MSCI Inc. (NYSE:MSCI) announced its fiscal 2025 second-quarter results on Tuesday. The company’s total revenue reached $772.7 million, an increase of 9.1% year-over-year, exceeding the analyst consensus estimate of $763.5 million. Adjusted earnings per share (EPS) were $4.17, also surpassing the analyst consensus of $4.11.
As of June 30, 2025, MSCI’s total run rate, the annualized value of recurring revenues, grew by 10.7% year-over-year to $3.11 billion. The organic recurring subscription run rate saw a 7.4% increase. The client retention rate was 94.4%, a slight decrease from 94.8% in the previous year.
Segment Performance
MSCI’s Index operating revenues increased 9.5% year-over-year to $434.8 million, driven by higher recurring subscription revenues and asset-based fees.
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Analytics operating revenues rose 7.1% year-over-year to $177.7 million, primarily due to increased recurring subscription revenues from equity and multi-asset class analytics products.
Sustainability and climate operating revenues (formerly ESG and climate operating revenues) grew 11.3% year-over-year to $88.9 million, supported by growth in ratings and climate products. Finally, All Other – private assets operating revenues improved by 9.7% year-over-year to $71.2 million.
Margins, Cash Flow, and Capital Allocation
The operating margin improved from 54.0% to 55.0%, and the adjusted EBITDA margin increased from 60.7% to 61.4%.
MSCI generated $301.6 million in free cash flow during the quarter and held $347.3 million in cash and equivalents as of June 30, 2025.
The company invested $34.6 million in capital expenditures. MSCI returned capital to shareholders through $131.2 million in share repurchases, buying back 250,818 shares at an average price of $523.20. Additionally, approximately $139.3 million was paid in dividends.
On July 21, the Board declared a third-quarter cash dividend of $1.80 per share, payable August 29 to shareholders of record as of August 15, 2025.
CEO Commentary and Outlook
Chair and CEO Henry A. Fernandez noted MSCI delivered strong financial results for the quarter, driven by 17% growth in asset-based fee (ABF) run rate, supported by record AUM in ETFs linked to its indexes. The company led all index providers in equity ETF cash inflows and achieved double-digit subscription run-rate growth across key client segments, including banks, broker-dealers, wealth managers, hedge funds, and asset owners, while maintaining steady growth and high retention among asset managers.
MSCI also expanded its existing solutions to meet a broader range of client use cases and continued developing new offerings for a more diverse client base. The company leveraged its resilient financial model and integrated products to deliver scalable, innovative solutions that help clients advance their strategies.
FY25 Outlook
MSCI reiterated operating expenses of $1.405 billion-$1.445 billion, capex of $115-$125 million, and free cash flow of $1.40 billion-$1.46 billion.
Price Action: MSCI stock is trading lower by 3.46% to $557.95 at last check Tuesday.
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