Why Is MSCI (MSCI) Down 1% Since Last Earnings Report?

A month has gone by since the last earnings report for MSCI (MSCI). Shares have lost about 1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is MSCI due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

MSCI Q2 Earnings Beat Estimates, Revenues Rise Y/Y

MSCI reported second-quarter 2026 adjusted earnings of $4.94 per share, up 18.5% year over year. The figure beat the Zacks Consensus Estimate by 0.82%.

Revenues increased 12.2% year over year to $867 million and surpassed the consensus mark by 0.90%. Growth reflected higher recurring subscription revenues and asset-based fees. The retention rate improved to 95.3%, while period-end AUM in ETFs linked to MSCI equity indexes reached $2.818 trillion.

Recurring subscription revenues rose 9% year over year to $613.4 million. Asset-based fees advanced 26.6% to $233.1 million, benefiting from higher AUM in ETFs and non-ETF indexed funds linked to MSCI indexes. Non-recurring revenues declined 20.5% to $20.5 million.

MSCI’s Top-Line Details

In second-quarter 2026, Index revenues of $511 million increased 17.5% year over year. Recurring subscriptions and asset-based fees rose 11.6% and 26.6% on a year-over-year basis, respectively. Non-recurring revenues slipped 1.3% year over year. Organically, Index’s operating revenue growth was 17.5%.

The segment’s adjusted EBITDA rose 20.5% to $397.8 million, and its margin expanded to 77.8% from 75.9%. Index run rate reached $2.027 billion, up 17.4%, supported by market-cap-weighted and custom index products across client segments and regions.

Analytics’ operating revenues of $189.4 million increased 6.6% year over year, aided by growth in Equity Analytics and Multi-Asset Class products. Recurring subscription revenues jumped 9.5% and non-recurring revenues decreased 55.7% on a year-over-year basis. Organically, Analytics’ operating revenue growth was 7%. However, adjusted EBITDA fell 5% to $88 million as expenses grew faster than revenues. The segment’s margin contracted to 46.5% from 52.1%.

Sustainability and Climate revenues rose 3.4% to $91.9 million, while adjusted EBITDA increased 12.3%. While recurring subscriptions increased 4% year over year, non-recurring revenues declined 26.3% on a year-over-year basis. Organically, Sustainability and Climate operating revenue growth was 3%. The segment’s adjusted EBITDA rose 12.3% to $35.6 million, and its margin expanded to 38.7% from 35.6%.

All Other – Private Assets operating revenues, which primarily comprise the Real Assets operating segment and the Private Capital Solutions, were $74.7 million, up 4.9% year over year. Organic operating revenue growth for All Other – Private Assets was 4.4%. However, adjusted EBITDA fell 14.1% to $17.1 million. The segment’s margin contracted to 22.9% from 28%.

MSCI's Sales Trends Highlight Index Strength

New recurring subscription sales increased 1.9% year over year to $76.6 million. Subscription cancellations declined 7.3%, helping net new recurring subscription sales grow 8.4% to $47.5 million. Total net sales decreased 1.4% because of weaker non-recurring activity.

Index net new recurring subscription sales surged 40.5% to $28.1 million. All Other – Private Assets also delivered a 57.5% increase. These gains were partly offset by declines in Analytics and Sustainability and Climate, where net new recurring subscription sales fell 24.3% and 62%, respectively.

MSCI’s Q2 Operating Details

Total operating expenses increased 9.2% year over year to $379.5 million. The rise reflected higher information technology, market data, professional fees, occupancy and compensation costs. Expenses also included amounts related to the Compass, Vantager and PM Insights acquisitions.

Operating income grew 14.6% to $487.5 million. The operating margin improved 120 basis points to 56.2%, while adjusted EBITDA advanced 13.5% to $538.5 million. The adjusted EBITDA margin widened 70 basis points to 62.1%, reflecting revenue growth that outpaced adjusted costs.

MSCI’s Balance Sheet & Cash Flow

As of June 30, 2026, cash and cash equivalents stood at $356.4 million, while total principal debt was $6.4 billion. The debt-to-adjusted EBITDA ratio was 3.1 times.

Net cash provided by operating activities increased 10.3% year over year to $370.8 million. Free cash flow rose 8.2% to $326.4 million.

MSCI repurchased $145 million of shares during the quarter and paid about $149.2 million in dividends.

MSCI Updates 2026 Guidance

MSCI raised its full-year operating expense outlook to $1.535-$1.575 billion from $1.490-$1.530 billion. Adjusted EBITDA expense guidance increased to $1.340-$1.370 billion from $1.305-$1.335 billion, reflecting acquisitions, stronger index-linked AUM and additional growth investments.

The company now expects net cash provided by operating activities of $1.655-$1.705 billion and free cash flow of $1.485-$1.545 billion. Interest expense is projected to be between $282 million and $286 million, while capital expenditures are anticipated to be in the range of $160-$170 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

At this time, MSCI has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock has a grade of F on the value side, putting it in the lowest quintile for value investors.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, MSCI has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

MSCI is part of the Zacks Financial - Investment Management industry. Over the past month, Cohen & Steers Inc (CNS), a stock from the same industry, has gained 0.9%. The company reported its results for the quarter ended June 2026 more than a month ago.

Cohen & Steers reported revenues of $152.73 million in the last reported quarter, representing a year-over-year change of +12.2%. EPS of $0.85 for the same period compares with $0.73 a year ago.

For the current quarter, Cohen & Steers is expected to post earnings of $0.89 per share, indicating a change of +9.9% from the year-ago quarter. The Zacks Consensus Estimate has changed 0% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Cohen & Steers. Also, the stock has a VGM Score of F.

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This article originally published on Zacks Investment Research (zacks.com).

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