MSCI Inc. ("MSCI" or the "Company") (NYSE:MSCI), a leading provider of critical decision support tools and services for the global investment community, today announced its financial results for the three months ended March 31, 2023 ("first quarter 2023").

Financial and Operational Highlights for First Quarter 2023

(Note: Unless otherwise noted, percentage and other changes are relative to the three months ended March 31, 2022 ("first quarter 2022") and Run Rate percentage changes are relative to March 31, 2022).

Operating revenues of $592.2 million, up 5.8%; Organic operating revenue growth of 7.2%
Recurring subscription revenues up 11.4%; Asset-based fees down 8.2%
Operating margin of 53.1%; Adjusted EBITDA margin of 58.2%
Diluted EPS of $2.97, up 6.8%; Adjusted EPS of $3.14, up 5.4%
Organic recurring subscription Run Rate growth of 12.1%; Retention Rate of 95.2%
Approximately $110.5 million in dividends were paid to shareholders in first quarter 2023; Cash dividend of $1.38 per share declared by MSCI Board of Directors for second quarter 2023

	Three Months Ended
	Mar. 31,			Mar. 31,
In thousands, except per share data (unaudited)		2023			2022		% Change
Operating revenues	$	592,218		$	559,945		5.8	%
Operating income	$	314,602		$	288,978		8.9	%
Operating margin %		53.1	%		51.6	%

Net income	$	238,728		$	228,423		4.5	%

Diluted EPS	$	2.97		$	2.78		6.8	%
Adjusted EPS	$	3.14		$	2.98		5.4	%

Adjusted EBITDA	$	344,729		$	318,544		8.2	%
Adjusted EBITDA margin %		58.2	%		56.9	%

"MSCI delivered solid first-quarter results in a tough environment, confirming the underlying strengths of our franchise. We posted 13.3% organic recurring subscription revenue growth as well as our 37th consecutive quarter of double-digit Index recurring subscription Run Rate growth and 67.8% Run Rate growth from Climate across our product lines," said Henry A. Fernandez, Chairman and CEO of MSCI.

"We have not been immune to the market turmoil, which impacted sales in areas such as ESG and Real Estate, but our resilience and leadership in the industry continue to stand out. MSCI has a globally diversified franchise that provides mission-critical investment solutions for a diverse and growing range of clients and use cases. This helps to stabilize demand for our solutions across business cycles. Moreover, difficult environments highlight our competitive advantages and thus create new opportunities for us to outdistance our competitors," added Mr. Fernandez.

First Quarter Consolidated Results

Operating Revenues: Operating revenues were $592.2 million, up 5.8%. Organic operating revenue growth was 7.2%. The $32.3 million increase was the result of $45.5 million in higher recurring subscription revenues offset by an $11.9 million decrease in asset-based fees and a $1.3 million decrease in non-recurring revenues.

Run Rate and Retention Rate: Total Run Rate at March 31, 2023 was $2,379.1 million, up 6.7%. Recurring subscription Run Rate increased by $191.3 million, and asset-based fees Run Rate decreased by $41.7 million. Organic recurring subscription Run Rate growth was 12.1%. Retention Rate in first quarter 2023 was 95.2%, compared to 95.9% in first quarter 2022.

Expenses: Total operating expenses were $277.6 million, up 2.5%. Adjusted EBITDA expenses were $247.5 million, up 2.5%, primarily reflecting higher non-compensation costs including information technology and market data costs. The increase also reflected higher compensation and benefits costs related to continued investments to support growth. Total operating expenses excluding the impact of foreign currency exchange rate fluctuations ("ex-FX") and adjusted EBITDA expenses ex-FX increased 5.4% and 5.9%, respectively.

Operating Income: Operating income was $314.6 million, up 8.9%. Operating income margin in first quarter 2023 was 53.1%, compared to 51.6% in first quarter 2022.

Headcount: As of March 31, 2023, we had 4,846 employees reflecting an 11.1% increase. Approximately 35% and 65% of employees are located in developed market and emerging market locations, respectively.

Other Expense (Income), Net: Other expense (income), net was $38.2 million, down 4.5% primarily driven by higher interest income reflecting higher yields and higher cash balance, partially offset by higher interest expense associated with higher average outstanding debt balances and the impact of foreign currency exchange rate fluctuations.

Income Taxes: The effective tax rate was 13.6% in first quarter 2023 compared to 8.2% in first quarter 2022. The higher rate in the current period reflected lower net favorable discrete items, primarily driven by lower excess tax benefits recognized on share-based compensation vested during the period, partially offset by higher tax benefits related to the resolution of prior year items.

Net Income: As a result of the factors described above, net income was $238.7 million, up 4.5%.

Adjusted EBITDA: Adjusted EBITDA was $344.7 million, up 8.2%. Adjusted EBITDA margin in first quarter 2023 was 58.2%, compared to 56.9% in first quarter 2022.

Index Segment:

Table 1A: Results (unaudited)

	Three Months Ended
	Mar. 31,			Mar. 31,
In thousands		2023			2022		% Change
Operating revenues:
Recurring subscriptions	$	196,678		$	174,498		12.7	%
Asset-based fees		133,126			145,053		(8.2	)%
Non-recurring		9,578			11,208		(14.5	)%
Total operating revenues		339,382			330,759		2.6	%
Adjusted EBITDA expenses		85,700			84,884		1.0	%
Adjusted EBITDA	$	253,682		$	245,875		3.2	%
Adjusted EBITDA margin %		74.7	%		74.3	%

Index operating revenues were $339.4 million, up 2.6%. The $8.6 million increase was driven by $22.2 million in higher recurring subscription revenues offset by $11.9 million in lower asset-based fees and $1.7 million in lower non-recurring revenues.

Growth in recurring subscription revenues was primarily driven by strong growth from market-cap weighted and factor, ESG and climate Index products.

The decrease in revenues attributable to asset-based fees primarily reflected a decline in revenues from non-ETF indexed funds linked to MSCI indexes, primarily driven by decrease in average AUM. The decrease in revenues attributable to asset-based fees also reflected a decline in revenues from ETFs linked to MSCI equity indexes, primarily driven by a decrease in average AUM, partially offset by an increase in average basis point fees.

Index Run Rate as of March 31, 2023, was $1.3 billion, up 3.3%. The $42.8 million increase was comprised of an $84.5 million increase in recurring subscription Run Rate offset by a $41.7 million decrease in asset-based fees Run Rate. The increase in recurring subscription Run Rate was primarily driven by strong growth from market cap-weighted products, custom Index products and special packages, and factor, ESG and climate products. The increase reflected growth across all regions and client segments. The decline in asset-based fees Run Rate primarily reflected lower AUM in non-ETF indexed funds linked to MSCI indexes and ETFs linked to MSCI equity indexes.

Analytics Segment:

Table 1B: Results (unaudited)

	Three Months Ended
	Mar. 31,			Mar. 31,
In thousands		2023			2022		% Change
Operating revenues:
Recurring subscriptions	$	144,503		$	137,799		4.9	%
Non-recurring		2,567			1,998		28.5	%
Total operating revenues		147,070			139,797		5.2	%
Adjusted EBITDA expenses		86,290			88,908		(2.9	)%
Adjusted EBITDA	$	60,780		$	50,889		19.4	%
Adjusted EBITDA margin %		41.3	%		36.4	%

Analytics operating revenues were $147.1 million, up 5.2%. The $7.3 million increase was primarily driven by growth from recurring subscriptions related to both Equity Analytics and Multi-Asset Class products. Excluding the impact of foreign currency exchange rate fluctuations, Analytics operating revenue growth was 5.9%.

Analytics Run Rate as of March 31, 2023, was $621.6 million, up 5.6%. The increase of $33.2 million was driven by strong growth in Equity Analytics products as well as growth in Multi-Asset Class products, and reflected growth across all regions. Excluding the impact of foreign currency exchange rate fluctuations, Analytics Run Rate growth was 6.3%.

ESG and Climate Segment:

Table 1C: Results (unaudited)

	Three Months Ended
	Mar. 31,			Mar. 31,
In thousands		2023			2022		% Change
Operating revenues:
Recurring subscriptions	$	65,732		$	50,572		30.0	%
Non-recurring		1,326			1,457		(9.0	)%
Total operating revenues		67,058			52,029		28.9	%
Adjusted EBITDA expenses		49,182			39,937		23.1	%
Adjusted EBITDA	$	17,876		$	12,092		47.8	%
Adjusted EBITDA margin %		26.7	%		23.2	%

ESG and Climate operating revenues were $67.1 million, up 28.9%. The $15.0 million increase was primarily driven by strong growth from recurring subscriptions related to Ratings, Climate and Screening products. Excluding the impact of foreign currency exchange rate fluctuations, ESG and Climate operating revenue growth was 37.6%.

ESG and Climate Run Rate as of March 31, 2023, was $278.9 million, up 29.0%. The $62.8 million increase primarily reflects strong growth from Ratings, Climate and Screening products with contributions across all regions and client segments. Excluding the impact of foreign currency exchange rate fluctuations, ESG and Climate Run Rate growth was 29.9%.

All Other – Private Assets Segment:

Table 1D: Results (unaudited)

	Three Months Ended
	Mar. 31,			Mar. 31,
In thousands		2023			2022		% Change
Operating revenues:
Recurring subscriptions	$	38,334		$	36,891		3.9	%
Non-recurring		374			469		(20.3	)%
Total operating revenues		38,708			37,360		3.6	%
Adjusted EBITDA expenses		26,317			27,672		(4.9	)%
Adjusted EBITDA	$	12,391		$	9,688		27.9	%
Adjusted EBITDA margin %		32.0	%		25.9	%

All Other – Private Assets operating revenues, which reflect the Real Assets operating segment, were $38.7 million, up 3.6%, primarily driven by growth from recurring subscriptions related to growth from RCA, Datscha, Global Intel and Climate Value-at-Risk products, partially offset by unfavorable foreign currency exchange rate fluctuations. All Other – Private Assets operating revenues also include contributions from Enterprise Analytics and Income & Risk products, which typically have higher deliveries in the first half of the year. All Other – Private Assets organic operating revenues increased by 8.0%.

All Other – Private Assets Run Rate, which reflects the Real Assets operating segment, was $148.4 million as of March 31, 2023, up 7.9%, driven by the growth in RCA, Global Intel, Enterprise Analytics, Datscha and Climate Value-at-Risk products, partially offset by unfavorable foreign currency exchange rate fluctuations. Excluding the impact of foreign currency exchange rate fluctuations, All Other – Private Assets Run Rate growth was 10.4%.

Select Balance Sheet Items and Capital Allocation

Cash Balances and Outstanding Debt: Cash and cash equivalents was $1,080.6 million as of March 31, 2023, including $3.9 million of restricted cash. MSCI typically seeks to maintain minimum cash balances globally of approximately $225.0 million to $275.0 million for general operating purposes.

Total principal amounts of debt outstanding as of March 31, 2023, were $4.5 billion. The total debt to net income ratio (based on trailing twelve months net income) was 5.1x. The total debt to adjusted EBITDA ratio (based on trailing twelve months adjusted EBITDA) was 3.3x.

MSCI seeks to maintain total debt to adjusted EBITDA in a target range of 3.0x to 3.5x.

Capex and Cash Flow: Capex was $21.6 million, and net cash provided by operating activities increased by 8.2% to $264.1 million, primarily reflecting lower cash expenses paid in the quarter and higher cash collections from customers, partially offset by higher payments for interest expense. Free cash flow for first quarter 2023 was up 6.0% to $242.6 million.

Share Count and Share Repurchases: Weighted average diluted shares outstanding were 80.5 million in first quarter 2023, down 2.2% year-over-year. Total shares outstanding as of March 31, 2023 were 80.1 million. As of April 24, 2023 trade date, a total of approximately $1.3 billion remains available on the outstanding share repurchase authorization.

Dividends: Approximately $110.5 million in dividends were paid to shareholders in first quarter 2023. On April 24, 2023, the MSCI Board of Directors declared a cash dividend of $1.38 per share for second quarter 2023, payable on May 31, 2023 to shareholders of record as of the close of trading on May 12, 2023.

Full-Year 2023 Guidance

MSCI's guidance for the year ending December 31, 2023 ("Full-Year 2023") is based on assumptions about a number of factors, in particular related to macroeconomic factors and the capital markets. These assumptions are subject to uncertainty, and actual results for the year could differ materially from our current guidance, including as a result of the uncertainties, risks and assumptions discussed in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our Annual Report on Form 10-K, as updated in quarterly reports on Form 10-Q and current reports on Form 8-K filed or furnished with the SEC. See "Forward-Looking Statements" below.

Guidance Item	Current Guidance for Full-Year 2023
Operating Expense	$1,090 to $1,130 million
Adjusted EBITDA Expense	$965 to $995 million
Interest Expense (including amortization of financing fees)	$184 to $187 million
Depreciation & Amortization Expense	$125 to $135 million
Effective Tax Rate	17.0% to 20.0%
Capital Expenditures	$75 to $85 million
Net Cash Provided by Operating Activities	$1,145 to $1,195 million
Free Cash Flow	$1,060 to $1,120 million

The guidance provided above assumes, among other things, that MSCI maintains its current debt levels.

Conference Call Information

MSCI's senior management will review the first quarter 2023 results on Tuesday, April 25, 2023 at 11:00 AM Eastern Time. To listen to the live event via webcast, visit the events and presentations section of MSCI's Investor Relations website, https://ir.msci.com/events-and-presentations, or via telephone, dial 1-833-630-1956 within the United States. International callers may dial 1-412-317-1837. Participants should ask the operator to be joined into the MSCI call. The teleconference will also be webcast with an accompanying slide presentation that can be accessed through MSCI's Investor Relations website.

About MSCI Inc.

MSCI is a leading provider of critical decision support tools and services for the global investment community. With over 50 years of expertise in research, data and technology, we power better investment decisions by enabling clients to understand and analyze key drivers of risk and return and confidently build more effective portfolios. We create industry-leading research-enhanced solutions that clients use to gain insight into and improve transparency across the investment process. To learn more, please visit www.msci.com. MSCI#IR

Forward-Looking Statements

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, MSCI's Full-Year 2023 guidance. These forward-looking statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential" or "continue," or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond MSCI's control and that could materially affect actual results, levels of activity, performance or achievements.

Other factors that could materially affect actual results, levels of activity, performance or achievements can be found in MSCI's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission ("SEC") on February 10, 2023 and in quarterly reports on Form 10-Q and current reports on Form 8-K filed or furnished with the SEC. If any of these risks or uncertainties materialize, or if MSCI's underlying assumptions prove to be incorrect, actual results may vary significantly from what MSCI projected. Any forward-looking statement in this earnings release reflects MSCI's current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to MSCI's operations, results of operations, growth strategy and liquidity. MSCI assumes no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise, except as required by law.

Website and Social Media Disclosure

MSCI uses its Investor Relations homepage, Corporate Responsibility homepage and corporate Twitter account (@MSCI_Inc) as channels of distribution of company information. The information MSCI posts through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following MSCI's press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about MSCI when you enroll your email address by visiting the "Email Alerts" section of MSCI's Investor Relations homepage at http://ir.msci.com/email-alerts. The contents of MSCI's website, including its quarterly updates, blog, podcasts and social media channels are not, however, incorporated by reference into this earnings release.

Notes Regarding the Use of Operating Metrics

MSCI has presented supplemental key operating metrics as part of this earnings release, including Retention Rate, Run Rate, subscription sales, subscription cancellations and non-recurring sales.

Retention Rate is an important metric because subscription cancellations decrease our Run Rate and ultimately our future operating revenues over time. The annual Retention Rate represents the retained subscription Run Rate (subscription Run Rate at the beginning of the fiscal year less actual cancels during the year) as a percentage of the subscription Run Rate at the beginning of the fiscal year.

The Retention Rate for a non-annual period is calculated by annualizing the cancellations for which we have received a notice of termination or for which we believe there is an intention not to renew or discontinue the subscription during the non-annual period, and we believe that such notice or intention evidences the client's final decision to terminate or not renew the applicable agreement, even though such notice is not effective until a later date. This annualized cancellation figure is then divided by the subscription Run Rate at the beginning of the fiscal year to calculate a cancellation rate. This cancellation rate is then subtracted from 100% to derive the annualized Retention Rate for the period.

Retention Rate is computed by operating segment on a product/service-by-product/service basis. In general, if a client reduces the number of products or services to which it subscribes within a segment, or switches between products or services within a segment, we treat it as a cancellation for purposes of calculating our Retention Rate except in the case of a product or service switch that management considers to be a replacement product or service. In those replacement cases, only the net change to the client subscription, if a decrease, is reported as a cancel. In the Analytics and the ESG and Climate operating segments, substantially all product or service switches are treated as replacement products or services and netted in this manner, while in our Index and Real Assets operating segments, product or service switches that are treated as replacement products or services and receive netting treatment occur only in certain limited instances. In addition, we treat any reduction in fees resulting from a down-sell of the same product or service as a cancellation to the extent of the reduction. We do not calculate Retention Rate for that portion of our Run Rate attributable to assets in index-linked investment products or futures and options contracts, in each case, linked to our indexes.

Run Rate estimates at a particular point in time the annualized value of the recurring revenues under our client license agreements ("Client Contracts") for the next 12 months, assuming all Client Contracts that come up for renewal, or reach the end of the committed subscription period, are renewed and assuming then-current currency exchange rates, subject to the adjustments and exclusions described below. For any Client Contract where fees are linked to an investment product's assets or trading volume/fees, the Run Rate calculation reflects, for ETFs, the market value on the last trading day of the period, for futures and options, the most recent quarterly volumes and/or reported exchange fees, and for other non-ETF products, the most recent client-reported assets. Run Rate does not include fees associated with "one-time" and other non-recurring transactions. In addition, we add to Run Rate the annualized fee value of recurring new sales, whether to existing or new clients, when we execute Client Contracts, even though the license start date, and associated revenue recognition, may not be effective until a later date. We remove from Run Rate the annualized fee value associated with products or services under any Client Contract with respect to which we have received a notice of termination, non-renewal or an indication the client does not intend to continue their subscription during the period and have determined that such notice evidences the client's final decision to terminate or not renew the applicable products or services, even though such notice is not effective until a later date.

"Organic recurring subscription Run Rate growth" is defined as the period over period Run Rate growth, excluding the impact of changes in foreign currency and the first year impact of any acquisitions. It is also adjusted for divestitures. Changes in foreign currency are calculated by applying the currency exchange rate from the comparable prior period to current period foreign currency denominated Run Rate.

Sales represents the annualized value of products and services clients commit to purchase from MSCI and will result in additional operating revenues. Non-recurring sales represent the actual value of the customer agreements entered into during the period and are not a component of Run Rate. New recurring subscription sales represent additional selling activities, such as new customer agreements, additions to existing agreements or increases in price that occurred during the period and are additions to Run Rate. Subscription cancellations reflect client activities during the period, such as discontinuing products and services and/or reductions in price, resulting in reductions to Run Rate. Net new recurring subscription sales represent the amount of new recurring subscription sales net of subscription cancellations during the period, which reflects the net impact to Run Rate during the period.

Total gross sales represent the sum of new recurring subscription sales and non-recurring sales. Total net sales represent the total gross sales net of the impact from subscription cancellations.

Notes Regarding the Use of Non-GAAP Financial Measures

MSCI has presented supplemental non-GAAP financial measures as part of this earnings release. Reconciliations are provided in Tables 9 through 13 below that reconcile each non-GAAP financial measure with the most comparable GAAP measure. The non-GAAP financial measures presented in this earnings release should not be considered as alternative measures for the most directly comparable GAAP financial measures. The non-GAAP financial measures presented in this earnings release are used by management to monitor the financial performance of the business, inform business decision-making and forecast future results.

"Adjusted EBITDA" is defined as net income before (1) provision for income taxes, (2) other expense (income), net, (3) depreciation and amortization of property, equipment and leasehold improvements, (4) amortization of intangible assets and, at times, (5) certain other transactions or adjustments, including, when applicable, certain non-recurring acquisition-related integration and transaction costs.

"Adjusted EBITDA expenses" is defined as operating expenses less depreciation and amortization of property, equipment and leasehold improvements and amortization of intangible assets and, at times, certain other transactions or adjustments, including, when applicable, certain non-recurring acquisition-related integration and transaction costs.

"Adjusted EBITDA margin" is defined as adjusted EBITDA divided by operating revenues.

"Adjusted net income" and "adjusted EPS" are defined as net income and diluted EPS, respectively, before the after-tax impact of: the amortization of acquired intangible assets, including the amortization of the basis difference between the cost of the equity method investment and MSCI's share of the net assets of the investee at historical carrying value and, at times, certain other transactions or adjustments, including, when applicable, the impact related to certain non-recurring acquisition-related integration and transaction costs and the impact related to gain from changes in ownership interest of investees.

"Capex" is defined as capital expenditures plus capitalized software development costs.

"Free cash flow" is defined as net cash provided by operating activities, less Capex.

"Organic operating revenue growth" is defined as operating revenue growth compared to the prior year period excluding the impact of acquired businesses, divested businesses and foreign currency exchange rate fluctuations.

Asset-based fees ex-FX does not adjust for the impact from foreign currency exchange rate fluctuations on the underlying assets under management ("AUM").

We believe adjusted EBITDA, adjusted EBITDA margin and adjusted EBITDA expenses are meaningful measures of the operating performance of MSCI because they adjust for significant one-time, unusual or non-recurring items as well as eliminate the accounting effects of certain capital spending and acquisitions that do not directly affect what management considers to be our ongoing operating performance in the period.

We believe adjusted net income and adjusted EPS are meaningful measures of the performance of MSCI because they adjust for the after-tax impact of significant one-time, unusual or non-recurring items as well as eliminate the impact of any transactions that do not directly affect what management considers to be our ongoing operating performance in the period. We also exclude the after-tax impact of the amortization of acquired intangible assets and amortization of the basis difference between the cost of the equity method investment and MSCI's share of the net assets of the investee at historical carrying value, as these non-cash amounts are significantly impacted by the timing and size of each acquisition and therefore not meaningful to the ongoing operating performance in the period.

We believe that free cash flow is useful to investors because it relates the operating cash flow of MSCI to the capital that is spent to continue and improve business operations, such as investment in MSCI's existing products. Further, free cash flow indicates our ability to strengthen MSCI's balance sheet, repay our debt obligations, pay cash dividends and repurchase shares of our common stock.

We believe organic operating revenue growth is a meaningful measure of the operating performance of MSCI because it adjusts for the impact of foreign currency exchange rate fluctuations and excludes the impact of operating revenues attributable to acquired and divested businesses for the comparable prior year period, providing insight into our ongoing operating performance for the period(s) presented.

We believe that the non-GAAP financial measures presented in this earnings release facilitate meaningful period-to-period comparisons and provide a baseline for the evaluation of future results.

Adjusted EBITDA expenses, adjusted EBITDA margin, adjusted EBITDA, adjusted net income, adjusted EPS, Capex, free cash flow and organic operating revenue growth are not defined in the same manner by all companies and may not be comparable to similarly-titled non-GAAP financial measures of other companies. These measures can differ significantly from company to company depending on, among other things, long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. Accordingly, the Company's computation of these measures may not be comparable to similarly-titled measures computed by other companies.

Notes Regarding Adjusting for the Impact of Foreign Currency Exchange Rate Fluctuations

Foreign currency exchange rate fluctuations reflect the difference between the current period results as reported compared to the current period results recalculated using the foreign currency exchange rates in effect for the comparable prior period. While operating revenues adjusted for the impact of foreign currency fluctuations includes asset-based fees that have been adjusted for the impact of foreign currency fluctuations, the underlying AUM, which is the primary component of asset-based fees, is not adjusted for foreign currency fluctuations. Approximately three-fifths of the AUM is invested in securities denominated in currencies other than the U.S. dollar, and accordingly, any such impact is excluded from the disclosed foreign currency-adjusted variances.

Table 2: Condensed Consolidated Statements of Income (unaudited)

	Three Months Ended
	Mar. 31,			Mar. 31,			%
In thousands, except per share data		2023			2022		Change
Operating revenues	$	592,218		$	559,945		5.8	%
Operating expenses:
Cost of revenues (exclusive of depreciation and amortization)		108,647			102,771		5.7	%
Selling and marketing		66,475			66,053		0.6	%
Research and development		31,323			28,322		10.6	%
General and administrative		41,044			45,567		(9.9	)%
Amortization of intangible assets		24,667			21,720		13.6	%
Depreciation and amortization of property,
equipment and leasehold improvements		5,460			6,534		(16.4	)%
Total operating expenses(1)		277,616			270,967		2.5	%

Operating income		314,602			288,978		8.9	%

Interest income		(10,362	)		(298	)	n/m
Interest expense		46,206			40,714		13.5	%
Other expense (income)		2,386			(381	)	n/m
Other expense (income), net		38,230			40,035		(4.5	)%

Income before provision for income taxes		276,372			248,943		11.0	%

Provision for income taxes		37,644			20,520		83.5	%
Net income	$	238,728		$	228,423		4.5	%


Earnings per basic common share	$	2.98		$	2.80		6.4	%


Earnings per diluted common share	$	2.97		$	2.78		6.8	%

Weighted average shares outstanding used
in computing earnings per share:

Basic		80,041			81,591		(1.9	)%
Diluted		80,482			82,286		(2.2	)%

n/m: not meaningful.

^{(1) Includes stock-based compensation expense of $21.6 million and $22.2 million for the three months ended Mar. 31, 2023 and Mar. 31, 2022, respectively.}

Table 3: Selected Balance Sheet Items (unaudited)

	As of
	Mar. 31,	Dec. 31,
In thousands	2023	2022
Cash and cash equivalents (1)	$1,080,608	$993,564
Accounts receivable, net of allowances	$641,584	$663,236

Current deferred revenue	$920,255	$882,886
Current portion of long-term debt (2)	$8,715	$8,713
Long-term debt (3)	$4,502,176	$4,503,233

^{(1) Includes restricted cash of $3.9 million at Mar. 31, 2023 and $0.4 million at Dec. 31, 2022.}
^{(2) Consists of gross current portion of long-term debt, net of deferred financing fees. Gross current portion of long-term debt was $8.8 million at Mar. 31, 2023 and $8.8 million at Dec. 31, 2022.}
^{(3) Consists of gross long-term debt, net of deferred financing fees. Gross long-term debt was $4,536.9 million at Mar. 31, 2023 and $4,539.1 million at Dec. 31, 2022.}

Table 4: Selected Cash Flow Items (unaudited)

	Three Months Ended
	Mar. 31,			Mar. 31,			%
In thousands		2023			2022		Change
Net cash provided by operating activities	$	264,141		$	244,184		8.2	%
Net cash used in investing activities		(21,762	)		(15,310	)	(42.1	)%
Net cash (used in) provided by financing activities		(158,293	)		(966,117	)	83.6	%
Effect of exchange rate changes		2,958			(4,891	)	160.5	%
Net (decrease) increase in cash, cash equivalents and restricted cash	$	87,044		$	(742,134	)	111.7	%

Table 5: Operating Results by Segment and Revenue Type (unaudited)

*Index*	Three Months Ended
	Mar. 31,			Mar. 31,			%
In thousands		2023			2022		Change
Operating revenues:
Recurring subscriptions	$	196,678		$	174,498		12.7	%
Asset-based fees		133,126			145,053		(8.2	)%
Non-recurring		9,578			11,208		(14.5	)%
Total operating revenues		339,382			330,759		2.6	%
Adjusted EBITDA expenses		85,700			84,884		1.0	%
Adjusted EBITDA	$	253,682		$	245,875		3.2	%
Adjusted EBITDA margin %		74.7	%		74.3	%

*Analytics*	Three Months Ended
	Mar. 31,			Mar. 31,			%
In thousands		2023			2022		Change
Operating revenues:
Recurring subscriptions	$	144,503		$	137,799		4.9	%
Non-recurring		2,567			1,998		28.5	%
Total operating revenues		147,070			139,797		5.2	%
Adjusted EBITDA expenses		86,290			88,908		(2.9	)%
Adjusted EBITDA	$	60,780		$	50,889		19.4	%
Adjusted EBITDA margin %		41.3	%		36.4	%

*ESG and Climate*	Three Months Ended
	Mar. 31,			Mar. 31,			%
In thousands		2023			2022		Change
Operating revenues:
Recurring subscriptions	$	65,732		$	50,572		30.0	%
Non-recurring		1,326			1,457		(9.0	)%
Total operating revenues		67,058			52,029		28.9	%
Adjusted EBITDA expenses		49,182			39,937		23.1	%
Adjusted EBITDA	$	17,876		$	12,092		47.8	%
Adjusted EBITDA margin %		26.7	%		23.2	%

*All Other - Private Assets*	Three Months Ended
	Mar. 31,			Mar. 31,			%
In thousands		2023			2022		Change
Operating revenues:
Recurring subscriptions	$	38,334		$	36,891		3.9	%
Non-recurring		374			469		(20.3	)%
Total operating revenues		38,708			37,360		3.6	%
Adjusted EBITDA expenses		26,317			27,672		(4.9	)%
Adjusted EBITDA	$	12,391		$	9,688		27.9	%
Adjusted EBITDA margin %		32.0	%		25.9	%

*Consolidated*	Three Months Ended
	Mar. 31,			Mar. 31,			%
In thousands		2023			2022		Change
Operating revenues:
Recurring subscriptions	$	445,247		$	399,760		11.4	%
Asset-based fees		133,126			145,053		(8.2	)%
Non-recurring		13,845			15,132		(8.5	)%
Operating revenues total		592,218			559,945		5.8	%
Adjusted EBITDA expenses		247,489			241,401		2.5	%
Adjusted EBITDA	$	344,729		$	318,544		8.2	%
Operating margin %		53.1	%		51.6	%
Adjusted EBITDA margin %		58.2	%		56.9	%

Table 6: Sales and Retention Rate by Segment (unaudited)(1)

	Three Months Ended
	Mar. 31,			Mar. 31,
In thousands		2023			2022
Index
New recurring subscription sales	$	25,090		$	22,417
Subscription cancellations		(7,082	)		(5,920	)
Net new recurring subscription sales	$	18,008		$	16,497
Non-recurring sales	$	12,782		$	13,715
Total gross sales	$	37,872		$	36,132
Total Index net sales	$	30,790		$	30,212

Index Retention Rate		96.4	%		96.6	%

Analytics
New recurring subscription sales	$	13,674		$	14,069
Subscription cancellations		(9,183	)		(8,128	)
Net new recurring subscription sales	$	4,491		$	5,941
Non-recurring sales	$	1,370		$	3,489
Total gross sales	$	15,044		$	17,558
Total Analytics net sales	$	5,861		$	9,430

Analytics Retention Rate		94.0	%		94.4	%

ESG and Climate
New recurring subscription sales	$	12,486		$	19,142
Subscription cancellations		(2,635	)		(643	)
Net new recurring subscription sales	$	9,851		$	18,499
Non-recurring sales	$	1,219		$	1,308
Total gross sales	$	13,705		$	20,450
Total ESG and Climate net sales	$	11,070		$	19,807

ESG and Climate Retention Rate		96.1	%		98.7	%

All Other - Private Assets
New recurring subscription sales	$	5,143		$	5,559
Subscription cancellations		(2,856	)		(1,978	)
Net new recurring subscription sales	$	2,287		$	3,581
Non-recurring sales	$	213		$	152
Total gross sales	$	5,356		$	5,711
Total All Other - Private Assets net sales	$	2,500		$	3,733

All Other - Private Assets Retention Rate		92.1	%		94.1	%

Consolidated
New recurring subscription sales	$	56,393		$	61,187
Subscription cancellations		(21,756	)		(16,669	)
Net new recurring subscription sales	$	34,637		$	44,518
Non-recurring sales	$	15,584		$	18,664
Total gross sales	$	71,977		$	79,851
Total net sales	$	50,221		$	63,182

Total Retention Rate		95.2	%		95.9	%

^{(1) See "Notes Regarding the Use of Operating Metrics" for details regarding the definition of new recurring subscription sales, subscription cancellations, net new recurring subscription sales, non-recurring sales, total gross sales, total net sales and Retention Rate.}

Table 7: AUM in ETFs Linked to MSCI Equity Indexes (unaudited)(1)(2)

	Three Months Ended
	Mar. 31			June 30			Sep. 30			Dec. 31		Mar. 31
In billions		2022			2022			2022		2022		2023
Beginning Period AUM in ETFs linked to
MSCI equity indexes	$	1,451.6		$	1,389.3		$	1,189.5		$	1,081.2	$	1,222.9
Market Appreciation/(Depreciation)		(89.7	)		(207.3	)		(105.7	)		118.8		75.1
Cash Inflows		27.4			7.5			(2.6	)		22.9		7.4
Period-End AUM in ETFs linked to
MSCI equity indexes	$	1,389.3		$	1,189.5		$	1,081.2		$	1,222.9	$	1,305.4

Period Average AUM in ETFs linked to
MSCI equity indexes	$	1,392.5		$	1,285.4		$	1,208.9		$	1,182.1	$	1,287.5

Period-End Basis Point Fee(3)		2.51			2.52			2.52			2.54		2.53

^{(1) The historical values of the AUM in ETFs linked to our equity indexes as of the last day of the month and the monthly average balance can be found under the link "AUM in ETFs Linked to MSCI Equity Indexes" on our Investor Relations homepage at http://ir.msci.com. Information contained on our website is not incorporated by reference into this Press Release or any other report filed with the SEC. The AUM in ETFs also includes AUM in Exchange Traded Notes, the value of which is less than 1% of the AUM amounts presented.}
^{(2) The value of AUM in ETFs linked to MSCI equity indexes is calculated by multiplying the equity ETFs net asset value by the number of shares outstanding.}
^{(3) Based on period-end Run Rate for ETFs linked to MSCI equity indexes using period-end AUM.}

Table 8: Run Rate by Segment and Type (unaudited)(1)

	As of
	Mar. 31,		Mar. 31,		%
In thousands	2023		2022		Change
Index
Recurring subscriptions	$	795,621	$	711,113	11.9	%
Asset-based fees		534,491		576,234	(7.2	)%
Index Run Rate		1,330,112		1,287,347	3.3	%

Analytics Run Rate		621,611		588,447	5.6	%

ESG and Climate Run Rate		278,947		216,197	29.0	%

All Other - Private Assets Run Rate		148,440		137,532	7.9	%

Total Run Rate	$	2,379,110	$	2,229,523	6.7	%

Total recurring subscriptions	$	1,844,619	$	1,653,289	11.6	%
Total asset-based fees		534,491		576,234	(7.2	)%
Total Run Rate	$	2,379,110	$	2,229,523	6.7	%

^{(1) See "Notes Regarding the Use of Operating Metrics" for details regarding the definition of Run Rate.}

Table 9: Reconciliation of Net Income to Adjusted EBITDA (unaudited)

	Three Months Ended
	Mar. 31,		Mar. 31,
In thousands	2023		2022
Net income	$	238,728	$	228,423
Provision for income taxes		37,644		20,520
Other expense (income), net		38,230		40,035
Operating income		314,602		288,978
Amortization of intangible assets		24,667		21,720
Depreciation and amortization of property,
equipment and leasehold improvements		5,460		6,534
Acquisition-related integration and transaction costs(1)		—		1,312
Consolidated adjusted EBITDA	$	344,729	$	318,544

Index adjusted EBITDA	$	253,682	$	245,875
Analytics adjusted EBITDA		60,780		50,889
ESG and Climate adjusted EBITDA		17,876		12,092
All Other - Private Assets adjusted EBITDA		12,391		9,688
Consolidated adjusted EBITDA	$	344,729	$	318,544

^{(1) Incremental and non-recurring costs attributable to acquisitions directly related to the execution of the transaction and integration of the acquired business that have occurred no later than 12 months after the close of the transaction.}

Table 10: Reconciliation of Net Income and Diluted EPS to Adjusted Net Income and Adjusted EPS (unaudited)

	Three Months Ended
	Mar. 31,			Mar. 31,
In thousands, except per share data		2023			2022
Net income	$	238,728		$	228,423
Plus: Amortization of acquired intangible assets and
equity method investment basis difference		16,809			16,899
Plus: Acquisition-related integration and transaction costs(1)		—			1,385
Less: Gain from changes in ownership interest of investees		(447	)		—
Less: Income tax effect		(2,196	)		(1,507	)
Adjusted net income	$	252,894		$	245,200

Diluted EPS	$	2.97		$	2.78
Plus: Amortization of acquired intangible assets and
equity method investment basis difference		0.21			0.21
Plus: Acquisition-related integration and transaction costs(1)		—			0.02
Less: Gain from changes in ownership interest of investees		(0.01	)		—
Less: Income tax effect		(0.03	)		(0.03	)
Adjusted EPS	$	3.14		$	2.98

^{(1) Incremental and non-recurring costs attributable to acquisitions directly related to the execution of the transaction and integration of the acquired business that have occurred no later than 12 months after the close of the transaction.}

Table 11: Reconciliation of Operating Expenses to Adjusted EBITDA Expenses (unaudited)

	Three Months Ended				Full-Year
	Mar. 31,		Mar. 31,		2023
In thousands	2023		2022		Guidance(1)
Total operating expenses	$	277,616	$	270,967	$1,090,000 - $1,130,000
Amortization of intangible assets		24,667		21,720
Depreciation and amortization of property,
equipment and leasehold improvements		5,460		6,534	$125,000 - $135,000
Acquisition-related integration and transaction costs(2)		—		1,312
Consolidated adjusted EBITDA expenses	$	247,489	$	241,401	$965,000 - $995,000

Index adjusted EBITDA expenses	$	85,700	$	84,884
Analytics adjusted EBITDA expenses		86,290		88,908
ESG and Climate adjusted EBITDA expenses		49,182		39,937
All Other - Private Assets adjusted EBITDA expenses		26,317		27,672
Consolidated adjusted EBITDA expenses	$	247,489	$	241,401	$965,000 - $995,000

^{(1) We have not provided a full line-item reconciliation for total operating expenses to adjusted EBITDA expenses for this future period because we believe such a reconciliation would imply a degree of precision and certainty that could be confusing to investors and we are unable to reasonably predict certain items contained in the GAAP measure without unreasonable efforts. This is due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred and are out of the Company's control or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures. See "Forward-Looking Statements" above.}
^{(2) Incremental and non-recurring costs attributable to acquisitions directly related to the execution of the transaction and integration of the acquired business that have occurred no later than 12 months after the close of the transaction.}

Table 12: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (unaudited)

	Three Months Ended						Full-Year
	Mar. 31,			Mar. 31,			2023
In thousands		2023			2022		Guidance(1)
Net cash provided by operating activities	$	264,141		$	244,184		$1,145,000 - $1,195,000
Capital expenditures		(6,225	)		(1,254	)
Capitalized software development costs		(15,351	)		(14,084	)
Capex		(21,576	)		(15,338	)	($75,000 - $85,000)
Free cash flow	$	242,565		$	228,846		$1,060,000 - $1,120,000

^{(1) We have not provided a line-item reconciliation for free cash flow to net cash provided by operating activities for this future period because we believe such a reconciliation would imply a degree of precision and certainty that could be confusing to investors and we are unable to reasonably predict certain items contained in the GAAP measure without unreasonable efforts. This is due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred and are out of the Company's control or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures. See "Forward-Looking Statements" above.}

Table 13: First Quarter 2023 Reconciliation of Operating Revenue Growth to Organic Operating Revenue Growth (unaudited)

	Comparison of the Three Months Ended March 31, 2023 and 2022
	Total	Recurring Subscription	Asset-Based Fees	Non-Recurring Revenues
Index	Change Percentage	Change Percentage	Change Percentage	Change Percentage
Operating revenue growth	2.6 %	12.7 %	(8.2) %	(14.5) %
Impact of acquisitions and divestitures	— %	— %	— %	— %
Impact of foreign currency exchange rate fluctuations	0.3 %	0.4 %	0.1 %	— %
Organic operating revenue growth	2.9 %	13.1 %	(8.1) %	(14.5) %

	Total	Recurring Subscription	Asset-Based Fees	Non-Recurring Revenues
Analytics	Change Percentage	Change Percentage	Change Percentage	Change Percentage
Operating revenue growth	5.2 %	4.9 %	— %	28.5 %
Impact of acquisitions and divestitures	— %	— %	— %	— %
Impact of foreign currency exchange rate fluctuations	0.7 %	0.6 %	— %	2.8 %
Organic operating revenue growth	5.9 %	5.5 %	— %	31.3 %

	Total	Recurring Subscription	Asset-Based Fees	Non-Recurring Revenues
ESG and Climate	Change Percentage	Change Percentage	Change Percentage	Change Percentage
Operating revenue growth	28.9 %	30.0 %	— %	(9.0) %
Impact of acquisitions and divestitures	— %	— %	— %	— %
Impact of foreign currency exchange rate fluctuations	8.7 %	8.9 %	— %	2.4 %
Organic operating revenue growth	37.6 %	38.9 %	— %	(6.6) %

	Total	Recurring Subscription	Asset-Based Fees	Non-Recurring Revenues
All Other - Private Assets	Change Percentage	Change Percentage	Change Percentage	Change Percentage
Operating revenue growth	3.6 %	3.9 %	— %	(20.3) %
Impact of acquisitions and divestitures	— %	— %	— %	— %
Impact of foreign currency exchange rate fluctuations	4.4 %	4.4 %	— %	1.3 %
Organic operating revenue growth	8.0 %	8.3 %	— %	(19.0) %

	Total	Recurring Subscription	Asset-Based Fees	Non-Recurring Revenues
Consolidated	Change Percentage	Change Percentage	Change Percentage	Change Percentage
Operating revenue growth	5.8 %	11.4 %	(8.2) %	(8.5) %
Impact of acquisitions and divestitures	— %	— %	— %	— %
Impact of foreign currency exchange rate fluctuations	1.4 %	1.9 %	0.1 %	0.7 %
Organic operating revenue growth	7.2 %	13.3 %	(8.1) %	(7.8) %

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MSCI Reports Financial Results for First Quarter 2023