MSCI Inc.

Good day, ladies and gentlemen. Welcome to the MSCI second quarter 2026 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 Ulan, head of investor relations and treasurers. You may begin.

Thank you. Good day and welcome to the MSCI second quarter 2026 earnings conference call. Earlier this morning, we issued a press release announcing our results for the second quarter 2026. This press release along with an earnings presentation 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 the presentation. You are cautioned 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 a discussion of additional risks and uncertainties, please see the risk factors in 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. will 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, and Andy Wiechmann, 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 very strong financial results, along with an acceleration in run rate growth in both index and private assets, our two key engines of growth. and the company. We also show strength in recurring net new sales across client segments and geographies despite continued challenges in sustainability. Meanwhile, record ETF and non-ETF AUM balances in products linked to MSCI indices help us achieve our best ever and many more. MSCI is building momentum in the second half of 2026 with a strong pipeline of opportunities and exciting AI fuel innovation. AI is enabling MSCI to move even faster in building new products, enhancing our existing solutions and strengthening our foundational mission-critical role in global investing and the rapidly growing ecosystem around our solutions. MSCI's Q2 financial metrics included organic revenue growth of over 12%, adjusted EPS growth of nearly 19%, and adjusted EBITDA growth of 14%. We further demonstrated our commitment to driving attractive shareholder returns and our confidence in MSCI by repurchasing $147 million of MSCI shares at an average price of about $558 per share during the quarter and through yesterday. Our Q2 operating metrics included total run rate growth of 12%, fueled by ABF run rate of $948 million, growing 25%. This reflected record AUM levels in both ETF and non-ETF products linked to MSCI indices supported by another quarter of solid inflows of nearly $40 billion in ETFs linked to MSCI indices. Over the past 15 months, total ETF AUM linked to MSCI indices has grown by more than $1 trillion. The incredible scale of MSCI's ABF franchise and the recent volumes of inflows into products linked to MSCI indices is the ultimate endorsement of trust in our IP, research, and standards. Turning back to our Q2 performance, MSCI achieved organic subscription run rate growth of over 8% with a retention rate of over 95%. This growth is enabled by our success in scaling our footprint across key client segments. Among traders and hedge funds, a category that collectively includes market makers, hedge funds, broker dealers, and exchanges, MSCI delivered subscription run rate growth of 15%. Among hedge funds specifically, we posted our best quarter on record with 19% subscription run rate growth and nearly $15 million in recurring new sales, in recurring net new sales, for a growth of 75%, including three separate seven-figure deals in index analytics. So for example, MSCI won a seven-figure index deal with one of the world's largest multi-strategy hedge funds, covering our ETF-linked and non-ETF-linked custom index modules along with our constituent AUM packages. Although we more than triple our index recurring net new sales with hedge funds from a year earlier, reaching $8.6 million in total. These results highlight four overlapping trends in the segment of traders and hedge funds for us. MSCI's indices are becoming increasingly embedded in the core trading and liquidity infrastructure used by active and passive investors alike. Second, the growth of systematic and quantitative investing has contributed to rising demand for our index content. As traders and hedge funds have expanded their role in global investing, MSCI has gained new opportunities to make our index franchise more diversified and resilient. And fourth, as clients demand faster, more specialized indices and structure products and derivatives in larger volumes, AI is helping us accelerate are index production and deliver customization at scale. Shifting from traders and hedge funds to asset owners, we deliver 9% subscription run rate growth, along with our best Q2 on record for recurring net new sales at $8.4 million and growing 43%. For example, One of the world's largest public pension funds signed a major new agreement for MSCI's private capital indices and expanded access to our private capital intel solution. We also completed a seven-figure deal with a large sovereign wealth fund for our total portfolio solution, which includes private assets and analytics. Among asset managers, we posted 6% organic subscription run rate growth, along with 9% recurring net new sales growth. This includes a large deal with one of the world's largest asset managers for our enterprise risk and performance tools to support their ongoing initiatives to incorporate factors and enhance their risk reporting across asset classes. In addition, we continue making a steady progress with our ETF and other tradable product solutions for active managers. During the quarter, we signed a handful of clients to support their launch of active ETF strategies leveraging MSCI's index universe, research, and IP. Overall, some of the biggest themes of Q2 included the rapidly expanding ecosystem around MSCI indices, our momentum in private assets, and our rapid pace of innovation as enabled by our AI transformation and laser targeted acquisitions to unlock additional layers of growth. Turning more specifically to our product lines, in index, we deliver 41% growth in recurring net new sales, 17% growth in total run rate, more than 11% growth in subscription run rate, and a retention rate of more than 97%. In private assets, MSCI achieved 57% recurrent net new sales growth with more and more pension funds and sovereign wealth funds embracing our total portfolio solutions. Earlier this month, we announced a new strategic partnership with UBS that will extend the reach of our private assets solutions and enable wealth managers to better connect high net worth clients with GP opportunities while promoting greater transparency for the entire investment ecosystem. By combining MSEI's independent data, analytics, models, and AI power platforms with UBS's global client insights, and expertise in alternative investments, we can help make private markets more understandable, more accessible, and enable stronger connectivities between GPs and the wealth channel. This private asset platform for wealth channels is only one example of how we are using AI to improve our solutions and the client experience. We already have over 1,000 clients using Index AI Insights, which we just launched in February. Meanwhile, hundreds of companies and end users are now accessing our Total Plan Manager and Private Capital Intel solutions through their preferred AI models. Innovation remains the lifeblood of MSCI's product development, but we're also expanding our capability through highly strategic acquisitions. Last month, for example, we announced that MSCI would acquire FirstStreet, a leading provider of physics-based Climate Risk Data and Analytics, enabling physical risk assessment across over 2 billion building infrastructures. Combining our respective tools will help us deliver the insights clients need as physical risk becomes a more immediate priority. We're also addressing the broader category of emerging risks, along with issues such as energy access, tariffs, and supply chains and AI. Much of our product innovation in sustainability and climate is now focused on these emerging risks, which have become increasingly significant to investors. At the same time, MSCI working climate is separate and distinct from our working sustainability as we are seeing the opportunities there. Sustainability faces persisting market challenges and we do not expect that to change in the near future. Even still, MSCI remains the provider of choice in this industry and our sustainability tools continue to help us in other business areas, most notably in index. They are now close to $1.3 trillion in index fund assets benchmarked to MSCI sustainability and climate indices, with over one-third of those assets benchmarked to our climate indices. MSCI also took several other steps to advance our AI transformation. In Q1, we brought into the firm Dinesh Gupta from Goldman Sachs to serve as our new chief data officer and global head of operations. In Q2, we welcome Kashi Kakarla from Intuit as our new chief technology officer and head of product engineering. and we announced that Kashi will lead the creation of a new MSCI office in Silicon Valley focused on AI, product engineering and technology. Given his background, Kashi is the perfect leader to help us maximize the benefits of AI across client segments, product clients and asset classes. We have also established a technology and data committee of our board of directors. Looking ahead, we remain confident in our pipeline, in our resource allocation, and in our ability to leverage AI. MSCI plays a key role in virtually every stage of the global investment process. and we are well positioned to save new opportunities for growth. And with that, let me turn things over to Andy.