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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 10-Q
___________________________________
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from____________to____________
Commission file number 001-33812
________________________________________
msci-logo-resized.gif
MSCI INC.
(Exact Name of Registrant as Specified in its Charter)
________________________________________
Delaware13-4038723
(State or other jurisdiction of
Incorporation or Organization)		(I.R.S. Employer
Identification Number)
7 World Trade Center
250 Greenwich Street, 49th Floor
New York, New York
10007
(Address of Principal Executive Offices)(Zip Code)
Registrant’s telephone number, including area code: (212) 804-3900
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.01 per shareMSCINew York Stock Exchange
________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x  No  o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  x  No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filero
Non-accelerated fileroSmaller reporting companyo
Emerging growth companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
As of October 24, 2024, there were 78,371,294 shares of the registrant’s common stock, par value $0.01, outstanding.

FOR THE QUARTER ENDED SEPTEMBER 30, 2024
TABLE OF CONTENTS
Page
Item 5.
Item 6.
2
AVAILABLE INFORMATION
Our corporate headquarters is located at 7 World Trade Center, 250 Greenwich Street, 49th Floor, New York, New York, 10007, and our telephone number is (212) 804-3900. We maintain a website on the internet at www.msci.com. The contents of our website are not a part of or incorporated by reference in this Quarterly Report on Form 10-Q.
We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). The SEC maintains a website that contains reports, proxy and information statements and other information that we file electronically with the SEC at www.sec.gov. We also make available free of charge, on or through our website, these reports, proxy statements and other information as soon as reasonably practicable following the time they are electronically filed with or furnished to the SEC. To access these, click on the “SEC Filings” link under the “Financial Information” tab found on our Investor Relations homepage (http://ir.msci.com).
We also use our Investor Relations homepage and our Corporate Responsibility homepage as channels of distribution of Company information. The information we post through these channels may be deemed material.
Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about us when you enroll your email address by visiting the “Email Alerts” section of our Investor Relations homepage at https://ir.msci.com/email-alerts. The contents of our website, including our Investor Relations homepage and Corporate Responsibility homepage, and our social media channels are not, however, a part of or incorporated by reference in this Quarterly Report on Form 10-Q.
FORWARD-LOOKING STATEMENTS
We have included in this Quarterly Report on Form 10-Q, and from time to time may make in our public filings, press releases or other public statements, certain statements that constitute forward-looking statements. In addition, our management may make forward-looking statements to analysts, investors, representatives of the media and others. These forward-looking statements are not historical facts and represent only MSCI’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and beyond our control. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these statements.
In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” or the negative of these terms or other comparable terminology. Statements concerning our financial position, business strategy and plans or objectives for future operations are forward-looking statements. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and that could materially affect our actual results, levels of activity, performance or achievements. Such risks and uncertainties include those set forth under “Risk Factors” in Part I, Item 1A of the 2023 Annual Report on Form 10-K filed with the SEC on February 9, 2024. If any of these risks, uncertainties or other factors materialize, or if MSCI’s underlying assumptions prove to be incorrect, actual results may vary significantly from what MSCI projected. Any forward-looking statement reflects our current views with respect to future events, levels of activity, performance or achievements and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. The forward-looking statements in this report speak only as of the time they are made and do not necessarily reflect our outlook at any other point in time. MSCI assumes no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise, except as required by law. Therefore, readers should carefully review the risk factors set forth in our Annual Report on Form 10-K and in other reports or documents we file from time to time with the SEC.
3
PART I – FINANCIAL INFORMATION
Item 1.    Financial Statements
MSCI INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except per share and share data)
As of
September 30,December 31,
(unaudited) 20242023
ASSETS
Current assets:
Cash and cash equivalents (includes restricted cash of $3,909 and $3,878 at September 30, 2024 and December 31, 2023, respectively)
$500,979 $461,693 
Accounts receivable (net of allowances of $4,363 and $3,968 at September 30, 2024 and December 31, 2023, respectively)
643,807 839,555 
Prepaid income taxes77,493 59,002 
Prepaid and other assets63,517 57,903 
Total current assets1,285,796 1,418,153 
Property, equipment and leasehold improvements, net 62,317 55,920 
Right of use assets 121,726 115,243 
Goodwill2,916,102 2,887,692 
Intangible assets, net 931,428 956,234 
Deferred tax assets41,761 41,074 
Other non-current assets49,819 43,903 
Total assets$5,408,949 $5,518,219 
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable$8,748 $9,812 
Income taxes payable38,744 24,709 
Accrued compensation and related benefits179,041 219,456 
Current portion of long-term debt— 10,902 
Other accrued liabilities208,542 168,282 
Deferred revenue942,840 1,083,864 
Total current liabilities1,377,915 1,517,025 
Long-term debt4,484,773 4,496,826 
Long-term operating lease liabilities123,939 120,134 
Deferred tax liabilities61,281 27,028 
Other non-current liabilities112,039 96,970 
Total liabilities6,159,947 6,257,983 
Commitments and Contingencies (see Note 8)
Shareholders’ equity (deficit):
Preferred stock (par value $0.01; 100,000,000 shares authorized; no shares issued)
— — 
Common stock (par value $0.01; 750,000,000 common shares authorized; 134,079,131
and 133,817,332 common shares issued and 78,371,202 and 79,091,212 common shares outstanding at September 30, 2024 and December 31, 2023, respectively)
1,341 1,338 
Treasury shares, at cost (55,707,929 and 54,726,120 common shares held at September 30, 2024 and December 31, 2023, respectively)
(6,960,512)(6,447,101)
Additional paid in capital1,660,793 1,587,670 
Retained earnings4,600,360 4,179,681 
Accumulated other comprehensive loss(52,980)(61,352)
Total shareholders’ equity (deficit)(750,998)(739,764)
Total liabilities and shareholders’ equity (deficit)$5,408,949 $5,518,219 
See Notes to Condensed Consolidated Financial Statements (Unaudited)
4
MSCI INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Ended
September 30,		Nine Months Ended
September 30,
(unaudited) 2024202320242023
Operating revenues$724,705 $625,439 $2,112,619 $1,838,814 
Operating expenses:
Cost of revenues (exclusive of depreciation and amortization)126,192 105,311 382,815 324,024 
Selling and marketing70,763 66,581 214,385 201,044 
Research and development38,584 31,438 120,182 92,901 
General and administrative41,561 36,826 137,958 113,527 
Amortization of intangible assets41,939 26,722 121,316 77,543 
Depreciation and amortization of property, equipment and
   leasehold improvements
4,332 5,252 12,639 15,911 
Total operating expenses323,371 272,130 989,295 824,950 
Operating income401,334 353,309 1,123,324 1,013,864 
Interest income(5,217)(10,314)(17,375)(31,079)
Interest expense46,688 46,902 139,995 139,725 
Other expense (income)2,927 (935)7,881 4,032 
Other expense (income), net44,398 35,653 130,501 112,678 
Income before provision for income taxes356,936 317,656 992,823 901,186 
Provision for income taxes76,035 57,997 189,210 155,974 
Net income$280,901 $259,659 $803,613 $745,212 
Earnings per share:
Basic$3.58 $3.28 $10.18 $9.36 
Diluted$3.57 $3.27 $10.15 $9.32 
Weighted average shares outstanding:
Basic78,49979,11678,92579,580
Diluted78,72979,50079,15979,959
See Notes to Condensed Consolidated Financial Statements (Unaudited)
5
MSCI INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Three Months Ended
September 30,		Nine Months Ended
September 30,
(unaudited) 2024202320242023
Net income$280,901 $259,659 $803,613 $745,212 
Other comprehensive income (loss):
Foreign currency translation adjustments12,899 (5,832)9,102 1,046 
Income tax effect(1,039)771 (827)(660)
Foreign currency translation adjustments, net11,860 (5,061)8,275 386 
Pension and other post-retirement adjustments(28)756 78 (1,338)
Income tax effect23 (72)19 141 
Pension and other post-retirement adjustments, net(5)684 97 (1,197)
Other comprehensive income (loss), net of tax
11,855 (4,377)8,372 (811)
Comprehensive income$292,756 $255,282 $811,985 $744,401 
See Notes to Condensed Consolidated Financial Statements (Unaudited)
6
MSCI INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)
(in thousands)

(unaudited) Common
Stock		Treasury
Stock 		Additional
Paid in
Capital		Retained
Earnings 		Accumulated
Other
Comprehensive
Income (Loss) 		Total
Balance at December 31, 2023
$1,338 $(6,447,101)$1,587,670 $4,179,681 $(61,352)$(739,764)
Net income255,954 255,954 
Dividends declared ($1.60 per common share)
(129,444)(129,444)
Dividends paid in shares74 74 
Other comprehensive income (loss), net of tax(2,205)(2,205)
Common stock issued3 3 
Shares withheld for tax withholding(69,991)(69,991)
Compensation payable in common stock34,894 34,894 
Common stock repurchased and held in treasury— 
Common stock issued to Directors and
   (held in)/released from treasury
(38)(38)
Balance at March 31, 2024
1,341 (6,517,130)1,622,638 4,306,191 (63,557)(650,517)
Net income266,758 266,758 
Dividends declared ($1.60 per common share)
(127,304)(127,304)
Dividends paid in shares 40 40 
Other comprehensive income (loss), net of tax(1,278)(1,278)
Common stock issued — 
Shares withheld for tax withholding(200)(200)
Compensation payable in common stock19,707 19,707 
Common stock repurchased and held in treasury(243,035)(243,035)
Common stock issued to Directors and
   (held in)/released from treasury
1,346 1,346 
Balance at June 30, 2024
$1,341 $(6,759,019)$1,642,385 $4,445,645 $(64,835)$(734,483)
Net income280,901 280,901 
Dividends declared ($1.60 per common share)
(126,186)(126,186)
Dividends paid in shares8 8 
Other comprehensive income (loss), net of tax11,855 11,855 
Common stock issued— — 
Shares withheld for tax withholding and exercises(761)(761)
Compensation payable in common stock— 18,400 18,400 
Common stock repurchased and held in treasury(200,724)(200,724)
Common stock issued to Directors and
   (held in)/released from treasury
(8)(8)
Balance at September 30, 2024
$1,341 $(6,960,512)$1,660,793 $4,600,360 $(52,980)$(750,998)
See Notes to Condensed Consolidated Financial Statements (Unaudited)














7
MSCI INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)
(in thousands)

(unaudited) Common
Stock		Treasury
Stock		Additional
Paid in
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Total
Balance at December 31, 2022
$1,336 $(5,938,116)$1,515,874 $3,473,192 $(60,211)$(1,007,925)
Net income238,728 238,728 
Dividends declared ($1.38 per common share)
(111,986)(111,986)
Dividends paid in shares44 44 
Other comprehensive income (loss), net of tax2,775 2,775 
Common stock issued2 2 
Shares withheld for tax withholding
(43,960)(43,960)
Compensation payable in common stock20,988 20,988 
Common stock repurchased and held in treasury— 
Common stock issued to Directors and
   (held in)/released from treasury
(30)(30)
Balance at March 31, 2023
1,338 (5,982,106)1,536,906 3,599,934 (57,436)(901,364)
Net income246,825 246,825 
Dividends declared ($1.38 per common share)
(110,383)(110,383)
Dividends paid in shares— 33 33 
Other comprehensive income (loss), net of tax791 791 
Common stock issued— — 
Shares withheld for tax withholding
(611)(611)
Compensation payable in common stock16,426 16,426 
Common stock repurchased and held in treasury(444,655)(444,655)
Common stock issued to Directors and
   (held in)/released from treasury
(730)(730)
Balance at June 30, 2023
$1,338 $(6,428,102)$1,553,365 $3,736,376 $(56,645)$(1,193,668)
Net income259,659 259,659 
Dividends declared ($1.38 per common share)
(109,847)(109,847)
Dividends paid in shares30 30 
Other comprehensive income (loss), net of tax(4,377)(4,377)
Common stock issued— — 
Shares withheld for tax withholding and exercises(871)(871)
Compensation payable in common stock18,047 18,047 
Common stock repurchased and held in treasury(18,039)(18,039)
Common stock issued to Directors and
   (held in)/released from treasury
(30)(30)
Balance at September 30, 2023
$1,338 $(6,447,042)$1,571,442 $3,886,188 $(61,022)$(1,049,096)
See Notes to Condensed Consolidated Financial Statements (Unaudited)
8
MSCI INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
September 30,
(unaudited) 20242023
Cash flows from operating activities
Net income$803,613 $745,212 
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets121,316 77,543 
Stock-based compensation expense72,235 55,375 
Depreciation and amortization of property, equipment and leasehold improvements12,639 15,911 
Amortization of right of use assets19,582 17,484 
Amortization of debt origination fees3,856 3,791 
Loss on extinguishment of debt1,510 — 
Deferred taxes32,085 (30,973)
Other adjustments7,915 1,199 
Changes in assets and liabilities:
Accounts receivable194,233 58,132 
Prepaid income taxes(17,882)(17,654)
Prepaid and other assets(6,179)1,687 
Other non-current assets(579)(4,837)
Accounts payable(1,163)(5,719)
Income taxes payable14,063 11,425 
Accrued compensation and related benefits(38,461)(25,599)
Other accrued liabilities20,664 15,118 
Deferred revenue(146,357)(43,571)
Long-term operating lease liabilities(19,294)(16,027)
Other non-current liabilities(2,681)(11,195)
Other(121)(226)
Net cash provided by operating activities1,070,994 847,076 
Cash flows from investing activities  
Capitalized software development costs(59,648)(50,080)
Capital expenditures(19,515)(18,942)
Cash paid for acquisitions, net of cash acquired(27,467)— 
Other(892)(389)
Net cash used in investing activities(107,522)(69,411)
Cash flows from financing activities
Repurchase of common stock held in treasury(511,218)(504,161)
Payment of dividends(383,980)(331,640)
Repayment of borrowings(364,063)(6,563)
Proceeds from borrowings336,875 — 
Payment of debt issuance costs(3,739)— 
Net cash used in financing activities(926,125)(842,364)
Effect of exchange rate changes1,939 (313)
Net increase (decrease) in cash, cash equivalents and restricted cash39,286 (65,012)
Cash, cash equivalents and restricted cash, beginning of period461,693 993,564 
Cash, cash equivalents and restricted cash, end of period$500,979 $928,552 
Supplemental disclosure of cash flow information:
Cash paid for interest$124,963 $125,068 
Cash paid for income taxes, net of refunds received$161,423 $197,746 
Supplemental disclosure of non-cash investing activities
Property, equipment and leasehold improvements in other accrued liabilities$3,153 $4,734 
Supplemental disclosure of non-cash financing activities
Cash dividends declared, but not yet paid$1,173 $1,453 
See Notes to Condensed Consolidated Financial Statements (Unaudited)
9
MSCI INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. INTRODUCTION AND BASIS OF PRESENTATION
MSCI Inc., together with its wholly owned subsidiaries (the “Company” or “MSCI”) is a leading provider of critical decision support tools and solutions for the global investment community. Our mission-critical offerings help investors address the challenges of a transforming investment landscape and power better investment decisions. Leveraging our knowledge of the global investment process and our expertise in research, data and technology, we enable our clients to understand and analyze key drivers of risk and return and confidently and efficiently build more effective portfolios. Our products and services include indexes; portfolio construction and risk management tools; environmental, social and governance (“ESG”) and climate solutions; and private asset data and analysis.
Basis of Presentation and Use of Estimates
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. If not materially different, certain note disclosures included therein have been omitted from these interim condensed consolidated financial statements.
In the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair statement of the interim consolidated financial statements, have been included. The results of operations for interim periods are not necessarily indicative of results for the entire year.
The Company’s unaudited condensed consolidated financial statements are prepared in accordance with GAAP. The Company makes certain estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the unaudited condensed consolidated financial statements, as well as the reported amounts of operating revenues and expenses during the periods presented. Significant estimates and judgments made by management include such examples as assessment of impairment of goodwill and intangible assets and income taxes. The Company believes that estimates used in the preparation of these unaudited condensed consolidated financial statements are reasonable; however, actual results could differ materially from these estimates. Inter-company balances and transactions are eliminated in consolidation.
Concentrations
For the nine months ended September 30, 2024 and 2023, BlackRock, Inc. (“BlackRock”) accounted for 10.1% and 10.1% of the Company’s consolidated operating revenues, respectively. For the nine months ended September 30, 2024 and 2023, BlackRock accounted for 17.8% and 17.0% of the Index segment’s operating revenues, respectively. No single customer represented 10.0% or more of operating revenues within the Analytics, ESG and Climate or All Other – Private Assets segments for the nine months ended September 30, 2024 and 2023.
Allowance for Credit Losses
Changes in the allowance for credit losses from December 31, 2022 to September 30, 2024 were as follows:
(in thousands) Amount
Balance as of December 31, 2022$2,652 
Addition to credit loss expense2,196 
Write-offs, net of recoveries(880)
Balance as of December 31, 2023$3,968 
Addition to credit loss expense2,377 
Write-offs, net of recoveries(1,982)
Balance as of September 30, 2024$4,363 
10
2. RECENT ACCOUNTING PRONOUNCEMENTS
In November 2023, the FASB issued Accounting Standards Update No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” or ASU 2023-07. The amendments in ASU 2023-07 aim to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent interim periods, with early adoption permitted. The adoption of ASU 2023-07 will expand our disclosures, and we do not expect the adoption of ASU 2023-07 to have a material impact on our consolidated financial statements.
In December 2023, the FASB issued Accounting Standards Update No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” or ASU 2023-09. The amendments in ASU 2023-09 aim to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 is effective for the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, with early adoption permitted. The Company is currently evaluating the impact of this update on disclosures within its consolidated financial statements.
3. REVENUE RECOGNITION
MSCI’s operating revenues are reported by product type and each product type may have different timing for recognizing revenue. The Company’s operating revenue types are recurring subscriptions, asset-based fees and non-recurring revenues. The Company also disaggregates operating revenues by segment.
The tables that follow present the disaggregated operating revenues for the periods indicated:
For the Three Months Ended September 30, 2024
Segments
(in thousands)IndexAnalyticsESG and ClimateAll Other - Private AssetsTotal
Operating Revenue Types
Recurring subscriptions$223,945 $168,150 $81,536 $62,991 $536,622 
Asset-based fees168,622 — — — 168,622 
Non-recurring12,315 4,226 2,107 813 19,461 
Total$404,882 $172,376 $83,643 $63,804 $724,705 
For the Nine Months Ended September 30, 2024
Segments
(in thousands)IndexAnalyticsESG and ClimateAll Other - Private AssetsTotal
Operating Revenue Types
Recurring subscriptions$653,929 $490,829 $235,954 $190,434 $1,571,146 
Asset-based fees482,162 — — — 482,162 
Non-recurring39,855 11,508 5,428 2,520 59,311 
Total$1,175,946 $502,337 $241,382 $192,954 $2,112,619 
For the Three Months Ended September 30, 2023
Segments
(in thousands)IndexAnalyticsESG and ClimateAll Other - Private AssetsTotal
Operating Revenue Types
Recurring subscriptions$206,453 $151,269 $71,744 $35,531 $464,997 
Asset-based fees141,066 — — — 141,066 
Non-recurring14,603 2,999 1,294 480 19,376 
Total$362,122 $154,268 $73,038 $36,011 $625,439 
11
For the Nine Months Ended September 30, 2023
Segments
(in thousands)IndexAnalyticsESG and ClimateAll Other - Private AssetsTotal
Operating Revenue Types
Recurring subscriptions$603,845 $443,276 $207,523 $111,292 $1,365,936 
Asset-based fees412,354 — — — 412,354 
Non-recurring47,621 7,943 3,792 1,168 60,524 
Total$1,063,820 $451,219 $211,315 $112,460 $1,838,814 
The tables that follow present the change in accounts receivable, net of allowances, and current deferred revenue between the dates indicated:
(in thousands) Accounts receivable, net of allowancesDeferred revenue
Opening (December 31, 2023)
$839,555 $1,083,864 
Closing (September 30, 2024)
643,807 942,840 
Increase/(decrease)$(195,748)$(141,024)
(in thousands) Accounts receivable, net of allowancesDeferred revenue
Opening (December 31, 2022)
$663,236 $882,886 
Closing (September 30, 2023)
603,266 837,479 
Increase/(decrease)$(59,970)$(45,407)
The amounts of revenues recognized in the periods that were included in the opening current deferred revenue, which reflects contract liability amounts, were $209.9 million and $915.5 million for the three and nine months ended September 30, 2024, respectively, and $171.8 million and $798.0 million for the three and nine months ended September 30, 2023, respectively. The difference between the opening and closing balances of the Company’s deferred revenue was primarily driven by an increase in the amortization of deferred revenue to operating revenues, partially offset by an increase in billings. As of September 30, 2024 and December 31, 2023, the Company carried a long-term deferred revenue balance of $28.8 million and $28.8 million, respectively, in “Other non-current liabilities” on the Unaudited Condensed Consolidated Statement of Financial Condition.
For contracts that have a duration of one year or less, the Company has not disclosed either the remaining performance obligation as of the end of the reporting period or when the Company expects to recognize the revenue. The remaining performance obligations for contracts that have a duration of greater than one year and the periods in which they are expected to be recognized are as follows:
As of
September 30,
(in thousands)2024
First 12-month period
$912,103 
Second 12-month period
567,796 
Third 12-month period
258,819 
Periods thereafter172,423 
Total$1,911,141 
4. EARNINGS PER COMMON SHARE
Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the assumed conversion of all dilutive securities, including, when applicable, restricted stock units (“RSUs”), performance stock units (“PSUs”) and performance stock options (“PSOs”).
12
The following table presents the computation of basic and diluted EPS:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands, except per share data)2024202320242023
Net income$280,901 $259,659 $803,613 $745,212 
Basic weighted average common shares outstanding78,499 79,116 78,925 79,580 
Effect of dilutive securities:
PSUs, RSUs and PSOs230 384 234 379 
Diluted weighted average common shares outstanding78,729 79,500 79,159 79,959 
Earnings per common share:
Basic$3.58 $3.28 $10.18 $9.36 
Diluted$3.57 $3.27 $10.15 $9.32 
5. ACQUISITIONS
On October 2, 2023, the Company acquired the remaining 66.4% interest in The Burgiss Group, LLC (“Burgiss”) for $696.8 million in cash (the “step acquisition”). The Company’s existing 33.6% interest in Burgiss had a fair value at acquisition date of $353.2 million which resulted in a non-taxable gain of $143.0 million which the Company recognized during the three months ended December 31, 2023. The acquisition of Burgiss provides the Company with comprehensive data and deep expertise in private assets, enabling investors to evaluate fundamental information, measure and compare performance, understand exposures, manage risk, and conduct robust analytics.
The step acquisition has been accounted for as a business combination using the acquisition method of accounting and its results are reported within the Private Capital Solutions operating segment within the All Other – Private Assets reportable segment. With the step acquisition, the Company renamed the Burgiss operating segment to Private Capital Solutions. Prior to the step acquisition, Burgiss was accounted for as an equity-method investment. Therefore, MSCI did not recognize the proportionate share of Burgiss’ operating revenues, rather, the Company’s proportionate share of the income or loss of Burgiss was reported as a component of other (expense) income, net. A portion of Burgiss’s client agreements do not have automatic renewal clauses at the end of the subscription period. Due to the historically high retention rate, the expectation that a substantial portion of the client agreements will be renewed and the nature of the subscription service, the associated revenue is recorded as recurring subscription revenue.
The table below represents the final purchase price allocation to total assets acquired and liabilities assumed based on their respective estimated fair values as of October 2, 2023 and the associated estimated useful lives of acquired intangibles as of that date.
13
(in thousands) Estimated
Useful Life		Fair Value
Cash and cash equivalents$5,397 
Accounts receivable25,839 
Prepaid Income Taxes72 
Other current assets4,201 
Property, equipment and leasehold improvements, net670 
Right of use assets3,443 
Other non-current assets487 
Deferred revenue(21,479)
Other current liabilities(13,705)
Long-term operating lease liabilities(2,525)
Intangible assets:
Proprietary data11 years229,900 
Customer relationships21 years179,900 
Acquired technology and software3 years19,000 
Trademarks1 year900 
Goodwill617,834 
Net assets acquired$1,049,934 
The Company, with the assistance of third-party valuation experts, calculated the fair values of intangible assets using the relief from royalty method for proprietary data, acquired technology and software and trademarks and the multi-period excess earnings method for customer relationships. The significant assumptions used to estimate the fair value of the acquired intangible assets included forecasted cash flows, which were determined based on certain assumptions that included, among others, projected future revenues, and expected market royalty rates, technology obsolescence rates and discount rates. The weighted average amortization period of the acquired intangible assets was 14.8 years.
The recorded goodwill is primarily attributable to the expected synergies from the utilization of the acquired data as well as expanded market opportunities. Goodwill attributable to the acquisition is deductible for federal income tax purposes to the extent of consideration paid.
Revenue of Burgiss recognized within the consolidated financial statements was $27.0 million and $78.0 million for the three and nine months ended September 30, 2024, respectively.
On November 1, 2023, MSCI completed the acquisition of Trove Research Ltd (“Trove”), a carbon markets intelligence provider. Trove is a part of the ESG and Climate operating segment.
On January 2, 2024, MSCI completed the acquisition of Fabric RQ, Inc. (“Fabric”), a wealth technology platform specializing in portfolio design, customization and analytics for wealth managers and advisors. Fabric is a part of the Analytics operating segment. The contingent consideration related to Fabric is payable based upon the future product sales of the acquired business.
On April 16, 2024, MSCI completed the acquisition of Foxberry Ltd. (“Foxberry”), a front-office index technology platform. Foxberry is a part of the Index operating segment. The contingent consideration related to Foxberry is payable based upon the achievement of integration metrics related to the operation of the platform.
The Company recognizes the fair value of contingent consideration at the date of acquisition. The liability associated with any contingent consideration is remeasured to fair value at each reporting date subsequent to the acquisition and changes in the fair value are recorded in the Unaudited Condensed Consolidated Statements of Income.
The following table presents the preliminary acquired balances related to the acquisitions of Trove, Fabric and Foxberry:
14
(in thousands, except weighted average amortization period of intangible asset)TroveFabricFoxberry
Acquisition Date
November 1, 2023January 2, 2024April 16, 2024
Cash payments
$37,465 $7,959 $20,945 
Deferred payments— — 2,529 
Contingent consideration liability— 8,146 19,094 
Aggregate purchase price
$37,465 $16,105 $42,568 
Net tangible assets acquired (liabilities assumed)
$(4,787)$(226)$1,748 
Intangible assets
7,705 11,300 22,500 
Goodwill
34,547 5,031 18,320 
Aggregate purchase price
$37,465 $16,105 $42,568 
Weighted average amortization period of intangible assets (years)
13.09.17.9
The fair values of the contingent consideration were determined based on management estimates and assumptions which primarily include forecasted product sales, probability of achievement of certain integration targets and discount rates. The Company classifies these liabilities as Level 3 within the fair value hierarchy, as the measurement is based on inputs that are not observable in the market. As of September 30, 2024, the fair value of the contingent consideration was $28.2 million, of which $9.3 million is included in “Other accrued liabilities” and $18.9 million is included in “Other non-current liabilities” on the Unaudited Condensed Consolidated Statement of Financial Condition.
Changes in the Company’s Level 3 financial liabilities for the three and nine months ended September 30, 2024 and 2023, respectively, were as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Beginning balance$27,746 $— $— $— 
Additions of contingent consideration1
— — 27,240 — 
Change in fair value448 — 954 — 
Payments— — — — 
Ending Balance$28,194 $— $28,194 $— 
___________________________
(1)Reflects balance of contingent consideration at acquisition date fair value.
The recorded goodwill for Trove is primarily attributable to expected synergies from the utilization of the acquired data as well as expanded market opportunities. The recorded goodwill amounts for Fabric and Foxberry are primarily attributable to expected synergies from the utilization of the acquired technology platforms. Goodwill attributable to the acquisitions of Fabric, Trove and Foxberry are not deductible for federal income tax purposes.
Revenue of Trove, Fabric and Foxberry recognized within the Unaudited Condensed Consolidated Statement of Income was $1.1 million, $189 thousand and $207 thousand for the three months ended September 30, 2024, respectively. Revenue of Trove, Fabric and Foxberry recognized within the Unaudited Condensed Consolidated Statement of Income was $3.5 million, $526 thousand and $385 thousand for the nine months ended September 30, 2024, respectively.
15
6. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET
Property, equipment and leasehold improvements, net consisted of the following as of the dates indicated:
As of
September 30,December 31,
(in thousands)20242023
Computer & related equipment$167,939 $192,008 
Furniture & fixtures15,980 16,169 
Leasehold improvements56,412 58,582 
Work-in-process1,646 897 
Subtotal241,977 267,656 
Accumulated depreciation and amortization(179,660)(211,736)
Property, equipment and leasehold improvements, net$62,317 $55,920 
Depreciation and amortization expense of property, equipment and leasehold improvements was $4.3 million and $5.3 million for the three months ended September 30, 2024 and 2023, respectively.
Depreciation and amortization expense of property, equipment and leasehold improvements was $12.6 million and $15.9 million for the nine months ended September 30, 2024 and 2023, respectively.
7. GOODWILL AND INTANGIBLE ASSETS, NET
Goodwill
The following table presents goodwill by reportable segment:
(in thousands)IndexAnalyticsESG and ClimateAll Other - Private AssetsTotal
Goodwill at December 31, 2023$1,203,435 $290,976 $84,724 $1,308,557 $2,887,692 
Acquisitions (1)
18,320 5,031 (365)(582)22,404 
Foreign exchange translation adjustment3,095 — 1,876 1,035 6,006 
Goodwill at September 30, 2024$1,224,850 $296,007 $86,235 $1,309,010 $2,916,102 
___________________________
(1)Reflects the impact of the acquisitions of Foxberry, Fabric, Trove and Burgiss.
The Company completed its annual goodwill impairment test as of July 1, 2024 on its Index, Analytics, ESG and Climate, Real Assets and Private Capital Solutions reporting units, which are also the Company’s operating segments, and no impairments were noted. The Company performed a test for impairment and determined that it was more likely than not that the fair value of each reporting unit was greater than its carrying value. See Note 12, “Segment Information,” for further descriptions of the operating segments.
Intangible Assets, Net
The following table presents the amount of amortization expense related to intangible assets by category for the periods indicated:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Amortization expense of acquired intangible assets$26,066 $15,748 $77,226 $47,430 
Amortization expense of internally developed capitalized software15,873 10,974 44,090 30,113 
Total amortization of intangible assets expense$41,939 $26,722 $121,316 $77,543 
16
The gross carrying and accumulated amortization amounts related to the Company’s intangible assets were as follows:
September 30, 2024December 31, 2023
(in thousands)Gross intangible assets:Accumulated amortization:Net intangible assets:Gross intangible assets:Accumulated amortization:Net intangible assets:
Customer relationships$716,121 $(369,817)$346,304 $709,299 $(340,248)$369,051 
Proprietary data454,477 (96,417)358,060 452,543 (64,694)387,849 
Acquired technology and software258,108 (195,608)62,500 228,785 (185,583)43,202 
Trademarks209,090 (179,238)29,852 209,090 (171,715)37,375 
Internally developed capitalized software297,489 (162,777)134,712 237,060 (118,303)118,757 
Total$1,935,285 $(1,003,857)$931,428 $1,836,777 $(880,543)$956,234 
The following table presents the estimated amortization expense for the remainder of the year ending December 31, 2024 and succeeding years:    
Years Ending December 31,
(in thousands)		Amortization
Expense
Remainder of 2024$43,292 
2025151,514 
2026