MSCI (MSCI) 31 Oct 232023 Q3 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the MSCI Third Quarter 2023 Earnings Conference Call.

As a reminder, this call is being recorded. [Operator Instructions]

I'd now like to turn the call over to Jeremy Ulan, Head of Investor Relations and Treasurer.

You may begin.

you. Thank welcome Third and Conference XXXX the Call. to day, Quarter MSCI Earnings Good we release a for this issued Earlier morning, press quarter the XXXX. announcing third results our quarterly earnings This under msci.com, Relations and with release, Investor available an press a our along the brief update tab. website, are on presentation .

statements, the me of second Let forward-looking today's you by governed presentation. this that are remind slide the contains call which language on

undue on You as reliance they not are statements. place on only based date from to which and are are and of statements, made, and subject the expectations forward-looking to actual cause the differ current which results may conditions forward-looking are materially speak anticipated current results risks these cautioned on that to uncertainties economic in

risks please factors uncertainties, discussion For XX-K see in most additional a forward-looking and in recent of filings. risk and SEC our Form disclaimer statements other the our and

presented non-GAAP addition today's of to refer results call, U.S. in also on During measures. the we basis to GAAP,

You'll of our earnings to the measures measures find a GAAP appendix the presentation. reconciliation the in of equivalent non-GAAP

such the We metrics run rate also retention run such metrics available of Important as our operating discuss rate. as rate and operating are rates and earnings information regarding presentation. will in retention use

Fernandez. let are that, the me COO; Pettit, our now and Chairman the On President Henry? today Henry With and turn call over and Financial Chief Andy our Fernandez, CEO; Henry to Officer. Baer Wiechmann, call our

subscription of EPS and growth day, over rate quarter, XX% other an total a Good Among growth thank Jeremy. uncertain us. third in adjusted XX%, of retention growth MSCI we of XX%, you, Thank results the for of achieved rate recurring revenue highlights, everyone, impressive XX.X%. run and you joining delivered In environment.

that diversified than markets, global recognize franchise all weather financial this highly capital allocation more to by turmoil a important uncertain ever. Amid are are decisions performance. our rising drive geopolitical We strong in environment, operating continues and environment challenging tensions in

our months repurchases of of of X $XXX first share to million the the we in This high while signals more MSCI's dividends. for prioritizing high our returned in form confidence to potential and million growth to shareholders. prospects be high $XXX compounder this and also We're In of commitment year, levels of MSCI than committed investments long-term a maintaining form owners profitability. the in and the

We acquisitions. on opportunistic strategic recently capitalized X

public of Burgiss, additional acquisition completed clarity by can needed portfolios. their the provide highly With and and now assets MSCI investors across transparency, in private

investors Burgiss as past created and such the family greater foundations private while has offices. endowments, XX special funds, serving Over years, asset institutional transparency

franchise, $XX private Combined private the of foundation data models with have estate covering a our real world's tools. allocation largest trillion and MSCI performance, more such build analytics to benchmark as database, and class a standards believe -- liquidity, than indices, we quality of now We now asset unique risk, and assets. and has strong asset highest other pricing

our In to assets. the private of MSCI effect, is develop goal

play source robust [ transparency. uniform market. MSCI's a believe Research, and this companies reliable standards significant risk. a announced reduce of voluntary of markets world-renowned is will the in intelligence Trove on drive ] investors for As market carbon and Trove institutional We All helping role on climate acquisition

whether tools robust integrating suite capabilities will data of have with and analytics to solutions, a selling. understand carbon credits. companies As and of the using own companies to are the they market. the and emissions, are for need real By to consistency in Trove clarity credits pushes voluntary X the world value investors progress they of net understand promote climate comprehensive the buying our making how Likewise, carbon are MSCI need and

leads to and advanced acquisitions, investment understand world construction. measure providing of risk, asset mission optimal and for tools business MSCI's these larger to more and which of allocation and systemically Both Burgiss the Trove performance portfolio strategy and

We growing the the securities as aim and of continued including to allocations capital. a across climate private investment reallocation the of assets capture of to the incorporation and repricing major the material landscape, trends driver in

product vice are private interconnected, work our our lines assets means work in in climate versa. which reinforces increasingly Our and

For business resilient model and solutions, believe well model in a positioned developed continues tool summary, mission funds. tailwinds. on critical private with our recurring and business management benefit by rigorous together data X,XXX to and around strong offers that example, climate Burgiss, financial we MSCI XX,XXX private to operating previously underpinned debt we our companies equity than more from remains In a secular From private our MSCI any environment. revenue

call And turn with me that, the let over Baer. to

greetings, Henry, said and third in Pacific. I'll line In our remarks about product quarter Burgiss, and on highlight Thank my Henry discuss performance by Asia regional results our build today, you, everyone. what

solutions Our asset and private largest MSCI all which across more one than industry's classes managers serve acquisition the of XX,XXX completed we Burgiss, investment asset portfolio this of databases month, total bonds. a earlier and position investors world-class platform delivering to . covering for with

Henry as As our and Burgiss helping sovereign existing offices. family presence endowments, funds expand funds foundations pension while wealth client with among and our deepens mentioned, MSCI presence segments, such

well forward our Burgiss are integrating the underway with X,XXX the providing XXX-plus we We and clients on to into employees operations, look our Burgiss and progress. roughly updates

managers At and our of results. run product rate subscription lines. delivered performance corporates. achieved the insurance managers, and across growth of level, for And around another collectively QX broker-dealers, client quarter our we base, and we to client funds, banks Turning wealth companies among hedge segments client asset largest XX% growth combined. and delivered MSCI asset solid owners XX% amongst

across indicate, momentum numbers client have strength and segments. our As all those we maintained

our indexes product posted indexing rate direct run to double-digit of In Meanwhile, index, XX%. MSCI $XX XX% Looking total consecutive subscription we growth at billion. based XXth by quarter AUM on our lines. of increased

new index cap-weighted from growth licensing than modules sales float increased data. both subscription saw from fund hedge reflecting where also more our doubled, We clients, recurring market and

build to largest strategic client mandate a one design In big indexes managers. addition, of America's for MSCI won wealth

to on tools at a for capitalize customization in that scale, we the This support demand segment. especially rising trend is wealth continue visible portfolio demonstrates how to

run resulting over we number record XX% $XXX of significant growth rate recurring in million to deals enterprise of by Turning a asset posted sales XX.X%. Globally, of rate delivered growth risk We of with rate retention in large of analytics. driven owners. and a managers subscription and X%, near performance run asset and

grew For Despite our one in both we and analytics largest covering liquidity equity of reporting managers, example, pressures million XX% risk liquidity run MSCI completed to requirements analytics deals nearly also ever $XXX by management. regulatory equity on rate.

retention new At the the while lines across in helping ESG, and EMEA, continues regulatory In to run regional of product our for, ADSG to our posting run our rate environment delivered XX%. level, clients a we requirements. growth rate rate taking continue $XXX navigate XX% sales solutions million,

growing In of including a we lines rate growth subscription rate our run run $XX achieved we retention XX%, of now Climate, of which product Y, from run million had million across rate have rate XX% by where $XX XX%.

while climate XX% billion. increased non-ETF XX% addition, $XX ETFs climate and million by increased index-linked MSCI AUM AUM equity In index-linked $XXX to MSCI by to

XX%, to industry total growing strong with and Finally, retention scale run in real in the QX XX%. investment we benefit the were a our of assets, MSCI APAC, rate especially rate along continues growth breadth of of where the results and Geographically, from reach. posted increasing almost

Performance For and delivered our and million. for growth with tool. asset growth XX% owners, real grow footprint our strong example, including sales approximately in In XX%, real run to of subscription rate index assets, APAC Index, run rate almost recurring Intel Insights estate achieved APAC $XXX bringing

market and of reflects the MSCI's increasingly underlying of more capabilities and volatility even become advantages range periods our company of clients during diverse uncertainty. geographies. Those strength across important

we approach the of across As the we end pipeline of to client year. result, a and high we see And continue levels regions. segments, as healthy see also engagement products

MSCI strong profitability in on continuing will our remain business. ahead, Looking to laser while invest focused

to And with turn call over the that, Andy? me Andy. let

and Thanks, Baer, hi, everyone.

the growth growth cap of model steady strong index run in factor wealth recurring hedge enabled of XX% us continue subscription rate across growth revenue, run our run respectively, growth deliver support . We rate modules, rate which in broker-dealers in market and and EPS. double-digit and we adjusted our double-digit XX%, weighted mid-teens subscription, financial subscription high-teens XX%, Our and funds, ESG growth. to drove all saw indexes to in from and modules. managers X% rate custom run In Index subscription attractive growth quarter

inflows Asset-based cash billion fee the last billion ETFs revenues up linked market were over appreciation $XX and more than of $XXX year-over-year, to indexes. benefiting XX% within months from equity MSCI of XX

to also was MSCI inflows ESG the supported And with linked AUM to analytics, to third XX% entirely growing by reaching income year-over-year. in more MSCI indexes During fixed continue ETFs with These Bloomberg gain and $X than market other U.S. into models inflows to we were tools equity income indexes. risk driven exposures. X%, ETFs were $XX strength and with developed flows nearly fixed factor ETFs ETFs run billion, of linked subscription billion traction broadly. joint rate by and our and growth our cash in more quarter, roughly cash and equity our In continued Climate indexes into linked

enhancing reporting commercial and the driving content, Lab our experience, in services client Enterprise investments Our our are and including capabilities opportunities ESG analytics. new climate across and insights through Climate

we the reflect growth in In research Americas, was growth saw Relative sales measured more to purchasing and in XX% rate continue XX% the segment, to recurring our new run U.S. Climate. Climate with among growth ago, and year ESG in ESG investors. which reportable XX% lower decisions a

essentially new However, Europe and recurring APAC year-over-year. in unchanged sales both were

client segment Assets, in We see index Real portfolio ESG resulting in from our slightly and estate remained real institutions. healthy momentum we intel events higher rate growth The although XX%, offerings. Climate at smaller was cancels retention XX%. did Within and see run rate at

notably our continue Although estate such brokers pressures industry the see segments in impact data, and we client lenders. transaction of most real as on to

we see of market continue, providing. expect by we encouraged the portfolio many we opportunity pressures While momentum climate and we the in data, to and are are offerings the long-term the

to We have include real our commercial expanding are deals that estate database properties include transacted. our $X.X data transaction and million to never below universe also

in in on private with all above of XXXX, assets will financial full quarter. million rev of the million financial to quarter, expected we a an in year As the generate segment. to revenues beginning fourth of Burgiss we fourth for $XX for Burgiss, Burgiss million report $XX impact expect update the reminder, $XX provide slightly our To results other

is year margin full EBITDA adjusted be around for Burgiss XX% XXXX. to expected stand-alone The

we per shared centralized these expect segments not are to adjusted stand-alone costs of However, reallocated impact Burgiss to million worth is top and It about the quarter other EBITDA. on will $X allocations of that EBITDA. currently $X noting firm-wide from from and million allocations

will we Other some expect as margin for we certain QX, allocations, expansion expenses from the adjusted segment done figures. these although Burgiss in previous to we've contributions be acquisitions, year. non-GAAP the all EBITDA to Burgiss from we exclude Meanwhile, Given adjusted minimal in next integration-related our from expect

More Trove. announced to we attractive opportunities the by as capital capitalize acquisition on front, and broadly of on allocation continue be our opportunistic highlighted

We Trove, Climate run a results million in near dollars and of in rate segment to has term. which which and will immaterial to the be ESG few be our our expect included

highlight impact our balance Turning elevated that adjusted of well of that be metrics. slightly AUM will and the a of integration from remain the through guidance. a Burgiss incorporate as ranges small including both now to Burgiss, ranges quarter reflect stable expenses the full expenses assume as of I of spend would the relatively that amount from our pace not levels Expense year.

cash Our remains guidance unchanged. flow free

higher includes and presence to maintaining cloud a have reflect we capitalization elevated data related increased in software leveraging infrastructure centers purchases CapEx of partnerships. our approach, on-prem hybrid guidance slightly select is Although a to which level public to some our our hardware continues

adjustments of slightly We've captures million the related be fourth in D&A Burgiss to the tax our will quarter, the narrowed guidance, a Our approximately purchase nontaxable on effective which lowered acquisitions. $X our additional our the of impact rate excluded gain from accounting intangible guidance metrics. reflecting and adjusted investment in from

expect the about of impact than effective or the we this rate the full XX%. X% is item, onetime XX.X% tax that to adjusted tax for would an Excluding range higher year rate range

intention our on to to additional our a liquidity. the small interest amount provide some Lastly, draw reflects guidance expense revolver

that highlight income interest would expect we I purchase. as a result Additionally, of on our cash lower funding balances

cash positioned remain Overall, of drive our As is of $XXX line in balance well global hand, cash with today, we currently range. which million have more growth. to we than minimum on

the healthy engagement clients While elevated of continue clients We posted we from level questions. to in finish client pressures in budget you continue we on a look out open see see our XXXX. to forward pipeline progress. please strong events, line for to slightly our to keeping some Operator, from a

from is Kramm question with Alex The Instructions] UBS. [Operator first

I would like sales to talk about during the quarter. the index

flat year-over-year. think I

generally just comp terms I you as the is third fourth the little index think if particular looks it was highlight slower. the also as but would anything on maybe a both bit custom in think of was third just -- XQ there's there in then wondering like we rate But a the it tough higher in run sales, quarter, index about quarter, quarter. And quarter-over-quarter. marginally specifically and

big was So and maybe just wondering that a if why.

sure. significant to say Sure, I'd results. note nothing the here. It's Andy Alex. in index

hit you client think the More we momentum segments. I continue say and on points. have across pretty I would relevant to generally, probably module good types

X% with rate I managers double-digit in growth provided rate our and high run our cap we cap-weighted market had solid client I from about some basically about teens across in Baer and run major . We other growth think growth highlighted asset to color, growth every as nonmarket more had modules modules. mid- X% segment.

to, in rate, the at of year. line good slightly remains largely higher last think, QX retention alluded with overall Cancels you were sales pretty were recurring XX.X%. we As although

Just we did on higher say those by have in pressures which periods, do markets a were events, and budget just slightly funds would environment this provide the generally. We there. from environment. we -- do hedge some we've cancels driven bit mainly more recent in equity and cancels more point, see the something color the client and is this I'd expect from seen to we

client see Although very heading and momentum strong that have we do across QX, into and engagement we segments.

here. too as I into much read nothing probably so mentioned, to And

across to momentum see the continue good franchise. We

next is Alexander question with The Hess JPMorgan. from

accelerating goes, new? as to into Climate. fits that should into you where I Maybe up partnership we Google last as stepping development far of keep within sort the as product might want some back about comments ESG quarter show from and how fits in when mind how far Trove as in know other that to the net maybe that, that considerations any acquisition and stand

Baer Sure. here.

Pacific ESG central a variety both into sure, areas, In and Asia greater of the demand expansions, cetera. notably including forward day-to-day look, see certain lot So market as a in a for of regional got investment our of for . types where and before, data opportunities of we've cards, company data things, includes out to year. this looking laid is for lot ESG, et Climate of activities expansion and new we product we've next coverage, significant

for So regions by in the the it's which a also in past, by investment in comments but into asset regulation. segments information in Climate, in And private in brought classes there's as at different driven demand we're client I steady ESG, think Clearly, definitely hailwinds and story other across across solutions then increasingly the markets finally, Europe, EMEA, increasingly. in we've and mentioned the also climate well. today, and tying phase there

growth our a on comments the story. -- those to areas impact consistent So quarters. continue with we'll And I have think all of from very positive are those previous

follow-up I head through your their maybe vis-vis program Can on count impact could comment of in. large positioning competitors if And guys? shedding might you layoff quickly how one a you get competitive a

all we discuss Yes. the same instance, area specifically committed as are avoid compete, competitors an competitor more broadly to I be to chosen I a try position exactly clearly cutting you we've think may this back was in not we I our Look, that know, in providing that . Certain to think, the to areas, business. We're not in we're to services it. compete wisely. competitors this where would strong we're in that core that. in say

our position. confident a and So very this environment, overall, we're being tougher can we're in I leadership we that even think a continue area, in to leader committed

The next from Morgan Toni with is Stanley. Kaplan question

you provide hoping still a was prepared from America bit color little somewhat extra maybe ESG. on Europe was like It sounded of could I under the remarks with pressure. flattish

in drives get coming to more sense if could are catalysts there wanted any quarters? there accelerated seeing Just help if a growth of up, that you're stability upcoming

Thanks, sure. Toni. Sure,

it's say mission-critical mentioned remarks. very see parts and you would are prepared and can across we Climate clear, from structural Climate of and it's becoming a in probably we that and I already. firstly investment strong engagement ESG the think rate see I to that the the ESG process retention are And underscore So as this important

dynamics I'd consistent seen We see point, to pretty did, your growth the And what in so the say in we've quarters. are with recent slower Americas.

XX% versus climate, Just to in that, within and XX% and represents the put Europe Climate segment, It's in a finer that on APAC. close run ESG within was ESG around point and EMEA to the rate. XX% important growth and to EMEA underscore XX% Americas the of the in

for region of healthy us pretty a rate growing the largest is XX%. So at growth

sales although year-over-year. in the flat year-over-year As they fairly Americas were APAC, mentioned, were and in I EMEA softer

the and purchasing to seeing I much investors they longer where dynamics year U.S. more being that's to measured a plus relative out deliberate sales are in play decisions ago. on continue what the think that how we're we more cycles, in saw ESG integrate resulting

front. that regulations, to catalyst. think can and a as cycles them we element is is but be will to of users the engagement same. But lower well tools quite and though you're solutions have one to the it's helpful even we rate. the to it of also I firms strong Baer we're regulation say the It dynamics Americas, retention they're there's think seeing, the as financial encouraged and going be services resulting these is we've they as growth range to and in that that stability alluded investors about use cases, the help given how but as comply well this, EMEA rates continue in being even where by a seen broader something sales longer on some navigate I'd and as in that

as equity are There continue for in set the worth that us. in are translating we to see and opportunity we believe environmental big well. to noting and is of through investors, is It dynamics a continue the under long-term impacts. impacts this have to some confidence cyclical long-term But some pressure, particular, that here

Barclays. question next The with from is Patnaik Manav

just of numbers, the I could X pipeline, that the for it look you quarters, that at that Baer, new terms talked was a pipeline net you in hoping sales you just mean first contextualize us? bit strong the strong. I the about, been hasn't if

you for quick maybe how in how that in just Maybe what some color, margins the you looks perhaps and will just guidance, you And for gave us, and it quarter. Andy, follow-up Burgiss see bit that a fourth the terms QX a next for just of year. the just So then increased drag -- 'XX? into looks like that that heading like a expense be

if how So next of year just we think will constrained dynamics? those be because just should about margins

So we about you're I them. where everyone, and Manav, firm. the think There's correct we're uncertain the it's very overall for No, I nothing there that of think very for some on that? understanding at pipeline where environment clients pressure allowing talking today, Am are Yes. be we would very healthy. for healthy. our sales the abnormal

and still calls, nothing Andy, to in right? context happy to of here for as am healthy it call clearly, solid over that to would and not these but I the there's I excessively solid, maybe the that pass to than certainly fine-tune attention refer to generally or it's other healthy to to we're there it you, say either rest. So try

Sure. Yes.

guidance, company. broader on specifically potential color the impact the maybe margin can the and on to and on provide then can I touch So I expense broader some the Burgiss

AUM guidance balance for remain the we'd largely high quarter. third the during end If the towards commented last . AUM range. the our you levels we of if was expense flat be year, that increase flat of or likely quarter, remember

bit up was picking organic And pace picking up as spend we the investment a and of little pace expense were so of the our a picking up bit. growth little importantly,

tracking the fourth impact, expenses, That are is which with And Burgiss of coming end the bigger so -- this probably the in we will towards in higher quarter. combined be the and range.

higher that So margin overall here we range Burgiss impact roughly flat adjust overall your firm expenses balance I quarter assumes in AUM of year. business. the would the leading remain To expense will to guidance have on the underscore here. is the lower levels through that, a the point margin, full of are a about QX

basis, we margin commented the in a on Burgiss. stand-alone As mid-teens is the on

firm And bring margin so that just bringing in will down. overall the

so as Burgiss to results will we likely to XXXX, overall the in year. our start be results the financial prior during margin lower And have compared

that there leverage, we in products is most that, things MSCI to do, operating given does they attractive generate similar dynamics. solutions do, positive is margin operating have of said believe they the Having that Burgiss, as leverage what I and nice very IP-based commented, very

just on continue And down. to Burgiss, that expansion will hope the looking bring drive drive Burgiss expense apples-to-apples basis, in so growth Burgiss, base we firm overall some should we the if the an margin that margin within but

next is The from question with Autonomous.

And one I The what mid- target think Climate. and was I growth And the high X new lastly, tell on divergence in key wondering have for QX? range, between ESG long-term run and the quick ESG does more ESG stronger in like just drivers work sales those XXs net if for Climate for and the subscription bit a about the to the the you a rate between ESG. to that similar much about little compared behind us overall across looks as segments? Climate second growth looks climate? you performances growth separately can

Sure.

try to tackle them in few So in maybe here. there, on questions there I'll but turn -- a are

we within it it varying So a into research is the ratings, it degrees, on are to in ESG to and but an and solutions our distinct. climate overlap, There the related it distinct depending and company have the is feeds sector, heavily Climate, then offering. is

solutions can navigate climate process, climate areas Zero achieve offer understand our run portfolio. investment goals can million. across specific MSCI in at and performance to tell to risk million the product which into you objectives help how I integrate around of systematically clients And range is by considerations within we rate, say considerations overall would climate, well this to and a Climate lines $XX ESG impact all a $XX Net climate that as that and specific it's so as segment and their of the

is compared ESG. to small It

so tools. starting still their and climate climate early everything the in beginning thinking to from we're just evolving are X Clients they think And objectives still of just to about how they adoption integrate really in to very are have. and that curve Net to navigate regulations

So quite been we would Climate ESG, expect some ESG, for think within growth to providing relative and higher I time where we've is more established.

It's But compared product I'd to still more used penetrated broadly young relatively ESG. other more lines. say it and is than

we would And to climate to to ESG outsized more drive so continue expect growth relative broadly.

touched changes Climate. targets as our any haven't well. in targets including any think ESG say I would I and on area, made long-term we you in the to long-term

continue there for in of areas, on, the about early both be ESG evolution was I in Client we solutions. very to commenting to on still long-term excited And opportunities as are classes, opportunities these fronts, we I numerous asset us and and very continue As Climate. to geographies, across the alluded be both segments,

long-term is so long-term And is short continue play believe, overall, continue impacting are, to opportunity think other quite Climate. we've the big growth in at are and in well big factors But a we dynamics There prepared talked there capitalize. which opportunity and to where there term I some about. cyclical we are ESG that a to we believe

this to of an color some earlier think I question. gave I

did growth growth subscription on I and This within And Climate last within around rate our The QX. remarks, that I touch prepared -- XX%. And is XX%. ESG versus in in my was question is growth your ESG for think a around about segment. was was ESG ESG run the this Climate bit.

rate it tools. was Climate, within and our run associated Climate ESG within for climate our with segment the And XX% around

we I And think that Baer for tools rate closer mentioned $XX and every the Climate was cuts that XX%. have. million, growing in to product across overall that run is segment

is The Ashish with Capital next RBC question Markets. from Sabadra

'XX? lot I I any talking new focus a comment as just we pricing on normalizing the wondering seen pricing, this pushback year. significant to next into you deal on could do wondering, get net we for... you went a was think about pricing. are pricing year. to I on was of companies if into you trend have get was as how wanted about And particularly Pricing

Yes.

the we've So comparable we've in increases quarter, say out modest past. I although third to price this relative price what higher increases, -- amount in at been recent a point, in they've the what increases rolling we've to quarters. to would contributed successful it's done contributed

So across to in product which increases plus represented areas, within was sales mid- recurring we've quarters. with what of consistent it price is new recent all index, the XX% seen XX% high

are Clearly, there and are degrees clients we of varying very and many and pressure feeling on are the of that type, depending region in our the client pushback the of product cognizant fact current environment.

increases. delivering that try with we so ensure we And to value price to together be very try any and measured are

So clients them. on to delivering on. we are we are that out together increases ensuring the pricing very adding also, to But product, oftentimes, value rolling solutions enhancing solutions additional more with more usage, increases are we're we focused are to that price ensure that we

the We market. do overall monitor

does inputs into the inflationary price the future, inflation our in roll is our an input ensuring many to of environment. biggest but If broader increases. we to clients it's continue is one And that calibrate. said, inputs, value the us the equation into that something continue I deliver we when be we price can out as that to will of pricing One factor potentially moderating moderate, do

Oppenheimer. Owen question Lau next with is from The

ask bit back guidance I want question and expense differently. to a to go the

million million would math, quarter incremental So expense year is And you recurring of I XXXX? the $X Burgiss question on full of rest much $XX that acquisition-related OpEx raised you think based mentioned the per guidance My this million $X by about the million year. in increase? expense of $XX how and my about expense. how And to be

earlier Got to, stage. I this want just question. XXXX into That's results as our would do. the release and point comment this I don't will to I typically at made it. we get to we something when QX we cover

had increase, flat adjusted EBITDA range. $XXX to remain that if we'd a $XXX quarter prior . We the million AUM Our of guidance levels ago, expense be towards or million. was said end higher

so levels flat. been I have quarter, third And the as mentioned, AUM over relatively

so we that vicinity we're And layer before like things $XX on the then integration allocations the high expenses in or -- you on range. and organic you expense. And an of the so Burgiss add tracking million expenses that basis, end said, additional of as will towards

guidance And the expense out. you so how new that we put that's bridge to

ESG seasonality. I Climate question And fantastic. just to That's right. All on and want one add quick

the past years, net Should we strong fourth in quite few sales continue ESG So to seasonality quarter. recurring for year? this and the expect similar I subscription new was over think Climate of

Yes. I on segments. to want I -- don't wouldn't specific color give

As seasonality earlier on the our of you've what the I say, And based you to, in would given is alluded do Baer we past business. see seen healthy, years. in fourth nature some as pipeline that mentioned quarter the

I that budgets, are decisions. number that, think their feed factors there into of . a including client purchasing

have feed place client highest And incentive concentration also renewals quarter. have also We plans in that the the into of that. taking annual we fourth

into had quarter. those all the see That's as tend not a But QX. we healthy always we factors, to there's a for So pipeline going mentioned, higher case. fourth

Tong Goldman Sachs. The George next with question is from

I investors and in In regulations, ESG is do with when see would Americas that mentioned or relative how while growth you're address in the then to have the have EMEA, slowed not the that clients How to growth you prepare expect what in they to the you was that to have products how seeing for ESG the healthy products do Can you at ESG do XX%, on something objectives and in competitors? new they and in Climate, and my to do it's forecoming Americas XX%. EMEA position how communicate they themselves that factor well. but again and just investors their U.S. a which other market elaborate as they launch approach deal

complex is position we it that. good integrate is them are so in navigate ESG. for news a a The And to help good X it's a to them

overall, sales a these longer lower healthy, that persist factors the that they But and decisions, for feed sales And longer time more we of conversations buying we do complexity, complexities level strongly, into decisions, clients is ultimately some we cycles want because engaging to all amount because Americas. continue of expect with to have say when engagement so but and sales. those their But are cycles, measured our us. of are in the purchasing seeing those

I top think will play factors quarters factors for persist on these cyclical some at of here. the probably

Faiza is next The with Deutsche Alwy Bank. from question

So on more I analytics segment. wanted a the bit color

rate accelerate run seen You've growth here.

competitive you you're that I to acceleration more about segment? seeing might invested about you where the in the love think hear have where how and dynamics and would So

Sure. question, here. Thank the you for Baer

includes we nice we've So which content, would saw competitive income structured is got in fixed and equities frame assets, climate and More in you what very better it fixed income, in focus. and key X say I had front to of areas doing coverage risk. insights, and The better being equities. both office, products of numbers more private and

pleased we're we're that and definitely focused happy on So those think not with the key number. we're I say I growth with, would well, the are areas

We a see our retention of these think go be to continue it continue that up. rate XX% also sign to is ambitious look environments. we'd use in our The to to tools clients

here. the we've very in this consistent So story been --

think I of products content analytics. better improvements of to we struck technology, continue different greater how types deliver we the in through our integration have across

across use with use our that going in wide here, variety that excellent, repeated engagement cases is to a the office solve we've very asking theme we structured of portfolio us very specific cases, from use large have are front construction. equity firm client and cases clients to And products, keeping

but things -- the is an uncertain the a events good don't content and we clients, I control to have with just would can client better continue bring it's we to hope combination in category and to delivery expertise a So only thing that investments slight the as amicable add note and a it are environment directional our better often of technology is where growth and those of caution we just that occur, ourselves.

The is Wells with next question Seth from Fargo. Weber

it, to know joint development opportunities about cross-selling. if it's could you traction good acquisition, just when wondering days, you seeing you're early announced any there? that for talk the you but early I with Burgiss product I'm talked and

Yes.

risk and need pricing develop the all an strong we call allocation, by very and used flows, performance it of liquidity We strategically liquidity going cetera. reception redemptions get investments So asset et what MSCI is then assets. models, are of the investment you are of attribution, us investment understanding I it's those that the we get of when terms an Burgiss in and called mean, benchmarked portfolio the extremely how calls, the what investment to of risk by and data -- private when you develop management, the private analysis, manage obviously that, for to provides foundation data, tools acquisition portfolio to assets or cash managers asset whole classes. that -- of And the and to going of are indices, allocators are tools

parallel think first -- going So integration of it's kind about to you were X so -- if tracks. follow Burgiss, so to of the in the

The in first the functions accounting in right? and and all in and office of data alignment of that, that track data the the of and integration of is HR finance and clearly and technology and integration space, of support the centers a and of the lot all

salespeople that. the integration Burgiss sales obviously, the of at all office front force So MSCI office or front salespeople the with and

So bucket. that's X

from asked going be better second develop -- assets. questions bucket And private The recently frequently the indices the be benchmark of to big one would a time most going new product is, to is development. focus we here for are over clients most

be that that sure. something be will So high agenda will the on for

scratching line. of there. climate. expansion pillar, expand especially only on dramatically credit started to we're the but and private already that, second climate, going assets intersection product we're And private on surface the major a the That's that But and to with we continue

pillar, all third Burgiss that change severely we salespeople having product coordination taking our with that working in the to And to sales one and fastest steps The line loaded a which Burgiss believe among execute world. going more from is is actually over people around that the we're we're the LPs the world. the senior is undersold one in on lot of

sales of are sales clearly and We in the new to need that And to there clearly over of significantly pillars. get we right? middle to integrate. growth first outpaced Clearly, piece X analytics, money products want of business. time, the want we create lot the a in So

question Balsky is from The with Heather next Bank of America.

Two questions.

First, just regards to with capital allocation.

to about how the company. important talked it's You

that has Has it buybacks thinking integrate half M&A versus And with in helpful then half? the a does ESG put And U.S. -- the Can Is are M&A? pickup? allocation for follow-up, the in just So just and first as year? like? you you I to you of look ask the pipeline it thought -- of saw? how quarter. EMEA about as capital kind prioritizing What Burgiss? compare the looked that the to numbers first would be quick gave you you're like rate growth in that it for that what it the you Europe a Is consistent the growth

Yes.

in great on look about this first deal about needless -- to say, So past. to capital a the allocation, question your talked we've in

make growth capital is at financial a business, decisions allocation asset long-term time. that MSCI. day-to-day with great aggregate obsessed ultimately a capital gives always are to compounder the a what that and compounding allocation great model of it you and is you that We allocation believe We over

is organic past. with what there methodology, follow we've triple area put our allocation, very "external" pursue. which with we're crown about in that's asset respects. is the focused do is X inorganic And dividends, money and we where is of One respect do talked we with investments, we what on. So with the And the internal we then call that the to buybacks in that an investments which it capital and we allocation

of are properties, part", Investment are in asset are other. environment to significantly tripping end over Acquisitions bullish each very up They in overpaying. rich. the respect with you So people prices the inorganic up investments options, bid or latter rich. very very periods category, "external the are and

So we to in we stay tend like stay out. -- that, periods

was But in the done disciplined have RCA about general, that. very are of period. We we financially -- in we acquisition middle the

uncertainty the excess the and cash therefore, In make we've are and periods and of unpredictability, acquisitions like. averse flows of are people periods So high few and the up risk we most nice and back shares. cash, a end to lot of disciplined seen we hide, and believe the Burgiss that's acquisition last back retrench Directors excess in like very months, financially high generating of we Board acquisition, those the in people can that what which buy Trove

-- small our use And a so relatively lot that up small acquisitions bolt-on pursue cash. we'll to continue will of

is financing the last environment this now, and thing So the expensive. -- very of Right therefore is piece financing.

delevering. point. our now keen we less. have don't right at leverage, are a increasing -- We We're maybe debt at leverage our X.Xx interest in therefore, X.Xx, And this in leverage

up the small we going we -- this not likely to for rates. see we're have attractive capital lever So some to buybacks of therefore, limited bigger, few pursue at it to is next a market in financing bolt-on means for unless all excess combine that, And when this that that. acquisitions cash, because continue quarters. will you point And we're we going given very in the

bit in our at time. capital allocation little this overall financial a that's of So strategy

run the subscription just in would they're that the at rates that if growth quickly rate on I I this Climate, ESG by for quoted I then largely And quarter. region second rates say and your look quarter, with the question, second consistent growth figures

So and in Americas APAC's the consistent. mid-XXs similar in very low mid-XXs, dynamic where teens. is is EMEA so to the in the the

next from Kelch Atlantic. with Russell The Redburn question is

I think you of difficult great a last markets. did year a job playbook in downturn implementing

levels could big some I in next in tricky equity equity particularly again you do out? maybe have some And business case fall to see You off than a the you you look perhaps what of to year this start, peers. plans do market place flex wondering, said was much take areas cost can your a if we of in more costs already gets markets? XXXX in

commensurate our -- our -- subscriptions, And order cost. been desire, company. clearly take severely may with slowdown we that in decline downdraft not in big equity in be to and obviously, of in the a financially protect the our the the what values that to not into disciplined. out in cut investments That's company the ability, revenues. profitability to more more have extremely with downturn put an desire be we is to always continues we call new there can the . If playbook slowdown but definitely effect ability in We've

But that and that So good high investment in analyze for levels we for sure, point. committed we'll trade-off times and of profitability to bad of in impact high are times. to at have levels

Huber from with Craig Huber is Research next The Partners. question

they the also down Andy, in of in just were costs the to interesting touch for all quarter. in question, were me your the that us is Can on first segments like third sequentially. which question. that? overall light down Why That's and look X just first guidance cost year, my that your costs you my

Yes.

So this nothing you specific other other I quarters. to call out in -- think there see than and

related the things Our things costs costs, and a range like of like things will outlook costs, of around and to move it less like be on quarter-to-quarter including can comp nonrecurring adjustments type factors, be related of recurring it professional based pace severance fees, spend. can accrual to

there's on So out to expense the to nothing relative QX. side specifically call

on the trend that guidance into given. I wouldn't would of I there. read we've sort focus so any And more

is with Greg Simpson Our from final BNP question Paribas.

of just on EBITDA been expense the looks the is ask your It and think, guidance. growth north Climate. in XX% it's below now. ESG like margin, mid-to-high XXs I medium-term Can The I

around So in of versus on investments any in check side? this I to the kind just slowdown change on cost kind any of segment there's if wanted

on ESG there into opportunities. and investing in and the front and Yes, An read area segments plans to It's big no objectives. continually growth an opportunities financial calibrate as nothing to attractive overall in continues the the we all Climate. be we and us with that generally changes across ESG based of in Climate or one calibrating outlook are

and to to look plan software whole based things. will some based related will some can can fluctuate margin perform on see period-to-period expense costs. I do alluded you question, The have. some we movement margin see to, adjustments in continue a kind allocations we can area. of growth invest that you product you see or development expenses host to accrual the to on last expenses, on non-comp-type of related to at When noise expense you noise as start So of segments, -- other moving, that other based capitalization And nonrecurring

wouldn't on the change alluded to Climate too And our in and much I as segment. no earlier, to this But margin I targets. long-term focus ESG

We over have to I'll time. at no further turn Fernandez for any Henry it this remarks. questions closing

And you, financially, everyone, great thank to joining from more and today. predictable uncertain for despite a benefit continue the more we us So environment, economically, franchise. all-weather geopolitically,

be compounder ESG but to and see a . assets we're And very with be that Burgiss Trove. index the markets and capital analytics the unlock about those and voluntary and in the to ahead lines opportunities the climate we and Our to opportunities product obviously we in all about desire will times is now our didn't from good private excited in and much significant. times. opportunities of very can with there, We bad of us all talk

in of we you about our again, of and forward look for to all our this. in calls progress So future all thanks And plans updating joining.

you call. this and conference for participating. Thank concludes Ladies gentlemen, today's

may You now disconnect.