Executive Summary

Q3 2025 beat on revenue and adjusted EPS: Revenue rose 8.4% YoY to $617.4M (organic +9.0%) and adjusted diluted EPS grew 27.5% to $2.55; Street was looking for ~$605.8M revenue and $2.42 EPS, implying beats of ~$11.6M and ~$0.13, respectively (consensus from S&P Global estimates)*
Morningstar Credit led growth (+28.5% revenue; +9.4 pp adj. operating margin), with contributions from Morningstar Direct Platform (+6.3% revenue) and PitchBook (+7.9% revenue), while adjusted operating margin expanded 150 bps to 24.4% .
Capital allocation accelerated: 686,512 shares settled for repurchase in Q3 ($170.1M) and a new 3‑year $1B buyback authorization starts Oct 31 (prior $500M program completed in October) .
No earnings call transcript: Morningstar does not host quarterly earnings calls; investor engagement occurs via written Q&A 8‑Ks on a schedule in non-earnings months, with a new cadence starting Nov 2025 .

What Went Well and What Went Wrong

What Went Well
- Morningstar Credit delivered a “standout quarter,” supported by robust issuance across ABS/CMBS in the U.S. and corporate ratings in Canada/Europe; revenue +28.5% YoY to $91.1M and adjusted operating margin +9.4 pp to 30.8% .
- Adjusted margin expansion to 24.4% (+150 bps YoY) on higher revenue and operating leverage; adjusted operating income +15.6% YoY to $150.6M .
- Direct Platform revenue +6.3% YoY to $211.1M with Morningstar Data strength; “growth across geographies”; CEO emphasized building “durable growth” and scale via the planned CRSP acquisition and AI collaborations (PitchBook + Morningstar) .
What Went Wrong
- PitchBook growth moderated (licensed users flat YoY after definition change); margin dipped 90 bps to 31.3% on higher compensation and healthcare costs; softness persisted in the corporate client segment amid slower deal activity .
- Direct Platform adjusted margin fell 160 bps to 44.4% on higher compensation and increased depreciation from prior capitalized software; Office sunset was a $1.5M headwind to Wealth .
- Effective tax rate rose to 25.5% vs 19.8% last year (prior-year gain on a sale affected comparability), muting GAAP EPS (down 21.7% YoY to $2.17) despite underlying strength .

Financial Results

Results vs prior periods

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenue ($M)	$569.4	$581.9	$605.1	$617.4
Diluted EPS (GAAP)	$2.77	$1.82	$2.09	$2.17
Adjusted Diluted EPS	$2.00	$2.23	$2.40	$2.55
Operating Margin (%)	20.3%	19.6%	20.7%	20.7%
Adjusted Operating Margin (%)	22.9%	23.3%	23.7%	24.4%
Cash from Ops ($M)	$191.9	$91.0	$99.0	$195.7
Free Cash Flow ($M)	$155.8	$58.8	$62.4	$160.1

Results vs estimates (S&P Global consensus)*

Metric	Q3 2025 Consensus	Q3 2025 Actual	Surprise
Revenue ($M)	$605.8*	$617.4	+$11.6 (+1.9%)
EPS (Primary/Adjusted)	$2.42*	$2.55	+$0.13 (+5.5%)

Segment performance (Q3 2025 vs Q3 2024)

Segment	Revenue Q3’24 ($M)	Revenue Q3’25 ($M)	YoY	Adj. Op Margin Q3’24	Adj. Op Margin Q3’25
Morningstar Direct Platform	198.5	211.1	+6.3%	46.0%	44.4%
PitchBook	156.6	169.0	+7.9%	32.2%	31.3%
Morningstar Credit	70.9	91.1	+28.5%	21.4%	30.8%
Morningstar Wealth	61.8	62.1	+0.5%	-1.1%	5.0%
Morningstar Retirement	31.8	34.2	+7.5%	53.1%	49.4%
Corporate & All Other (rev)	49.8	49.9	+0.2%	—	—

KPIs

KPI	Q3 2024	Q3 2025
Morningstar Retirement AUMA ($B)	264.4	297.8
Investment Management AUMA ($B)	63.7	70.8
Asset value linked to Morningstar Indexes ($B)	228.2	237.5
Average AUMA ($B)	322.2	360.4
PitchBook Licensed Users	113,410	113,453
Morningstar Direct Licenses	18,767	18,771
Headcount (approx.)	—	11,154 (as of Sept 30, 2025)

Guidance Changes

Morningstar does not issue formal quarterly financial guidance; no revenue/margin/tax guidance ranges were provided in Q3 materials .
Capital returns and dividends:

Metric	Period	Previous Guidance/Status	Current Update	Change
Share repurchase authorization	3-year program	Prior $500M program (effective Jan 1, 2023) completed in October 2025	New 3-year authorization up to $1B effective Oct 31, 2025	Raised
Dividend per share	Quarterly	$0.455 declared Jun 20, 2025	No new Q3 declaration disclosed in earnings materials; $19.2M dividends paid in Q3	Maintained (no change disclosed)

Earnings Call Themes & Trends

Note: Morningstar does not host quarterly earnings calls; themes reflect management’s shareholder letter, press release, and supplemental deck.

Topic	Previous Mentions (Q1–Q2 2025)	Current Period (Q3 2025)	Trend
AI/Technology	Q2: Enhanced Direct Advisory Suite; expanded CLO holdings in PitchBook; “State of Semiliquid Funds” published . Q1: Launched DealX & Lumonic acquisitions to bolster private credit/structured finance .	CEO laid out AI roadmap across delivery, speed-to-insight, and ops; integrations with Anthropic/Perplexity; PitchBook data accessible in Claude; MCP servers for entitled access .	Improving adoption and partnerships
PitchBook product/client trends	Q1–Q2: Growth led by core investor/advisor segments; softness in corporate segment; licensed users grew in Q2; margin modestly up .	Revenue +7.9%; licensed users flat after methodology update; margin -90 bps on comp/health costs; continued corporate softness and extended sales cycles; investments in proprietary research/datasets/workflows .	Moderating growth; mix headwinds
Credit cycle/issuance	Q1–Q2: Strong structured finance/new issuance; data licensing up; geographic breadth .	“Standout quarter” with robust issuance; strength in US CMBS/ABS and Canada/Europe corporates; revenue +28.5%; adj. margin +9.4 pp .	Improving
Wealth/Office/TAMP	Q1–Q2: AUMA growing on markets and model portfolio flows; TAMP sale affects platform revenue; Office sunsetting .	Organic +9.8% with Investment Management and ad sales; $1.5M negative impact from Office sunsetting; AUMA +11.1% to $70.8B .	Improving organically; reported muted
Sustainalytics/Indexes	Q2: Sustainalytics softer (vendor consolidation, product streamlining); Indexes investable product outflows .	Indexes revenue modestly down (outflows, lower AUMA for higher-margin products); Sustainalytics roughly flat reported, modestly down organic .	Stabilizing/slightly soft
Regional expansion (Credit)	—	DBRS launched APAC hub in Australia; AFSL granted; local leadership hires .	Expanding footprint

Management Commentary

“Morningstar Credit delivered a standout quarter… while Morningstar Direct Platform and PitchBook also contributed meaningfully to consolidated growth.” — Kunal Kapoor, CEO .
“We continue to lay the foundation for durable growth with our planned acquisition of the Center for Research in Security Prices… and new collaborations to integrate our trusted data with leading generative AI platforms.” .
On AI strategy: “We are using AI technologies… to deliver our data and IP; to accelerate speed‑to‑insights in our products; and to boost the operational excellence of our teams,” including integrations with Anthropic and Perplexity via MCP .
On PitchBook: “Activity… remained below prior‑period peaks… we continued to experience elevated churn among smaller firms and corporates… we are actively investing in proprietary research, derived datasets, and integrated workflows… and embedding AI into the PitchBook platform” .

Q&A Highlights

No live Q&A or earnings call; the company engages via written investor Q&A 8‑Ks on a set cadence in months without earnings. New schedule starts Nov 2025 (submissions by the 5th, responses by the 25th, adjusted for holidays) .
Clarifications from materials:
- Tax rate: ETR rose to 25.5% vs 19.8% last year due to prior-year gain dynamics on a divestiture .
- Non-GAAP adjustments: Q3 included $15.1M intangible amortization and $8.2M M&A-related expenses; adjusted EPS reconciled to $2.55 .
- Shareholder returns: Q3 repurchases of $170.1M settled; new $1B authorization effective Oct 31 .

Estimates Context

Q3 2025 results vs S&P Global consensus*: Revenue $617.4M vs $605.8M*; EPS (Primary/Adjusted) $2.55 vs $2.42*; both beats .
Coverage was thin (2 estimates each for EPS and revenue); estimate models appear aligned to the company’s adjusted EPS this quarter [functions.GetEstimates output].
Implications: modest upward bias likely to out‑year adj. EPS on stronger credit issuance and sustained cost discipline; Direct margin pressure from comp/depreciation may limit magnitude of revisions near term .

Values with asterisks (*) retrieved from S&P Global.

Key Takeaways for Investors

Broad-based beat driven by Credit strength and operating leverage; adjusted margin expanded to 24.4% despite compensation headwinds in Direct and PitchBook .
PitchBook growth remains healthy but moderating; corporate segment and longer sales cycles weigh on mix and margins; near-term catalysts include AI features (Navigator) and LLM integrations to deepen workflows .
Credit is cyclical tailwind: issuance breadth across geographies/asset classes boosted revenue/margins; APAC expansion (Australia hub) adds a structural growth vector .
Capital returns are re-accelerating: ~$487M repurchased YTD through Oct 28 and a fresh $1B authorization provide downside support and EPS accretion, contingent on valuation and cash generation .
Watch areas: Direct Platform margin pressure (comp/depreciation), Sustainalytics/Indexes revenue softness (vendor consolidation/outflows), and elevated ETR vs prior-year .
Medium-term thesis: Proprietary data/IP and AI distribution partnerships (Anthropic/Claude, others) should enhance pricing power and seat-based/entitled data monetization, while CRSP (if closed) scales Indexes .

Appendix: Additional Tables

Segment and revenue-type detail (Q3 2025)

Category	Q3 2025 Revenue ($M)
License-based: Direct Platform	$211.1
License-based: PitchBook	$166.9
Transaction-based: PitchBook	$2.1
Transaction-based: Morningstar Credit	$85.7
License-based: Morningstar Credit	$5.4
Wealth (License/Asset/Txn total)	$62.1
Retirement (License)	$34.2
Corporate & All Other (Sustainalytics + Indexes + other)	$49.9

Balance sheet and cash return snapshots (as of/for Q3 2025)

Cash, cash equivalents & investments: $514.5M; Long-term debt: $848.9M .
Q3 dividends paid: $19.2M; share repurchases settled: $170.1M .

Relevant Q3 2025 press releases and updates

Morningstar DBRS launches APAC regional hub (Australia); AFSL granted .
PitchBook data accessible within Claude (Anthropic); expanding LLM partnerships .
Morningstar Retirement integrates advisor managed accounts into NPPG PEPs .

Sources: Q3 2025 8‑K (including EX‑99.1 press release, EX‑99.2 supplemental deck, EX‑99.3 shareholder letter) and company press releases as cited above . No earnings call transcript exists; Morningstar does not host quarterly calls .

Morningstar, Inc. (MORN)·Q3 2025 Earnings Summary