MSCI (MSCI) Down 5.8% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for MSCI (MSCI). Shares have lost about 5.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is MSCI due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for MSCI Inc before we dive into how investors and analysts have reacted as of late.

MSCI Q4 Earnings Beat Estimates, Revenues Rise Y/Y

MSCI’s fourth-quarter 2025 adjusted earnings of $4.66 per share beat the Zacks Consensus Estimate by 0.86% and increased 11.5% year over year.

MSCI’s revenues rose 10.6% year over year to $822.5 million, in line with the Zacks Consensus Estimate. The year-over-year improvement was driven by strong growth in recurring subscription revenues and asset-based fees. Organic operating revenues grew 10.2% year over year.

Recurring subscriptions of $584.2 million increased 7.5% year over year and contributed 71% to revenues. Asset-based fees of $211.7 million jumped 20.7% year over year and contributed 25.7% to revenues. Non-recurring revenues of $26.6 million increased 7.1% year over year and contributed 3.2% to revenues.

At the end of the reported quarter, average assets under management were $2.340 trillion in ETFs linked to MSCI equity indexes. The total retention rate was 93.4% in the reported quarter.

MSCI’s Top-Line Details

In fourth-quarter 2025, Index revenues of $479.1 million increased 14% year over year. Recurring subscriptions and asset-based fees rose 7.8% and 20.7% on a year-over-year basis, respectively. Non-recurring revenues increased 28.2% year over year. Organically, Index’s operating revenue growth was 14%.

The uptick in recurring subscription revenues was driven by strong growth from market-cap-weighted Index products and ETFs linked to MSCI equity indexes.

Analytics’ operating revenues of $182.3 million increased 5.5% year over year. Recurring subscription revenues jumped 7.1% and non-recurring revenues decreased 46.1% on a year-over-year basis. Organically, Analytics’ operating revenue growth was 5.5%.

The Sustainability and Climate segment’s (previously titled "ESG and Climate") operating revenues were $90.3 million, rising 5.9% year over year. While recurring subscriptions increased 6.1% year over year, non-recurring revenues declined 1.7% on a year-over-year basis. Organically, Sustainability and Climate operating revenue growth was 3.1%. 

All Other – Private Assets operating revenues, which primarily comprise the Real Assets operating segment and the Private Capital Solutions (formerly known as Burgiss), were $70.9 million, up 8.4% year over year. Organic operating revenue growth for All Other – Private Assets was 6.6%.

MSCI’s Q4 Operating Details

Adjusted EBITDA increased 13.2% year over year to $512 million in the reported quarter. The adjusted EBITDA margin in the fourth quarter of 2025 was 62.2% compared with 60.8% in the fourth quarter of 2024.

Adjusted EBITDA expenses were $310.5 million, up 6.6% year over year, reflecting higher compensation and benefits costs due to higher headcount, as well as elevated severance costs.
Total operating expenses increased 6.1% on a year-over-year basis to $358.9 million due to higher compensation costs from a 2.2% increase in headcount.

Operating income improved 14.4% year over year to $463.6 million. The operating margin expanded 190 bps on a year-over-year basis to 56.4%.

MSCI’s Balance Sheet & Cash Flow

Total cash and cash equivalents, as of Dec. 31, 2025, were $515.3 million compared with $400.1 million as of Sept. 30, 2025.

Total debt was $6.2 billion as of Dec. 31, 2025, compared with $5.6 billion as of Sept 30, 2025. The total debt-to-adjusted EBITDA ratio (based on trailing 12-month-adjusted EBITDA) was 3.3 times. Management targets total debt to adjusted EBITDA of 3-3.5 times.

As of Dec. 31, 2025, the free cash flow was $464.8 million, up 17.8% year over year from $423.3 million as of Sept. 30, 2025.

The company paid out dividends worth $134.7 million in the fourth quarter of 2025.

MSCI Initiates 2026 Guidance

For 2026, MSCI expects total operating expenses in the range of $1.490-$1.530 billion. 

Adjusted EBITDA expenses are anticipated to be between $1.305 billion and $1.335 billion.

Interest expenses are expected to be between $274 million and $280 million.

Net cash provided by operating activities and the free cash flow are expected to be $1.64-$1.69 billion and $1.47-$1.53 billion, respectively.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

VGM Scores

Currently, MSCI has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for value investors.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, MSCI has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

MSCI is part of the Zacks Financial - Investment Management industry. Over the past month, Cohen & Steers Inc (CNS), a stock from the same industry, has gained 4%. The company reported its results for the quarter ended December 2025 more than a month ago.

Cohen & Steers reported revenues of $143.8 million in the last reported quarter, representing a year-over-year change of +2.9%. EPS of $0.81 for the same period compares with $0.78 a year ago.

Cohen & Steers is expected to post earnings of $0.76 per share for the current quarter, representing a year-over-year change of +1.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Cohen & Steers. Also, the stock has a VGM Score of F.

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This article originally published on Zacks Investment Research (zacks.com).

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