MSCI Inc.
02/06/2026 | Press release | Distributed by Public on 02/06/2026 13:55
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
INDEX TO MANAGEMENT'S DISCUSSION AND ANALYSIS
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Overview
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36
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Current Trends Affecting MSCI
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36
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Key Financial and Operating Metrics and Drivers
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37
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Non-GAAP Financial Measures and Operating Metrics, definitions
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39
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Critical Accounting Estimates
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40
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Results of Operations
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41
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Segment Results
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46
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Operating Metrics
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49
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Liquidity and Capital Resources
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55
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Cash Flows
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56
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Contractual Obligations
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57
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Recent Accounting Standards Updates
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57
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The following Management's Discussion and Analysis of Financial Condition and Results of Operations is a discussion and analysis of the financial condition and results of the operations of MSCI Inc. and its consolidated subsidiaries for the year ended December 31, 2025. This discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The discussion summarizing the significant factors affecting the results of operations and financial condition of MSCI for the year ended December 31, 2024 can be found in Part II, "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report"), which was filed with the Securities and Exchange Commission on February 7, 2025.
Overview
Our research-based data, analytics and indexes, supported by advanced technology, set standards for global investors and help our clients understand risks and opportunities, make better investment decisions and unlock innovation. The Company has five operating segments: Index, Analytics, Sustainability and Climate, Real Assets and Private Capital Solutions, whichare presented as the following three reportable segments: Index, Analytics, and Sustainability and Climate. For reporting purposes, the Real Assets and Private Capital Solutions operating segments are combined and presented as All Other - Private Assets, as they did not meet the required thresholds for separate reportable segment disclosure.
Our growth strategy includes: (a) extending leadership in research-enhanced content across asset classes, (b) leading the enablement of sustainability and climate investment integration, (c) enhancing distribution and content-enabling technology, (d) expanding solutions that empower client customization, (e) strengthening client relationships and expanding our presence in key geographic areas and (f) executing strategic partnerships and acquisitions with complementary data, content and technology companies. For more information about our Company's operations, see "Item 1: Business".
Our principal business model is generally to license annual, recurring subscriptions for the majority of our products and services for a fee due in advance of the service period. A portion of our fees comes from clients who use our indexes as the basis for index-linked investment products. Such fees are primarily based on a client's assets under management ("AUM"), trading volumes and fee levels.
In the first quarter of 2025, we renamed our "ESG and Climate" operating and reportable segment to "Sustainability and Climate" to reflect the breadth of our product offerings. There were no changes to the composition of our reportable segments or information reviewed by the chief operating decision maker and no impact on our historical segment operating results.
Current Trends Affecting MSCI
Trends in Sustainability and Climate Investment Strategies
We believe sustainability and climate risks are investment risks that significantly impact many investment decisions and corporate strategies. In Europe, disclosure requirements continue to drive demand for sustainability and climate tools to meet both
regulatory and investor expectations. In the United States, political debate has led to some scrutiny of the use of sustainability and climate considerations in investment and risk management decisions.
The Company's growth in this space depends on rising global demand for sustainability and climate solutions, which may be influenced by potential regulatory uncertainty or political opposition in certain markets. While some markets may face greater near-term challenges and uncertainty, we believe the long-term shift toward integrating financially material sustainability and climate factors into investment and risk management processes will support continued adoption of our sustainability and climate tools.
Asset Management Industry Dynamics
In recent periods, the asset management industry-a key client segment for the Company-has undergone fee pressure and consolidation, driven by structural shifts, intensifying competition and evolving investor preferences. While industry fee pressure and consolidation may result in cost-cutting and vendor consolidation, firms may require more sophisticated and a broader array of investment tools across use cases and asset classes, driving demand for the Company's offerings.
The impact of this fee pressure and consolidation remains uncertain, as client cost pressures could lead to contract adjustments or terminations, while asset managers may expand their use of the Company's products and services, including for additional investment strategies. The extent to which these dynamics will impact the Company's growth, client retention and revenue generation will depend on the pace of industry fee pressure and consolidation, evolving client priorities and the Company's ability to adapt to shifting market demands.
See Item 1. Business-Industry Trends and Competitive Advantagesand -Strategy, and Item 1A. Risk Factors-Client Risksof this Annual Report on Form 10-K for additional discussion of client trends and related risks.
Key Financial and Operating Metrics and Drivers
In evaluating our financial performance, we focus on revenue and profit growth, including results accounted for under generally accepted accounting principles in the United States ("GAAP") as well as non-GAAP measures, for the Company as a whole and by segment.
We present revenues disaggregated by types and by segments, which represent our major product lines. We also review expenses by activity, which provides more transparency into how resources are being deployed. In addition, we utilize operating metrics including Run Rate, Subscription Sales and Retention Rate to manage and assess performance and to provide deeper insights into the recurring portion of our business.
In the discussion that follows, we provide certain variances excluding 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 is invested in securities denominated in currencies other than the U.S. dollar, and any such impact is excluded from the disclosed foreign currency-adjusted variances.
Revenues
Our revenues are presented by type and by segment. For each segment, we present revenues disaggregated by the nature of the revenues, which are recurring subscriptions, asset-based fees and non-recurring revenues.
Recurring subscription revenues represent fees earned from clients primarily under renewable contracts and are generally recognized ratably over the term of the license or service pursuant to the contract terms. The fees are recognized as we provide the product and service to the client over the license period and are generally billed in advance, prior to the license start date.
Asset-based fees represent fees earned that are variable in nature, as they are primarily calculated based on the AUM linked to our indexes. Asset-based fees also include revenues related to futures and options contracts linked to our indexes, which are based on trading volumes and fee levels.
Non-recurring revenues primarily represent fees earned on products and services where we typically do not have renewal clauses within the contract. Examples of such products and services include one-time license fees, certain derivative financial products, certain implementation services, historical data sets and, occasionally, fees for unlicensed usage of our content in historical
periods. Based on the nature of the services provided, non-recurring revenues are generally billed either in advance or after delivery and recognized point in time or over the service period.
See Note 1, "Introduction and Basis of Presentation" and Note 3, "Revenue Recognition" of the Notes to the Consolidated Financial Statements included herein for additional information on revenue recognition.
Operating Expenses
We group our operating expenses into the following activity categories:
•Cost of revenues;
•Selling and marketing;
•Research and development ("R&D");
•General and administrative ("G&A");
•Amortization of intangible assets; and
•Depreciation and amortization of property, equipment and leasehold improvements.
Costs are assigned to these activity categories based on the nature of the expense or, when not directly attributable, an estimated allocation based on the type of effort involved. Cost of revenues, selling and marketing, R&D and G&A all include both compensation as well as non-compensation related expenses.
Cost of Revenues
Cost of revenues expenses consist of costs related to the production and servicing of our products and services and primarily includes related information technology costs, including data center, cloud service, platform and infrastructure costs; costs to acquire, produce and maintain market data information; costs of research to support and maintain existing products; costs of product management teams; costs of client service and consultant teams to support customer needs; as well as other support costs directly attributable to the cost of revenues including certain human resources, finance and legal costs.
Selling and Marketing
Selling and marketing expenses consist of costs associated with acquiring new clients or selling new products or product renewals to existing clients and primarily includes the costs of our sales and marketing teams, as well as costs incurred in other departments associated with acquiring new business, including product management, research, technology and sales operations.
Research and Development
R&D expenses consist of costs to develop new or enhanced products and the costs to develop new or enhanced technologies and service platforms for the delivery of our products and services and primarily include the costs of development, research, product management, project management and the technology support directly associated with these activities.
General and Administrative
G&A expenses consist of costs primarily related to finance operations, human resources, office of the CEO, legal, corporate technology, corporate development and certain other administrative costs that are not directly attributed, but are instead allocated, to a product or service.
Amortization of Intangible Assets
Amortization of intangible assets expense relates to definite-lived intangible assets arising from past acquisitions and capitalization of internally developed software projects. Intangibles arising from past acquisitions consist of customer relationships, proprietary data, trademarks and trade names and technology and software. We amortize definite-lived intangible assets over their estimated useful lives. See Note 1, "Introduction and Basis of Presentation" and Note 9, "Goodwill and Intangible Assets, Net" of the Notes to the Consolidated Financial Statements included herein for additional information on intangible assets and amortization expense.
Depreciation and Amortization of Property, Equipment and Leasehold Improvements
Depreciation and amortization of property, equipment and leasehold improvements consists of expenses related to depreciating or amortizing the cost of computer and related equipment, leasehold improvements, software and furniture and fixtures over the estimated useful life of the assets.
Other Expense (Income), Net
Other expense (income), net consists primarily of interest we pay on our outstanding indebtedness, including losses on early extinguishment of debt, gains and losses associated with equity method and other minority investments, foreign currency exchange rate gains and losses, interest we collect on cash and short-term investments, as well as other non-operating income and expense items that may arise from time to time.
Non-GAAP Financial Measures
Adjusted EBITDA
"Adjusted EBITDA," a non-GAAP measure used by management to assess operating performance, 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, when applicable, certain acquisition-related integration and transaction costs.
"Adjusted EBITDA expenses," a non-GAAP measure used by management to assess operating performance, 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, when applicable, certain acquisition-related integration and transaction costs.
"Adjusted EBITDA margin" is defined as Adjusted EBITDA divided by operating revenues.
Adjusted EBITDA, Adjusted EBITDA expenses and Adjusted EBITDA margin are believed to be meaningful measures for management to assess the operating performance of the Company 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 the Company's ongoing operating performance in the period. All companies do not calculate adjusted EBITDA, adjusted EBITDA expenses and adjusted EBITDA margin in the same way. 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 the Adjusted EBITDA, Adjusted EBITDA expenses and Adjusted EBITDA margin measures may not be comparable to similarly titled measures computed by other companies.
Operating Metrics
Run Rate
Run Rate is a key operating metric and is important because an increase or decrease in our Run Rate ultimately impacts our future operating revenues over time. At the end of any period, we generally have recurring subscription and investment product license agreements in place for a large portion of total revenues for the following 12 months. We measure the fees related to these agreements and refer to this as "Run Rate." See "-Operating Metrics-Run Rate" below for additional information on the calculation of this metric.
Subscription Sales
Subscription Sales is a key operating metric and is important to management because new Subscription Sales increase our Run Rate and represent future operating revenues that will be recognized over time. See "-Operating Metrics-Sales" below for additional information.
Retention Rate
Retention Rate is a key operating metric and is important to management because subscription cancellations decrease our Run Rate and ultimately our future operating revenues over time. See "-Operating Metrics-Retention Rate" below for additional information on the calculation of this metric.
Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with GAAP. These accounting principles require us to make certain estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the periods presented. Significant estimates and judgments made by management include such examples as assessment of impairment of goodwill and intangible assets and income taxes. We believe the estimates and judgments upon which we rely are reasonable based upon information available to us at the time these estimates and judgments are made. To the extent there are material differences between these estimates and actual results, our consolidated financial statements will be affected.
Goodwill
We recognize goodwill in business combination transactions when the purchase price exceeds the fair value of the acquired net tangible and separately identifiable intangible assets. We test goodwill for impairment annually on July 1 or when interim triggers arise. When testing goodwill for impairment, we first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test; however, on a periodic basis, we may elect to bypass the qualitative assessment and proceed directly to the quantitative test. During the year ended December 31, 2025, the Company has selected to bypass the optional qualitative assessment for the Real Assets and Private Capital Solutions ("PCS") reporting units. This decision was based on the relatively low excess of fair value over carrying value observed in the prior year's analysis. Therefore, a quantitative goodwill impairment test was performed for both Real Assets and PCS. For the Index, Analytics, and Sustainability and Climate reporting units, the company performed a qualitative assessment. The quantitative test for impairment used an equal weighting of the income approach and the market approach to estimate the fair value of the Real Assets and PCS reporting units.
The income approach requires significant judgment in estimating future cash flows, including assumptions, amongst others, about revenue growth rates and EBITDA margins, and the selection of an appropriate discount rate, which reflects the reporting unit's cost of capital. Forecasted future cash flows are estimated based on a combination of historical experience and assumptions regarding future growth and profitability of each reporting unit. Discount rates are selected for each reporting unit being valued based on each reporting unit's estimated weighted-average cost of capital. The weighted-average cost of capital is estimated based on both the capital structure that we believe a market participant would utilize as well as the discount rates of guideline public companies that have similar characteristics to each reporting unit being valued, adjusted for the risk inherent in each reporting unit. Terminal growth rates are selected based on growth rates used during the reporting unit's forecast period in combination with economic conditions. The market approach utilizes valuation multiples of revenue and cash flows derived from guideline public companies that have similar characteristics to each reporting unit being valued. Selecting appropriate guideline companies, valuation multiples and other key assumptions such as revenue growth rates and discount rates requires significant management judgment, and changes to these estimates could materially impact the fair value determination of each reporting unit. We perform sensitivity analyses around key assumptions in order to assess the reasonableness of the assumptions and the impact on the estimated fair value.
Impairment occurs when the estimated fair value of the reporting unit is below the carrying value. As of July 1, 2025, all reporting units had fair values exceeding their carrying values. As a result, no goodwill impairment was recorded as of this date.
We completed our annual goodwill impairment test as of July 1, 2025 on our Index, Analytics, Sustainability and Climate, Real Assets and Private Capital Solutions reporting units, which are also our operating segments. At December 31, 2025, the carrying value of goodwill within the Real Assets and Private Capital Solutions reporting units were $691 million and $618 million, respectively. As of July 1, 2025, the fair value of the Real Assets and Private Capital Solutions reporting units exceeded their carrying values by approximately 39% and 15%, respectively. If we experience a prolonged or severe period of weakness in the business environment, financial markets, the performance of one or more of our recently acquired companies or reporting units, or our common stock price, or if economic conditions differ significantly from management's assumptions, our goodwill could be impaired in the future, which may be material to our results of operations and financial position.
For the Real Assets and PCS reporting units, individually, a hypothetical decrease in revenue growth rates by 100 basis points or a hypothetical 100 basis point increase in the weighted average cost of capital would not result in an impairment. See Note 1, "Introduction and Basis of Presentation" and Note 9, "Goodwill and Intangible Assets, Net" of the Notes to the Consolidated Financial Statements included herein for additional information on goodwill.
Definite Lived Intangible Assets
Definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset or asset group may not be recoverable. These events or circumstances include adverse changes in the manner in which the asset will be used, adverse changes in legal factors related to the asset or negative changes in expected financial
performance of the asset, including accumulation of costs and operating losses. Determining whether an event or changes in circumstances warrant an impairment review involves management judgment.
Once it is determined that an impairment review is necessary, recoverability is determined based on comparing the carrying amount of the asset group to the estimated future undiscounted cash flows. If the carrying amount exceeds the estimated future undiscounted cash flows, the asset grouping is considered to be impaired. Measurement of impairment for intangible assets is based on the amount the carrying value exceeds the fair value of the asset, which is based on estimated discounted future cash flows. Estimated undiscounted and discounted cash flows used in the determination and calculation of impairments represent management forecasts and require significant management judgment. While management believes that its forecasts are reasonable, differences between forecasts and actual experience could materially affect the valuations. There were no events or changes in circumstances that would indicate that the carrying value of the definite-lived intangible assets may not be recoverable during the years presented.
We amortize our intangible assets over the estimated period of economic benefit. If the estimated period of economic benefit is changed, the prospective amortization of the intangible asset could materially change.
See Note 1, "Introduction and Basis of Presentation" and Note 9, "Goodwill and Intangible Assets, Net" of the Notes to the Consolidated Financial Statements included herein for additional information on intangible assets and amortization expense.
Income Taxes
We are subject to income taxes in the U.S. and other foreign jurisdictions. Our tax provision is an estimate based on our understanding of laws in federal, state and foreign tax jurisdictions. These laws can be complicated and are difficult to apply to any business. The tax laws also require us to allocate our taxable income to many jurisdictions based on subjective allocation methodologies and information collection processes.
Provision for income taxes is provided for using the asset and liability method, under which deferred tax assets and deferred tax liabilities are determined based on the temporary differences between the financial statement and income tax bases of assets and liabilities using currently enacted tax rates. Deferred tax assets are reduced by a valuation allowance when, in our opinion, it is more likely than not that all or some portion of the deferred tax assets will not be realized. In assessing the need for a valuation allowance, management is required to estimate future taxable income which requires judgment.
We must regularly assess the likelihood of additional assessments in each of the taxing jurisdictions in which we file income tax returns and adjust unrecognized tax benefits when additional information is available or when an event occurs. This assessment requires significant judgment in assessment of tax laws, frequency of tax examinations, and the nature of intercompany transactions and tax positions.
See Note 1, "Introduction and Basis of Presentation" and Note 12, "Income Taxes" of the Notes to the Consolidated Financial Statements included herein for additional information on income taxes.
Results of Operations
Operating Revenues
Our operating revenues are grouped by the following types: recurring subscriptions, asset-based fees and non-recurring. We also group operating revenues by major product as follows: Index, Analytics, Sustainability and Climate and All Other - Private Assets.
The following table presents operating revenues by type for the years indicated:
| Years Ended | ||||||||||||||||||||
| (in thousands) |
December 31,
2025
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December 31,
2024
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Increase/(Decrease) | |||||||||||||||||
| Operating revenues: | ||||||||||||||||||||
| Index | ||||||||||||||||||||
| Recurring subscriptions | $ | 957,897 | $ | 882,367 | 8.6 | % | ||||||||||||||
| Asset-based fees | 770,670 | 657,501 | 17.2 | % | ||||||||||||||||
| Non-recurring | 58,241 | 56,277 | 3.5 | % | ||||||||||||||||
| Index total | 1,786,808 | 1,596,145 | 11.9 | % | ||||||||||||||||
| Analytics | ||||||||||||||||||||
| Recurring subscriptions | 697,488 | 658,610 | 5.9 | % | ||||||||||||||||
| Non-recurring | 16,909 | 16,479 | 2.6 | % | ||||||||||||||||
| Analytics total | 714,397 | 675,089 | 5.8 | % | ||||||||||||||||
| Sustainability and Climate | ||||||||||||||||||||
| Recurring subscriptions | 346,401 | 318,835 | 8.6 | % | ||||||||||||||||
| Non-recurring | 7,514 | 7,766 | (3.2 | %) | ||||||||||||||||
| Sustainability and Climate total | 353,915 | 326,601 | 8.4 | % | ||||||||||||||||
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All Other -Private Assets
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| Recurring subscriptions | 276,918 | 254,633 | 8.8 | % | ||||||||||||||||
| Non-recurring | 2,421 | 3,660 | (33.9 | %) | ||||||||||||||||
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All Other - Private Assets total
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279,339 | 258,293 | 8.1 | % | ||||||||||||||||
| Recurring subscriptions | 2,278,704 | 2,114,445 | 7.8 | % | ||||||||||||||||
| Asset-based fees | 770,670 | 657,501 | 17.2 | % | ||||||||||||||||
| Non-recurring | 85,085 | 84,182 | 1.1 | % | ||||||||||||||||
| Total operating revenues | $ | 3,134,459 | $ | 2,856,128 | 9.7 | % | ||||||||||||||
Total operating revenues increased 9.7% for the year ended December 31, 2025. The $278.3 million increase was driven by $164.3 million in higher recurring subscription revenues, $113.2 million in higher asset-based fees and a $0.9 million increase in non-recurring revenues. Adjusting for the impact of foreign currency exchange rate fluctuations, total operating revenues would have increased 9.3%.
Refer to the section titled "Segment Results" that follows for further discussion of segment revenues.
Operating Expenses
Total operating expenses increased 7.0% for the year ended December 31, 2025. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 6.7%.
The following table presents operating expenses by activity category for the years indicated:
| Years Ended | ||||||||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
Increase/(Decrease) | |||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Cost of revenues | $ | 550,366 | $ | 514,382 | 7.0 | % | ||||||||||||||
| Selling and marketing | 319,829 | 291,220 | 9.8 | % | ||||||||||||||||
| Research and development | 177,596 | 158,653 | 11.9 | % | ||||||||||||||||
| General and administrative | 180,216 | 182,340 | (1.2 | %) | ||||||||||||||||
| Amortization of intangible assets | 169,480 | 164,037 | 3.3 | % | ||||||||||||||||
| Depreciation and amortization of property, equipment and leasehold improvements | 23,405 | 16,978 | 37.9 | % | ||||||||||||||||
| Total operating expenses | $ | 1,420,892 | $ | 1,327,610 | 7.0 | % | ||||||||||||||
Cost of Revenues
Cost of revenues increased 7.0% for the year ended December 31, 2025, primarily driven by increases in compensation and benefits costs as a result of increased headcount costs and higher severance costs, as well as increases in non-compensation costs reflecting higher information technology and market data costs.
Selling and Marketing
Selling and marketing expenses increased 9.8% for the year ended December 31, 2025, primarily driven by increases in compensation and benefits costs as a result of increased headcount costs as well as higher severance costs.
Research and Development
R&D expenses increased 11.9% for the year ended December 31, 2025, primarily driven by increases in compensation and benefits costs as a result of increased headcount costs as well as higher severance costs, partially offset by increased capitalization of costs related to internally developed software projects. The increase was also driven by increases in non-compensation costs reflecting higher information technology costs.
General and Administrative
G&A expenses decreased 1.2% for the year ended December 31, 2025, primarily driven by decreases in non-compensation costs reflecting lower transaction costs, partially offset by increases in compensation and benefits costs as a result of increased headcount costs as well as higher severance costs.
The following table presents operating expenses using compensation and non-compensation categories, rather than using activity categories, for the years indicated:
| Years Ended | ||||||||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
Increase/(Decrease) | |||||||||||||||||
| Compensation and benefits | $ | 889,041 | $ | 822,789 | 8.1 | % | ||||||||||||||
| Non-compensation expenses | 338,966 | 323,806 | 4.7 | % | ||||||||||||||||
| Amortization of intangible assets | 169,480 | 164,037 | 3.3 | % | ||||||||||||||||
| Depreciation and amortization of property, equipment and leasehold improvements | 23,405 | 16,978 | 37.9 | % | ||||||||||||||||
| Total operating expenses | $ | 1,420,892 | $ | 1,327,610 | 7.0 | % | ||||||||||||||
A significant portion of the incentive compensation component of operating expenses is based on the achievement of a number of financial and operating metrics. In a scenario where operating revenue growth and profitability moderate, incentive compensation would be expected to decrease accordingly.
Fixed costs constitute a significant portion of the non-compensation component of operating expenses. The discretionary non-compensation component of operating expenses could, however, be reduced in the near-term in a scenario where operating revenue growth moderates.
We had 6,268 employees as of December 31, 2025 compared to 6,132 employees as of December 31, 2024, reflecting a 2.2% growth in the number of employees. Continued growth of our emerging market centers around the world is an important factor in our ability to manage and control the growth of our compensation and benefits costs. As of December 31, 2025, 71% of our employees were located in emerging market centers compared to 69% as of December 31, 2024.
Compensation and benefits costs increased 8.1% for the year ended December 31, 2025, primarily driven by increased headcount costs and higher severance costs. Adjusting for the impact of foreign currency exchange rate fluctuations, compensation and benefits costs would have increased by 7.7%.
Non-compensation expenses increased 4.7% for the year ended December 31, 2025, primarily driven by higher information technology and market data costs, partially offset by lower transaction costs. Adjusting for the impact of foreign currency exchange rate fluctuations non-compensation expenses would have increased by 4.4%.
Amortization of Intangible Assets
Amortization of intangible assets expense increased 3.3% for the year ended December 31, 2025, primarily driven by higher amortization of internally developed software, partially offset by certain intangible assets becoming fully amortized during the period.
Depreciation and Amortization of Property, Equipment and Leasehold Improvements
Depreciation and amortization of property, equipment and leasehold improvements increased 37.9% for the year ended December 31, 2025, primarily driven by higher depreciation on computer and related equipment.
Total Other Expense (Income), Net
The following table shows our other expense (income), net for the years indicated:
| Years Ended | ||||||||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
Increase/(Decrease) | |||||||||||||||||
| Interest income | $ | (16,012) | $ | (21,277) | (24.7 | %) | ||||||||||||||
| Interest expense | 209,889 | 185,500 | 13.1 | % | ||||||||||||||||
| Other expense (income) | 25,434 | 8,127 | 213.0 | % | ||||||||||||||||
| Total other expense (income), net | $ | 219,311 | $ | 172,350 | 27.2 | % | ||||||||||||||
Total other expense (income), net increased 27.2% for the year ended December 31, 2025, primarily driven by higher interest expenses reflecting higher debt levels and an $11.8 million loss resulting from the full write-off of the investment in a minority investee.
Income Taxes
The effective tax rate for the years ended December 31, 2025 and 2024 was 19.5% and 18.2%, respectively. The increase in the effective tax rate in 2025 was driven by $38 million of expense recognized in connection with a multi-phase internal legal entity restructuring that commenced in the period and was completed subsequent to year end.
Net Income
The following table shows our net income for the years indicated:
| Years Ended | ||||||||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
Increase/(Decrease) | |||||||||||||||||
| Net income | $ | 1,202,305 | $ | 1,109,128 | 8.4 | % | ||||||||||||||
As a result of the factors described above, net income increased 8.4% for the year ended December 31, 2025.
Weighted Average Shares and Common Shares Outstanding
The following table shows our weighted average shares and common shares outstanding for the years indicated:
| Years Ended | ||||||||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
% Change | |||||||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 76,504 | 78,710 | (2.8 | %) | ||||||||||||||||
| Diluted | 76,636 | 78,960 | (2.9 | %) | ||||||||||||||||
The following table shows our common shares outstanding for the periods indicated:
| As of | % Change | |||||||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
||||||||||||||||||
| Common shares outstanding | 73,563 | 77,745 | (5.4 | %) | ||||||||||||||||
The decrease in weighted average shares and common shares outstanding primarily reflects the impact of share repurchases made pursuant to the Company's stock repurchase program, partially offset by the vesting of certain stock-based awards.
Adjusted EBITDA
The following table presents non-GAAP Adjusted EBITDA, Adjusted EBITDA expenses and Adjusted EBITDA margin for the years indicated:
| Years Ended | ||||||||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
Increase/(Decrease) | |||||||||||||||||
| Operating revenues: | $ | 3,134,459 | $ | 2,856,128 | 9.7 | % | ||||||||||||||
| Adjusted EBITDA expenses | 1,228,007 | 1,139,644 | 7.8 | % | ||||||||||||||||
| Adjusted EBITDA | $ | 1,906,452 | $ | 1,716,484 | 11.1 | % | ||||||||||||||
| Operating margin % | 54.7 | % | 53.5 | % | ||||||||||||||||
| Adjusted EBITDA margin % | 60.8 | % | 60.1 | % | ||||||||||||||||
The increase in Adjusted EBITDA reflects growth in operating revenues as compared to Adjusted EBITDA expenses, driven by the factors previously described.
Reconciliation of Net Income to Adjusted EBITDA and Operating Expenses to Adjusted EBITDA Expenses
The following table presents the reconciliation of net income to Adjusted EBITDA for the years indicated:
| Years Ended | ||||||||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
Increase/(Decrease) | |||||||||||||||||
| Net income | $ | 1,202,305 | $ | 1,109,128 | 8.4 | % | ||||||||||||||
| Provision for income taxes | 291,951 | 247,040 | 18.2 | % | ||||||||||||||||
| Other expense (income), net | 219,311 | 172,350 | 27.2 | % | ||||||||||||||||
| Operating income | 1,713,567 | 1,528,518 | 12.1 | % | ||||||||||||||||
| Amortization of intangible assets | 169,480 | 164,037 | 3.3 | % | ||||||||||||||||
| Depreciation and amortization of property, equipment and leasehold improvements | 23,405 | 16,978 | 37.9 | % | ||||||||||||||||
|
Acquisition-related integration and transaction costs (1)
|
- | 6,951 | (100.0 | %) | ||||||||||||||||
| Consolidated Adjusted EBITDA | $ | 1,906,452 | $ | 1,716,484 | 11.1 | % | ||||||||||||||
| Index Adjusted EBITDA | 1,366,008 | 1,222,054 | 11.8 | % | ||||||||||||||||
| Analytics Adjusted EBITDA | 342,530 | 328,295 | 4.3 | % | ||||||||||||||||
| Sustainability and Climate Adjusted EBITDA | 128,477 | 104,708 | 22.7 | % | ||||||||||||||||
|
All Other - Private Assets Adjusted EBITDA
|
69,437 | 61,427 | 13.0 | % | ||||||||||||||||
| Consolidated Adjusted EBITDA | $ | 1,906,452 | $ | 1,716,484 | 11.1 | % | ||||||||||||||
________________
(1)Represents transaction expenses and other costs directly related to the acquisition and integration of acquired businesses, including professional fees, severance expenses, regulatory filing fees and other costs, in each case that are incurred no later than 12 months after the close of the relevant acquisition.
The following table presents the reconciliation of operating expenses to Adjusted EBITDA expenses for the years indicated:
| Years Ended | ||||||||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
Increase/(Decrease) | |||||||||||||||||
| Total operating expenses | $ | 1,420,892 | $ | 1,327,610 | 7.0 | % | ||||||||||||||
| Amortization of intangible assets | 169,480 | 164,037 | 3.3 | % | ||||||||||||||||
| Depreciation and amortization of property, equipment and leasehold improvements | 23,405 | 16,978 | 37.9 | % | ||||||||||||||||
|
Acquisition-related integration and transaction costs(1)
|
- | 6,951 | (100.0 | %) | ||||||||||||||||
| Consolidated Adjusted EBITDA expenses | $ | 1,228,007 | $ | 1,139,644 | 7.8 | % | ||||||||||||||
| Index Adjusted EBITDA expenses | 420,800 | 374,091 | 12.5 | % | ||||||||||||||||
| Analytics Adjusted EBITDA expenses | 371,867 | 346,794 | 7.2 | % | ||||||||||||||||
| Sustainability and Climate Adjusted EBITDA expenses | 225,438 | 221,893 | 1.6 | % | ||||||||||||||||
|
All Other -Private Assets Adjusted EBITDA expenses
|
209,902 | 196,866 | 6.6 | % | ||||||||||||||||
| Consolidated Adjusted EBITDA expenses | $ | 1,228,007 | $ | 1,139,644 | 7.8 | % | ||||||||||||||
________________
(1)Represents transaction expenses and other costs directly related to the acquisition and integration of acquired businesses, including professional fees, severance expenses, regulatory filing fees and other costs, in each case that are incurred no later than 12 months after the close of the relevant acquisition.
Segment Results
The results for each of our three reportable segments and All Other -Private Assets for the years ended December 31, 2025, and 2024 are presented below:
Index Segment
The following table presents the results for the Index segment for the years indicated:
| Years Ended | ||||||||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
Increase/(Decrease) | |||||||||||||||||
| Operating revenues: | ||||||||||||||||||||
| Recurring subscriptions | $ | 957,897 | $ | 882,367 | 8.6 | % | ||||||||||||||
| Asset-based fees | 770,670 | 657,501 | 17.2 | % | ||||||||||||||||
| Non-recurring | 58,241 | 56,277 | 3.5 | % | ||||||||||||||||
| Operating revenues total | 1,786,808 | 1,596,145 | 11.9 | % | ||||||||||||||||
| Adjusted EBITDA expenses | 420,800 | 374,091 | 12.5 | % | ||||||||||||||||
| Adjusted EBITDA | $ | 1,366,008 | $ | 1,222,054 | 11.8 | % | ||||||||||||||
| Adjusted EBITDA margin % | 76.4 | % | 76.6 | % | ||||||||||||||||
Index operating revenues increased 11.9% for the year ended December 31, 2025, driven by growth from asset-based fees as well as recurring subscriptions. Adjusting for the impact of foreign currency exchange rate fluctuations, Index segment operating revenues would have increased 11.9%.
Operating revenues from recurring subscriptions increased 8.6% for the year ended December 31, 2025, primarily driven by growth from market cap-weighted Index products.
Operating revenues from asset-based fees increased 17.2% for the year ended December 31, 2025, primarily driven by growth in revenues from ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes. Operating revenues from ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes increased by 21.5% and 12.4%, respectively, primarily driven by increases in average AUM, partially offset by a decrease in average basis points.
The following table presents the value of AUM in ETFs linked to MSCI equity indexes and the sequential change of such assets as of the end of each of the periods indicated:
| Period Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| (in billions) |
March 31, |
June 30, |
September 30, | December 31, |
March 31, |
June 30, |
September 30, | December 31, | ||||||||||||||||||||||||||||||||||||||||||
|
AUM in ETFs linked to MSCI equity indexes(1) (2)
|
$ | 1,582.6 | $ | 1,631.9 | $ | 1,761.8 | $ | 1,724.7 | $ | 1,783.1 | $ | 2,024.6 | $ | 2,211.0 | $ | 2,340.7 | ||||||||||||||||||||||||||||||||||
| Sequential Change in Value | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Market Appreciation/(Depreciation) | $ | 92.8 | $ | 21.2 | $ | 111.3 | $ | (85.3) | $ | 16.4 | $ | 193.0 | $ | 140.0 | $ | 62.8 | ||||||||||||||||||||||||||||||||||
|
Cash Inflows/(Outflows)
|
20.9 | 28.1 | 18.6 | 48.2 | 42.0 | 48.5 | 46.4 | 66.9 | ||||||||||||||||||||||||||||||||||||||||||
| Total Change | $ | 113.7 | $ | 49.3 | $ | 129.9 | $ | (37.1) | $ | 58.4 | $ | 241.5 | $ | 186.4 | $ | 129.7 | ||||||||||||||||||||||||||||||||||
The following table presents the average value of AUM in ETFs linked to MSCI equity indexes for the periods indicated:
| Year-to-Date Average | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| (in billions) | March | June | September | December | March | June | September | December | ||||||||||||||||||||||||||||||||||||||||||
|
AUM in ETFs linked to MSCI equity indexes(1) (2)
|
$ | 1,508.8 | $ | 1,549.7 | $ | 1,592.1 | $ | 1,632.9 | $ | 1,793.7 | $ | 1,831.2 | $ | 1,923.6 | $ | 2,011.3 | ||||||||||||||||||||||||||||||||||
________________
(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. This information is updated mid-month each month. Information contained on our website is not deemed part of or incorporated by reference into this Annual Report on Form 10-K 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 ETF net asset value by the number of shares outstanding.
For the year ended December 31, 2025, the average value of AUM in ETFs linked to MSCI equity indexes was up $378.4 billion, or 23.2%.
Index segment Adjusted EBITDA expenses increased 12.5% for the year ended December 31, 2025, primarily driven by increases in compensation and benefits costs as a result of increased headcount costs as well as higher severance costs. The increase was also driven by non-compensation expenses reflecting higher information technology costs and professional fees. Adjusting for the impact of foreign currency exchange rate fluctuations, Index segment Adjusted EBITDA expenses would have increased 12.2%.
Analytics Segment
The following table presents the results for the Analytics segment for the years indicated:
| Years Ended | ||||||||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
Increase/(Decrease) | |||||||||||||||||
| Operating revenues: | ||||||||||||||||||||
| Recurring subscriptions | $ | 697,488 | $ | 658,610 | 5.9 | % | ||||||||||||||
| Non-recurring | 16,909 | 16,479 | 2.6 | % | ||||||||||||||||
| Operating revenues total | 714,397 | 675,089 | 5.8 | % | ||||||||||||||||
| Adjusted EBITDA expenses | 371,867 | 346,794 | 7.2 | % | ||||||||||||||||
| Adjusted EBITDA | $ | 342,530 | $ | 328,295 | 4.3 | % | ||||||||||||||
| Adjusted EBITDA margin % | 47.9 | % | 48.6 | % | ||||||||||||||||
Analytics operating revenues increased 5.8% for the year ended December 31, 2025, primarily driven by growth from recurring subscriptions related to both Equity and Multi-Asset Class Analytics products. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics operating revenues would have increased 5.7%.
Analytics segment Adjusted EBITDA expenses increased 7.2% for the year ended December 31, 2025, primarily driven by increases in compensation and benefits costs as a result of increased headcount costs as well as higher severance costs. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics segment Adjusted EBITDA expenses would have increased 7.1%.
Sustainability and Climate Segment
The following table presents the results for the Sustainability and Climate segment for the years indicated:
| Years Ended | ||||||||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
Increase/(Decrease) | |||||||||||||||||
| Operating revenues: | ||||||||||||||||||||
| Recurring subscriptions | $ | 346,401 | $ | 318,835 | 8.6 | % | ||||||||||||||
| Non-recurring | 7,514 | 7,766 | (3.2 | %) | ||||||||||||||||
| Operating revenues total | 353,915 | 326,601 | 8.4 | % | ||||||||||||||||
| Adjusted EBITDA expenses | 225,438 | 221,893 | 1.6 | % | ||||||||||||||||
| Adjusted EBITDA | $ | 128,477 | $ | 104,708 | 22.7 | % | ||||||||||||||
| Adjusted EBITDA margin % | 36.3 | % | 32.1 | % | ||||||||||||||||
Sustainability and Climate operating revenues increased 8.4% for the year ended December 31, 2025, primarily driven by growth from recurring subscriptions related to Ratings and Climate products, with growth primarily attributable to EMEA. Adjusting for the impact of foreign currency exchange rate fluctuations, Sustainability and Climate operating revenues would have increased 6.0%.
Sustainability and Climate segment Adjusted EBITDA expenses increased 1.6% for the year ended December 31, 2025, primarily driven by non-compensation expenses reflecting higher information technology costs. Adjusting for the impact of foreign currency exchange rate fluctuations, Sustainability and Climate segment Adjusted EBITDA expenses would have increased 1.2%.
All Other - Private Assets
The following table presents the results for All Other - Private Assets for the years indicated:
| Years Ended | ||||||||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
Increase/(Decrease) | |||||||||||||||||
| Operating revenues: | ||||||||||||||||||||
| Recurring subscriptions | $ | 276,918 | $ | 254,633 | 8.8 | % | ||||||||||||||
| Non-recurring | 2,421 | 3,660 | (33.9 | %) | ||||||||||||||||
| Operating revenues total | 279,339 | 258,293 | 8.1 | % | ||||||||||||||||
| Adjusted EBITDA expenses | 209,902 | 196,866 | 6.6 | % | ||||||||||||||||
| Adjusted EBITDA | $ | 69,437 | $ | 61,427 | 13.0 | % | ||||||||||||||
| Adjusted EBITDA margin % | 24.9 | % | 23.8 | % | ||||||||||||||||
All Other - Private Assets operating revenues increased 8.1% for the year ended December 31, 2025, primarily driven by growth from recurring subscriptions in Private Capital Solutions related to Private Capital Intel, Total Plan Manager and Private Capital Portfolio Management products, as well as growth from recurring subscription in Real Assets related to Index Intel and Portfolio Performance Insights products. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other - Private Assets operating revenues would have increased 7.1%.
All Other - Private Assets Adjusted EBITDA expenses increased 6.6% for the year ended December 31, 2025, primarily driven by increases in compensation and benefits costs as a result of increased headcount costs as well as higher severance costs. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other -Private Assets Adjusted EBITDA expenses would have increased 5.9%.
Operating Metrics
A substantial portion of MSCI's operating revenues is derived from recurring subscriptions or licenses for products and services that are ongoing in nature and provided over contractually agreed periods, which are subject to renewal or cancellation upon the expiration of the then-current term. In addition, we generate non-recurring revenues from one-time sales and other transactions or services that are discrete in nature or that have a defined life. The operating metrics defined below help management assess the stability and growth of this recurring-revenue base and track non-recurring revenues. There have been no changes to the methodologies used to compute these metrics compared with prior years.
Run Rate
Run Rate estimates, at a specific point in time, the annualized value of the recurring portion of executed client contracts ("Client Contracts") expected to generate revenues over the next 12 months, assuming that all such Client Contracts are renewed and using fixed foreign exchange rates. Run Rate includes new Client Contracts upon execution, even if the license start date and related revenue recognition occur later.
For Client Contracts where fees are linked to an investment product's assets or trading volume or fees (referred to as "Asset-based Fees"), the Run Rate calculation is based on:
•For exchange-traded funds ("ETFs"): assets under management as of the last trading day of the period;
•For non-ETF products: the most recent client-reported assets under management; and
•For listed futures and options contracts: the most recent quarterly volumes and/or reported exchange fees.
Run Rate excludes fees associated with one-time or other non-recurring transactions.
We remove from Run Rate the annualized fee value associated with products or services under any Client Contracts when (i) we have received a notice of termination, reduction in fees, non-renewal or other clear indication that the client does not intend to continue its subscription at then current fees; and (ii) management has determined that such notice or indication reflects the client's final decision to terminate, not renew or renew at a lower fee the applicable products or services, even if such termination or non-renewal is not yet effective (each such event, a "Subscription Cancellation").
In general, when a client reduces the fees paid to MSCI associated with a reduction in the number of products or services to which it subscribes within a segment, or a switch between products or services within a segment, unless the client switches to a product or service that management considers a replacement, such reduction or switch is treated as a Subscription Cancellation, including for purposes of calculating MSCI's Retention Rate (as detailed below). In the cases where the client switches products or services to a replacement service, only the net decrease, if any, is reported as a cancellation.
•In the Analytics and Sustainability and Climate operating segments, substantially all such product or service switches are treated as replacements and are netted accordingly.
•In contrast, in the Index, Real Assets, and Private Capital Solutions operating segments, such netting treatment is applied only in limited circumstances.
Run Rate may differ from revenues recognized in accordance with Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers. Changes in our recurring revenues typically lag changes in Run Rate. Key factors include, but are not limited to:
•Immediate recognition of the annualized value of newly executed recurring Client Contracts;
•Immediate removal of the annualized value of Subscription Cancellations on Client Contracts;
•Immediate updates to reflect modifications to existing Client Contracts, including changes in price or scope of services;
•Timing differences between the effective date of service delivery and contract execution (e.g., Client Contracts with implementation periods, fee waivers or future-dated start terms);
•Variability in revenues driven by exogenous factors, such as changes in reference asset values, currency exchange rates or investment flows;
•Variability in revenues tied to trading volumes of futures and options contracts linked to MSCI indexes; and
•The effects of acquisitions and divestitures.
•Multi-period agreements with contractual price escalators where the total revenue is recognized ratably over the contract period.
Organic recurring subscription Run Rate growth is defined as the period-over-period growth in Run Rate, excluding:
•The impact of changes in foreign currency exchange rates;
•The impact of acquisitions during the first 12 months following the transaction date; and
•The impact of divestitures, where Run Rate from divested businesses are excluded from prior period Run Rates.
The following table presents Run Rates as of the dates indicated and the growth percentages over the years indicated:
| As of | ||||||||||||||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
Run Rate Growth % |
Organic Run Rate Growth % | ||||||||||||||||||||||
| Index: | ||||||||||||||||||||||||||
| Recurring subscriptions | $ | 1,021,651 | $ | 934,251 | 9.4 | % | 9.3 | % | ||||||||||||||||||
| Asset-based fees | 852,464 | 678,599 | 25.6 | % | 25.6 | % | ||||||||||||||||||||
| Index total | 1,874,115 | 1,612,850 | 16.2 | % | 16.2 | % | ||||||||||||||||||||
| Analytics | 757,366 | 698,377 | 8.4 | % | 7.0 | % | ||||||||||||||||||||
| Sustainability and Climate | 378,102 | 343,741 | 10.0 | % | 4.9 | % | ||||||||||||||||||||
|
All Other -Private Assets
|
291,993 | 266,719 | 9.5 | % | 7.4 | % | ||||||||||||||||||||
| Total Run Rate | $ | 3,301,576 | $ | 2,921,687 | 13.0 | % | 11.9 | % | ||||||||||||||||||
| Recurring subscriptions total | $ | 2,449,112 | $ | 2,243,088 | 9.2 | % | 7.7 | % | ||||||||||||||||||
| Asset-based fees | 852,464 | 678,599 | 25.6 | % | 25.6 | % | ||||||||||||||||||||
| Total Run Rate | $ | 3,301,576 | $ | 2,921,687 | 13.0 | % | 11.9 | % | ||||||||||||||||||
Total Run Rate increased 13.0% for the year ended December 31, 2025, driven by a 9.2% increase from recurring subscriptions, primarily driven by increases in the asset manager, banks and broker-dealer, asset owner and hedge fund client segments, as well as a 25.6% increase from asset-based fees.
Run Rate from Index recurring subscriptions increased 9.4% for the year ended December 31, 2025, primarily driven by growth from market cap-weighted and custom Index products. The increase reflected growth across all regions and client segments.
Run Rate from Index asset-based fees increased 25.6% for the year ended December 31, 2025, primarily driven by higher AUM in ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes.
Run Rate from Analytics products increased 8.4% for the year ended December 31, 2025, driven by growth in both Multi-Asset Class and Equity Analytics products, reflecting growth across all regions and client segments.
Run Rate from Sustainability and Climate products increased 10.0% for the year ended December 31, 2025, primarily driven by growth in Ratings and Climate products, with growth primarily attributable to EMEA. The increase was primarily driven by growth in the asset manager, insurance and wealth manager client segments.
Run Rate from All Other -Private Assets increased 9.5% for the year ended December 31, 2025, primarily driven by growth from Private Capital Solutions related to Total Plan Manager, Private Capital Transparency Data and Private Capital Intel products, and reflected growth across all regions. The increase was primarily driven by growth in asset owner and asset manager client segments.
Sales
Sales represents the annualized value of products and services that clients have committed to purchase from MSCI and that are expected to result in additional operating revenues.
Non-recurring sales represent the aggregate value of client agreements entered into during the period that generate non-recurring fees and are not included in Run Rate (as defined elsewhere herein), even if such agreements span multiple periods or years.
New recurring subscription sales represent the annualized value of additional client commitments entered into during the period, such as new Client Contracts, expansions of existing Client Contracts or price increases, that contribute to Run Rate.
Net new recurring subscription sales represent new recurring subscription sales minus the impact of Subscription Cancellations, capturing the net impact to Run Rate for the period.
Total gross sales is the sum of new recurring subscription sales and non-recurring sales.
Total net sales is total gross sales minus the impact of Subscription Cancellations.
Changes in foreign currency are calculated by applying the exchange rates from the prior comparable period to the current period's foreign currency-denominated Run Rate.
The following table presents our recurring subscription sales, cancellations and non-recurring sales for the years indicated:
| Years Ended | ||||||||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
Increase/(Decrease) | |||||||||||||||||
| Index | ||||||||||||||||||||
| New recurring subscription sales | $ | 126,698 | $ | 118,191 | 7.2 | % | ||||||||||||||
| Subscription cancellations | (38,279) | (45,730) | (16.3 | %) | ||||||||||||||||
| Net new recurring subscription sales | $ | 88,419 | $ | 72,461 | 22.0 | % | ||||||||||||||
| Non-recurring sales | $ | 66,022 | $ | 62,840 | 5.1 | % | ||||||||||||||
| Total gross sales | $ | 192,720 | $ | 181,031 | 6.5 | % | ||||||||||||||
| Total Index net sales | $ | 154,441 | $ | 135,301 | 14.1 | % | ||||||||||||||
| Analytics | ||||||||||||||||||||
| New recurring subscription sales | $ | 88,651 | $ | 82,419 | 7.6 | % | ||||||||||||||
| Subscription cancellations | (39,787) | (39,106) | 1.7 | % | ||||||||||||||||
| Net new recurring subscription sales | $ | 48,864 | $ | 43,313 | 12.8 | % | ||||||||||||||
| Non-recurring sales | $ | 16,619 | $ | 16,368 | 1.5 | % | ||||||||||||||
| Total gross sales | $ | 105,270 | $ | 98,787 | 6.6 | % | ||||||||||||||
| Total Analytics net sales | $ | 65,483 | $ | 59,681 | 9.7 | % | ||||||||||||||
| Sustainability and Climate | ||||||||||||||||||||
| New recurring subscription sales | $ | 40,186 | $ | 55,397 | (27.5 | %) | ||||||||||||||
| Subscription cancellations | (23,301) | (22,989) | 1.4 | % | ||||||||||||||||
| Net new recurring subscription sales | $ | 16,885 | $ | 32,408 | (47.9 | %) | ||||||||||||||
| Non-recurring sales | $ | 5,016 | $ | 9,015 | (44.4 | %) | ||||||||||||||
| Total gross sales | $ | 45,202 | $ | 64,412 | (29.8 | %) | ||||||||||||||
| Total Sustainability and Climate net sales | $ | 21,901 | $ | 41,423 | (47.1 | %) | ||||||||||||||
|
All Other - Private Assets
|
||||||||||||||||||||
| New recurring subscription sales | $ | 42,772 | $ | 40,758 | 4.9 | % | ||||||||||||||
| Subscription cancellations | (23,141) | (23,685) | (2.3 | %) | ||||||||||||||||
| Net new recurring subscription sales | $ | 19,631 | $ | 17,073 | 15.0 | % | ||||||||||||||
| Non-recurring sales | $ | 4,304 | $ | 3,878 | 11.0 | % | ||||||||||||||
| Total gross sales | $ | 47,076 | $ | 44,636 | 5.5 | % | ||||||||||||||
|
Total All Other - Private Assets net sales
|
$ | 23,935 | $ | 20,951 | 14.2 | % | ||||||||||||||
| Consolidated | ||||||||||||||||||||
| New recurring subscription sales | $ | 298,307 | $ | 296,765 | 0.5 | % | ||||||||||||||
| Subscription cancellations | (124,508) | (131,510) | (5.3 | %) | ||||||||||||||||
| Net new recurring subscription sales | $ | 173,799 | $ | 165,255 | 5.2 | % | ||||||||||||||
| Non-recurring sales | $ | 91,961 | $ | 92,101 | (0.2 | %) | ||||||||||||||
| Total gross sales | $ | 390,268 | $ | 388,866 | 0.4 | % | ||||||||||||||
| Total net sales | $ | 265,760 | $ | 257,356 | 3.3 | % | ||||||||||||||
Retention Rate
The following table presents our Retention Rate for the periods indicated:
| Index | Analytics |
Sustainability and Climate
|
All Other - Private Assets
|
Total | ||||||||||||||||||||||||||||
| 2025 | ||||||||||||||||||||||||||||||||
| Three Months Ended March 31, | 96.5% | 95.5% | 94.5% | 91.5% | 95.3% | |||||||||||||||||||||||||||
| Three Months Ended June 30, | 96.0% | 93.7% | 93.8% | 91.2% | 94.4% | |||||||||||||||||||||||||||
| Three Months Ended September 30, | 95.8% | 94.4% | 93.6% | 93.3% | 94.7% | |||||||||||||||||||||||||||
|
Three Months Ended December 31,
|
95.3% | 93.7% | 91.0% | 89.2% | 93.4% | |||||||||||||||||||||||||||
|
Year Ended December 31,
|
95.9% | 94.3% | 93.2% | 91.3% | 94.4% | |||||||||||||||||||||||||||
| 2024 | ||||||||||||||||||||||||||||||||
| Three Months Ended March 31, | 93.2% | 93.5% | 90.8% | 92.2% | 92.8% | |||||||||||||||||||||||||||
| Three Months Ended June 30, | 95.2% | 95.8% | 94.3% | 91.2% | 94.8% | |||||||||||||||||||||||||||
| Three Months Ended September 30, | 95.4% | 93.8% | 93.0% | 92.7% | 94.2% | |||||||||||||||||||||||||||
| Three Months Ended December 31, | 95.0% | 93.3% | 93.1% | 86.4% | 93.1% | |||||||||||||||||||||||||||
|
Year Ended December 31,
|
94.7% | 94.1% | 92.8% | 90.6% | 93.7% | |||||||||||||||||||||||||||
Retention Rate is a key performance metric that provides insight into the stability and durability of MSCI's recurring revenue base. Subscription cancellations reduce Run Rate and, over time, lower future operating revenues.
For full-year periods, Retention Rate is calculated as the retained subscription Run Rate, which is defined as the subscription Run Rate at the beginning of the fiscal year minus actual subscription cancellations during the fiscal year, expressed as a percentage of the subscription Run Rate at the beginning of the fiscal year.
For interim (non-annual) periods, Retention Rate is presented on an annualized basis. The annualized Retention Rate is calculated by:
1.Dividing annualized subscription cancellations in the period by the subscription Run Rate at the beginning of the fiscal year, to determine a cancellation rate; and
2.Subtracting that rate from 100%, to derive the annualized Retention Rate.
Retention Rate is calculated by operating segment and is based on an individual product or service level within each segment. We do not calculate Retention Rate for the portion of Run Rate attributable to Asset-based Fees.
For example, in the fourth quarter of 2025, we recorded cancellations of $36.9 million. To derive the Retention Rate for the fourth quarter, we annualized the actual cancellations during the quarter of $36.9 million to derive $147.6 million of annualized cancellations. This $147.6 million was then divided by the $2,243.1 million subscription Run Rate at the beginning of the year to derive a cancellation rate of 6.6%. The 6.6% was then subtracted from 100.0% to derive a Retention Rate of 93.4% for the fourth quarter.
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 Sustainability 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 Assets 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-sell 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.
For the year ended December 31, 2025, 29.6% of our cancellations occurred in the fourth quarter. In our product lines, Retention Rate is generally higher during the first three quarters and lower in the fourth quarter, as the fourth quarter is traditionally the largest renewal period in the year.
Liquidity and Capital Resources
We require capital to fund ongoing operations, internal growth initiatives and acquisitions. Our primary sources of liquidity are cash flows generated from our operations, existing cash and cash equivalents and credit capacity under our existing credit facility. In addition, we believe we have access to additional funding in the public and private markets. We intend to use these sources of liquidity to, among other things, service our existing and future debt obligations, fund our working capital requirements for capital expenditures, investments, acquisitions and dividend payments, and make repurchases of our common stock. In connection with our business strategy, we regularly evaluate acquisition and strategic partnership opportunities. We believe our liquidity, along with other financing alternatives, will provide the necessary capital to fund these transactions and achieve our planned growth.
Senior Notes and Credit Agreement
As of December 31, 2025, we had an aggregate of $6.0 billion in Senior Notes outstanding. In addition, under the Credit Agreement, we had as of December 31, 2025 an aggregate of $0.3 billion in outstanding borrowings under the Revolving Credit Facility. See Note 6, "Debt," of the Notes to Consolidated Financial Statements included herein for additional information on our outstanding Senior Notes and Revolving Credit Facility.
2025 Issuances and Amendments
On August 8, 2025, we issued $1.25 billion aggregate principal amount of 5.25% Senior Unsecured Notes due 2035 (the "2035 Senior Notes") in a registered public offering. The 2035 Senior Notes mature on September 1, 2035. At any time prior to June 1, 2035, we may redeem all or part of the 2035 Senior Notes at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest, if any, thereon to, but not including, the redemption date. On or after June 1, 2035, the 2035 Senior Notes are redeemable at 100% of the principal amount, plus accrued and unpaid interest to, but not including, the redemption date.
On August 20, 2025, we entered into a Third Amended and Restated Credit Agreement (the "Credit Agreement") amending and restating in its entirety the Company's prior Second Amended and Restated Credit Agreement (the "Prior Credit Agreement"). The Credit Agreement increased the aggregate revolving commitments to $1.6 billion (from $1.25 billion under the Prior Credit Agreement) under a revolving credit facility (the "Revolving Credit Facility"), and extends the availability period until August 20, 2030. Obligations under the Credit Agreement are unsecured senior obligations of the Company.
On November 6, 2025, we issued $500 million aggregate principal amount of 5.15% Senior Unsecured Notes due 2036 (the "2036 Senior Notes") in a registered public offering. The 2036 Senior Notes mature on March 15, 2036. At any time prior to December 15, 2035, we may redeem all or part of the 2036 Senior Notes at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest, if any, thereon to, but not including, the redemption date. On or after December 15, 2035, the 2036 Senior Notes are redeemable at 100% of the principal amount, plus accrued and unpaid interest to, but not including, the redemption date.
Covenants
The indentures governing our Senior Notes (the "Indentures")and the Credit Agreement contain covenants that limit our and our subsidiaries' ability to, among other things, incur liens, enter into sale/leaseback transactions and consolidate, merge or sell all or substantially all of our assets, and that limit the ability of our subsidiaries to incur certain indebtedness.
The Credit Agreement and the Indentures also contain customary events of default, including those relating to non-payment, breach of representations, warranties or covenants, cross-default and cross-acceleration, and bankruptcy and insolvency events, and, in the case of the Credit Agreement, invalidity or impairment of loan documentation, change of control and customary ERISA defaults in addition to the foregoing. None of the restrictions above are expected to impact our ability to effectively operate the business.
The Credit Agreement also requires us and our subsidiaries to achieve financial and operating results sufficient to maintain compliance with the following financial ratios on a consolidated basis through the termination of the Credit Agreement: (1) the maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) measured quarterly on a rolling four-quarter basis not to exceed 4.25:1.00 (or 4.50:1.00 for four fiscal quarters following a material acquisition) and (2) during any Non-Investment Grade Covenant Period (as defined in the Credit Agreement), the minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) measured quarterly on a rolling four-quarter basis of at least 3.00:1.00. As of December 31, 2025, our Consolidated Leverage Ratio was 2.97.
As of December 31, 2025, all of the Company's subsidiaries were non-guarantor subsidiaries under the Indentures ("non-guarantor subsidiaries"). The non-guarantor subsidiaries accounted for approximately $2,455.7 million, or 78.3%, of our total revenue
for the trailing 12 months ended December 31, 2025, approximately $1,019.5 million, or 59.5%, of our consolidated operating income for the trailing 12 months ended December 31, 2025, and approximately $4,964.6 million, or 87.1%, of our consolidated total assets (excluding intercompany assets) and $1,669.6 million, or 20.0%, of our consolidated total liabilities, in each case as of December 31, 2025.
Share Repurchases
In 2025, our Board of Directors approved a stock repurchase program for the purchase of shares of the Company's common stock in the open market. See Note 11, "Shareholders' Equity (Deficit)," of the Notes to Consolidated Financial Statements included herein for additional information on our stock repurchase program.
As of trade date February 5, 2026, a total of approximately $2.0 billion of authorization remained available under the share repurchase program. This authorization may be modified, suspended or terminated by the Board of Directors at any time without prior notice.
Cash Dividends
On September 17, 2014, our Board of Directors approved a plan to initiate a regular quarterly cash dividend to our shareholders. On October 30, 2014, we began paying regular quarterly cash dividends and have paid such dividends each quarter thereafter.
On January 27, 2026, the Board of Directors declared a quarterly cash dividend of $2.05 per share of common stock to be paid on February 27, 2026 to shareholders of record as of the close of trading on February 13, 2026.
Cash Flows
The following table presents the Company's cash and cash equivalents, including restricted cash, as of the dates indicated:
| As of | ||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
||||||||||||
|
Cash and cash equivalents (includes restricted cash of $3,667 and
$3,497 at December 31, 2025 and December 31, 2024, respectively)
|
$ | 515,332 | $ | 409,351 | ||||||||||
The following table presents the breakdown of the Company's cash flows for the periods indicated:
| Years Ended | ||||||||||||||
| (in thousands) |
December 31,
2025
|
December 31,
2024
|
||||||||||||
| Net cash provided by operating activities | $ | 1,588,446 | $ | 1,501,627 | ||||||||||
|
Net cash (used in) investing activities
|
(130,064) | (144,255) | ||||||||||||
|
Net cash (used in) financing activities
|
(1,361,990) | (1,402,308) | ||||||||||||
| Effect of exchange rate changes | 9,589 | (7,406) | ||||||||||||
|
Net increase (decrease) in cash, cash equivalents and restricted cash
|
$ | 105,981 | $ | (52,342) | ||||||||||
Cash and Cash Equivalents
We typically seek to maintain minimum cash balances globally of approximately $225.0 million to $275.0 million for general operating purposes. As of December 31, 2025 and 2024, $335.7 million and $265.5 million, respectively, of the cash and cash equivalents were held by foreign subsidiaries. Repatriation of some foreign cash may be subject to certain withholding taxes in local jurisdictions and other distribution restrictions. We believe the global cash and cash equivalent balances that are maintained will be available to meet our global needs whether for general corporate purposes or other needs, including acquisitions or expansion of our products.
Cash Flows From Operating Activities
Cash flows from operating activities consist of net income adjusted for certain non-cash items and changes in assets and liabilities. The year-over-year change was primarily driven by higher cash collections from customers, partially offset by higher payments for cash expenses.
Our primary uses of cash from operating activities are for the payment of cash compensation expenses, income taxes, interest expenses, technology costs, professional fees, market data and office rent. Historically, the payment of cash for compensation and benefits is at its highest level in the first quarter when we pay discretionary employee compensation related to the previous fiscal year.
Cash Flows From Investing Activities
The year-over-year change was due to prior year acquisitions, partially offset by increased capital expenditures.
Cash Flows From Financing Activities
The year-over-year change was primarily driven by proceeds from borrowings partially offset by the impact of higher share repurchases, repayment of borrowings and dividend payments.
We believe that global cash flows from operations, together with existing cash and cash equivalents and funds available under our existing revolving credit facility and our ability to access bank debt, private debt and the capital markets for additional funds, will continue to be sufficient to fund our global operating activities and cash commitments for investing and financing activities, such as material capital expenditures and share repurchases, for at least the 12 months following issuance of this Form 10-K and for the foreseeable future thereafter. In addition, we expect that foreign cash flows from operations, together with existing cash and cash equivalents, will continue to be sufficient to fund our foreign operating activities and cash commitments for investing activities, such as material capital expenditures, for at least the 12 months following issuance of this Form 10-K and for the foreseeable future thereafter.
Contractual Obligations
Our contractual obligations consist primarily of our debt obligations arising from the issuance of the Senior Notes, Revolving Loan Commitments, leases for office space, leases for equipment and other operating leases and obligations to vendors arising out of market data contracts. The following table summarizes our contractual obligations for the periods indicated as of December 31, 2025:
| Years Ending December 31, | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Total | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | |||||||||||||||||||||||||||||||||||||
|
Senior Notes(1)
|
$ | 7,714,800 | $ | 247,977 | $ | 247,250 | $ | 247,250 | $ | 1,247,250 | $ | 1,107,250 | $ | 4,617,823 | ||||||||||||||||||||||||||||||
|
Revolving Loan Commitments(2)
|
386,658 | 18,683 | 18,683 | 18,734 | 18,683 | 311,875 | - | |||||||||||||||||||||||||||||||||||||
| Operating leases | 152,282 | 33,616 | 29,113 | 28,276 | 17,862 | 14,345 | 29,070 | |||||||||||||||||||||||||||||||||||||
| Vendor obligations | 408,927 | 137,723 | 97,724 | 62,309 | 55,481 | 51,108 | 4,582 | |||||||||||||||||||||||||||||||||||||
| Total contractual obligations | $ | 8,662,667 | $ | 437,999 | $ | 392,770 | $ | 356,569 | $ | 1,339,276 | $ | 1,484,578 | $ | 4,651,475 | ||||||||||||||||||||||||||||||
______________________________
(1)Includes the impact of payments for the principal amount on the Senior Notes due 2029, the Senior Notes due 2030, the 3.875% Senior Notes due 2031, the 3.625% Senior Notes due 2031, the Senior Notes due 2033, the Senior Notes due 2035 and the Senior Notes due 2036 plus interest based on the 4.000%, 3.625%, 3.875%, 3.625%, 3.250%, 5.250% and 5.150% coupon interest rates, respectively.
(2)Includes the impact of payments for the principal amount as well as coupon interest payments at the interest rate in effect as of December 31, 2025 on the revolving loans under the Revolving Credit Facility due 2030.
The obligations related to our uncertain tax positions, which are not considered material, have been excluded from the table above because of the uncertainty surrounding the timing and final amounts of any settlement.
Recent Accounting Standards Updates
See Note 2, "Recent Accounting Standards Updates," of the Notes to the Consolidated Financial Statements included herein for further information.
MSCI Inc. published this content on February 06, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 06, 2026 at 19:55 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]