• Organic Revenue Growth: Almost 10% for the full year 2024.
• Adjusted Earnings Per Share Growth: 12.4% for the full year 2024.
• Free Cash Flow Growth: 21% for the full year 2024.
• Share Repurchases: $810 million for the full year 2024; $425 million in the fourth quarter.
• Organic Subscription Run Rate Growth: 8% excluding FX headwinds, 7% on a reported basis in Q4.
• Asset-Based Fee Run Rate Growth: 15% in Q4.
• Retention Rate: 93% in Q4.
• Global Cash Inflows into Equity ETFs: $48 billion in Q4.
• Wealth Managers Subscription Run Rate Growth: 12% excluding FX in Q4.
• Direct Indexing AUM: Increased by 31% to nearly $130 billion.
• Fixed Income Run Rate Growth: 15% in Q4, totaling $104 million.
• Index Subscription Run Rate Growth: Almost 7% with asset managers and 12% with asset owners in Q4.
• ESG and Climate Subscription Run Rate Growth: 10% excluding FX in Q4.
• Private Capital (Trades, Portfolio) Solutions Run Rate Growth: 15% over the same period last year.
• Free Cash Flow: Up 21% in 2024.
• Gross Leverage: 2.6 times 2024 EBITDA.

• Warning! GuruFocus has detected 4 Warning Signs with BOM:539978.

Release Date: January 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• MSCI Inc (NYSE:MSCI) achieved organic revenue growth of almost 10% for the full year 2024.
• The company reported adjusted earnings per share growth of 12.4% and free cash flow growth of 21%.
• MSCI Inc (NYSE:MSCI) repurchased $810 million worth of shares in 2024, demonstrating a shareholder-centric capital allocation policy.
• The company saw strong growth in its asset-based fee run rate, driven by higher average AUM and significant cash inflows into equity ETFs linked to MSCI indices.
• MSCI Inc (NYSE:MSCI) achieved a retention rate of 93% in the fourth quarter, indicating strong client loyalty.

Negative Points

• Active asset managers continue to face cyclical pressures, impacting MSCI Inc (NYSE:MSCI)'s growth in this segment.
• The company experienced some FX headwinds, which affected its reported subscription run rate growth.
• There were elevated cancels in areas like real assets, impacting retention rates.
• The revenue growth in the Analytics segment was slightly below run rate growth due to timing of implementation-related revenues.
• MSCI Inc (NYSE:MSCI) faces lingering pressures on active managers, particularly in Europe, which could impact future growth.

Q & A Highlights

Q: Henry, how are you thinking about the potential growth rate for the ESG business long term? Are we in a cyclical challenging period, or is this the new normal? A: Henry Fernandez, CEO: I've spent the last 4 weeks in Europe, visiting over 50 clients. There's no let-up in commitment to sustainability among European financial institutions. The demand is there, and we need to evolve our product line to meet it. In the U.S., sustainability is seen as a secular trend, regardless of political changes. We're reevaluating our long-term targets and will update the market in due course.

Q: Andy, can you contextualize your comment on the exciting year ahead, given the current environment? A: Andrew Wiechmann, CFO: Rising markets are supportive for clients, and we're seeing encouraging signs in the U.S. My excitement comes from our innovations in custom indexes, front-office analytics, and private asset solutions. While some areas still face pressure, overall, the environment is more constructive, and we're seeing a pickup in the pipeline.

Q: Can you talk about how pricing conversations and impact should be this year? A: Andrew Wiechmann, CFO: In 2024, the contribution from price increases was slightly less than in 2023. We focus on capturing value linked to the enhancements we provide. The pricing environment and client health are key factors, and we believe we're well-positioned relative to competitors, especially in areas like ESG.

Q: Could you expand on the trends you're seeing in the Analytics segment? A: Andrew Wiechmann, CFO: Organic subscription run rate growth was around 7%, consistent with the prior quarter. FX impacts made it appear lower. We're seeing good momentum in fixed income and wealth, with our insights offering opening new doors. Revenue growth was slightly below run rate growth due to timing of implementation-related revenues.

Q: Can you provide more color on the partnership with Moody's in the ESG segment? A: Henry Fernandez, CEO: The partnership involves Moody's subscribing to our ESG data, using their Orbis database to create ESG scores, and exploring collaboration in private credit. It's early days for synergistic revenues, but we're optimistic about the potential.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.