MSCI (NYSE:MSCI) reported what management called one of the strongest first quarters in the company’s history, pointing to double-digit organic growth, record asset-based fee run rate, and improving momentum in several subscription businesses. Executives also emphasized an accelerating push to embed “agentic AI” across product development and operations, alongside recent bolt-on acquisitions meant to expand customization and private markets capabilities.
Quarterly growth and capital return
Chairman and CEO Henry Fernandez said MSCI’s first-quarter results “affirm our foundational mission-critical role in global investing,” highlighting organic revenue growth of “over 13%,” adjusted EPS growth of “nearly 14%,” and adjusted EBITDA growth of “almost 19%.”
In operating metrics, Fernandez said total run rate grew “nearly 13%,” driven by a “record asset-based fee run rate of $872 million, growing 25%,” and recurring subscription run rate growth of 9%. He added that net new recurring subscription sales were $39.6 million, up 52%, calling it MSCI’s best first quarter for net new recurring subscription sales since 2022. Total retention across product lines was 95.4%.
Index business: subscription re-acceleration and record ETF inflows
In Index, Fernandez said subscription run rate growth returned to double digits in the quarter, at 10.7%, with “a record level of Q1 recurring sales at nearly $33 million.” Chief Financial Officer Andy Wiechmann similarly described Index organic subscription run rate growth re-accelerating to “over 10%,” with record first-quarter recurring net new sales of $25 million, up 75% year over year, aided by “a few large deals with trader and hedge fund clients.”
Wiechmann said Index retention was “nearly 97%,” improving from last year. He also described asset-based fee strength tied to ETF flows. Equity ETFs linked to MSCI indexes captured a “record $103 billion of inflows” during the quarter, representing “roughly 35% of all flows into equity index-linked ETFs.” He contrasted that with a prior record of $67 billion in the fourth quarter of the prior year.
Executives discussed MSCI’s position in international exposures and Europe. Wiechmann said that nearly $1.1 trillion of the $2.4 trillion in equity ETF AUM linked to MSCI indexes is in European-listed products, and that European-listed ETFs linked to MSCI indexes captured $46 billion of inflows in the quarter, “nearly 50% of all flows in the region.”
Fernandez added that more than $21 trillion in AUM is benchmarked to MSCI indices, including $7.4 trillion of indexed equity AUM. He also said the quarter was MSCI’s best since 2023 for traded volumes and run rate from listed futures and options linked to MSCI indices, and referenced “our new licensing agreement for options on MSCI indices listed on the New York Stock Exchange.”
Private Capital Solutions, Analytics, and mixed Sustainability & Climate trends
In Private Capital Solutions (PCS), Fernandez said recurring net new sales grew nearly 44% in the quarter, citing newer tools such as “daily private valuation indices and benchmarks for private equity and private credit.” Wiechmann said PCS subscription run rate growth accelerated to “nearly 16%,” with momentum in transparency data, Private Capital Intel, and total plan offerings, though he noted ongoing headwinds in real assets property transaction solutions.
On the impact of private credit concerns, Fernandez called rising risk scrutiny “definitely a tailwind,” arguing that volatility and limited transparency are increasing demand for tools around fund holdings, loan terms, credit assessments—highlighting MSCI’s partnership with Moody’s—market risk and valuation work in private credit.
In Analytics, Wiechmann reported subscription run rate growth of “nearly 8%,” driven by new recurring sales of $17 million, up 30% year over year. He said Analytics revenue grew over 10% in Q1, but attributed part of that to a “large implementation” completed during the quarter that contributed non-recurring revenues, adding that for Q2 MSCI expects Analytics year-over-year revenue growth of roughly 5% and that, longer term, revenue growth should track run rate growth more closely.
On Sustainability and Climate, Wiechmann said modest growth in new recurring sales was offset by higher cancels, as clients focus spending on “their most critical sustainability priorities,” causing some down-sales but also competitive wins. He said MSCI expects “muted growth” and pressures in the near term. Fernandez said MSCI is “taking away” market share in sustainability, while expressing cautious optimism on climate—particularly physical risk—and cited a climate risk tools win with the Deutsche Bundesbank on behalf of the European Central Bank system as a competitive win.
AI adoption, new connectors, and acquisitions
Management repeatedly returned to AI as a driver of product velocity and internal productivity. Fernandez said business momentum reflects “the relentless adoption of agentic AI in everything we do,” and later told analysts that MSCI launched as many products in Q1 as it did in the full year 2025. He also said MSCI made AI “a condition of employment” about a year and a half ago and that “the vast majority of MSCI employees” are using AI models daily.
Fernandez described early efficiency gains from applying AI to data capture and development, software development productivity, and faster creation of models and methodologies. He also said MSCI revamped its ESG ratings system using AI and is in the process of relaunching it, with expectations for improved scalability.
On the customer side, Wiechmann said MSCI is seeing early interest from clients licensing more content for AI-driven use cases. He and Fernandez highlighted the MSCI IndexAI Insights connector, which Fernandez said launched in late February and has already been used by “hundreds of clients.” In response to a question about economics, Wiechmann said the economics are “generally consistent” regardless of whether clients access the capability via MSCI One or third-party AI tools, though there can be “upcharges and upsales” depending on usage and content needs.
MSCI also pointed to three small acquisitions: Compass Financial Technologies (index calculation services), Vantager (an AI-native due diligence platform), and PM Insights (secondary market pricing, liquidity, and reference data). Wiechmann said the acquisitions add a “relatively modest” contribution to run rate and expenses, and that MSCI updated full-year depreciation and amortization guidance by $5 million to incorporate acquisition-related intangibles.
Guidance considerations and outlook commentary
Wiechmann said MSCI’s cash position remained strong, with “close to $400 million of cash” at the end of March. He also said the company was “trending to be in the top half” of its expense guidance range given strong asset-based fee performance and an assumption of “very gradual market appreciation” in the back half of the year. He noted the Q1 effective tax rate reflected lower stock-compensation windfall benefits, but said the full-year 2026 effective tax rate outlook was unchanged and that Q2’s effective tax rate is expected to be between 18% and 20%.
During Q&A, Fernandez said MSCI had not seen broad client pullbacks or decision delays, citing business-as-usual trends aside from “a slowdown in dialogue and presentations” in the Arabian Gulf region.
Looking ahead, Fernandez said MSCI’s strategy is to increase growth in core segments like index and analytics while also stepping up development and growth in newer product lines such as climate and PCS, and expanding into newer client bases. He described MSCI as “an all-weather franchise” and said the focus is on optimizing and monetizing that franchise to drive long-term compound growth and shareholder value creation.
About MSCI (NYSE:MSCI)
MSCI Inc is a global provider of investment decision support tools and services for the financial industry. The company is best known for its family of market indexes, which are widely used as benchmarks by asset managers and as the basis for exchange-traded funds and other passive products. In addition to index construction and licensing, MSCI offers portfolio analytics, risk models, factor and performance attribution tools, and a suite of data and technology solutions designed to support portfolio management and trading.
Beyond traditional indexing and risk analytics, MSCI has expanded into environmental, social and governance (ESG) research and ratings, offering data, scores and screening tools that help investors integrate sustainability considerations into investment processes.
