MSCI Inc.

What they do

MSCI sells indexes, portfolio construction and risk management analytical models and tools, sustainability and climate solutions, and private asset data and analytics. Its offerings help clients define investment universes, make asset allocation decisions, construct and analyze portfolios, measure risk and performance, integrate sustainability and climate considerations, design ETFs and other indexed products, and prepare regulatory and client reports. The company operates an integrated business across all functions, products and solutions, and uses technology including artificial intelligence to collect and validate data.

Revenue drivers

• Recurring subscription revenues — Fees earned from clients primarily under renewable contracts, generally recognized ratably over the license or service term and generally billed in advance; in second quarter 2026 these rose 9.0% year over year and contributed $50.6 million of the quarter's revenue increase.
• Asset-based fees — Fees that are variable in nature, primarily calculated based on assets under management linked to MSCI indexes, such as ETFs; in second quarter 2026 they rose 26.6% year over year and contributed $49.0 million of the revenue increase.
• Index segment — One of the company's major product lines, encompassing index products used to design and manage indexed financial products; management cited accelerated run-rate growth in Index during second quarter 2026.
• Private Capital Solutions — A product line covering private asset data and analytics; management cited accelerated run-rate growth in Private Capital Solutions in second quarter 2026.

Recent performance

Second quarter 2026 operating revenues were $867.0 million, up 12.2% year over year, with organic operating revenue growth also 12.2%. Net income was $342.0 million and diluted EPS was $4.69, up 19.6%, while adjusted EPS was $4.94, up 18.5%. Operating margin was 56.2% and adjusted EBITDA margin was 62.1%. Total Run Rate at June 30, 2026 was $3,479.7 million, up 12.0%, with asset-based fees Run Rate up $190.9 million and recurring subscription Run Rate up $182.1 million. Retention Rate was 95.3%, compared with 94.4% in second quarter 2025.

Strategy

MSCI describes itself as focused on supporting investors' total portfolio needs across asset classes through integrated solutions, using advanced technology including AI to improve data collection and validation and to enhance client insights. Management said the company launched twice as many products in 2026 as in all of 2024 and sees AI as a way to build new products, enhance existing products and expand capabilities for large financial institutions. Growth in emerging market centers is described as an important factor in managing compensation and benefits costs, with 71% of employees located in emerging market centers as of June 30, 2026. The company also returns capital to shareholders through dividends and buybacks, paying approximately $149.2 million in dividends in second quarter 2026 and repurchasing $147.2 million of shares in the quarter and through July 20, 2026.

Risks

• Client concentration — BlackRock accounted for 10.8% of consolidated operating revenues in 2025, with 96.5% of that revenue coming from fees based on assets in BlackRock's ETFs and non-ETF products based on MSCI indexes.
• Asset-based fee variability — Asset-based fees are variable and calculated primarily on AUM linked to MSCI indexes, so market declines or outflows at linked products directly reduce revenue.
• Rising non-compensation costs — Non-compensation expenses increased 23.5% in second quarter 2026, driven by higher information technology costs, market data costs, professional fees and occupancy costs.
• Higher interest expense — Interest expense rose 53.7% to $71.0 million in second quarter 2026, and total liabilities were $8.29 billion against total assets of $5.60 billion at June 30, 2026.

Outlook

Management said it is building momentum heading into the second half of 2026, citing a strong pipeline of opportunities and AI-fueled innovation. The company reported record asset-based-fee run rate and accelerated run-rate growth in Index and Private Capital Solutions, along with strength in recurring net-new sales across key client segments and geographies. MSCI declared a third-quarter 2026 cash dividend of $2.05 per share.