Image source: The Motley Fool. Meanwhile, DATETuesday, July 22, 2025 at 11 a, in light of current trends.
ETCALL PARTICIPANTSChairman and Chief Executive Officer — Henry FernandezPresident and Chief Operating Officer — Baer PettitChief Financial Officer — Andy WiechmannHead of Investor Relations — Jeremy Ulan Need a quote from one of our analysts.
Moreover, [ tected]RISKSWiechmann indicated, "retention rates (this bears monitoring).
Moreover, Nevertheless, It's mostly lower in real assets and sustainability and climate," attributing "slightly lower retention rates" in Q2 2025, attributed to client events and budget pressures, with hedge funds and corporate advisors being the primary sources of increased cancellations, amid market uncertainty.
Management stated that sustainability remains challenged, with continued muted demand and slower sales, particularly in the climate and ESG segments, as discussed for Q2 2025.
Additionally, At the same time, Fernandez said, I don't see in the near future a major catalyst for acceleration of growth or rapid acceleration of growth on the active asset management industry.
That's something that will continue to take time.
On the other hand, TAKEAWAYSTotal Revenue Growth: Revenue grew over 9% in Q2 2025, reflecting broad-based client and duct momentum, as stated by management, in this volatile climate.
However, Adjusted EBITDA Growth: Adjusted EBITDA (non-GAAP) grew over 10% in Q2 2025, directly supported by operating leverage on higher revenues.
However, Adjusted EPS Growth: Adjusted earnings per grew almost 15% in the second quarter, attributed to stronger financial performance.
Nevertheless, Free Cash Flow: Free cash flow exceeded $300 million in Q2 2025, illustrating robust cash generation during the period, amid market uncertainty.
Repurchases: $286 million in repurchases year to date through Q2 2025 at an average price of $557 per, signifying capital return priorities.
Total Run Rate Growth: Total run rate grew 11% in Q2 2025, with record AUM levels in ETF ducts linked to MSCI Inc.
Asset-Based Fee (ABF) Run Rate Growth: Asset-based fee run rate grew 17% in Q2 2025, described as the key growth engine, mainly driven by index-linked ducts.
Asset-Based Revenue: ABF revenue reached its highest ever quarterly level in Q2 2025, fueled by strong inflows and duct innovation (this bears monitoring). Indexed Equity ETF AUM Linked to MSCI Inc.
Indices: Surpassed $2 trillion for the first time, indicating increased adoption (noteworthy indeed). Moreover, Meanwhile, Total Index ETF and Non-ETF AUM Tracking MSCI Inc.
Conversely, Indices: $6 trillion, demonstrating the scale of client assets benchmarked, considering recent developments.
Additionally, Conversely, Fixed Income Index ETF AUM: $84 billion in AUM linked to MSCI Inc.
Nevertheless, Indices or co-branded partner indices as of Q2 2025 (quite telling), considering recent developments.
Furthermore, Index ETF Cash Flows: $49 billion in inflows during Q2 2025, representing 29% of all indexed equity ETF inflows and marking the largest quarterly inflow since 2021.
Nevertheless, Developed ex U, in today's financial world. ETF Inflows: $32 billion, accounting for more than 50% of all flows in DMXUS index ETFs in Q2 2025.
Factor Index ETF Inflows: $9 billion in inflows in Q2 2025, with notable traction in quality, value, and growth strategies, given the current landscape.
Custom Index Subscription Run Rate Growth: Remained in the teens, as noted by management.
Additionally, Analytics Subscription Run Rate Growth: Analytics subscription run rate grew 8%, marking the strongest ever Q2 for recurring sales and net new sales.
In contrast, Wealth Management Subscription Run Rate Growth: Asset-based fee run rate for wealth management grew 17% in Q2 2025, benefiting from broad investor appetite for global market exposures.
Largest-ever Wealth Deal: in Q2 2025, described as a seven-figure contract with a major U. Regional bank.
Additionally, Direct Indexing AUM: Direct indexing AUM grew by 20% globally to reach $135 billion in total.
Private Capital Solutions Run Rate Growth: Private capital solutions run rate grew nearly 13%, indicating acceleration in tools and duct launches for private assets in Q2 2025.
Private Asset Retention Rate: Private asset retention rate was slightly over 91%, stable with the prior-year level for Q2 2025, given the current landscape.
Hedge Fund Subscription Run Rate Growth: Hedge fund subscription run rate grew 12% in Q2 2025, driven largely by analytics, with lumpiness noted.
In contrast, Asset Owner Subscription Run Rate Growth: Asset owner subscription run rate grew 12% in Q2 2025, driven primarily by analytics and private capital solutions (fascinating analysis).
Climate Index Mandates: Won a pair of European pension fund mandates in Q2 2025, contributing to a combined $25 billion in new AUM benchmarked to the MSCI Inc, in today's market environment.
Climate index.
However, Additionally, Insurance Segment Subscription Run Rate Growth: Insurance companies saw 12% subscription run rate growth in Q2 2025, led by index and climate solutions; a notable win with a U.
Annuity vider is jected to add $5 billion–$10 billion of AUM benchmarked to an MSCI Inc (something worth watching), given current economic conditions.
Sustainability and Climate Segment Subscription Run Rate Growth: The sustainability and climate reportable segment saw 11% subscription run rate growth in Q2 2025; sustainability solutions grew roughly 9%, while climate solutions grew almost 20%.
Nevertheless, Sustainability and Climate Growth by Region: In Q2 2025, Europe saw 18% growth, the Americas 3%, and Asia 6% (an important development).
On the other hand, Year-to-Date Sales from New duct Areas: Year to date, over $4 million in total sales came from solutions launched within the last six months.
Expense Guidance: Expense guidance remains unchanged across all ; management expects results to fall toward the middle of the guidance range for the remainder of the year if AUM levels remain near current highs.
Guidance: No changes vided for any major financial or operating forecast lines.
SUMMARYManagement highlighted record- ETF-linked AUM and sustained growth in asset-based fees in Q2 2025, confirming their central role in MSCI Inc. Meanwhile, 's growth model.
New duct launches, especially in private capital and climate data, have contributed to differentiated sales opportunities and client engagement, in today's financial world.
The subscription posted double-digit run rate growth in multiple client segments in Q2 2025, though asset managers remain a slower-growing segment due to industry pressures and consolidation.
Furthermore, Additionally, The largest-ever wealth management deal and an expanding presence among insurance and asset owner clients underscore diversification of MSCI Inc, considering recent developments.
Additionally, 's revenue base.
The sustainability and climate segment demonstrated robust growth in Europe, with subscription run rate growth of 18% in Q2 2025, compared to sluggish demand in the Americas (3%) and Asia (6%), indicating regional variances in adoption.
Management noted client budget constraints and episodic deal lumpiness impacting retention and sales metrics, particularly in analytics and hedge fund segments.
Additionally, The company confirmed stable pricing yields for ETF and non-ETF passive ducts, with international inflows offering favorable mix shift benefits to fees.
Continues to prioritize duct innovation and strategic client reclassification, aiming to accelerate non-active subscription growth over time despite current visibility challenges.
However, INDUSTRY GLOSSARYABF (Asset-Based Fees): Revenue model deriving fees based on client AUM tracking MSCI Inc. On the other hand, Indexes, including ETFs and non-ETF index funds.
On the other hand, Additionally, Run Rate: The annualized value of recurring revenues or subscriptions at a point in time, used to assess underlying momentum.
ETF: Exchange-traded fund; an investment fund traded on stock exchanges, often tracking an index.
Custom Index: Bespoke benchmarking duct tailored for a client’s specifications, used for portfolio construction or duct innovation, in this volatile climate.
Direct Indexing: Investment apach where portfolios directly replicate an index by owning underlying securities, allowing for customization and tax optimization, given current economic conditions.
Factor Index: An index that selects, weights, and rebalances securities based on specific investment factors such as value, quality, or growth.
Additionally, GP/LP: General Partner/Limited Partner; in private asset, GPs manage investment funds while LPs vide capital.
Moreover, Full Conference Call TranscriptJeremy Ulan: Good day, and welcome to the MSCI Inc. Second Quarter 2025 Earnings Conference Call (something worth watching).
Moreover, Meanwhile, Earlier this morning, we issued a press release announcing our results for the second quarter of 2025, given the current landscape.
This press release, along with an earnings presentation and brief quarterly, are available on our website, msci. Furthermore, Com, under the Investor Relations tab (an important development).
At the same time, Let me remind you that this call contains forward-looking statements which are governed by the language on the second slide of today's presentation.
You are cautioned not to place undue reliance on forward-looking statements which speak only as of the date on which they are made, are based on current expectations and current economic conditions, and are subject to risks and uncertainties that may cause actual results to differ materially from the results anticipated in these forward-looking statements, in this volatile climate.
Furthermore, For a discussion of additional risks and uncertainties, please see the Risk Factors and forward-looking statements disclaimer in our most recent Form 10-K and in our other SEC filings, given current economic conditions.
During today's call, in addition to results presented on the basis of U. GAAP, we also refer to non-GAAP measures (noteworthy indeed).
You'll find a reconciliation of our non-GAAP measures to the equivalent GAAP in the appendix of the earnings presentation, given the current landscape.
However, We will also discuss operating metrics such as run rate and retention rate.
Important information regarding our use of operating metrics, such as run rate and retention rate, are available in the earnings presentation.
On the call today are Henry Fernandez, our Chairman and CEO, Baer Pettit, our President and COO, and Andy Wiechmann, our Chief Financial Officer.
With that, let me now turn the call over to Henry Fernandez (something worth watching). Nevertheless, Henry Fernandez: Thank you, Jeremy. Good day, everyone.
Nevertheless, And thank you all for joining us. In the second quarter, MSCI Inc.
Dered another strong financial performance, including revenue growth of over 9%, adjusted EBITDA growth of over 10%, adjusted earnings per growth of almost 15%, and free cash flow of over $300 million (this bears monitoring).
Year to date, we have repurchased $286 million worth of MSCI Inc (noteworthy indeed). Meanwhile, S at an average price of $557 per, demonstrating our long-term conviction in the value of our franchise.
Moreover, Our second quarter operating metrics included total run rate growth of 11% fueled by record AUM levels in ETF ducts linked to MSCI Inc.
Additionally, Indices, and asset-based fee run rate growth of 17%.
On the other hand, Additionally, Among client segments, we recorded double-digit subscription run rate growth with banks and broker-dealers, wealth managers, hedge funds, and asset owners (an important development).
Despite the well-known pressures on active asset managers, MSCI Inc.
's subscription run rate growth with its client segment held steady at 6%, while rotation with active asset managers stayed high at 96%. Across all client segments, MSCI Inc.
Is rapidly innovative use cases for our existing solutions while new solutions for our increasingly diverse client base. Nevertheless, Turning to our duct lines, MSCI Inc.
's Q2 performance affirmed that index in general and our asset-based fee franchise in particular, is a key growth engine for us with enormous opportunities (noteworthy indeed).
Most notably, our strong ABF run rate growth reflects the vital importance of MSCI Inc. Indices to global, especially in non-US market exposures, considering recent developments.
Moreover, In fact, MSCI Inc. Additionally, Captured more indexed equity ETF cash flows than any other index vider during the quarter. Total equity index ETF AUM linked to MSCI Inc.
Moreover, At the same time, Indices surpassed $2 trillion for the first time, driving total index ETF and non-ETF AUM balances tracking MSCI Inc.
On the other hand, Additionally, Indices to $6 trillion. In addition, fixed income index ETF AUM linked to indices created entirely by MSCI Inc.
On the other hand, Or in partnership with partners reached $84 billion. All of this helped us achieve our highest ever level of quarterly ABF revenue.
Furthermore, 's index gress was also underpinned by several duct launches, including new data solutions that offer deeper insights into the building blocks of our indices, such as our constituent AUM and index liquidity datasets.
For all these reasons, we are very excited the tremendous potential of our index franchise.
Moreover, 's second quarter results also confirm the value of our risk and performance analytics tool during periods of fast-moving market conditions and volatility.
We achieved our highest ever Q2 recurring sales in analytics driven mainly by equity risk models, given current economic conditions. However, Meanwhile, we our largest ever deal for MSCI Inc.
Wealth Manager, which Baer will cover in greater detail. Furthermore, Moreover, Let us shift to private assets, which is an attractive long-term opportunity where MSCI Inc.
Meanwhile, Is expanding our tools to drive adoption across the investment community.
We have made significant gress in boosting our capabilities for private capital solutions with Q2 run rate growth of nearly 13% while launching or enhancing a number of key ducts (this bears monitoring).
Furthermore, For example, we introduced MSCI Inc.
Additionally, Asset and deal metrics which include data from over 26,000 private equity deals covering $2 trillion in net asset value (remarkable data).
We recently unveiled the MSCI Inc, given the current landscape.
World Private Equity Return Tracker Index, which offers an apximation of private equity investments by replicating region, sector, and style exposures through public equities leveraging fundamental data from MSCI Inc (noteworthy indeed).
At the same time, Private capital universe, in this volatile climate.
Furthermore, In contrast, Already, we see strong interest from clients in launching tradable ducts linked to this index, in this volatile climate.
Our first phase of private credit risk assessment in partnership with Moody's is expected in the coming weeks, and we are very excited the dialogue we've been having with clients on this duct.
In addition, we now have more than 30 LP clients using our private capital indices as their policy or performance benchmark.
Furthermore, These offerings underscore our innovation and the benefits of our integrated franchise, which enhances all MSCI Inc. Duct lines creating powerful network effects for our clients.
In real assets, new recurring sales were challenged and down from Q2 of last year (noteworthy indeed).
However, we introduced new ducts targeted to the areas of relative acceleration in commercial real estate, including our new data centers duct and RCA funds, a new intelligence offering covering over eight real estate funds to empower GPs and LPs to optimize fundraising, investor engagement, and capital allocation decisions.
Moreover, Moving on to sustainability and climate, despite the current cyclical slowdown, our tools have become a permanent feature of the global investment cess, and MSCI Inc.
Will continue to be a leader in this space.
We recently won valuable climate mandates in index, and our climate physical risk and reporting solutions are helping us expand our foot with newer client segments, such as insurance companies, in this volatile climate.
While we expect sustainability to remain challenged, we are adapting and repositioning our tools to capture new opportunities when they arise (this bears monitoring).
In conclusion, our solutions are strongly embedded in the global investment ecosystem.
We're always intensely focused on anticipating and in the biggest trends across our industry to serve a broad base of client segments while dering an attractive financial model for our holders, in light of current trends.
And with that, let me turn things over to Baer. Baer Pettit: Thank you, Henry, and greetings, everyone. During the quarter with rapidly moving, MSCI Inc. Benefited from both traditional an.