Executive Summary

Q4 2024 operating revenue rose 7.7% to $743.5M, with organic growth of 7.4%; Adjusted EPS increased 13.6% to $4.18 while GAAP EPS fell 23.1% to $3.90 on a tough comp from a prior-year Burgiss remeasurement gain .
Asset-based fees (ABF) were a bright spot: ABF revenue grew 20.8% YoY to $175.3M as equity ETF cash inflows linked to MSCI indexes reached ~$48B in the quarter and ESG/Climate ETFs saw their strongest inflows since Q1’22 .
Subscription metrics were mixed: total retention rate slipped to 93.1% (from 93.6%), new recurring subscription sales -0.9% YoY, and consolidated net new recurring sales fell 10.3% YoY; management cited lingering client events and budget pressures, with some regional bifurcation (US > Europe) .
2025 guide introduced: OpEx $1.405–$1.445B; Adjusted EBITDA expenses $1.220–$1.250B; FCF $1.40–$1.46B; effective tax rate 17.5–20.0% (Q1 aided by discrete items) . Dividend was raised 12.5% to $1.80 for Q1 2025; $1.5B remains on buyback authorization .
Street estimates (S&P Global) were unavailable at time of analysis; we cannot quantify beats/misses versus consensus. S&P Global estimates data was unavailable due to access limits at the time of this analysis.

What Went Well and What Went Wrong

What Went Well

ABF strength and flows: ABF revenue +20.8% YoY to $175.3M; Q4 equity ETF cash inflows linked to MSCI indexes ~ $48B, with nearly $12B into ESG/Climate and the highest factor ETF flows since Q2’21 .
Index franchise momentum: Index operating revenue +8.3% YoY to $420.2M; Record recurring sales in Index for Q4 and 11.1% Index Run Rate growth to $1.613B; custom/climate index traction noted with a $2.4B seed in a climate ETF .
Profitability resilience: Operating margin 54.5% (+80 bps YoY) and Adjusted EBITDA margin 60.8% (+70 bps YoY), reflecting operating leverage despite higher compensation/IT/professional fees .

Management quote: “Fourth-quarter highlights included our best-ever recurring sales in Index… and 15% asset-based fees run-rate growth” — Henry A. Fernandez, CEO .

What Went Wrong

GAAP EPS down YoY: Diluted EPS fell 23.1% to $3.90 due to a tough prior-year comparison that included a non-taxable $143M one-time Burgiss gain; effective tax rate rose to 15.9% (from 13.8%) .
Softer subscription dynamics: Consolidated total retention rate declined to 93.1% (from 93.6%); net new recurring subscription sales down 10.3% YoY; elevated cancels persisted, notably in Real Assets and certain ESG/Climate corporate use cases .
Private assets margin mix: All Other – Private Assets revenue +6.9% YoY but Adjusted EBITDA margin remained ~23.4% (vs 21.8% LY) and run-rate grew only 5.6% YoY; Real Assets still pressured by low transaction activity and vendor consolidation .

Financial Results

Consolidated P&L – sequential and YoY (oldest → newest)

Metric	Q2 2024	Q3 2024	Q4 2024
Operating Revenues ($M)	$707.9	$724.7	$743.5
Operating Margin (%)	54.0%	55.4%	54.5%
Adjusted EBITDA Margin (%)	60.7%	62.2%	60.8%
Diluted EPS (GAAP)	$3.37	$3.57	$3.90
Adjusted EPS (Non-GAAP)	$3.64	$3.86	$4.18

Notes: Q4 GAAP EPS YoY decline reflects prior-year one-time Burgiss gain; Adjusted EPS strips such items per reconciliation tables .

Segment Revenue – sequential view (oldest → newest)

Segment Revenue ($M)	Q2 2024	Q3 2024	Q4 2024
Index	$397.2	$404.9	$420.2
Analytics	$166.0	$172.4	$172.8
ESG & Climate	$79.9	$83.6	$85.2
All Other – Private Assets	$64.9	$63.8	$65.3

ABF and Subscription KPIs (oldest → newest)

KPI	Q2 2024	Q3 2024	Q4 2024
ABF Revenue ($M)	$163.3	$168.6	$175.3
Total Run Rate ($M)	$2,807.3	$2,894.2	$2,921.7
Total Retention Rate (%)	94.8%	94.2%	93.1%
Equity ETF Cash Inflows ($B)	28.1	18.6	48.2
Period-end ETF AUM linked to MSCI ($T)	1.6319	1.7618	1.7247
New Recurring Sub Sales ($M)	82.8	65.3	91.3
Net New Recurring Sales ($M)	55.4	35.0	55.3

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Operating Expense ($M)	FY 2025	N/A	1,405–1,445	New
Adjusted EBITDA Expense ($M)	FY 2025	N/A	1,220–1,250	New
Interest Expense ($M)	FY 2025	N/A	182–186	New
Depreciation & Amortization ($M)	FY 2025	N/A	185–195	New
Effective Tax Rate (%)	FY 2025	N/A	17.5–20.0 (Q1 benefit expected)	New
Capital Expenditures ($M)	FY 2025	N/A	115–125	New
Net Cash from Ops ($M)	FY 2025	N/A	1,525–1,575	New
Free Cash Flow ($M)	FY 2025	N/A	1,400–1,460	New
Dividend per share ($)	Q1 2025	$1.60 (Q4 2024 declared)	$1.80 (Q1 2025 declared)	Raised 12.5%

Note: Prior year (Q3 2024) guidance pertained to FY 2024, not FY 2025 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
AI/technology initiatives	Investing in architecture; hybrid cloud/data center enhancements highlighted (Q3) .	AI to reduce data acquisition costs; private credit data mapping; AI Analytics Insights; Google geospatial collaboration; 2025 a “transformative year” for AI products .	Building from infra to productized AI; accelerating in 2025.
Custom/climate index & ABF flows	Record AUM balances; ABF run-rate +16% (Q2) ; strong climate integration (Q3) .	~ $48B Q4 ETF inflows; ~ $12B into ESG/Climate ETFs; AUM in climate equity indexes +50% YoY; factor ETF inflows ~$6B .	Strong acceleration in flows, especially ESG/climate and factors.
Wealth management	Growing wealth run rate; Fabric/Wealth platform engagement (Q3) .	Wealth subscription run rate +12% ex-FX; enterprise deal for Wealth Manager platform; roadmap to scale portfolio construction and add private assets .	Continued double-digit growth; platform expansion.
Fixed income analytics	Strength in fixed income & liquidity analytics (Q3) .	15% fixed income run-rate growth; large portfolio analytics win; first-of-its-kind US federal client for MBS analytics .	Momentum broadening across client types.
ESG & Climate demand	Cyclical softness but secular opportunity (Q3) .	Retention >93%; cancels skew to down-sells; CEO bullish on Europe/Asia regs; US to be more private-sector-led .	Stabilizing retention; recovery depends on region/regulation.
Private Assets (PCS/Real Assets)	PCS run-rate +17%; Real Assets pressured by low transactions (Q3) .	PCS run-rate +15% YoY; Real Assets cancellations from stressed client groups; early signs of capital returning .	PCS steady; Real Assets still cyclical but early green shoots.
Pricing discipline	Moderating increases vs 2023; long-term partnership focus (Q3) .	2024 price contribution < 2023; calibrated to client health/value; selective pricing power remains .	Steady, measured approach continues.
Geographic trends	US dialogues improving; Europe lags (Q3) .	US more constructive; lingering Europe pressures; watching large mergers .	Bifurcation persists (US > Europe).

Management Commentary

CEO strategic framing: “In 2025 and beyond, MSCI is increasingly well positioned to expand our footprint… thanks to our continued investment in data, models, and technology” .
ABF and climate flows: “Q4 cash inflows into ETF products linked to MSCI ESG and Climate indexes reached nearly $12 billion… highest since Q1 2022” .
Wealth push: “Closed a large enterprise deal for the MSCI Wealth Manager platform… positioned us to support use cases from proposal generation to home office monitoring” .
Fixed income traction: “Completed a large 7-figure fixed income portfolio management analytics deal… and a first-of-its-kind federal government contract for agency MBS analytics” .
ESG/Climate outlook: “I have not seen any let up in [European] commitment to sustainability… US demand likely shifts to private sector regardless of administration” .
Pricing approach: “We have enormous pricing power, but that cannot be misused… consistent with creating value for our clients” .

Q&A Highlights

ESG ex-Climate trajectory: CEO sees secular demand intact, especially in Europe/Asia; product must evolve beyond ratings to data/materiality/regulatory solutions; US more private-sector led .
Pipeline and cancels: Environment becoming more constructive with rising markets; Q4 cancels generally in line with expectations; still some lumpiness and lingering noise .
Pricing: 2024 price contribution below 2023; linking increases to delivered value; competitive stance remains strong across segments including ESG .
Custom index momentum: Mid-teens custom index subscription growth; strong institutional passive non-market-cap growth and structured products; Foxberry integration to accelerate .
Wealth roadmap: Scale tools for CIO/home office and advisors; incorporate private assets analytics; expects 2025 to be “really important” for wealth with larger deals .
AI impact: Efficiency gains in data ops/software engineering and new products (AI Insights, thematic drivers, geospatial with Google); 2025 key for AI delivery .

Estimates Context

S&P Global consensus (EPS, revenue) for Q4 2024 was unavailable at the time of analysis due to access limits. As a result, we cannot quantify beats/misses versus consensus for revenue or EPS. We recommend revisiting comparisons when S&P Global estimates are available.

Key Takeaways for Investors

ABF-led upside: Q4 ABF revenue +20.8% YoY with ~$48B ETF inflows and broad-based factor/ESG/climate strength — a near-term tailwind if markets/inflows stay constructive .
Subscription stabilizing but not fully healed: Retention dipped to 93.1% and net new recurring sales declined YoY; management points to improving US budgets and persistent Europe lag, implying gradual, uneven recovery into 2025 .
2025 guide supports durable FCF compounding: Targeting $1.40–$1.46B FCF and 17.5–20% ETR; expect Q1 tax benefit and higher sequential Q1 adjusted EBITDA expenses (~+$35M QoQ) .
Wealth and fixed income are second engines: Double‑digit wealth run-rate growth and notable fixed income wins broaden growth beyond Index; monitor enterprise Wealth Manager deals and MBS analytics adoption .
ESG/Climate normalization likely gradual: >93% retention with down-sell driven cancels; Europe/Asia regulation should underpin growth; US to be more private-sector-led; mix favors Climate near term .
Capital returns remain supportive: Dividend raised 12.5% to $1.80 (Q1 2025) and $1.5B buyback capacity; gross leverage ~2.6x TTM adj. EBITDA provides flexibility .
Trading lens: Momentum in ABF and dividend hike are near-term positives; subscription softness and regionally mixed demand warrant selectivity into 2025 budget cycles; watch custom/climate index mandates, wealth platform wins, and PCS bookings for catalysts .

Appendix: Additional Detail

Cash from Ops $430.6M (+10.7% YoY), FCF $394.7M (+7.5% YoY), Capex $36.0M in Q4 .
Total debt ~$4.5B; TTM total debt/Adjusted EBITDA 2.6x; target 3.0–3.5x .
Shareholder returns: ~$865.5M buybacks FY2024 through Jan 28, 2025; Q4 dividends paid $124.8M .

Non-GAAP definitions and reconciliations are provided in Tables 9–14 of the 8‑K/press release .

MSCI Inc. (MSCI)·Q4 2024 Earnings Summary