MSCI Shares Slide 5.8% After Q4 EPS Beat, Forecasts $1.47B–$1.53B FCF
MSCI’s shares have slid 5.8% since its Q4 report after adjusted EPS climbed 11.5% to $4.66 and revenues rose 10.6% to $822.5 million, driven by 7.5% subscription and 20.7% asset-based fee growth. The company projects 2026 free cash flow of $1.47–$1.53 billion and plans operating expenses of $1.49–$1.53 billion.
1. Q4 Financial Highlights
MSCI reported adjusted EPS of $4.66 for Q4 2025, up 11.5% year over year, and revenues of $822.5 million, up 10.6%, beating estimates on profitability. Recurring subscription revenues rose 7.5% to $584.2 million, asset-based fees jumped 20.7% to $211.7 million, and non-recurring revenues increased 7.1%. Shares have declined 5.8% since the report.
2. Segment Performance
Index segment revenues reached $479.1 million, up 14%, driven by market-cap-weighted products and ETFs linked to MSCI equity indexes. Analytics generated $182.3 million (+5.5%), Sustainability and Climate achieved $90.3 million (+5.9%), and Private Assets delivered $70.9 million (+8.4%). Average AUM in ETFs stood at $2.34 trillion, with a total retention rate of 93.4%.
3. 2026 Guidance and Outlook
As of December 31, cash and equivalents were $515.3 million against $6.2 billion in debt for a 3.3x debt-to-EBITDA ratio. Management forecasts 2026 operating expenses of $1.49–$1.53 billion, adjusted EBITDA expenses of $1.305–$1.335 billion, interest expense of $274–$280 million, operating cash of $1.64–$1.69 billion and free cash flow of $1.47–$1.53 billion. Earnings estimates have trended downward over the past month, resulting in an aggregate VGM Score of D.