MSCI Inc. Achieves 15.9% Revenue Growth in Q3 2024
MSCI Inc. (NYSE: MSCI), has announced robust financial results for the third quarter of 2024. The company reported operating revenues of $724.7 million, marking a 15.9% increase from the same period last year.
The growth was driven by a significant rise in recurring subscription revenues and asset-based fees, which grew by 15.4% and 19.5%, respectively. The company achieved an operating margin of 55.4% and an adjusted EBITDA margin of 62.2%, highlighting its operational efficiency. Diluted earnings per share (EPS) reached $3.57, up 9.2% from the previous year, while adjusted EPS was $3.86, reflecting an 11.9% increase.
The company’s net income for the quarter stood at $280.9 million, an 8.2% rise compared to the third quarter of 2023. MSCI’s retention rate remained strong at 94.2%, despite a slight decline from the previous year’s 95.4%. The company also repurchased 380,397 shares, amounting to $198.7 million, and declared a cash dividend of $1.60 per share for the fourth quarter of 2024.
MSCI Beats Expectations in Third Quarter of 2024
MSCI’s performance in the third quarter of 2024 surpassed market expectations in terms of revenue but fell slightly short on earnings per share. The company reported revenues of $724.7 million, exceeding the anticipated $714.59 million.
However, the reported diluted EPS of $3.57 was below the expected $3.76, though the adjusted EPS of $3.86 was higher than the consensus, indicating strong underlying business performance after accounting for specific adjustments. The company’s strategic focus on expanding its recurring revenue streams paid off, as evidenced by the significant growth in both recurring subscriptions and asset-based fees.
Despite the slight miss on the expected EPS, MSCI’s overall financial health remains solid, with strong adjusted EBITDA growth of 16.7% compared to the previous year. The company’s ability to exceed revenue expectations while maintaining high operational margins underscores its robust business model and effective cost management strategies.
MSCI Guidance and Future Outlook
Looking ahead, MSCI has provided guidance for the full year 2024, reflecting its confidence in continued growth despite potential macroeconomic uncertainties. The company has projected operating expenses to be in the range of $1,305 to $1,345 million, with adjusted EBITDA expenses expected between $1,130 and $1,160 million.
MSCI anticipates interest expenses to range from $183 to $186 million, while capital expenditures are forecasted between $105 and $115 million, reflecting the company’s commitment to strategic investments and operational efficiency. MSCI expects net cash provided by operating activities to be between $1,420 and $1,470 million, with free cash flow projected at $1,305 to $1,365 million.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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