Morningstar 2025 Q2 Earnings Strong Performance as Net Income Rises 28.8%

Morningstar, Inc. (MORN) reported its fiscal 2025 Q2 earnings on July 31, 2025. The firm posted a 5.8% growth in revenue, reaching $605.10 million, and achieved a 28.8% increase in net income, setting a record high for fiscal Q2. Morningstar's results outperformed expectations, driven by robust performance from key platforms. The company maintained its guidance in line with previous expectations, as it navigates market complexities. Morningstar anticipates continuous revenue growth driven by its core platforms, focusing on innovation and expanded data offerings to adapt to evolving investor demands.

Revenue
Morningstar's total revenue for Q2 2025 grew by 5.8% to $605.10 million compared to the prior year. The license-based revenue reached $428.40 million, contributing significantly to the overall growth. Asset-based revenue grew to $82.40 million, indicating a positive trend in asset management services. Additionally, transaction-based revenue saw an increase to $94.30 million, showcasing steady growth in transactional services.

Earnings/Net Income
Morningstar's earnings per share (EPS) rose by 31.1% to $2.11 in Q2 2025 from $1.61 in Q2 2024, reflecting strong earnings growth. Net income increased by 28.8% to $89 million, marking the highest fiscal Q2 net income in over two decades. The impressive EPS underscores Morningstar's solid financial performance.

Price Action
The stock price of Morningstar has edged down 0.21% during the latest trading day, has edged down 0.68% during the most recent full trading week, and has tumbled 11.94% month-to-date.

Post-Earnings Price Action Review
The investment strategy of acquiring Morningstar shares following a quarter-over-quarter revenue increase on the financial report release date, and holding them for a 30-day period, yielded moderate returns. However, it underperformed the broader market, with a compound annual growth rate (CAGR) of 9.02%, lagging behind the benchmark by 32.01%. Despite a maximum drawdown of 0.00% and a Sharpe ratio of 0.32, the strategy exhibited low risk but only modest returns. This makes it particularly appealing to investors who prioritize stability over higher returns, as it offers a steady approach amidst market fluctuations.

CEO Commentary
"PitchBook, Morningstar Direct Platform, and Morningstar Credit led the way in the second quarter, contributing to solid growth," said Kunal Kapoor, Chief Executive Officer of Morningstar, Inc. He emphasized the company's commitment to delivering essential insights and experiences for investors, highlighting recent enhancements to the Direct Advisory Suite and PitchBook, which provide critical data and tools for navigating both public and private markets. Kapoor noted that these efforts are creating a common language for investors, reflecting the company’s focused strategy on growth through innovation and expanded data offerings.

Guidance
The company expressed a forward-looking view, indicating a commitment to ongoing enhancements in its product offerings to support investor needs. Morningstar anticipates continued revenue growth driven by its core platforms while navigating the complexities of the market environment. The outlook reflects a focus on maintaining strong operational performance and adapting to evolving investor demands, with a strategic emphasis on integrating new data capabilities to enhance its value proposition in the marketplace.

Additional News
Morningstar Inc. recently declared a quarterly dividend of 45.5 cents per share, emphasizing its commitment to returning value to shareholders. In addition, the company launched a new digital platform aimed at empowering Canadian investors, showcasing its dedication to expanding its global reach and enhancing investor engagement. Furthermore, Morningstar introduced the Medalist Rating for semiliquid funds, advancing transparency within private markets, reflecting its strategic focus on innovation and addressing market demands. These developments highlight Morningstar's proactive approach in maintaining its leadership position in the investment insights industry, strengthening its offerings, and enhancing shareholder value.