MSCI Inc.

Q2 organic revenue growth was over 12%, adjusted EPS growth was nearly 19%, and adjusted EBITDA growth was 14%. Total run rate growth was 12%, including ABF run rate of $948 million, up 25%, and organic subscription run rate growth of over 8% with retention of over 95%. Index delivered over 11% subscription run rate growth and over $28 million in recurring net new subscription sales, up nearly 41% year over year; private capital solutions subscription run rate growth accelerated to over 16%; and sustainability drove nearly $6 million of new recurring sales in sustainability and over $3 million in climate. Management said it expects First Street to add about $10 million of subscription run rate to the sustainability and climate reporting segment upon close in Q3, and expects combined sustainability and climate recurring net new sales to be roughly zero to slightly negative across the next two quarters.

Henry Fernandez framed the quarter as evidence that MSCI’s growth engines are reaccelerating, especially in index and private assets, and said the company is building momentum into the second half with a strong pipeline and AI-fueled innovation. He emphasized that MSCI has launched 80+ new products in the last two quarters and that many are only beginning to convert because institutional sales cycles take time. His tone was notably confident and expansive, while also acknowledging that sustainability remains weak and will not improve quickly.

Andy Wiechmann highlighted the core financial drivers: index subscription run rate growth above 11%, ABF run rate near $950 million, and close to $40 billion of ETF cash inflows that pushed linked ETF AUM above $2.8 trillion. He said the ABF basis point decline was mainly due to mix shift toward lower-fee developed markets ex-U.S. and all-country products, plus earlier BlackRock floor changes, rather than a broad pricing problem. He also noted higher expense guidance from acquisitions, performance stock-based comp, bonus accruals tied to stronger AUM, higher D&A from First Street, and higher interest expense from revolver balances used for First Street and share repurchases, while free cash flow guidance improved due to stronger collections.

Analysts pressed on whether hedge fund and trader demand could create volatility, whether analytics softness was just lumpiness, and whether the strong new-product push is translating into sales. Management said hedge funds are becoming a more stable channel because MSCI is focusing on larger multi-strategy firms, and that the trading/liquidity ecosystem around index arbitrage is a secular opportunity rather than a one-off. They also said analytics softness was largely quarter-to-quarter lumpiness, new-product contribution to first-half new sales is up around 40% year over year, and AI/content licensing is early but starting to show up with the first training license signed.