MSCI Inc.

Good day, ladies and gentlemen, and welcome to the MSCI First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session where we will limit participants to one question and one follow-up. We will have further instructions for you at that time. As a reminder, this conference call is being recorded. I would now like to turn the call over to Sally Schwartz, Head of Investor Relations and Treasurer. You may begin.

Thank you, operator. Good day and welcome to the MSCI first quarter 2020 earnings conference call. Earlier this morning, we issued a press release announcing our results for the first quarter 2020. This press release, along with an earnings presentation we will reference on this call, as well as a brief first quarter update, are available on our website, msci.com, under the Investor Relations tab. Let me remind you that this call contains forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements, which speak as of the date on which they are made and are governed by the language on the second slide of today's presentation. For a discussion of additional risks and uncertainties, please see the Risk Factors and Forward-Looking Statements disclaimer in our most recent Form 10-K and in our other SEP filings. During today's call, in addition to results presented on the basis of U.S. GAAP, we also refer to non-GAAP measures, including, but not limited to, organic operating revenue growth rate, adjusted EBITDA, adjusted EBITDA expenses, adjusted EPS, and free cash flow. We believe our non-GAAP measures facilitate meaningful period-to-period comparisons and provide insight into our core operating performance. You'll find a reconciliation to the equivalent gap measures in the earnings materials and an explanation of why we deem this information to be meaningful, as well as how management uses these measures on pages 30 to 37 of the earnings presentation. We will also discuss organic run rate growth figures, which include the impact of changes in foreign currencies and the impact of any acquisitions or divestitures. On the call today are Henry Fernandez, our Chairman and CEO, Bear Pettit, our President and COO, and Linda Huber, our Chief Financial Officer. Andy Wishman, our Chief Strategy Officer, will also join us for the Q&A portion of the call. Like many of you, we are in various remote locations today. If we have any audio quality issues, we appreciate your patience as we work through them. And finally, I would like to point out that members of the media may be on the call this morning in a listen-only mode. With that, let me turn the call over to Henry Fernandez. Henry?

Thank you, Sally. Hello, everyone, and thank you for joining us today. I hope everyone is staying safe and healthy in this difficult environment. Before I turn our call over to our first quarter results, I would like to acknowledge these unprecedented times and share a few of the actions related to our people, our clients, and our shareholders that we have taken to manage successfully through this challenging environment. Across MSCI's 35 locations in 22 countries around the globe, we have deployed our business continuity plans in full force. Almost 100% of our 3,500 employees are currently working remotely. They remain engaged and productive with the right tools to work effectively across all functions of the company. Our data processing production environment remains extremely resilient and reliable with an uptime of over 99.9%. Because we have been able to seamlessly transition to this new working environment, we have stayed keenly focused on our clients, supporting the challenges that they're facing in managing their portfolios and businesses. Our sales consultants and our client coverage representatives have provided immediate expanded access to our products and services. One example is by removing location restrictions of our products and services to support our clients as they work from home. We have delivered more frequent content updates and offered select free trials across our product suite in an effort that has been widely and praised in the last few weeks. And our research team has mobilized rapidly to create a wide variety of insight and research analysis. This has been delivered to the market timely through social media, podcasts, and our dedicated coronavirus webpage. The allocates we have received from clients tell us that we're doing the right things to support them at this crucial time. I am incredibly proud of the way my colleagues have stepped up to work with our clients to serve whatever their needs may be, keeping faithfully to our mission of providing critical tools and insights to help clients build resilient portfolios regardless of market conditions. And finally, we have taken a series of concrete actions to ensure MSCI remains well positioned financially and that our shareholders continue to benefit from their support of the company. Let me now turn our focus to Q1 and how we will continue to navigate during this crisis. During the first quarter, we delivered strong financial performance across our franchise. with year-over-year growth of 12% in operating revenues, 16% in adjusted EBITDA, and nearly 23% in adjusted earnings per share. Since the beginning of the year and through April 24th, we bought back $357 million of MSCI shares. a total of 1.4 million shares at an average price of $250.65. We also paid to shareholders approximately $58 million in dividends during the quarter, and our board has approved the upcoming second quarter dividend payment of 68 cents per share. These actions are consistent with our stated objectives of managing our business with the most optimized capital structure possible and of returning excess capital to our shareholders. Our share repurchase program since the start of the year is consistent with our practice of taking advantage of periods of volatility in our stock price. And our dividend declaration is consistent with our policy of paying 40 to 50% of adjusted EPS in the form of quarterly dividends. As stewards of your capital and as important shareholders ourselves, we are highly driven to manage our company carefully through these times of economic stress and market uncertainty. with an ongoing keen drive to innovate and strategically grow the business for the benefits of our stakeholders, regardless of market conditions. As you know, compensation costs are the most significant part of our expense base. Currently, we have a hiring freeze in place, and only very few health care additions are being made in critical areas. a significant part of our compensation expense is variable and meant to be flexed up or flexed down depending on the financial performance of the company. We are more focused than ever on driving productivity improvements and ensuring that our operations are appropriately scaled for the opportunities and challenges we see in front of us this year. As we continue to navigate this unprecedented and evolving environment, we are confident that MSCI's content, analytics, and technology applications remain must-have tools for our clients, underpinning the resiliency of our franchise. The enduring secular trends and drivers supporting our business also propel our confidence and belief in our ability to add significant value to our clients and create more value to our shareholders. I will now turn the call over to Bear, who will provide more color on what we are seeing and hearing from clients, as well as examples of our ongoing innovation. Bear?