Morningstar Inc

For the period ended Sep 30, 2024. Filed Oct 25, 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.

Sep 30, 2024 · Filed Oct 25, 2024

MORN$246.15+0.8%Stored close · as of Nov 9, 2026

Extracted filing text, with the paragraph anchors used by the comparison.

See the whole filing, with its images and exhibits

Contents

Item 1. Financial Statements

Unaudited Consolidated Statements of Income

	Three months ended September 30,		Nine months ended September 30,
(in millions, except per share amounts)	2024	2023	2024	2023
Revenue	$569.4	$515.5	$1,684.1	$1,499.9
Operating expense:
Cost of revenue	222.7	202.9	663.5	638.1
Sales and marketing	107.9	106.3	323.8	323.4
General and administrative	77.6	89.7	238.2	263.8
Depreciation and amortization	45.7	46.6	142.0	138.4
Total operating expense	453.9	445.5	1,367.5	1,363.7
Operating income	115.5	70.0	316.6	136.2
Non-operating income (expense), net:
Interest expense, net	(8.9)	(12.8)	(30.7)	(40.2)
Realized gain on sale of investments, reclassified from other comprehensive income	0.5	1.9	3.3	2.4
Gain on sale of business	45.3	—	45.3	—
Expense from equity method transaction, net	—	—	—	(11.8)
Other income (expense), net	(0.5)	(1.7)	(6.1)	4.6
Non-operating income (expense), net	36.4	(12.6)	11.8	(45.0)
Income before income taxes and equity in investments of unconsolidated entities	151.9	57.4	328.4	91.2
Equity in investments of unconsolidated entities	(2.6)	(1.6)	(5.3)	(4.7)
Income tax expense	29.6	16.7	70.1	18.9
Consolidated net income	$119.7	$39.1	$253.0	$67.6
Net income per share:
Basic	$2.79	$0.92	$5.91	$1.59
Diluted	$2.77	$0.91	$5.87	$1.58
Dividends per common share:
Dividends declared per common share	$0.41	$0.38	$1.22	$1.13
Dividends paid per common share	$0.41	$0.38	$1.22	$1.13
Weighted average shares outstanding:
Basic	42.9	42.7	42.8	42.6
Diluted	43.2	42.9	43.1	42.8

Unaudited Consolidated Statements of Comprehensive Income

	Three months ended September 30,		Nine months ended September 30,
(in millions)	2024	2023	2024	2023
Consolidated net income	$119.7	$39.1	$253.0	$67.6
Other comprehensive income (loss), net
Foreign currency translation adjustment	24.3	(23.0)	12.3	(8.0)
Unrealized gains on securities:
Unrealized holding gains arising during period	0.4	1.5	2.5	1.7
Reclassification of realized gains on investments included in net income	(0.4)	(1.6)	(2.5)	(1.9)
Other comprehensive income (loss), net	24.3	(23.1)	12.3	(8.2)
Comprehensive income	$144.0	$16.0	$265.3	$59.4

Consolidated Balance Sheets

(in millions, except share amounts)	As of September 30, 2024 (unaudited)	As of December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$552.9	$337.9
Investments	48.8	51.1
Accounts receivable, less allowance for credit losses of $8.1 million and $5.6 million, respectively	328.4	343.9
Income tax receivable, net	—	0.6
Deferred commissions	40.9	41.9
Prepaid expenses	44.0	34.9
Other current assets	7.8	5.4
Total current assets	1,022.8	815.7
Goodwill	1,579.6	1,578.8
Intangible assets, net	432.5	484.4
Property, equipment, and capitalized software, less accumulated depreciation and amortization of $789.7 million and $714.0 million, respectively	212.4	207.7
Operating lease assets	157.5	163.9
Investments in unconsolidated entities	96.0	100.2
Deferred tax assets, net	30.9	14.6
Deferred commissions	27.5	29.3
Other assets	7.1	8.8
Total assets	$3,566.3	$3,403.4
Liabilities and equity
Current liabilities:
Deferred revenue	$539.5	$517.7
Accrued compensation	216.0	214.4
Accounts payable and accrued liabilities	80.4	78.4
Current portion of long-term debt	—	32.1
Operating lease liabilities	32.2	36.4
Other current liabilities	27.8	1.8
Total current liabilities	895.9	880.8
Operating lease liabilities	145.7	151.4
Accrued compensation	21.2	23.7
Deferred tax liabilities, net	29.9	35.6
Long-term debt	864.7	940.3
Deferred revenue	23.1	26.3
Other long-term liabilities	20.1	17.5
Total liabilities	$2,000.6	$2,075.6
Equity:
Morningstar, Inc. shareholders’ equity:
Common stock, no par value, 200,000,000 shares authorized, of which 42,884,181 and 42,728,182 shares were outstanding as of September 30, 2024 and December 31, 2023, respectively	—	—

Accumulated other comprehensive loss:
Treasury stock at cost, 11,978,267 and 11,987,495 shares as of September 30, 2024 and December 31, 2023, respectively	(981.6)	(985.5)
Additional paid-in capital	809.8	789.0
Retained earnings	1,811.7	1,610.8
Currency translation adjustment	(74.1)	(86.4)
Unrealized loss on available-for-sale investments	(0.1)	(0.1)
Total accumulated other comprehensive loss	(74.2)	(86.5)
Total equity	1,565.7	1,327.8
Total liabilities and equity	$3,566.3	$3,403.4

Unaudited Consolidated Statements of Equity

For the three and nine months ended September 30, 2024 and 2023

	Morningstar, Inc. Shareholders’ Equity
Accumulated Other Comprehensive Loss
Common Stock · Additional Paid-in Capital · Retained Earnings
(in millions, except share and per share amounts) · Shares Outstanding · Par Value · Treasury Stock · Total Equity
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
Net income		—		—		—		69.1		—		69.1
Other comprehensive income (loss):
Unrealized gain on available-for-sale investments, net of tax		—		—		—		—		0.2		0.2
Reclassification of realized gain on investments included in net income, net of tax		—		—		—		—		(0.2)		(0.2)
Foreign currency translation adjustment, net		—		—		—		—		(1.4)		(1.4)
Other comprehensive loss, net		—		—		—		—		(1.4)		(1.4)
Issuance of common stock related to vesting of stock awards, net of shares withheld for taxes on settlements of stock awards	93,002		—		1.6		(15.9)		—		—		(14.3)
Reclassification of awards previously liability-classified that were converted to equity		—		—		0.4		—		—		0.4
Stock-based compensation		—		—		14.2		—		—		14.2
Dividends declared ($0.41 per share)		—		—		—		(17.4)		—		(17.4)
Balance as of June 30, 2024	42,838,572		$—		$(983.9)		$806.7		$1,709.4		$(98.5)		$1,433.7
Net income		—		—		—		119.7		—		119.7
Other comprehensive income (loss):
Unrealized gain on available-for-sale investments, net of tax		—		—		—		—		0.4		0.4
Reclassification of realized gain on investments included in net income, net of tax		—		—		—		—		(0.4)		(0.4)
Foreign currency translation adjustment, net		—		—		—		—		24.3		24.3
Other comprehensive income, net		—		—		—		—		24.3		24.3
Issuance of common stock related to vesting of stock awards, net of shares withheld for taxes on settlements of stock awards	45,609		—		2.3		(10.2)		—		—		(7.9)
Reclassification of awards previously liability-classified that were converted to equity		—		—		0.1		—		—		0.1
Stock-based compensation		—		—		13.2		—		—		13.2
Dividends declared ($0.41 per share)		—		—		—		(17.4)		—		(17.4)
Balance as of September 30, 2024	42,884,181		$—		$(981.6)		$809.8		$1,811.7		$(74.2)		$1,565.7

	Morningstar, Inc. Shareholders’ Equity
Accumulated Other Comprehensive Loss
Common Stock · Additional Paid-in Capital · Retained Earnings
(in millions, except share and per share amounts) · Shares Outstanding · Par Value · Treasury Stock · Total Equity
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
Net income		—		—		—		36.1		—		36.1
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		—		—		—		—		(0.1)		(0.1)
Foreign currency translation adjustment, net		—		—		—		—		7.9		7.9
Other comprehensive income, net		—		—		—		—		7.9		7.9
Issuance of common stock related to vesting of stock awards, net of shares withheld for taxes on settlements of stock awards	111,102		—		1.3		(11.7)		—		—		(10.4)
Reclassification of awards previously liability-classified that were converted to equity		—		—		(0.1)		—		—		(0.1)
Stock-based compensation		—		—		14.8		—		—		14.8
Common shares repurchased	(8,484)		—		(1.4)		—		—		—		(1.4)
Dividends declared ($0.38 per share)		—		—		—		(16.0)		—		(16.0)
Balance as of June 30, 2023	42,653,561		$—		$(986.8)		$775.0		$1,531.5		$(84.1)		$1,235.6
Net Income		—		—		—		39.1		—		39.1
Other comprehensive income (loss):
Unrealized gain on available-for-sale investments, net of tax		—		—		—		—		1.5		1.5
Reclassification of realized gain on investments included in net income, net of tax		—		—		—		—		(1.6)		(1.6)
Foreign currency translation adjustment, net		—		—		—		—		(23.0)		(23.0)
Other comprehensive loss, net		—		—		—		—		(23.1)		(23.1)
Issuance of common stock related to vesting of stock awards, net of shares withheld for taxes on settlements of stock awards	46,237		—		0.9		(7.1)		—		—		(6.2)
Stock-based compensation		—		—		14.7		—		—		14.7
Dividends declared ($0.38 per share)	—		—		—		—		(16.0)		—		(16.0)
Balance as of September 30, 2023	42,699,798		$—		$(985.9)		$782.6		$1,554.6		$(107.2)		$1,244.1

Unaudited Consolidated Statements of Cash Flows

	Nine months ended September 30,
(in millions)	2024	2023
Operating activities
Consolidated net income	$253.0	$67.6
Adjustments to reconcile consolidated net income to net cash flows from operating activities:
Depreciation and amortization	142.0	138.4
Deferred income taxes	(21.0)	(10.6)
Stock-based compensation expense	38.8	41.7
Provision for bad debt	6.3	3.6
Equity in investments of unconsolidated entities	5.3	4.7
Gain on equity method transaction	—	(49.6)
Gain on sale of business	(45.3)	—
Other, net	2.8	(8.9)
Changes in operating assets and liabilities:
Accounts receivable	8.2	5.3
Accounts payable and accrued liabilities	4.7	(5.8)
Accrued compensation and deferred commissions	16.1	(18.8)
Income taxes, current	25.2	(17.3)
Deferred revenue	18.5	27.8
Other assets and liabilities	(16.4)	0.5
Cash provided by operating activities	438.2	178.6
Investing activities
Purchases of investment securities	(12.5)	(8.9)
Proceeds from maturities and sales of investment securities	23.6	23.9
Capital expenditures	(102.1)	(89.1)
Proceeds from sale of business	52.2	—
Proceeds from sale of equity method investments, net	—	26.2
Purchases of investments in unconsolidated entities	(6.8)	(1.1)
Other, net	0.2	(0.1)
Cash used for investing activities	(45.4)	(49.1)
Financing activities
Common shares repurchased	—	(1.4)
Dividends paid	(52.0)	(47.9)
Proceeds from revolving credit facility	90.0	260.0
Repayment of revolving credit facility	(105.0)	(290.0)
Repayment of term facility	(93.1)	(24.4)
Employee taxes withheld for stock awards	(25.4)	(25.9)
Payment of acquisition-related earn-outs	—	(45.5)
Other, net	0.2	0.1
Cash used for financing activities	(185.3)	(175.0)
Effect of exchange rate changes on cash and cash equivalents	7.5	(6.1)
Net increase (decrease) in cash and cash equivalents	215.0	(51.6)
Cash and cash equivalents—beginning of period	337.9	376.6
Cash and cash equivalents—end of period	$552.9	$325.0
Supplemental disclosure of cash flow information
Cash paid for income taxes	$66.0	$46.7
Cash paid for interest	$36.9	$41.9

ContentsView on SEC.gov

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