MSCI Inc
For the period ended Sep 30, 2024. Filed Oct 31, 2024.
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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 31, 2024
MSCI$641.01-2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-23.
0001408198-24-000131
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-31.
0001408198-24-000170
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 181 previous paragraphs and 185 current paragraphs.
111 unchanged; 57 reworded; 14 added; 13 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 21 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Goodwill
Current report
We recognize goodwill in business combination transactions when the purchase price exceeds the fair value of the acquired net tangible and separately identifiable intangible assets. We test goodwill for impairment annually on July 1 or when interim triggers arise. The test for impairment was performed at the reporting unit level, and we used an equal weighting of the income approach and the market approach to estimate the fair value of each reporting unit.
Current report
The income approach requires significant judgement in estimating future cash flows, including assumptions, amongst others, about revenue growth rates and operating margins, and the selection of an appropriate discount rate, which reflects the reporting unit’s cost of capital. Forecasted future cash flows are estimated based on a combination of historical experience and assumptions regarding future growth and profitability of each reporting unit. Discount rates are selected for each reporting unit being valued based on each reporting unit’s estimated weighted-average cost of capital. The weighted-average cost of capital is estimated based on both the capital structure that we believe a market participant would utilize as well as the discount rates of guideline public companies that have similar characteristics to each reporting unit being valued, adjusted for the risk inherent in each reporting unit. Terminal growth rates are selected based on growth rates used during the reporting unit’s forecast period in combination with economic conditions. The market approach utilizes valuation multiples of revenue and cash flows derived from guideline public companies that have similar characteristics to each reporting unit being valued. Selecting appropriate guideline companies, valuation multiples and other key assumptions such as revenue growth rates and discount rates requires significant management judgment, and changes to these estimates could materially impact the fair value determination of each reporting unit. We perform sensitivity analyses around key assumptions in order to assess the reasonableness of the assumptions and the impact on the estimated fair value.
Current report
Impairment occurs when the estimated fair value of the reporting unit is below the carrying value. As of July 1, 2024, all reporting units had fair values exceeding their carrying values. As a result, no goodwill impairment was recorded as of this date.
Current report
We completed our annual goodwill impairment test as of July 1, 2024 on our Index, Analytics, ESG and Climate, Real Assets and Private Capital Solutions reporting units, which are also our operating segments. As of July 1, 2024, the fair value of all reporting units exceeded their respective carrying values. At September 30, 2024, the carrying value of goodwill within the Private Capital Solutions reporting unit was $617.8 million. As of July 1, 2024, and given the recent step acquisition of Burgiss on October 2, 2023, the fair value of the Private Capital Solutions reporting unit exceeded its carrying value by approximately 10%, making it vulnerable to potential future impairment. If we experience a prolonged or severe period of weakness in the business environment, financial markets, the performance of one or more of our recently acquired companies or reporting units, or our common stock price, or if economic conditions differ significantly from management’s assumptions, our goodwill could be impaired in the future, which may be material to our results of operations and financial position.
Current report
For all of our reporting units, individually, a hypothetical decrease in revenue growth rates by 100 basis points or a hypothetical 100 basis point increase in the weighted average cost of capital would not result in an impairment.
Current report
Operating revenues from asset-based fees increased 16.9% for the nine months ended September 30, 2024, 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 and non-ETF indexed funds linked to MSCI indexes increased by 17.9% and 19.4%, respectively, primarily driven by an increase in average AUM.
Current report
Cost of revenues increased 19.8% for the three months ended September 30, 2024, reflecting increases across all reportable segments. The change was driven by increases in compensation and benefits costs, primarily relating to higher wages and salaries, incentive compensation and benefits costs as a result of increased headcount, as well as increases in non-compensation costs reflecting higher professional fees, information technology and market data costs.
Current report
R&D expenses increased 29.4% for the nine months ended September 30, 2024, reflecting increases across all reportable segments. The change was primarily driven by increases in compensation and benefits costs, relating to higher wages and salaries and incentive compensation costs as a result of increased headcount, partially offset by increased capitalization of costs related to internally developed software projects.
Current report
Non-compensation expenses increased 20.4% for the three months ended September 30, 2024, driven by higher professional fees, market data costs, information technology, marketing costs, transaction and integration costs related to recent acquisitions and recruiting costs.
Current report
The effective tax rate of 18.3% for the three months ended September 30, 2023 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling $3.4 million, primarily related to $3.2 million of prior-year items.
Current report
Operating revenues from recurring subscriptions increased 8.5% for the three months ended September 30, 2024, primarily driven by growth from market cap-weighted and factor, ESG and climate Index products.
Current report
Operating revenues from recurring subscriptions increased 8.3% for the nine months ended September 30, 2024, primarily driven by growth from market cap-weighted and factor, ESG and climate index products.
Current report
Operating revenues from asset-based fees increased 16.9% for the nine months ended September 30, 2024, primarily driven by strong 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 and non-ETF indexed funds linked to MSCI indexes increased by 17.9% and 19.4%, respectively, primarily driven by an increase in average AUM.
Removed paragraphs (13)
Previous report
Operating revenues from non-recurring revenues decreased 15.0% for the three months ended June 30, 2024, as the three months ended June 30, 2023 included one-time fees related to unlicensed usage of our content in historical periods.
Previous report
Operating revenues from asset-based fees increased 15.6% for the six months ended June 30, 2024, mainly driven by growth in revenues from ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI equity indexes. Operating revenues from ETFs linked to MSCI equity indexes increased by 17.0%, primarily driven by an increase in average AUM, partially offset by a decrease in average basis point fees. Operating revenues from non-ETF indexed funds linked to MSCI indexes increased by 18.5%, primarily driven by increases in average AUM, partially offset by a decrease in average basis point fees. Operating revenues from exchange traded futures and options contracts linked to MSCI indexes remained flat.
Previous report
Operating revenues from non-recurring revenues decreased 3.2% for the six months ended June 30, 2024, as the six months ended June 30, 2023 included one-time fees related to unlicensed usage of our content in historical periods.
Previous report
Selling and marketing expenses increased 6.8% for the six months ended June 30, 2024, reflecting increases across the All Other - Private Assets, Index and Analytics reportable segments, partially offset by decreases in the ESG and Climate reportable segment. The change was driven by increases in compensation and benefits costs, primarily relating to higher incentive compensation and wages and salaries as a result of increased headcount.
Previous report
R&D expenses increased 36.3% for the three months ended June 30, 2024, reflecting increases across all reportable segments. The change was driven by increases in compensation and benefits costs, relating to higher wages and salaries, incentive compensation and benefits costs as a result of increased headcount.
Previous report
Non-compensation expenses increased 14.4% for the three months ended June 30, 2024, driven by higher professional fees, transaction and integration costs related to recent acquisitions, information technology and market data costs.
Previous report
The effective tax rate of 19.6% for the three months ended June 30, 2023 reflects the Company’s estimate of the effective tax rate for the period. The level of discrete items was not impactful to the effective tax rate for the period.
Previous report
Operating revenues from recurring subscriptions increased 8.1% for the three months ended June 30, 2024, primarily driven by growth from market cap-weighted Index products.
Previous report
Operating revenues from non-recurring revenues decreased 28.0% for the three months ended June 30, 2024, as the three months ended June 30, 2023 included one-time fees related to unlicensed usage of our content in historical periods.
Previous report
Operating revenues from recurring subscriptions increased 8.2% for the six months ended June 30, 2024, primarily driven by growth from market cap-weighted Index products.
Previous report
Operating revenues from asset-based fees increased 15.6% for the six months ended June 30, 2024, mainly driven by strong growth in revenues from ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI equity indexes. Operating revenues from ETFs linked to MSCI equity indexes increased by 17.0%, primarily driven by an increase in average AUM, partially offset by a decrease in average basis point fees. Operating revenues from non-ETF indexed funds linked to MSCI indexes increased by 18.5%, primarily driven by an increases in average AUM, partially offset by a decrease in average basis point fees. Operating revenues from exchange traded futures and options contracts linked to MSCI indexes remained flat.
Previous report
Operating revenues from non-recurring revenues decreased 16.6% for the six months ended June 30, 2024, as the six months ended June 30, 2023 included one-time fees related to unlicensed usage of our content in historical periods.
Previous report
ESG and Climate operating revenues increased 12.1% for the three months ended June 30, 2024, primarily driven by growth from recurring subscriptions related to Climate, Screening and Ratings products. Adjusting for the impact of the acquisition of Trove and foreign currency exchange rate fluctuations, ESG and Climate operating revenues would have increased 10.0%.
Reworded paragraphs (57)
Previous wording
As of June 30, 2024, we served approximately 7,0001 clients in more than 95 countries.
Current wording
As of September 30, 2024, we served approximately 6,9001 clients in more than 95 countries.
Previous wording
Our principal business model is generally to license annual, recurring subscriptions for the majority of our Index, Analytics and ESG 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.
Current wording
Our principal business model is generally to license annual, recurring subscriptions for the majority of our Index, Analytics and ESG 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 either 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.
Previous wording
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.
Current wording
In evaluating our financial performance, we focus on revenue and profit growth. This includes evaluating results based on 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.
Previous wording
1(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.
Current wording
(1)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.
Previous wording
For the six months ended June 30, 2024, our largest client organization by revenue, BlackRock, accounted for 10.1% of our consolidated operating revenues, with 95.8% 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.
Current wording
A material portion of our revenues is concentrated in some of our largest clients. For the nine months ended September 30, 2024, our largest client organization by revenue, BlackRock, accounted for 10.1% of our consolidated operating revenues. 96.1% of the operating revenues from BlackRock come from fees based on the assets in BlackRock’s ETFs and non-ETF products that are based on our indexes.
Previous wording
The discussion of our results of operations for the three and six months ended June 30, 2024 and 2023 are presented below. The results of operations for interim periods may not be indicative of future results.
Current wording
The discussion of our results of operations for the three and nine months ended September 30, 2024 and 2023 are presented below. The results of operations for interim periods may not be indicative of future results.
Previous wording
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, 2023 or critical accounting estimates applied in the fiscal year ended December 31, 2023.
Current wording
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, 2023 or critical accounting estimates applied in the fiscal year ended December 31, 2023, except as described below.
Previous wording
Total operating revenues increased 14.0% for the three months ended June 30, 2024. Adjusting for the impact of foreign currency exchange rate fluctuations and recent acquisitions, total operating revenues would have increased 9.7%.
Current wording
Total operating revenues increased 15.9% for the three months ended September 30, 2024. Adjusting for the impact of foreign currency exchange rate fluctuations and recent acquisitions, total operating revenues would have increased 11.1%.
Previous wording
Operating revenues from recurring subscriptions increased 14.4% for the three months ended June 30, 2024, driven by growth in All Other - Private Assets products, which increased $26.9 million, or 71.8%, which included $26.8 million of Burgiss revenue; Index products, which increased $16.3 million, or 8.1%; Analytics products, which increased $14.6 million, or 9.9%, and ESG and Climate products, which increased $8.0 million, or 11.4%. Adjusting for the impact of foreign currency exchange rate fluctuations and recent acquisitions, operating revenues from recurring subscriptions would have increased 8.6%.
Current wording
Operating revenues from recurring subscriptions increased 15.4% for the three months ended September 30, 2024, driven by growth in All Other - Private Assets products, which increased $27.5 million, or 77.3%, which included $26.7 million of Burgiss revenue; Index products, which increased $17.5 million, or 8.5%; Analytics products, which increased $16.9 million, or 11.2%, and ESG and Climate products, which increased $9.8 million, or 13.6%. Adjusting for the impact of foreign currency exchange rate fluctuations and recent acquisitions, operating revenues from recurring subscriptions would have increased 9.0%.
Previous wording
Operating revenues from asset-based fees increased 18.2% for the three months ended June 30, 2024, mainly 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 by 19.0%, primarily driven by an increase in average AUM. Operating revenues from non-ETF indexed funds linked to MSCI indexes increased by 22.2%, primarily driven by an increase in average AUM. Operating revenues from exchange traded futures and options contracts linked to MSCI indexes increased by 4.6%, driven by volume increases.
Current wording
Operating revenues from asset-based fees increased 19.5% for the three months ended September 30, 2024, 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 and non-ETF indexed funds linked to MSCI indexes increased by 19.7% and 21.1%, respectively, primarily driven by an increase in average AUM. Operating revenues from exchange traded futures and options contracts linked to MSCI indexes increased by 11.3%, driven by volume increases.
Previous wording
Total operating revenues increased 14.4% for the six months ended June 30, 2024. Adjusting for the impact of foreign currency exchange rate fluctuations and recent acquisitions, total operating revenues would have increased 10.0%.
Current wording
Total operating revenues increased 14.9% for the nine months ended September 30, 2024. Adjusting for the impact of foreign currency exchange rate fluctuations and recent acquisitions, total operating revenues would have increased 10.4%.
Previous wording
Operating revenues from recurring subscriptions increased 14.8% for the six months ended June 30, 2024, driven by growth in All Other - Private Assets products, which increased $51.7 million, or 68.2%, which included $51.0 million of Burgiss revenue; Index products, which increased $32.6 million, or 8.2%; Analytics products, which increased $30.7 million, or 10.5%; and ESG and Climate products, which increased $18.6 million, or 13.7%. Adjusting for the impact of foreign currency exchange rate fluctuations and recent acquisitions, operating revenues from recurring subscriptions would have increased 8.9%.
Current wording
Operating revenues from recurring subscriptions increased 15.0% for the nine months ended September 30, 2024, driven by growth in All Other - Private Assets products, which increased $79.1 million, or 71.1%, which included $77.1 million of Burgiss revenue; Index products, which increased $50.1 million, or 8.3%; Analytics products, which increased $47.6 million, or 10.7%; and
Previous wording
The average value of AUM in ETFs linked to MSCI equity indexes for the three months ended June 30, 2024, was up $256.8 billion, or 19.3%. For the six months ended June 30, 2024, the average value of AUM in ETFs linked to MSCI equity indexes was up $239.0 billion, or 18.2%.
Current wording
The average value of AUM in ETFs linked to MSCI equity indexes for the three months ended September 30, 2024, was up $300.5 billion, or 21.8%. For the nine months ended September 30, 2024, the average value of AUM in ETFs linked to MSCI equity indexes was up $259.5 billion, or 19.5%.
Previous wording
Total operating expenses increased 18.2% for the three months ended June 30, 2024. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 18.8%.
Current wording
Total operating expenses increased 18.8% for the three months ended September 30, 2024. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 18.9%.
Previous wording
Total operating expenses increased 20.5% for the six months ended June 30, 2024. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 20.4%.
Current wording
Total operating expenses increased 19.9% for the nine months ended September 30, 2024. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 19.9%.
Previous wording
Cost of revenues increased 17.3% for the six months ended June 30, 2024, reflecting increases across all reportable segments. The change was driven by increases in compensation and benefits costs, primarily relating to higher wages and salaries, incentive compensation and benefits costs as a result of increased headcount, as well as increases in non-compensation costs, primarily reflecting higher information technology, professional fees and market data costs.
Current wording
Cost of revenues increased 18.1% for the nine months ended September 30, 2024, reflecting increases across all reportable segments. The change was driven by increases in compensation and benefits costs, primarily relating to higher wages and salaries, incentive compensation and benefits costs as a result of increased headcount, as well as increases in non-compensation costs reflecting higher information technology, professional fees and market data costs.
Previous wording
Cost of revenues increased 16.4% for the three months ended June 30, 2024, reflecting increases across the All Other - Private Assets, Index and ESG and Climate reportable segments, partially offset by decreases in the Analytics reportable segment. The change was driven by increases in compensation and benefits costs, primarily relating to higher wages and salaries, incentive compensation and benefits costs as a result of increased headcount, as well as increases in non-compensation costs, primarily reflecting higher information technology, professional fees and market data costs.
Current wording
Selling and marketing expenses increased 6.3% for the three months ended September 30, 2024, reflecting increases across the All Other - Private Assets and Index reportable segments, partially offset by decreases in the Analytics and ESG and Climate reportable segments. The change was driven by increases in compensation and benefits costs, primarily relating to higher wages and salaries as a result of increased headcount, as well as increases in non-compensation costs reflecting higher marketing costs.
Previous wording
Selling and marketing expenses increased 5.1% for the three months ended June 30, 2024, reflecting increases across the All Other - Private Assets, Index and Analytics reportable segments, partially offset by decreases in the ESG and Climate reportable segment. The change was driven by increases in compensation and benefits costs, primarily relating to higher incentive compensation and wages and salaries as a result of increased headcount.
Current wording
Selling and marketing expenses increased 6.6% for the nine months ended September 30, 2024, reflecting increases across the All Other - Private Assets and Index reportable segments, partially offset by decreases in the ESG and Climate and Analytics reportable segments. The change was driven by increases in compensation and benefits costs, primarily relating to higher incentive compensation and wages and salaries as a result of increased headcount, as well as increases in non-compensation costs reflecting higher marketing costs.
Previous wording
R&D expenses increased 32.8% for the six months ended June 30, 2024, reflecting increases across all reportable segments. The change was driven by increases in compensation and benefits costs, relating to higher wages and salaries, incentive compensation and benefits costs as a result of increased headcount, partially offset by increased capitalization of costs related to internally developed software projects.
Current wording
R&D expenses increased 22.7% for the three months ended September 30, 2024, reflecting increases across all reportable segments. The change was driven by increases in compensation and benefits costs, relating to higher wages and salaries and incentive compensation costs as a result of increased headcount, partially offset by increased capitalization of costs related to internally developed software projects.
Previous wording
G&A expenses increased 11.4% for the three months ended June 30, 2024, reflecting increases across the All Other - Private Assets and ESG and Climate reportable segments, partially offset by decreases in the Index and Analytics reportable segments. The increase was driven by higher transaction and integration costs related to recent acquisitions, as well as increased compensation and benefits costs, relating to higher wages and salaries as a result of increased headcount. The increase was also driven by higher non-compensation costs, reflecting higher information technology and insurance costs.
Current wording
G&A expenses increased 12.9% for the three months ended September 30, 2024, reflecting increases across the All Other - Private Assets, and ESG and Climate reportable segments, partially offset by decreases in the Index and Analytics reportable segments. The change was primarily driven by increases in non-compensation costs primarily relating to higher occupancy costs and higher professional fees.
Previous wording
G&A expenses increased 25.7% for the six months ended June 30, 2024, reflecting increases across all reportable segments. The change was driven by increases in compensation and benefits costs, relating to higher incentive compensation, wages and salaries and benefits costs as a result of increased headcount, as well as increases in non-compensation costs, reflecting higher transaction related expenses due to recent acquisitions, professional fees and information technology costs.
Current wording
G&A expenses increased 21.5% for the nine months ended September 30, 2024, reflecting increases across all reportable segments. The change was driven by increases in non-compensation costs, reflecting higher transaction costs related expenses due to the recent acquisitions, professional fees and information technology costs, as well as increases in compensation and benefits costs, relating to higher wages and salaries, incentive compensation and benefits costs as a result of increased headcount.
Previous wording
We had 6,059 employees as of June 30, 2024, compared to 4,980 employees as of June 30, 2023, reflecting a 21.7% growth in the number of employees which is primarily related to recent acquisitions. 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 June 30, 2024, 68.5% of our employees were located in emerging market centers compared to 66.2% as of June 30, 2023.
Current wording
We had 6,118 employees as of September 30, 2024, compared to 5,005 employees as of September 30, 2023, reflecting a 22.2% growth in the number of employees which is primarily related to recent acquisitions. 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 September 30, 2024, 68.5% of our employees were located in emerging market centers compared to 66.5% as of September 30, 2023.
Previous wording
Compensation and benefits costs increased 15.2% and 19.1%, for the three and six months ended June 30, 2024, driven by an increase in wages and salaries, incentive compensation and benefits costs due to headcount growth, partially offset by increased capitalization of expenses related to internally developed software projects. Adjusting for the impact of foreign currency exchange rate fluctuations and recent acquisitions, compensation and benefits costs would have increased by 4.2% and increased by 7.7%, respectively, for the three and six months ended June 30, 2024.
Current wording
Compensation and benefits costs increased 13.4% and 17.2%, for the three and nine months ended September 30, 2024, driven by an increase in wages and salaries, incentive compensation and benefits costs due to headcount growth, partially offset by increased capitalization of expenses related to internally developed software projects. Adjusting for the impact of foreign currency exchange rate fluctuations and recent acquisitions, compensation and benefits costs would have increased by 2.7% and increased by 6.1%, respectively, for the three and nine months ended September 30, 2024.
Previous wording
Non-compensation expenses increased 14.0% for the six months ended June 30, 2024, driven by higher professional fees, information technology, transaction and integration costs related to recent acquisitions, as well as market data costs. Adjusting for the impact of foreign currency exchange rate fluctuations and recent acquisitions, non-compensation expenses would have increased by 5.5% and increased by 4.9%, respectively, for the three and six months ended June 30, 2024.
Current wording
Non-compensation expenses increased 16.2% for the nine months ended September 30, 2024, driven by higher professional fees, information technology, transaction and integration costs related to recent acquisitions, market data costs and travel and entertainment costs. Adjusting for the impact of foreign currency exchange rate fluctuations and recent acquisitions, non-compensation expenses would have increased by 8.5% and increased by 6.1%, respectively, for the three and nine months ended September 30, 2024.
Previous wording
Amortization of intangible assets expense increased 55.9% and 56.2% for the three and six months ended June 30, 2024, respectively, primarily driven by higher amortization recognized on acquired intangible assets from recent acquisitions
Current wording
Amortization of intangible assets expense increased 56.9% and 56.4% for the three and nine months ended September 30, 2024, respectively, primarily driven by higher amortization recognized on acquired intangible assets from recent acquisitions
Previous wording
Depreciation and amortization of property, equipment and leasehold improvements decreased 18.7% and 22.1% for the three and six months ended June 30, 2024, respectively, primarily driven by lower depreciation on computer and related equipment.
Current wording
Depreciation and amortization of property, equipment and leasehold improvements decreased 17.5% and 20.6% for the three and nine months ended September 30, 2024, respectively, primarily driven by lower depreciation on computer and related equipment.
Previous wording
Total other expense (income), net increased 9.8% for the three months ended June 30, 2024, primarily driven by lower interest income reflecting lower average cash balances.
Current wording
Total other expense (income), net increased 24.5% for the three months ended September 30, 2024, primarily driven by lower interest income reflecting lower average cash balances and the impact of foreign currency exchange rate fluctuations.
Previous wording
Total other expense (income), net increased 11.8% for the six months ended June 30, 2024, primarily driven by lower interest income, reflecting lower average cash balances as well as loss on extinguishment related to unamortized debt issuance costs associated with the prepayment of the Tranche A Term Loans and the entry into the Credit Agreement, partially offset by the impact of foreign currency exchange rate fluctuations.
Current wording
Total other expense (income), net increased 15.8% for the nine months ended September 30, 2024, primarily driven by lower interest income, reflecting lower average cash balances as well as loss on extinguishment related to unamortized debt issuance costs associated with the prepayment of the Tranche A Term Loans and the entry into the Credit Agreement and the impact of foreign currency exchange rate fluctuations.
Previous wording
The effective tax rate of 21.5% for the three months ended June 30, 2024 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain unfavorable discrete items totaling $4.2 million, primarily related to prior-year items.
Current wording
The effective tax rate of 21.3% for the three months ended September 30, 2024 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain unfavorable discrete items totaling $3.6 million, primarily related to prior-year items.
Previous wording
The effective tax rate of 16.8% for the six months ended June 30, 2023 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling $16.4 million, primarily related to $11.2 million of excess tax benefits recognized on share-based compensation vested during the period and $5.2 million related to prior-year items.
Current wording
The effective tax rate of 19.1% for the nine months ended September 30, 2024 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling $12.4 million, related to $15.9 million of excess tax benefits recognized on share-based compensation vested during the period partially offset by $3.5 million related to prior-year items.
Previous wording
The effective tax rate of 17.8% for the six months ended June 30, 2024 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling $16.0 million, related to $15.7 million of excess tax benefits recognized on share-based compensation vested during the period and $0.3 million related to prior-year items.
Current wording
The effective tax rate of 17.3% for the nine months ended September 30, 2023 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling $19.8 million, related to $11.4 million of excess tax benefits recognized on share-based compensation vested during the period and $8.4 million related to prior-year items.
Previous wording
As a result of the factors described above, net income increased 8.1% for the three months ended June 30, 2024, and increased 7.7% for the six months ended June 30, 2024.
Current wording
As a result of the factors described above, net income increased 8.2% for the three months ended September 30, 2024, and increased 7.8% for the nine months ended September 30, 2024.
Previous wording
The decrease in weighted average shares and common shares outstanding for the three and six months ended June 30, 2024 primarily reflects the impact of share repurchases made pursuant to the Company’s stock repurchase program.
Current wording
The decrease in weighted average shares and common shares outstanding for the three and nine months ended September 30, 2024 primarily reflects the impact of share repurchases made pursuant to the Company’s stock repurchase program.
Previous wording
Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EBITDA expenses 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 margin and adjusted EBITDA expenses 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 margin and Adjusted EBITDA expenses measures may not be comparable to similarly titled measures computed by other companies.
Current wording
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 margin and Adjusted EBITDA expenses measures may not be comparable to similarly titled measures computed by other companies.
Previous wording
Index operating revenues increased 9.6% for the three months ended June 30, 2024, primarily driven by strong growth from asset-based fees as well as growth from recurring subscriptions, partially offset by a decrease in non-recurring revenues. Adjusting for the impact of the acquisition of Foxberry and foreign currency exchange rate fluctuations, Index operating revenues would have increased 9.8%.
Current wording
Index operating revenues increased 11.8% for the three months ended September 30, 2024, primarily driven by strong growth in higher asset-based fees and higher recurring subscription revenue, partially offset by lower non-recurring revenues. Adjusting for the impact of the acquisition of Foxberry and foreign currency exchange rate fluctuations, Index operating revenues would have increased 11.8%.
Previous wording
Operating revenues from asset-based fees increased 18.2% for the three months ended June 30, 2024, mainly 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 by 19.0%, primarily driven by an increase in average AUM. Operating revenues from non-ETF indexed funds linked to MSCI indexes increased by 22.2%, primarily driven by increases in average AUM and average basis point fees. Operating revenues from exchange traded futures and options contracts linked to MSCI indexes increased by 4.6%, driven by volume increases.
Current wording
Operating revenues from asset-based fees increased 19.5% for the three months ended September 30, 2024, 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 and non-ETF indexed funds linked to MSCI indexes increased by 19.7% and 21.1%, respectively, primarily driven by an increase in average AUM. Operating revenues from exchange traded futures and options contracts linked to MSCI indexes increased by 11.3%, driven by volume increases.
Previous wording
Index segment Adjusted EBITDA expenses increased 5.8% for the three months ended June 30, 2024, primarily driven by higher compensation costs in R&D, selling and marketing and cost of revenues expense activity categories, partially offset by decreases in compensation costs in the G&A expense activity category. The increase in compensation costs was driven by higher wages and salaries and incentive compensation costs. The increase was also driven by higher non-compensation expenses across cost of revenues, G&A and R&D expense activity categories, partially offset by a decrease in the selling and marketing expense activity category. This increase was primarily driven by higher professional fees. Adjusting for the impact of the acquisition of Foxberry and foreign currency exchange rate fluctuations, Index segment Adjusted EBITDA expenses would have increased by 5.1%.
Current wording
Index segment Adjusted EBITDA expenses increased 7.4% for the three months ended September 30, 2024, primarily driven by higher non-compensation expenses across cost of revenues, selling and marketing, and G&A expense activity categories, partially offset by a decrease in the R&D expense activity category. The increase in non-compensation expenses was primarily driven by higher professional fees and marketing costs. The increase was also driven by higher compensation expenses in R&D, cost of revenues, and selling and marketing expense activity categories, partially offset by the G&A expense activity category. The increase in compensation expenses was driven by higher wages and salaries and incentive compensation costs. Adjusting for the impact of the acquisition of Foxberry and foreign currency exchange rate fluctuations, Index segment Adjusted EBITDA expenses would have increased by 6.4%.
Previous wording
Index operating revenues increased 9.9% for the six months ended June 30, 2024, primarily driven by strong growth from asset-based fees as well as growth from recurring subscriptions, partially offset by a decrease in non-recurring revenue. Adjusting for the impact of the acquisition of Foxberry and foreign currency exchange rate fluctuations, Index operating revenues would have increased 10.1%.
Current wording
Index operating revenues increased 10.5% for the nine months ended September 30, 2024, primarily driven by strong growth from asset-based fees and recurring subscriptions, partially offset by a decrease in non-recurring revenue. Adjusting for the impact of the acquisition of Foxberry and foreign currency exchange rate fluctuations, Index operating revenues would have increased 10.7%.
Previous wording
Index segment Adjusted EBITDA expenses increased 9.0% for the six months ended June 30, 2024, primarily driven by higher compensation expenses across all expense activity categories. The increase reflects higher incentive compensation, wages and salaries and benefits costs. The increase was also driven by higher non-compensation expenses across cost of revenues, G&A and R&D expense activity categories, partially offset by lower non-compensation expenses in the selling and marketing expense activity category. This increase is primarily due to higher professional fees and transaction fees related to the acquisition of Foxberry. Adjusting for the impact of the acquisition of Foxberry and foreign currency exchange rate fluctuations, Index segment Adjusted EBITDA expenses would have increased by 8.1%.
Current wording
Index segment Adjusted EBITDA expenses increased 8.5% for the nine months ended September 30, 2024, primarily driven by higher compensation expenses across all expense activity categories. The increase reflects higher incentive compensation and wages and salaries. The increase was also driven by non-compensation expenses across the cost of revenues, G&A, and selling and marketing expense activity categories, partially offset by the R&D expense activity category. This increase was primarily due to higher professional fees and transaction fees related to the acquisition of Foxberry. Adjusting for the impact of the acquisition of Foxberry and foreign currency exchange rate fluctuations, Index segment Adjusted EBITDA expenses would have increased by 7.5%.
Previous wording
Analytics operating revenues increased 10.8% for the three months ended June 30, 2024, primarily driven by growth from recurring subscriptions related to both Multi-Asset Class and Equity Analytics products. The increase was also driven by an increase in non-recurring revenues driven by one-time sales related to both Multi-Asset Class and Equity products as well as a number of implementations which were completed in the three months ended June 30, 2024. Adjusting for the impact of the acquisition of Fabric and foreign currency exchange rate fluctuations, Analytics operating revenues would have increased 11.2%.
Current wording
Analytics operating revenues increased 11.7% for the three months ended September 30, 2024, primarily driven by growth from recurring subscriptions related to both Multi-Asset Class and Equity Analytics products, which also benefited from subscription revenue impacted by client implementations. The increase was also driven by an increase in non-recurring revenues driven by one-time deals related to both Multi-Asset Class and Equity products as well as a number of implementations which were completed in the quarter. Adjusting for the impact of the acquisition of Fabric and foreign currency exchange rate fluctuations, Analytics operating revenues would have increased 11.7%.
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Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
ESG and Climate products, which increased $28.4 million, or 13.7%. Adjusting for the impact of foreign currency exchange rate fluctuations and recent acquisitions, operating revenues from recurring subscriptions would have increased 9.0%.
Current report — wording carried from elsewhere
Analytics segment Adjusted EBITDA expenses decreased 0.5% for the three months ended September 30, 2024, primarily driven by lower compensation expenses across the selling and marketing and G&A expense activity categories, partially
Current report — wording carried from elsewhere
ESG and Climate operating revenues increased 14.2% for the nine months ended September 30, 2024, primarily driven by growth from recurring subscriptions related to Ratings, Climate and Screening products. Adjusting for the impact of the acquisition of Trove and foreign currency exchange rate fluctuations, ESG and Climate operating revenues would have increased 10.7%.