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MSCI Q3 Earnings Surpass Estimates, Revenues Increase Year over Year
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Key Takeaways
MSCI's Q3 adjusted EPS rose 14.3% to $5.11, beating estimates, while revenues climbed 12.4% to $892 million.
Asset-based fees surged 24.9%, while Index revenues jumped 18.1%, driving MSCI's strong quarterly growth.
MSCI's net new recurring subscription sales rose 41.2%, but free cash flow declined 8.9% to $385.4 million.
MSCI (MSCI - Free Report) reported third-quarter 2026 adjusted earnings of $5.11 per share, up 14.3% year over year. The figure surpassed the Zacks Consensus Estimate by 2.61%.
Revenues rose 12.4% year over year to $892 million, beating the consensus mark by 1.30%. Higher recurring subscription revenue and asset-based fees drove growth. The retention rate improved to 95% from 94.7%, while period-end assets under management (AUM) in ETFs linked to MSCI equity indexes reached $2.905 trillion.
Recurring subscription revenues increased 7.7% year over year to $623.6 million, supported by growth across client segments. Asset-based fees surged 24.9% year over year to $246.6 million, benefiting from higher AUM in ETFs and non-ETF indexed funds linked to MSCI indexes.
Non-recurring revenues increased 29.8% year over year to $21.8 million. Organic operating revenue growth was 12.3%. Total run rate, representing the annualized value of recurring contracts, reached $3.572 billion, up 12.1% year over year.
Index revenues of $532.6 million increased 18.1% year over year. Recurring subscriptions rose 11.1%, while non-recurring revenues jumped 48.6%. Organic operating revenue growth was 18%.
The segment’s adjusted EBITDA increased 17.8% year over year to $412.4 million, while its margin contracted to 77.4% from 77.6%. Index run rate reached $2.083 billion, up 16.5%, supported by market-cap-weighted and custom index products.
Analytics operating revenues increased 4.8% year over year to $191 million, aided by growth in Equity Analytics and Multi-Asset Class products. Recurring subscription revenues rose 5.5%, while non-recurring revenues declined 25.6% year over year. Adjusted EBITDA decreased 4.9% to $85.7 million, and the margin contracted to 44.9% from 49.4%.
Sustainability and Climate revenues rose 4% year over year to $93.7 million. Adjusted EBITDA rose 10.1% year over year to $38.2 million, and the margin expanded to 40.8% from 38.6%. Organic revenue growth was 2.2%, reflecting acquisition contributions and underlying demand for Climate products.
All Other - Private Assets revenues increased 6.7% to $74.7 million. However, adjusted EBITDA fell 4.6% to $18.5 million, and the margin contracted to 24.8% from 27.6%.
MSCI's Sales Trends Show Improving Client Demand
New recurring subscription sales increased 25.3% year over year to $85.8 million. Subscription cancellations rose 4.4% to $31 million. Consequently, net new recurring subscription sales surged 41.2% to $54.8 million. Total net sales advanced 35% to $76.4 million.
Index net new recurring subscription sales increased 40.5% to $27.4 million. Analytics and All Other - Private Assets recorded growth of 63.6% and 67.3%, respectively.
However, Sustainability and Climate reported negative net new recurring subscription sales of $1.1 million against positive sales of $2 million a year ago, reflecting increased cancellations.
MSCI's Q3 Operating Performance
Total operating expenses increased 12.8% year over year to $389.9 million.
Adjusted EBITDA advanced 12.2% to $554.8 million. The adjusted EBITDA margin narrowed 10 basis points to 62.2%, reflecting expenses rising slightly faster than revenues.
Operating income increased 12.2% to $502.1 million. The operating margin contracted 10 basis points to 56.3%.
MSCI's Balance Sheet and Cash Flow
As of Sept. 30, 2026, cash and cash equivalents were $261 million, while total principal debt stood at $6.8 billion. The debt-to-adjusted EBITDA ratio was 3.2 times.
Net cash provided by operating activities declined 3% year over year to $436.1 million, primarily reflecting higher interest payments. Free cash flow fell 8.9% to $385.4 million.
MSCI repurchased $552.3 million of shares during the quarter and paid approximately $147.5 million in dividends. The company also declared a fourth-quarter dividend of $2.05 per share.
MSCI Updates Full-Year 2026 Guidance
MSCI expects full-year operating expense outlook in the range of $1.535-$1.575 billion and adjusted EBITDA expense guidance to be between $1.340 and $1.370 billion. Capital expenditures are expected to be between $160 million and $170 million.
The company continues to anticipate operating cash flow of $1.655-$1.705 billion and free cash flow of $1.485-$1.545 billion. However, interest expense guidance increased to $288-$291 million from $282-$286 million, while the expected effective tax rate narrowed to 18-19.5% from 18-20%.
Robinhood Markets shares have plunged 14.7% in the year-to-date period. Robinhood Markets is likely to report its third-quarter 2026 results on Oct. 27, 2026.
First Busey shares have gained 23.3% in the year-to-date period. First Busey is set to report its third-quarter 2026 results on Oct. 27, 2026.
S&T Bancorp shares have gained 23.2% in the year-to-date period. S&T Bancorp is likely to report its third-quarter 2026 results on Oct. 22, 2026.
View the Zacks #1 Rank List
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MSCI Q3 Earnings Surpass Estimates, Revenues Increase Year over Year
Key Takeaways
MSCI (MSCI - Free Report) reported third-quarter 2026 adjusted earnings of $5.11 per share, up 14.3% year over year. The figure surpassed the Zacks Consensus Estimate by 2.61%.
Revenues rose 12.4% year over year to $892 million, beating the consensus mark by 1.30%. Higher recurring subscription revenue and asset-based fees drove growth. The retention rate improved to 95% from 94.7%, while period-end assets under management (AUM) in ETFs linked to MSCI equity indexes reached $2.905 trillion.
MSCI's Revenue Growth Reflects Strong Asset-Based Fees
Recurring subscription revenues increased 7.7% year over year to $623.6 million, supported by growth across client segments. Asset-based fees surged 24.9% year over year to $246.6 million, benefiting from higher AUM in ETFs and non-ETF indexed funds linked to MSCI indexes.
Non-recurring revenues increased 29.8% year over year to $21.8 million. Organic operating revenue growth was 12.3%. Total run rate, representing the annualized value of recurring contracts, reached $3.572 billion, up 12.1% year over year.
MSCI Inc Price, Consensus and EPS Surprise
MSCI Inc price-consensus-eps-surprise-chart | MSCI Inc Quote
MSCI's Top-Line Details Highlight Index Strength
Index revenues of $532.6 million increased 18.1% year over year. Recurring subscriptions rose 11.1%, while non-recurring revenues jumped 48.6%. Organic operating revenue growth was 18%.
The segment’s adjusted EBITDA increased 17.8% year over year to $412.4 million, while its margin contracted to 77.4% from 77.6%. Index run rate reached $2.083 billion, up 16.5%, supported by market-cap-weighted and custom index products.
Analytics operating revenues increased 4.8% year over year to $191 million, aided by growth in Equity Analytics and Multi-Asset Class products. Recurring subscription revenues rose 5.5%, while non-recurring revenues declined 25.6% year over year. Adjusted EBITDA decreased 4.9% to $85.7 million, and the margin contracted to 44.9% from 49.4%.
Sustainability and Climate revenues rose 4% year over year to $93.7 million. Adjusted EBITDA rose 10.1% year over year to $38.2 million, and the margin expanded to 40.8% from 38.6%. Organic revenue growth was 2.2%, reflecting acquisition contributions and underlying demand for Climate products.
All Other - Private Assets revenues increased 6.7% to $74.7 million. However, adjusted EBITDA fell 4.6% to $18.5 million, and the margin contracted to 24.8% from 27.6%.
MSCI's Sales Trends Show Improving Client Demand
New recurring subscription sales increased 25.3% year over year to $85.8 million. Subscription cancellations rose 4.4% to $31 million. Consequently, net new recurring subscription sales surged 41.2% to $54.8 million. Total net sales advanced 35% to $76.4 million.
Index net new recurring subscription sales increased 40.5% to $27.4 million. Analytics and All Other - Private Assets recorded growth of 63.6% and 67.3%, respectively.
However, Sustainability and Climate reported negative net new recurring subscription sales of $1.1 million against positive sales of $2 million a year ago, reflecting increased cancellations.
MSCI's Q3 Operating Performance
Total operating expenses increased 12.8% year over year to $389.9 million.
Adjusted EBITDA advanced 12.2% to $554.8 million. The adjusted EBITDA margin narrowed 10 basis points to 62.2%, reflecting expenses rising slightly faster than revenues.
Operating income increased 12.2% to $502.1 million. The operating margin contracted 10 basis points to 56.3%.
MSCI's Balance Sheet and Cash Flow
As of Sept. 30, 2026, cash and cash equivalents were $261 million, while total principal debt stood at $6.8 billion. The debt-to-adjusted EBITDA ratio was 3.2 times.
Net cash provided by operating activities declined 3% year over year to $436.1 million, primarily reflecting higher interest payments. Free cash flow fell 8.9% to $385.4 million.
MSCI repurchased $552.3 million of shares during the quarter and paid approximately $147.5 million in dividends. The company also declared a fourth-quarter dividend of $2.05 per share.
MSCI Updates Full-Year 2026 Guidance
MSCI expects full-year operating expense outlook in the range of $1.535-$1.575 billion and adjusted EBITDA expense guidance to be between $1.340 and $1.370 billion. Capital expenditures are expected to be between $160 million and $170 million.
The company continues to anticipate operating cash flow of $1.655-$1.705 billion and free cash flow of $1.485-$1.545 billion. However, interest expense guidance increased to $288-$291 million from $282-$286 million, while the expected effective tax rate narrowed to 18-19.5% from 18-20%.
Zacks Rank & Stocks to Consider
MSCI currently carries a Zacks Rank #3 (Hold).
Robinhood Markets (HOOD - Free Report) , First Busey (BUSE - Free Report) , and S&T Bancorp (STBA - Free Report) are some better-ranked stocks that investors can consider in the Finance sector. While HOOD sports a Zacks Rank #1 (Strong Buy), BUSE and STBA carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Robinhood Markets shares have plunged 14.7% in the year-to-date period. Robinhood Markets is likely to report its third-quarter 2026 results on Oct. 27, 2026.
First Busey shares have gained 23.3% in the year-to-date period. First Busey is set to report its third-quarter 2026 results on Oct. 27, 2026.
S&T Bancorp shares have gained 23.2% in the year-to-date period. S&T Bancorp is likely to report its third-quarter 2026 results on Oct. 22, 2026.