MSCI surpasses earnings expectations, with strong revenue growth and increase in recurring subscriptions
From Nasdaq: 2024-07-23 12:31:00
MSCI Inc. reported second-quarter 2024 adjusted earnings of $3.64 per share, beating estimates by 2.25% and increasing 11.7% year over year. Revenues rose 14% year over year to $708 million, with organic revenues up 9.7%. Recurring subscriptions increased by 14.4% year over year, contributing 73.7% to revenues, and asset-based fees rose by 18.2%. Index revenues grew due to acquisitions and strong growth in market-cap-weighted Index products and ETFs. Analytics operating revenues increased by 10.8%, with recurring subscriptions and non-recurring revenues up by 9.9% and 62.7%, respectively. ESG and Climate segment’s operating revenues grew by 12.1%, driven by a 10% organic increase.
Adjusted EBITDA increased 14% to $430 million, with total operating expenses rising by 18.2%. Operating income grew by 10.6% to $382.6 million, with the operating margin contracting by 170 bps. The balance sheet showed total cash and cash equivalents of $451.4 million as of Jun 30, 2024. Total debt remained at $4.5 billion, with a total debt-to-adjusted EBITDA ratio of 2.8 times.
For 2024, MSCI expects total operating expenses between $1.305-$1.345 billion, adjusted EBITDA expenses between $1.130-$1.160 billion, and interest expenses between $185-$189 million. Net cash provided by operating activities and free cash flow are expected to be $1.33-$1.38 billion and $1.225-$1.285 billion, respectively. MSCI currently holds a Zacks Rank #2 and has underperformed the Computer & Technology sector this year.
Top-ranked stocks in the sector include Arista Networks, Apple, and Cognizant Technology Solutions. Arista Networks, with a Zacks Rank #1, has gained 45.4% year to date. Apple, carrying a Zacks Rank #2, has increased by 16.3%, while Cognizant Technology Solutions, also with a Zacks Rank #2, has dropped by 0.5% this year. These companies are set to report their earnings in the coming weeks.
Read more at Nasdaq: MSCI Q2 Earnings Beat, Recurring Subscriptions Rise Y/Y