01—Abstract
Summary
Summary of the 8-K filed July 23, 2024. Cited figures are marked; the original filing is the authoritative source.
MSCI Inc. reported second-quarter 2024 results (three months ended June 30, 2024) in a press release furnished as Exhibit 99.1.
Operating revenues were $707.9 milliona, up 14.0%, with organic operating revenue growth of 9.7%. Operating income was $382.6 million, up 10.6%, and operating margin was 54.0%, compared with 55.7% a year earlier. Net income was $266.8 million, up 8.1%, and diluted EPS was $3.37, up 9.1%.
Adjusted EBITDA was $430.0 millionb, up 14.0%, with an adjusted EBITDA margin of 60.7%, flat year over year. Adjusted EPS was $3.64, up 11.7%. Total Run Rate reached $2,807.3 million, up 14.6%, and organic recurring subscription Run Rate growth was 8.6%.
Retention Rate was 94.8%c, compared with 95.5% in second quarter 2023. Growth was broad across segments. Index operating revenues rose 9.6%, with asset-based fees up 18.2%.
Analytics revenues rose 10.8%, and ESG and Climate revenues rose 12.1%. All Other - Private Assets revenues rose 72.0%, driven largely by Private Capital Solutions and acquisitions; its organic growth was 1.3%. Operating expenses rose 18.2% to $325.3 milliond, including $37.5 million from recently acquired businesses.
Net cash provided by operating activities rose 19.7% to $349.2 million, and free cash flow rose 21.3% to $321.9 million. The company reaffirmed or updated full-year 2024 guidance: operating expense of $1,305 to $1,345 million (raised from $1,300 to $1,340 million), D&A expense of $175 to $185 million (raised from $170 to $180 million), and unchanged adjusted EBITDA expense, interest expense, tax rate, capex, operating cash flow and free cash flow ranges. The board declared a $1.60 per share dividend for third quarter 2024, and the company repurchased $289.9 million of shares through July 19, 2024.
02—Key points
Key Highlights
- Operating revenues of $707.9 million, up 14.0%; organic operating revenue growth of 9.7%
- Diluted EPS of $3.37, up 9.1%; Adjusted EPS of $3.64, up 11.7%
- Adjusted EBITDA of $430.0 million, up 14.0%, with a 60.7% adjusted EBITDA margin
- Total Run Rate of $2,807.3 million, up 14.6%; organic recurring subscription Run Rate growth of 8.6%
- Retention Rate of 94.8%, down from 95.5% in second quarter 2023
- Free cash flow of $321.9 million, up 21.3%; net cash from operations up 19.7% to $349.2 million
- Full-year 2024 operating expense guidance raised to $1,305 to $1,345 million; $1.60 quarterly dividend declared for third quarter 2024
03—Questions
Frequently Asked Questions
How did MSCI perform in the second quarter of 2024?
Operating revenues rose 14.0% to $707.9 million, and net income rose 8.1% to $266.8 million. Diluted EPS was $3.37, up 9.1%. Organic operating revenue growth, which excludes acquisitions, divestitures and currency effects, was 9.7%.
What drove the revenue growth?
Index asset-based fees rose 18.2%, driven mainly by ETFs linked to MSCI equity indexes. Private Assets revenues rose 72.0%, largely from Private Capital Solutions and acquisitions, though its organic growth was only 1.3%. Analytics revenues rose 10.8% and ESG and Climate revenues rose 12.1%.
Did retention or margins change?
The Retention Rate fell to 94.8% from 95.5% a year earlier. Operating margin declined to 54.0% from 55.7%, while adjusted EBITDA margin was flat at 60.7%. Operating expenses rose 18.2%, including costs from recently acquired businesses.
What is the outlook and capital return plan?
Full-year 2024 operating expense guidance was raised to $1,305 to $1,345 million from $1,300 to $1,340 million. Adjusted EBITDA expense, free cash flow and operating cash flow guidance were unchanged. The board declared a $1.60 per share cash dividend for third quarter 2024, and the company repurchased $289.9 million of shares through July 19, 2024.
04—Continue