MSCI Inc.

Good day, ladies and gentlemen, and welcome to the MSCI Second Quarter 2025 Earnings Conference Call. As a reminder, this call is being recorded at this time. All participants are in 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. Sir, you may begin.

Thank you, Operator. Good day and welcome to the MSCI Second Quarter 2025 Earnings Conference Call. Earlier this morning, we issued a press release announcing our results for the second quarter 2025. 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 your caution not to place undue reliance on forward-looking statements which speak only as 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 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 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. With that, let me now turn the call over to Henry Fernandez. Henry? Thank you, Jeremy.

Good day, everyone, and thank you all for joining us. In the second quarter, MSCI delivered another strong financial performance, including revenue growth of over 9%, adjusted EBITDA growth of over 10 percent, adjusted earnings per share growth of almost 15 percent, and free cash flow of over $300 million. Year to date, we have repurchased $286 million worth of MSCI shares at an average price of $557 per share, demonstrating our long-term conviction in the value of our franchise. Our second quarter operating metrics included total run rate growth of 11%, fueled by record AUM levels in ETF products linked to MSCI indices, and asset base fee run rate growth of 17%. Among client segments, We recorded double-digit subscription run rate growth with banks and broker dealers, wealth managers, hedge funds, and asset owners. Despite the well-known ongoing pressures on active asset managers, MSCI's subscription run rate growth with this client segment held steady at 6%, while retention with active asset managers stay high at 96%. Across all client segments, MSCI is rapidly developing innovative use cases for our existing solutions while developing new solutions for our increasingly diverse client base. Turning to our product lines, MSCI's Q2 performance affirm that index in general and our asset-based fee franchise in particular is a key growth engine for us with enormous opportunities. Most notably, our strong ABF run rate growth reflects the vital importance of MSCI indices to global investing, especially in non-U.S. market exposures. In fact, MSCI capture more indexed equity ETF cash flows than any other index provider during the quarter. Total equity index ETF AUM linked to MSCI indices surpass $2 trillion for the first time. Driving total index ETF and non-ETF AUM balances tracking MSCI indices to $6 trillion. In addition, fixed income index ETF AUM linked to indices created entirely by MSCI or in partnership with partners reached $84 billion. All of this helped us achieve our highest ever level of quarterly APF revenue. MSCI's index progress was also underpinned by several product launches, including new data solutions that offer deeper insights into the building blocks of our indices, such as our constituent AUM and index liquidity data sets. For all these reasons, we are very excited about the tremendous potential of our index franchise. MSCI's second quarter results also confirm the value of our risk and performance analytics tools during periods of fast-moving market conditions and volatility. We achieved our highest ever Q2 recurring sales in analytics, driven mainly by equity risk models. Meanwhile, we completed our largest ever deal for MSCI Wealth Manager, which Bear will cover in greater detail. Let us shift to private assets, which is an attractive long-term opportunity where MSCI is expanding our tools to drive adoption across the investment community. We have made significant progress in boosting our capabilities for private capital solutions with Q2 run rate growth of nearly 13 percent while launching or enhancing a number of key products. For example, we introduced MSCI asset and deal metrics, which include data from over 26,000 private equity deals covering $2 trillion in net asset value. We recently unveiled the MSCI World Private Equity Return Tracker Index, which offers an approximation of private equity investments by replicating region, sector, and style exposures through public equities, leveraging fundamental data from MSCI private capital universe. Already, we see strong interest from clients in launching tradable products linked to this index. Our first phase of private credit risk assessments in partnership with Moody's is expected in the coming weeks. And we're very excited about the dialogue we've been having with clients on this product. In addition, we now have more than 30 LP clients using our private capital indices as their policy or performance benchmark. These offerings underscore our innovation and the benefits of our integrated franchise, which enhances all MSCI product lines, creating powerful network effects for our clients. In real assets, new recurring sales were challenged and down from Q2 of last year. However, we introduced new products targeted to the areas of relative acceleration in commercial real estate, including our new data centers product and RCA funds, a new intelligence offering covering over 8,000 real estate funds to empower GPs and LPs to optimize fundraising, investor engagement, and capital allocation decisions. Moving on to sustainability and climate. Despite the current cyclical slowdown, our tools have become a permanent feature of the global investment process. And MSCI is and will continue to be a leader in this space. We recently won valuable climate mandates in index, and our climate physical risk and reporting solutions are helping us expand our footprint with newer client segments, such as insurance companies. While we expect sustainability to remain challenged, we're adapting and repositioning our tools to capture new opportunities when they arise. In conclusion, our solutions are strongly embedded in the global investment ecosystem. We're always intensely focused on anticipating and investing in the biggest trends across our industry to serve a broad base of client segments while delivering an attractive financial model for our shareholders. And with that, let me turn things over to Bear.