MSCI Inc.

Good day, ladies and gentlemen, and welcome to the MSCI third quarter 2022 earnings conference call. At this time, all participants are in 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 Jeremy Ulam, head of investor relations and treasurer. Please go ahead and begin.

Thank you, operator. Good day and welcome to the MSCI third quarter 2022 earnings conference call. Earlier this morning, we issued a press release announcing our results for the third quarter 2022. 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. Your caution 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 discussion of additional risks and uncertainties, please see the risk factors and forward looking statements disclaimer in our most recent form 10K and in our other SEC 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 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 agreements for the next 12 months. subject to a variety of adjustments and exclusions that we detail in our SEC filings. 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 revenues. We will also discuss organic 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, Jeremy. Welcome, everyone, and thank you for joining us today. In the third quarter, MSCI delivered another strong performance despite significant turmoil and dislocation in financial and commodity markets around the world. We posted organic recurring subscription run rate growth of over 14% and adjusted EPS growth of 12.6%. We achieved our best third quarter ever of net new recurring subscription sales, growing at 26%. In addition, our retention rate was 96.4% up by 188 basis points from a year earlier. In terms of capital management, we repurchased another $235 million worth of MSCI shares through October 24th. For the year as a whole, our total share repurchases now stand at approximately $1.3 billion. This performance demonstrates the resilience and adaptability of MSCI's all-weather franchise. There is no question that the global economy faces major hell wins. These hell wins have created challenges for all companies, including MSCI. Yet, they have also created a massive opportunity for us to differentiate ourselves and to show to both clients and shareholders the power of our all weather franchise. At moments of extreme volatility and high uncertainty, investors become more reliant in high quality data, insightful models, and relevant research. They want a clear blueprint for navigating choppy waters. MSCI's tools can help them design one. Indeed, our solutions take on even greater importance during periods of elevated global risk. In other words, this is the time when what we do best matters most, and we fully intend to demonstrate it. Our third quarter performance showed continuous trends across client segments and product lines. In index, we delivered our highest subscription run rate growth in a decade at 12.6%. And the listed futures and options trading volume linked to MSCI indices increased by 21%. In analytics, we achieved our highest retention rate ever at 95.9%. We also posted subscription run rate growth, excluding foreign exchange, of 97% in climate and 35% in ESG ex-climate. All of these numbers illustrate how MSCI is capturing key market trends. As the indexing trend continues beyond market capitalization indices, we are meeting investor demand for tools to support more customized and personalized portfolio construction and highly specialized outcomes. Likewise, As global economic pressures accumulate, we are providing the risk analytical tools investors need to stay ahead of the turmoil. Meanwhile, as ESG becomes increasingly mainstream, we are helping investors measure the full scope of sustainability risks, capitalize on sustainability opportunities, and achieve sustainability objectives. For all the political noise and controversy around ESG, the simple fact is that sustainability risks are financial risks and will continue to be so. Investors know this. In fact, a recent PwC report found that 81% of institutional investors in the U.S., along with 84% in Europe, quote, plan to increase their allocations to ESG products over the next two years, end quote. The same report projected that ESG-related assets under management will reach nearly $34 trillion U.S. globally by 2026, an 84% increase from 2021. It is important to underscore that as our ESG product line becomes more diverse with many different use cases and client types, ESG sales growth will naturally fluctuate based on market shifts, cyclical conditions, and regulatory development. Right now, the world is simultaneously witnessing global energy and food crisis, the largest European war in almost 80 years, the biggest inflation surge in decades, rapidly rising interest rates, and COVID lockdowns in China, which continue to affect supply chain. At the same time, MSCI remains bullish on ESG long-term potential. If anything, the main factors driving ESG growth, from greater environmental and social awareness to demographic shifts, will become even more powerful in the years ahead. As for climate specifically, there is no turning back in the race to net zero emissions. While the global energy crisis has created new obstacles to decarbonization, policymakers continue to embrace bold green investment plans. Here in the US, President Biden recently signed the most aggressive climate law in American history. In Europe, governments enacted or proposed a wide range of measures that would speed up the low-carbon transition. These include more ambitious decarbonization and clean energy targets, policies to maintain or expand nuclear power, and a $5.4 billion hydrogen project. For our part, MSCI will continue building a robust and dynamic climate franchise. Two climate wins in the third quarter deserve special attention because they demonstrate our emergence as a leader in this area. First, the California State Teachers Retirement System, or CALSTRS, approved a plan to cut their portfolio emissions in half by 2030. To help them get there, they endorsed a proposal for 20% of their public equity assets to track the MSCI AQUI low-carbon target index. This means CalSTRS will now have nearly $27 billion allocated to tracking that index. Second, the New Zealand Superfund announced that it had moved roughly 40 percent of its total investment portfolio to track the MSCI World Climate Paris-Aligned Index and the MSCI Emerging Markets Climate Paris-Aligned Index. That 40 percent translates into 25 billion New Zealand dollars, or about 15 billion U.S. dollars. Each win represents a milestone on our climate journey. As I have frequently said, MSCI aspires to be the number one provider of climate solutions to the global finance and investment industries. We recently published a net zero guide for asset owners outlining concrete steps for decarbonizing portfolios. We also hosted White House National Climate Advisors, ALICEAD, at our New York offices during Climate Week. That same week, we joined with the Glasgow Financial Alliance for Net Zero, or GFAN, to help launch a proposed climate data public utility. All of this has helped MSCI generate strong momentum during the run-up to COP27 in Sharm El Sheikh, Egypt. In climate, ESG, analytics, index, and other areas, MSCI continues to benefit from our mission-critical solutions, our diversified client base, and our commitment to financial disciplines. Right now, many companies are retrenching and turning inward. MSCI is doing quite the opposite. Even as we reallocate resources, we continue investing in key differentiators using our triple crown investment framework. More than that, we continue to attract talent, pursue MP&A opportunities, double down on client centricity, and reinforce our competitive advantages. All of these will help us emerge even stronger when the current market turmoil subsides. And with that, let me turn the call over to Bert. Bert?