MSCI third-quarter revenue rises 12.4% to $892.0 million as asset-based fees climb 24.9%

MSCI Inc. (MSCI) said on Tuesday that operating revenues rose 12.4% to $892.0 million in the third quarter ended Sept. 30, 2026, from $793.4 million a year earlier.

The figures were released in an earnings press release furnished with the company's 8-K, according to the filing. Diluted earnings per share rose 14.4% to $4.86, and adjusted earnings per share rose 14.3% to $5.11.

Here's how the company did:

• Revenue: $892.0 million vs. $793.4 million a year earlier
• Diluted EPS: $4.86 vs. $4.25 a year earlier
• Adjusted EPS: $5.11 vs. $4.47 a year earlier
• Operating income: $502.1 million vs. $447.6 million a year earlier
• Net income: $351.0 million vs. $325.3 million a year earlier
• Adjusted EBITDA: $554.8 million vs. $494.4 million a year earlier

Recurring subscription revenue rose 7.7% to $623.6 million, while asset-based fees rose 24.9% to $246.6 million.

Asset-based fees accounted for $49.1 million of the $98.6 million increase in operating revenues, the company said.

Total Run Rate, the annualized value of recurring client contracts expected to generate revenue over the next 12 months, was $3,571.9 million at Sept. 30, up 12.1%. Organic recurring subscription Run Rate growth was 8.7%.

Retention Rate, which measures how much of the recurring revenue base clients keep, was 95.0% in the quarter, compared with 94.7% a year earlier.

Chairman and CEO Henry A. Fernandez said: “In the third quarter MSCI delivered strong financial and operating metrics, including our best-ever recurring net-new sales in Analytics and Private Capital Solutions, our best-ever Q3 recurring net-new sales in Index, and another record quarter for asset-based fees.”

Fernandez said: “Thanks to these results, we entered Q4 with solid momentum and strong client engagement across our franchise.”

Segment results

Index revenue was $532.6 million, up 18.1%, and Index adjusted EBITDA was $412.4 million, up 17.8%.

Analytics operating revenues were $191.0 million, up 4.8%. Adjusted EBITDA expenses in the segment rose 14.3% to $105.3 million, and adjusted EBITDA fell 4.9% to $85.7 million.

Sustainability and Climate revenue was $93.7 million, up 4.0%, and adjusted EBITDA rose 10.1% to $38.2 million. The segment's retention rate was 91.0%, down from 93.6%, and net new recurring subscription sales were negative $1.1 million.

All Other - Private Assets revenue was $74.7 million, up 6.7%. Its adjusted EBITDA fell 4.6% to $18.5 million from $19.4 million a year earlier. The line reflects the Real Assets and Private Capital Solutions operating segments.

Full-year 2026 guidance

The company raised its interest expense guidance to $288 million to $291 million, including amortization of financing fees, from $282 million to $286 million. A portion of that expense comes from variable rate revolving credit facility debt, and most comes from fixed rate senior unsecured notes, the filing said.

The effective tax rate range narrowed to 18.0% to 19.5% from 18.0% to 20.0%. The company excludes a multi-phase internal legal entity restructuring from its non-GAAP tax figures, including an $88 million tax benefit recognized in the first quarter of 2026.

Other full-year guidance was unchanged. The company kept operating expense at $1,535 million to $1,575 million, adjusted EBITDA expense at $1,340 million to $1,370 million, and capital expenditures at $160 million to $170 million. It also kept free cash flow at $1,485 million to $1,545 million and depreciation and amortization at $195 million to $205 million.

Costs, headcount and acquisitions

Total operating expenses were $389.9 million, up 12.8%. Adjusted EBITDA expenses were $337.2 million, up 12.8%, primarily reflecting higher non-compensation costs for information technology, professional fees and market data.

Compensation and benefits also rose, driven by incentive compensation and salaries, partly offset by more capitalized software costs.

Other expense, net was $74.2 million, up 45.2%, primarily due to interest expense of $74.8 million, up from $53.6 million a year earlier. The filing attributes the increase to higher debt levels.

The company completed its acquisition of First Street Technology, Inc. (“First Street”) on Aug. 3, 2026. First Street provides physics-based physical climate risk data and analytics.

The aggregate purchase price was $122.6 million, net of cash acquired, plus potential additional cash payments over two years tied to revenue thresholds.

Acquisition-related integration and transaction costs were $1.0 million in the quarter, and the company excluded them from adjusted measures.

The company had 6,259 employees as of Sept. 30, a 0.1% increase, with 29% in developed market locations and 71% in emerging market locations.

Balance sheet and capital return

Cash and cash equivalents were $261.0 million at Sept. 30, down from $515.3 million at Dec. 31, 2025. Total debt principal was $6.8 billion, or 3.2x trailing twelve-month adjusted EBITDA, against a target range of 3.0x to 3.5x.

Share repurchases in the third quarter totaled $552.3 million, or 1.0 million shares, at an average price of $562.92. In the third quarter and through Oct. 19, the company repurchased $627.2 million, or 1,116,460 shares, at an average price of $561.81.

About $0.9 billion remained on the repurchase authorization as of Oct. 19.

The board declared a cash dividend of $2.05 per share for the fourth quarter, payable Nov. 27 to shareholders of record at the close of trading on Nov. 13. Dividends paid in the third quarter totaled $147.5 million.