MSCI Reports Financial Results for Third Quarter and Nine Months 2019
Financial and Operational Highlights for Third Quarter 2019
(Note: Percentage and other changes refer to third quarter 2018 unless otherwise noted.)
- Operating revenues up 10.1%, with recurring subscription revenues up 7.8%, asset-based fees up 17.1% and non-recurring revenues up 18.5%
- Organic operating revenue growth was 11.8%, with organic recurring subscription revenue growth of 9.8%
-
Diluted EPS of
$1.60 , up 17.6%; Adjusted EPS of$1.68 , up 24.4% -
Organic subscription Run Rate growth of 10.0%, with Index up 11.1%, Analytics up 6.2% and All Other up 20.4%. ESG Run Rate at
September 30, 2019 almost doubled over the past 3 years - Third quarter 2019 Retention Rate at 95.0%
-
Extended our long-term relationship with
BlackRock for another 10 years beginningMarch 2020 , as further described in Index Segment section below
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||||||
In thousands, |
|
Sep. 30, |
|
|
Sep. 30, |
|
|
June 30, |
|
|
YoY % |
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
YoY % |
|
|||||||
except per share data (unaudited) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
Change |
|
|
2019 |
|
|
2018 |
|
|
Change |
|
|||||||
Operating revenues |
|
$ |
394,251 |
|
|
$ |
357,934 |
|
|
$ |
385,558 |
|
|
|
10.1 |
% |
|
$ |
1,151,190 |
|
|
$ |
1,072,296 |
|
|
|
7.4 |
% |
Operating income |
|
$ |
201,219 |
|
|
$ |
176,403 |
|
|
$ |
192,378 |
|
|
|
14.1 |
% |
|
$ |
556,272 |
|
|
$ |
517,080 |
|
|
|
7.6 |
% |
Operating margin % |
|
|
51.0 |
% |
|
|
49.3 |
% |
|
|
49.9 |
% |
|
|
|
|
|
|
48.3 |
% |
|
|
48.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
136,983 |
|
|
$ |
123,832 |
|
|
$ |
125,690 |
|
|
|
10.6 |
% |
|
$ |
440,865 |
|
|
$ |
355,753 |
|
|
|
23.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS |
|
$ |
1.60 |
|
|
$ |
1.36 |
|
|
$ |
1.47 |
|
|
|
17.6 |
% |
|
$ |
5.15 |
|
|
$ |
3.87 |
|
|
|
33.1 |
% |
Adjusted EPS |
|
$ |
1.68 |
|
|
$ |
1.35 |
|
|
$ |
1.54 |
|
|
|
24.4 |
% |
|
$ |
4.77 |
|
|
$ |
3.96 |
|
|
|
20.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
220,789 |
|
|
$ |
195,537 |
|
|
$ |
211,796 |
|
|
|
12.9 |
% |
|
$ |
630,292 |
|
|
$ |
582,671 |
|
|
|
8.2 |
% |
Adjusted EBITDA margin % |
|
|
56.0 |
% |
|
|
54.6 |
% |
|
|
54.9 |
% |
|
|
|
|
|
|
54.8 |
% |
|
|
54.3 |
% |
|
|
|
|
“We are excited to deliver another quarter of strong results for our shareholders driven by both our core subscription offerings and asset-based fees. Additionally, our new long-term agreements with
Third Quarter 2019 and Nine Months 2019 Consolidated Results
Revenues: Operating revenues for third quarter 2019 increased
For nine months 2019, operating revenues increased
Run Rate: Total Run Rate at
Non-Recurring Sales: Total non-recurring sales for third quarter 2019 increased
Expenses: Total operating expenses for third quarter 2019 increased
Adjusted EBITDA expenses for third quarter 2019 increased
For nine months 2019, total operating expenses increased
Headcount: As of
Amortization and Depreciation Expenses: Amortization and depreciation expenses increased
Other Expense (Income), Net: Other expense (income), net increased
Income Taxes: Income tax expense was
For nine months 2019, the income tax expense was
Net Income: Net income increased 10.6% to
Adjusted EBITDA: Adjusted EBITDA was
Cash Balances and Outstanding Debt: Total cash and cash equivalents as of
Total outstanding debt as of
Cash Flow and
Net cash provided by operating activities was
Share Count and Capital Return: The weighted average diluted shares outstanding in third quarter 2019 declined 6.4% to 85.6 million, compared to 91.4 million in third quarter 2018. In nine months 2019, a total of 0.7 million shares were repurchased at an average price of
On
Table 1: Results by Segment (unaudited) |
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Index |
|
|
Analytics |
|
|
All Other |
|
|||||||||||||||||||||
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|
|
|
|
|
|
|
Adjusted |
|
|
|
|
|
|
|
|
Adjusted |
|
|
|
|
|
|
|
|
Adjusted |
|
|||
|
|
Operating |
|
Adjusted |
|
EBITDA |
|
|
Operating |
|
Adjusted |
|
EBITDA |
|
|
Operating |
|
Adjusted |
|
EBITDA |
|
|||||||||
In thousands |
|
Revenues |
|
EBITDA |
|
Margin |
|
|
Revenues |
|
EBITDA |
|
Margin |
|
|
Revenues |
|
EBITDA |
|
Margin |
|
|||||||||
3Q'19 |
|
$ |
237,427 |
|
$ |
177,680 |
|
|
74.8 |
% |
|
$ |
123,603 |
|
$ |
37,797 |
|
|
30.6 |
% |
|
$ |
33,221 |
|
$ |
5,312 |
|
|
16.0 |
% |
3Q'18 |
|
$ |
210,194 |
|
$ |
154,477 |
|
|
73.5 |
% |
|
$ |
119,898 |
|
$ |
37,046 |
|
|
30.9 |
% |
|
$ |
27,842 |
|
$ |
4,014 |
|
|
14.4 |
% |
2Q'19 |
|
$ |
225,550 |
|
$ |
163,915 |
|
|
72.7 |
% |
|
$ |
123,681 |
|
$ |
39,071 |
|
|
31.6 |
% |
|
$ |
36,327 |
|
$ |
8,810 |
|
|
24.3 |
% |
YoY % change |
|
|
13.0 |
% |
|
15.0 |
% |
|
|
|
|
|
3.1 |
% |
|
2.0 |
% |
|
|
|
|
|
19.3 |
% |
|
32.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD 2019 |
|
$ |
677,750 |
|
$ |
493,806 |
|
|
72.9 |
% |
|
$ |
368,719 |
|
$ |
113,266 |
|
|
30.7 |
% |
|
$ |
104,721 |
|
$ |
23,220 |
|
|
22.2 |
% |
YTD 2018 |
|
$ |
625,042 |
|
$ |
457,923 |
|
|
73.3 |
% |
|
$ |
358,004 |
|
$ |
106,966 |
|
|
29.9 |
% |
|
$ |
89,250 |
|
$ |
17,782 |
|
|
19.9 |
% |
% change |
|
|
8.4 |
% |
|
7.8 |
% |
|
|
|
|
|
3.0 |
% |
|
5.9 |
% |
|
|
|
|
|
17.3 |
% |
|
30.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Index Segment: Operating revenues for third quarter 2019 increased
Growth in revenues from asset-based fees included
The adjusted EBITDA margin for Index was 74.8% for third quarter 2019, compared to 73.5% for third quarter 2018.
Operating revenues for nine months 2019 increased
Index Run Rate at
On
In addition to the above, the combined impact on asset-based fees Run Rate from certain renegotiated agreements, based on third quarter 2019 trading volumes, will add approximately
1 The description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, which will be filed with the
Analytics Segment: Operating revenues for third quarter 2019 increased
Operating revenues for nine months 2019 increased
Analytics Run Rate at
All Other Segment: Operating revenues for third quarter 2019 increased
Operating revenues for nine months 2019 increased
All Other Run Rate at
Full-Year 2019 Guidance
MSCI’s guidance for full-year 2019 is as follows:
-
Total operating expenses are expected to be toward the high end of the guidance range of
$775 million to $800 million .
-
Adjusted EBITDA expenses1 are expected to be toward the high end of the guidance range of
$685 million to $705 million .
-
Interest expense, including the amortization of financing fees, is expected to be approximately
$144 million , assuming no additional financings.
-
Capex is expected to be toward the high end of the guidance range of$45 million to $55 million .
-
Net cash provided by operating activities and free cash flow are expected to be at, or slightly above, the high end of the guidance ranges of
$600 million to $630 million and$545 million to $585 million , respectively.
- The effective tax rate2 is now expected to be in the range of 6.0% to 9.0%.
1 Excludes the payroll tax impact from the vesting in first quarter 2019 of the Multi-Year PSUs.
2 Includes the PSU windfall benefit which is expected to reduce the 2019 effective tax rate by ~11 percentage points.
The guidance provided above assumes, among other things, that
Conference Call Information
An audio recording of the conference call will be available on our Investor Relations website, http://ir.msci.com/events.cfm, beginning approximately two hours after the conclusion of the live event. Through
-Ends-
About
To learn more, please visit www.msci.com. MSCI#IR
Forward-Looking Statements
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, MSCI’s full-year 2019 guidance. These forward-looking statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond MSCI’s control and that could materially affect actual results, levels of activity, performance or achievements.
Other factors that could materially affect actual results, levels of activity, performance or achievements can be found in MSCI’s Annual Report on Form 10-K for the fiscal year ended
Website and Social Media Disclosure
Notes Regarding the Use of Operating Metrics
Retention Rate is an important metric because subscription cancellations decrease our Run Rate and ultimately our operating revenues over time. The annual Retention Rate represents the retained subscription Run Rate (subscription Run Rate at the beginning of the fiscal year less actual cancels during the year) as a percentage of the subscription Run Rate at the beginning of the fiscal year.
The Retention Rate for a non-annual period is calculated by annualizing the cancellations for which we have received a notice of termination or for which we believe there is an intention not to renew during the non-annual period, and we believe that such notice or intention evidences the client’s final decision to terminate or not renew the applicable agreement, even though such notice is not effective until a later date. This annualized cancellation figure is then divided by the subscription Run Rate at the beginning of the fiscal year to calculate a cancellation rate. This cancellation rate is then subtracted from 100% to derive the annualized Retention Rate for the period.
Retention Rate is computed by operating segment on a product/service-by-product/service basis. In general, if a client reduces the number of products or services to which it subscribes within a segment, or switches between products or services within a segment, we treat it as a cancellation for purposes of calculating our Retention Rate except in the case of a product or service switch that management considers to be a replacement product or service. In those replacement cases, only the net change to the client subscription, if a decrease, is reported as a cancel. In the Analytics and the ESG segments, substantially all product or service switches are treated as replacement products or services and netted in this manner, while in our Index and Real Estate segments, product or service switches that are treated as replacement products or services and receive netting treatment occur only in certain limited instances. In addition, we treat any reduction in fees resulting from a down-sale of the same product or service as a cancellation to the extent of the reduction. We do not calculate Retention Rate for that portion of our Run Rate attributable to assets in index-linked investment products or futures and options contracts, in each case, linked to our indexes.
Run Rate estimates at a particular point in time the annualized value of the recurring revenues under our client license agreements (“Client Contracts”) for the next 12 months, assuming all Client Contracts that come up for renewal are renewed and assuming then-current currency exchange rates, subject to the adjustments and exclusions described below. For any Client Contract where fees are linked to an investment product’s assets or trading volume/fees, the Run Rate calculation reflects, for ETFs, the market value on the last trading day of the period, for futures and options, the most recent quarterly volumes and/or reported exchange fees, and for other non-ETF products, the most recent client-reported assets. Run Rate does not include fees associated with “one-time” and other non-recurring transactions. In addition, we add to Run Rate the annualized fee value of recurring new sales, whether to existing or new clients, when we execute Client Contracts, even though the license start date, and associated revenue recognition, may not be effective until a later date. We remove from Run Rate the annualized fee value associated with products or services under any Client Contract with respect to which we have received a notice of termination or non-renewal during the period and have determined that such notice evidences the client’s final decision to terminate or not renew the applicable products or services, even though such notice is not effective until a later date.
“Organic subscription Run Rate growth” is defined as the period over period Run Rate growth, excluding the impact of changes in foreign currency and the first year impact of any acquisitions. It is also adjusted for divestitures. Changes in foreign currency are calculated by applying the currency exchange rate from the comparable prior period to current period foreign currency denominated Run Rate.
Notes Regarding the Use of Non-GAAP Financial Measures
“Adjusted EBITDA” is defined as net income before (1) provision for income taxes, (2) other expense (income), net, (3) depreciation and amortization of property, equipment and leasehold improvements, (4) amortization of intangible assets and, at times, (5) certain other transactions or adjustments, including the impact related to the vesting of the Multi-Year PSUs.
“Adjusted EBITDA expenses” is defined as operating expenses less depreciation and amortization of property, equipment and leasehold improvements and amortization of intangible assets and, at times, certain other transactions or adjustments, including the impact related to the vesting of the Multi-Year PSUs.
“Adjusted net income” and “adjusted EPS” are defined as net income and diluted EPS, respectively, before the after-tax impact of the amortization of acquired intangible assets, the impact of divestitures, the impact of adjustments for the Tax Cuts and Jobs Act that was enacted on
“Adjusted tax rate” is defined as the effective tax rate excluding the impact of Tax Reform adjustments (except for amounts associated with active tax planning implemented as a result of Tax Reform) and the impact related to the vesting of the Multi-Year PSUs.
“Capex” is defined as capital expenditures plus capitalized software development costs.
“Free cash flow” is defined as net cash provided by operating activities, less
“Organic operating revenue growth” is defined as operating revenue growth compared to the prior year period excluding the impact of acquired businesses, divested businesses and foreign currency exchange rate fluctuations.
Asset-based fees ex-FX does not adjust for the impact from foreign currency exchange rate fluctuations on the underlying AUM.
We believe adjusted EBITDA and adjusted EBITDA expenses are meaningful measures of the operating performance of
We believe adjusted net income and adjusted EPS are meaningful measures of the performance of
We believe that adjusted tax rate is useful to investors because it increases the comparability of period-to-period results by adjusting for the estimated net impact of Tax Reform and the impact related to the vesting of the Multi-Year PSUs.
We believe that free cash flow is useful to investors because it relates the operating cash flow of
We believe organic operating revenue growth is a meaningful measure of the operating performance of
We believe that the non-GAAP financial measures presented in this earnings release facilitate meaningful period-to-period comparisons and provide a baseline for the evaluation of future results.
Adjusted EBITDA expenses, adjusted EBITDA, adjusted net income, adjusted EPS, adjusted tax rate,
Notes Regarding Adjusting for the Impact of Foreign Currency Exchange Rate Fluctuations
Foreign currency exchange rate fluctuations reflect the difference between the current period results as reported compared to the current period results recalculated using the foreign currency exchange rates in effect for the comparable prior period. While operating revenues adjusted for the impact of foreign currency fluctuations includes asset-based fees that have been adjusted for the impact of foreign currency fluctuations, the underlying AUM, which is the primary component of asset-based fees, is not adjusted for foreign currency fluctuations. Approximately two-thirds of the AUM are invested in securities denominated in currencies other than the U.S. dollar, and accordingly, any such impact is excluded from the disclosed foreign currency adjusted variances.
Table 2: Condensed Consolidated Statements of Income (unaudited) |
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|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|||||||||||||||||||||
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
June 30, |
|
|
YoY % |
|
|
Sep. 30, |
|
|
Sep. 30, |
|
YoY % |
|
|||||||
In thousands, except per share data |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
Change |
|
|
2019 |
|
|
2018 |
|
Change |
|
|||||||
Operating revenues |
|
$ |
394,251 |
|
|
$ |
357,934 |
|
|
$ |
385,558 |
|
|
|
10.1 |
% |
|
$ |
1,151,190 |
|
|
$ |
1,072,296 |
|
|
7.4 |
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
70,486 |
|
|
|
70,906 |
|
|
|
71,975 |
|
|
|
(0.6 |
%) |
|
|
224,807 |
|
|
|
213,578 |
|
|
5.3 |
% |
Selling and marketing |
|
|
52,107 |
|
|
|
46,149 |
|
|
|
51,657 |
|
|
|
12.9 |
% |
|
|
159,812 |
|
|
|
139,974 |
|
|
14.2 |
% |
Research and development |
|
|
24,310 |
|
|
|
20,591 |
|
|
|
23,752 |
|
|
|
18.1 |
% |
|
|
71,234 |
|
|
|
61,099 |
|
|
16.6 |
% |
General and administrative |
|
|
26,559 |
|
|
|
24,751 |
|
|
|
26,378 |
|
|
|
7.3 |
% |
|
|
80,434 |
|
|
|
74,974 |
|
|
7.3 |
% |
Amortization of intangible assets |
|
|
12,361 |
|
|
|
11,681 |
|
|
|
12,013 |
|
|
|
5.8 |
% |
|
|
36,167 |
|
|
|
42,556 |
|
|
(15.0 |
%) |
Depreciation and amortization of property, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equipment and leasehold improvements |
|
|
7,209 |
|
|
|
7,453 |
|
|
|
7,405 |
|
|
|
(3.3 |
%) |
|
|
22,464 |
|
|
|
23,035 |
|
|
(2.5 |
%) |
Total operating expenses(1) |
|
|
193,032 |
|
|
|
181,531 |
|
|
|
193,180 |
|
|
|
6.3 |
% |
|
|
594,918 |
|
|
|
555,216 |
|
|
7.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
201,219 |
|
|
|
176,403 |
|
|
|
192,378 |
|
|
|
14.1 |
% |
|
|
556,272 |
|
|
|
517,080 |
|
|
7.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
(3,673 |
) |
|
|
(6,522 |
) |
|
|
(3,345 |
) |
|
|
(43.7 |
%) |
|
|
(11,104 |
) |
|
|
(13,573 |
) |
|
(18.2 |
%) |
Interest expense |
|
|
35,922 |
|
|
|
35,902 |
|
|
|
35,915 |
|
|
|
0.1 |
% |
|
|
107,752 |
|
|
|
97,223 |
|
|
10.8 |
% |
Other expense (income) |
|
|
222 |
|
|
|
177 |
|
|
|
63 |
|
|
|
25.4 |
% |
|
|
2,839 |
|
|
|
(9,177 |
) |
|
(130.9 |
%) |
Other expense (income), net |
|
|
32,471 |
|
|
|
29,557 |
|
|
|
32,633 |
|
|
|
9.9 |
% |
|
|
99,487 |
|
|
|
74,473 |
|
|
33.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes |
|
|
168,748 |
|
|
|
146,846 |
|
|
|
159,745 |
|
|
|
14.9 |
% |
|
|
456,785 |
|
|
|
442,607 |
|
|
3.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
31,765 |
|
|
|
23,014 |
|
|
|
34,055 |
|
|
|
38.0 |
% |
|
|
15,920 |
|
|
|
86,854 |
|
|
(81.7 |
%) |
Net income |
|
$ |
136,983 |
|
|
$ |
123,832 |
|
|
$ |
125,690 |
|
|
|
10.6 |
% |
|
$ |
440,865 |
|
|
$ |
355,753 |
|
|
23.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per basic common share |
|
$ |
1.62 |
|
|
$ |
1.39 |
|
|
$ |
1.48 |
|
|
|
16.5 |
% |
|
$ |
5.21 |
|
|
$ |
3.98 |
|
|
30.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per diluted common share |
|
$ |
1.60 |
|
|
$ |
1.36 |
|
|
$ |
1.47 |
|
|
|
17.6 |
% |
|
$ |
5.15 |
|
|
$ |
3.87 |
|
|
33.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding used |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in computing earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
84,765 |
|
|
|
88,796 |
|
|
|
84,750 |
|
|
|
(4.5 |
%) |
|
|
84,591 |
|
|
|
89,323 |
|
|
(5.3 |
%) |
Diluted |
|
|
85,550 |
|
|
|
91,372 |
|
|
|
85,393 |
|
|
|
(6.4 |
%) |
|
|
85,533 |
|
|
|
91,843 |
|
|
(6.9 |
%) |
(1) Includes stock-based compensation expense of
Table 3: Selected Balance Sheet Items (unaudited) |
||||||
|
|
As of |
||||
|
|
Sep. 30, |
|
Sep. 30, |
|
Dec. 31, |
In thousands |
|
2019 |
|
2018 |
|
2018 |
Cash and cash equivalents |
|
$881,150 |
|
$1,398,398 |
|
$904,176 |
Accounts receivable, net of allowances |
|
$409,519 |
|
$378,705 |
|
$473,433 |
|
|
|
|
|
|
|
Deferred revenue |
|
$479,371 |
|
$441,884 |
|
$537,977 |
Long-term debt(1) |
|
$2,578,159 |
|
$2,574,616 |
|
$2,575,502 |
(1) Consists of gross long-term debt, net of deferred financing fees. Gross long-term debt at
Table 4: Selected Cash Flow Items (unaudited) |
||||||||||||||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||||||
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
June 30, |
|
|
YoY % |
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
YoY % |
|
|||||||
In thousands |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
Change |
|
|
2019 |
|
|
2018 |
|
|
Change |
|
|||||||
Net cash provided by operating activities |
|
$ |
188,535 |
|
|
$ |
143,825 |
|
|
$ |
189,470 |
|
|
|
31.1 |
% |
|
$ |
465,880 |
|
|
$ |
439,587 |
|
|
|
6.0 |
% |
Net cash used in investing activities |
|
|
(14,765 |
) |
|
|
(13,097 |
) |
|
|
(12,391 |
) |
|
|
12.7 |
% |
|
|
(35,292 |
) |
|
|
(5,164 |
) |
|
n/m |
|
|
Net cash (used in) provided by financing activities |
|
|
(58,766 |
) |
|
|
(97,758 |
) |
|
|
(49,914 |
) |
|
|
(39.9 |
%) |
|
|
(450,315 |
) |
|
|
80,600 |
|
|
n/m |
|
|
Effect of exchange rate changes |
|
|
(4,971 |
) |
|
|
(2,168 |
) |
|
|
1,171 |
|
|
|
129.3 |
% |
|
|
(3,299 |
) |
|
|
(6,127 |
) |
|
|
(46.2 |
%) |
Net increase (decrease) in cash and cash equivalents |
|
$ |
110,033 |
|
|
$ |
30,802 |
|
|
$ |
128,336 |
|
|
|
257.2 |
% |
|
$ |
(23,026 |
) |
|
$ |
508,896 |
|
|
|
(104.5 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
n/m: not meaningful. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 5: Operating Results by Segment and Revenue Type (unaudited) |
||||||||||||||||||||||||||||
Index |
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||||||
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
June 30, |
|
|
YoY % |
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
YoY % |
|
|||||||
In thousands |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
Change |
|
|
2019 |
|
|
2018 |
|
|
Change |
|
|||||||
Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring subscriptions |
|
$ |
133,403 |
|
|
$ |
121,285 |
|
|
$ |
132,145 |
|
|
|
10.0 |
% |
|
$ |
393,222 |
|
|
$ |
354,116 |
|
|
|
11.0 |
% |
Asset-based fees |
|
|
96,013 |
|
|
|
82,007 |
|
|
|
87,733 |
|
|
|
17.1 |
% |
|
|
265,554 |
|
|
|
255,126 |
|
|
|
4.1 |
% |
Non-recurring |
|
|
8,011 |
|
|
|
6,902 |
|
|
|
5,672 |
|
|
|
16.1 |
% |
|
|
18,974 |
|
|
|
15,800 |
|
|
|
20.1 |
% |
Total operating revenues |
|
|
237,427 |
|
|
|
210,194 |
|
|
|
225,550 |
|
|
|
13.0 |
% |
|
|
677,750 |
|
|
|
625,042 |
|
|
|
8.4 |
% |
Adjusted EBITDA expenses |
|
|
59,747 |
|
|
|
55,717 |
|
|
|
61,635 |
|
|
|
7.2 |
% |
|
|
183,944 |
|
|
|
167,119 |
|
|
|
10.1 |
% |
Adjusted EBITDA |
|
$ |
177,680 |
|
|
$ |
154,477 |
|
|
$ |
163,915 |
|
|
|
15.0 |
% |
|
$ |
493,806 |
|
|
$ |
457,923 |
|
|
|
7.8 |
% |
Adjusted EBITDA margin % |
|
|
74.8 |
% |
|
|
73.5 |
% |
|
|
72.7 |
% |
|
|
|
|
|
|
72.9 |
% |
|
|
73.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analytics |
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||||||
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
June 30, |
|
|
YoY % |
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
YoY % |
|
|||||||
In thousands |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
Change |
|
|
2019 |
|
|
2018 |
|
|
Change |
|
|||||||
Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring subscriptions |
|
$ |
122,120 |
|
|
$ |
118,857 |
|
|
$ |
121,699 |
|
|
|
2.7 |
% |
|
$ |
363,929 |
|
|
$ |
354,629 |
|
|
|
2.6 |
% |
Non-recurring |
|
|
1,483 |
|
|
|
1,041 |
|
|
|
1,982 |
|
|
|
42.5 |
% |
|
|
4,790 |
|
|
|
3,375 |
|
|
|
41.9 |
% |
Total operating revenues |
|
|
123,603 |
|
|
|
119,898 |
|
|
|
123,681 |
|
|
|
3.1 |
% |
|
|
368,719 |
|
|
|
358,004 |
|
|
|
3.0 |
% |
Adjusted EBITDA expenses |
|
|
85,806 |
|
|
|
82,852 |
|
|
|
84,610 |
|
|
|
3.6 |
% |
|
|
255,453 |
|
|
|
251,038 |
|
|
|
1.8 |
% |
Adjusted EBITDA |
|
$ |
37,797 |
|
|
$ |
37,046 |
|
|
$ |
39,071 |
|
|
|
2.0 |
% |
|
$ |
113,266 |
|
|
$ |
106,966 |
|
|
|
5.9 |
% |
Adjusted EBITDA margin % |
|
|
30.6 |
% |
|
|
30.9 |
% |
|
|
31.6 |
% |
|
|
|
|
|
|
30.7 |
% |
|
|
29.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other |
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||||||
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
June 30, |
|
|
YoY % |
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
YoY % |
|
|||||||
In thousands |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
Change |
|
|
2019 |
|
|
2018 |
|
|
Change |
|
|||||||
Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring subscriptions |
|
$ |
32,585 |
|
|
$ |
27,234 |
|
|
$ |
35,305 |
|
|
|
19.6 |
% |
|
$ |
102,470 |
|
|
$ |
86,185 |
|
|
|
18.9 |
% |
Non-recurring |
|
|
636 |
|
|
|
608 |
|
|
|
1,022 |
|
|
|
4.6 |
% |
|
|
2,251 |
|
|
|
3,065 |
|
|
|
(26.6 |
%) |
Total operating revenues |
|
|
33,221 |
|
|
|
27,842 |
|
|
|
36,327 |
|
|
|
19.3 |
% |
|
|
104,721 |
|
|
|
89,250 |
|
|
|
17.3 |
% |
Adjusted EBITDA expenses |
|
|
27,909 |
|
|
|
23,828 |
|
|
|
27,517 |
|
|
|
17.1 |
% |
|
|
81,501 |
|
|
|
71,468 |
|
|
|
14.0 |
% |
Adjusted EBITDA |
|
$ |
5,312 |
|
|
$ |
4,014 |
|
|
$ |
8,810 |
|
|
|
32.3 |
% |
|
$ |
23,220 |
|
|
$ |
17,782 |
|
|
|
30.6 |
% |
Adjusted EBITDA margin % |
|
|
16.0 |
% |
|
|
14.4 |
% |
|
|
24.3 |
% |
|
|
|
|
|
|
22.2 |
% |
|
|
19.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||||||
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
June 30, |
|
|
YoY % |
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
YoY % |
|
|||||||
In thousands |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
Change |
|
|
2019 |
|
|
2018 |
|
|
Change |
|
|||||||
Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring subscriptions |
|
$ |
288,108 |
|
|
$ |
267,376 |
|
|
$ |
289,149 |
|
|
|
7.8 |
% |
|
$ |
859,621 |
|
|
$ |
794,930 |
|
|
|
8.1 |
% |
Asset-based fees |
|
|
96,013 |
|
|
|
82,007 |
|
|
|
87,733 |
|
|
|
17.1 |
% |
|
|
265,554 |
|
|
|
255,126 |
|
|
|
4.1 |
% |
Non-recurring |
|
|
10,130 |
|
|
|
8,551 |
|
|
|
8,676 |
|
|
|
18.5 |
% |
|
|
26,015 |
|
|
|
22,240 |
|
|
|
17.0 |
% |
Operating revenues total |
|
|
394,251 |
|
|
|
357,934 |
|
|
|
385,558 |
|
|
|
10.1 |
% |
|
|
1,151,190 |
|
|
|
1,072,296 |
|
|
|
7.4 |
% |
Adjusted EBITDA expenses |
|
|
173,462 |
|
|
|
162,397 |
|
|
|
173,762 |
|
|
|
6.8 |
% |
|
|
520,898 |
|
|
|
489,625 |
|
|
|
6.4 |
% |
Adjusted EBITDA |
|
$ |
220,789 |
|
|
$ |
195,537 |
|
|
$ |
211,796 |
|
|
|
12.9 |
% |
|
$ |
630,292 |
|
|
$ |
582,671 |
|
|
|
8.2 |
% |
Adjusted EBITDA margin % |
|
|
56.0 |
% |
|
|
54.6 |
% |
|
|
54.9 |
% |
|
|
|
|
|
|
54.8 |
% |
|
|
54.3 |
% |
|
|
|
|
Operating margin % |
|
|
51.0 |
% |
|
|
49.3 |
% |
|
|
49.9 |
% |
|
|
|
|
|
|
48.3 |
% |
|
|
48.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 6: Sales and Retention Rate by Segment (unaudited) |
||||||||||||||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||||||
|
|
Sep. 30,
|
|
|
June 30,
|
|
|
Mar. 31,
|
|
|
Dec. 31,
|
|
|
Sep. 30,
|
|
|
Sep. 30,
|
|
|
Sep. 30,
|
|
|||||||
In thousands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Index |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New recurring subscription sales |
|
$ |
17,553 |
|
|
$ |
19,526 |
|
|
$ |
17,329 |
|
|
$ |
21,013 |
|
|
$ |
15,546 |
|
|
$ |
54,408 |
|
|
$ |
51,647 |
|
Subscription cancellations |
|
|
(5,066 |
) |
|
|
(3,601 |
) |
|
|
(4,366 |
) |
|
|
(7,699 |
) |
|
|
(4,428 |
) |
|
$ |
(13,033 |
) |
|
|
(13,120 |
) |
Net new recurring subscription sales |
|
$ |
12,487 |
|
|
$ |
15,925 |
|
|
$ |
12,963 |
|
|
$ |
13,314 |
|
|
$ |
11,118 |
|
|
$ |
41,375 |
|
|
$ |
38,527 |
|
Non-recurring sales |
|
$ |
9,029 |
|
|
$ |
5,982 |
|
|
$ |
5,081 |
|
|
$ |
6,845 |
|
|
$ |
7,097 |
|
|
$ |
20,092 |
|
|
$ |
15,885 |
|
Total gross sales(1) |
|
$ |
26,582 |
|
|
$ |
25,508 |
|
|
$ |
22,410 |
|
|
$ |
27,858 |
|
|
$ |
22,643 |
|
|
$ |
74,500 |
|
|
$ |
67,532 |
|
Total Index net sales |
|
$ |
21,516 |
|
|
$ |
21,907 |
|
|
$ |
18,044 |
|
|
$ |
20,159 |
|
|
$ |
18,215 |
|
|
$ |
61,467 |
|
|
$ |
54,412 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Index Retention Rate(2) |
|
|
96.0 |
% |
|
|
97.1 |
% |
|
|
96.5 |
% |
|
|
93.2 |
% |
|
|
96.1 |
% |
|
|
96.5 |
% |
|
|
96.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analytics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New recurring subscription sales |
|
$ |
15,285 |
|
|
$ |
13,669 |
|
|
$ |
12,751 |
|
|
$ |
19,438 |
|
|
$ |
16,797 |
|
|
$ |
41,705 |
|
|
$ |
45,549 |
|
Subscription cancellations |
|
|
(7,854 |
) |
|
|
(7,102 |
) |
|
|
(7,764 |
) |
|
|
(8,524 |
) |
|
|
(7,117 |
) |
|
$ |
(22,720 |
) |
|
|
(25,148 |
) |
Net new recurring subscription sales |
|
$ |
7,431 |
|
|
$ |
6,567 |
|
|
$ |
4,987 |
|
|
$ |
10,914 |
|
|
$ |
9,680 |
|
|
$ |
18,985 |
|
|
$ |
20,401 |
|
Non-recurring sales |
|
$ |
4,876 |
|
|
$ |
2,631 |
|
|
$ |
2,577 |
|
|
$ |
3,249 |
|
|
$ |
3,189 |
|
|
$ |
10,084 |
|
|
$ |
6,959 |
|
Total gross sales(1) |
|
$ |
20,161 |
|
|
$ |
16,300 |
|
|
$ |
15,328 |
|
|
$ |
22,687 |
|
|
$ |
19,986 |
|
|
$ |
51,789 |
|
|
$ |
52,508 |
|
Total Analytics net sales |
|
$ |
12,307 |
|
|
$ |
9,198 |
|
|
$ |
7,564 |
|
|
$ |
14,163 |
|
|
$ |
12,869 |
|
|
$ |
29,069 |
|
|
$ |
27,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analytics Retention Rate(2) |
|
|
93.6 |
% |
|
|
94.2 |
% |
|
|
93.7 |
% |
|
|
92.7 |
% |
|
|
94.1 |
% |
|
|
93.8 |
% |
|
|
93.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New recurring subscription sales |
|
$ |
7,495 |
|
|
$ |
8,014 |
|
|
$ |
7,215 |
|
|
$ |
7,596 |
|
|
$ |
6,459 |
|
|
$ |
22,724 |
|
|
$ |
18,605 |
|
Subscription cancellations |
|
|
(1,002 |
) |
|
|
(1,902 |
) |
|
|
(1,275 |
) |
|
|
(1,959 |
) |
|
|
(1,547 |
) |
|
$ |
(4,179 |
) |
|
|
(4,463 |
) |
Net new recurring subscription sales |
|
$ |
6,493 |
|
|
$ |
6,112 |
|
|
$ |
5,940 |
|
|
$ |
5,637 |
|
|
$ |
4,912 |
|
|
$ |
18,545 |
|
|
$ |
14,142 |
|
Non-recurring sales |
|
$ |
487 |
|
|
$ |
630 |
|
|
$ |
454 |
|
|
$ |
1,194 |
|
|
$ |
641 |
|
|
$ |
1,571 |
|
|
$ |
2,243 |
|
Total gross sales(1) |
|
$ |
7,982 |
|
|
$ |
8,644 |
|
|
$ |
7,669 |
|
|
$ |
8,790 |
|
|
$ |
7,100 |
|
|
$ |
24,295 |
|
|
$ |
20,848 |
|
Total All Other net sales |
|
$ |
6,980 |
|
|
$ |
6,742 |
|
|
$ |
6,394 |
|
|
$ |
6,831 |
|
|
$ |
5,553 |
|
|
$ |
20,116 |
|
|
$ |
16,385 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Retention Rate(2) |
|
|
96.8 |
% |
|
|
93.9 |
% |
|
|
95.9 |
% |
|
|
92.8 |
% |
|
|
94.3 |
% |
|
|
95.5 |
% |
|
|
94.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New recurring subscription sales |
|
$ |
40,333 |
|
|
$ |
41,209 |
|
|
$ |
37,295 |
|
|
$ |
48,047 |
|
|
$ |
38,802 |
|
|
$ |
118,837 |
|
|
$ |
115,801 |
|
Subscription cancellations |
|
|
(13,922 |
) |
|
|
(12,605 |
) |
|
|
(13,405 |
) |
|
|
(18,182 |
) |
|
|
(13,092 |
) |
|
|
(39,932 |
) |
|
|
(42,731 |
) |
Net new recurring subscription sales |
|
$ |
26,411 |
|
|
$ |
28,604 |
|
|
$ |
23,890 |
|
|
$ |
29,865 |
|
|
$ |
25,710 |
|
|
$ |
78,905 |
|
|
$ |
73,070 |
|
Non-recurring sales |
|
$ |
14,392 |
|
|
$ |
9,243 |
|
|
$ |
8,112 |
|
|
$ |
11,288 |
|
|
$ |
10,927 |
|
|
$ |
31,747 |
|
|
$ |
25,087 |
|
Total gross sales(1) |
|
$ |
54,725 |
|
|
$ |
50,452 |
|
|
$ |
45,407 |
|
|
$ |
59,335 |
|
|
$ |
49,729 |
|
|
$ |
150,584 |
|
|
$ |
140,888 |
|
Total net sales |
|
$ |
40,803 |
|
|
$ |
37,847 |
|
|
$ |
32,002 |
|
|
$ |
41,153 |
|
|
$ |
36,637 |
|
|
$ |
110,652 |
|
|
$ |
98,157 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Retention Rate(2) |
|
|
95.0 |
% |
|
|
95.5 |
% |
|
|
95.2 |
% |
|
|
92.9 |
% |
|
|
95.0 |
% |
|
|
95.2 |
% |
|
|
94.5 |
% |
(1) Total gross sales equal new recurring subscription sales plus non-recurring sales.
(2) See "Notes Regarding the Use of Operating Metrics" for details regarding the definition of Retention Rate.
Table 7: AUM in ETFs Linked to MSCI Indexes (unaudited)(1)(2)(3) |
||||||||||||||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||||||
|
|
Sep. 30, |
|
|
June 30, |
|
|
Mar. 31, |
|
|
Dec. 31, |
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|||||||
In billions |
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|||||||
Beginning Period AUM in ETFs linked to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MSCI indexes |
|
$ |
819.3 |
|
|
$ |
802.2 |
|
|
$ |
695.6 |
|
|
$ |
765.5 |
|
|
$ |
744.7 |
|
|
$ |
695.6 |
|
|
$ |
744.3 |
|
Market Appreciation/(Depreciation) |
|
|
(9.2 |
) |
|
|
14.9 |
|
|
|
78.3 |
|
|
|
(94.7 |
) |
|
|
15.6 |
|
|
|
84.0 |
|
|
|
(15.6 |
) |
Cash Inflows |
|
|
4.9 |
|
|
|
2.2 |
|
|
|
28.3 |
|
|
|
24.8 |
|
|
|
5.2 |
|
|
|
35.4 |
|
|
|
36.8 |
|
Period-End AUM in ETFs linked to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MSCI indexes |
|
$ |
815.0 |
|
|
$ |
819.3 |
|
|
$ |
802.2 |
|
|
$ |
695.6 |
|
|
$ |
765.5 |
|
|
$ |
815.0 |
|
|
$ |
765.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Average AUM in ETFs linked to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MSCI indexes |
|
$ |
810.9 |
|
|
$ |
811.4 |
|
|
$ |
766.0 |
|
|
$ |
717.1 |
|
|
$ |
755.8 |
|
|
$ |
796.1 |
|
|
$ |
770.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avg. Basis Point Fee(4) |
|
|
2.81 |
|
|
|
2.85 |
|
|
|
2.88 |
|
|
|
2.92 |
|
|
|
2.90 |
|
|
|
2.81 |
|
|
|
2.90 |
|
(1) The historical values of the AUM in ETFs linked to our indexes as of the last day of the month and the monthly average balance can be found under the link “AUM in ETFs Linked to MSCI Indexes” on our Investor Relations homepage at http://ir.msci.com. Information contained on our website is not incorporated by reference into this Earnings Release or any other report filed with the
(2) The values for periods prior to
(3) The value of AUM in ETFs linked to
(4) Based on period-end Run Rate for ETFs linked to
Table 8: Run Rate by Segment and Type (unaudited)(1) |
|||||||||||||||
|
|
As of |
|
|
|
|
|||||||||
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
June 30, |
|
YoY % |
|
||||
In thousands |
|
2019 |
|
|
2018 |
|
|
2019 |
|
Change |
|
||||
Index |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring subscriptions |
|
$ |
544,059 |
|
|
$ |
489,515 |
|
|
$ |
531,590 |
|
|
11.1 |
% |
Asset-based fees |
|
|
356,013 |
|
|
|
326,148 |
|
|
|
345,126 |
|
|
9.2 |
% |
Index Run Rate |
|
|
900,072 |
|
|
|
815,663 |
|
|
|
876,716 |
|
|
10.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analytics Run Rate |
|
|
509,261 |
|
|
|
499,219 |
|
|
|
503,969 |
|
|
2.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Run Rate |
|
|
141,283 |
|
|
|
120,419 |
|
|
|
137,045 |
|
|
17.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Run Rate |
|
$ |
1,550,616 |
|
|
$ |
1,435,301 |
|
|
$ |
1,517,730 |
|
|
8.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total recurring subscriptions |
|
$ |
1,194,603 |
|
|
$ |
1,109,153 |
|
|
$ |
1,172,604 |
|
|
7.7 |
% |
Total asset-based fees |
|
|
356,013 |
|
|
|
326,148 |
|
|
|
345,126 |
|
|
9.2 |
% |
Total Run Rate |
|
$ |
1,550,616 |
|
|
$ |
1,435,301 |
|
|
$ |
1,517,730 |
|
|
8.0 |
% |
(1) See "Notes Regarding the Use of Operating Metrics" for details regarding the definition of Run Rate.
Table 9: Reconciliation of Adjusted EBITDA to Net Income (unaudited) |
||||||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
June 30, |
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|||||
In thousands |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|||||
Index adjusted EBITDA |
|
$ |
177,680 |
|
|
$ |
154,477 |
|
|
$ |
163,915 |
|
|
$ |
493,806 |
|
|
$ |
457,923 |
|
Analytics adjusted EBITDA |
|
|
37,797 |
|
|
|
37,046 |
|
|
|
39,071 |
|
|
|
113,266 |
|
|
|
106,966 |
|
All Other adjusted EBITDA |
|
|
5,312 |
|
|
|
4,014 |
|
|
|
8,810 |
|
|
|
23,220 |
|
|
|
17,782 |
|
Consolidated adjusted EBITDA |
|
|
220,789 |
|
|
|
195,537 |
|
|
|
211,796 |
|
|
|
630,292 |
|
|
|
582,671 |
|
Multi-Year PSU payroll tax expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15,389 |
|
|
|
— |
|
Amortization of intangible assets |
|
|
12,361 |
|
|
|
11,681 |
|
|
|
12,013 |
|
|
|
36,167 |
|
|
|
42,556 |
|
Depreciation and amortization of property, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equipment and leasehold improvements |
|
|
7,209 |
|
|
|
7,453 |
|
|
|
7,405 |
|
|
|
22,464 |
|
|
|
23,035 |
|
Operating income |
|
|
201,219 |
|
|
|
176,403 |
|
|
|
192,378 |
|
|
|
556,272 |
|
|
|
517,080 |
|
Other expense (income), net |
|
|
32,471 |
|
|
|
29,557 |
|
|
|
32,633 |
|
|
|
99,487 |
|
|
|
74,473 |
|
Provision for income taxes |
|
|
31,765 |
|
|
|
23,014 |
|
|
|
34,055 |
|
|
|
15,920 |
|
|
|
86,854 |
|
Net income |
|
$ |
136,983 |
|
|
$ |
123,832 |
|
|
$ |
125,690 |
|
|
$ |
440,865 |
|
|
$ |
355,753 |
|
Table 10: Reconciliation of Net Income and Diluted EPS to Adjusted Net Income and Adjusted EPS (unaudited) |
||||||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||
|
|
Sep. 30,
|
|
|
Sep. 30,
|
|
|
June 30,
|
|
|
Sep. 30,
|
|
|
Sep. 30,
|
||||||
In thousands, except per share data |
|
|
|
|
|
|
|
|
|
|||||||||||
Net income |
|
$ |
136,983 |
|
|
$ |
123,832 |
|
|
$ |
125,690 |
|
|
$ |
440,865 |
|
|
$ |
355,753 |
|
Plus: Amortization of acquired intangible assets |
|
|
8,616 |
|
|
|
8,999 |
|
|
|
8,663 |
|
|
|
25,995 |
|
|
|
35,235 |
|
Plus: Multi-Year PSU payroll tax expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15,389 |
|
|
|
— |
|
Less: Discrete excess tax benefit related |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to Multi-Year PSU vesting |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(66,581 |
) |
|
|
— |
|
Less: Gain on sale of FEA (not-tax effected) |
|
|
— |
|
|
|
(10 |
) |
|
|
— |
|
|
|
— |
|
|
|
(10,646 |
) |
Less: Valuation allowance released in connection |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
with InvestorForce divestiture |
|
|
— |
|
|
|
(7,758 |
) |
|
|
— |
|
|
|
— |
|
|
|
(7,758 |
) |
Less: Tax Reform adjustments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,601 |
) |
Less: Income tax effect |
|
|
(1,702 |
) |
|
|
(1,884 |
) |
|
|
(2,638 |
) |
|
|
(7,474 |
) |
|
|
(7,613 |
) |
Adjusted net income |
|
$ |
143,897 |
|
|
$ |
123,179 |
|
|
$ |
131,715 |
|
|
$ |
408,194 |
|
|
$ |
363,370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS |
|
$ |
1.60 |
|
|
$ |
1.36 |
|
|
$ |
1.47 |
|
|
$ |
5.15 |
|
|
$ |
3.87 |
|
Plus: Amortization of acquired intangible assets |
|
|
0.10 |
|
|
|
0.10 |
|
|
|
0.10 |
|
|
|
0.30 |
|
|
|
0.38 |
|
Plus: Multi-Year PSU payroll tax expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.18 |
|
|
|
— |
|
Less: Discrete excess tax benefit related |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to Multi-Year PSU vesting |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.78 |
) |
|
|
— |
|
Less: Gain on sale of FEA (not-tax effected) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.12 |
) |
Less: Valuation allowance released in connection |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
with InvestorForce divestiture |
|
|
— |
|
|
|
(0.08 |
) |
|
|
— |
|
|
|
— |
|
|
|
(0.08 |
) |
Less: Tax Reform adjustments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.02 |
) |
Less: Income tax effect |
|
|
(0.02 |
) |
|
|
(0.03 |
) |
|
|
(0.03 |
) |
|
|
(0.08 |
) |
|
|
(0.07 |
) |
Adjusted EPS |
|
$ |
1.68 |
|
|
$ |
1.35 |
|
|
$ |
1.54 |
|
|
$ |
4.77 |
|
|
$ |
3.96 |
|
Table 11: Reconciliation of Adjusted EBITDA Expenses to Operating Expenses (unaudited) |
||||||||||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Full-Year |
|
|||||||||||||||
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
June 30, |
|
|
Sep. 30, |
|
|
Sep. 30, |
|
|
2019 |
|
||||||
In thousands |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
Outlook(1) |
|
||||||
Index adjusted EBITDA expenses |
|
$ |
59,747 |
|
|
$ |
55,717 |
|
|
$ |
61,635 |
|
|
$ |
183,944 |
|
|
$ |
167,119 |
|
|
|
|
|
Analytics adjusted EBITDA expenses |
|
|
85,806 |
|
|
|
82,852 |
|
|
|
84,610 |
|
|
|
255,453 |
|
|
|
251,038 |
|
|
|
|
|
All Other adjusted EBITDA expenses |
|
|
27,909 |
|
|
|
23,828 |
|
|
|
27,517 |
|
|
|
81,501 |
|
|
|
71,468 |
|
|
|
|
|
Consolidated adjusted EBITDA expenses |
|
|
173,462 |
|
|
|
162,397 |
|
|
|
173,762 |
|
|
|
520,898 |
|
|
|
489,625 |
|
|
$685,000 - $705,000 |
|
|
Multi-Year PSU payroll tax expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15,389 |
|
|
|
— |
|
|
15,389 |
|
|
Amortization of intangible assets |
|
|
12,361 |
|
|
|
11,681 |
|
|
|
12,013 |
|
|
|
36,167 |
|
|
|
42,556 |
|
|
|
|
|
Depreciation and amortization of property, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000 - 85,000 |
|
|
equipment and leasehold improvements |
|
|
7,209 |
|
|
|
7,453 |
|
|
|
7,405 |
|
|
|
22,464 |
|
|
|
23,035 |
|
|
|
|
|
Total operating expenses |
|
$ |
193,032 |
|
|
$ |
181,531 |
|
|
$ |
193,180 |
|
|
$ |
594,918 |
|
|
$ |
555,216 |
|
|
$775,389 - $800,389 |
|
(1) We have not provided a line-item reconciliation for adjusted EBITDA expenses to total operating expenses for this future period because we do not provide guidance on the individual reconciling items between total operating expenses and adjusted EBITDA expenses.
Table 12: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (unaudited) |
||||||||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Full-Year |
||||||||||||||
|
|
Sep. 30,
|
|
|
Sep. 30,
|
|
|
June 30,
|
|
|
Sep. 30,
|
|
|
Sep. 30,
|
|
|
2019
|
|||||
In thousands |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net cash provided by operating activities |
|
$ |
188,535 |
|
|
$ |
143,825 |
|
|
$ |
189,470 |
|
|
$ |
465,880 |
|
|
$ |
439,587 |
|
|
$600,000 - $630,000 |
Capital expenditures |
|
|
(7,782 |
) |
|
|
(8,590 |
) |
|
|
(6,278 |
) |
|
|
(17,216 |
) |
|
|
(13,069 |
) |
|
|
Capitalized software development costs |
|
|
(6,983 |
) |
|
|
(4,517 |
) |
|
|
(6,113 |
) |
|
|
(18,086 |
) |
|
|
(13,115 |
) |
|
|
Capex |
|
|
(14,765 |
) |
|
|
(13,107 |
) |
|
|
(12,391 |
) |
|
|
(35,302 |
) |
|
|
(26,184 |
) |
|
(55,000 - 45,000) |
Free cash flow |
|
$ |
173,770 |
|
|
$ |
130,718 |
|
|
$ |
177,079 |
|
|
$ |
430,578 |
|
|
$ |
413,403 |
|
|
$545,000 - $585,000 |
(1) We have not provided a line-item reconciliation for free cash flow to net cash from operating activities for this future period because we do not provide guidance on the individual reconciling items between net cash from operating activities and free cash flow.
Table 13: Reconciliation of Effective Tax Rate to Adjusted Tax Rate (unaudited) |
||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||
|
|
Sep. 30, |
|
Sep. 30, |
|
June 30, |
|
Sep. 30, |
|
Sep. 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2019 |
|
2018 |
Effective tax rate |
|
18.82% |
|
15.67% |
|
21.32% |
|
3.49% |
|
19.62% |
Tax Reform impact on effective tax rate |
|
—% |
|
—% |
|
—% |
|
—% |
|
0.36% |
Multi-Year PSU impact on effective tax rate |
|
—% |
|
—% |
|
—% |
|
14.57% |
|
—% |
Adjusted tax rate |
|
18.82% |
|
15.67% |
|
21.32% |
|
18.06% |
|
19.98% |
Table 14: Third Quarter 2019 Reconciliation of Operating Revenue Growth to Organic Operating Revenue Growth (unaudited) |
|||||||
|
Comparison of the Three Months Ended September 30, 2019 and 2018 |
||||||
|
Total |
|
Recurring
|
|
Asset-Based Fees |
|
Non-Recurring
|
Index |
Change
|
|
Change
|
|
Change
|
|
Change
|
Operating revenue growth |
13.0% |
|
10.0% |
|
17.1% |
|
16.1% |
Impact of acquisitions and divestitures |
—% |
|
—% |
|
—% |
|
—% |
Impact of foreign currency exchange rate fluctuations |
(0.1%) |
|
(0.1%) |
|
—% |
|
0.2% |
Organic operating revenue growth |
12.9% |
|
9.9% |
|
17.1% |
|
16.3% |
|
|
|
|
|
|
|
|
|
Total |
|
Recurring
|
|
Asset-Based Fees |
|
Non-Recurring
|
Analytics |
Change
|
|
Change
|
|
Change
|
|
Change
|
Operating revenue growth |
3.1% |
|
2.7% |
|
—% |
|
42.5% |
Impact of acquisitions and divestitures |
4.0% |
|
4.0% |
|
—% |
|
12.3% |
Impact of foreign currency exchange rate fluctuations |
(0.2%) |
|
(0.2%) |
|
—% |
|
0.8% |
Organic operating revenue growth |
6.9% |
|
6.5% |
|
—% |
|
55.6% |
|
|
|
|
|
|
|
|
|
Total |
|
Recurring
|
|
Asset-Based Fees |
|
Non-Recurring
|
All Other |
Change
|
|
Change
|
|
Change
|
|
Change
|
Operating revenue growth |
19.3% |
|
19.7% |
|
—% |
|
4.4% |
Impact of acquisitions and divestitures |
—% |
|
—% |
|
—% |
|
—% |
Impact of foreign currency exchange rate fluctuations |
4.0% |
|
4.0% |
|
—% |
|
2.8% |
Organic operating revenue growth |
23.3% |
|
23.7% |
|
—% |
|
7.2% |
|
|
|
|
|
|
|
|
|
Total |
|
Recurring
|
|
Asset-Based Fees |
|
Non-Recurring
|
Consolidated |
Change
|
|
Change
|
|
Change
|
|
Change
|
Operating revenue growth |
10.1% |
|
7.8% |
|
17.1% |
|
18.5% |
Impact of acquisitions and divestitures |
1.4% |
|
1.7% |
|
—% |
|
1.1% |
Impact of foreign currency exchange rate fluctuations |
0.3% |
|
0.3% |
|
—% |
|
0.5% |
Organic operating revenue growth |
11.8% |
|
9.8% |
|
17.1% |
|
20.1% |
Table 15: Nine Months 2019 Reconciliation of Operating Revenue Growth to Organic Operating Revenue Growth (unaudited) |
|||||||
|
Comparison of the Nine Months Ended September 30, 2019 and 2018 |
||||||
|
Total |
|
Recurring
|
|
Asset-Based Fees |
|
Non-Recurring
|
Index |
Change
|
|
Change
|
|
Change
|
|
Change
|
Operating revenue growth |
8.4% |
|
11.0% |
|
4.1% |
|
20.1% |
Impact of acquisitions and divestitures |
—% |
|
—% |
|
—% |
|
—% |
Impact of foreign currency exchange rate fluctuations |
0.1% |
|
—% |
|
0.1% |
|
0.1% |
Organic operating revenue growth |
8.5% |
|
11.0% |
|
4.2% |
|
20.2% |
|
|
|
|
|
|
|
|
|
Total |
|
Recurring
|
|
Asset-Based Fees |
|
Non-Recurring Revenues |
Analytics |
Change
|
|
Change
|
|
Change
|
|
Change
|
Operating revenue growth |
3.0% |
|
2.6% |
|
—% |
|
41.9% |
Impact of acquisitions and divestitures |
5.2% |
|
5.1% |
|
—% |
|
27.9% |
Impact of foreign currency exchange rate fluctuations |
—% |
|
—% |
|
—% |
|
1.1% |
Organic operating revenue growth |
8.2% |
|
7.7% |
|
—% |
|
70.9% |
|
Total |
|
Recurring
|
|
Asset-Based Fees |
|
Non-Recurring
|
All Other |
Change
|
|
Change
|
|
Change
|
|
Change
|
Operating revenue growth |
17.3% |
|
18.9% |
|
—% |
|
(26.6%) |
Impact of acquisitions and divestitures |
—% |
|
—% |
|
—% |
|
—% |
Impact of foreign currency exchange rate fluctuations |
4.7% |
|
4.7% |
|
—% |
|
3.5% |
Organic operating revenue growth |
22.0% |
|
23.6% |
|
—% |
|
(23.1%) |
|
|
|
|
|
|
|
|
|
Total |
|
Recurring
|
|
Asset-Based Fees |
|
Non-Recurring
|
Consolidated |
Change
|
|
Change
|
|
Change
|
|
Change
|
Operating revenue growth |
7.4% |
|
8.1% |
|
4.1% |
|
17.0% |
Impact of acquisitions and divestitures |
1.7% |
|
2.4% |
|
—% |
|
3.0% |
Impact of foreign currency exchange rate fluctuations |
0.4% |
|
0.5% |
|
0.1% |
|
0.7% |
Organic operating revenue growth |
9.5% |
|
11.0% |
|
4.2% |
|
20.7% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20191031005463/en/
Source:
MSCI Inc. Contacts
Investor Inquiries
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