MSCI Inc.

Good day, ladies and gentlemen, and welcome to the MSCI First Quarter 2021 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 2021 earnings conference call. Earlier this morning, we issued a press release announcing our results for the first quarter 2021. This press release, along with an earnings presentation we will reference on this call, as well as a brief quarterly 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 only 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 SEC filings. During today's call, in addition to results presented on the basis of U.S. GAAP, we will also refer to non-GAAP measures, including, but not limited to, organic operating revenue growth rates, 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 in the appendix of the earnings presentation. We will also discuss run rate, which estimates at a particular point in time the annualized value of the recurring revenues under our client agreement for the next 12 months, subject to a variety of adjustments and exclusions that we detail in our SEC filing. As a result of those adjustments and exclusions, the actual amount of recurring revenues we will realize over the following 12 months will differ from run rate. We therefore caution you not to place undue reliance on run rate to estimate or forecast recurring revenue. Additionally, we will discuss organic run rate growth figures, which exclude the impact of changes in foreign currency 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 Andy Wishman, our Chief Financial Officer. 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 now turn the call over to Henry Fernandez. Henry?

Thank you, Sally. Hello, everyone, and thank you for joining us today. When we spoke at our Investor Day in February, I pointed to our 50-plus year track record of building standards and our continued role in transforming the global investment world. MSCI's mission remains to enable investors build better portfolios for a better world. Our excellent first quarter performance demonstrates the financial benefits of our mission and the ongoing strategic and discipline investments we have made in the client experience in our client segments and in our solutions and capabilities. For the quarter, we achieved total revenue growth of 15%, adjusted EBITDA growth of 21%, and adjusted earnings per share growth of 30%. We also generated free cash flow of $205 million, doubling year over year. At Investor Day, my colleagues and I spoke about MSCI's strategy to support the investment process needs of various client segments with highly differentiated solutions supported by best-in-class capabilities. I would like to highlight recent selected advancements within each of these areas. Within clients, I would like to emphasize the wealth management segment where industry trends toward digitalization, designing of model portfolios, and incorporated sustainability criteria continue to drive significant demand for MSCI's offerings. A growing interest in direct indexing in wealth management is creating opportunities for MSCI. These personalized portfolio solutions leverage MSCI's models, data, and technology from across the entire franchise, including our index capabilities, optimization tools, and ESG and climate data. Staying on clients, let me also touch on corporates, our newest client segment, where we now serve 53 corporate issuers 42 corporate advisor entities, and two distribution platforms. We continue to see strong corporate interests related to our ESG and climate offerings. Corporate needs range from benchmarking against underlying ESG and climate data to licensing our ESG ratings for new sustainability link financings. I would like now to highlight our progress expanding and deepening our solutions in climate change, which is increasingly recognized as an existential threat to our planet and a major investment and portfolio risk. Put simply, we believe that addressing the impacts of climate change will require the largest reconstruction of the global economy since the Industrial Revolution. Capital markets are an essential and critical force to drive the transition to a net zero world, with concerted actions from all participants. These actions range from a reallocation of capital by asset owners, effective channeling of funds by asset managers and banks to greener investments and innovation, to decarbonizing operations by companies. Last week, my colleagues and I put forth our call to action to all participants in the global investment community to support a net zero revolution. We urge asset owners and asset managers to decarbonize their portfolios, effect change on companies through voting and shareholder engagement. and transition to investment policy benchmarks that reflect a path to net zero. Providers, users, and intermediaries of capital have a fundamental responsibility to reduce their impact on the planet and join the journey to a decarbonized economy as quickly as possible. failure to identify the investment opportunities and risks related to climate change will result in missed opportunities and avoidable losses. We're also holding ourselves to the same high standards. MSCI, as a company, recently committed to reach net zero carbon emissions before 2040. This commitment is in addition to our prior pledge to reduce by 2035 our Scope 1 and Scope 2 emissions by 50% and our Scope 3 emissions by 20%. This past quarter, we also became an official supporter of the TCFD. We integrated climate risks into our internal risk management framework and announced our commitment to the UN Sustainable Development Goals. As we said in our call to action, the time to act is now. Regulators, asset owners and managers, and societies are all encouraged to adopt and adapt a net zero emissions targets, especially before the COP26 conference later this year. Supporting the investment industry as it undertakes this enormous paradigm shift makes investing in our climate franchise a critical Triple Crown investment priority. At MSCI, we have an enormous opportunity to be a leading provider of all the necessary data, models, and technology to help all capital market participants accelerate this significant economic transformation. Let me now turn to our critical capabilities, where I would like to highlight a recent strategic development. Last week, we announced a strategic collaboration with Royalty Pharma PLC, the largest buyer of biopharmaceutical royalties and a leading funder of innovation across the life sciences industry. Together, we will develop thematic indices for the biotech and biopharma megatrend. Royalty Pharma will provide MSCI with expertise on various medical conditions, clinical trials, transformative therapies, and technologies that may lead to breakthrough medical treatments. This knowledge and expertise will assist MSCI in the design of a classification framework and in index methodologies. Joseph MSCI has become a standard in market cap weighted indices. We are building a strong brand in non-market cap weighted indices, including ESG, climate, and factor indices, and now thematic indices. capturing the major megatrend opportunities in the world. If you consider the sizable business we have built in market cap weighted indices and the significantly larger and broader range of applications for non-market cap indices, you can quickly see why we are so excited about these opportunities. You already have a sense for the potential for ESG climate, and factor indices. Let me, therefore, take a minute to describe what we believe is possible with thematic indices. Our thematic indices provide investors a ready-made way to tap into societal megatrends that are creating both disruption and opportunities. The three most significant megatrends we have identified include high-tech, for which we have partnered with ARK Invest, biotech, for which we have now this new partnership with Royalty Pharma, and clean energy, an increasing area of focus for investors and therefore for MSCI. You will see us continue to build partnerships in these areas and others to ensure we have access to best-in-class subject matter expertise. Before I turn the call over to Bear and Andy... I'll take a few moments to describe our observations on our global operating environment. Notwithstanding the ongoing risks associated with the continued pandemic, the rollout of vaccines provides hope for our collective health and will unleash unprecedented pent-up economic activity starting in the U.S. Many financial markets are already reflecting this expectation. MSCI is very well positioned to benefit from this, in addition to the secular trends that are accelerating MSCI's opportunity set. We need to continue to scale MSCI to ensure we appropriately capitalize on these significant opportunities ahead of us. As we continue through 2021, we remain deeply committed to investing responsibly in Triple Crown opportunities in order to leverage and build on the established scale of our business. We are confident we can continue to create long-term value for all of our various stakeholders. With that, I would now like to turn the call over to Barrett. Barry?