Executive Summary

Q1 2025 results were resilient: operating revenues $745.8M (+9.7% YoY), adjusted EPS $4.00 (+13.6% YoY), operating margin 50.6% and adjusted EBITDA margin 57.1% . Consensus context: revenue modest beat ($745.8M vs $744.5M*), EPS beat ($4.00 vs $3.90*), but EBITDA missed ($407.6M vs $423.6M*) (S&P Global).
Growth was led by Index: asset-based fees +18.1% YoY on strong ETF/non‑ETF AUM; recurring Index subscriptions +9.6% YoY; consolidated retention improved to 95.3% (vs 92.8% a year ago) .
Guidance for FY 2025 was maintained across expense, FCF, tax and capex ranges vs Q4 2024; management reiterated expense-flex levers and unchanged outlook despite macro uncertainty .
Strategic catalysts: rising non‑U.S. equity flows and a weaker dollar benefitting ABF; momentum in custom indices and wealth; and a new Moody’s partnership to deliver private credit risk assessments, expanding PCS use-cases .

What Went Well and What Went Wrong

What Went Well
- ABF strength and ETF flows: asset-based-fee revenue +18.1% YoY; period-end ETF AUM $1.78T; Q1 saw “highest Q1 cash flows into ETF products linked to MSCI Indices since 2021” .
- Retention and sales mix: total retention 95.3% (Index 96.5%, Analytics 95.5%); net new recurring subscription sales +33% YoY with notable gains in Index and Analytics .
- Strategic advances: integration of Foxberry F9 to scale custom indices and Moody’s partnership to add private credit risk assessments on MSCI’s 2,800 funds/14,000+ companies database .
What Went Wrong
- EBITDA shortfall vs Street: adjusted EBITDA $425.6M (margins 57.1%) below consensus $423.6M* estimate translates to a negative variance on EBITDA vs expectation (S&P Global) .
- Sustainability & Climate net new sales declined YoY; though retention improved, near-term demand remains muted in the U.S. amid regulatory complexity and product rebranding in Europe .
- Non‑recurring revenues declined consolidated (-5.3% YoY), and management noted some Q1 deals slipped to Q2 amid uncertainty, though pipeline remains “in decent shape” .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Operating Revenues ($M)	$724.7	$743.5	$745.8
Operating Margin %	55.4%	54.5%	50.6%
Adjusted EBITDA ($M)	$450.7	$452.3	$425.6
Adjusted EBITDA Margin %	62.2%	60.8%	57.1%
Diluted EPS ($)	$3.57	$3.90	$3.71
Adjusted EPS ($)	$3.86	$4.18	$4.00

Consensus vs. Actual (S&P Global; asterisked values from S&P Global)

Metric	Q1 2025 Consensus	Q1 2025 Actual
Revenue ($M)	$744.5*	$745.8
Primary EPS ($)	$3.90*	$4.00
EBITDA ($M)	$423.6*	$407.6

Segment Revenue (Q1 2025)

Segment	Total Operating Revenues ($M)	YoY %
Index	$421.7	12.8%
Analytics	$172.2	5.0%
Sustainability & Climate	$84.6	8.6%
All Other – Private Assets	$67.3	4.7%

Key KPIs and Operating Metrics

KPI	Q1 2025	Prior Year / Notes
Retention Rate (Total)	95.3%	92.8% in Q1’24
Run Rate (Total)	$2,979.2M	+9.3% YoY
ETF AUM (Period-End)	$1,783.1B	$1,724.7B at 12/31/24
ETF AUM (Period-Average)	$1,793.7B	$1,755.4B in Q4’24 avg
Period-End Fee (bps)	2.43	2.44 in Dec’24
Free Cash Flow ($M)	$268.9	$275.9 in Q1’24
Net Cash from Ops ($M)	$301.7	$300.1 in Q1’24
Capex ($M)	$32.9	$24.2 in Q1’24
Share Repurchases	$275.4M; 493,322 shares thru 4/21	—
Dividend	$1.80 declared; $139.7M paid in Q1	$1.80 declared Q1’25

Guidance Changes

Metric	Period	Previous Guidance (Q4 2024)	Current Guidance (Q1 2025)	Change
Operating Expense	FY 2025	$1,405–$1,445M	$1,405–$1,445M	Maintained
Adjusted EBITDA Expense	FY 2025	$1,220–$1,250M	$1,220–$1,250M	Maintained
Interest Expense	FY 2025	$182–$186M	$182–$186M	Maintained
D&A	FY 2025	$185–$195M	$185–$195M	Maintained
Effective Tax Rate	FY 2025	17.5%–20.0%	17.5%–20.0%	Maintained
Capital Expenditures	FY 2025	$115–$125M	$115–$125M	Maintained
Net Cash from Ops	FY 2025	$1,525–$1,575M	$1,525–$1,575M	Maintained
Free Cash Flow	FY 2025	$1,400–$1,460M	$1,400–$1,460M	Maintained

Management reiterated expense flexibility levers (incentive comp, non-comp/pro fees, hiring pace) and noted expenses would land at low end of ranges if markets remain flat .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
International flows & ABF	Record AUM-linked products; strong ESG/factor ETF inflows	Shift toward Europe/Japan/EM; tariffs/weaker USD tailwinds for ABF	Improving
Custom indices & Wealth	Custom index growth mid-teens; Wealth run-rate +12% Q4; direct indexing ~ $130B AUM	Further momentum; Foxberry F9 integration; Wealth solutions expanding across regions	Positive
Analytics & AI	Q4: front-office analytics, fixed income wins; AI Insights launched	Analytics run rate +7%; stress-testing/factor models demand; >60 hedge funds on new factor models	Solid, selective
Sustainability & Climate	Cyclical headwinds; evolving to underlying data and regulatory solutions	Retention 94.5%; net new sales softer; pivot to physical risk/data granularity	Stabilizing mixed
Private Assets / PCS	PCS run-rate +15% Q4; new PCS datasets	PCS net new +24%; Moody’s partnership for private credit risk assessments	Positive setup
Expense & Tax	FY25 tax 17.5–20%; expense flex levers	Q1 ETR 12.8% discrete; 19–21% per quarter rest of 2025; expense levers reiterated	As guided

Management Commentary

“In the first quarter, MSCI delivered strong financial metrics, durable retention, and solid asset-based-fee revenue growth… recurring net new sales growth across Index, Analytics, and Private Assets.” — Henry A. Fernandez, CEO .
“88% of our subscription run rates come from clients who use multiple MSCI product lines… all-weather franchise, robust cash flows and fortress balance sheet.” — CEO .
“Subscription run rate growth from custom indexes was 15%… asset-based fee revenue grew 18%, aided by stronger flows into international exposure products.” — CFO .
“Our guidance is unchanged… if markets remain at current levels, expenses would be at the low end of guidance ranges.” — CFO .
“Partnership with Moody’s to develop independent credit risk assessments for private credit” leveraging EDF‑X and MSCI’s private credit dataset — CEO .

Q&A Highlights

Selling environment: Some larger deals slipped from Q1 to Q2; pipeline “in decent shape,” high client engagement; demand for transparency, analytics, stress testing remains strong .
Expense framework: Incentive comp, non-comp and hiring pace can each flex ~$20M annually; would bias to low end of expense ranges if markets flat .
International allocation: Notable rotation to non‑U.S. markets (Europe, Japan, EM); supportive for ABF (ex‑U.S. exposures, FX tailwinds) and data/model demand .
Sustainability & Climate: Retention solid; near-term U.S. demand muted; Europe managing regulatory complexity; pivot toward physical risk and granular data .
Non‑ETF passive: End-of-period non‑ETF AUM around $3.9T; healthy new fund creation incl. climate/custom mandates; resilient basis points .

Estimates Context

Revenue modestly beat S&P Global consensus ($745.8M vs $744.5M*) .
EPS beat ($4.00 vs $3.90*); adjusted EPS reconciliation provided in 8‑K .
EBITDA missed ($407.6M vs $423.6M*), with consolidated adjusted EBITDA at $425.6M but Street EBITDA basis lower (S&P Global) .
Values retrieved from S&P Global.

Key Takeaways for Investors

Index remains the growth engine (ABF +18% YoY; custom index and non‑U.S. exposures in focus), positioning MSCI to benefit from global rotation and FX translation .
High retention (95.3%) and broad client diversification stabilize subscription revenue; watch Sustainability & Climate recovery path as product mix shifts to granular data/reg solutions .
FY25 guidance intact; expect margin/expense discipline via variable levers if markets weaken; quarterly ETR normalizing to 19–21% after Q1 discrete items .
Private Assets optionality expanding (PCS +24% net new; Moody’s-EDF‑X), with new venture-backed private company indexes enhancing transparency and wealth use-cases .
Near-term trading setup: modest top‑line/EPS beat vs consensus and unchanged guidance; investors will focus on ABF trajectory with non‑U.S. flows, subscription net new conversion in Q2, and Sustainability & Climate demand normalization .

Notes:

All 8‑K and earnings call metrics are cited inline.
Consensus figures marked with asterisk (*) are from S&P Global.

MSCI Inc. (MSCI)·Q1 2025 Earnings Summary