MSCI (MSCI) Q3 Earnings call transcript Oct 29, 2024
2min read MSCI Corporation, a leading provider of critical decision support tools and indexes for the global investment industry, recently released its third quarter earnings report for 2024. The earnings call, led by Jeremy Ulan, Head of Investor Relations and Treasurer, provided insights into the company's financial performance and strategic initiatives.
Financial Highlights
MSCI reported total revenue growth of 16%, adjusted earnings per share growth of 12%, and free cash flow growth of 46%. The company's asset-based fee revenue grew nearly 20%, driven by record asset balances in both exchange-traded funds (ETFs) and non-ETF products linked to MSCI indices. The index and analytics new recurring subscription sales grew 5% and 11%, respectively, while organic subscription run rate growth was 11% for asset owners and 15% for hedge funds.
Strategic Priorities
During the call, MSCI's Chairman and CEO, Henry Fernandez, highlighted the company's focus on three key strategic drivers for long-term growth:
1. Growth among wealth managers and the benefits of MSCI's new technology platform.2. Developing private capital solutions across product lines.3. Committing to providing climate solutions that clients need to measure, report, and act on decarbonization of investments.
Wealth Management and Technology Platform
MSCI achieved significant growth in wealth management, securing a major index win with a private banking arm of a leading global bank. The company also saw direct indexing run rate growth of 22% and robust client engagement for analytics, particularly in the wealth manager platform, which was previously known as Fabric.
Private Capital Solutions
MSCI's private capital fund indices, launched in July 2024, have already secured important client wins and prospects, covering more than 13,000 funds that represent over $11 trillion in assets under management. These indices aim to help MSCI become a standard setter in private assets.
Climate Solutions
With the increasing awareness of climate risks and the need for investors to integrate ESG (Environmental, Social, and Governance) factors into their investment decisions, MSCI is well-positioned to provide climate solutions. The company has seen strong demand for carbon emission data on more than 60,000 private companies and over 7,500 private equity and private debt funds.
Market Outlook and Future Prospects
Looking ahead, MSCI remains optimistic about its growth prospects, citing the underlying strength of its business model and client footprint. The company is focused on delivering innovative products and capabilities to support its clients and grow its wallet share. Despite some challenges in certain areas, such as ESG and Climate, MSCI is confident in its ability to navigate these trends and capitalize on the long-term opportunities they present.
Conclusion
MSCI's third quarter earnings call highlighted the company's strong financial performance, strategic priorities, and optimism for future growth. With a focus on wealth management, private capital solutions, and climate solutions, MSCI is well-positioned to capitalize on the trends shaping the global investment industry. As the company continues to innovate and deliver value to its clients, it remains a key player in the evolving investment landscape.
