MSCI Q2 2024 Earnings Summary $MSCI

In the latest episode, we dive into MSCI's impressive Q2 2024 earnings call, which showcased resilience amidst a challenging market climate. The company reported a robust 12% growth in adjusted earnings per share and a notable 10% organic revenue growth, with asset-based fee revenue soaring by 18% due to record assets under management linked to MSCI indices. CEO Henry Fernandez highlighted the company's strong diversification and its highest-ever Q2 for new recurring subscription sales at $83 million, indicating a promising 14% rise in subscription run rate. CFO Andy Wiechmann noted continued high client engagement, despite expecting challenges with cancellation rates in the coming quarter. Key segments showed remarkable performance, particularly analytics, which achieved a record 96% retention rate and new subscription sales exceeding $21 million. Looking forward, MSCI’s leadership emphasizes ongoing innovation and long-term growth drivers, especially through partnerships enhancing ESG offerings. Tune in to gain deep insights into how MSCI plans to navigate the evolving investment landscape and capitalize on emerging opportunities.

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MSCI reported Q2 2024 results that demonstrated resilience and growth in a challenging market environment. The company achieved adjusted earnings per share growth of 12% and organic revenue growth of 10%. Notably, asset-based fee revenue surged by 18%, propelled by record assets under management, or AUM, linked to MSCI indices, particularly in ETFs and non-listed products. Free cash flow increased by an impressive 21% year-over-year.

CEO Henry Fernandez emphasized the strength of MSCI's diversified business model, stating, "We are determined to capture the long-term secular trends disrupting the investment industry." He highlighted the 14% growth in subscription run rate, with organic growth at 9%, marking MSCI's highest-ever Q2 for new recurring subscription sales at $83 million—up 22% year-over-year. The retention rate across the MSCI client base remained robust at nearly 95%.

CFO Andy Wiechmann echoed this sentiment, noting, "We are encouraged by the results, which reflect our unrelenting dedication to execution even in the face of market headwinds." He pointed out that MSCI's strong client engagement and momentum in equity markets could lead to more favorable buying dynamics, although they expect ongoing challenges with elevated cancellation rates through Q3.

The quarter also saw significant developments in several key segments. In Index, subscription run rate growth reached 9%, particularly highlighted by a 17% increase in custom indexes and special packages. The Analytics segment performed exceptionally well, achieving a record retention rate close to 96% and new recurring subscription sales over $21 million, aided by heightened demand for risk management solutions from a variety of clients.

Looking to the future, Baer Pettit, President and COO, reaffirmed MSCI's commitment to driving innovation, noting, "We are laser-focused on continuing to drive these long-term growth drivers," particularly through advancements in AI and climate solutions. The recently announced partnership with Moody’s is expected to enhance their ESG offerings and expand data accessibility for private companies.

As MSCI continues to navigate a complex investment landscape, the leadership remains optimistic about long-term growth prospects. Fernandez concluded the call saying, "We're excited about the large growth opportunities in front of us and encouraged by a very high level of client engagement."

Overall, MSCI's Q2 2024 results not only reflect significant financial achievements but also a strategic approach to capitalize on emerging opportunities, setting the stage for sustained growth amid evolving market conditions.