MSCI (MSCI) Q2 2024 earnings summary

Executive summary

• Q2 2024 operating revenues grew 14% year-over-year to $707.9 million, with organic growth of 10% and strong recurring subscription and asset-based fee growth, supported by record AUM in ETFs and non-listed products.

• Adjusted EPS increased 12% to $3.64, and adjusted EBITDA rose 14% to $430 million, with a margin of 60.7%.

• Free cash flow for Q2 2024 was $321.9 million, up 21% year-over-year, and recurring revenue comprised 97% of total revenue.

• Strategic partnerships and product launches included a major ESG data partnership with Moody’s, the launch of Private Capital Closed-End Fund Indexes, and AI Portfolio Insights.

• Share repurchases totaled $289.9 million in Q2 2024, with $126.6 million in dividends paid.

Financial highlights

• Net income for Q2 2024 was $266.8 million, up 8.1% year-over-year; diluted EPS was $3.37, up 9%.

• Adjusted EBITDA margin was 60.7%; operating margin was 54.0%, down from 55.7% year-over-year.

• Subscription run rate grew 14% as reported and 9% organically, with strong performance in wealth managers, asset owners, and hedge funds.

• Asset-based fee revenues grew 18.2% year-over-year, supported by $28 billion in ETF inflows and $21 billion in market appreciation.

• Free cash flow for Q2 2024 increased 21.3% to $321.9 million.

Outlook and guidance

• Full-year 2024 operating expense guidance: $1,305–$1,345 million; adjusted EBITDA expense: $1,130–$1,160 million.

• Effective tax rate expected between 18% and 22% for Q3 and Q4; capex guidance $95–$105 million.

• Free cash flow guidance for 2024: $1,225–$1,285 million.

• Q3 expected to be seasonally softer for sales, with cancels anticipated to remain elevated.

• Guidance reflects Foxberry acquisition and assumes ETF AUM levels increase slightly through year-end.