Active Stock to Observe: MSCI Inc.’s (NYSE: MSCI)

On 10 Dec 18, MSCI Inc.’s (NYSE: MSCI) has shown upward/downward moved of 0.27% and ended the last trade at $150.16. The trading volume was recorded to 530,234 shares as compared to average traded volume of 806,270 shares. The stock as of last trading session moved 21.02% up from its 52 week low and was -18.49% behind its 52 week high.

MSCI Inc. (MSCI) recently reported results for the three months ended September 30, 2018 (“third quarter 2018”) and nine months ended September 30, 2018 (“nine months 2018”).

Financial and Operational Highlights for Third Quarter 2018
(Notes: Percentage and other changes refer to third quarter 2017 unless otherwise noted.)

  • Operating revenues up 11.1%; recurring subscription revenues up 9.9%; asset-based fees up 12.6%.
  • Diluted EPS of $1.36, up 46.2%; Adjusted EPS of $1.35, up 35.0%.
  • Quarter‐end AUM of $765.5B in ETFs linked to MSCI indexes; up 13.5% contrast to previous year.
  • Total Run Rate up 10.0% to $1,435.3M, driven by asset-based fees Run Rate, up 12.5%, and subscription Run Rate, up 9.3%. Organic subscription Run Rate growth of 10.5%.
  • Section organic subscription Run Rate growth: Index up 11.4%, Analytics up 7.4%, All Other up 20.7%.
  • Operating income growth of 18.6%, with operating margin of 49.3%.
  • Adjusted EBITDA growth of 15.9%, with Adjusted EBITDA margin of 54.6%.
  • Continued strong retention with total Retention Rate at 95.0%.
  • During third quarter 2018 and through October 31, 2018, a total of 1.0M shares were repurchased at an average price of $159.40 per share for a total value of $165.2M.

Third Quarter 2018 Consolidated Results

  • Revenues:Operating revenues for third quarter 2018 raised $35.8M, or 11.1%, to $357.9M, contrast to $322.1M for the three months ended September 30, 2017 (“third quarter 2017”). The $35.8M raise in operating revenues was driven by a $24.0M, or 9.9%, raise in recurring subscriptions (driven primarily by a $13.3M, or 12.3%, raise in Index products and a $5.3M, or 4.7%, raise in Analytics products), and a $9.1M, or 12.6%, raise in asset-based fees, which was driven by growth in revenue from exchange traded funds (“ETFs”) and non-ETF passive funds linked to MSCI indexes. Adjusting for the impact from foreign currency exchange rate fluctuations (“ex-FX”) in third quarter 2018, operating revenues raised 11.2%, while foreign currency exchange rate fluctuations had a negligible impact on recurring subscription revenues and asset-based fees. Asset-based fees ex-FX does not adjust for the impact from foreign currency exchange rate fluctuations on the underlying assets under management (“AUM”).
  • For nine months 2018, operating revenues raised $132.9M, or 14.1%, to $1,072.3M, contrast to $939.4M for the nine months ended September 30, 2017 (“nine months 2017”). The raise was driven by a $71.0M, or 9.8%, raise in recurring subscriptions, and by a $57.5M, or 29.1% raise in asset-based fees. For nine months 2018, operating revenues ex-FX raised 13.9%, and recurring subscription revenues ex-FX raised 9.5%. There was a negligible impact on asset-based fees ex-FX.
  • Run Rate:Total Run Rate at September 30, 2018 grew by $130.3M, or 10.0%, to $1,435.3M, contrast to September 30, 2017. The $130.3M raise was driven by a $93.9M, or 9.3%, raise in subscription Run Rate to $1,109.2M, and a $36.3M, or 12.5%, raise in asset-based fees Run Rate to $326.1M. Organic subscription Run Rate growth was 10.5% in third quarter 2018, driven by strong growth in the Index and ESG sections and in the Analytics section’s Multi-Asset Class and Equity Analytics products. Retention Rate was 95.0% in third quarter 2018, contrast to 94.0% in third quarter 2017.
  • Expenses:Total operating expenses for third quarter 2018 raised $8.2M, or 4.8%, to $181.5M contrast to third quarter 2017, driven mainly by a $7.1M, or 6.5%, raise in compensation and benefit costs. The higher compensation and benefit costs were attributable to an raise in wages and salaries, benefits and incentive compensation. Non-compensation costs raised $1.9M, or 4.4%, primarily driven by higher costs relating to professional fees, IT costs and market data costs. Adjusted EBITDA expenses for third quarter 2018 raised $9.0M, or 5.9%, to $162.4M contrast to third quarter 2017. Total operating expenses ex-FX and adjusted EBITDA expenses ex-FX for third quarter 2018 raised 6.2% and 7.5%, respectively, contrast to third quarter 2017.

In the liquidity ratio analysis; quick ratio for most recent quarter was 2.80 while current ratio for time period was 2.80. In most recent quarter, LT Debt/Equity ratio was listed at 6.80 and Total Debt/Equity ratio was noted at 6.80.

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