MSCI (NYSE:MSCI) executives pointed to broad-based momentum across product lines and client segments during the company’s fourth-quarter 2025 earnings call, highlighting double-digit organic revenue growth, expanding asset-based fees, and continued investment in artificial intelligence to support product innovation and internal efficiency.
Quarterly performance and operating metrics
Chairman and CEO Henry Fernandez said MSCI delivered organic revenue growth of “over 10%” in the fourth quarter, alongside adjusted EBITDA growth of “over 13%” and adjusted EPS growth of “almost 12%” for the quarter. Fernandez added that adjusted EPS rose “almost 14%” for the full year, extending the company’s record of “11 consecutive years of double-digit Adjusted EPS growth.”
MSCI’s full-year retention rate was “over 94%,” management said. Total run rate exceeded $3.3 billion, growing 13%, including:
- Total asset-based fee (ABF) run rate of $852 million, up 26%
- Recurring subscription run rate of over $2.4 billion, up over 9%
Index and asset-based fees: ETF inflows and a new agreement with BlackRock
Index results were a focal point on the call. Fernandez said MSCI posted its “best quarter ever for new recurring subscription sales in Index,” while CFO Andy Wiechmann reported index subscription run rate growth accelerated to 9.4%, including 16% growth in custom indexes. Wiechmann said index retention remained strong at “nearly 96%” for the full year and 95% for the quarter.
On the asset-based fee side, Wiechmann said ABF run rate rose 26%. He also noted equity ETFs linked to MSCI indexes captured a record $67 billion of inflows during the quarter, totaling $204 billion for the full year. Management attributed the strength to inflows into developed markets ex-U.S. exposures—citing EAFE and World indexes—as well as MSCI emerging markets indexes.
Wiechmann also disclosed MSCI is extending its ETF agreement with BlackRock through 2035. As part of enabling future growth, he said MSCI will lower fee floors impacting certain “super scale ETFs.” The aggregate impact is expected to be roughly 0.1 basis points based on year-end 2025 AUM levels, with approximately a 0.05 basis point decrease on Jan. 1 of this year and another 0.05 basis point decrease on Jan. 1 of next year. Outside the timing of these adjustments, he said MSCI expects fee dynamics to remain consistent with its prior trajectory.
Product-line highlights: Analytics strength, private markets traction, and sustainability divergence
In analytics, Fernandez said MSCI posted its “second-best Q4 on record for new subscription sales,” while Wiechmann reported subscription run rate growth of “over 8%,” supported by strong sales of enterprise risk and performance tools—particularly with banks and asset owners—alongside continued momentum with risk models.
Private Capital Solutions (PCS) was described as a standout growth area. Fernandez said recurring sales growth in PCS was 86%, and Wiechmann said the company closed “almost $8 million” of new recurring subscription sales in the quarter, also up 86% from the prior year. Management highlighted traction in offerings such as Total Plan and transparency data, and also referenced newer capabilities including document management and “Source View,” asset and deal-level metrics, and indexes including private credit indexes. Wiechmann added that real assets run rate growth was “almost 6%,” with improving retention and traction in newer solutions such as Index Intel and a data center product, though he characterized real assets improvement as early.
By contrast, Fernandez said sustainability and climate new subscription sales were lower than the prior year, citing “particular softness in the Americas.” However, Wiechmann pointed to a large fourth-quarter sustainability deal with a European wealth tech firm that positions MSCI to be an embedded sustainability solutions provider for small and mid-sized wealth managers in Europe through the client’s distribution network.
In Q&A, Fernandez said ESG recovery in Europe has already occurred, though “not at the pace that we would wish.” He said MSCI is benefiting from a consolidation of ESG data and ratings suppliers in Europe, while conditions remain softer in the U.S. due to political dynamics. Fernandez also described a strategic broadening of the sustainability franchise to address emerging risks beyond traditional ESG, citing examples such as tariffs, supply chains, and the effects of AI on companies, while emphasizing an increased focus on climate physical risk tools.
AI strategy: efficiency gains and faster product development
Executives repeatedly emphasized AI as a driver of both internal productivity and product enhancement. Fernandez said MSCI has “about 120-140 projects” using AI across the company, initially focused on operational use cases such as controversies analysis for ESG ratings and data gathering in private markets. He said the company has also rolled out AI-driven capabilities in products, citing “AI insights” in analytics to help clients understand performance, risk, and correlations, as well as AI-enabled automation to speed custom index creation and methodology testing under human supervision.
Later in Q&A, Fernandez said AI is beginning to lower the run rate of expenses in the existing business, allowing MSCI to reallocate savings toward innovation. He said this impact began in 2025, will play into 2026, and is expected to accelerate in 2027 and 2028, supporting a higher pace of investment. CFO Wiechmann added that MSCI’s enhancements and innovations are being monetized through a “relatively stable” contribution from price increases, and he called AI particularly supportive of continued value-based pricing over time.
Capital allocation, guidance considerations, and leadership changes
Fernandez said MSCI repurchased nearly $958 million of shares in the fourth quarter and through the day prior to the call at an average price of about $560 per share. Over the last two years, he said the company repurchased almost $3.3 billion of shares at an average price of $554, adding that management believes the franchise “remains undervalued.”
Wiechmann discussed several factors affecting 2026 free cash flow comparisons. He said free cash flow guidance reflects roughly $100 million of higher expected cash taxes in 2026 versus 2025, driven by one-time discrete tax benefits in 2025 and payment timing. He also noted a “meaningful step-up” in cash interest expense in 2026 of about $90 million due to interest payment schedules following two debt issuances in the third and fourth quarters of 2025, when there were no cash interest payments. Additionally, he highlighted approximately $25 million of occupancy CapEx related to building out a new London office, as well as higher software capitalization tied to investments across products. MSCI ended December with more than $515 million in cash and subsequently paid down $125 million on its revolver, leaving $175 million outstanding, he said.
On strategic targets, Wiechmann reiterated MSCI’s firm-wide long-term targets—low double-digit revenue growth excluding ABF, adjusted EBITDA expense growth of high single-digit to low double-digit, and adjusted EBITDA growth of low to mid-teens—while stating the company will no longer maintain product line-specific long-term targets. He said MSCI will continue reporting by product line with the same level of disclosure.
Finally, Fernandez and the team recognized President Baer Pettit on his final earnings call. Fernandez said Pettit will formally step down as president on March 1 following his previously announced retirement, and Fernandez said he is looking forward to working with Alvise Munari and Jorge Mina as MSCI seeks to build on its momentum.
About MSCI (NYSE:MSCI)
MSCI Inc is a global provider of investment decision support tools and services for the financial industry. The company is best known for its family of market indexes, which are widely used as benchmarks by asset managers and as the basis for exchange-traded funds and other passive products. In addition to index construction and licensing, MSCI offers portfolio analytics, risk models, factor and performance attribution tools, and a suite of data and technology solutions designed to support portfolio management and trading.
Beyond traditional indexing and risk analytics, MSCI has expanded into environmental, social and governance (ESG) research and ratings, offering data, scores and screening tools that help investors integrate sustainability considerations into investment processes.
