MSCI Inc MSCI reported third-quarter FY23 revenue growth of 11.6% year-on-year to $625.44 million, versus the consensus of $625.82 million.
The adjusted EPS of $3.45 beat the consensus of $3.32.
The total run-rate at September 30, 2023, rose 12% Y/Y to $2.47 billion. The organic recurring subscription run rate growth was 10.7%. The retention rate was 95.4% compared to 96.4% last year.
Index operating revenues of the investment research firm rose 12.4% Y/Y to $362.1 million, aided by higher recurring subscription revenues and asset-based fees.
Analytics operating revenues increased 6.5% Y/Y to $154.3 million, driven by higher recurring subscription revenues from Equity and Multi-Asset Class Analytics products.
ESG and Climate operating revenues grew 26.8% Y/Y to $73 million from solid growth from Ratings, Screening, and Climate products.
All Other – Private Assets operating revenues improved 0.3% Y/Y to $36 million.
Margin: The operating margin expanded 130 basis points to 56.5%. The adjusted EBITDA margin expanded 100 basis points to 61.8%.
MSCI generated $270.2 million in free cash flow and held $928.6 million in cash and equivalents.
"Our recent acquisitions of Burgiss and Trove will help us further capture major industry trends and strengthen our ability to provide clients with market-leading portfolio solutions," Chair and CEO Henry A. Fernandez added.
Outlook: MSCI expects FY23 operating expense of $1.135 billion - $1.165 billion (prior $1.090 billion - $1.130 billion), capex of $85 million - $95 million (earlier $80 million - $90 million), and reiterated free cash flow of $1.060 billion - $1.120 billion.
Price Action: MSCI shares traded lower by 2.00% at $472.35 on the last check Tuesday.
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