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Msci Annual Report, Year Ended Dec 31, 2021

Filing Date
Filed February 11, 2022
Period End
December 31, 2021
Security
MSCI
In the record · 2016–202610-K1110-Q338-K133

MSCI filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 133 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Aug ’16Aug ’16
  2. Leadership change8-K · Mar ’19Mar ’19
  3. Material agreement8-K · Mar ’21Mar ’21
  4. Leadership change8-K · Aug ’26Aug ’26

01—Abstract

Summary

Summary of the 10-K filed February 11, 2022. Cited figures are marked; the original filing is the authoritative source.

MSCI Inc. reported full-year 2021 operating revenues of $2,043.5 milliona, up 20.5% from $1,695.4 million in 2020, with recurring subscriptions up 14.3% and asset-based fees up 38.6%.

Operating income rose to $1,072.7 million and net income to $726.0 millionb, or $8.70 diluted EPS, versus $601.8 million and $7.12 a year earlier. Adjusted EBITDA reached $1,196.8 million, a 58.6% margin, and total Run Rate grew 20.3% to $2,203.9 million. Growth was driven by the September 2021 acquisition of Real Capital Analytics (RCA) for $949.0 million in cash, which expanded the All Other – Private Assets segment, and by higher AUM in ETFs linked to MSCI equity indexes, which averaged $422.9 billion (47.7%) higher than in 2020.

The company's balance sheet shows total shareholders' deficit of $(163.5) million, with long-term debt of $4,161.4 millionc against $4,200.0 million of senior unsecured notes outstanding. Cash and equivalents were $1,421.4 million, and the $500.0 million revolver was undrawn at year-end. During 2021 MSCI issued $1,800 million of senior notes, redeemed its 2026 and 2027 notes at a combined loss on extinguishment of about $59.1 million, and returned capital through $198.4 million of share repurchases and $302.4 million of dividends paid.

Subsequent to year-end and through February 10, 2022, the company repurchased an additional $634.1 milliond of shares, leaving $955.1 million of authorization. Concentration remains a key consideration: BlackRock accounted for 12.7% of total revenues in 2021, and 93.6% of the revenue from BlackRock came from fees based on its ETFs that track MSCI indexes. The company also disclosed an effective tax rate of 15.4% for 2021, that the Revolving Credit Facility's leverage ratio was 3.28:1.00 against a 4.25:1.00 maximum, and that 4,303 employees were on the payroll at year-end.

02—Key points

Key Highlights

  1. Operating revenues rose 20.5% to $2,043.5 million; Index segment revenues grew 23.1% to $1,251.8 million, led by a 38.6% increase in asset-based fees.
  2. Net income increased 20.6% to $726.0 million, with diluted EPS of $8.70 versus $7.12 in 2020.
  3. Adjusted EBITDA was $1,196.8 million, a 58.6% margin, compared with 57.3% in 2020.
  4. Total Run Rate grew 20.3% to $2,203.9 million at December 31, 2021, including a 139.2% increase in All Other – Private Assets driven by the RCA acquisition.
  5. The RCA acquisition for $949.0 million cash closed September 13, 2021, adding $394 million of acquired intangible assets and $670.9 million of goodwill.
  6. BlackRock represented 12.7% of total 2021 revenues, a concentration risk the filing highlights alongside its dependence on asset-based fees tied to ETFs.
  7. Shareholders' equity was a deficit of $(163.5) million, and $955.1 million of repurchase authorization remained as of February 10, 2022.

03—One dollar

04—Financials

Financial Highlights

Figures from 10-KFY2021filed February 11, 2022
Revenue$2.04BNet Income$725.98M35.5% Net MarginEPS (Diluted)$8.70Total Assets$5.51BCash & Equivalents$1.42BFree Cash Flow$922.56M

Financial Statements

FY2021 against FY2020

Line itemFY2021FY2020Change
Revenue$2.04B$1.70B+20.5%
R&D Expenses$111.56M$101.05M+10.4%
Operating Expenses$970.82M$810.63M+19.8%
Operating Income$1.07B$884.76M+21.2%
Interest Expense$159.61M$156.32M+2.1%
Net Income$725.98M$601.82M+20.6%
EPS (Basic)$8.80$7.19+22.4%
EPS (Diluted)$8.70$7.12+22.2%
Shares Outstanding (Basic)82.51M83.72M−1.4%
Shares Outstanding (Diluted)83.48M84.52M−1.2%

05—Questions

Frequently Asked Questions

  1. What drove MSCI's revenue growth in 2021?

    Operating revenues grew 20.5% to $2,043.5 million. Asset-based fees rose 38.6% to $554.0 million on higher average AUM in ETFs and non-ETF funds linked to MSCI indexes, recurring subscriptions rose 14.3% to $1,426.0 million, and the RCA acquisition contributed to the All Other – Private Assets segment, which grew 51.3%.

  2. How concentrated is MSCI's client base?

    BlackRock was the largest client, accounting for 12.7% of total 2021 revenues and 20.4% of Index segment revenues. The filing notes that 93.6% of BlackRock's revenue came from fees based on assets in its ETFs that track MSCI indexes, and that clients may negotiate lower asset-based fees or cease using MSCI indexes.

  3. What is MSCI's debt and liquidity position?

    MSCI had $4,200.0 million of senior unsecured notes outstanding and a $500.0 million undrawn revolving credit agreement at December 31, 2021. Its Consolidated Leverage Ratio was 3.28:1.00 against a maximum of 4.25:1.00, and its Consolidated Interest Coverage Ratio was 8.27:1.00 against a minimum of 4.00:1.00. Cash and cash equivalents were $1,421.4 million.

  4. How is MSCI returning capital to shareholders?

    In 2021 MSCI paid $302.4 million in dividends and repurchased $198.4 million of common stock in cash terms. It declared dividends of $3.64 per share for the year and a quarterly dividend of $1.04 per share declared January 24, 2022. Through February 10, 2022, it repurchased an additional $634.1 million of shares, leaving $955.1 million of authorization.

06—Continue

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