MSCI Inc.

Good day ladies and gentlemen and welcome to the MSCI third quarter 2024 earnings conference call. As a reminder this call is being recorded. At this time all participants are in a listen only mode. Later we will conduct a question and answer session where participants are requested to ask one question at a time then add themselves back to the queue for any additional questions. We will have further instructions for you later on. I would now like to turn the call over to Jeremy Yulin, head of investor relations and treasurer. You may begin.

Thank you. Good day and welcome to the MSCI third quarter 2024 earnings conference call. Earlier this morning, we issued a press release announcing our results for the third quarter 2024. This press release, along with an earnings presentation and 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, which are governed by the language on the second slide of today's presentation. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made, are based on current expectations and current economic conditions, and are subject to risks and uncertainties that may cause actual results to differ materially from the results anticipated in these forward-looking statements. 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 US GAAP, we also refer to non-GAAP measures. you'll find a reconciliation of our non-GAAP measures to the equivalent GAAP measures in the appendix of the earnings presentation. We will also discuss operating metrics, such as run rate and retention rate. Important information regarding our use of operating metrics, such as run rate and retention rate, are available in the earnings presentation. On the call today are Henry Fernandez, our Chairman and CEO, Bear Pettit, our President and COO, and Andy Wishman, our Chief Financial Officer. As a housekeeping item, we wanted to remind our analysts to ask one question at a time during the Q&A portion of our call. We do encourage you to ask more questions by adding yourselves back to the queue. With that, let me now turn the call over to Henry Fernandez. Henry? Thank you, Jeremy.

Good day, everyone, and thank you for joining us. MSCI's third quarter results highlight the underlying strengths of our business model and client footprint, as well as the essential role that our solutions play in global investing. Financially, we achieved total revenue growth of 16%, adjusted earnings per share growth of 12%, and free cash flow growth of 46%. We repurchased $199 million worth of MSCI shares, bringing our total share repurchases for the year to $440 million. In our operating metrics, we deliver asset base fee revenue growth of nearly 20%, subscription run rate growth of 15%, and a retention rate of 94%. Looking at our overall performance, we show significant strength in ABF revenue driven by record AUM balances in both ETF and non-ETF products linked to MSCI indices, including third quarter ETF cash flows of $18.6 billion. Index and analytics new recurring subscription sales grew 5% and almost 11% respectively. Among asset owners and hedge funds, organic subscription run rate growth was 11% and 15% respectively. New, met new recurring sales in our ESG and climate segment were down meaningfully from last year's levels. We think the subdued demand in ESG and climate is cyclical and may be prolonged. But the need for all investors to integrate ESG financial materiality and to decarbonize portfolios are real and secular. On asset managers, New recurring subscription sales were down 5% year over year, reflecting cyclical pressures, although retention is excellent at 96%. As our Q3 results show, MSCI's product lines are diverse and increasingly complement each other. We are a growth company with enormous addressable market for our products, which serve a vital function across the investment ecosystem. Today, I would also like to comment on three key drivers of our long-term strategy. First, our growth among wealth managers and how it reflects both the increasing use of indices and the benefits of our new technology platform. Second, our progress in developing private capital solutions that cut across product lines. And third, our commitment to providing climate solutions that clients need to measure, report, and act on the carbonization of investments. Starting with wealth. In Q3, MSCI achieved a major index win. with the private banking arm of one of the world's largest banks. We also achieved direct indexing run rate growth of 22%. Meanwhile, our MSCI Wealth Manager technology platform, formerly known as Fabric, continued driving robust client engagement for analytics. Looking ahead, we believe this platform can help us deliver content for wealth managers that expands multiple product lines, including index, ESG, climate, and private assets. In private capital solutions, we believe that our work there can enhance our capabilities in many areas. We have already seen this with products such as MSCI private capital fund indices, which are catalyzing important new client wins and prospects since their launch in July. Our private capital fund indices cover more than 13,000 funds that represent more than $11 trillion in AUM, and we believe they can help us become a standard setter in private assets. Our partnership with Moody's positions as well to expand our ESG coverage of private companies, while also providing more ESG content for segments such as banks, insurance companies, and corporates. As we announced last week, I am pleased to welcome Luke Flemer to MSCI as our new head of private assets, to further build and scale our business to new heights. Luke joins us from Goldman Sachs. Regarding climate solutions, as the risks and negative impacts of climate change become ever more apparent, all institutional investors and capital market participants will need high quality data, models, and research to adapt. This is inactivable and just a matter of time for this demand to accelerate. MSCI already supplies carbon emission data on more than 60,000 private companies and more than 7,500 private equity and private debt funds. MSCI is well positioned to be the provider of choice for this large-scale reallocation of capital and repricing of assets. With that in mind, we're also constantly seeking to upgrade both our talent and our solutions. Last week, we announced that Richard Madison has joined MSCI as head of ESG and climate. Richard comes to us from S&P Global and is also the founder and former CEO of True Cost. We know that MSCI will greatly benefit from his expertise and knowledge. Meanwhile, on the climate product side, MSCI has responded to the emerging consensus that voluntary carbon markets are critical to achieving net zero. Just last month, we introduced MSCI carbon project ratings which offer comprehensive and independent assessment of more than 4,000 carbon credit projects around the world. All of this demonstrates MSCI's single most important competitive advantage, the global, diversified, and integrated nature of our franchise. We have always tried to capture the biggest trends reshaping the global investment industry. We are now better equipped than ever to capitalize on these trends while supporting both traditional and new client segments. And with that, let me turn the call over to Bert. Bert?