MSCI Q2 Earnings Beat Estimates, Revenues Rise Y/Y, Shares Fall

MSCI’s MSCI second-quarter 2025 adjusted earnings of $4.17 per share beat the Zacks Consensus Estimate by 0.24% and increased 14.6% year over year.MSCI's revenues rose 9.1% year over year to $772.68 million, missing the consensus estimate by 0.12%. The year-over-year growth was driven by strong growth in recurring subscription revenues and asset-based fees. Organic operating revenues grew 8.3% year over year.Recurring subscriptions of $562.8 million increased 7.9% year over year and contributed 72.8% to revenues. Asset-based fees of $184.1 million jumped 12.7% year over year and contributed 23.8% to revenues. Non-recurring revenues of $25.8 million increased 11.4% year over year and contributed 3.3% to revenues.At the end of the reported quarter, average assets under management were $2.024 trillion in ETFs linked to MSCI equity indexes. The total retention rate was 94.4% in the reported quarter.MSCI Inc Price, Consensus and EPS Surprise MSCI Inc price-consensus-eps-surprise-chart | MSCI Inc QuoteMSCI reported solid growth in the second quarter of 2025, with notable increases in revenues and earnings. However, despite the strong quarterly results, MSCI shares lost 0.39% in the pre-market trading on April 22.MSCI’s Top-Line DetailsIn second-quarter 2025, Index revenues of $434.8 million increased 9.5% year over year. Recurring subscriptions and asset-based fees rose 8.6% and 12.7% on a year-over-year basis, respectively. Non-recurring revenues declined 10.5% year over year. Organically, Index operating revenue growth was 9.3%.The uptick in recurring subscription revenues was driven by strong growth from market-cap-weighted Index products and ETFs linked to MSCI equity indexes.Analytics operating revenues of $177.7 million increased 7.1% year over year. Recurring subscription revenues jumped 4.7% and non-recurring revenues increased 104.9% on a year-over-year basis. Organically, Analytics’ operating revenue growth was 6.6%.The Sustainability and Climate segment’s (previously titled "ESG and Climate") operating revenues were $88.9 million, rising 11.3% year over year. Recurring subscriptions and non-recurring revenues increased 11.6% and 1.6% on a year-over-year basis, respectively. Organically, Sustainability and Climate operating revenue growth was 7.1%. All Other – Private Assets operating revenues, which primarily comprise the Real Assets operating segment and the Private Capital Solutions (formerly known as Burgiss), were $71.2 million, up 9.7% year over year. Organic operating revenue growth for All Other – Private Assets was 8.2%.MSCI’s Q2 Operating DetailsAdjusted EBITDA increased 10.3% year over year to $474.3 million in the reported quarter. The adjusted EBITDA margin in the second quarter of 2025 was 61.4% compared with 60.7% in the second quarter of 2024.Adjusted EBITDA expenses were $298.3 million, up 7.3% year over year, reflecting higher compensation and benefits costs due to higher headcount, as well as elevated severance costs.Total operating expenses increased 6.8% on a year-over-year basis to $347.4 million due to higher compensation costs from a 2.5% increase in headcount.Operating income improved 11.1% year over year to $425.2 million. The operating margin expanded 100 bps on a year-over-year basis to 55%.MSCI’s Balance Sheet & Cash FlowTotal cash and cash equivalents, as of June 30, 2025, were $347.3 million compared with $360.7 million as of March 31, 2025.Total debt was $4.5 billion as of June 30, 2025, compared with $4.5 billion as of March 31, 2025. The total debt-to-adjusted EBITDA ratio (based on trailing 12-month-adjusted EBITDA) was 2.5 times, lower than management’s target of 3-3.5 times.As of June 30, 2025, the free cash flow was $301.6 million, down 6.3% year over year from $268.9 million as of March 31, 2025.MSCI had $1.2 billion outstanding under its share-repurchase authorization as of July 21, 2025.The company paid out dividends worth $139.3 million in the second quarter of 2025.MSCI Maintains 2025 GuidanceFor 2025, MSCI expects total operating expenses of $1.405-$1.445 billion. Adjusted EBITDA expenses are anticipated to be between $1.220 billion and $1.250 billion.Interest expenses are expected to be between $182 million and $186 million.Net cash provided by operating activities and the free cash flow are expected to be $1.52-$1.57 billion and $1.400-$1.460 billion, respectively.Zacks Rank & Stocks to ConsiderMSCI currently carries a Zacks Rank #3 (Hold).Acadian Asset Management AAMI, AllianceBernstein AB and Artisan Partners Asset Management APAM are some better-ranked stocks that investors can consider in the Finance sector.Acadian Asset Management, AllianceBernstein and Artisan Partners Asset Management each sport a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Acadian Asset Management shares have gained 11.6% year to date. AAMI is scheduled to release second-quarter 2025 results on July 31.AllianceBernstein shares have rallied 17.9% year to date. AB is set to report its second-quarter 2025 results on July 24.Artisan Partners Asset Management shares have plunged 27% year to date. APAM is scheduled to release second-quarter 2025 results on July 29.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AllianceBernstein Holding L.P. (AB): Free Stock Analysis Report MSCI Inc (MSCI): Free Stock Analysis Report Artisan Partners Asset Management Inc. (APAM): Free Stock Analysis Report Acadian Asset Management Inc. (AAMI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks