Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

INDEX TO MANAGEMENT’S DISCUSSION AND ANALYSIS


			Page
Overview			22
Critical Accounting Estimates			23
Results of Operations			23
Segment Results			29
Liquidity and Capital Resources			36
Cash Flows			38

The following discussion and analysis of the financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “Form 10-K”). This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in “Item 1A.—Risk Factors,” in our Form 10-K.

Except as the context otherwise indicates, the terms “MSCI,” the “Company,” “we,” “our” and “us” refer to MSCI Inc., together with its subsidiaries.

Overview

We are a leading provider of critical decision support tools and solutions for the global investment community. Our mission-critical offerings help investors navigate the complexities of a dynamic and evolving investment landscape. Leveraging our deep knowledge of the global investment process and our expertise in research, data and technology, we enable our clients to understand and analyze key drivers of risk and return and build portfolios more effectively. The Company has five operating segments: Index, Analytics, Sustainability and Climate, Real Assets and Private Capital Solutions which are presented as the following three reportable segments: Index, Analytics, and Sustainability and Climate. For reporting purposes, the Real Assets and Private Capital Solutions operating segments are combined and presented as All Other – Private Assets, as they did not meet the required thresholds for separate reportable segment disclosure.

Our growth strategy includes: (a) extending leadership in research-enhanced content across asset classes, (b) leading the enablement of sustainability and climate investment integration, (c) enhancing distribution and content-enabling technology, (d) expanding solutions that empower client customization, (e) strengthening client relationships and expanding our presence in key geographic areas and (f) executing strategic partnerships and acquisitions with complementary data, content and technology companies. For more information about our Company’s operations, see “Item 1: Business” in our Form 10-K.

As of March 31, 2025, we served approximately 7,0001 clients in more than 95 countries.

Our principal business model is generally to license annual, recurring subscriptions for the majority of our Index, Analytics and Sustainability and Climate products and services for a fee due in advance of the service period. Private Assets products are also licensed annually through subscriptions, which are generally recurring, for a fee which is paid in advance when products are generally delivered ratably over the subscription period or in arrears after the product is delivered. A portion of our fees comes from clients who use our indexes as the basis for index-linked investment products. Such fees are primarily based on a client’s assets under management (“AUM”), trading volumes and fee levels.

In evaluating our financial performance, we focus on revenue and profit growth, including results accounted for under generally accepted accounting principles in the United States (“GAAP”), as well as non-GAAP measures, for the Company as a whole and by operating segment.

We present revenues disaggregated by types and by segments, which represent our major product lines. We also review expenses by activity, which provides more transparency into how resources are being deployed. In addition, we utilize operating metrics including Run Rate, subscription sales and Retention Rate to manage and assess performance and to provide deeper insights into the recurring portion of our business.

1 Represents the aggregate of all related clients under their respective parent entity. At acquisition, we align an acquired Company’s client count to our methodology.

In the first quarter of 2025, we renamed our “ESG and Climate” operating and reportable segment to “Sustainability and Climate” to reflect the breadth of our product offerings. There were no changes to the composition of our reportable segments or information reviewed by the chief operating decision maker and no impact on our historical segment operating results.

In the discussion that follows, we provide certain variances excluding the impact of foreign currency exchange rate fluctuations and acquisitions. Foreign currency exchange rate fluctuations reflect the difference between the current period results as reported compared to the current period results recalculated using the foreign currency exchange rates in effect for the comparable prior period. While operating revenues adjusted for the impact of foreign currency fluctuations includes asset-based fees that have been adjusted for the impact of foreign currency fluctuations, the underlying AUM, which is the primary component of asset-based fees, is not adjusted for foreign currency fluctuations. Approximately three-fifths of the AUM is invested in securities denominated in currencies other than the U.S. dollar, and accordingly, any such impact is excluded from the disclosed foreign currency-adjusted variances.

For the three months ended March 31, 2025, our largest client organization by revenue, BlackRock, accounted for 10.3% of our consolidated operating revenues, with 96.1% of the operating revenues from BlackRock coming from fees based on the assets in BlackRock’s ETFs and non-ETF products that are based on our indexes.

The discussion of our results of operations for the three months ended March 31, 2025 and 2024 are presented below. The results of operations for interim periods may not be indicative of future results.

Critical Accounting Policies and Estimates

We describe our significant accounting policies in Note 1, “Introduction and Basis of Presentation,” of the Notes to Consolidated Financial Statements included in our Form 10-K. There have been no significant changes in our accounting policies since the end of the fiscal year ended December 31, 2024 or critical accounting estimates applied in the fiscal year ended December 31, 2024.

Results of Operations

Operating Revenues

Our operating revenues are grouped by the following types: recurring subscriptions, asset-based fees and non-recurring. We also group operating revenues by major product as follows: Index, Analytics, Sustainability and Climate and All Other – Private Assets.

The following table presents operating revenues by type for the periods indicated:


	Three Months Ended March 31,				% Change
(in thousands)	2025		2024
Operating revenues:
Index
Recurring subscriptions	$	233,330	$	212,952	9.6	%
Asset-based fees	177,415		150,259		18.1	%
Non-recurring	10,998		10,661		3.2	%
Index total	421,743		373,872		12.8	%


Analytics
Recurring subscriptions	169,755		160,551		5.7	%
Non-recurring	2,430		3,415		(28.8	%)
Analytics total	172,185		163,966		5.0	%


Sustainability and Climate
Recurring subscriptions	82,737		76,418		8.3	%
Non-recurring	1,882		1,466		28.4	%
Sustainability and Climate total	84,619		77,884		8.6	%


All Other - Private Assets
Recurring subscriptions	66,819		63,134		5.8	%
Non-recurring	460		1,109		(58.5	%)
All Other - Private Assets total	67,279		64,243		4.7	%


Recurring subscriptions total	552,641		513,055		7.7	%

Asset-based fees	177,415		150,259		18.1	%

Non-recurring total	15,770		16,651		(5.3	%)

Total operating revenues	$	745,826	$	679,965	9.7	%

Total operating revenues increased 9.7%. Adjusting for the impact of foreign currency exchange rate fluctuations, total operating revenues would have increased 9.9%.

Refer to the section titled “Segment Results” that follows for further discussion of segment revenues.

Operating Expenses

We group our operating expenses into the following activity categories:

Cost of revenues;
Selling and marketing;
Research and development (“R&D”);
General and administrative (“G&A”);
Amortization of intangible assets; and
Depreciation and amortization of property, equipment and leasehold improvements.

Costs are assigned to these activity categories based on the nature of the expense or, when not directly attributable, an estimated allocation based on the type of effort involved. Cost of revenues, selling and marketing, R&D and G&A all include both compensation as well as non-compensation related expenses.

The following table presents operating expenses by activity category for the periods indicated:


	Three Months Ended March 31,				% Change
(in thousands)	2025		2024
Operating expenses:
Cost of revenues	$	136,790	$	128,514	6.4	%
Selling and marketing	78,707		72,168		9.1	%
Research and development	47,591		40,525		17.4	%
General and administrative	57,097		56,691		0.7	%
Amortization of intangible assets	43,872		38,604		13.6	%
Depreciation and amortization of property, equipment and leasehold improvements	4,746		4,081		16.3	%
Total operating expenses	$	368,803	$	340,583	8.3	%

Total operating expenses increased 8.3%. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 10.0%.

Descriptions of MSCI’s operating expense categories are provided in “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K. The discussion below focuses on year-over-year changes and key drivers.

Cost of Revenues

Cost of revenues increased 6.4%, primarily driven by increases in non-compensation costs, primarily relating to higher information technology and market data costs, as well as increases in compensation and benefits costs reflecting higher severance costs and incentive compensation.

Selling and Marketing

Selling and marketing expenses increased 9.1%, primarily driven by increases in compensation and benefits costs as a result of increased headcount costs as well as higher severance costs.

Research and Development

R&D expenses increased 17.4%, primarily driven by increases in compensation and benefits costs as a result of increased headcount costs as well as higher severance costs.

General and Administrative

G&A expenses increased 0.7%, primarily driven by increases in compensation and benefits costs as a result of increased headcount costs, partially offset by decreases in non-compensation costs reflecting lower transaction costs.

The following table presents operating expenses using compensation and non-compensation categories, rather than using activity categories, for the periods indicated:


	Three Months Ended March 31,				% Change
(in thousands)	2025		2024
Compensation and benefits	$	240,246	$	222,994	7.7	%
Non-compensation expenses	79,939		74,904		6.7	%
Amortization of intangible assets	43,872		38,604		13.6	%
Depreciation and amortization of property, equipment and leasehold improvements	4,746		4,081		16.3	%
Total operating expenses	$	368,803	$	340,583	8.3	%

Compensation and Benefits

We had 6,184 employees as of March 31, 2025, compared to 5,858 employees as of March 31, 2024, reflecting a 5.6% increase in the number of employees. Continued growth of our emerging market centers around the world is an important factor in our ability to manage and control the growth of our compensation and benefits costs. As of March 31, 2025, 69.7% of our employees were located in emerging market centers compared to 67.2% as of March 31, 2024.

Compensation and benefits costs increased 7.7%, primarily driven by increases in compensation and benefits costs as a result of increased headcount costs as well as higher severance costs. Adjusting for the impact of foreign currency exchange rate fluctuations, compensation and benefits costs would have increased by 10.0%.

Non-Compensation Expenses

Non-compensation expenses increased 6.7%, primarily driven by higher information technology, market data costs and professional fees. Adjusting for the impact of foreign currency exchange rate fluctuations, non-compensation expenses would have increased by 7.5%.

Amortization of Intangible Assets

Amortization of intangible assets expense increased 13.6%, primarily driven by higher amortization recognized on internal use software.

Depreciation and Amortization of Property, Equipment and Leasehold Improvements

Depreciation and amortization of property, equipment and leasehold improvements increased 16.3%, primarily driven by higher depreciation on computer and related equipment.

Total Other Expense (Income), Net

The following table shows our other expense (income), net for the periods indicated:


	Three Months Ended March 31,				% Change
(in thousands)	2025		2024
Interest income	$	(3,876)	$	(6,048)	(35.9	%)
Interest expense	46,492		46,674		(0.4	%)
Other expense (income)	3,337		2,863		16.6	%
Total other expense (income), net	$	45,953	$	43,489	5.7	%

Total other expense (income), net increased 5.7%, primarily driven by lower interest income reflecting lower average cash balances as well as unfavorable foreign currency exchange rate fluctuations.

Income Taxes

The effective tax rate for the three months ended March 31, 2025 and 2024 was 12.8% and 13.5%, respectively. The difference from the statutory tax rate in both periods was primarily related to excess tax benefits recognized on the vesting of stock-based compensation and the benefit of prior year refund claims.

Net Income

The following table shows our net income for the periods indicated:


	Three Months Ended March 31,				% Change
(in thousands)	2025		2024
Net income	$	288,600	$	255,954	12.8	%

As a result of the factors described above, net income increased 12.8%.

Weighted Average Shares and Common Shares Outstanding

The following table shows our weighted average shares outstanding for the periods indicated:


	Three Months Ended March 31,		% Change
(in thousands)	2025	2024
Weighted average shares outstanding:
Basic	77,630	79,195	(2.0	%)
Diluted	77,807	79,508	(2.1	%)

The following table shows our common shares outstanding for the periods indicated:


	As of		% Change
(in thousands)	March 31, 2025	December 31, 2024
Common shares outstanding	77,602	77,745	(0.2	%)

The decrease in weighted average shares and common shares outstanding for the three months ended March 31, 2025 primarily reflects the impact of share repurchases made pursuant to the Company’s stock repurchase program partially offset by the vesting of certain stock-based awards.

Non-GAAP Financial Measures

Adjusted EBITDA

“Adjusted EBITDA,” a non-GAAP measure used by management to assess operating performance, is defined as net income before (1) provision for income taxes, (2) other expense (income), net, (3) depreciation and amortization of property, equipment and leasehold improvements, (4) amortization of intangible assets and, at times, (5) certain other transactions or adjustments, including, when applicable, certain acquisition-related integration and transaction costs.

“Adjusted EBITDA expenses,” a non-GAAP measure used by management to assess operating performance, is defined as operating expenses less depreciation and amortization of property, equipment and leasehold improvements and amortization of intangible assets and, at times, certain other transactions or adjustments, including, when applicable, certain acquisition-related integration and transaction costs.

“Adjusted EBITDA margin” is defined as Adjusted EBITDA divided by operating revenues.

Adjusted EBITDA, Adjusted EBITDA expenses and Adjusted EBITDA margin are believed to be meaningful measures for management to assess the operating performance of the Company because they adjust for significant one-time, unusual or non-recurring items as well as eliminate the accounting effects of certain capital spending and acquisitions that do not directly affect what

management considers to be the Company’s ongoing operating performance in the period. All companies do not calculate adjusted EBITDA, adjusted EBITDA expenses and adjusted EBITDA margin in the same way. These measures can differ significantly from company to company depending on, among other things, long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. Accordingly, the Company’s computation of the Adjusted EBITDA, Adjusted EBITDA expenses and Adjusted EBITDA margin measures may not be comparable to similarly titled measures computed by other companies.

The following table presents non-GAAP Adjusted EBITDA for the periods indicated:


	Three Months Ended March 31,
(in thousands)	2025			2024
Operating revenues	$	745,826		$	679,965
Adjusted EBITDA expenses	320,185			296,392
Adjusted EBITDA	$	425,641		$	383,573

Operating margin %	50.6		%	49.9		%
Adjusted EBITDA margin %	57.1		%	56.4		%

Reconciliation of Net Income to Adjusted EBITDA and Operating Expenses to Adjusted EBITDA Expenses

The following table presents the reconciliation of net income to Adjusted EBITDA for the periods indicated:


	Three Months Ended March 31,
(in thousands)	2025		2024
Net income	$	288,600	$	255,954
Provision for income taxes	42,470		39,939
Other expense (income), net	45,953		43,489
Operating income	377,023		339,382

Amortization of intangible assets	43,872		38,604
Depreciation and amortization of property, equipment and leasehold improvements	4,746		4,081
Acquisition-related integration and transaction costs(1)	—		1,506
Consolidated Adjusted EBITDA	$	425,641	$	383,573


Index Adjusted EBITDA	$	311,571	$	277,760
Analytics Adjusted EBITDA	76,030		72,212
Sustainability and Climate Adjusted EBITDA	23,821		21,091
All Other - Private Assets Adjusted EBITDA	14,219		12,510
Consolidated Adjusted EBITDA	$	425,641	$	383,573

(1)Represents transaction expenses and other costs directly related to the acquisition and integration of acquired businesses, including professional fees, severance expenses, regulatory filing fees and other costs, in each case that are incurred no later than 12 months after the close of the relevant acquisition.

The following table presents the reconciliation of operating expenses to Adjusted EBITDA expenses for the periods indicated:


	Three Months Ended March 31,
(in thousands)	2025		2024
Total operating expenses	$	368,803	$	340,583
Amortization of intangible assets	43,872		38,604
Depreciation and amortization of property, equipment and leasehold improvements	4,746		4,081
Acquisition-related integration and transaction costs(1)	—		1,506
Consolidated Adjusted EBITDA expenses	$	320,185	$	296,392


Index Adjusted EBITDA expenses	$	110,172	$	96,112
Analytics Adjusted EBITDA expenses	96,155		91,754
Sustainability and Climate Adjusted EBITDA expenses	60,798		56,793
All Other - Private Assets Adjusted EBITDA expenses	53,060		51,733
Consolidated Adjusted EBITDA expenses	$	320,185	$	296,392

Segment Results

Index Segment

The following table presents the results for the Index segment for the periods indicated:


	Three Months Ended March 31,						% Change
(in thousands)	2025			2024
Operating revenues:
Recurring subscriptions	$	233,330		$	212,952		9.6	%
Asset-based fees	177,415			150,259			18.1	%
Non-recurring	10,998			10,661			3.2	%
Operating revenues total	421,743			373,872			12.8	%

Adjusted EBITDA expenses	110,172			96,112			14.6	%
Adjusted EBITDA	$	311,571		$	277,760		12.2	%

Adjusted EBITDA margin %	73.9		%	74.3		%

Index operating revenues increased 12.8%, primarily driven by growth from recurring subscriptions as well as asset-based fees. Adjusting for the impact of the acquisition of Foxberry and foreign currency exchange rate fluctuations, Index operating revenues would have increased 12.8%.

Operating revenues from recurring subscriptions increased 9.6%, primarily driven by growth from market cap-weighted Index products.

Operating revenues from asset-based fees increased 18.1%, primarily driven by growth in revenues from ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes. Operating revenues from ETFs linked to MSCI equity indexes increased 16.0%, primarily driven by an increase in average AUM, partially offset by decreases in average basis point fees. Operating revenues from non-ETF indexed funds linked to MSCI indexes increased by 28.2%, primarily driven by an increase in average AUM.

The following table presents the value of AUM in ETFs linked to MSCI equity indexes and the sequential change of such assets as of the end of each of the periods indicated:


	Three Months Ended
	2024								2025
(in billions)	March 31,		June 30,		September 30,		December 31,		March 31,
AUM in ETFs linked to MSCI equity indexes(1) (2)	$	1,582.6	$	1,631.9	$	1,761.8	$	1,724.7	$	1,783.1
Sequential Change in Value
Market Appreciation/(Depreciation)	$	92.8	$	21.2	$	111.3	$	(85.3)	$	16.4
Cash Inflows	20.9		28.1		18.6		48.2		42.0
Total Change	$	113.7	$	49.3	$	129.9	$	(37.1)	$	58.4

The following table presents the average value of AUM in ETFs linked to MSCI equity indexes for the periods indicated:


	2024								2025
(in billions)	March		June		September		December		March
AUM in ETFs linked to MSCI equity indexes(1) (2)
Quarterly average	$	1,508.8	$	1,590.6	$	1,677.0	$	1,755.4	$	1,793.7
Year-to-date average	$	1,508.8	$	1,549.7	$	1,592.1	$	1,632.9	$	1,793.7

(1)The historical values of the AUM in ETFs linked to our equity indexes as of the last day of the month and the monthly average balance can be found under the link “AUM in ETFs Linked to MSCI Equity Indexes” on our Investor Relations homepage at http://ir.msci.com. This information is updated mid-month

each month. Information contained on our website is not deemed part of or incorporated by reference into this Quarterly Report on Form 10-Q or any other report filed with the SEC. The AUM in ETFs also includes AUM in Exchange Traded Notes, the value of which is less than 1.0% of the AUM amounts presented.

(2)The value of AUM in ETFs linked to MSCI equity indexes is calculated by multiplying the equity ETF net asset value by the number of shares outstanding.

The average value of AUM in ETFs linked to MSCI equity indexes for the three months ended March 31, 2025, was up $284.9 billion, or 18.9%, compared to the three months ended March 31, 2024.

Index segment Adjusted EBITDA expenses increased 14.6%, primarily driven by increases in compensation and benefits costs as a result of increased headcount costs as well as higher severance costs. Adjusting for the impact of foreign currency exchange rate fluctuations, Index segment Adjusted EBITDA expenses would have increased by 16.6%.

Analytics Segment

The following table presents the results for the Analytics segment for the periods indicated:


	Three Months Ended March 31,						% Change
(in thousands)	2025			2024
Operating revenues:
Recurring subscriptions	$	169,755		$	160,551		5.7	%
Non-recurring	2,430			3,415			(28.8	%)
Operating revenues total	172,185			163,966			5.0	%

Adjusted EBITDA expenses	96,155			91,754			4.8	%
Adjusted EBITDA	$	76,030		$	72,212		5.3	%

Adjusted EBITDA margin %	44.2		%	44.0		%

Analytics operating revenues increased 5.0%, primarily driven by growth from recurring subscriptions related to both Equity Analytics and Multi-Asset Class products. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics operating revenues would have increased 5.2%.

Analytics segment Adjusted EBITDA expenses increased 4.8%, primarily driven by increases in compensation and benefits costs as a result of increased headcount costs as well as higher severance costs. The increase was also driven by non-compensation expenses reflecting higher information technology costs. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics segment Adjusted EBITDA expenses would have increased 6.7%.

Sustainability and Climate Segment

The following table presents the results for the Sustainability and Climate segment for the periods indicated:


	Three Months Ended March 31,						% Change
(in thousands)	2025			2024
Operating revenues:
Recurring subscriptions	$	82,737		$	76,418		8.3	%
Non-recurring	1,882			1,466			28.4	%
Operating revenues total	84,619			77,884			8.6	%

Adjusted EBITDA expenses	60,798			56,793			7.1	%
Adjusted EBITDA	$	23,821		$	21,091		12.9	%

Adjusted EBITDA margin %	28.2		%	27.1		%

Sustainability and Climate operating revenues increased 8.6%, primarily driven by growth from recurring subscriptions related to Ratings and Climate products, with growth primarily attributable to EMEA. Adjusting for the impact of foreign currency exchange rate fluctuations, Sustainability and Climate operating revenues would have increased 9.2%.

Sustainability and Climate segment Adjusted EBITDA expenses increased 7.1%, primarily driven by increases in compensation and benefits costs as a result of increased headcount costs as well as higher severance costs. The increase was also driven by non-compensation expense relating to information technology costs. Adjusting for the impact of foreign currency exchange rate fluctuations, Sustainability and Climate segment Adjusted EBITDA expenses would have increased 9.3%.

All Other – Private Assets

The following table presents the results for All Other – Private Assets for the periods indicated:


	Three Months Ended March 31,						% Change
(in thousands)	2025			2024
Operating revenues:
Recurring subscriptions	$	66,819		$	63,134		5.8	%
Non-recurring	460			1,109			(58.5	%)
Operating revenues total	67,279			64,243			4.7	%

Adjusted EBITDA expenses	53,060			51,733			2.6	%
Adjusted EBITDA	$	14,219		$	12,510		13.7	%

Adjusted EBITDA margin %	21.1		%	19.5		%

All Other – Private Assets operating revenues increased 4.7%, primarily driven by growth from recurring subscriptions in Private Capital Solutions related to Transparency and Universe Data products. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other – Private Assets operating revenues would have increased 5.2%.

All Other – Private Assets Adjusted EBITDA expenses increased 2.6%, primarily driven by increases in compensation and benefits costs as a result of higher severance costs. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other - Private Assets Adjusted EBITDA expenses would have increased 3.9%.

Operating Metrics

Run Rate

“Run Rate” estimates at a particular point in time the annualized value of the recurring revenues under our client license agreements (“Client Contracts”) for the next 12 months, assuming all Client Contracts that come up for renewal, or reach the end of the committed subscription period, are renewed and assuming then-current currency exchange rates, subject to the adjustments and exclusions described below. For any Client Contract where fees are linked to an investment product’s assets or trading volume/fees, the Run Rate calculation reflects, for ETFs, the market value on the last trading day of the period, for futures and options, the most recent quarterly volumes and/or reported exchange fees, and for other non-ETF products, the most recent client-reported assets. Run Rate does not include fees associated with “one-time” and other non-recurring transactions. In addition, we add to Run Rate the annualized fee value of recurring new sales, whether to existing or new clients, when we execute Client Contracts, even though the license start date, and associated revenue recognition, may not be effective until a later date. We remove from Run Rate the annualized fee value associated with products or services under any Client Contract when we (i) have received a notice of termination, non-renewal or an indication the client does not intend to continue their subscription during the period and (ii) have determined that such notice evidences the client’s final decision to terminate or not renew the applicable products or services, even though such termination or non-renewal may not be effective until a later date.

Changes in our recurring revenues typically lag changes in Run Rate. The actual amount of recurring revenues we will realize over the following 12 months will differ from Run Rate for numerous reasons, including:

fluctuations in revenues associated with new recurring sales;
modifications, cancellations and non-renewals of existing Client Contracts, subject to specified notice requirements;
differences between the recurring license start date and the date the Client Contract is executed due to, for example, contracts with onboarding periods or fee waiver periods;
fluctuations in asset-based fees, which may result from changes in certain investment products’ total expense ratios, market movements, including foreign currency exchange rates, or from investment inflows into and outflows from investment products linked to our indexes;
fluctuations in fees based on trading volumes of futures and options contracts linked to our indexes;
price changes or discounts;
revenue recognition differences under U.S. GAAP, including those related to the timing of implementation and report deliveries for certain of our products and services;
fluctuations in the number of hedge funds for which we provide investment information and risk analysis to hedge fund investors;
fluctuations in foreign currency exchange rates; and
the impact of acquisitions and divestitures.

“Organic recurring subscription Run Rate growth” is defined as the period over period Run Rate growth, excluding the

impact of changes in foreign currency and the first year impact of any acquisitions. It is also adjusted for divestitures. Changes in

foreign currency are calculated by applying the currency exchange rate from the comparable prior period to current period foreign

currency denominated Run Rate.

The following table presents Run Rates as of the dates indicated and the growth percentages over the periods indicated:


	As of
(in thousands)	March 31, 2025		March 31, 2024		Run Rate Growth %		Organic Run Rate Growth %
Index:
Recurring subscriptions	$	948,387	$	869,931	9.0	%	9.0	%
Asset-based fees	697,227		619,431		12.6	%	12.6	%
Index total	1,645,614		1,489,362		10.5	%	10.5	%


Analytics	707,792		662,079		6.9	%	6.8	%

Sustainability and Climate	352,335		320,611		9.9	%	9.6	%

All Other - Private Assets	273,507		254,432		7.5	%	7.0	%

Total Run Rate	$	2,979,248	$	2,726,484	9.3	%	9.2	%


Recurring subscriptions total	$	2,282,021	$	2,107,053	8.3	%	8.2	%
Asset-based fees	697,227		619,431		12.6	%	12.6	%
Total Run Rate	$	2,979,248	$	2,726,484	9.3	%	9.2	%

Total Run Rate increased 9.3%, driven by a 8.3% increase from recurring subscriptions and a 12.6% increase from asset-based fees.

Run Rate from Index recurring subscriptions increased 9.0%, primarily driven by growth from market cap-weighted and custom Index products. The increase reflected growth across all regions.

Run Rate from Index asset-based fees increased 12.6%, primarily driven by higher AUM in both ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes.

Run Rate from Analytics products increased 6.9%, driven by growth in both Equity Analytics and Multi-Asset Class products, and reflected growth across all regions and client segments.

Run Rate from Sustainability and Climate products increased 9.9%, driven by growth in Ratings, Climate and Screening products with contributions across all regions.

Run Rate from All Other - Private Assets increased 7.5%, primarily driven by growth from Private Capital Solutions related to Transparency and Universe Data products, and reflected growth across all regions and client segments.

Sales

Sales represents the annualized value of products and services clients commit to purchase from MSCI and will result in additional operating revenues. Non-recurring sales represent the actual value of the customer agreements entered into during the period and are not a component of Run Rate. New recurring subscription sales represent additional selling activities, such as new customer agreements, additions to existing agreements or increases in price that occurred during the period and are additions to Run Rate. Subscription cancellations reflect client activities during the period, such as discontinuing products and services and/or reductions in price, resulting in reductions to Run Rate. Net new recurring subscription sales represent the amount of new recurring subscription sales net of subscription cancellations during the period, which reflects the net impact to Run Rate during the period.

Total gross sales represent the sum of new recurring subscription sales and non-recurring sales. Total net sales represent the total gross sales net of the impact from subscription cancellations.

The following table presents our recurring subscription sales, cancellations and non-recurring sales for the periods indicated:


	Three Months Ended
(in thousands)	March 31, 2025		March 31, 2024
Index
New recurring subscription sales	$	22,424	$	23,513
Subscription cancellations	(8,254)		(14,702)
Net new recurring subscription sales	$	14,170	$	8,811

Non-recurring sales	$	12,374	$	12,811
Total gross sales	$	34,798	$	36,324

Total Index net sales	$	26,544	$	21,622


Analytics
New recurring subscription sales	$	13,218	$	14,088
Subscription cancellations	(7,942)		(10,794)
Net new recurring subscription sales	$	5,276	$	3,294

Non-recurring sales	$	2,202	$	2,462
Total gross sales	$	15,420	$	16,550

Total Analytics net sales	$	7,478	$	5,756


Sustainability and Climate
New recurring subscription sales	$	7,234	$	11,471
Subscription cancellations	(4,694)		(7,351)
Net new recurring subscription sales	$	2,540	$	4,120

Non-recurring sales	$	1,914	$	1,672
Total gross sales	$	9,148	$	13,143

Total Sustainability and Climate net sales	$	4,454	$	5,792


All Other - Private Assets
New recurring subscription sales	$	9,708	$	8,264
Subscription cancellations	(5,640)		(4,922)
Net new recurring subscription sales	$	4,068	$	3,342

Non-recurring sales	$	1,061	$	1,089
Total gross sales	$	10,769	$	9,353

Total All Other - Private Assets net sales	$	5,129	$	4,431


Consolidated
New recurring subscription sales	$	52,584	$	57,336
Subscription cancellations	(26,530)		(37,769)
Net new recurring subscription sales	$	26,054	$	19,567

Non-recurring sales	$	17,551	$	18,034
Total gross sales	$	70,135	$	75,370

Total net sales	$	43,605	$	37,601

A significant portion of MSCI’s operating revenues are derived from subscriptions or licenses of products and services, which are provided over contractually-agreed periods of time that are subject to renewal or cancellation at the end of current contract terms.

Retention Rate

The following table presents our Retention Rate for the periods indicated:


	Three Months Ended March 31,
	2025	2024
Index	96.5%	93.2%
Analytics	95.5%	93.5%
Sustainability and Climate	94.5%	90.8%
All Other - Private Assets	91.5%	92.2%

Total	95.3%	92.8%

Retention Rate is an important metric because subscription cancellations decrease our Run Rate and ultimately our future operating revenues over time. The annual Retention Rate represents the retained subscription Run Rate (subscription Run Rate at the beginning of the fiscal year less actual cancels during the year) as a percentage of the subscription Run Rate at the beginning of the fiscal year.

The Retention Rate for a non-annual period is calculated by annualizing the cancellations for which we have received a notice of termination or for which we believe there is an intention not to renew or discontinue the subscription during the non-annual period, and we believe that such notice or intention evidences the client’s final decision to terminate or not renew the applicable agreement, even though such termination or non-renewal may not be effective until a later date. This annualized cancellation figure is then divided by the subscription Run Rate at the beginning of the fiscal year to calculate a cancellation rate. This cancellation rate is then subtracted from 100% to derive the annualized Retention Rate for the period.

Retention Rate is computed by segment on a product/service-by-product/service basis. In general, if a client reduces the number of products or services to which it subscribes within a segment, or switches between products or services within a segment, we treat it as a cancellation for purposes of calculating our Retention Rate except in the case of a product or service switch that management considers to be a replacement product or service. In those replacement cases, only the net change to the client subscription, if a decrease, is reported as a cancel. In the Analytics and the Sustainability and Climate operating segments, substantially all product or service switches are treated as replacement products or services and netted in this manner, while in our Index, Real Assets, and Private Capital Solutions operating segments, product or service switches that are treated as replacement products or services and receive netting treatment occur only in certain limited instances. In addition, we treat any reduction in fees resulting from a down-sell of the same product or service as a cancellation to the extent of the reduction. We do not calculate Retention Rate for that portion of our Run Rate attributable to assets in index-linked investment products or futures and options contracts, in each case, linked to our indexes.

Retention Rate is generally higher during the first three quarters and lower in the fourth quarter, as the fourth quarter is traditionally the largest renewal period in the year.

Liquidity and Capital Resources

We require capital to fund ongoing operations, internal growth initiatives and acquisitions. Our primary sources of liquidity are cash flows generated from our operations, existing cash and cash equivalents and credit capacity under our existing credit facility. In addition, we believe we have access to additional funding in the public and private markets. We intend to use these sources of liquidity to, among other things, service our existing and future debt obligations, fund our working capital requirements for capital expenditures, investments, acquisitions and dividend payments, and make repurchases of our common stock. In connection with our business strategy, we regularly evaluate acquisition and strategic partnership opportunities. We believe our liquidity, along with other financing alternatives, will provide the necessary capital to fund these transactions and achieve our planned growth.

Senior Notes and Credit Agreement

As of March 31, 2025, we had an aggregate of $4,200.0 million in Senior Notes outstanding. In addition, under the Credit Agreement, we had as of March 31, 2025 an aggregate of $371.9 million in outstanding borrowings under the revolving credit facility. See Note 7, “Debt,” of the Notes to Condensed Consolidated Financial Statements (Unaudited) included herein for additional information on our outstanding indebtedness and revolving credit facility.

On January 26, 2024, we entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) amending and restating in its entirety the Prior Credit Agreement. The Credit Agreement makes available an aggregate of $1,250.0 million of revolving loan commitments under the Revolving Credit Facility, which may be drawn until January 26, 2029. The obligations under the Credit Agreement are general unsecured obligations of the Company.

The Senior Notes and the Prior Credit Agreement were previously fully and unconditionally, and jointly and severally, guaranteed by our direct or indirect wholly owned domestic subsidiaries that account for more than 5% of our and our subsidiaries’ consolidated assets, other than certain excluded subsidiaries (the “subsidiary guarantors”). Upon the closing of the Credit Agreement on January 26, 2024, the subsidiary guarantors’ were released from their guarantees under the Prior Credit Agreement and the indentures governing our Senior Notes (the “Indentures”).

The Indentures among us and Computershare, National Association, as trustee and successor to Wells Fargo Bank, National Association, contain covenants that limit our and our subsidiaries’ ability to, among other things, incur liens, enter into sale/leaseback transactions and consolidate, merge or sell all or substantially all of our assets, and that limit the ability of our subsidiaries to incur certain indebtedness. The Credit Agreement also contains covenants that limit our and our subsidiaries’ ability to, among other things, incur liens, enter into sale/leaseback transactions and consolidate, merge or sell all or substantially all of our assets, and that limit the ability of our subsidiaries to incur certain indebtedness.

The Credit Agreement and the Indentures also contain customary events of default, including those relating to non-payment, breach of representations, warranties or covenants, cross-default and cross-acceleration, and bankruptcy and insolvency events, and, in the case of the Credit Agreement, invalidity or impairment of loan documentation, change of control and customary ERISA defaults in addition to the foregoing. None of the restrictions above are expected to impact our ability to effectively operate the business.

The Credit Agreement also requires us and our subsidiaries to achieve financial and operating results sufficient to maintain compliance with the following financial ratios on a consolidated basis through the termination of the Credit Agreement: (1) the maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) measured quarterly on a rolling four-quarter basis not to exceed 4.25:1.00 (or 4.50:1.00 for four fiscal quarters following a material acquisition) and (2) the minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) measured quarterly on a rolling four-quarter basis of at least 4.00:1.00. As of March 31, 2025, our Consolidated Leverage Ratio was 2.30:1.00 and our Consolidated Interest Coverage Ratio was 10.45:1.00.

Share Repurchases

The following table provides information with respect to repurchases of the Company’s common stock pursuant to open market repurchases:


Three months ended (in thousands, except per share data)	Average Price Paid Per Share		Total Number of Shares Repurchased	Dollar Value of Shares Repurchased(1)
March 31, 2025	$	590.60	263	$	155,358
March 31, 2024	$	—	—	$	—

(1)The values in this column exclude the 1% excise tax incurred on share repurchases pursuant to the Inflation Reduction Act. Any excise tax incurred is recognized as part of the cost of the shares acquired in the Unaudited Condensed Consolidated Statement of Shareholders’ Equity (Deficit).

As of March 31, 2025, there was $1,380.2 million of available authorization remaining under the 2024 Repurchase Program. This authorization may be modified, suspended or terminated by the Board of Directors at any time without prior notice.

Cash Dividends

On April 21, 2025, the Board of Directors declared a quarterly cash dividend of $1.80 per share for the three months ending June 30, 2025. The second quarter 2025 dividend is payable on May 30, 2025 to shareholders of record as of the close of trading on May 16, 2025.

Cash Flows

The following table presents the Company’s cash and cash equivalents, including restricted cash, as of the dates indicated:


	As of
(in thousands)	March 31, 2025		December 31, 2024
Cash and cash equivalents (includes restricted cash of $3,565 and $3,497 at March 31, 2025 and December 31, 2024, respectively)	$	360,671	$	409,351

We typically seek to maintain minimum cash balances globally of approximately $225.0 million to $275.0 million for general operating purposes. As of March 31, 2025 and December 31, 2024, $261.5 million and $265.5 million, respectively, of the Company’s cash and cash equivalents were held by foreign subsidiaries. Repatriation of some foreign cash may be subject to certain withholding taxes in local jurisdictions and other distribution restrictions. We believe the global cash and cash equivalent balances that are maintained will be available to meet our global needs whether for general corporate purposes or other needs, including acquisitions or expansion of our products.

We believe that global cash flows from operations, together with existing cash and cash equivalents and funds available under our existing revolving credit facility and our ability to access bank debt, private debt and the capital markets for additional funds, will continue to be sufficient to fund our global operating activities and cash commitments for investing and financing activities, such as material capital expenditures and share repurchases, for at least the next 12 months and for the foreseeable future thereafter. In addition, we expect that foreign cash flows from operations, together with existing cash and cash equivalents, will continue to be sufficient to fund our foreign operating activities and cash commitments for investing activities, such as material capital expenditures, for at least the next 12 months and for the foreseeable future thereafter.

Net Cash Provided by (Used In) Operating, Investing and Financing Activities


	Three Months Ended March 31,
(in thousands)	2025		2024
Net cash provided by operating activities	$	301,737	$	300,137
Net cash (used in) investing activities	(32,904)		(32,333)
Net cash (used in) provided by financing activities	(321,722)		(207,223)
Effect of exchange rate changes	4,209		(2,959)
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(48,680)	$	57,622

Cash Flows From Operating Activities

Cash flows from operating activities consist of net income adjusted for certain non-cash items and changes in assets and liabilities. The year-over-year change was primarily driven by higher cash collections from customers, partially offset by higher payments for cash expenses.

Our primary uses of cash from operating activities are for the payment of cash compensation expenses, interest expenses, income taxes, technology costs, professional fees, market data costs and office rent. Historically, the payment of cash for compensation and benefits is at its highest level in the first quarter when we pay discretionary employee compensation related to the previous fiscal year.

Cash Flows From Investing Activities

The year-over-year change was primarily driven by higher capital expenditures.

Cash Flows From Financing Activities

The year-over-year change was primarily driven by the impact of higher share repurchases and dividend payments.

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