UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_______________________________
 
FORM 8-K
_______________________________
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): January 27, 2022

 _______________________________

MSCI Inc.
(Exact name of Registrant as Specified in Its Charter)
_______________________________
 
Delaware
 
001-33812
 
13-4038723
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
7 World Trade Center, 250 Greenwich Street, 49th Floor, New York, New York 10007
(Address of principal executive offices) (Zip Code)
 
(212) 804-3900
(Registrant’s telephone number, including area code)
 
NOT APPLICABLE
(Former name or former address, if changed since last report)
_______________________________


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
 
Trading
Symbol(s)
 
Name of each exchange on which registered
Common Stock, par value $0.01 per share
 
MSCI
 
New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 



Item 2.02 Results of Operations and Financial Condition.
 
On January 27, 2022, MSCI Inc. (the “Registrant”) released financial information with respect to its fourth quarter and full-year ended December 31, 2021. A copy of the press release containing this information is furnished as Exhibit 99.1 to this Current Report on Form 8-K (the “Report”).
 
The Registrant’s press release contains certain non-GAAP financial measures. Definitions of each non-GAAP financial measure, additional information about why management believes such non-GAAP measures are meaningful and reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are also contained in Exhibit 99.1.
 
The information furnished under Item 2.02 of this Report, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
 
Item 9.01 Financial Statements and Exhibits.
 
(d) Exhibits.

Exhibit No.
 
Description
 
Exhibit 104
 
Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL).
 



 
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 


 
MSCI Inc.
 
 
 
 
Date: January 27, 2022
By:
/s/ Henry A. Fernandez
 
Name:
Henry A. Fernandez
 
Title:
Chairman and Chief Executive Officer

Exhibit 99.1

MSCI Reports Financial Results for Fourth Quarter and Full Year 2021

NEW YORK--(BUSINESS WIRE)--January 27, 2022--MSCI Inc. (“MSCI” or the “Company”) (NYSE: MSCI), a leading provider of critical decision support tools and services for the global investment community, today announced its financial results for the three months ended December 31, 2021 (“fourth quarter 2021”) and full year ended December 31, 2021 (“full year 2021”).

Financial and Operational Highlights for Fourth Quarter 2021
(Note: Unless otherwise noted, percentage and other changes are relative to the three months ended December 31, 2020 (“fourth quarter 2020”) and Run Rate percentage changes are relative to December 31, 2020).

  • Operating revenues of $549.8 million, up 23.9%; Organic operating revenue growth of 19.8%
  • Recurring subscription revenues up 19.3%; Asset-based fees up 34.4%
  • Operating margin of 51.0%; Adjusted EBITDA margin of 58.0%
  • Diluted EPS of $2.32, up 24.1%; Adjusted EPS of $2.51, up 28.1%
  • New recurring subscription sales growth of 43.1%; Organic subscription Run Rate growth of 13.4%; Retention Rate of 94.4%
  • In first quarter 2022 and through trade date of January 25, 2022, a total of $474.3 million or 915,866 shares were repurchased at an average repurchase price of $517.83
  • Approximately $85.8 million in dividends were paid to shareholders in fourth quarter 2021; Cash dividend of $1.04 per share declared by MSCI Board of Directors for first quarter 2022

 

 

Three Months Ended

 

 

 

 

 

 

Year Ended

 

 

 

 

 

 

 

Dec. 31,

 

 

Dec. 31,

 

 

%

 

 

Dec. 31,

 

 

Dec. 31,

 

 

%

 

In thousands, except per share data

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

Operating revenues

 

$

549,842

 

 

$

443,661

 

 

 

23.9

%

 

$

2,043,544

 

 

$

1,695,390

 

 

 

20.5

%

Operating income

 

$

280,587

 

 

$

234,085

 

 

 

19.9

%

 

$

1,072,725

 

 

$

884,764

 

 

 

21.2

%

Operating margin %

 

 

51.0

%

 

 

52.8

%

 

 

 

 

 

 

52.5

%

 

 

52.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

193,865

 

 

$

156,216

 

 

 

24.1

%

 

$

725,983

 

 

$

601,822

 

 

 

20.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS

 

$

2.32

 

 

$

1.87

 

 

 

24.1

%

 

$

8.70

 

 

$

7.12

 

 

 

22.2

%

Adjusted EPS

 

$

2.51

 

 

$

1.96

 

 

 

28.1

%

 

$

9.95

 

 

$

7.83

 

 

 

27.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

318,660

 

 

$

256,136

 

 

 

24.4

%

 

$

1,196,790

 

 

$

971,510

 

 

 

23.2

%

Adjusted EBITDA margin %

 

 

58.0

%

 

 

57.7

%

 

 

 

 

 

 

58.6

%

 

 

57.3

%

 

 

 

 

“MSCI’s ground-breaking performance in the fourth quarter and full year of 2021 reflected strong success on key strategic investments, a laser focus on the needs of our clients, and unprecedented demand for our solutions. Among other milestones, we achieved record full-year and quarterly recurring sales and recurring net new sales, along with the 32nd consecutive quarter of double-digit subscription growth in our Index business,” said Henry A. Fernandez, Chairman and CEO of MSCI.

“Over the course of 2022, we will continue investing and executing aggressively to meet growing client demand and secure leadership positions across the enormous growth opportunities in front of us, including ESG and Climate. The global race to net-zero keeps accelerating, and we have positioned MSCI as a leading provider of climate-related tools for the capital markets industry,” added Mr. Fernandez.


Fourth Quarter Consolidated Results

Operating Revenues: Operating revenues were $549.8 million, up 23.9%. Organic operating revenue growth was 19.8%. The $106.2 million increase was comprised of $61.9 million in higher recurring subscription revenues and $38.3 million in higher asset-based fees, as well as $6.0 million in higher non-recurring revenues.

Run Rate and Retention Rate: Total Run Rate at December 31, 2021 was $2,203.9 million, up 20.3%. Recurring subscriptions Run Rate increased by $246.2 million and asset-based fees Run Rate increased by $125.2 million. Organic recurring subscriptions Run Rate growth was 13.4%. Retention Rate in fourth quarter 2021 was 94.4%, compared to 92.6% in fourth quarter 2020.

Expenses: Total operating expenses were $269.3 million, up 28.5%. Adjusted EBITDA expenses were $231.2 million, up 23.3%, primarily reflecting higher compensation and benefits costs, related to continued investments to support growth, including increased headcount in product development and research and technology and increased non-compensation costs in the areas of information technology costs, professional fees, market data costs and marketing costs. Approximately $8.7 million in impairment charges related to the sublease of leased property were excluded from Adjusted EBITDA expenses. Total operating expenses excluding the impact of foreign currency exchange rate fluctuations (“ex-FX”) and adjusted EBITDA expenses ex-FX increased 29.0% and 23.9%, respectively.

Headcount: As of December 31, 2021, headcount was 4,303 employees, with approximately 37% and approximately 63% of employees located in developed market and emerging market locations, respectively.

Other Expense (Income), Net: Other expense (income), net was $34.8 million, down 10.5% primarily reflecting a one-time gain of $7.0 million related to the gain resulting from changes in ownership interest of The Burgiss Group, LLC, an equity method investee, partially offset by higher interest expense due to higher debt balances versus the prior period.

Income Taxes: The effective tax rate was 21.1% in fourth quarter 2021, compared to 20.0% in fourth quarter 2020, primarily driven by higher net unfavorable discrete expenses, including accruals for potential audit settlements and other prior year items.

Net Income: As a result of the factors described above, net income was $193.9 million, up 24.1%.

Adjusted EBITDA: Adjusted EBITDA was $318.7 million, up 24.4%. Adjusted EBITDA margin in fourth quarter 2021 was 58.0%, compared to 57.7% in fourth quarter 2020.


Index Segment:

Table 1A: Results (unaudited)

 

 

Three Months Ended

 

 

 

Year Ended

 

 

 

 

Dec. 31,

 

Dec. 31,

 

%

 

Dec. 31,

 

Dec. 31,

 

%

In thousands

 

2021

 

2020

 

Change

 

2021

 

2020

 

Change

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Recurring subscriptions

 

$170,141

 

$148,762

 

14.4%

 

$650,629

 

$580,393

 

12.1%

Asset-based fees

 

149,398

 

111,129

 

34.4%

 

553,991

 

399,771

 

38.6%

Non-recurring

 

12,268

 

8,749

 

40.2%

 

47,144

 

36,331

 

29.8%

Total operating revenues

 

331,807

 

268,640

 

23.5%

 

1,251,764

 

1,016,495

 

23.1%

Adjusted EBITDA expenses

 

79,429

 

63,710

 

24.7%

 

300,452

 

250,002

 

20.2%

Adjusted EBITDA

 

$252,378

 

$204,930

 

23.2%

 

$951,312

 

$766,493

 

24.1%

Adjusted EBITDA margin %

 

76.1%

 

76.3%

 

 

 

76.0%

 

75.4%

 

 

Index operating revenues were $331.8 million, up 23.5%. The $63.2 million increase was primarily driven by $38.3 million in higher asset-based fees mainly reflecting an increase in revenues from exchange traded funds (“ETFs”) linked to MSCI equity indexes. This increase reflected higher average AUM in ETFs linked to MSCI equity indexes, partially offset by a decline in average basis point fees on those AUM.

Recurring subscription revenues increased by $21.4 million, primarily reflecting strong contributions from market cap-weighted index products and from factor, ESG and climate index products. The $3.5 million increase in non-recurring revenues reflected higher licenses of derivative and factor and ESG index products, including client license and usage fees related to prior periods.

Index Run Rate as of December 31, 2021 was $1.3 billion, up 18.6%. The $201.4 million increase was comprised of a $125.2 million increase in asset-based fees Run Rate and a $76.2 million increase in recurring subscription Run Rate. The increase in asset-based fees Run Rate was primarily driven by higher AUM in ETFs linked to MSCI equity indexes and higher AUM in non-ETF indexed funds linked to MSCI indexes. The increase in recurring subscription Run Rate was primarily driven by growth across products, including market cap-weighted index products and strong growth in factor, ESG and climate index products and reflected growth across all regions and all client segments.

Analytics Segment:

Table 1B: Results (unaudited)

 

 

Three Months Ended

 

 

 

Year Ended

 

 

 

 

Dec. 31,

 

Dec. 31,

 

%

 

Dec. 31,

 

Dec. 31,

 

%

In thousands

 

2021

 

2020

 

Change

 

2021

 

2020

 

Change

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Recurring subscriptions

 

$133,818

 

$129,796

 

3.1%

 

$533,178

 

$506,301

 

5.3%

Non-recurring

 

4,264

 

2,604

 

63.7%

 

11,121

 

7,507

 

48.1%

Total operating revenues

 

138,082

 

132,400

 

4.3%

 

544,299

 

513,808

 

5.9%

Adjusted EBITDA expenses

 

85,119

 

87,016

 

(2.2%)

 

345,500

 

340,884

 

1.4%

Adjusted EBITDA

 

$52,963

 

$45,384

 

16.7%

 

$198,799

 

$172,924

 

15.0%

Adjusted EBITDA margin %

 

38.4%

 

34.3%

 

 

 

36.5%

 

33.7%

 

 

Analytics operating revenues were $138.1 million, up 4.3%. The $5.7 million increase was driven primarily by higher recurring subscription revenues from Equity Analytics products.

Analytics Run Rate as of December 31, 2021 was $585.2 million, up 5.4%. The increase of $30.1 million was also driven by growth in both Multi-Asset Class and Equity Analytics products. Analytics organic Run Rate growth was 6.8%.


ESG and Climate Segment:

Table 1C: Results (unaudited)

 

 

Three Months Ended

 

 

 

Year Ended

 

 

 

 

Dec. 31,

 

Dec. 31,

 

%

 

Dec. 31,

 

Dec. 31,

 

%

In thousands

 

2021

 

2020

 

Change

 

2021

 

2020

 

Change

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Recurring subscriptions

 

$47,310

 

$30,984

 

52.7%

 

$162,609

 

$109,945

 

47.9%

Non-recurring

 

1,133

 

294

 

285.4%

 

3,583

 

1,419

 

152.5%

Total operating revenues

 

48,443

 

31,278

 

54.9%

 

166,192

 

111,364

 

49.2%

Adjusted EBITDA expenses

 

39,280

 

25,210

 

55.8%

 

136,444

 

88,513

 

54.2%

Adjusted EBITDA

 

$9,163

 

$6,068

 

51.0%

 

$29,748

 

$22,851

 

30.2%

Adjusted EBITDA margin %

 

18.9%

 

19.4%

 

 

 

17.9%

 

20.5%

 

 

ESG and Climate operating revenues were $48.4 million, up 54.9%. The $17.2 million increase was primarily driven by strong growth from Ratings, Climate and Screening products. Excluding foreign currency exchange rate fluctuations, ESG and Climate revenue growth was 53.0%.

ESG and Climate Run Rate as of December 31, 2021 was $199.6 million, up 44.3%. The $61.3 million increase primarily reflects strong growth from Ratings, Climate and Screening products with contributions across all regions and client segments. ESG and Climate organic Run Rate growth was 47.1%.

All Other – Private Assets Segment:

Table 1D: Results (unaudited)

 

 

Three Months Ended

 

 

 

Year Ended

 

 

 

 

Dec. 31,

 

Dec. 31,

 

%

 

Dec. 31,

 

Dec. 31,

 

%

In thousands

 

2021

 

2020

 

Change

 

2021

 

2020

 

Change

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Recurring subscriptions

 

$31,269

 

$11,134

 

180.8%

 

$79,624

 

$51,536

 

54.5%

Non-recurring

 

241

 

209

 

15.3%

 

1,665

 

2,187

 

(23.9%)

Total operating revenues

 

31,510

 

11,343

 

177.8%

 

81,289

 

53,723

 

51.3%

Adjusted EBITDA expenses

 

27,354

 

11,589

 

136.0%

 

64,358

 

44,481

 

44.7%

Adjusted EBITDA

 

$4,156

 

$(246)

 

nm

 

$16,931

 

$9,242

 

83.2%

Adjusted EBITDA margin %

 

13.2%

 

(2.2%)

 

 

 

20.8%

 

17.2%

 

 

All Other – Private Assets operating revenues, which reflects the Real Estate operating segment, were $31.5 million, up 177.8%, and included $18.7 million from the acquisition of RCA which closed on September 13, 2021. Excluding the acquisition of RCA, All Other – Private Assets segment revenues increased 13.0% reflecting strong growth in Global Intel and Real Estate Climate Value-at-Risk products. Excluding foreign currency exchange rate fluctuations and contributions from RCA, All Other – Private Assets revenue growth was 12.9%.

All Other – Private Assets Run Rate, which reflects the Real Estate operating segment, was $135.1 million as of December 31, 2021, up 139.2%, and included $76.0 million associated with the RCA business. Excluding the acquisition, the increase reflected contributions from Global Intel products, as well as strong growth in new sales of Real Estate Climate Value-at-Risk products. All Other – Private Assets organic subscription Run Rate growth was 7.6%.


Select Balance Sheet Items and Capital Allocation

Cash Balances and Outstanding Debt: Cash and cash equivalents was $1.4 billion as of December 31, 2021. MSCI typically seeks to maintain minimum cash balances globally of approximately $200.0 million to $250.0 million for general operating purposes.

Total principal amounts of debt outstanding as of December 31, 2021 was $4.2 billion. The total debt to net income ratio (based on trailing twelve months net income) was 5.7x. The total debt to adjusted EBITDA ratio (based on trailing twelve months adjusted EBITDA) was 3.5x.

MSCI seeks to maintain total debt to adjusted EBITDA in a target range of 3.0x to 3.5x.

Capex and Cash Flow: Capex was $16.6 million, cash provided by operating activities increased by 18.5% to $279.7 million due to higher cash collections and free cash flow was $263.1 million, up 20.1%.

Share Count and Share Repurchases: Weighted average diluted shares outstanding were 83.6 million in fourth quarter 2021, down 0.2% year-over-year. Total share repurchases during the quarter were $5.2 million or 9,069 shares at an average repurchase price of $577.76. In first quarter 2022 and through trade date of January 25, 2022, a total of $474.3 million or 915,866 shares were repurchased at an average repurchase price of $517.83. Total shares outstanding as of December 31, 2021 were 82.4 million. A total of $1.1 billion remains on the outstanding share repurchase authorization as of trade date of January 25, 2021.

Dividends: Approximately $85.8 million in dividends were paid to shareholders in fourth quarter 2021. On January 24, 2022, the MSCI Board of Directors declared a cash dividend of $1.04 per share for first quarter 2022, payable on February 28, 2022 to shareholders of record as of the close of trading on February 18, 2022.

Full-Year 2022 Guidance

MSCI's guidance for the year ending December 31, 2022 (“Full-Year 2022”) is based on assumptions about a number of macroeconomic and capital market factors, in particular related to equity markets. These assumptions are subject to uncertainty, and actual results for the year could differ materially from our current guidance, including as a result of ongoing uncertainty related to the duration, magnitude and impact of the ongoing COVID-19 pandemic.

Guidance Item

Current Guidance for Full-Year 2022

Operating Expense

$1,075 to $1,115 million

Adjusted EBITDA Expense

$975 to $1,005 million

Interest Expense (including amortization of financing fees)(1)

~$162 million

Depreciation & Amortization Expense

$100 to $110 million

Effective Tax Rate

15.5% to 18.5%

Capital Expenditures

$60 to $70 million

Net Cash Provided by Operating Activities

$1,120 to $1,160 million

Free Cash Flow

$1,050 to $1,100 million

(1) Interest income will continue to be impacted by the lower rates available on cash balances.

The guidance provided above assumes, among other things, that MSCI maintains its current debt levels. On January 26, 2022, the MSCI Board of Directors authorized management to opportunistically explore financing options that would increase the Company's leverage ratio and interest expense. Any potential financing is subject to market and other conditions, and there can be no assurance as to the timing or certainty of a transaction.


Conference Call Information

MSCI's senior management will review the fourth quarter and full year 2021 results on Thursday, January 27, 2022 at 11:00 AM Eastern Time. To listen to the live event via webcast, visit the events and presentations section of MSCI's Investor Relations website, https://ir.msci.com/events-and-presentations, or via telephone, dial 1-877-376-9931 conference ID: 3990859 within the United States. International callers may dial 1-720-405-2251 conference ID: 3990859. The teleconference will also be webcast with an accompanying slide presentation which can be accessed through MSCI's Investor Relations website.

About MSCI Inc.

MSCI is a leading provider of critical decision support tools and services for the global investment community. With over 50 years of expertise in research, data and technology, we power better investment decisions by enabling clients to understand and analyze key drivers of risk and return and confidently build more effective portfolios. We create industry-leading research-enhanced solutions that clients use to gain insight into and improve transparency across the investment process. 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 2022 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 December 31, 2020 filed with the Securities and Exchange Commission (“SEC”) on February 12, 2021 and in quarterly reports on Form 10-Q and current reports on Form 8-K filed or furnished with the SEC. If any of these risks or uncertainties materialize, or if MSCI’s underlying assumptions prove to be incorrect, actual results may vary significantly from what MSCI projected. Any forward-looking statement in this earnings release reflects MSCI’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to MSCI’s operations, results of operations, growth strategy and liquidity. MSCI assumes no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise, except as required by law.


Website and Social Media Disclosure

MSCI uses its website, including its quarterly updates, blog, podcasts and social media channels, including its corporate Twitter account (@MSCI_Inc), as channels of distribution of company information. The information MSCI posts through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following MSCI’s press releases, quarterly SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about MSCI when you enroll your email address by visiting the “Email Alerts Subscription” section of MSCI’s Investor Relations homepage at http://ir.msci.com/email-alerts. The contents of MSCI’s website, including its quarterly updates, blog, podcasts and social media channels are not, however, incorporated by reference into this earnings release.

Notes Regarding the Use of Operating Metrics

MSCI has presented supplemental key operating metrics as part of this earnings release, including Retention Rate, Run Rate, subscription sales, subscription cancellations and non-recurring sales.

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 or discontinue the subscription 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 and Climate operating 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 operating 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, or reach the end of the committed subscription period, 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, non-renewal or an indication the client does not intend to continue their subscription 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, including the acquisition of RCA completed on September 13, 2021. 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.

Sales represents the annualized value of products and services clients commit to purchase from MSCI and will result in additional operating revenues. Non-recurring sales represent the actual value of the customer agreements entered into during the period and are not a component of Run Rate. New recurring subscription sales represent additional selling activities, such as new customer agreements, additions to existing agreements or increases in price that occurred during the period and are additions to Run Rate. Subscription cancellations reflect client activities during the period, such as discontinuing products and services and/or reductions in price, resulting in reductions to Run Rate. Net new recurring subscription sales represent the amount of new recurring subscription sales net of subscription cancellations during the period, which reflects the net impact to Run Rate during the period.

Total gross sales represent the sum of new recurring subscription sales and non-recurring sales. Total net sales represent the total gross sales net of the impact from subscription cancellations.

Notes Regarding the Use of Non-GAAP Financial Measures

MSCI has presented supplemental non-GAAP financial measures as part of this earnings release. Reconciliations are provided in Tables 9 through 15 below that reconcile each non-GAAP financial measure with the most comparable GAAP measure. The non-GAAP financial measures presented in this earnings release should not be considered as alternative measures for the most directly comparable GAAP financial measures. The non-GAAP financial measures presented in this earnings release are used by management to monitor the financial performance of the business, inform business decision-making and forecast future results.

“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 impairment related to sublease of leased property and certain non-recurring acquisition-related integration and transaction costs.

“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 impairment related to sublease of leased property and certain non-recurring acquisition-related integration and transaction costs.

“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, including the amortization of the basis difference between the cost of the equity method investment and MSCI's share of the net assets of the investee at historical carrying value, the impact related to costs associated with debt extinguishment, the impact related to certain non-recurring acquisition-related integration and transaction costs, the impact from impairment related to sublease of leased property, the impact related to gain from changes in ownership interest of equity method investee, and, at times, certain other transactions or adjustments.  We also exclude the tax impact of adjustments for the Tax Cuts and Jobs Act that was enacted on December 22, 2017 (“Tax Reform”), except for certain amounts associated with active tax planning implemented as a result of Tax Reform.

“Adjusted tax rate” is defined as the effective tax rate excluding the impact of Tax Reform adjustments (except for certain amounts associated with active tax planning implemented as a result of Tax Reform).

“Capex” is defined as capital expenditures plus capitalized software development costs.

“Free cash flow” is defined as net cash provided by operating activities, less Capex.

“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 assets under management (“AUM”).

We believe adjusted EBITDA and adjusted EBITDA expenses are meaningful measures of the operating performance of MSCI because they adjust for significant one-time, unusual or non-recurring items as well as eliminate the accounting effects of certain capital spending and acquisitions that do not directly affect what management considers to be our ongoing operating performance in the period.

We believe adjusted net income and adjusted EPS are meaningful measures of the performance of MSCI because they adjust for the after-tax impact of significant one-time, unusual or non-recurring items as well as eliminate the impact of any transactions that do not directly affect what management considers to be our ongoing operating performance in the period. We also exclude the after-tax impact of the amortization of acquired intangible assets and amortization of the basis difference between the cost of the equity method investment and MSCI’s share of the net assets of the investee at historical carrying value, as these non-cash amounts are significantly impacted by the timing and size of each acquisition and therefore not meaningful to the ongoing operating performance in the period.

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.

We believe that free cash flow is useful to investors because it relates the operating cash flow of MSCI to the capital that is spent to continue and improve business operations, such as investment in MSCI’s existing products. Further, free cash flow indicates our ability to strengthen MSCI’s balance sheet, repay our debt obligations, pay cash dividends and repurchase shares of our common stock.

We believe organic operating revenue growth is a meaningful measure of the operating performance of MSCI because it adjusts for the impact of foreign currency exchange rate fluctuations and excludes the impact of operating revenues attributable to acquired and divested businesses for the comparable prior year period, providing insight into our ongoing operating performance for the period(s) presented.

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, Capex, free cash flow and organic operating revenue growth are not defined in the same manner by all companies and may not be comparable to similarly-titled non-GAAP financial measures of other companies. These measures can differ significantly from company to company depending on, among other things, long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. Accordingly, the Company’s computation of these measures may not be comparable to similarly-titled measures computed by other companies.

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 three-fifths 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)

 

 

Three Months Ended

 

 

 

 

 

 

Year Ended

 

 

 

 

 

 

 

Dec. 31,

 

 

Dec. 31,

 

 

%

 

 

Dec. 31,

 

 

Dec. 31,

 

 

%

 

In thousands, except per share data

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

Operating revenues

 

$

549,842

 

 

$

443,661

 

 

 

23.9

%

 

$

2,043,544

 

 

$

1,695,390

 

 

 

20.5

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

95,903

 

 

 

75,935

 

 

 

26.3

%

 

 

358,684

 

 

 

291,704

 

 

 

23.0

%

Selling and marketing

 

 

68,708

 

 

 

56,662

 

 

 

21.3

%

 

 

243,185

 

 

 

216,496

 

 

 

12.3

%

Research and development

 

 

30,819

 

 

 

27,056

 

 

 

13.9

%

 

 

111,564

 

 

 

101,053

 

 

 

10.4

%

General and administrative

 

 

44,873

 

 

 

27,872

 

 

 

61.0

%

 

 

147,893

 

 

 

114,627

 

 

 

29.0

%

Amortization of intangible assets

 

 

21,023

 

 

 

14,770

 

 

 

42.3

%

 

 

80,592

 

 

 

56,941

 

 

 

41.5

%

Depreciation and amortization of property,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

equipment and leasehold improvements

 

 

7,929

 

 

 

7,281

 

 

 

8.9

%

 

 

28,901

 

 

 

29,805

 

 

 

(3.0

%)

Total operating expenses(1)

 

 

269,255

 

 

 

209,576

 

 

 

28.5

%

 

 

970,819

 

 

 

810,626

 

 

 

19.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

280,587

 

 

 

234,085

 

 

 

19.9

%

 

 

1,072,725

 

 

 

884,764

 

 

 

21.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(368

)

 

 

(301

)

 

 

22.3

%

 

 

(1,497

)

 

 

(5,030

)

 

 

(70.2

%)

Interest expense

 

 

40,336

 

 

 

37,330

 

 

 

8.1

%

 

 

159,614

 

 

 

156,324

 

 

 

2.1

%

Other expense (income)

 

 

(5,144

)

 

 

1,890

 

 

nm

 

 

 

56,472

 

 

 

47,245

 

 

 

19.5

%

Other expenses (income), net

 

 

34,824

 

 

 

38,919

 

 

 

(10.5

%)

 

 

214,589

 

 

 

198,539

 

 

 

8.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

 

245,763

 

 

 

195,166

 

 

 

25.9

%

 

 

858,136

 

 

 

686,225

 

 

 

25.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

51,898

 

 

 

38,950

 

 

 

33.2

%

 

 

132,153

 

 

 

84,403

 

 

 

56.6

%

Net income

 

 

193,865

 

 

 

156,216

 

 

 

24.1

%

 

 

725,983

 

 

 

601,822

 

 

 

20.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per basic common share

 

$

2.35

 

 

$

1.89

 

 

 

24.3

%

 

$

8.80

 

 

$

7.19

 

 

 

22.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per diluted common share

 

$

2.32

 

 

$

1.87

 

 

 

24.1

%

 

$

8.70

 

 

$

7.12

 

 

 

22.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding used

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in computing earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

82,473

 

 

 

82,737

 

 

 

(0.3

%)

 

 

82,508

 

 

 

83,716

 

 

 

(1.4

%)

Diluted

 

 

83,578

 

 

 

83,707

 

 

 

(0.2

%)

 

 

83,479

 

 

 

84,517

 

 

 

(1.2

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

nm: not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes stock-based compensation expense of $12.2 million and $12.3 million for the three months ended Dec. 31, 2021 and Dec. 31, 2020, respectively. Includes stock-based compensation expense of $58.5 million and $55.6 million for the year ended Dec. 31, 2021 and Dec. 31, 2020, respectively.


Table 3: Selected Balance Sheet Items (unaudited)

 

 

As of

 

 

Dec. 31,

 

Dec. 31,

In thousands

 

2021

 

2020

Cash and cash equivalents

 

$1,421,449

 

$1,300,521

Accounts receivable, net of allowances

 

$664,511

 

$558,569

 

 

 

 

 

Deferred revenue

 

$824,912

 

$675,870

Long-term debt(1)

 

$4,161,422

 

$3,366,777

(1) Consists of gross long-term debt, net of deferred financing fees. Gross long-term debt was $4,200.0 million at Dec. 31, 2021 and $3,400.0 million at Dec. 31, 2020.

Table 4: Selected Cash Flow Items (unaudited)

 

 

Three Months Ended

 

 

 

 

 

 

Year Ended

 

 

 

 

 

 

 

 

 

Dec. 31,

 

 

Dec. 31,

 

 

%

 

 

Dec. 31,

 

 

Dec. 31,

 

 

%

 

 

 

In thousands

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

 

 

Net cash provided by operating activities

 

$

279,664

 

 

$

235,928

 

 

 

18.5

%

 

$

936,069

 

 

$

811,109

 

 

 

15.4

%

 

 

Net cash used in investing activities

 

 

(49,834

)

 

 

(16,892

)

 

 

(195.0

%)

 

 

(1,035,713

)

 

 

(241,791

)

 

nm

 

 

 

Net cash (used in) provided by financing activities

 

 

(91,744

)

 

 

(229,554

)

 

 

60.0

%

 

 

229,505

 

 

 

(779,038

)

 

 

129.5

%

 

 

Effect of exchange rate changes

 

 

(1,301

)

 

 

8,181

 

 

 

(115.9

%)

 

 

(8,933

)

 

 

3,674

 

 

nm

 

 

 

Net (decrease) increase in cash and cash equivalents

 

$

136,785

 

 

$

(2,337

)

 

nm

 

 

$

120,928

 

 

$

(206,046

)

 

 

158.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

nm: not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Table 5: Operating Results by Segment and Revenue Type (unaudited)

Index

 

Three Months Ended

 

 

 

Year Ended

 

 

 

 

Dec. 31,

 

Dec. 31,

 

%

 

Dec. 31,

 

Dec. 31,

 

%

In thousands

 

2021

 

2020

 

Change

 

2021

 

2020

 

Change

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Recurring subscriptions

 

$170,141

 

$148,762

 

14.4%

 

$650,629

 

$580,393

 

12.1%

Asset-based fees

 

149,398

 

111,129

 

34.4%

 

553,991

 

399,771

 

38.6%

Non-recurring

 

12,268

 

8,749

 

40.2%

 

47,144

 

36,331

 

29.8%

Total operating revenues

 

331,807

 

268,640

 

23.5%

 

1,251,764

 

1,016,495

 

23.1%

Adjusted EBITDA expenses

 

79,429

 

63,710

 

24.7%

 

300,452

 

250,002

 

20.2%

Adjusted EBITDA

 

$252,378

 

$204,930

 

23.2%

 

$951,312

 

$766,493

 

24.1%

Adjusted EBITDA margin %

 

76.1%

 

76.3%

 

 

 

76.0%

 

75.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Analytics

 

Three Months Ended

 

 

 

Year Ended

 

 

 

 

Dec. 31,

 

Dec. 31,

 

%

 

Dec. 31,

 

Dec. 31,

 

%

In thousands

 

2021

 

2020

 

Change

 

2021

 

2020

 

Change

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Recurring subscriptions

 

$133,818

 

$129,796

 

3.1%

 

$533,178

 

$506,301

 

5.3%

Non-recurring

 

4,264

 

2,604

 

63.7%

 

11,121

 

7,507

 

48.1%

Total operating revenues

 

138,082

 

132,400

 

4.3%

 

544,299

 

513,808

 

5.9%

Adjusted EBITDA expenses

 

85,119

 

87,016

 

(2.2%)

 

345,500

 

340,884

 

1.4%

Adjusted EBITDA

 

$52,963

 

$45,384

 

16.7%

 

$198,799

 

$172,924

 

15.0%

Adjusted EBITDA margin %

 

38.4%

 

34.3%

 

 

 

36.5%

 

33.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ESG and Climate

 

Three Months Ended

 

 

 

Year Ended

 

 

 

 

Dec. 31,

 

Dec. 31,

 

%

 

Dec. 31,

 

Dec. 31,

 

%

In thousands

 

2021

 

2020

 

Change

 

2021

 

2020

 

Change

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Recurring subscriptions

 

$47,310

 

$30,984

 

52.7%

 

$162,609

 

$109,945

 

47.9%

Non-recurring

 

1,133

 

294

 

285.4%

 

3,583

 

1,419

 

152.5%

Total operating revenues

 

48,443

 

31,278

 

54.9%

 

166,192

 

111,364

 

49.2%

Adjusted EBITDA expenses

 

39,280

 

25,210

 

55.8%

 

136,444

 

88,513

 

54.2%

Adjusted EBITDA

 

$9,163

 

$6,068

 

51.0%

 

$29,748

 

$22,851

 

30.2%

Adjusted EBITDA margin %

 

18.9%

 

19.4%

 

 

 

17.9%

 

20.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All Other - Private Assets

 

Three Months Ended

 

 

 

Year Ended

 

 

 

 

Dec. 31,

 

Dec. 31,

 

%

 

Dec. 31,

 

Dec. 31,

 

%

In thousands

 

2021

 

2020

 

Change

 

2021

 

2020

 

Change

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Recurring subscriptions

 

$31,269

 

$11,134

 

180.8%

 

$79,624

 

$51,536

 

54.5%

Non-recurring

 

241

 

209

 

15.3%

 

1,665

 

2,187

 

(23.9%)

Total operating revenues

 

31,510

 

11,343

 

177.8%

 

81,289

 

53,723

 

51.3%

Adjusted EBITDA expenses

 

27,354

 

11,589

 

136.0%

 

64,358

 

44,481

 

44.7%

Adjusted EBITDA

 

$4,156

 

$(246)

 

nm

 

$16,931

 

$9,242

 

83.2%

Adjusted EBITDA margin %

 

13.2%

 

(2.2%)

 

 

 

20.8%

 

17.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

Three Months Ended

 

 

 

Year Ended

 

 

 

 

Dec. 31,

 

Dec. 31,

 

%

 

Dec. 31,

 

Dec. 31,

 

%

In thousands

 

2021

 

2020

 

Change

 

2021

 

2020

 

Change

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Recurring subscriptions

 

$382,538

 

$320,676

 

19.3%

 

$1,426,040

 

$1,248,175

 

14.3%

Asset-based fees

 

149,398

 

111,129

 

34.4%

 

553,991

 

399,771

 

38.6%

Non-recurring

 

17,906

 

11,856

 

51.0%

 

63,513

 

47,444

 

33.9%

Operating revenues total

 

549,842

 

443,661

 

23.9%

 

2,043,544

 

1,695,390

 

20.5%

Adjusted EBITDA expenses

 

231,182

 

187,525

 

23.3%

 

846,754

 

723,880

 

17.0%

Adjusted EBITDA

 

$318,660

 

$256,136

 

24.4%

 

$1,196,790

 

$971,510

 

23.2%

Adjusted EBITDA margin %

 

58.0%

 

57.7%

 

 

 

58.6%

 

57.3%

 

 

Operating margin %

 

51.0%

 

52.8%

 

 

 

52.5%

 

52.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

nm: not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 


Table 6: Sales and Retention Rate by Segment (unaudited)(1)

 

 

Three Months Ended

 

 

Year Ended

 

 

 

Dec. 31,

 

 

Dec. 31,

 

 

Dec. 31,

 

 

Dec. 31,

 

In thousands

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Index

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New recurring subscription sales

 

$

33,649

 

 

$

27,338

 

 

$

99,686

 

 

$

85,411

 

Subscription cancellations

 

 

(6,207

)

 

 

(7,809

)

 

 

(24,399

)

 

 

(27,398

)

Net new recurring subscription sales

 

$

27,442

 

 

$

19,529

 

 

$

75,287

 

 

$

58,013

 

Non-recurring sales

 

$

14,690

 

 

$

10,729

 

 

$

54,030

 

 

$

41,463

 

Total gross sales

 

$

48,339

 

 

$

38,067

 

 

$

153,716

 

 

$

126,874

 

Total Index net sales

 

$

42,132

 

 

$

30,258

 

 

$

129,317

 

 

$

99,476

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Index Retention Rate

 

 

96.0

%

 

 

94.4

%

 

 

96.1

%

 

 

95.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Analytics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New recurring subscription sales

 

$

27,275

 

 

$

20,112

 

 

$

71,656

 

 

$

61,538

 

Subscription cancellations

 

 

(9,103

)

 

 

(12,995

)

 

 

(34,291

)

 

 

(40,003

)

Net new recurring subscription sales

 

$

18,172

 

 

$

7,117

 

 

$

37,365

 

 

$

21,535

 

Non-recurring sales

 

$

4,284

 

 

$

3,510

 

 

$

12,407

 

 

$

10,996

 

Total gross sales

 

$

31,559

 

 

$

23,622

 

 

$

84,063

 

 

$

72,534

 

Total Analytics net sales

 

$

22,456

 

 

$

10,627

 

 

$

49,772

 

 

$

32,531

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Analytics Retention Rate

 

 

93.4

%

 

 

90.1

%

 

 

93.8

%

 

 

92.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ESG and Climate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New recurring subscription sales

 

$

23,258

 

 

$

14,658

 

 

$

69,964

 

 

$

40,786

 

Subscription cancellations

 

 

(1,175

)

 

 

(1,120

)

 

 

(4,811

)

 

 

(5,593

)

Net new recurring subscription sales

 

$

22,083

 

 

$

13,538

 

 

$

65,153

 

 

$

35,193

 

Non-recurring sales

 

$

1,208

 

 

$

432

 

 

$

4,135

 

 

$

1,134

 

Total gross sales

 

$

24,466

 

 

$

15,090

 

 

$

74,099

 

 

$

41,920

 

Total ESG and Climate net sales

 

$

23,291

 

 

$

13,970

 

 

$

69,288

 

 

$

36,327

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ESG and Climate Retention Rate

 

 

96.6

%

 

 

95.6

%

 

 

96.5

%

 

 

94.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All Other - Private Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New recurring subscription sales

 

$

8,119

 

 

$

2,388

 

 

$

14,142

 

 

$

6,121

 

Subscription cancellations

 

 

(3,856

)

 

 

(1,093

)

 

 

(6,737

)

 

 

(2,787

)

Net new recurring subscription sales

 

$

4,263

 

 

$

1,295

 

 

$

7,405

 

 

$

3,334

 

Non-recurring sales

 

$

493

 

 

$

292

 

 

$

1,694

 

 

$

1,442

 

Total gross sales

 

$

8,612

 

 

$

2,680

 

 

$

15,836

 

 

$

7,563

 

Total All Other - Private Assets net sales

 

$

4,756

 

 

$

1,587

 

 

$

9,099

 

 

$

4,776

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All Other - Private Assets Retention Rate(2)

 

 

88.1

%

 

 

91.4

%

 

 

90.5

%

 

 

94.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New recurring subscription sales

 

$

92,301

 

 

$

64,496

 

 

$

255,448

 

 

$

193,856

 

Subscription cancellations

 

 

(20,341

)

 

 

(23,017

)

 

 

(70,238

)

 

 

(75,781

)

Net new recurring subscription sales

 

$

71,960

 

 

$

41,479

 

 

$

185,210

 

 

$

118,075

 

Non-recurring sales

 

$

20,675

 

 

$

14,963

 

 

$

72,266

 

 

$

55,035

 

Total gross sales

 

$

112,976

 

 

$

79,459

 

 

$

327,714

 

 

$

248,891

 

Total net sales

 

$

92,635

 

 

$

56,442

 

 

$

257,476

 

 

$

173,110

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Retention Rate

 

 

94.4

%

 

 

92.6

%

 

 

94.7

%

 

 

93.9

%

(1) See "Notes Regarding the Use of Operating Metrics" for details regarding the definition of new recurring subscription sales, subscription cancellations, net new recurring subscription sales, non-recurring sales, total gross sales, total net sales and Retention Rate.

(2) Retention rate for All Other – Private Assets excluding the impact of RCA was 87.0% for the three months ended Dec. 31, 2021 and 92.4% for the year ended Dec. 31, 2021.


Table 7: AUM in ETFs Linked to MSCI Equity Indexes (unaudited)(1)(2)

 

 

Three Months Ended

 

 

Year Ended

 

 

 

Dec. 31,

 

 

Sep. 30,

 

 

June 30,

 

 

Mar. 31,

 

 

Dec. 31,

 

 

Dec. 31,

 

 

Dec. 31,

 

In billions

 

2021

 

 

2021

 

 

2021

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Beginning Period AUM in ETFs linked to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MSCI equity indexes

 

$

1,336.6

 

 

$

1,336.2

 

 

$

1,209.6

 

 

$

1,103.6

 

 

$

908.9

 

 

$

1,103.6

 

 

$

934.4

 

Market Appreciation/(Depreciation)

 

 

56.5

 

 

 

(30.7

)

 

 

73.7

 

 

 

43.2

 

 

 

135.7

 

 

 

142.7

 

 

 

93.6

 

Cash Inflows

 

 

58.5

 

 

 

31.1

 

 

 

52.9

 

 

 

62.8

 

 

 

59.0

 

 

 

205.3

 

 

 

75.6

 

Period-End AUM in ETFs linked to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MSCI equity indexes

 

$

1,451.6

 

 

$

1,336.6

 

 

$

1,336.2

 

 

$

1,209.6

 

 

$

1,103.6

 

 

$

1,451.6

 

 

$

1,103.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period Average AUM in ETFs linked to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MSCI equity indexes

 

$

1,414.8

 

 

$

1,361.9

 

 

$

1,292.4

 

 

$

1,169.2

 

 

$

999.2

 

 

$

1,309.6

 

 

$

886.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period-End Basis Point Fee(3)

 

 

2.54

 

 

 

2.57

 

 

 

2.58

 

 

 

2.61

 

 

 

2.67

 

 

 

2.54

 

 

 

2.67

 

(1) The historical values of the AUM in ETFs linked to our equity 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 Equity Indexes” on our Investor Relations homepage at http://ir.msci.com. Information contained on our website is not incorporated by reference into this Press Release or any other report filed with the SEC. The AUM in ETFs also includes AUM in Exchange Traded Notes, the value of which is less than 1.0% of the AUM amounts presented.

(2) The value of AUM in ETFs linked to MSCI equity indexes is calculated by multiplying the equity ETFs net asset value by the number of shares outstanding.

(3) Based on period-end Run Rate for ETFs linked to MSCI equity indexes using period-end AUM.

Table 8: Run Rate by Segment and Type (unaudited)(1)

 

 

As of

 

 

 

 

 

 

 

Dec. 31,

 

 

Dec. 31,

 

 

 

 

 

In thousands

 

2021

 

 

2020

 

 

% Change

 

Index

 

 

 

 

 

 

 

 

 

 

 

 

Recurring subscriptions

 

$

694,591

 

 

$

618,391

 

 

 

12.3

%

Asset-based fees

 

 

589,320

 

 

 

464,108

 

 

 

27.0

%

Index Run Rate

 

 

1,283,911

 

 

 

1,082,499

 

 

 

18.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Analytics Run Rate