Good day and Welcome to the MSCI third quarter 2025 earnings conference call. This press release, along with an earnings presentation and brief quarterly update, are available on our website msci.com under the Investor Relations tab. You'll find a reconciliation of our non-GAAP measures to the equivalent GAAP measures in the appendix of the earnings presentation. Important information regarding our use of operating metrics such as run rate and retention rate are available in the earnings presentation.
We had organic revenue growth of 9%, adjusted EBITDA growth of 10%, and adjusted earnings per share growth of over 15%. Our third quarter operating metrics included total run rate growth of over 10%, which includes asset-based fee run rate growth of 17%. Our asset-based fee performance was driven by record AUM levels in both ETF and non-ETF products linked to MSCI indices. MSCI achieved recurrent net new subscription sales growth of 27% in Index, including 43% growth in the Americas.
This helped our ETF run rate hit a new record high of nearly $800 million. The ongoing adoption of MSCI indices showcases the investment community's confidence in using our indices as a foundational element of their portfolios and to help them attract capital. In Analytics, MSCI delivered recurrent net new sales growth of 16%, driven by a strong adoption of our risk tools and equity models by multi-strategy hedge funds. Our growth in Analytics increasingly supports our growth in private assets and vice versa.
What went well
- Index recurring net new subscription sales grew 27% (up 43% in the Americas), the best Q3 ever for index recurring sales; total AUM linked to MSCI indices reached $6.4 trillion with ETF run rate hitting a record ~$800 million (four ETFs now over $100B each)
- Organic revenue grew 9%, adjusted EBITDA 10%, and adjusted EPS over 15%; ABF run rate grew 17% on record AUM in both ETF and non-ETF products
- Highest Q3 ever for hedge fund recurring net new sales (up 21%), including a seven-figure renewal with one of the world's largest hedge funds; analytics recurring net new sales grew 16% with 29% growth in equity solutions
- Rapid private-credit and private-asset innovation: launched a Private Credit Factor Model (1,500+ funds), the MSCI PACS classification standard, credit assessments via the Moody's partnership, and 60-80 private credit indices
- Strong capital returns and conviction: $1.25 billion of buybacks since quarter start ($1.5B YTD) plus a new $3 billion repurchase authorization; asset manager recurring net new sales grew 11% (best Q3 ever in index for that segment)
What went wrong
- Private assets (PCS) run rate growth was only about 5.5%, described as soft; management said PCS had been softening and needs to turn the corner
- Sustainability & climate pressures continue with management guiding those dynamics to persist in the near term; reportable-segment subscription run rate growth of 8% (sustainability only ~6%)
- EMEA net new sales declined with continued sluggishness among asset managers who have been slower to rebound than the Americas
- Asset manager segment subscription run rate growth was just over 6%, still challenged; management characterized the 11% net-new improvement as encouraging but 'not a trend'
- Non-ETF passive and fixed income run rate showed lumpiness (true-ups/true-downs and fee adjustments); the quarter followed a Q2 management called the bottom ('darkest before dawn'), implying a still-early, non-linear recovery
Reported 2025-10-28 · figures from the MSCI Inc. Q3 2025 earnings call.