MSCI Inc. (“MSCI” or the “Company”) (NYSE:MSCI), a leading
provider of critical decision support tools and services for the
global investment community, today announced its financial results
for the three months ended September 30, 2021 (“third quarter
2021”) and nine months ended September 30, 2021 (“nine months
2021”).
Financial and Operational Highlights for Third Quarter
2021 (Note: Unless otherwise noted, percentage and other
changes are relative to the three months ended September 30, 2020
(“third quarter 2020”) and Run Rate percentage changes are relative
to September 30, 2020).
- Operating revenues of $517.1 million, up 21.6%; Organic
operating revenue growth of 20.4%
- Recurring subscription revenues up 14.2%; Asset-based fees
up 41.2%
- Operating margin of 54.2%; Adjusted EBITDA margin of
59.3%
- Diluted EPS of $2.03, down 6.0%; Adjusted EPS of $2.53, up
15.0%
- New recurring subscription sales growth of 27.5%; Organic
subscription Run Rate growth of 11.8%; Retention Rate of
94.5%
- Approximately $85.8 million in dividends were paid to
shareholders in third quarter 2021; Cash dividend of $1.04 per
share declared by MSCI Board of Directors for fourth quarter
2021
Three Months Ended
Nine Months Ended
In thousands,
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
except per share data
(unaudited)
2021
2020
% Change
2021
2020
% Change
Operating revenues
$
517,099
$
425,333
21.6
%
$
1,493,702
$
1,251,729
19.3
%
Operating income
$
280,230
$
227,620
23.1
%
$
792,138
$
650,679
21.7
%
Operating margin %
54.2
%
53.5
%
53.0
%
52.0
%
Net income
$
169,876
$
182,358
(6.8
%)
$
532,118
$
445,606
19.4
%
Diluted EPS
$
2.03
$
2.16
(6.0
%)
$
6.38
$
5.26
21.3
%
Adjusted EPS
$
2.53
$
2.20
15.0
%
$
7.44
$
5.87
26.7
%
Adjusted EBITDA
$
306,595
$
249,447
22.9
%
$
878,130
$
715,374
22.8
%
Adjusted EBITDA margin %
59.3
%
58.6
%
58.8
%
57.2
%
“MSCI's third quarter reflected strong performance across the
company, resulting in double-digit organic operating revenue
growth. We benefited from our targeted investments, which position
us very well for the ongoing transformation of the global
investment industry,” said Henry A. Fernandez, Chairman and CEO of
MSCI.
“Our deep engagement with clients and other capital market
participants regarding climate change supports MSCI's continued
leadership of the investment industry's critical transition to a
net-zero world. We will continue to innovate and invest heavily in
order to best serve investors globally,” added Mr. Fernandez.
Third Quarter Consolidated
Results
Operating Revenues:
Operating revenues were $517.1 million, up 21.6%. Excluding the
impact of foreign currency and contributions from Real Capital
Analytics, Inc. (“RCA”), operating revenues were up 20.4%. The
$91.8 million increase was comprised of $44.5 million in higher
recurring subscription revenues and $41.4 million in higher
asset-based fees, as well as $5.9 million in higher non-recurring
revenues.
Run Rate and Retention Rate:
Total Run Rate at September 30, 2021 was $2,096.3 million, up
21.9%. Recurring subscriptions Run Rate increased by $227.7 million
and asset-based fees Run Rate increased by $149.0 million. Organic
recurring subscriptions Run Rate growth was 11.8%. Retention Rate
in third quarter 2021 was 94.5%, unchanged from third quarter
2020.
Expenses: Total operating
expenses were $236.9 million, up 19.8%. Adjusted EBITDA expenses
were $210.5 million, up 19.7%, primarily reflecting continued
investments in the business including increased headcount in
product development, research and technology to support growth, as
well as higher non-compensation costs in the areas of professional
fees, information technology costs and market data costs. During
the quarter, total operating expenses associated with RCA were
$10.3 million, of which $3.6 million were included in Adjusted
EBITDA expenses. Approximately $5.5 million in non-recurring
integration and transaction costs related to the acquisition of
RCA, and $1.2 million of acquired intangible assets amortization
expense related to RCA were excluded from Adjusted EBITDA expenses.
Total operating expenses excluding the impact of foreign currency
exchange rate fluctuations (“ex-FX”) and adjusted EBITDA expenses
ex-FX increased 18.4% and 18.2%, respectively.
Headcount: As of September
30, 2021, headcount was 4,237 employees, with approximately 37% and
approximately 63% of employees located in developed market and
emerging market locations, respectively.
Other Expense (Income), Net:
Other expense (income), net was $79.6 million, up 106.3%, primarily
driven by a loss of approximately $37.3 million on debt
extinguishment associated with the redemption of the $500.0 million
aggregate principal amount of the Company’s 5.375% senior unsecured
notes due 2027 (the “2027 Senior Notes Redemption”) in third
quarter 2021, which was excluded from adjusted net income and
adjusted EPS.
Income Taxes: The effective
tax rate was 15.3% in third quarter 2021, compared to 3.5% in third
quarter 2020. The increase was primarily due to the absence of the
prior year benefits related to the favorable impact of final
regulations released during third quarter 2020 clarifying certain
provisions of the Tax Cuts and Jobs Act that was enacted on
December 22, 2017 (“Tax Reform”). Both periods reflected
significant discrete tax benefits, in relation to pretax income,
including in third quarter 2021, the tax impact of loss on debt
extinguishment recognized in the period, in third quarter 2020, the
tax impact related to the revaluation of the cost of deemed
repatriation of foreign earnings and in each period, the settlement
of prior year items.
Net Income: As a result of
the factors described above, net income was $169.9 million, down
6.8%.
Adjusted EBITDA: Adjusted
EBITDA was $306.6 million, up 22.9%. Adjusted EBITDA margin was
59.3%, compared to 58.6% in third quarter 2020.
Index Segment:
Table 1A: Results (unaudited)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2021
2020
% Change
2021
2020
% Change
Operating revenues:
Recurring subscriptions
$165,310
$146,387
12.9%
$480,488
$431,631
11.3%
Asset-based fees
141,745
100,371
41.2%
404,593
288,642
40.2%
Non-recurring
14,448
8,933
61.7%
34,876
27,582
26.4%
Total operating revenues
321,503
255,691
25.7%
919,957
747,855
23.0%
Adjusted EBITDA expenses
75,916
60,971
24.5%
221,023
186,292
18.6%
Adjusted EBITDA
$245,587
$194,720
26.1%
$698,934
$561,563
24.5%
Adjusted EBITDA margin %
76.4%
76.2%
76.0%
75.1%
Index operating revenues were $321.5 million, up 25.7%. The
$65.8 million increase was primarily driven by $41.4 million in
higher asset-based fees mainly reflecting an increase in revenues
from exchange traded funds (“ETFs”) linked to MSCI equity indexes.
This increase was in turn driven by a 52.4% increase in average AUM
in ETFs linked to MSCI equity indexes, partially offset by a
decline in average basis point fees on those AUM. Non-ETF indexed
funds linked to MSCI indexes also contributed to the increase in
asset-based fees.
Recurring subscription revenues increased by $18.9 million,
primarily reflecting strong contributions from market cap-weighted
index products and from factor, ESG and climate index products. The
$5.5 million increase in non-recurring revenue included client
license and usage fees related to prior periods.
Index Run Rate as of September 30, 2021 was $1.2 billion, up
21.7%. The $217.3 million increase was comprised of a $149.0
million increase in asset-based fees Run Rate and a $68.2 million
increase in recurring subscription Run Rate. The increase in
asset-based fees Run Rate was primarily driven by higher AUM in
ETFs linked to MSCI equity indexes and higher AUM in non-ETF
indexed funds linked to MSCI indexes. The increase in recurring
subscription Run Rate was primarily driven by growth across
products, including market cap-weighted index products and strong
growth in factor, ESG and climate index products and reflected
growth across all regions and all client segments.
Analytics Segment:
Table 1B: Results (unaudited)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2021
2020
% Change
2021
2020
% Change
Operating revenues:
Recurring subscriptions
$134,320
$126,251
6.4%
$399,360
$376,505
6.1%
Non-recurring
1,978
2,086
(5.2%)
6,857
4,903
39.9%
Total operating revenues
136,298
128,337
6.2%
406,217
381,408
6.5%
Adjusted EBITDA expenses
86,007
83,281
3.3%
260,381
253,868
2.6%
Adjusted EBITDA
$50,291
$45,056
11.6%
$145,836
$127,540
14.3%
Adjusted EBITDA margin %
36.9%
35.1%
35.9%
33.4%
Analytics operating revenues were $136.3 million, up 6.2%. The
$8.0 million increase was driven by higher recurring subscription
revenues from both Multi-Asset Class and Equity Analytics
products.
Analytics Run Rate as of September 30, 2021 was $568.9 million,
up 4.5%. The increase of $24.6 million was also driven by growth in
both Equity Analytics and Multi-Asset Class products. Analytics
organic Run Rate growth was 4.9%.
ESG and Climate Segment:
Table 1C: Results (unaudited)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2021
2020
% Change
2021
2020
% Change
Operating revenues:
Recurring subscriptions
$42,592
$28,152
51.3%
$115,299
$78,961
46.0%
Non-recurring
1,099
399
175.4%
2,450
1,125
117.8%
Total operating revenues
43,691
28,551
53.0%
117,749
80,086
47.0%
Adjusted EBITDA expenses
33,871
20,893
62.1%
97,164
63,303
53.5%
Adjusted EBITDA
$9,820
$7,658
28.2%
$20,585
$16,783
22.7%
Adjusted EBITDA margin %
22.5%
26.8%
17.5%
21.0%
ESG and Climate operating revenues were $43.7 million, up 53.0%.
The $15.1 million increase was primarily driven by strong growth
from Ratings, Screening and Climate products. Excluding foreign
currency exchange rate fluctuations, ESG and Climate revenue growth
was 47.2%.
ESG and Climate Run Rate as of September 30, 2021 was $178.4
million, up 45.9%. The $56.1 million increase primarily reflects
strong growth across both Ratings and Climate products with
contributions across all regions and client segments. ESG and
Climate organic Run Rate growth was 46.3%.
All Other – Private Assets
Segment:
Table 1D: Results (unaudited)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2021
2020
% Change
2021
2020
% Change
Operating revenues:
Recurring subscriptions
$15,418
$12,400
24.3%
$48,355
$40,402
19.7%
Non-recurring
189
354
(46.6%)
1,424
1,978
(28.0%)
Total operating revenues
15,607
12,754
22.4%
49,779
42,380
17.5%
Adjusted EBITDA expenses
14,710
10,741
37.0%
37,004
32,892
12.5%
Adjusted EBITDA
$897
$2,013
(55.4%)
$12,775
$9,488
34.6%
Adjusted EBITDA margin %
5.7%
15.8%
25.7%
22.4%
All Other – Private Assets operating revenues, which reflects
the Real Estate operating segment, were $15.6 million, up 22.4%,
and included $3.4 million from the acquisition of RCA, which closed
on September 13, 2021. Excluding the acquisition of RCA, All Other
– Private Assets segment revenues were lower due to lower volume of
deliveries to clients in third quarter 2021 as compared to third
quarter 2020. Excluding foreign currency exchange rate fluctuations
and contributions from RCA, All Other – Private Assets revenue
growth decreased 7.6%.
All Other – Private Assets Run Rate, which reflects the Real
Estate operating segment, as of September 30, 2021 was $131.7
million, up 148.6%, and included $73.9 million associated with the
RCA business. Excluding the acquisition, the increase reflected
contributions from both Global Intel and Enterprise Analytics
products, as well as strong growth in new sales of Real Estate
Climate Value-at-Risk products. All Other – Private Assets organic
subscription Run Rate growth was 7.3%.
Select Balance Sheet Items and Capital
Allocation
Cash Balances and Outstanding
Debt: Cash and cash equivalents was $1.3 billion as of
September 30, 2021. This balance reflects the net impact from
funding the acquisition of RCA for $948.7 million, receiving the
proceeds from the issuance of $700.0 million aggregate principal
amount of 3.250% senior unsecured notes due 2033 completed on
August 17, 2021, and funding the 2027 Senior Notes Redemption. MSCI
typically seeks to maintain minimum cash balances globally of
approximately $200.0 million to $250.0 million for general
operating purposes.
Total principal amounts of debt outstanding as of September 30,
2021 was $4.2 billion. The total debt to net income ratio (based on
trailing twelve months net income) was 6.0x. The total debt to
adjusted EBITDA ratio (based on trailing twelve months adjusted
EBITDA) was 3.7x.
MSCI seeks to maintain total debt to adjusted EBITDA in a target
range of 3.0x to 3.5x.
Capex and Cash Flow: For
third quarter 2021, Capex was $14.8 million, cash provided by
operating activities increased by 8.1% to $215.9 million due to
higher cash collections and free cash flow was $201.1 million, up
6.9%.
Share Count and Share
Repurchases: Weighted average diluted shares outstanding
were 83.6 million in third quarter 2021, down 1.1% year-over-year.
Total shares outstanding as of September 30, 2021 were 82.4
million. A total of $1.6 billion of outstanding share repurchase
authorization remains as of October 22, 2021.
Dividends: Approximately
$85.8 million in dividends were paid to shareholders in third
quarter 2021. On October 25, 2021, the MSCI Board of Directors
declared a cash dividend of $1.04 per share for fourth quarter
2021, payable on November 30, 2021 to shareholders of record as of
the close of trading on November 12, 2021.
Full-Year 2021 Guidance
MSCI's guidance for the year ending December 31, 2021
(“Full-Year 2021”) is based on assumptions about a number of
macroeconomic and capital market factors, in particular related to
equity markets. These assumptions are subject to uncertainty, and
actual results for the year could differ materially from our
current guidance, including as a result of ongoing uncertainty
related to the duration, magnitude and impact of the ongoing
COVID-19 pandemic.
Guidance Item
Current Guidance for Full-Year
2021
Prior Guidance for Full-Year
2021
Operating Expense(1)
$955 to $975 million
$920 to $940 million
Adjusted EBITDA Expense
$840 to $860 million
$820 to $840 million
Interest Expense (including
amortization of financing fees)(2)
~$160 million
~$160 million
Depreciation & Amortization
Expense(1)
~$110 million
~$100 million
Effective Tax Rate
15.0% to 16.0%
14.0% to 17.0%
Capital Expenditures
$50 to $60 million
$50 to $60 million
Net Cash Provided by Operating
Activities
$800 to $840 million
$900 to $940 million
Free Cash Flow(3)
$740 to $790 million
$840 to $890 million
(1) Depreciation & Amortization
includes $16.0 million intangible asset write-off related to Beon
in second quarter 2021, partially offset by lower depreciation
& amortization expenses for the remainder of 2021.
(2) Interest income will continue to be
impacted by the lower rates available on cash balances.
(3) Lower free cash flow range is nearly
all attributable to cash tax payments incremental to what we
previously expected to make, of which approximately $110.0 million
will occur in the fourth quarter. We currently expect these
accelerated tax payments to reduce future tax payments.
Conference Call Information
MSCI's senior management will review the third quarter 2021
results on Tuesday, October 26, 2021 at 11:00 AM Eastern Time. To
listen to the live event, visit the events and presentations
section of MSCI's Investor Relations homepage,
https://ir.msci.com/events-and-presentations, or dial
1-877-376-9931 conference ID: 2974258 within the United States.
International callers may dial 1-720-405-2251 conference ID:
2974258. The teleconference will also be webcast with an
accompanying slide presentation which can be accessed through
MSCI's Investor Relations website.
MSCI is a leading provider of critical decision support tools
and services for the global investment community. With over 50
years of expertise in research, data and technology, we power
better investment decisions by enabling clients to understand and
analyze key drivers of risk and return and confidently build more
effective portfolios. We create industry-leading research-enhanced
solutions that clients use to gain insight into and improve
transparency across the investment process. To learn more, please
visit www.msci.com. MSCI#IR
Forward-Looking Statements
This earnings release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including without limitation, MSCI’s full-year 2021 guidance.
These forward-looking statements relate to future events or to
future financial performance and involve known and unknown risks,
uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance
or achievements expressed or implied by these statements. In some
cases, you can identify forward-looking statements by the use of
words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,”
“anticipate,” “believe,” “estimate,” “predict,” “potential” or
“continue,” or the negative of these terms or other comparable
terminology. You should not place undue reliance on forward-looking
statements because they involve known and unknown risks,
uncertainties and other factors that are, in some cases, beyond
MSCI’s control and that could materially affect actual results,
levels of activity, performance or achievements.
Other factors that could materially affect actual results,
levels of activity, performance or achievements can be found in
MSCI’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2020 filed with the Securities and Exchange Commission
(“SEC”) on February 12, 2021 and in quarterly reports on Form 10-Q
and current reports on Form 8-K filed or furnished with the SEC. If
any of these risks or uncertainties materialize, or if MSCI’s
underlying assumptions prove to be incorrect, actual results may
vary significantly from what MSCI projected. Any forward-looking
statement in this earnings release reflects MSCI’s current views
with respect to future events and is subject to these and other
risks, uncertainties and assumptions relating to MSCI’s operations,
results of operations, growth strategy and liquidity. MSCI assumes
no obligation to publicly update or revise these forward-looking
statements for any reason, whether as a result of new information,
future events, or otherwise, except as required by law.
Website and Social Media Disclosure
MSCI uses its website, including its quarterly updates, blog,
podcasts and social media channels, including its corporate Twitter
account (@MSCI_Inc), as channels of distribution of company
information. The information MSCI posts through these channels may
be deemed material. Accordingly, investors should monitor these
channels, in addition to following MSCI’s press releases, quarterly
SEC filings and public conference calls and webcasts. In addition,
you may automatically receive email alerts and other information
about MSCI when you enroll your email address by visiting the
“Email Alerts Subscription” section of MSCI’s Investor Relations
homepage at http://ir.msci.com/email-alerts. The contents of MSCI’s
website, including its quarterly updates, blog, podcasts and social
media channels are not, however, incorporated by reference into
this earnings release.
Notes Regarding the Use of Operating Metrics
MSCI has presented supplemental key operating metrics as part of
this earnings release, including Retention Rate, Run Rate,
subscription sales, subscription cancellations and non-recurring
sales.
Retention Rate is an important metric because subscription
cancellations decrease our Run Rate and ultimately our operating
revenues over time. The annual Retention Rate represents the
retained subscription Run Rate (subscription Run Rate at the
beginning of the fiscal year less actual cancels during the year)
as a percentage of the subscription Run Rate at the beginning of
the fiscal year.
The Retention Rate for a non-annual period is calculated by
annualizing the cancellations for which we have received a notice
of termination or for which we believe there is an intention not to
renew or discontinue the subscription during the non-annual period,
and we believe that such notice or intention evidences the client’s
final decision to terminate or not renew the applicable agreement,
even though such notice is not effective until a later date. This
annualized cancellation figure is then divided by the subscription
Run Rate at the beginning of the fiscal year to calculate a
cancellation rate. This cancellation rate is then subtracted from
100% to derive the annualized Retention Rate for the period.
Retention Rate is computed by operating segment on a
product/service-by-product/service basis. In general, if a client
reduces the number of products or services to which it subscribes
within a segment, or switches between products or services within a
segment, we treat it as a cancellation for purposes of calculating
our Retention Rate except in the case of a product or service
switch that management considers to be a replacement product or
service. In those replacement cases, only the net change to the
client subscription, if a decrease, is reported as a cancel. In the
Analytics and the ESG and Climate operating segments, substantially
all product or service switches are treated as replacement products
or services and netted in this manner, while in our Index and Real
Estate operating segments, product or service switches that are
treated as replacement products or services and receive netting
treatment occur only in certain limited instances. In addition, we
treat any reduction in fees resulting from a down-sale of the same
product or service as a cancellation to the extent of the
reduction. We do not calculate Retention Rate for that portion of
our Run Rate attributable to assets in index-linked investment
products or futures and options contracts, in each case, linked to
our indexes.
Run Rate estimates at a particular point in time the annualized
value of the recurring revenues under our client license agreements
(“Client Contracts”) for the next 12 months, assuming all Client
Contracts that come up for renewal, or reach the end of the
committed subscription period, are renewed and assuming
then-current currency exchange rates, subject to the adjustments
and exclusions described below. For any Client Contract where fees
are linked to an investment product’s assets or trading
volume/fees, the Run Rate calculation reflects, for ETFs, the
market value on the last trading day of the period, for futures and
options, the most recent quarterly volumes and/or reported exchange
fees, and for other non-ETF products, the most recent
client-reported assets. Run Rate does not include fees associated
with “one-time” and other non-recurring transactions. In addition,
we add to Run Rate the annualized fee value of recurring new sales,
whether to existing or new clients, when we execute Client
Contracts, even though the license start date, and associated
revenue recognition, may not be effective until a later date. We
remove from Run Rate the annualized fee value associated with
products or services under any Client Contract with respect to
which we have received a notice of termination, non-renewal or an
indication the client does not intend to continue their
subscription during the period and have determined that such notice
evidences the client’s final decision to terminate or not renew the
applicable products or services, even though such notice is not
effective until a later date.
“Organic subscription Run Rate growth” is defined as the period
over period Run Rate growth, excluding the impact of changes in
foreign currency and the first year impact of any acquisitions,
including the acquisition of RCA completed on September 13, 2021.
It is also adjusted for divestitures. Changes in foreign currency
are calculated by applying the currency exchange rate from the
comparable prior period to current period foreign currency
denominated Run Rate.
Sales represents the annualized value of products and services
clients commit to purchase from MSCI and will result in additional
operating revenues. Non-recurring sales represent the actual value
of the customer agreements entered into during the period and are
not a component of Run Rate. New recurring subscription sales
represent additional selling activities, such as new customer
agreements, additions to existing agreements or increases in price
that occurred during the period and are additions to Run Rate.
Subscription cancellations reflect client activities during the
period, such as discontinuing products and services and/or
reductions in price, resulting in reductions to Run Rate. Net new
recurring subscription sales represent the amount of new recurring
subscription sales net of subscription cancellations during the
period, which reflects the net impact to Run Rate during the
period.
Total gross sales represent the sum of new recurring
subscription sales and non-recurring sales. Total net sales
represent the total gross sales net of the impact from subscription
cancellations.
Notes Regarding the Use of Non-GAAP Financial
Measures
MSCI has presented supplemental non-GAAP financial measures as
part of this earnings release. Reconciliations are provided in
Tables 9 through 15 below that reconcile each non-GAAP financial
measure with the most comparable GAAP measure. The non-GAAP
financial measures presented in this earnings release should not be
considered as alternative measures for the most directly comparable
GAAP financial measures. The non-GAAP financial measures presented
in this earnings release are used by management to monitor the
financial performance of the business, inform business
decision-making and forecast future results.
“Adjusted EBITDA” is defined as net income before (1) provision
for income taxes, (2) other expense (income), net, (3) depreciation
and amortization of property, equipment and leasehold improvements,
(4) amortization of intangible assets and, at times, (5) certain
other transactions or adjustments, including certain non-recurring
acquisition-related integration and transaction costs.
“Adjusted EBITDA expenses” is defined as operating expenses less
depreciation and amortization of property, equipment and leasehold
improvements and amortization of intangible assets and, at times,
certain other transactions or adjustments, including certain
non-recurring acquisition-related integration and transaction
costs.
“Adjusted net income” and “adjusted EPS” are defined as net
income and diluted EPS, respectively, before the after-tax impact
of the amortization of acquired intangible assets, including the
amortization of the basis difference between the cost of the equity
method investment and MSCI’s share of the net assets of the
investee at historical carrying value, the impact of divestitures,
the impact of adjustments for Tax Reform, except for certain
amounts associated with active tax planning implemented as a result
of Tax Reform, and, at times, certain other transactions or
adjustments, including the impact related to costs associated with
debt extinguishment and the impact related to certain non-recurring
acquisition-related integration and transaction costs.
“Adjusted tax rate” is defined as the effective tax rate
excluding the impact of Tax Reform adjustments (except for certain
amounts associated with active tax planning implemented as a result
of Tax Reform).
“Capex” is defined as capital expenditures plus capitalized
software development costs.
“Free cash flow” is defined as net cash provided by operating
activities, less Capex.
“Organic operating revenue growth” is defined as operating
revenue growth compared to the prior year period excluding the
impact of acquired businesses, divested businesses and foreign
currency exchange rate fluctuations.
Asset-based fees ex-FX does not adjust for the impact from
foreign currency exchange rate fluctuations on the underlying
assets under management (“AUM”).
We believe adjusted EBITDA and adjusted EBITDA expenses are
meaningful measures of the operating performance of MSCI because
they adjust for significant one-time, unusual or non-recurring
items as well as eliminate the accounting effects of certain
capital spending and acquisitions that do not directly affect what
management considers to be our ongoing operating performance in the
period.
We believe adjusted net income and adjusted EPS are meaningful
measures of the performance of MSCI because they adjust for the
after-tax impact of significant one-time, unusual or non-recurring
items as well as eliminate the impact of any transactions that do
not directly affect what management considers to be our ongoing
operating performance in the period. We also exclude the after-tax
impact of the amortization of acquired intangible assets and
amortization of the basis difference between the cost of the equity
method investment and MSCI’s share of the net assets of the
investee at historical carrying value, as these non-cash amounts
are significantly impacted by the timing and size of each
acquisition and therefore not meaningful to the ongoing operating
performance in the period.
We believe that adjusted tax rate is useful to investors because
it increases the comparability of period-to-period results by
adjusting for the estimated net impact of Tax Reform.
We believe that free cash flow is useful to investors because it
relates the operating cash flow of MSCI to the capital that is
spent to continue and improve business operations, such as
investment in MSCI’s existing products. Further, free cash flow
indicates our ability to strengthen MSCI’s balance sheet, repay our
debt obligations, pay cash dividends and repurchase shares of our
common stock.
We believe organic operating revenue growth is a meaningful
measure of the operating performance of MSCI because it adjusts for
the impact of foreign currency exchange rate fluctuations and
excludes the impact of operating revenues attributable to acquired
and divested businesses for the comparable prior year period,
providing insight into our ongoing operating performance for the
period(s) presented.
We believe that the non-GAAP financial measures presented in
this earnings release facilitate meaningful period-to-period
comparisons and provide a baseline for the evaluation of future
results.
Adjusted EBITDA expenses, adjusted EBITDA, adjusted net income,
adjusted EPS, adjusted tax rate, Capex, free cash flow and organic
operating revenue growth are not defined in the same manner by all
companies and may not be comparable to similarly-titled non-GAAP
financial measures of other companies. These measures can differ
significantly from company to company depending on, among other
things, long-term strategic decisions regarding capital structure,
the tax jurisdictions in which companies operate and capital
investments. Accordingly, the Company’s computation of these
measures may not be comparable to similarly-titled measures
computed by other companies.
Notes Regarding Adjusting for the Impact of Foreign Currency
Exchange Rate Fluctuations
Foreign currency exchange rate fluctuations reflect the
difference between the current period results as reported compared
to the current period results recalculated using the foreign
currency exchange rates in effect for the comparable prior period.
While operating revenues adjusted for the impact of foreign
currency fluctuations includes asset-based fees that have been
adjusted for the impact of foreign currency fluctuations, the
underlying AUM, which is the primary component of asset-based fees,
is not adjusted for foreign currency fluctuations. Approximately
three-fifths of the AUM are invested in securities denominated in
currencies other than the U.S. dollar, and accordingly, any such
impact is excluded from the disclosed foreign currency-adjusted
variances.
Table 2: Condensed Consolidated Statements of Income
(unaudited)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
%
Sep. 30,
Sep. 30,
%
In thousands, except per share
data
2021
2020
Change
2021
2020
Change
Operating revenues
$
517,099
$
425,333
21.6
%
$
1,493,702
$
1,251,729
19.3
%
Operating expenses:
Cost of revenues
89,674
70,704
26.8
%
262,781
215,769
21.8
%
Selling and marketing
59,819
52,668
13.6
%
174,477
159,834
9.2
%
Research and development
28,352
24,901
13.9
%
80,745
73,997
9.1
%
General and administrative
38,110
27,613
38.0
%
103,020
86,755
18.7
%
Amortization of intangible assets
14,105
14,333
(1.6
%)
59,569
42,171
41.3
%
Depreciation and amortization of
property,
equipment and leasehold improvements
6,809
7,494
(9.1
%)
20,972
22,524
(6.9
%)
Total operating expenses(1)
236,869
197,713
19.8
%
701,564
601,050
16.7
%
Operating income
280,230
227,620
23.1
%
792,138
650,679
21.7
%
Interest income
(396
)
(475
)
(16.6
%)
(1,129
)
(4,729
)
(76.1
%)
Interest expense
42,137
37,536
12.3
%
119,278
118,994
0.2
%
Other expense (income)
37,839
1,516
n/m
61,616
45,355
35.9
%
Other expense (income), net
79,580
38,577
106.3
%
179,765
159,620
12.6
%
Income before provision for income
taxes
200,650
189,043
6.1
%
612,373
491,059
24.7
%
Provision for income taxes
30,774
6,685
n/m
80,255
45,453
76.6
%
Net income
$
169,876
$
182,358
(6.8
%)
$
532,118
$
445,606
19.4
%
Earnings per basic common share
$
2.06
$
2.18
(5.5
%)
$
6.45
$
5.30
21.7
%
Earnings per diluted common share
$
2.03
$
2.16
(6.0
%)
$
6.38
$
5.26
21.3
%
Weighted average shares outstanding
used
in computing earnings per share:
Basic
82,470
83,602
(1.4
%)
82,521
84,044
(1.8
%)
Diluted
83,554
84,479
(1.1
%)
83,446
84,789
(1.6
%)
n/m: not meaningful.
(1) Includes stock-based compensation expense of $13.7 million
and $12.0 million for the three months ended Sep. 30, 2021 and Sep.
30, 2020, respectively. Includes stock-based compensation expense
of $46.3 million and $43.3 million for the nine months ended Sep.
30, 2021 and Sep. 30, 2020, respectively.
Table 3: Selected Balance Sheet Items (unaudited)
As of
Sep. 30,
Dec. 31,
In thousands
2021
2020
Cash and cash equivalents
$1,284,664
$1,300,521
Accounts receivable, net of allowances
$496,726
$558,569
Deferred revenue
$643,352
$675,870
Long-term debt(1)
$4,160,379
$3,366,777
(1) Consists of gross long-term debt, net of deferred financing
fees. Gross long-term debt was $4,200.0 million at Sep. 30, 2021
and $3,400.0 million at Dec. 31, 2020.
Table 4: Selected Cash Flow Items (unaudited)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2021
2020
% Change
2021
2020
% Change
Net cash provided by operating
activities
$
215,891
$
199,795
8.1
%
$
656,405
$
575,181
14.1
%
Net cash used in investing activities
(963,558
)
(11,725
)
n/m
(985,879
)
(224,899
)
n/m
Net cash provided by (used in) financing
activities
64,391
(274,433
)
123.5
%
321,249
(549,484
)
158.5
%
Effect of exchange rate changes
(4,062
)
4,244
(195.7
%)
(7,632
)
(4,507
)
(69.3
%)
Net increase (decrease) in cash and
cash equivalents
$
(687,338
)
$
(82,119
)
n/m
$
(15,857
)
$
(203,709
)
92.2
%
n/m: not meaningful.
Table 5: Operating Results by Segment and Revenue Type
(unaudited)
Index
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2021
2020
% Change
2021
2020
% Change
Operating revenues:
Recurring subscriptions
$165,310
$146,387
12.9%
$480,488
$431,631
11.3%
Asset-based fees
141,745
100,371
41.2%
404,593
288,642
40.2%
Non-recurring
14,448
8,933
61.7%
34,876
27,582
26.4%
Total operating revenues
321,503
255,691
25.7%
919,957
747,855
23.0%
Adjusted EBITDA expenses
75,916
60,971
24.5%
221,023
186,292
18.6%
Adjusted EBITDA
$245,587
$194,720
26.1%
$698,934
$561,563
24.5%
Adjusted EBITDA margin %
76.4%
76.2%
76.0%
75.1%
Analytics
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2021
2020
% Change
2021
2020
% Change
Operating revenues:
Recurring subscriptions
$134,320
$126,251
6.4%
$399,360
$376,505
6.1%
Non-recurring
1,978
2,086
(5.2%)
6,857
4,903
39.9%
Total operating revenues
136,298
128,337
6.2%
406,217
381,408
6.5%
Adjusted EBITDA expenses
86,007
83,281
3.3%
260,381
253,868
2.6%
Adjusted EBITDA
$50,291
$45,056
11.6%
$145,836
$127,540
14.3%
Adjusted EBITDA margin %
36.9%
35.1%
35.9%
33.4%
ESG and Climate
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2021
2020
% Change
2021
2020
% Change
Operating revenues:
Recurring subscriptions
$42,592
$28,152
51.3%
$115,299
$78,961
46.0%
Non-recurring
1,099
399
175.4%
2,450
1,125
117.8%
Total operating revenues
43,691
28,551
53.0%
117,749
80,086
47.0%
Adjusted EBITDA expenses
33,871
20,893
62.1%
97,164
63,303
53.5%
Adjusted EBITDA
$9,820
$7,658
28.2%
$20,585
$16,783
22.7%
Adjusted EBITDA margin %
22.5%
26.8%
17.5%
21.0%
All Other - Private Assets
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2021
2020
% Change
2021
2020
% Change
Operating revenues:
Recurring subscriptions
$15,418
$12,400
24.3%
$48,355
$40,402
19.7%
Non-recurring
189
354
(46.6%)
1,424
1,978
(28.0%)
Total operating revenues
15,607
12,754
22.4%
49,779
42,380
17.5%
Adjusted EBITDA expenses
14,710
10,741
37.0%
37,004
32,892
12.5%
Adjusted EBITDA
$897
$2,013
(55.4%)
$12,775
$9,488
34.6%
Adjusted EBITDA margin %
5.7%
15.8%
25.7%
22.4%
Consolidated
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2021
2020
% Change
2021
2020
% Change
Operating revenues:
Recurring subscriptions
$357,640
$313,190
14.2%
$1,043,502
$927,499
12.5%
Asset-based fees
141,745
100,371
41.2%
404,593
288,642
40.2%
Non-recurring
17,714
11,772
50.5%
45,607
35,588
28.2%
Operating revenues total
517,099
425,333
21.6%
1,493,702
1,251,729
19.3%
Adjusted EBITDA expenses
210,504
175,886
19.7%
615,572
536,355
14.8%
Adjusted EBITDA
$306,595
$249,447
22.9%
$878,130
$715,374
22.8%
Adjusted EBITDA margin %
59.3%
58.6%
58.8%
57.2%
Operating margin %
54.2%
53.5%
53.0%
52.0%
Table 6: Sales and Retention Rate by Segment
(unaudited)(1)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2021
2020
2021
2020
Index
New recurring subscription sales
$
19,546
$
18,743
$
66,037
$
58,073
Subscription cancellations
(6,203
)
(7,050
)
$
(18,192
)
(19,589
)
Net new recurring subscription sales
$
13,343
$
11,693
$
47,845
$
38,484
Non-recurring sales
$
17,366
$
10,001
$
39,340
$
30,734
Total gross sales
$
36,912
$
28,744
$
105,377
$
88,807
Total Index net sales
$
30,709
$
21,694
$
87,185
$
69,218
Index Retention Rate
96.0
%
95.0
%
96.1
%
95.3
%
Analytics
New recurring subscription sales
$
15,889
$
15,229
$
44,381
$
41,426
Subscription cancellations
(9,213
)
(8,211
)
$
(25,188
)
(27,008
)
Net new recurring subscription sales
$
6,676
$
7,018
$
19,193
$
14,418
Non-recurring sales
$
2,377
$
2,562
$
8,123
$
7,486
Total gross sales
$
18,266
$
17,791
$
52,504
$
48,912
Total Analytics net sales
$
9,053
$
9,580
$
27,316
$
21,904
Analytics Retention Rate
93.4
%
93.8
%
94.0
%
93.2
%
ESG and Climate
New recurring subscription sales
$
17,310
$
7,932
$
46,706
$
26,128
Subscription cancellations
(1,338
)
(1,215
)
$
(3,636
)
(4,473
)
Net new recurring subscription sales
$
15,972
$
6,717
$
43,070
$
21,655
Non-recurring sales
$
1,090
$
135
$
2,927
$
702
Total gross sales
$
18,400
$
8,067
$
49,633
$
26,830
Total ESG and Climate net sales
$
17,062
$
6,852
$
45,997
$
22,357
ESG and Climate Retention Rate
96.1
%
95.2
%
96.5
%
94.1
%
All Other - Private Assets
New recurring subscription sales
$
2,479
$
1,412
$
6,023
$
3,733
Subscription cancellations
(1,296
)
(656
)
$
(2,881
)
(1,694
)
Net new recurring subscription sales
$
1,183
$
756
$
3,142
$
2,039
Non-recurring sales
$
130
$
112
$
1,201
$
1,150
Total gross sales
$
2,609
$
1,524
$
7,224
$
4,883
Total All Other - Private Assets net
sales
$
1,313
$
868
$
4,343
$
3,189
All Other - Private Assets Retention
Rate2
91.0
%
94.8
%
91.2
%
95.6
%
Consolidated
New recurring subscription sales
$
55,224
$
43,316
$
163,147
$
129,360
Subscription cancellations
(18,050
)
(17,132
)
(49,897
)
(52,764
)
Net new recurring subscription sales
$
37,174
$
26,184
$
113,250
$
76,596
Non-recurring sales
$
20,963
$
12,810
$
51,591
$
40,072
Total gross sales
$
76,187
$
56,126
$
214,738
$
169,432
Total net sales
$
58,137
$
38,994
$
164,841
$
116,668
Total Retention Rate
94.5
%
94.5
%
94.9
%
94.3
%
(1) See "Notes Regarding the Use of Operating Metrics" for
details regarding the definition of new recurring subscription
sales, subscription cancellations, net new recurring subscription
sales, non-recurring sales, total gross sales, total net sales and
Retention Rate. (2) Retention rate for All Other – Private Assets
excluding the impact of RCA was 93.7% and 94.2% for the three and
nine months ended Sep. 30, 2021, respectively.
Table 7: AUM in ETFs Linked to MSCI Equity Indexes
(unaudited)(1)(2)
Three Months Ended
Nine Months Ended
Sep. 30,
June 30,
Mar. 31,
Dec. 31,
Sep. 30,
Sep. 30,
Sep. 30,
In billions
2021
2021
2021
2020
2020
2021
2020
Beginning Period AUM in ETFs linked to
MSCI equity indexes
$
1,336.2
$
1,209.6
$
1,103.6
$
908.9
$
825.4
$
1,103.6
$
934.4
Market Appreciation/(Depreciation)
(30.7
)
73.7
43.2
135.7
57.0
86.2
(42.1
)
Cash Inflows
31.1
52.9
62.8
59.0
26.5
146.8
16.6
Period-End AUM in ETFs linked to
MSCI equity indexes
$
1,336.6
$
1,336.2
$
1,209.6
$
1,103.6
$
908.9
$
1,336.6
$
908.9
Period Average AUM in ETFs linked to
MSCI equity indexes
$
1,361.9
$
1,292.4
$
1,169.2
$
999.2
$
893.4
$
1,274.5
$
849.1
Period-End Basis Point Fee(3)
2.57
2.58
2.61
2.67
2.67
2.57
2.67
(1) The historical values of the AUM in ETFs linked to our
equity indexes as of the last day of the month and the monthly
average balance can be found under the link “AUM in ETFs Linked to
MSCI Equity Indexes” on our Investor Relations homepage at
http://ir.msci.com. Information contained on our website is not
incorporated by reference into this Press Release or any other
report filed with the SEC. The AUM in ETFs also includes AUM in
Exchange Traded Notes, the value of which is less than 1.0% of the
AUM amounts presented. (2) The value of AUM in ETFs linked to MSCI
equity indexes is calculated by multiplying the equity ETFs net
asset value by the number of shares outstanding. (3) Based on
period-end Run Rate for ETFs linked to MSCI equity indexes using
period-end AUM.
Table 8: Run Rate by Segment and Type (unaudited)(1)
As of
Sep. 30,
Sep. 30,
In thousands
2021
2020
% Change
Index
Recurring subscriptions
$
667,023
$
598,799
11.4
%
Asset-based fees
550,230
401,196
37.1
%
Index Run Rate
1,217,253
999,995
21.7
%
Analytics Run Rate
568,932
544,315
4.5
%
ESG and Climate Run Rate
178,398
122,273
45.9
%
All Other - Private Assets Run
Rate
131,678
52,970
148.6
%
Total Run Rate
$
2,096,261
$
1,719,553
21.9
%
Total recurring subscriptions
$
1,546,031
$
1,318,357
17.3
%
Total asset-based fees
550,230
401,196
37.1
%
Total Run Rate
$
2,096,261
$
1,719,553
21.9
%
(1) See "Notes Regarding the Use of Operating Metrics" for
details regarding the definition of Run Rate.
Table 9: Reconciliation of Adjusted EBITDA to Net Income
(unaudited)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands
2021
2020
2021
2020
Index adjusted EBITDA
$
245,587
$
194,720
$
698,934
$
561,563
Analytics adjusted EBITDA
50,291
45,056
145,836
127,540
ESG and Climate adjusted EBITDA
9,820
7,658
20,585
16,783
All Other - Private Assets adjusted
EBITDA
897
2,013
12,775
9,488
Consolidated adjusted EBITDA
306,595
249,447
878,130
715,374
Acquisition-related integration and
transaction costs1
5,451
—
5,451
—
Amortization of intangible assets
14,105
14,333
59,569
42,171
Depreciation and amortization of
property,
equipment and leasehold improvements
6,809
7,494
20,972
22,524
Operating income
280,230
227,620
792,138
650,679
Other expense (income), net
79,580
38,577
179,765
159,620
Provision for income taxes
30,774
6,685
80,255
45,453
Net income
$
169,876
$
182,358
$
532,118
$
445,606
(1) Incremental and non-recurring costs attributable to
acquisitions directly related to the execution of the transaction
and integration of the acquired business that have occurred no
later than 12 months after the close of the transaction.
Table 10: Reconciliation of Net Income and Diluted EPS to
Adjusted Net Income and Adjusted EPS (unaudited)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
In thousands, except per share
data
2021
2020
2021
2020
Net income
$
169,876
$
182,358
$
532,118
$
445,606
Plus: Amortization of acquired intangible
assets and
equity method investment basis
difference
10,792
9,515
29,915
27,885
Plus: Debt extinguishment costs associated
with the
2024, 2025, 2026 and 2027 Senior Notes
Redemptions
37,312
—
59,104
44,930
Plus: Write-off of internally developed
capitalized
software
—
—
16,013
—
Plus: Acquisition-related integration and
transaction costs1
5,451
—
5,451
—
Less: Tax Reform adjustments
—
(5,497
)
—
(6,256
)
Less: Income tax effect
(12,143
)
(532
)
(21,966
)
(14,483
)
Adjusted net income
$
211,288
$
185,844
$
620,635
$
497,682
Diluted EPS
$
2.03
$
2.16
$
6.38
$
5.26
Plus: Amortization of acquired intangible
assets and
equity method investment basis
difference
0.13
0.11
0.36
0.33
Plus: Debt extinguishment costs associated
with the
2024, 2025 and 2026 Senior Notes
Redemptions
0.45
—
0.71
0.53
Plus: Write-off of internally developed
capitalized
software
—
—
0.19
—
Plus: Acquisition-related integration and
transaction costs1
0.07
—
0.07
—
Less: Tax Reform adjustments
—
(0.07
)
—
(0.07
)
Less: Income tax effect
(0.15
)
—
(0.27
)
(0.18
)
Adjusted EPS
$
2.53
$
2.20
$
7.44
$
5.87
(1) Incremental and non-recurring costs attributable to
acquisitions directly related to the execution of the transaction
and integration of the acquired business that have occurred no
later than 12 months after the close of the transaction.
Table 11: Reconciliation of Adjusted EBITDA Expenses to
Operating Expenses (unaudited)
Three Months Ended
Nine Months Ended
Full-Year
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
2021
In thousands
2021
2020
2021
2020
Outlook(1)
Index adjusted EBITDA expenses
$
75,916
$
60,971
$
221,023
$
186,292
Analytics adjusted EBITDA expenses
86,007
83,281
260,381
253,868
ESG and Climate adjusted EBITDA
expenses
33,871
20,893
97,164
63,303
All Other - Private Assets adjusted EBITDA
expenses
14,710
10,741
37,004
32,892
Consolidated adjusted EBITDA
expenses
210,504
175,886
615,572
536,355
$840,000 - $860,000
Acquisition-related integration and
transaction costs2
5,451
—
5,451
—
Amortization of intangible assets
14,105
14,333
59,569
42,171
Depreciation and amortization of
property,
~$110,000
equipment and leasehold improvements
6,809
7,494
20,972
22,524
Total operating expenses
$
236,869
$
197,713
$
701,564
$
601,050
$955,000 - $975,000
(1) We have not provided a full line-item reconciliation for
adjusted EBITDA expenses to total operating expenses for this
future period because we do not provide guidance on the individual
reconciling items between total operating expenses and adjusted
EBITDA expenses. (2) Incremental and non-recurring costs
attributable to acquisitions directly related to the execution of
the transaction and integration of the acquired business that have
occurred no later than 12 months after the close of the
transaction.
Table 12: Reconciliation of Net Cash Provided by Operating
Activities to Free Cash Flow (unaudited)
Three Months Ended
Nine Months Ended
Full-Year
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
2021
In thousands
2021
2020
2021
2020
Outlook(1)
Net cash provided by operating
activities
$
215,891
$
199,795
$
656,405
$
575,181
$800,000 - $840,000
Capital expenditures
(4,646
)
(4,555
)
(7,119
)
(12,152
)
Capitalized software development costs
(10,141
)
(7,170
)
(29,078
)
(21,931
)
Capex
(14,787
)
(11,725
)
(36,197
)
(34,083
)
($60,000 - $50,000)
Free cash flow
$
201,104
$
188,070
$
620,208
$
541,098
$740,000 - $790,000
(1) We have not provided a line-item reconciliation for free
cash flow to net cash from operating activities for this future
period because we do not provide guidance on the individual
reconciling items between net cash from operating activities and
free cash flow.
Table 13: Reconciliation of Effective Tax Rate to Adjusted
Tax Rate (unaudited)
Three Months Ended
Nine Months Ended
Sep. 30,
Sep. 30,
Sep. 30,
Sep. 30,
2021
2020
2021
2020
Effective tax rate
15.3%
3.5%
13.1%
9.3%
Tax Reform impact on effective tax
rate
—%
2.9%
—%
1.2%
Adjusted tax rate
15.3%
6.4%
13.1%
10.5%
Table 14: Third Quarter 2021 Reconciliation of Operating
Revenue Growth to Organic Operating Revenue Growth
(unaudited)
Comparison of the Three Months
Ended September 30, 2021 and 2020
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Index
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
25.7%
12.9%
41.2%
61.7%
Impact of acquisitions and
divestitures
—%
—%
—%
—%
Impact of foreign currency exchange rate
fluctuations
0.1%
0.1%
—%
—%
Organic operating revenue growth
25.8%
13.0%
41.2%
61.7%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Analytics
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
6.2%
6.4%
—%
(5.2%)
Impact of acquisitions and
divestitures
—%
—%
—%
—%
Impact of foreign currency exchange rate
fluctuations
0.2%
0.2%
—%
(0.1%)
Organic operating revenue growth
6.4%
6.6%
—%
(5.3%)
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
ESG and Climate
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
53.0%
51.3%
—%
175.4%
Impact of acquisitions and divestures
—%
—%
—%
—%
Impact of foreign currency exchange rate
fluctuations
(5.8%)
(5.9%)
—%
(2.7%)
Organic operating revenue growth
47.2%
45.4%
—%
172.7%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
All Other - Private Assets
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
22.4%
24.3%
—%
(46.6%)
Impact of acquisitions and divestures
(26.8%)
(27.5%)
—%
—%
Impact of foreign currency exchange rate
fluctuations
(3.2%)
(3.3%)
—%
(0.9%)
Organic operating revenue growth
(7.6%)
(6.5%)
—%
(47.5%)
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Consolidated
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
21.6%
14.2%
41.2%
50.5%
Impact of acquisitions and
divestitures
(0.8%)
(1.1%)
—%
—%
Impact of foreign currency exchange rate
fluctuations
(0.4%)
(0.5%)
—%
(0.2%)
Organic operating revenue growth
20.4%
12.6%
41.2%
50.3%
Table 15: Nine Months 2021 Reconciliation of Operating
Revenue Growth to Organic Operating Revenue Growth
(unaudited)
Comparison of the Nine Months
Ended September 30, 2021 and 2020
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Index
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
23.0%
11.3%
40.2%
26.4%
Impact of acquisitions and
divestitures
—%
—%
—%
—%
Impact of foreign currency exchange rate
fluctuations
—%
—%
(0.1%)
—%
Organic operating revenue growth
23.0%
11.3%
40.1%
26.4%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Analytics
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
6.5%
6.1%
—%
39.9%
Impact of acquisitions and
divestitures
—%
—%
—%
—%
Impact of foreign currency exchange rate
fluctuations
—%
—%
—%
(0.7%)
Organic operating revenue growth
6.5%
6.1%
—%
39.2%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
ESG and Climate
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
47.0%
46.0%
—%
117.8%
Impact of acquisitions and divestures
—%
—%
—%
—%
Impact of foreign currency exchange rate
fluctuations
(7.4%)
(7.4%)
—%
(5.6%)
Organic operating revenue growth
39.6%
38.6%
—%
112.2%
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
All Other - Private Assets
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
17.5%
19.7%
—%
(28.0%)
Impact of acquisitions and divestures
(8.1%)
(8.5%)
—%
—%
Impact of foreign currency exchange rate
fluctuations
(7.8%)
(7.9%)
—%
(4.3%)
Organic operating revenue growth
1.6%
3.3%
—%
(32.3%)
Total
Recurring Subscription
Asset-Based Fees
Non-Recurring Revenues
Consolidated
Change Percentage
Change Percentage
Change Percentage
Change Percentage
Operating revenue growth
19.3%
12.5%
40.2%
28.2%
Impact of acquisitions and
divestitures
(0.2%)
(0.4%)
—%
—%
Impact of foreign currency exchange rate
fluctuations
(0.8%)
(0.9%)
(0.1%)
(0.5%)
Organic operating revenue growth
18.3%
11.2%
40.1%
27.7%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211026005364/en/
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