MSCI Inc (MSCI, Financial), a leading provider of critical decision support tools and services for the global investment community, announced its financial results for the third quarter and nine months ended September 30, 2023, on October 31, 2023. The company reported an 11.6% increase in operating revenues to $625.4 million and a 22.0% increase in diluted EPS to $3.27 for Q3 2023.
Financial Performance
MSCI's operating income for the quarter was $353.3 million, up 14.1% from Q3 2022. The company's net income increased by 19.9% to $259.7 million. Adjusted EBITDA for the quarter was $386.3 million, up 13.3% year-over-year. The company's operating margin and adjusted EBITDA margin for the quarter were 56.5% and 61.8%, respectively.
Revenue Breakdown
MSCI's operating revenues for the quarter were driven by a $44.8 million increase in recurring subscription revenues and a $15.4 million increase in asset-based fees. The company's total Run Rate at the end of September 2023 was $2,468.4 million, up 12.0% from the same period last year. The company's Retention Rate for the quarter was 95.4%, compared to 96.4% in Q3 2022.
Segment Performance
The Index segment reported operating revenues of $362.1 million, up 12.4% year-over-year. The Analytics segment reported operating revenues of $154.3 million, up 6.5% year-over-year. The ESG and Climate segment reported operating revenues of $73.0 million, up 26.8% year-over-year. The All Other – Private Assets segment reported operating revenues of $36.0 million, up 0.3% year-over-year.
Capital Allocation
During Q3 2023, MSCI repurchased $17.9 million worth of shares at an average repurchase price of $467.13. The company also paid approximately $109.2 million in dividends during the quarter. As of September 30, 2023, the company had cash and cash equivalents of $928.6 million and total principal amounts of debt outstanding of $4.5 billion.
Outlook
For the full year 2023, MSCI expects operating expenses to be between $1,135 million and $1,165 million, and adjusted EBITDA expenses to be between $1,000 million and $1,020 million. The company also expects an effective tax rate of 16.5% to 18.0% for the year.
Explore the complete 8-K earnings release (here) from MSCI Inc for further details.
