MSCI Q3 Revenue Rises 12% on Record Index-Linked AUM

MSCI Inc. (NYSE: MSCI) reported a 12.4% increase in third-quarter 2026 operating revenue, led by record asset-based fee revenue as assets in funds linked to its indexes reached new highs. Adjusted earnings per share rose 14.3%, while the company increased its full-year interest expense forecast and narrowed its expected effective tax-rate range.

Operating revenue for the three months ended September 30 totaled $892.0 million, up from $793.4 million a year earlier. Organic revenue growth was 12.3%. Recurring subscription revenue increased 7.7%, or 7.5% organically, while asset-based fee revenue climbed 24.9% to $246.6 million.

Operating income rose 12.2% to $502.1 million, with the operating margin edging down 10 basis points to 56.3%. Adjusted EBITDA increased 12.2% to $554.8 million, producing a 62.2% adjusted EBITDA margin.

Net income increased to $351.0 million from $325.3 million. Diluted EPS rose 14.4% to $4.86, while adjusted EPS advanced to $5.11 from $4.47. The adjusted EPS increase reflected operating performance and a lower diluted share count, which declined to 72.3 million from 76.6 million.

Index business leads growth

The Index segment generated $532.6 million in revenue, up 18% on both a reported and organic basis. The increase was supported by an 18% rise in recurring subscription revenue and a 25% increase in asset-based fees.

Quarter-end assets in exchange-traded funds linked to MSCI equity indexes reached $2.91 trillion, up 31% year over year. Assets tied to developed markets excluding the U.S. increased 48%, emerging markets and all-country exposures rose 21%, and U.S.-focused assets grew 28%. MSCI said asset-based fee run rate increased 22%, driven by record assets in ETF and non-ETF indexed funds.

Index adjusted EBITDA rose to $412.4 million from $350.2 million. The company also reported more than $22.8 trillion in global assets benchmarked to MSCI indexes as of June 30, 2026.

Analytics revenue increased 5% to $191.0 million, including 5% organic growth. Its subscription run rate rose 7% to $793.5 million, or 8% organically, although adjusted EBITDA declined to $85.7 million from $90.1 million as adjusted EBITDA expenses increased.

Sustainability and Climate revenue grew 4% to $93.7 million, with organic growth of 2%. Adjusted EBITDA increased to $38.2 million from $34.7 million. Revenue in All Other – Private Assets rose 7% to $74.7 million, while adjusted EBITDA decreased to $18.5 million from $19.4 million.

Recurring business remains stable

Total run rate reached approximately $3.57 billion, an increase of 12.1%. Reported subscription run rate grew 8.8%, while organic subscription run rate increased 8.7%. The quarterly retention rate was 95.0%.

MSCI highlighted demand from asset owners and hedge funds. Asset owners generated a record $13 million of recurring net new subscription sales during the quarter, lifting run-rate growth for that client group to 12.5%.

By region, subscription run rate grew 9% in the Americas, 7% in EMEA and 12% in Asia-Pacific. Recurring net new subscription sales totaled $25 million in the Americas, $18 million in EMEA and $12 million in Asia-Pacific.

The company also expanded its product and distribution capabilities during the period. Launches included new AI value-chain, commodities and energy-transition indexes, as well as SignalLab, a platform offering more than 600 investment signals. MSCI also introduced integrations with OpenAI’s ChatGPT, Anthropic’s Claude, Microsoft Copilot and Google Gemini for selected analytics and private-market products. A collaboration with CUSIP Global Services, announced in October, is intended to extend standardized identifiers to certain private companies using MSCI Private Company Insights data.

Guidance and cash flow

MSCI now expects full-year 2026 interest expense of $288 million to $291 million, compared with its previous range of $282 million to $286 million. The expected effective tax rate was narrowed to 18.0% to 19.5% from 18.0% to 20.0%.

Other full-year forecasts were unchanged. MSCI continues to expect operating expenses of $1.535 billion to $1.575 billion, adjusted EBITDA expenses of $1.340 billion to $1.370 billion, and free cash flow of $1.485 billion to $1.545 billion. Net cash provided by operating activities is projected at $1.655 billion to $1.705 billion.

Third-quarter operating cash flow declined to $436.1 million from $449.4 million. Free cash flow fell to $385.4 million from $423.2 million, while capital expenditures, including capitalized software development costs, increased to $50.7 million from $26.2 million.

MSCI returned $700 million to shareholders during the quarter through $552 million of share repurchases and $148 million of dividends. It ended September with $6.72 billion of debt and $261 million of cash, with net debt equal to 3.1 times last-12-month adjusted EBITDA.

The company said its guidance depends on assumptions involving macroeconomic conditions and capital markets. Asset-based fees remain sensitive to market levels, fund flows and trading activity, while changes in SOFR and borrowing levels can affect interest expense on variable-rate debt. MSCI also cautioned that actual results could differ materially if its assumptions prove incorrect or other disclosed risks materialize.