01—Abstract
Summary
Summary of the 10-Q filed October 31, 2024. Cited figures are marked; the original filing is the authoritative source.
MSCI Inc. reported third-quarter 2024 operating revenues of $724.7 milliona, up from $625.4 million a year earlier, and net income of $280.9 million versus $259.7 million.
For the nine months ended September 30, 2024, operating revenues were $2.11 billionb and net income was $803.6 million, with diluted EPS of $10.15 compared with $9.32. Growth was driven largely by the Burgiss acquisition, which moved the Private Capital Solutions business into the All Other – Private Assets segment, along with higher asset-based fees tied to ETFs linked to MSCI equity indexes. Total Run Rate reached $2.89 billion, up 17.3%, though the filing notes that adjusting for recent acquisitions and currency effects, recurring subscription Run Rate would have increased 8.0%.
Profitability and cash generation remained solid. Adjusted EBITDA was $450.7 millionc for the quarter, a 16.7% increase, with an Adjusted EBITDA margin of 62.2%. Net cash provided by operating activities was $1.07 billion for the nine months.
The company repurchased $440.3 milliond of shares during the nine months and paid $384.0 million in dividends. Total debt principal was $4.51 billion at quarter-end, including $4.2 billion of senior notes and $311.9 million drawn on the revolving credit facility. The filing states a Consolidated Leverage Ratio of 2.39:1.00 against a maximum of 4.25:1.00 and a Consolidated Interest Coverage Ratio of 9.79:1.00 against a minimum of 4.00:1.00.
Subsequent to quarter-end, on October 28, 2024, the Board declared a $1.60 quarterly dividend and authorized an additional $1.5 billion repurchase program, which together with the $405.4 million remaining under the 2022 program forms a $1.9 billion total 2024 program. The company also reported that its goodwill in the Private Capital Solutions reporting unit ($617.8 million) had a fair value exceeding carrying value by approximately 10% as of July 1, 2024, making it vulnerable to future impairment.
02—Key points
Key Highlights
- Operating revenues of $724.7 million for Q3 2024, up 15.9% from $625.4 million; nine-month revenues of $2.11 billion, up 14.9%.
- Net income of $280.9 million for Q3 2024 (diluted EPS $3.57) versus $259.7 million (diluted EPS $3.27) in Q3 2023; nine-month diluted EPS of $10.15 versus $9.32.
- Adjusted EBITDA of $450.7 million for Q3 2024, up 16.7%, with Adjusted EBITDA margin of 62.2% versus 61.8%.
- Total Run Rate of $2.89 billion as of September 30, 2024, up 17.3%, including a 25.3% increase in asset-based fee Run Rate.
- Burgiss step acquisition contributed $27.0 million of Q3 2024 revenue and $110.1 million of Run Rate; the Private Capital Solutions goodwill of $617.8 million is noted as vulnerable to impairment.
- Returned capital through $440.3 million of nine-month share repurchases and $384.0 million of dividends paid; a new $1.5 billion repurchase authorization was approved October 28, 2024.
- Total debt principal of $4.51 billion with a Consolidated Leverage Ratio of 2.39:1.00, well inside the 4.25:1.00 covenant maximum.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed October 31, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $724.71M$625.44M | +15.9% |
| R&D Expenses | $38.58M$31.44M | +22.7% |
| Operating Expenses | $323.37M$272.13M | +18.8% |
| Operating Income | $401.33M$353.31M | +13.6% |
| Net Income | $280.90M$259.66M | +8.2% |
| EPS (Basic) | $3.58$3.28 | +9.1% |
| EPS (Diluted) | $3.57$3.27 | +9.2% |
| Shares Outstanding (Basic) | 78.50M79.12M | −0.8% |
| Shares Outstanding (Diluted) | 78.73M79.50M | −1.0% |
05—Questions
Frequently Asked Questions
What drove the increase in MSCI's revenue this quarter?
Operating revenues rose 15.9% to $724.7 million. The filing attributes growth mainly to All Other – Private Assets, where revenue rose 77.2% largely due to the Burgiss step acquisition, and to asset-based fees, which increased 19.5% on higher average AUM in ETFs linked to MSCI equity indexes. Recurring subscriptions rose 15.4%.
How are margins and operating costs trending?
Total operating expenses rose 18.8% to $323.4 million in Q3 2024, outpacing revenue growth in some lines, including R&D (up 22.7%) and amortization of intangible assets (up 56.9%). Operating margin was 55.4% versus 56.5% a year earlier, while Adjusted EBITDA margin improved to 62.2% from 61.8%.
How is MSCI returning cash to shareholders?
For the nine months ended September 30, 2024, the company repurchased shares for $440.3 million and paid $384.0 million in dividends. On October 28, 2024, the Board declared a $1.60 quarterly dividend and authorized an additional $1.5 billion repurchase program, bringing total available authorization to approximately $1.9 billion.
What is MSCI's debt and leverage position?
Total debt principal was $4.51 billion at September 30, 2024, consisting of $4.2 billion in senior notes and $311.9 million drawn on the revolving credit facility. The Consolidated Leverage Ratio was 2.39:1.00 against a 4.25:1.00 maximum, and the Consolidated Interest Coverage Ratio was 9.79:1.00 against a 4.00:1.00 minimum. No principal maturities fall before 2029 per the maturity schedule.
What goodwill or acquisition risks does the filing flag?
Goodwill totaled $2.92 billion at September 30, 2024. The filing states that the Private Capital Solutions reporting unit, with $617.8 million of goodwill following the Burgiss acquisition, had a fair value exceeding its carrying value by approximately 10% as of July 1, 2024, making it vulnerable to potential future impairment if business conditions weaken.
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