MSCI(MSCI)2025-04-22 18:11Financial Data and Key Metrics Changes - MSCI Inc. reported organic revenue growth of 10%, adjusted EBITDA growth of 11%, and adjusted earnings per share growth of almost 14% in Q1 2025 [8][9] - The company repurchased 3.9 trillion [31][90] - Assets under management in ETF and non-ETF products linked to MSCI Inc. climate indexes grew by 50%, totaling 131 billion [22] Company Strategy and Development Direction - MSCI Inc. is focusing on providing a growing mix of solutions for portfolio customization and personalization, supported by the integration of Foxbury's F9 platform [11] - The company is enhancing its sustainability and climate offerings to meet changing client demands and regulatory burdens [115][116] - MSCI Inc. aims to leverage its capabilities to navigate periods of global turmoil, emphasizing the importance of its mission-critical tools [13][15] Management's Comments on Operating Environment and Future Outlook - Management noted that the current environment is uncertain, but there is no evidence of a significant change in client purchasing behavior [45][46] - The company is preparing for a range of outcomes, with flexibility in managing expenses based on market conditions [51][56] - There is a marked change in investor sentiment towards international markets, which could benefit MSCI's asset-based fees [62][66] Other Important Information - The company achieved a retention rate of 96% in index and over 95% in analytics [10][100] - The effective tax rate for Q1 was 12.8%, with expectations of 19% to 21% for the remainder of 2025 [39] - MSCI Inc. has a strong balance sheet with a gross leverage ratio of 2.6 times the last twelve months adjusted EBITDA [37] Q&A Session Summary Question: Selling environment and new sales - Management indicated that while there is uncertainty, they do not see a significant change in client purchasing behavior, and some deals that did not close in Q1 are expected to close in Q2 [45][46] Question: Preparing for a range of outcomes - Management discussed their ability to manage expenses based on market conditions, with various levers available to adjust spending [51][56] Question: International investing trends - Management noted a shift in asset flows towards international markets, which could positively impact their business [62][66] Question: Pricing trends for renewals and new sales - Pricing increases for new recurring sales were in line with previous years, with a focus on providing enhanced solutions to clients [75][77] Question: New sales environment and deal closures - Management expressed optimism that deals pushed from Q1 to Q2 would close, emphasizing continuity in client engagement [82][85] Question: Non-ETF AUM growth - Non-ETF average AUM was up around 20% in the quarter, driven by new fund creation and custom mandates [90][92] Question: Retention rates in index and analytics - Retention rates were healthy, with notable declines in cancellations compared to the previous year, particularly among hedge funds and banks [100][102] Question: Growth expectations for analytics - Management highlighted that Q1 was not a period of significant turmoil, and they expect analytics growth to improve as market conditions evolve [105][111] Question: Sustainability and climate segment growth - Management noted a potential inflection point in the sustainability segment, driven by changing client demands and regulatory burdens [114][121]