MSCI (MSCI) Q4 2024 earnings summary

Executive summary

• Achieved nearly 10% organic revenue growth, 12.4% adjusted EPS growth, and 21% free cash flow growth for 2024; Q4 organic subscription run rate growth was 8% (ex-FX), with strong performance in wealth management, hedge funds, and fixed income segments.

• Q4 2024 operating revenues rose 7.7% year-over-year to $743.5M; adjusted EBITDA margin reached 60.8%, and free cash flow was $395M for the quarter.

• Adjusted EPS grew 14% year-over-year, while reported diluted EPS declined 23% due to a one-time gain in 4Q23.

• Subscription run rate growth was 7% reported and 8% organic as of December 31, 2024.

Financial highlights

• Q4 saw $48 billion in cash inflows into equity ETFs linked to indices, the highest since 2021; AUM in ETFs linked to equity indexes reached $1,761.8B at 4Q24.

• Wealth manager subscription run rate grew 12% (ex-FX) to $116 million; direct indexing AUM up 31% to $130 billion.

• Free cash flow for Q4 was $394.7M, up 7.5% year-over-year; gross leverage at 2.6x 2024 EBITDA.

• $810 million in share repurchases in 2024, $425 million in Q4; $865.5M in share repurchases completed in 2024.

• Operating margin reached 54.5% in Q4 2024 (+80 bps YoY); adjusted EBITDA: $452.3M (+9.1% YoY).

Outlook and guidance

• 2025 expense outlook assumes gradually increasing market levels and ongoing reinvestment; operating expense guidance: $1.405B–$1.445B; adjusted EBITDA expense: $1.22B–$1.25B.

• Q1 2025 adjusted EBITDA expenses expected to be $35 million higher sequentially, mainly due to compensation.

• CapEx guidance reflects continued investment in software development; 2025 capex expected at $115M–$125M.

• Free cash flow guidance for 2025: $1.4B–$1.46B; effective tax rate projected at 17.5%–21%.