Executive Summary

Q4 2024 revenue rose 9.7% to $591.0M (+10.6% organic), led by Morningstar Credit (+33.8%) and PitchBook (+12.5%) .
Diluted EPS grew 58.5% to $2.71; adjusted diluted EPS increased 8.6% to $2.14. Operating margin expanded to 28.5% but included a $64.0M gain from the US TAMP asset sale; adjusted operating margin dipped slightly to 20.6% on higher bonus expense, especially in Credit .
Cash generated remained strong: cash from operations $153.4M (+11.3% YoY), free cash flow $112.8M (+4.6% YoY) .
Strategic updates: PitchBook continued license growth (125,491 users) and private credit build-out; Morningstar launched Direct Advisory Suite and plans to retire Morningstar Office. Dividend increased to $0.455 per share for 2025—an investor-friendly capital return catalyst .

What Went Well and What Went Wrong

What Went Well

Morningstar Credit delivered broad-based ratings growth across CMBS, RMBS, and corporates with revenue +33.8% (34.5% organic), contributing $20.8M to consolidated growth; adjusted operating margin for full year increased sharply, underscoring scaling benefits .
PitchBook revenue rose 12.5% with licensed users up 16.4%; segment adjusted operating margin improved to 30.0% as operating leverage and reduced stock-based compensation supported profitability. Management emphasized strong core client demand and platform enhancements including PitchBook Credit integration. “We finished 2024 strongly… using AI to transform client workflows.” — CEO Kunal Kapoor .
Cash generation and de-leveraging: full-year operating cash flow $591.6M and FCF $448.9M; debt reduced by $273.8M net in 2024. Quarterly cash from operations and FCF improved vs prior year .

What Went Wrong

Adjusted operating margin declined 40 bps to 20.6% in Q4 2024, driven by higher compensation (bonus accruals), depreciation from capitalized software, and increased advertising/marketing—despite revenue gains .
Sustainalytics revenues fell on streamlining of licensed-ratings offerings and softness in second-party opinions; Corporate and All Other’s adjusted operating income remained negative, reflecting unallocated corporate costs .
Wealth segment remained near breakeven on an adjusted basis (-$0.8M), with advertising softness; reported results benefitted from one-time US TAMP asset sale gain excluded from adjusted metrics .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$538.7	$569.4	$591.0
Diluted EPS ($USD)	$1.71	$2.77	$2.71
Adjusted Diluted EPS ($USD)	$1.97	$2.00	$2.14
Operating Income ($USD Millions)	$94.4	$115.5	$168.2
Adjusted Operating Income ($USD Millions)	$113.0	$130.3	$121.7
Operating Margin (%)	17.5%	20.3%	28.5%
Adjusted Operating Margin (%)	21.0%	22.9%	20.6%
Cash from Operations ($USD Millions)	$137.8	$191.9	$153.4
Free Cash Flow ($USD Millions)	$107.8	$155.8	$112.8

Segment detail (Q4 2024):

Segment	Revenue ($USD Millions)	YOY Reported %	Organic %	Adjusted Operating Income ($USD Millions)	Adjusted Operating Margin (%)
Morningstar Data & Analytics	$196.0	1.7%	3.6%	$85.5	43.6%
PitchBook	$162.5	12.5%	12.7%	$48.7	30.0%
Morningstar Credit	$82.3	33.8%	34.5%	$20.2	24.5%
Morningstar Wealth	$65.0	6.2%	6.2%	$(0.8)	(1.2)%
Morningstar Retirement	$33.6	11.3%	11.3%	$17.2	51.2%

KPIs:

KPI	Value	Reference
AUMA – Retirement (Dec 31, 2024) ($bil)	$275.9
AUMA – Investment Management (Dec 31, 2024) ($bil)	$62.3
Asset value linked to Morningstar Indexes ($bil)	$210.9
Average AUMA (Q4 2024) ($bil)	$333.2
PitchBook platform licensed users (Q4 2024)	125,491
Morningstar Direct licenses (Q4 2024)	18,761

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal revenue/EPS/margin guidance	FY/Q4 2024	None provided	None provided	Maintained (no formal guidance)
Dividend per share	FY 2025	$0.405 quarterly	$0.455 quarterly; payable Jan 31, Apr 30, Jul 31, Oct 31, 2025	Raised
Morningstar Wealth run-rate adjusted operating income	Post-12 month TAMP transition	N/A	Positive run-rate impact expected once transition completes (targeting 2026)	Raised (qualitative)

Note: Company did not issue quantitative revenue or margin guidance; strategic updates highlight expected profitability improvements in Wealth post-TAMP transition and product launches in advisor software .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2024)	Trend
Public–private market convergence	Q2: Continued convergence; product roadmaps across PitchBook/Indexes	Accelerated convergence highlighted; launch of Morningstar PitchBook Unicorn 30 Index; expanded benchmarks	Strengthening
Private credit data & workflows	Q2: Added CLO and BDC data to PitchBook; LCD integration	Launch of PitchBook Credit; integrated LCD BDC holdings and CLO data; strong traction with credit investors	Expanding
AI/technology initiatives	Q2: Intelligence Engine integrated into Advisor Workstation	Ongoing AI to transform client workflows; improved Research Center; modernized advisor suite	Ongoing investment
Advisor offerings & platforms	Q2: AssetMark TAMP alliance; focus on third-party distribution	Launch of Direct Advisory Suite; plan to retire Morningstar Office; Black Diamond integration announced	Streamlining/Focus
Sustainalytics performance	Q2: Flat YOY; streamlining licensed ratings	Decline on licensed-ratings streamlining and 2PO softness	Weakness persists
Indexes	Q2/Q3: Asset value up 22–37% on market gains/net inflows	Asset value linked to Indexes +19.4% YoY; investable product revenue growth	Positive
Retirement managed accounts	Q1/Q2: AUMA growth; Personal Finance Builder soft-launch; strong Advisor Managed Accounts growth	AUMA +19.7% YoY; strong growth in advisor managed and custom models	Positive

Sources: Q1–Q4 shareholder letters and supplemental decks .

Management Commentary

“We finished 2024 strongly by executing on themes such as the convergence of public and private markets and using AI to transform client workflows.” — Kunal Kapoor, CEO .
On Credit: leadership in CMBS, RMBS, corporates across US and Canada; roughly a quarter of 2024 Credit revenue related to private transactions, up from 18% in 2022 (private credit ratings opportunity) .
On PitchBook: demand from core investor/advisor clients remained robust despite softer corporates; platform enhancements (third-party equity research, improved Research Center) and near-complete migration of legacy LCD clients (~90%) .
On Advisor software: January launch of Direct Advisory Suite to modernize advisor workflows, with SS&C Black Diamond as first portfolio management system integration; plan to retire Morningstar Office to streamline offering and improve profitability .

Q&A Highlights

No earnings call transcript was available via our document tools for Q4 2024. We note the company’s Investor Communication approach: written responses to investor questions furnished via periodic 8-Ks and a comprehensive shareholder letter accompanying results .
Notable clarifications from materials: adjusted margins were pressured by higher bonus accruals (notably in Credit); depreciation increased due to capitalized software and accelerated depreciation tied to US TAMP asset sale; operating margin benefited by 10.9 pp from the $64.0M TAMP gain, excluded from adjusted results .

Estimates Context

S&P Global consensus estimates were unavailable due to system request limits at the time of retrieval; therefore, we cannot provide actual vs consensus comparisons for Q4 2024. Values would normally be retrieved from S&P Global.
Implication: Given actuals of revenue $591.0M and diluted EPS $2.71, and adjusted EPS $2.14, any future estimate revisions should incorporate the one-time gain’s impact on GAAP EPS and bonus-driven cost dynamics affecting adjusted margins .
Note: Estimates unavailable via S&P Global; comparisons not provided. Values would be retrieved from S&P Global if accessible.

Key Takeaways for Investors

Core engine intact: Double-digit organic revenue growth with Credit and PitchBook as twin pillars; expect continued demand from private credit and investor/advisor segments despite corporate softness .
Profit quality matters: GAAP margin expansion was aided by the $64.0M TAMP gain; adjusted margin saw modest compression on compensation—monitor normalization of bonus accruals and operating leverage in 2025 .
Durable cash generation: Strong operating cash flow and disciplined de-leveraging provide flexibility for investment and capital returns (dividend raised) .
Strategic focus in Wealth: AssetMark alliance and retiring Morningstar Office should enhance run-rate profitability post-transition; near-term revenue headwind in TAMP offset by strategist fee distribution expansion .
PitchBook product momentum: Platform feature upgrades and private credit build-out supported license growth; public–private data convergence and benchmark development expand addressable market .
Watch Sustainalytics: licensed-ratings streamlining and 2PO softness pressured revenue; look for product enhancements and regulatory use cases to stabilize trajectory .
Indexes as a tailwind: Asset-linked value rose 19.4% on market gains; investable product revenue growth adds resiliency to the portfolio .

All data and statements are sourced from Morningstar’s Q4 2024 8-K, earnings release, supplemental materials, and shareholder letters. Citations: .

Morningstar, Inc. (MORN)·Q4 2024 Earnings Summary