Morningstar Inc

For the period ended Mar 31, 2024. Filed Apr 26, 2024.

About this filing

A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Mar 31, 2024 · Filed Apr 26, 2024

MORN$246.47+0.1%Stored close · as of Nov 10, 2026

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Contents

Item 1. Financial Statements

Unaudited Condensed Consolidated Statements of Income (Loss)

	Three months ended March 31,
(in millions, except per share amounts)	2024	2023
Revenue	$542.8	$479.7
Operating expense:
Cost of revenue	218.1	218.8
Sales and marketing	104.6	107.6
General and administrative	80.3	84.0
Depreciation and amortization	47.2	44.8
Total operating expense	450.2	455.2
Operating income	92.6	24.5
Non-operating expense, net:
Interest expense, net	(11.5)	(13.3)
Realized gain on sale of investments, reclassified from other comprehensive income	2.6	0.2
Expense from equity method transaction, net	—	(11.8)
Other income, net	3.3	2.5
Non-operating expense, net	(5.6)	(22.4)
Income before income taxes and equity in investments of unconsolidated entities	87.0	2.1
Equity in investments of unconsolidated entities	(1.5)	(1.3)
Income tax expense	21.3	8.4
Consolidated net income (loss)	$64.2	$(7.6)
Net income (loss) per share:
Basic	$1.50	$(0.18)
Diluted	$1.49	$(0.18)
Dividends per common share:
Dividends declared per common share	$0.41	$0.38
Dividends paid per common share	$0.41	$0.38
Weighted average shares outstanding:
Basic	42.7	42.5
Diluted	43.0	42.5

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)

	Three months ended March 31,
(in millions)	2024	2023
Consolidated net income (loss)	$64.2	$(7.6)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(10.6)	7.1
Unrealized gains on securities:
Unrealized holding gains arising during period	1.9	0.1
Reclassification of realized gains on investments included in net income	(1.9)	(0.2)
Other comprehensive income (loss), net	(10.6)	7.0
Comprehensive income (loss)	$53.6	$(0.6)

Condensed Consolidated Balance Sheets

(in millions, except share amounts)	As of March 31, 2024 (unaudited)	As of December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$353.7	$337.9
Investments	55.4	51.1
Accounts receivable, less allowance for credit losses of $6.1 million and $5.6 million, respectively	326.2	343.9
Income tax receivable, net	—	0.6
Deferred commissions	41.6	41.9
Prepaid expenses	48.6	34.9
Other current assets	5.1	5.4
Total current assets	830.6	815.7
Goodwill	1,574.1	1,578.8
Intangible assets, net	463.4	484.4
Property, equipment, and capitalized software, less accumulated depreciation and amortization of $741.2 million and $714.0 million, respectively	210.8	207.7
Operating lease assets	156.5	163.9
Investments in unconsolidated entities	96.1	100.2
Deferred tax assets, net	19.7	14.6
Deferred commissions	30.0	29.3
Other assets	8.2	8.8
Total assets	$3,389.4	$3,403.4
Liabilities and equity
Current liabilities:
Deferred revenue	$565.2	$517.7
Accrued compensation	122.9	214.4
Accounts payable and accrued liabilities	72.0	78.4
Current portion of long-term debt	32.1	32.1
Operating lease liabilities	34.7	36.4
Other current liabilities	19.9	1.8
Total current liabilities	846.8	880.8
Operating lease liabilities	143.8	151.4
Accrued compensation	23.3	23.7
Deferred tax liabilities, net	32.8	35.6
Long-term debt	917.3	940.3
Deferred revenue	24.7	26.3
Other long-term liabilities	17.6	17.5
Total liabilities	$2,006.3	$2,075.6
Equity:
Morningstar, Inc. shareholders’ equity:
Common stock, no par value, 200,000,000 shares authorized, of which 42,745,570 and 42,728,182 shares were outstanding as of March 31, 2024 and December 31, 2023, respectively	—	—

Accumulated other comprehensive loss:
Treasury stock at cost, 11,987,495 and 11,987,495 shares as of March 31, 2024 and December 31, 2023, respectively	(985.5)	(985.5)
Additional paid-in capital	808.0	789.0
Retained earnings	1,657.7	1,610.8
Currency translation adjustment	(97.0)	(86.4)
Unrealized loss on available-for-sale investments	(0.1)	(0.1)
Total accumulated other comprehensive loss	(97.1)	(86.5)
Total equity	1,383.1	1,327.8
Total liabilities and equity	$3,389.4	$3,403.4

Unaudited Condensed Consolidated Statements of Equity

For the three months ended March 31, 2024 and 2023

	Morningstar, Inc. Shareholders’ Equity
AccumulatedOtherComprehensiveLoss
Common Stock · AdditionalPaid-inCapital
(in millions, except share and per share amounts) · SharesOutstanding · ParValue · TreasuryStock · RetainedEarnings · TotalEquity
Balance as of December 31, 2023	42,728,182		$—		$(985.5)		$789.0		$1,610.8		$(86.5)		$1,327.8
Net income		—		—		—		64.2		—		64.2
Other comprehensive income (loss):
Unrealized gain on available-for-sale investments, net of tax		—		—		—		—		1.9		1.9
Reclassification of realized gain on investments included in net income, net of tax		—		—		—		—		(1.9)		(1.9)
Foreign currency translation adjustment, net		—		—		—		—		(10.6)		(10.6)
Other comprehensive loss, net		—		—		—		—		(10.6)		(10.6)
Issuance of common stock related to vesting of stock awards, net of shares withheld for taxes on settlements of stock awards	17,388		—		—		(3.2)		—		—		(3.2)
Reclassification of awards previously liability-classified that were converted to equity		—		—		10.8		—		—		10.8
Stock-based compensation		—		—		11.4		—		—		11.4
Dividends declared ($0.41 per share)		—		—		—		(17.3)		—		(17.3)
Balance as of March 31, 2024	42,745,570		$—		$(985.5)		$808.0		$1,657.7		$(97.1)		$1,383.1

	Morningstar, Inc. Shareholders’ Equity
AccumulatedOtherComprehensiveLoss
Common Stock · AdditionalPaid-inCapital
(in millions, except share and per share amounts) · SharesOutstanding · ParValue · TreasuryStock · RetainedEarnings · TotalEquity
Balance as of December 31, 2022	42,480,051		$—		$(986.7)		$757.8		$1,535.0		$(99.0)		$1,207.1
Net loss		—		—		—		(7.6)		—		(7.6)
Other comprehensive income (loss):
Unrealized gain on available-for-sale investments, net of tax		—		—		—		—		0.1		0.1
Reclassification of realized gain on investments included in net income, net of tax		—		—		—		—		(0.2)		(0.2)
Foreign currency translation adjustment, net		—		—		—		—		7.1		7.1
Other comprehensive income, net		—		—		—		—		7.0		7.0
Issuance of common stock related to vesting of stock awards, net of shares withheld for taxes on settlements of stock awards	70,892		—		—		(9.4)		—		—		(9.4)
Reclassification of awards previously liability-classified that were converted to equity		—		—		11.4		—		—		11.4
Stock-based compensation		—		—		12.2		—		—		12.2
Dividends declared ($0.38 per share)		—		—		—		(16.0)		—		(16.0)
Balance as of March 31, 2023	42,550,943		$—		$(986.7)		$772.0		$1,511.4		$(92.0)		$1,204.7

Unaudited Condensed Consolidated Statements of Cash Flows

	Three months ended March 31,
(in millions)	2024	2023
Operating activities
Consolidated net income (loss)	$64.2	$(7.6)
Adjustments to reconcile consolidated net income to net cash flows from operating activities:
Depreciation and amortization	47.2	44.8
Deferred income taxes	(7.5)	2.0
Stock-based compensation expense	11.4	12.2
Provision for bad debt	1.4	1.0
Equity in investments of unconsolidated entities	1.5	1.3
Gain on equity method transaction	—	(49.6)
Other, net	(11.0)	(2.7)
Changes in operating assets and liabilities:
Accounts receivable	13.7	9.8
Accounts payable and accrued liabilities	(4.3)	(5.8)
Accrued compensation and deferred commissions	(79.2)	(75.2)
Income taxes, current	16.3	(2.6)
Deferred revenue	50.0	43.4
Other assets and liabilities	(10.1)	52.4
Cash provided by operating activities	93.6	23.4
Investing activities
Purchases of investment securities	(7.2)	(2.8)
Proceeds from maturities and sales of investment securities	17.4	5.5
Capital expenditures	(34.1)	(29.5)
Proceeds from sale of equity method investments, net	—	26.2
Purchases of investments in unconsolidated entities	(2.8)	(0.1)
Cash used for investing activities	(26.7)	(0.7)
Financing activities
Dividends paid	(17.3)	(15.9)
Proceeds from revolving credit facility	90.0	95.0
Repayment of revolving credit facility	(105.0)	(65.0)
Repayment of term facility	(8.1)	(8.1)
Employee taxes withheld for stock awards	(3.2)	(9.3)
Payment of acquisition-related earn-outs	—	(45.5)
Other, net	0.1	—
Cash used for financing activities	(43.5)	(48.8)
Effect of exchange rate changes on cash and cash equivalents	(7.6)	1.7
Net increase (decrease) in cash and cash equivalents	15.8	(24.4)
Cash and cash equivalents—beginning of period	337.9	376.6
Cash and cash equivalents—end of period	$353.7	$352.2
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$12.5	$9.1
Cash paid for interest	$11.5	$11.9

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The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.