MSCI, which sells investment benchmarks, financial data and tools for measuring risk, drew about four-fifths of its second-quarter 2026 revenue growth from its index business. Larger investment funds and rising subscriptions lifted earnings. In the first half, however, cash dividends and share-repurchase outflows totaled $883.2 million, exceeding the $604.4 million left from operations after software and equipment investment. Operations covered that internal investment, but the company’s combined spending also drew on borrowing and existing cash.
Reporting basis: MSCI Inc. and its consolidated subsidiaries; unaudited accounts prepared under U.S. generally accepted accounting principles, or GAAP. The quarter covers April 1–June 30, 2026, compared with the same quarter of 2025. First-half figures cover January 1–June 30; balance-sheet comparisons use December 31, 2025. Form 10-Q, filed July 21, 2026; SEC accession 0001408198-26-000046; CIK 0001408198. Information cutoff: October 3, 2026. Later developments are identified separately and do not change the June accounts. Dollar amounts are U.S. dollars.
Sources: SEC filing record; MSCI second-quarter 2026 Form 10-Q, financial statements, pages 4–9; revenue discussion, page 25.
1. A larger pool of indexed investments lifted earnings
MSCI earns money in two main ways. Customers buy subscriptions to its data, indexes and analytical tools. Fund providers also pay to use MSCI indexes, with many of these fees linked to the amount of money in their funds. Those fees can rise when investors add money or when the investments themselves become more valuable.
Index revenue supplied about four-fifths of the quarter’s revenue increase. The business added $76.1 million of revenue, out of MSCI’s $94.3 million increase. Its subscription revenue rose 11.6%, while fees linked to fund assets increased 26.6%.
Across MSCI, recurring subscriptions contributed $50.6 million of additional revenue and asset-based fees contributed $49.0 million. A $5.3 million decline in non-recurring revenue partly offset these gains. Total revenue increased 12.2%.
| Consolidated results; dollars in millions except per-share amounts | Second quarter 2025 | Second quarter 2026 | First half 2025 | First half 2026 |
|---|---|---|---|---|
| Revenue | 772.7 | 867.0 | 1,518.5 | 1,717.8 |
| Operating profit | 425.3 | 487.5 | 802.3 | 944.4 |
| Operating margin | 55.0% | 56.2% | 52.8% | 55.0% |
| Interest expense | 46.2 | 71.0 | 92.7 | 140.1 |
| Net income | 303.7 | 342.0 | 592.3 | 748.0 |
| Diluted earnings per share, dollars | 3.92 | 4.69 | 7.63 | 10.23 |
Calculation notes: Operating margin is the share of revenue remaining after operating expenses, before interest and income taxes. Margins are calculated from reported amounts and rounded. Diluted earnings per share includes the effect of securities that could become additional common shares.
Source: 2026 Form 10-Q, statements of income, page 5; revenue and expense analysis, pages 25–29.
The value of investments in exchange-traded funds using MSCI equity indexes averaged $2,706 billion during the quarter, compared with $1,869 billion a year earlier. These funds, commonly called ETFs, hold portfolios that investors can trade through fund shares. Their average assets grew 44.8%, while MSCI’s revenue from those ETFs grew 36.1%.
Lower average licensing fees per dollar of assets partly offset asset growth. The filing does not separate negotiated pricing from changes in the mix of funds.
The quarter’s increase in ending ETF assets was heavily influenced by markets. Assets rose from $2,403 billion in March to $2,818 billion in June. Of that increase, $376 billion came from market appreciation and $39 billion from net cash inflows. Thus, about 91% reflected investment values rising; that market contribution cannot be assumed to repeat.
The recent history shows both forces. In the first quarter of 2026, $103 billion of inflows more than offset $41 billion of market depreciation. In the second quarter of 2025, appreciation contributed $193 billion and inflows $49 billion. Continued fund inflows support MSCI’s business, while the fees it earns remain sensitive to financial markets.
Reporting basis: The filing’s ETF asset series also includes exchange-traded notes, representing less than 1% of the reported assets. Asset balances and movements are in billions; revenue is in millions. Calculations use the rounded tables rather than a reconstructed unrounded asset series.
Source: 2026 Form 10-Q, Index results and quarterly ETF asset tables, pages 31–32.
Operating expenses grew 9.2%, slower than revenue, allowing quarterly operating profit to rise 14.6%. Yet borrowing costs absorbed $24.8 million of that improvement. Net income grew 12.6%, and the share of revenue remaining as net income barely changed, from 39.3% to 39.4%. Higher interest therefore limited how much of the operating improvement reached the bottom line.
Source: 2026 Form 10-Q, pages 5 and 26–28; growth and net margins calculated from reported figures.
Revenue growth also spanned regions. Europe, the Middle East and Africa contributed $46.7 million of the quarterly increase, nearly half the total, as revenue rose from $305.6 million to $352.3 million. Revenue also increased in the Americas and Asia–Australia. Growth was geographically broad, although regional revenue alone does not separate pricing, customer demand and currency effects.
Source: 2026 Form 10-Q, Note 11, geographic revenue table, page 22. Geography is primarily based on the address of the customer using the product.
2. Subscriptions strengthened overall, but two businesses added less new sales value
Retention improved overall, while Analytics and Sustainability and Climate recorded weaker net new subscription sales. MSCI’s annualized value of recurring subscriptions grew 8.1% after excluding currency movements and specified acquisition and disposal effects. That compares with 7.4% a year earlier. Its annualized subscription retention measure rose to 95.3%, from 94.4% in the second quarter of 2025 and 94.8% in the second quarter of 2024.
The subscription component of MSCI’s “Run Rate” estimates a year of recurring revenue from signed subscription contracts. It assumes renewal and uses fixed exchange rates; contracts can enter the measure before services begin. Total Run Rate also includes asset-based fees, so it is broader than subscriptions alone. Neither measure is revenue already earned or guaranteed future cash.
Retention measures the subscription value kept after cancellations and reductions, using product-level rules. It is not the percentage of customers who renewed. For interim periods, MSCI annualizes cancellations and compares them with the subscription value at the start of the year.
Sources: 2026 Form 10-Q, operating metrics, pages 34–38; MSCI second-quarter 2025 results, July 22, 2025, Run Rate and Retention Rate discussion.
MSCI also compares its businesses using a profit measure that leaves out interest, taxes, charges spreading past investment costs over time, and specified acquisition costs. This measure, adjusted EBITDA, helps explain differences between products. Its margin is that adjusted profit divided by revenue.
| Segment; quarterly revenue in millions | Revenue, second quarter 2025 | Revenue, second quarter 2026 | Adjusted EBITDA margin, second quarter 2025 | Adjusted EBITDA margin, second quarter 2026 |
|---|---|---|---|---|
| Index | 434.9 | 511.0 | 75.9% | 77.8% |
| Analytics | 177.7 | 189.4 | 52.1% | 46.5% |
| Sustainability and Climate | 88.9 | 91.9 | 35.6% | 38.7% |
| All Other – Private Assets | 71.2 | 74.7 | 28.0% | 22.9% |
Reporting basis: Adjusted EBITDA excludes taxes, other non-operating expense and income, depreciation, amortization and specified acquisition costs. It is not GAAP operating profit or cash available for spending. Private Assets combines Real Assets and Private Capital Solutions. The calculation notes reconcile the consolidated measure to reported operating profit.
Source: 2026 Form 10-Q, Note 11 and segment results, pages 20–21 and 31–34.
Index’s adjusted segment profit increased by $67.6 million, more than the $64.1 million increase for MSCI as a whole. Analytics and Private Assets together declined by $7.4 million, while Sustainability and Climate added $3.9 million. The company’s margin improvement therefore rested on a strong Index contribution.
Analytics sells tools for assessing portfolios and investment risk. Its subscription revenue rose 9.5%, but lower non-recurring revenue and higher expenses weakened the result. Technology, market data and staffing costs increased. A reduction in estimated future payments for the Fabric acquisition had lowered expenses more in the prior-year quarter, making this year’s comparison harder.
Private Assets also experienced costs rising faster than sales, principally from staffing. Sustainability and Climate’s margin improvement needs a different reading: more software development costs were recorded as assets for future use, reducing the amount charged immediately against profit. That helped segment expenses decline even though subscription retention deteriorated.
The sales comparison shows where momentum differed:
| Net new recurring subscription sales; annualized value in millions | Second quarter 2025 | Second quarter 2026 |
|---|---|---|
| Index | 20.0 | 28.1 |
| Analytics | 14.8 | 11.2 |
| Sustainability and Climate | 5.0 | 1.9 |
| All Other – Private Assets | 4.0 | 6.3 |
Reporting basis: Net new recurring subscription sales equal additional annualized customer commitments, including expansions and price increases, less cancellations and reductions. These figures are not additional current-quarter revenue. The Sustainability and Climate figures cover the whole segment, not climate products alone.
The smaller additions in Analytics and Sustainability and Climate suggest less support for future subscription growth from the quarter’s selling activity. Index and Private Assets moved in the opposite direction. Private Assets’ stronger sales commitments provide a counterpoint to its lower current profit margin: its net contracted sales increased while staffing costs weighed on earnings. Actual revenue will also depend on service start dates, later sales and cancellations.
Source: 2026 Form 10-Q, segment results, pages 32–34; subscription sales and retention, pages 36–38.
3. Software investment and a tax benefit change how profit should be read
First-half earnings grew faster than pretax profit, helped by a restructuring tax benefit. MSCI reported net income growth of 26.3%, but pretax profit rose 13.8%. An $88.0 million tax benefit from an internal legal-entity restructuring, completed in the first quarter, explains a substantial part of the difference.
Removing only that benefit reduces first-half net income from $748.0 million to $660.0 million. That is 11.4% above the prior year’s reported $592.3 million. This calculation isolates one effect; it is not management’s adjusted earnings measure or a claim that everything else is recurring. It leaves all other tax effects, acquisition accounting and operating costs in both periods.
The second quarter did not contain that restructuring benefit. Its income-tax expense was 18.0% of pretax profit, compared with 19.6% a year earlier, reflecting U.S. tax changes and the locations where earnings arose. The unusually low first-half rate of 7.3% should not be treated as a continuing tax assumption.
Calculation notes: The $88.0 million is a tax-expense benefit. It is subtracted directly from net income without another tax adjustment.
Source: 2026 Form 10-Q, Note 10, pages 19–20; tax discussion, page 28.
Software spending also matters. First-half research and development expense increased from $91.7 million to $95.6 million. Separately, cash spent developing software that was recorded as an asset increased from $44.5 million to $59.4 million. Recording these costs as an asset spreads their effect on profit over later periods, even though cash has already been spent.
MSCI charged $45.2 million of previously capitalized software costs against first-half profit, up from $37.6 million. Meanwhile, charges spreading the cost of acquired intangible assets over their useful lives—amortization—fell from $50.0 million to $40.5 million. Some acquired assets had finished being amortized.
Total intangible amortization therefore declined even as software amortization rose. The modest growth in reported research expense does not fully describe MSCI’s technology investment.
Source: 2026 Form 10-Q, cash flows, page 9; Note 6, page 15; expense discussion, pages 26–27. No maintenance-versus-expansion spending split is disclosed or inferred.
MSCI identifies share repurchases as part of its strategy for returning capital to shareholders. Repurchases pay cash to selling shareholders and, when they reduce the share count, increase the remaining shareholders’ proportionate claim on earnings. They can also offset shares issued through employee compensation.
Quarterly diluted earnings per share increased 19.6%, faster than net income. The average diluted share count fell from 77.5 million to 72.9 million, largely because of repurchases. Fewer shares divide the company’s profit into fewer pieces; they do not create additional operating income.
First-half stock compensation of $73.1 million remained an expense and a potential source of additional shares even as outstanding shares fell. The repurchases’ effect on share count therefore needs to be weighed alongside their cash cost and any additional borrowing.
Sources: 2026 Form 10-Q, pages 5, 9 and 28; 2025 Form 10-K, share-repurchase discussion, page 30. Share counts used for earnings per share are weighted averages, distinct from period-end issued and treasury shares.
4. Collections improved, but payouts used more than the business retained
Operating cash grew 6.2%, considerably slower than reported first-half net income. MSCI collected more from customers, but paid more tax, operating expenses and interest. Cash income taxes, net of refunds, rose from $112.3 million to $203.5 million, while cash interest rose from $89.7 million to $137.1 million.
The reconciliation starts with $748.0 million of net income. Noncash and other adjustments added a net $105.7 million, including amortization and stock compensation, partly offset by a $79.9 million deferred-tax adjustment. Changes in operating assets and liabilities used $176.1 million, leaving $677.6 million of operating cash.
Customers paying down amounts owed supplied $99.7 million in that reconciliation. Conversely, customer amounts billed or collected before services were earned—deferred revenue—fell, subtracting $94.0 million from the reconciliation. Recognizing revenue from earlier advance billings does not bring in new cash at the same time.
The filing says revenue recognized on existing contracts exceeded the replenishment from new billings. That does not, by itself, establish weakening demand. The reduction in accrued compensation subtracted another $85.1 million; MSCI notes that annual discretionary compensation payments are concentrated in the first quarter.
Source: 2026 Form 10-Q, cash flows, page 9; revenue recognition, Note 3; cash-flow discussion, page 40. Balance-sheet movements can differ from cash-flow adjustments because acquisitions, currency and other noncash movements also affect balances.
| Cash allocation; first-half consolidated amounts in millions | 2025 | 2026 |
|---|---|---|
| Cash from operations | 637.9 | 677.6 |
| Equipment and other capital spending, positive cash outlay | 22.9 | 13.8 |
| Capitalized software development, positive cash outlay | 44.5 | 59.4 |
| Remainder after both investment categories | 570.5 | 604.4 |
| Cash dividends paid | 283.5 | 300.0 |
| Cash paid for share repurchases in cash-flow statement | 351.6 | 583.2 |
| Remainder after investment, dividends and repurchases | -64.6 | -278.8 |
Calculation notes: Free cash flow here means operating cash less cash capital expenditures and capitalized software development. It excludes acquisitions and acquisition-related deferred payments. The 2026 calculation is $677.6 million − $13.8 million − $59.4 million = $604.4 million. Paid cash amounts, not declared dividends or trade-date repurchase figures, govern this table.
Source: 2026 Form 10-Q, statement of cash flows, page 9.
The business funded its disclosed software and equipment investment. The cash shortfall arose after dividends and the cash-flow statement’s repurchase outflows. MSCI also spent $58.8 million acquiring businesses, net of acquired cash, and $9.5 million on contingent or deferred acquisition payments classified as financing cash flows. Net borrowings supplied $175.0 million, while the cash balance fell by $158.9 million.
This is consistent with management’s stated policy of using operating cash and borrowings to return capital. It also creates a choice: slower repurchases would retain more cash for acquisitions and debt service. The remaining repurchase authorization permits spending but does not require it.
Sources: 2026 Form 10-Q, pages 9, 18 and 39; 2025 Form 10-K, share-repurchase risk discussion, page 30.
5. Debt has time to mature, but interest already absorbs cash
MSCI has no scheduled principal repayments before 2029, although its financing cost has already risen. June debt principal—the amount borrowed before accounting adjustments—was $6,425.0 million. The balance sheet reports $6,380.4 million after $44.6 million of unamortized financing adjustments. Principal includes $475.0 million drawn on the revolving bank facility, up from $300.0 million at year-end.
| Contractual debt principal; millions | Due amount |
|---|---|
| Remainder of 2026 through 2028 | 0.0 |
| 2029 | 1,000.0 |
| 2030, including revolving loans | 1,375.0 |
| 2031 and later | 4,050.0 |
| Total | 6,425.0 |
Source: 2026 Form 10-Q, Note 7, pages 16–17. The 2031 maturities total $1,600.0 million; later notes mature in 2033, 2035 and 2036.
The fixed-rate notes carry annual interest rates, or coupons, from 3.25% to 5.25%. Applying those contractual rates to June principal gives $247.3 million of annual coupon payments. Keeping the June revolving balance and its 5.1% rate unchanged would add about $24.2 million annually.
This illustrative $271.5 million excludes fees, financing-cost amortization and future changes in debt. It describes interest on the June borrowing structure, not an earnings forecast.
The $1.6 billion bank facility had $1.125 billion of undrawn commitments by subtraction. MSCI’s reported borrowing-to-earnings measure under the loan agreement was 2.83 times, below its normal 4.25-times ceiling. This measure is called the covenant leverage ratio.
A qualifying material acquisition raises that ceiling to 4.50 times for four fiscal quarters. A separate requirement to cover interest at least three times applies during the agreement’s defined non-investment-grade period. Both tests use contractual definitions and four-quarter measurement periods, rather than a simple ratio built from this quarter’s profit.
Cash including restricted cash was $356.4 million. Of that, $3.7 million was restricted, and $270.6 million was held by foreign subsidiaries. Management generally seeks a minimum of $225–275 million of operating cash globally.
The entire balance therefore should not be treated as surplus acquisition money. Some foreign cash may also face local withholding taxes or distribution restrictions if moved. Management nevertheless expects its global balances to serve global needs, with bank capacity and continuing collections providing additional flexibility.
Source: 2026 Form 10-Q, balance sheet, page 4; Note 7; liquidity and covenants, pages 38–40. Coupon calculations appear in the calculation notes.
Leases add a separate obligation to pay for occupied facilities. Future payments before discounting totaled $189.6 million. Their balance-sheet value, which adjusts for the timing of future payments, was $163.8 million, including $24.9 million in current liabilities.
Assets representing the right to use leased premises increased from $112.9 million to $141.5 million. MSCI recorded $44.3 million of new lease obligations during the half. These obligations are smaller than financing debt, but still require cash for future lease payments. The increase alone does not distinguish additional premises from replacement or renewed leases.
Source: 2026 Form 10-Q, Note 8, pages 17–18.
6. Acquisitions added intangible assets while repurchases deepened the equity deficit
Accumulated capital returns have left liabilities above assets, while much of the asset base comes from acquired businesses and intellectual property. Goodwill and intangible assets together represented 68.4% of June assets. Goodwill records acquisition cost above the value assigned to identifiable net assets; other intangibles include customer relationships, data and software. Their recorded value depends on continuing business benefits, and they are not cash available to settle debt.
| Consolidated financial condition; millions | December 31, 2025 | June 30, 2026 |
|---|---|---|
| Cash, including restricted cash | 515.3 | 356.4 |
| Net accounts receivable | 986.7 | 884.4 |
| Property and equipment, net | 87.3 | 93.2 |
| Goodwill | 2,923.4 | 2,974.2 |
| Other intangible assets, net | 832.5 | 855.9 |
| Total assets | 5,702.5 | 5,602.5 |
| Deferred revenue, current | 1,231.8 | 1,136.9 |
| Total liabilities | 8,357.0 | 8,292.0 |
| Shareholders’ equity deficit | -2,654.5 | -2,689.5 |
Source: 2026 Form 10-Q, balance sheet, page 4. No inventory line is reported for this data and services business.
Acquisitions added $54.0 million of goodwill, partly offset by $3.2 million of currency translation effects. They also added $51.7 million of identifiable intangible assets. New software investment helped replenish the intangible asset base as amortization reduced it. Property and equipment increased more modestly.
Several operating liability balances also fell. Accrued compensation declined $85.7 million and income taxes payable fell $34.1 million, while prepaid income taxes rose $34.7 million. Deferred tax liabilities declined $73.4 million, but the filing does not provide a complete allocation of that movement to the restructuring and other causes. The cash-flow tax adjustment and the $88.0 million earnings benefit must not be counted as two independent economic gains.
The receivables decline was not accompanied by a reserve release. MSCI’s allowance for customer amounts it may not collect increased from $6.4 million to $7.2 million: $2.1 million of expense less $1.3 million of write-offs net of recoveries. That reconciliation does not support an explanation that releasing this allowance lifted earnings.
Source: 2026 Form 10-Q, pages 4 and 9; allowance reconciliation, Note 1; acquisitions and goodwill, Notes 5–6.
The equity accounts reconcile using the reported rounded amounts. Retained earnings rose $449.1 million, equal to $748.0 million of profit less $298.9 million of declared dividends. Paid-in capital rose $87.4 million, reflecting stock compensation payable in shares and option exercises.
Losses recorded in equity outside net income widened by $5.9 million, mainly from $6.0 million of after-tax currency translation losses, partly offset by pension adjustments. The recorded cost of treasury shares increased $565.6 million. Together, these movements left equity $35.0 million more negative.
Issued shares increased from 134.4 million to 134.5 million, while treasury shares—repurchased shares held by MSCI—increased from 60.8 million to 61.8 million. Shares outstanding therefore fell from 73.6 million to 72.7 million. The repurchased shares were held in treasury rather than reported as retired.
Negative accounting equity does not alone establish an immediate cash shortage. It does mean recorded liabilities exceed recorded assets, making cash generation and access to funding particularly important.
The different buyback figures describe different things. Open-market purchases were $544.3 million before excise tax; equity recorded $549.4 million of program repurchases. Tax-withheld employee shares and director treasury movements increased the treasury-account change to $565.6 million.
Cash paid in the cash-flow statement was $583.2 million. The filing does not provide a complete bridge from all trade-date entries to cash settlement, so these amounts are not treated as interchangeable. The cash-allocation table uses the full reported cash outflow; it does not label that amount as purchases under the authorized buyback program alone.
Source: 2026 Form 10-Q, equity statements, page 7; cash flows, page 9; Note 9, pages 18–19.
7. Acquisitions add capabilities as subscription results diverge
MSCI is buying capabilities in private markets and physical climate risk, but their future contribution must be earned. Vantager adds AI-assisted due diligence and reporting. Compass supplies index calculation and development capabilities. PM Insights provides pricing and transaction information for private-company securities, intended to support new indexes and related products.
The three completed acquisitions had an aggregate purchase price of $95.5 million. That differs from the $58.8 million net cash outflow because acquisition accounting includes consideration beyond immediate net cash. Across disclosed contingent acquisition-payment obligations, the June liability was $33.9 million. Payments can therefore continue after the initial purchases.
Source: 2026 Form 10-Q, Note 5, pages 13–14; cash flows, page 9.
First Street adds tools for estimating physical climate risks, property damage and business interruption. Management’s intended benefit is to put location-specific climate information directly into clients’ investment and risk decisions. The June agreement required $120.0 million at closing, subject to adjustments, plus possible payments tied to revenue thresholds during the following two years.
The acquisition was pending at June 30. MSCI subsequently announced completion on August 3, 2026. The closing payment therefore belongs to the company’s post-June funding needs and is not included in the first-half acquisition outflow. Completion settles whether the transaction closed, but does not establish that the products have improved sales or retention.
The broader Sustainability and Climate segment’s weaker net new subscription sales make customer commitments and cancellations useful measures to watch after integration. However, the filing attributes the segment’s existing Run Rate growth to Climate products. That is evidence of demand within the segment and prevents treating its overall slowdown as proof that climate products were weakening. Stronger commitments would still need to turn into earned revenue to establish the acquisition’s business contribution.
Sources: 2026 Form 10-Q, Note 5 and Run Rate discussion, page 36; MSCI First Street announcement, June 24, 2026; completion announcement, August 3, 2026. Completion is a post-quarter development.
Competition gives these investments a practical purpose. LSEG reported that its FTSE Russell business had begun selling private-market indexes developed with StepStone in the first quarter of 2026. FTSE Russell’s first-half 2026 revenue growth was 9.1% on LSEG’s organic constant-currency basis, which removes specified business changes and exchange-rate effects.
This suggests growth in index services extends beyond MSCI and shows an established rival pursuing private-market products. The figures do not establish market-share gains, and the companies’ margins are not directly compared.
Sources: LSEG first-quarter 2026 trading update, FTSE Russell product discussion; LSEG first-half 2026 results, July 30, 2026, divisional growth. The 9.1% figure belongs to FTSE Russell, not LSEG as a whole.
MSCI also depends meaningfully on a large customer. BlackRock accounted for 11.8% of first-half revenue, up from 10.3%; almost all revenue MSCI earned from BlackRock came from asset-linked fees. Strong fund growth helps MSCI, but changes in that customer’s products, assets or licensing arrangements matter disproportionately.
More broadly, roughly three-fifths of the assets underlying MSCI’s asset-based fees were invested in securities denominated outside the U.S. dollar. MSCI’s reported organic revenue calculation does not remove currency effects inside those underlying fund values. Exchange rates can therefore affect fee growth even when the reported comparison is adjusted for currency.
Source: 2026 Form 10-Q, Note 1, page 10; management discussion, page 24.
Tax, legal and regulatory exposures remain relevant. The 2025 annual report disclosed $59.5 million of gross unrecognized tax benefits—tax positions subject to uncertainty—excluding interest and penalties. That is a December balance, not an updated June estimate. The annual report also identifies changing benchmark oversight and competition from customers developing their own indexes.
The quarterly legal disclosure says possible losses cannot be reasonably estimated. Management does not expect currently known matters to have a material aggregate effect, but also acknowledges that an outcome could materially affect a particular period. An absence of a quantified range does not remove the exposure.
Sources: 2025 Form 10-K, Note 12, Income Taxes; Business/Competition and Risk Factors; 2026 Form 10-Q, Part II, Items 1 and 1A, page 42. No undisclosed loss estimate is assumed.
8. Strong indexes support investment, while payouts remain a funding choice
MSCI’s index business is expanding, while broader sales growth and stronger cash generation would increase its spending flexibility. Subscription growth and stronger overall retention provide support beyond market appreciation. Against that, Analytics and Private Assets experienced margin pressure, Sustainability and Climate added less net new subscription value, and higher interest absorbed part of the operating improvement. Private Assets’ improving new subscription sales and growth in Climate products provide counterevidence to a uniformly weak picture outside Index.
Management’s July forecast called for full-year operating cash of $1,655–1,705 million and software-inclusive capital spending of $160–170 million. After the first-half result, reaching the operating-cash range required $977.4–1,027.4 million in the second half.
That requirement is substantially above the first-half result, but the relevant seasonal comparison is with the previous second half. MSCI generated approximately $950.5 million of operating cash in the second half of 2025. The July forecast therefore required approximately 2.8%–8.1% growth over that comparable period.
| Consolidated operating cash; millions | First half 2025 actual | Second half 2025 calculated actual | First half 2026 actual | Second half 2026 required by July forecast |
|---|---|---|---|---|
| Cash from operations | 637.9 | 950.5 | 677.6 | 977.4–1,027.4 |
Seasonal compensation payments help explain why simply doubling first-half cash would be inappropriate. The forecast calls for growth over the prior second half, with collections and payment timing determining the outcome. It does not require the entire increase from the first to the second half to come from faster business growth.
Calculation notes: Required second-half operating cash equals the full-year forecast endpoints less $677.6 million. The 2025 comparison uses $1,588.446 million of full-year operating cash less the rounded first-half amount of $637.9 million, giving approximately $950.5 million. The required growth range uses that same calculation. Guidance assumed First Street would close in the third quarter and remains a forecast, not a confirmed full-year outcome.
Sources: MSCI second-quarter 2026 earnings release, July 21, 2026, Full-Year 2026 Guidance and Table 12; 2025 Form 10-K, cash-flow discussion, page 56; 2026 Form 10-Q, page 40, cash-flow seasonality.
The company funded its disclosed first-half internal investment from operations and has time before its first major debt maturity. Its more demanding choice concerns how much cash to distribute while adding products and servicing debt, including the post-June First Street purchase. Stronger sales and collections would widen that room. Continued dividends and repurchase outflows above cash remaining after internal investment would require other funding, including borrowing or existing cash, unless management slows capital returns.
Calculation notes — Profit growth did not cover all cash uses
Reporting basis: The analysis uses the SEC filing’s financial statements, segment results, operating metrics, liquidity discussion and legal disclosures. MSCI changed statement presentation from thousands to millions in 2026; prior-year comparators here use the rounded million-dollar figures in the 2026 filing, except for the explicitly identified annual cash-flow input above.
Profit growth and cash available after investment measure different things. The calculations below preserve that distinction and separate reported results from illustrative adjustments.
- Growth equals the current-period amount divided by the corresponding prior-period amount, minus one. Quarterly Index contribution to revenue growth is $76.1 million ÷ $94.3 million = 80.7%. Market appreciation’s share of the sequential ETF asset increase is $376 billion ÷ $415 billion = 90.6%. Neither estimates recurring future growth.
- First-half net income excluding only the identified tax benefit is $748.0 million − $88.0 million = $660.0 million. Compared with reported 2025 net income of $592.3 million, growth is 11.4%. Pretax growth is $806.5 million ÷ $708.9 million − 1 = 13.8%.
- Quarterly adjusted EBITDA reconciles as $487.5 million operating profit + $43.8 million intangible amortization + $6.2 million depreciation and related amortization + $1.0 million specified acquisition costs = $538.5 million. The comparable 2025 calculation is $425.3 million + $43.7 million + $5.4 million = $474.4 million.
- First-half adjusted EBITDA is $944.4 million + $85.7 million + $12.1 million + $1.0 million = $1,043.2 million. The comparable 2025 calculation is $802.3 million + $87.6 million + $10.1 million = $900.0 million. Stock compensation remains included in the expenses underlying these measures.
- The first-half cash reconciliation is $515.3 million opening cash + $677.6 million operating cash − $132.0 million investing cash − $703.9 million financing cash − $0.6 million currency effect = $356.4 million closing cash. Both balances include $3.7 million of restricted cash.
- Financing cash is −$583.2 million repurchases − $300.0 million dividends − $400.0 million repayments + $575.0 million borrowings − $9.5 million acquisition payments + $13.8 million option proceeds = −$703.9 million.
- June assets of $5,602.5 million equal $8,292.0 million liabilities less the $2,689.5 million equity deficit. December assets of $5,702.5 million equal $8,357.0 million liabilities less the $2,654.5 million equity deficit.
- June equity components are $1.3 million common stock + $1,889.9 million paid-in capital + $5,876.7 million retained earnings − $10,400.0 million treasury shares − $57.4 million accumulated other comprehensive loss = −$2,689.5 million.
- Annual fixed coupons, in millions: $1,000 × 4.000% + $900 × 3.625% + $1,000 × 3.875% + $600 × 3.625% + $700 × 3.250% + $1,250 × 5.250% + $500 × 5.150% = $247.25. The unchanged-balance revolving-loan illustration adds $475 × 5.1% = $24.225. A one-percentage-point rate increase on that revolving balance would add $4.75 million a year before tax, assuming no balance change.
Sources: 2026 Form 10-Q, pages 4–10, 16–19 and 29–32; SEC accession directory. Calculations use reported rounded inputs, so small rounding differences may arise.
This analysis is for general information and is not investment advice.