MSCI Q3 Deep Dive: Index Strength, AI Progress and Private Markets Shape Outlook

Investment analytics provider MSCI (NYSE:MSCI) met Wall Street’s revenue expectations in Q3 CY2025, with sales up 9.5% year on year to $793.4 million. Its non-GAAP profit of $4.47 per share was 2.3% above analysts’ consensus estimates.

Is now the time to buy MSCI? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

MSCI’s third quarter results drew a positive response from investors, reflecting management’s view that strategic product innovation and expanding client segments were key drivers of growth. CEO Henry Fernandez highlighted the company’s 9% organic revenue growth and strong uptake in index-linked investment products, noting, “Total AUM in investment products linked to MSCI indexes reached $6.4 trillion globally.” New product launches in analytics and private credit, along with robust recurring sales to hedge funds and asset managers, contributed to momentum across the business.

Looking forward, management’s guidance is shaped by accelerated investment in artificial intelligence, expansion into private credit analytics, and deepening relationships in wealth management and alternative asset classes. Fernandez identified AI as a “godsend,” enabling new product development and operational efficiencies, while CFO Andy Wiechmann cautioned that growth in sustainability solutions would likely remain pressured in the near term. The company is prioritizing investment in scalable technology and new market segments to support long-term growth, with a focus on monetizing recent innovations.

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to record index adoption, client expansion in private markets, and rapid integration of AI into product pipelines.

• Index franchise momentum: MSCI recorded 27% net new subscription sales growth in its Index business, driven by increased ETF adoption and recurring sales in the Americas. Total assets under management in products linked to MSCI indexes hit $6.4 trillion, aided by strong demand for both ETF and non-ETF offerings.
• Private credit data and tools: The launch of new credit assessment models and private credit indices was highlighted as a growth area, with management emphasizing the structural shift toward private credit funds. These new products, developed with Moody’s and leveraging MSCI’s proprietary data, aim to increase transparency and attract institutional and retail capital.
• AI-driven product development: MSCI reported that AI now permeates all aspects of its operations, from data capture and model building to delivery of analytics. Management expects AI to drive significant efficiency gains and enable the rapid scaling of new data sets and investment models, resulting in both cost savings and new revenue streams.
• Growth in alternative client segments: The company cited strong recurring sales growth from hedge funds (21%) and wealth managers (11%), with new products supporting the needs of both established and emerging client bases. Expansion into wealth management and private capital solutions is seen as a key lever for future growth.
• Geographic and segment diversification: While the Americas led in new sales, management acknowledged some continued sluggishness in Europe, particularly among asset managers. However, increased ETF flows and product launches in Europe and Asia-Pacific are expected to help offset these regional headwinds.

Drivers of Future Performance

MSCI’s outlook is underpinned by accelerated AI adoption, private markets expansion, and ongoing product innovation, balanced by headwinds in sustainability solutions.

• AI efficiency and product scale: Management believes AI will enable MSCI to expand its data and product offerings rapidly while reducing operating costs. Fernandez stated that AI is expected to “dramatically increase our margins,” allowing reinvestment in innovation without significant incremental expense.
• Private asset and wealth management focus: The company is investing in private capital solutions and tools for wealth managers, aiming to drive adoption of its transparency and benchmarking products among institutional and retail clients. Management views growth in private assets and wealth channels as a multi-year opportunity.
• Sustainability segment challenges: Despite growth in climate-linked indices, management cautioned that near-term headwinds in sustainability and climate solutions will likely persist. The company continues to monetize sustainability capabilities through index products, particularly in Europe, but expects some ongoing pressure in direct sustainability sales.

Catalysts in Upcoming Quarters

Looking ahead, our analysts will monitor (1) the pace of AI-driven product launches and efficiencies across MSCI’s core lines, (2) adoption and revenue contribution from private credit and wealth management solutions, and (3) stabilization or improvement in the sustainability and climate segment, particularly in Europe. The company’s ability to translate recent innovations into accelerating recurring sales will be a key signpost for sustained growth.

MSCI currently trades at $599, up from $546.87 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).

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