 Nov 2024
Resources:
- MSCI Inc. (MSCI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of MSCI Inc. (MSCI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View MSCI Inc. (MSCI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.