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What changed in MSCI Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of MSCI Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+516 added−543 removedSource: 10-K (2025-02-07) vs 10-K (2024-02-09)

Top changes in MSCI Inc.'s 2024 10-K

516 paragraphs added · 543 removed · 419 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

282 edited+69 added−94 removed111 unchanged
Biggest changeAs a result, the investment process is transforming, which is reflected in several trends we have observed, including: • Changing client operating models and business strategies, driven in part by fee compression, changing demographics, the regulatory environment and shifting economic outlooks; • Use of global, multi-asset-class and other complex investment strategies, including strategies incorporating private asset investments and factor objectives, as investors seek specific and unique outcomes; • The need for high-quality data, insightful models and timely research during times of volatility and high uncertainty; • Integration of ESG and climate considerations into investment processes, reporting and products, as investors focus on companies with strong sustainability practices as an indicator of long-term resilience; • Growth of indexed investing through indexed investment products such as ETFs, mutual/UCITS funds and annuities, as well as indexed derivatives such as futures, options, structured products and over-the-counter swaps, and other vehicles that seek to track an index, as investors seek lower-cost investment strategies or seek to incorporate complex investment strategies across geographies, sectors, factors, trends and other considerations; • Allocation of capital to private assets and desire for greater transparency into the performance of private assets; • Interest in high-quality data and greater disclosure, leading to increased demand for streamlined reporting solutions; • Demand for data and tools that clients can integrate to support customized portfolio construction and highly specialized preferences and objectives; and • Use of advanced technologies to enhance investment analytics, collect and evaluate data, improve client experiences, streamline operations, create efficiencies and gain competitive advantages.
Biggest changeAt acquisition, we align an acquired company’s client count to our methodology. 2 Table of Content s • Use of global, multi-asset-class and other complex strategies, including incorporating private asset and factor exposure objectives, as investors seek specific and unique outcomes; • The need for high-quality data, insightful models and timely research, particularly during times of volatility and uncertainty; • Integration of sustainability and climate considerations into investment processes, reporting and products; • Growth of indexed investing through products such as ETFs, mutual funds, annuities and Undertakings for Collective Investment in Transferable Securities (“UCITS funds”), as well as indexed derivatives such as futures, options, structured products and over-the-counter swaps; • Allocation of capital to private assets and desire for greater transparency into the drivers of private asset performance; • Growing disclosure requirements that necessitate high-quality data and streamlined reporting solutions; • Demand for data and tools that support customized portfolio construction and specialized preferences and objectives; and • Use of advanced technologies, including AI, to enhance products, improve analytics, collect and evaluate data, improve client experiences, streamline operations and gain competitive advantages.
Similarly, some of the large global investment organizations, such as custodians, have developed internal risk management and performance analytics tools that they offer to their clients. ESG and Climate. Our ESG and Climate offerings compete with a growing number of companies that issue ESG data, ratings or research.
Similarly, some of the large global investment organizations, such as custodians, have developed internal risk management and performance analytics tools that they offer to their clients. ESG and Climate. Our ESG and Climate offerings compete with a growing number of companies that issue ESG and climate data, ratings or research.
Pettit has served as the Company’s President since October 2017, the Company’s Chief Operating Officer since January 2020 and a Director on the Company’s Board since January 2023. As President and Chief Operating Officer, Mr. Pettit oversees the Company's business functions, including client coverage, marketing, product management, research and product development, technology and operations.
Pettit has served as the Company’s President since October 2017, the Company’s Chief Operating Officer since January 2020 and a Director on the Company’s Board since January 2023. As President and Chief Operating Officer, Mr. Pettit oversees the Company's business functions, including client coverage, marketing, product management, research and development, technology and operations.
If Vendor Products include errors, design defects, are delayed, become incompatible with future versions of our products, are unavailable on acceptable terms or are not available at all, we may not be able to deliver our products and services.
If Vendor Products include errors or design defects, are delayed, become incompatible with future versions of our products, are unavailable on acceptable terms or are not available at all, we may not be able to deliver our products and services.
In addition, we believe that MSCI’s corporate culture and reputation positively contribute to our ability to attract and retain talent, and that reputational damage could negatively affect our hiring, employee engagement and retention. Damage to our reputation, brand or credibility could have a material adverse effect on MSCI’s business, financial condition or results of operations.
In addition, we believe that MSCI’s corporate culture and reputation positively contribute to our ability to attract and retain talent, and that reputational damage could negatively affect our hiring, employee engagement and retention. Damage to our reputation, brand or credibility could have a material adverse effect on our business, financial condition or results of operations.
Additionally, social and health conditions, such as public health epidemics impacting the global economy and our employees, may have a material adverse effect on our business, financial condition or results of operations.
Additionally, social and health conditions, such as public health epidemics impacting the global economy or our employees, may have a material adverse effect on our business, financial condition or results of operations.
If we are unable to comply with the restrictions and covenants in our debt agreements, there could be a default that, in some cases, if continuing, could result in the accelerated payment of our debt obligations or the termination of borrowing commitments on the part of the lenders under our revolving credit facility (the “Revolving Credit Facility) under the Second Amended and Restated Credit Agreement (the “Credit Agreement”), dated as of January 26, 2024, by and among the Company, JPMorgan Chase Bank, N.A., as administrative agent and the lenders from time to time party thereto, as amended, supplemented, modified or amended and restated from time to time.
If we are unable to comply with the restrictions and covenants in our debt agreements, there could be a default that, in some cases, if continuing, could result in the accelerated payment of our debt obligations or the termination of borrowing commitments on the part of the lenders under our revolving credit facility (the “Revolving Credit Facility”) under the Second Amended and Restated Credit Agreement (the “Credit Agreement”), dated as of January 26, 2024, by and among the Company, JPMorgan Chase Bank, N.A., as administrative agent and the lenders from time to time party thereto, as amended, supplemented, modified or amended and restated from time to time.
If undetected errors exist in our products or services, or if our products or services fail to perform properly due to defects, malfunctions or similar problems, it could result in harm to our brand or reputation, significantly increased costs, lost sales and revenues, delays in commercial release, third-party claims, contractual disputes, negative publicity, delays in or loss of market acceptance of our products or services, license terminations or renegotiations or unexpected expenses and diversion of resources to remedy or mitigate such errors, defects or malfunctions.
If undetected errors exist in our products or services, or if our products or services fail to perform properly due to defects, malfunctions or similar problems, it could result in harm to our brand or reputation, increased costs, lost sales and revenues, delays in commercial release, third-party claims, contractual disputes, negative publicity, delays in or loss of market acceptance of our products or services, license terminations or renegotiations or unexpected expenses and diversion of resources to remedy or mitigate such errors, defects or malfunctions.
We differentiate cash bonus payouts based on actual results against goals and for managers, how effectively they demonstrate behaviors consistent with our values and culture. Senior employees and select other employees are eligible to participate in the MSCI Long-Term Incentive Program with awards of MSCI common stock that vest over a multi-year period.
We differentiate cash bonus payouts based on actual results against goals and for managers, how effectively they demonstrate behaviors consistent with our values and culture. Senior employees and select other employees are eligible to participate in the MSCI Long-Term Incentive Program (“LTIP”) with awards of MSCI common stock that vest over a multi-year period.
There can be no assurance that there will not be material adverse effects relating to these types of incidents in the future, in particular as these incidents have generally become increasingly frequent, sophisticated, difficult to detect and difficult to successfully defend against and may see their frequency increased, and effectiveness enhanced, by the use of AI.
There can be no assurance that there will not be material adverse effects relating to these types of incidents in the future, in particular as these types of incidents have generally become increasingly frequent, sophisticated, difficult to detect and difficult to successfully defend against, and we may see their frequency increased, and effectiveness enhanced, by the use of AI.
Our past and future acquisitions, strategic partnerships and investments may subject us to unanticipated risks or liabilities, including the potential to disrupt our operations. Additionally, strategic partnerships may increase our reliance on third parties, which may result in future disruptions if those partnerships are unsuccessful or discontinued or the content or level of support provided by strategic partners is diminished.
Our past and future acquisitions, strategic partnerships and investments may subject us to unanticipated risks or liabilities, including the potential to disrupt our operations, or increase our reliance on third parties, which may result in future disruptions if those partnerships are unsuccessful or discontinued or the content or level of support provided by strategic partners is diminished.
Competition for these employees is intense, and employee turnover may impact our objectives and place strain on our human resources teams. We may not be able to attract these employees or to develop and retain similar highly qualified personnel in the future. Rising compensation expenses could also adversely affect our ability to attract and retain high-quality employees.
Competition for these employees is intense, and turnover may impact our objectives and place strain on our human resources teams. We may not be able to attract these employees or to develop and retain similar highly qualified personnel in the future. Rising compensation expenses could also adversely affect our ability to attract and retain high-quality employees.
In addition, we believe that when we change the composition of our indexes or if we expect to change the methodologies that govern our indexes, in some cases the changes can have an indirect effect on the prices of constituent securities and on certain indexed investment products as a result of trading activity related to tracking our indexes.
In addition, we believe that when we change the composition of our indexes or if we expect to change the methodologies that govern our indexes, in some cases, those changes can have an indirect effect on the prices of constituent securities and on certain indexed investment products as a result of trading activity related to tracking our indexes.
Risk Factors You should carefully consider the following risks and all of the other information set forth in this Annual Report on Form 10-K. If any of the following risks actually occurs, our business, financial condition or results of operations could be materially and adversely affected.
Risk Factors You should carefully consider the following risks and all of the other information set forth in this Annual Report on Form 10-K. If any of the following risks occurs, our business, financial condition or results of operations could be materially and adversely affected.
Any such claims brought against us, even if the outcome were to be ultimately favorable to us, would require attention of our management, personnel, financial and other resources and could have a negative impact on our reputation or pose a significant disruption to our normal business operations.
Any such claims brought against us, even if the outcome were to be ultimately favorable to us, would require attention of our management, personnel, financial and other resources and could have a negative impact on our reputation or pose a disruption to our normal business operations.
These Index products are designed to help institutional investors more effectively benchmark ESG investment performance, issue indexed investment products, as well as manage, measure and report on ESG mandates. For a description of regulation applicable to MSCI ESG Research LLC, see “—Government Regulation” below.
These Index products are designed to help institutional investors more effectively benchmark ESG investment performance, issue indexed investment products, as well as manage, measure and report on ESG mandates. For a description of regulation applicable to MSCI ESG Research LLC, see “—Regulation” below.
Cyber-attacks, vulnerabilities in our suppliers’ software, systems or networks, failure of our suppliers’ safeguards, policies or procedures and other incidents related to our suppliers’ systems and networks may cause material interruptions or malfunctions in our or such suppliers’ websites, applications or data processing, or may compromise the confidentiality and integrity of affected information.
Cyber-attacks, vulnerabilities in our suppliers’ software, systems or networks, failure of our suppliers’ safeguards, policies or procedures and other incidents related to our suppliers’ systems and networks may cause material interruptions or malfunctions in our or such suppliers’ websites, applications or data processing and delivery, or may compromise the confidentiality and integrity of affected information.
The cost of establishing and maintaining these offices, including costs related to information technology infrastructure, as well as the costs of attracting, training and retaining employees in these locations may be higher, or may increase at a faster rate, than we anticipate.
The cost of establishing and maintaining these offices, including costs related to information technology, as well as the costs of attracting, training and retaining employees in these locations may be higher, or may increase at a faster rate, than we anticipate.
Further, laws, rules, regulations and orders affecting users of our indexes can have an indirect impact on our indexes, including their construction and composition, such as sanctions that prohibit users of our indexes from investing or transacting in securities included in our indexes. • ESG Ratings .
Further, laws, rules or regulations affecting users of our indexes, such as sanctions that prohibit users of our indexes from investing or transacting in securities included in our indexes, can have an indirect impact on our indexes, including their construction and composition. • ESG Ratings .
Our business could be materially adversely affected if we are unable to timely or effectively replace the data or functionality provided by Vendor Products that become unavailable or fail to operate effectively for any reason.
Our business could be materially adversely affected if we are unable to timely or effectively replace the data or functionality provided by Vendor Products that may become unavailable or fail to operate effectively for any reason.
Strategy and Growth Risks Our business may be affected by changes in economic conditions and the global capital markets, including resulting from geopolitical events, adverse equity market conditions, volatility in the financial markets and evolving investment trends.
Strategy and Growth Risks Our business may be affected by changes in economic conditions and the global capital markets, including those resulting from geopolitical events, adverse equity market conditions, volatility in the financial markets and evolving investment trends.
Any failure to effectively manage expansion or to effectively manage the business globally could damage our brand and reputation, result in increased costs and litigation and have a material adverse effect on our business, financial condition or results of operations.
Any failure to effectively manage expansion or to effectively manage our business globally could damage our brand and reputation, result in increased costs and litigation and have a material adverse effect on our business, financial condition or results of operations.
We and our vendors are subject to security risks, including cyber-attacks and other security incidents, such as phishing scams or other social engineering attacks, hacking, tampering, intrusions, viruses, malware (including ransomware) and denial-of-service attacks.
We and our vendors and service providers are subject to security risks, including cyber-attacks and other security incidents, such as phishing scams or other social engineering attacks, hacking, tampering, intrusions, viruses, malware (including ransomware) and denial-of-service attacks.
As such, to the extent that our clients become subject to certain laws, rules or regulations, we may incur higher costs in connection with modifying our products or services.
As such, to the extent our clients become subject to certain laws, rules or regulations, we may incur higher costs in connection with modifying our products or services.
Cyber-attacks, security incidents or third-party reports of perceived security vulnerability to our systems or networks, even if no intrusion has occurred, could damage our brand and reputation, result in litigation, regulatory actions, investigations, sanctions or other penalties, lead to loss of client confidence, which would harm our ability to retain clients and gain new ones, and lead to financial losses and reputational damage.
Cyber-attacks, security incidents or third-party reports of perceived security vulnerability to our systems or networks, even if no intrusion has occurred, could damage our brand and reputation, result in litigation, regulatory actions, investigations, sanctions or other penalties, lead to loss of client confidence, which would harm our ability to retain clients and gain new clients, and result in financial losses.
For the year ende d December 31, 2023, 11.4% of our revenues were attributable to our ESG and Climate segment. All Other – Private Assets Our private assets offerings include extensive data and analytics for private assets, enabling investors to evaluate fundamental information, measure and compare performance, understand exposures, manage risk and conduct robust analysis.
For the year ende d December 31, 2024, 11.4% of our revenues were attributable to our ESG and Climate segment. All Other – Private Assets Our private assets offerings include extensive data and analytics for private assets, enabling investors to evaluate fundamental information, measure and compare performance, understand exposures, manage risk and conduct robust analysis.
Information contained on our website is not deemed part of or incorporated by reference into this Annual Report on Form 10-K or any other report filed with the SEC. Human Capital Management MSCI is committed to creating a performance culture with a high degree of employee engagement.
Information contained on our website is not deemed part of or incorporated by reference into this Annual Report on Form 10-K or any other report filed with the SEC. Human Capital Management MSCI is committed to creating a performance culture and meritocracy with a high degree of employee engagement.
Our tools and solutions help investors define their investment universe; inform and analyze their asset allocation and portfolio construction decisions; measure and manage portfolio performance and risk; implement sustainable, climate-focused and other investment strategies; conduct performance attribution; construct and manage exchange traded funds (“ETFs”) and other indexed financial products; and facilitate reporting to stakeholders.
Our tools and solutions help investors define their investment universe; inform and analyze their asset allocation and portfolio construction decisions; measure and manage portfolio performance and risk; implement sustainability and climate-focused investment strategies; conduct performance attribution; construct and manage exchange-traded funds (“ETFs”) and other indexed financial products; and facilitate reporting to stakeholders.
If we do not have sufficient rights to use the data or other material or content that the AI solutions utilize or generate, we may incur liability through the violation of applicable laws and regulations, third-party intellectual property, privacy or other rights, or contracts to which we are a party.
If we do not have sufficient rights to use the data or other material or content that AI technologies utilize or generate, we may incur liability through the violation of applicable laws and regulations, third-party intellectual property, privacy or other rights or contracts to which we are a party.
The majority of our employees are located in offices outside of the U.S., and a number of those employees are located in emerging market locations.
In addition, the majority of our employees are located in offices outside of the U.S., and a number of those employees are located in emerging market locations.
In addition, the duration or outcome of such claims and lawsuits is difficult to predict, which could further exacerbate the adverse effect they may have on our business, financial condition or results of operations. MSCI is exposed to potential reputational and credibility concerns.
In addition, the duration or outcome of such claims and lawsuits is difficult to predict, which could further exacerbate the adverse effect they may have on our business, financial condition or results of operations. MSCI is exposed to potential reputational and credibility concerns, which could have a material adverse effect on our business, financial condition or results of operations.
In the ordinary course of our global business, there are many intercompany transactions and calculations where the ultimate tax determination is uncertain, and tax authorities of the jurisdictions in which we operate may challenge our methodologies. Changes in domestic and international tax laws could negatively impact our overall effective tax rate.
In the ordinary course of our global business, there are many intercompany transactions and calculations where the ultimate tax determination is uncertain, and tax authorities of the jurisdictions in which we operate may challenge our methodologies. Changes in tax laws could negatively impact our overall effective tax rate.
We depend heavily on the capacity, reliability and security of our information technology systems, networks and platforms and their components, including our data centers, cloud providers and other vendors and service providers, production and delivery systems as well as the Internet, to create and deliver our products and service our clients.
We depend heavily on the capacity, reliability and security of our information technology systems, networks and platforms and their components, including our data centers, cloud providers and other third-party vendors and service providers, production and delivery systems as well as the internet, to create and deliver our products and service our clients.
Clients Our clients comprise a wide spectrum of the global investment industry and include the following key client types: • Asset owners (including pension funds, endowments, foundations, central banks, sovereign wealth funds, family offices and insurance companies) • Asset managers (including managers of institutional funds and accounts, mutual funds, hedge funds, ETFs, insurance products, private banking products and real estate investment trusts) • Financial intermediaries (including banks, broker-dealers, exchanges, custodians, trust companies, fund administrators and investment consultants) • Wealth managers (including large wealth management organizations, robo-advisors and self-directed brokerages) • Real Estate Professionals (including real estate brokers, agents, developers, lenders and appraisers) • Corporates (including public and private companies and their advisors) As of December 31, 2023 we served approximately 7,000 clients 1 in more than 95 countries.
Clients Our clients comprise a wide spectrum of the global investment industry and include the following key client types: • Asset owners, including pension funds, endowments, foundations, central banks, sovereign wealth funds, family offices and insurance companies • Asset managers, including managers of institutional funds and accounts, mutual funds, hedge funds, ETFs, insurance products, private banking products and real estate investment trusts • Financial intermediaries, including banks, broker-dealers, exchanges, custodians, trust companies, fund administrators and investment consultants • Wealth managers, including large wealth management organizations, robo-advisors and self-directed brokerages • Real Estate Professionals, including brokers, agents, developers, lenders and appraisers • Corporates, including public and private companies and their advisors As of December 31, 2024, we served approximately 7,100 clients 1 in more than 100 countries.
In addition, our MSCI ESG indexes and our Climate Lab Enterprise analytics product are constructed using data from our ESG and Climate operating segment. Through our relationships with the world’s largest investment institutions, we monitor investment trends and their drivers globally and support instrument valuation, risk modeling, portfolio construction, portfolio attribution, asset allocation and value-at-risk simulation.
In addition, our MSCI ESG and Climate indexes and our climate reporting analytics product are constructed using data from our ESG and Climate operating segment. Through our relationships with the world’s largest investment institutions, we monitor investment trends and their drivers globally and support instrument valuation, risk modeling, portfolio construction, portfolio attribution, asset allocation and value-at-risk simulation.
ESG and Climate The ESG and Climate segment 3 offers products and services that help institutional investors understand how sustainability considerations can impact the long-term risk and return of their portfolio and individual security-level investments.
ESG and Climate The ESG and Climate segment 2 offers products and services that help institutional investors understand how sustainability considerations can impact the long-term risk and return of their portfolio and individual security-level investments.
Our clients use our products for a variety of purposes, including benchmarking, performance attribution, portfolio construction and risk management, and to support investment strategies including ESG, climate, factor, thematic, private asset and MAC investing.
Our clients use our products for a variety of purposes, including benchmarking, performance attribution, portfolio construction and risk management, and to support investment strategies including sustainability, climate, factor, thematic, private asset and MAC investing.
For example, more broker-dealers, data suppliers, credit rating agencies or other market participants or vendors could begin developing their own content such as proprietary risk analytics, ESG and climate data or indexes.
For example, more broker-dealers, data suppliers, credit rating agencies or other market participants or vendors could begin developing their own content such as proprietary risk analytics, sustainability and climate data or indexes.
As of December 31, 2023, we calculated indexes that covered more than 80 developed, emerging, frontier and standalone equity markets, as well as various regional indexes built from the component indexes. • ESG and Climate Indexes.
As of December 31, 2024, we calculated indexes that covered more than 80 developed, emerging, frontier and standalone equity markets, as well as various regional indexes built from the component indexes. • ESG and Climate Indexes.
Our operations rely on the secure collection, retrieval, storage, transmission and other processing of confidential, sensitive, proprietary and other types of data and information that is managed internally and with third-party vendors.
Our operations rely on the secure collection, retrieval, storage, transmission and other processing of confidential, sensitive, proprietary and other types of data and information that is managed internally and with third-party vendors and service providers.
In addition, our debt covenants contain certain obligations that are triggered by a change in our credit rating, including obligations to make repurchase offers to the noteholders of our Senior Notes if we experience one of the specified kinds of changes in control and related lowering of our credit ratings, as detailed in the indentures governing our Senior Notes.
In addition, our debt covenants contain certain obligations that are triggered by a change in our credit rating, including obligations to make repurchase offers to the noteholders of our senior unsecured notes (the “Senior Notes”) if we experience one of the specified kinds of changes in control and related lowering of our credit ratings, as detailed in the indentures governing our Senior Notes.
These institutional investors are increasingly the subject of additional disclosure requirements, as well as media and political scrutiny, that are focused on preventing asset managers from “greenwashing” (i.e., holding out an investment product as having “green” or “sustainable” characteristics when this is not, in fact, the case).
These institutional investors are increasingly the subject of additional disclosure requirements, as well as media and political scrutiny, that are focused on preventing “greenwashing” (i.e., holding out an investment product as having “green” or “sustainable” characteristics when this is not, in fact, the case).
Recently, we have taken numerous steps to support our employees, including transitioning to a hybrid work environment for most employees, enhancing our sick leave policies, engaging with external health and ergonomics consultants and increasing the use of technology to allow our employees to remain fully engaged, productive and well.
We have taken numerous steps to support our employees, including supporting a hybrid work environment for most employees, enhancing our sick leave policies, engaging with external health and ergonomics consultants and increasing the use of technology to allow our employees to remain fully engaged, productive and well.
These risks include, among others, the following key risks: • Our dependence on third parties to supply data, applications and services for our products and services and on certain vendors to distribute our products; • Undetected errors, defects, malfunctions or similar problems in our products leading to increased costs or liability; • Our exposure to potential reputational and credibility concerns; • The possibility that our clients seek to negotiate lower asset-based fees or cease using our indexes as the basis for indexed investment products; • Cancellations or reductions by any of our largest clients or reduced demand for our products or services; • The impact of failures, disruptions, instability or vulnerabilities in our information technology systems, networks or applications; • Our inability to ensure and protect the confidentiality of data; • Our exposure to security incidents including cyber-attacks or failures of our security plans, systems, networks or procedures; • Unanticipated failures, interruptions or delays in the performance or delivery of our products as a result of the adoption of new technologies; • Security vulnerabilities resulting from our use of open source code; • The impact of changes in economic conditions and the global capital markets, including resulting from geopolitical events, adverse equity market conditions, volatility in the financial markets and evolving investment trends; • The effects on us from competition and financial and budgetary pressures affecting our clients; • Our need to successfully develop new and enhanced products and services in order to remain competitive; • The impact of our global operations and any future expansion on management and our exposure to additional issues from our increased global footprint; • Failure to comply with laws, rules or regulations; changes to current laws, rules or regulations; or the introduction of new laws, rules or regulations relevant to our business; • Our inability to protect our intellectual property rights; • Failure to attract, develop or retain qualified personnel; • The impact of foreign currency exchange rate fluctuation; • The impact of our indebtedness on our financial flexibility; • The impact of changes in our credit ratings; and • Our exposure to tax liabilities in various jurisdictions.
These risks include, among others, the following key risks: • Our dependence on third parties to supply us with data, applications and services and to distribute our products; • Undetected errors, defects, malfunctions or similar problems leading to increased costs or liability; • Our exposure to potential reputational and credibility concerns; • The possibility that our clients seek to negotiate lower asset-based fees or cease using our indexes as the basis for indexed investment products; • Cancellations or reductions by our clients or reduced demand for our products or services; • The impact of failures, disruptions, instability or vulnerabilities in our information technology systems, networks or applications; • Our inability to ensure and protect the confidentiality of data; • Our exposure to security incidents including cyber-attacks or failures of our plans, systems, networks or procedures; • Unanticipated failures, interruptions or delays in the performance or delivery of our products as a result of the adoption of new technologies; • Security vulnerabilities resulting from our use of open source code; • Issues related to the use and development of AI resulting in reputational harm, competitive harm, regulatory scrutiny or legal liability; • The impact of changes in economic conditions and the global capital markets, including those resulting from geopolitical events, adverse equity market conditions, volatility in the financial markets and evolving investment trends; • The effects on us from competition and financial and budgetary pressures affecting our clients; • Our need to successfully develop new and enhanced products and services in order to remain competitive; • The impact of our global operations and any expansion and our exposure to additional issues from our increased global footprint; • Failure to comply with laws, rules or regulations; changes to current laws, rules or regulations; or the introduction of new laws, rules or regulations relevant to our business; • Inability to protect our intellectual property rights; • Failure to attract, develop or retain qualified personnel; • The impact of foreign currency exchange rate fluctuation; • The impact of our indebtedness on our financial flexibility; • The impact of changes in our credit ratings; and • Our exposure to tax liabilities in various jurisdictions.
It is possible that in addition to MSCI ESG Research LLC, other entities in our corporate family could become required to register as an investment adviser under the Advisers Act or comply with similar laws or requirements in states or foreign jurisdictions.
It is possible that in addition to MSCI ESG Research LLC, other entities in our corporate family could become required to register as an investment adviser under the Advisers Act or comply with similar laws or requirements in states or foreign jurisdictions. MSCI ESG Ratings and Research Pvt.
Prior to joining MSCI in 2012, Mr. Wiechmann was an investment banker at Morgan Stanley where he executed M&A and capital markets transactions for financial technology and specialty finance companies, including advising MSCI on its IPO and various acquisitions. Mr. Wiechmann holds Bachelor of Arts degrees in Physics and Economics from Hamilton College. 13 Table of Contents Robert J.
Prior to joining MSCI in 2012, Mr. Wiechmann was an investment banker at Morgan Stanley where he executed M&A and capital markets transactions for financial technology and specialty finance companies, including advising MSCI on its IPO and various acquisitions. Mr. Wiechmann holds Bachelor of Arts degrees in Physics and Economics from Hamilton College. Robert J. Gutowski Mr.
For example, our ESG and Climate offerings compete with those from a range of competitors, including Sustainalytics Holding B.V. (a part of Morningstar, Inc.), Institutional Shareholder Services Inc. (majority owned by Deutsche Börse AG), Trucost (an S&P Global Inc. business), Refinitiv (a London Stock Exchange Group business), Bloomberg and Moody’s Corporation. All Other – Private Assets.
For example, our ESG and Climate offerings compete with those from a range of competitors, including Sustainalytics Holding B.V. (a part of Morningstar, Inc.), Institutional Shareholder Services Inc. (majority owned by Deutsche Börse AG), S&P Global Inc., Refinitiv (a London Stock Exchange Group business) and Bloomberg. All Other – Private Assets.
We continue to develop new and improved tools and capabilities in response to the evolving needs of our clients. In addition, our analytics capabilities are helping to fuel growth in key areas across our business, such as our factor indexes and many of our climate risk and reporting offerings.
We continue to develop new and improved tools and capabilities in response to the evolving needs of our clients. In addition, our analytics capabilities are helping fuel growth in key areas across our business, such as our factor indexes and climate risk reporting solutions.
To the extent that any of MSCI’s operating segments or product lines or MSCI as a whole suffers a reputational or other loss in credibility, it could have a material adverse impact on MSCI’s business, financial condition or results of operations.
To the extent that any of MSCI’s operating segments, product lines or MSCI as a whole suffers a reputational or other loss in credibility, it could have a material adverse effect on our business, financial condition or results of operations.
In the U.S., the SEC has sought public comment on the role of certain third-party information providers to the asset management industry, including index providers and model providers, and whether, under particular facts and circumstances, information providers are acting as investment advisers under the Advisers Act.
In the U.S., the SEC has sought public comment on the role of certain third-party information providers to the asset management industry, including index providers and model providers, and whether information providers are acting as investment advisers under the Advisers Act.
In addition, an unfavorable tax settlement could require use of our cash and result in an increase in our effective tax rate in the period in which such resolution occurs and may have a material impact on our financial results. 28 Table of Contents General Risks Our business performance might not be sufficient for us to meet the full-year financial guidance or long-term targets that we provide publicly.
In addition, an unfavorable tax settlement could require use of our cash and result in an increase in our effective tax rate in the period in which such resolution occurs and may have a material impact on our financial results. 27 Table of Content s General Risks Our business performance might not be sufficient for us to meet the full-year financial guidance or long-term targets that we provide publicly.
While we have taken steps to mitigate such interruptions and delays, we cannot provide assurance that they will not occur again in the future as part of migration efforts to new technologies, applications or processes (e.g., cloud migration), even after extensive testing of new systems, processes, applications and hardware, or if we experience significant growth of our customer base or increases in the number of products or services or in the speed at which we are required to provide products and services.
While we have taken steps to mitigate such interruptions and delays, we cannot provide assurance that they will not occur again as part of future migration to new technologies, applications or processes (e.g., cloud migration), even after extensive testing, or if we experience significant growth of our customer base or increases in the number of products or services or in the speed at which we provide products and services.
Violations of any of these laws, including the FCPA or other anti-corruption laws, may result in severe criminal or civil sanctions and penalties, damage our brand and reputation and subject us to other liabilities which could have a material adverse effect on our business, financial condition or results of operations.
Violations of any of these laws, including the FCPA or other anti- 28 Table of Content s corruption laws, may result in severe criminal or civil sanctions and penalties, damage our brand and reputation and subject us to other liabilities which could have a material adverse effect on our business, financial condition or results of operations.
Research and Product Development We apply an integrated team approach to developing content across our operating segments. Our product management, research and product development, data operations and technology, and application development departments are at the center of this process. Our content is developed by a research and product development team comprised of mathematicians, economists, statisticians, financial engineers and industry experts.
Research and Development We apply an integrated team approach to developing content across our operating segments. Our research and development, product management, data operations and technology, and application development teams are at the center of this process. Our content is developed by a research and development team comprised of mathematicians, economists, statisticians, financial engineers, investment professionals and industry experts.
Migration of our applications, systems, processes and infrastructure to new technologies, cloud providers, data centers, processes, platforms or applications could result in unanticipated failures, interruptions or delays in the performance and delivery of our products, services and client support. Such incidents could have a material adverse effect on our business, financial condition or results of operations.
Migration of our applications, systems, processes and infrastructure to new technologies, providers, processes, platforms or applications could result in unanticipated failures, interruptions or delays in the performance and delivery of our products, services and support. Such incidents could have a material adverse effect on our business, financial condition or results of operations.
These indexes include stocks that demonstrate high exposure to the target factor. In addition to single factor indexes, we offer multiple-factor indexes for investors with diversified multi-factor strategies. • Thematic Indexes. Thematic Indexes are designed to measure the performance of companies associated with shifts in macroeconomic, geopolitical and technological trends.
These indexes include stocks that demonstrate high exposure to the target factor. In addition to single factor indexes, we offer multiple-factor indexes for investors with diversified multi-factor strategies. 4 Table of Content s • Thematic Indexes. Thematic Indexes are designed to measure the performance of companies associated with shifts in macroeconomic, geopolitical and technological trends.
Our open-architecture Investment Solutions as a Service (“ISaaS”) offerings include MSCI ONE, an integrated platform that provides access to investment content across a number of our products and solutions. These offerings help us deliver MSCI content and solutions to our clients at scale. • Expand solutions that empower client customization .
Our open-architecture Investment Solutions as a Service (“ISaaS”) offerings include MSCI ONE, an integrated platform that provides access to investment content across a number of 3 Table of Content s our products and solutions. These types of offerings help us deliver MSCI content and solutions to our clients at scale. • Expand solutions that empower client customization .
If our compensation programs do not adequately engage our key employees or are not competitive, or if we fail to attract, engage and retain the necessary qualified personnel, the quality of our products and services as well as our ability to support and retain our clients and achieve business objectives may suffer.
If our compensation programs do not adequately engage our key employees or are not competitive, or if we fail to attract, engage and retain the necessary qualified 29 Table of Content s personnel, the quality of our products and services as well as our ability to support and retain our clients and achieve business objectives may suffer.
Among our Index competitors are S&P Dow Jones Indices LLC (a joint venture 9 Table of Contents of S&P Global Inc. and CME Group Inc.); FTSE Russell, a subsidiary of the London Stock Exchange Group plc; Solactive AG; Nasdaq Inc; and Bloomberg Finance L.P. (“Bloomberg”).
Among our Index competitors are S&P Dow Jones Indices LLC (a joint venture 8 Table of Content s of S&P Global Inc. and CME Group Inc.); FTSE Russell, a subsidiary of the London Stock Exchange Group plc; Nasdaq Inc; Bloomberg Finance L.P. (“Bloomberg”); and Solactive AG.
Our goodwill and other intangible assets resulting from our acquisitions could be impaired as a result of future business conditions, requiring us to record substantial write-downs that would reduce our operating income. We evaluate the recoverability of recorded goodwill amounts annually or when evidence of potential impairment exists.
Our goodwill and other intangible assets resulting from our acquisitions could be impaired as a result of future business conditions, requiring us to record substantial write-downs that would reduce our operating income and materially adversely affect our financial condition. We evaluate the recoverability of recorded goodwill amounts annually or when evidence of potential impairment exists.
Additionally, while we conduct due diligence during the acquisition process, acquired businesses may not have invested as heavily in security measures and technology, and this may introduce additional security risk. In the past, we have experienced cyber-attacks of varying degrees, including denial-of-service attacks.
Additionally, although we conduct due diligence during acquisition processes, acquired businesses may not have invested as heavily in security measures and technology, and this may introduce additional security risk. In the past, we have experienced cyber-attacks of varying degrees, including denial-of-service attacks.
Legal and Regulatory Risks Failure to comply with laws, rules or regulations, or the introduction of new laws, rules or regulations or changes to existing laws, rules or regulations could materially adversely affect our business, financial condition or results of operations.
Legal and Regulatory Risks Failure to comply with laws, rules or regulations, or the introduction of new or revised laws, rules or regulations could materially adversely affect our business, financial condition or results of operations.
Although we do not believe that we are overly dependent upon any individual employee, our management and other employees may terminate employment at any time, and the loss of any of our key employees and our inability to replace them with suitable candidates quickly or at all, as well as any negative market perception resulting from such loss, could have a material adverse effect on our business, financial condition or results of operations.
Although we do not believe that we are overly dependent upon any individual employee, the loss of any of our key employees and our inability to replace them with suitable candidates quickly or at all, as well as any negative market perception resulting from such loss, could have a material adverse effect on our business, financial condition or results of operations.
Investors with unique index requirements can build an index to meet their specific needs and better update index design over time to support their evolving investment strategies. • Fixed Income Indexes .
Investors with unique index requirements can design an index to meet their specific needs and update the index design over time to support their evolving investment strategies. • Fixed Income Indexes .
Our Property Intel offering provides web-based services for the analysis of commercial real estate and offers extensive information on real estate, rental levels, property holdings, transactions, ownership, occupiers, footfall, lease data and the ability to simulate market values. Our Private Capital Solutions offerings include: • Private Capital Portfolio Management Platform .
Our Property Intel offering provides web-based services for the analysis of commercial real estate in the Nordics and offers extensive information on rental levels, property holdings, transactions, ownership, occupiers, footfall, lease data and the ability to simulate market values. Our Private Capital Solutions offerings include: • Private i Platform .
This risk may grow with the increase in the number, type and complexity of our products, such as complex client-designed indexes that may require unique and more manual implementation and maintenance. For instance, certain of our processes utilize manual data entry or collection, which subjects them to greater risk of human error.
This risk may grow with the increase in the number, type and complexity of our products, such as complex client-designed indexes that may require unique and more manual implementation and maintenance. For instance, certain of our processes utilize manual data entry or collection, which increases the risk of human error.
Clients purchase our products and services primarily through recurring fixed and variable fee arrangements, a business model which has historically delivered stable revenue and predictable cash flows. Finally, our disciplined capital-allocation policy provides us with flexibility to balance internal resources and investment needs, acquisitions and shareholder returns through dividends and opportunistic share repurchases. See Part II, Item 7.
Clients purchase our products and services primarily through recurring fixed and variable fee arrangements, which historically have delivered stable revenue and predictable cash flows. Our disciplined capital-allocation policy provides us with flexibility to balance internal resources and investment needs, acquisitions and shareholder returns through dividends and opportunistic share repurchases. See Part II, Item 7.
Except with respect to certain products provided by MSCI ESG Research LLC and certain of its designated foreign affiliates, we believe our products and services do not constitute or provide investment advice as contemplated by the Advisers Act. See Part I, Item 1. “Business—Government Regulation” above.
Except for certain products provided by MSCI ESG Research LLC and certain of its designated foreign affiliates, we believe our products and services do not constitute or provide investment advice as contemplated by the Advisers Act. See Part I, Item 1. “Business—Regulation” above.
Despite internal testing and in some cases testing or use by clients, our 16 Table of Contents products or services have contained, and in the future may contain, errors in our or third-party data, calculations, methodologies or analysis, including serious defects or malfunctions.
Despite internal testing and in some cases testing or use by clients, our products or services have contained, and in the future may contain, errors in our or third-party data, calculations, methodologies or analysis, including serious defects or malfunctions.
In addition, various government and regulatory bodies from time to time may 23 Table of Contents make inquiries and conduct investigations into our compliance with applicable laws and regulations and our business practices, including those related to our regulated activities and other matters.
In addition, various government and regulatory bodies from time to time may make inquiries and conduct investigations into our compliance with applicable laws and regulations and our business practices, including those related to our regulated activities and other matters.
RCA aggregates timely transaction data and provides valuable information on market pricing, capital flows and investment trends in more than 170 countries. Our clients use this unique data to formulate strategies, source new opportunities and execute deals. • Portfolio Performance Insights.
Our Real Assets offerings include: • Real Capital Analytics . RCA aggregates timely transaction data and provides valuable information on market pricing, capital flows and investment trends in more than 170 countries. Our clients use this unique data to formulate strategies, source new opportunities and execute deals. • Portfolio Performance Insights.
The Universe Analytics offering provides private capital performance data used by asset allocators as a source of official institutional benchmarks and as a basis for asset allocation, research, due diligence and compensation decisions. For the year ended December 31, 2023, 6.9% of our revenues were attributable to our private assets offerings.
The Universe Analytics offering provides private capital performance data that is used by asset allocators as a source of official institutional benchmarks and as a basis for asset allocation, research, due diligence and compensation decisions. For the year ended December 31, 2024, 9.0% of our revenues were attributable to our private assets offerings.
In addition, our RiskMetrics HedgePlatform service allows clients such as funds of funds, pension funds and endowments who invest in hedge funds to measure, evaluate and monitor the risk of their hedge fund investments across multiple hedge fund strategies. For the year ended December 31, 2023, 24.4% of our revenues were attributable to our Analytics segment.
In addition, our RiskMetrics HedgePlatform service allows clients such as funds of funds, pension funds and endowments who invest in hedge funds to measure, evaluate and monitor the risk of their hedge fund investments across multiple hedge fund strategies. For the year ended December 31, 2024, 23.6% of our revenues were attributable to our Analytics segment.
Cancellations or reductions by our clients could have a material adverse effect on our business, financial condition or results of operations. A material portion of our revenues is concentrated in some of our largest clients. For the fiscal year ended December 31, 2023, our largest client organization by revenue, BlackRock, accounted for 9.8% of our consolidated operating revenues.
Cancellations or reductions by our clients could have a material adverse effect on our business, financial condition or results of operations. A material portion of our revenues is concentrated in some of our largest clients. For the fiscal year ended December 31, 2024, our largest client organization by revenue, BlackRock, accounted for 10.2% of our consolidated operating revenues.
Our inability to maintain consistent internal policies and procedures across our offices and remain in compliance with local laws in a particular market could have a significant and negative effect not only on our businesses in that market but also on our reputation.
Our inability to maintain 22 Table of Content s consistent internal policies and procedures across our offices and remain in compliance with local laws in a particular market could have a significant and negative effect not only on our businesses in that market but also on our reputation.
We may not discover errors that affect our products or services or enhancements until after they are deployed, and we may need to provide enhancements or corrections to address such errors, and in certain cases it may be impracticable to do so.
We may not discover errors that affect our products or services or enhancements until after they 15 Table of Content s are deployed, and we may need to provide enhancements or corrections to address such errors, and in certain cases it may be impracticable to do so.
Use of our products or services as part of the investment process creates the risk that our clients, the parties whose assets are managed by our clients, investors in investment products linked to our indexes, the companies that we rate or assess in our ESG solutions or the shareholders of those companies, may pursue claims against us based on even a small error in our or third-party data, calculations, methodologies or analysis or a malfunction or failure in our systems, products or services.
Use of our products or services as part of the investment process creates the risk that our clients, the parties whose assets are managed by our clients, investors in investment products linked to our indexes, the companies that we rate or assess in our sustainability and climate solutions or the shareholders of those companies, may pursue claims against us based on errors in our or third-party data, calculations, methodologies or analysis or a malfunction or failure in our systems, products or services.
Factors affecting the availability of our products and services and our information technology systems and networks, such as loss of service from third parties, operational or execution failures, human error, terrorist or other attacks, geopolitical instability or unrest, climate or weather related events (e.g., hurricanes, floods or other natural disasters), outbreak of pandemic or contagious disease, power loss, telecommunications failures, technical breakdowns, Internet failures or malicious attacks exploiting security vulnerabilities, could impair our or our third-party service provider systems’ operations or interrupt their availability for extended periods of time or impact the availability of our or our third-party service provider’s personnel.
Factors affecting the availability of our products and services and our information technology systems and networks, such as loss of service, operational failures, human error, terrorist attacks, geopolitical instability, climate-related events (e.g., hurricanes, floods or other natural disasters), outbreak of pandemic or contagious disease, power loss, telecommunications failures, technical breakdowns, internet failures or cyber-attacks, could impair our or our third-party service provider systems’ operations or interrupt their availability for extended periods of time or impact the availability of our or our third-party service provider’s personnel.
ESG and Climate Indexes are constructed from an underlying index by applying data from our ESG and Climate segment to additional screening or other criteria. • Factor Indexes. Factor Indexes seek to reflect the performance characteristics of a range of investment styles and strategies, such as momentum or value.
ESG and Climate Indexes are constructed from underlying MSCI indexes by applying additional data from our ESG and Climate segment to the eligibility, weighting or other index construction criteria. • Factor Indexes. Factor Indexes seek to reflect the performance characteristics of a range of investment styles and strategies, such as momentum or value.
If interest rates continue to increase, the debt service obligations on such indebtedness will continue to increase even if the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. A change in our credit ratings could materially adversely affect our financial condition.
If interest rates increase, the debt service obligations on such indebtedness will increase even if the amount borrowed 26 Table of Content s remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. A change in our credit ratings could materially adversely affect our financial condition.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese employees are informed about, and monitor the prevention, mitigation, detection, and remediation of, cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including the operation of our ITROC, incident response plan and other processes.
Biggest changeOur CISO oversees a team of approximately 31 Table of Content s 50 professionals charged with the ongoing management of our cybersecurity risk and strategy. These employees monitor the prevention, mitigation, detection, and remediation of cybersecurity incidents, including through the operation of our ITROC, incident response plan and other processes.
On a quarterly basis, our CISO updates the Audit Committee on the Company’s IT risk program, including an overview of risks and trends, results from third-party assessments, progress towards pre-determined risk-mitigation-related goals, our incident response plan, and cybersecurity threat developments, as well as the steps management has taken to respond to these topics.
On a quarterly basis, our CISO updates the Audit Committee on the Company’s IT security program, including an overview of risks and trends, results from third-party assessments, progress towards pre-determined risk-mitigation-related goals, our incident response plan, and cybersecurity threat developments, as well as the steps management has taken to respond to these topics.
Our IT risk program also includes an incident response plan that provides procedures for how we detect, respond to and recover from cybersecurity incidents, which include processes designed to triage, assess severity, escalate, contain, investigate and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage.
Our IT risk program also includes an incident response plan that provides for how we detect, respond to and recover from cybersecurity incidents, which include processes designed to triage, assess severity, escalate, contain, investigate and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate damage to our brand and reputation.
To provide for the resilience of critical data and systems, to maintain regulatory compliance, to manage our material risks from cybersecurity threats, and to protect against, detect and respond to cybersecurity incidents, we regularly undertake the below listed activities: • 24x7x365 security operations monitoring of our systems, networks and services to detect and act on weaknesses and potential intrusions; • Regular internal and external security audits and penetration tests by third-party security vendors; • Testing of new products and services to identify potential security vulnerabilities before release; • Regular network and endpoint monitoring; • Periodic red- and purple-team assessments from third-party service providers; • Business resiliency planning with disaster recovery and business continuity testing; • Role-based access controls to identify, authenticate and authorize individuals to access systems based on their job responsibilities; • Protection, including encryption, for the secure communication of sensitive data; • Monitoring of emerging data protection laws and implementation of changes to our processes designed to comply therewith; • Regular review of policies and standards related to cybersecurity; • At least annual security awareness training and testing of our employees; • Regular review of critical third-party security practices; 31 Table of Contents • Tabletop exercises to simulate a response to a cybersecurity incident and to use the findings to improve our processes and technologies; • A cross-functional approach to addressing cybersecurity risk, with participation from Technology, Risk, Legal, Compliance, Privacy and Internal Audit functions; and • Cybersecurity risk insurance to provide protection against potential losses arising from a cybersecurity incident.
To help ensure the resilience of critical data and systems, maintain regulatory compliance, manage material cybersecurity risks, and protect against, detect and respond to cybersecurity incidents, we regularly undertake the following activities: • 24x7x365 security operations monitoring of our systems, networks and services to detect and act on weaknesses and potential intrusions; • Regular internal and external security audits and penetration tests by third-party security vendors; • Testing of new products and services to identify potential security vulnerabilities before release; • Regular network and endpoint monitoring; • Periodic red- and purple-team assessments from third-party service providers; • Business resiliency planning with disaster recovery and business continuity testing; 30 Table of Content s • Role-based access controls to identify, authenticate and authorize individuals to access systems based on their job responsibilities; • Protection, including encryption, for the secure communication of sensitive data; • Monitoring of emerging data protection laws and implementation of changes to our processes designed to comply therewith; • Regular review of policies and standards related to cybersecurity; • At least annual security awareness training and testing of our employees; • Regular review of critical third-party security practices; • Tabletop exercises to simulate a response to a cybersecurity incident and to use the findings to improve our processes and technologies; • A cross-functional approach to addressing cybersecurity risk, with participation from Technology, Risk, Legal, Compliance, Privacy and Internal Audit functions; and • Cybersecurity risk insurance to provide protection against potential losses arising from a cybersecurity incident.
Material cybersecurity risks are also considered during Board and Committee discussions of important matters such as enterprise risk management, operational and strategic planning, business continuity planning, mergers and acquisitions, reputation management and other relevant matters. The Board also conducts an annual education session on cybersecurity trends and risks.
Material cybersecurity risks are also considered during Board and Committee discussions of matters such as enterprise risk management, operational and strategic planning, business continuity planning, mergers and acquisitions, reputation management and other relevant matters. The Board periodically conducts education sessions on cybersecurity trends and risks.
To identify and assess material risks from cybersecurity threats, our enterprise risk management (“ERM”) program considers cybersecurity risks alongside other company risks as part of a quarterly and ongoing process designed to identify, assess and manage risk exposures over the short-, intermediate- and long-term.
Cybersecurity risks are integrated into our enterprise risk management (“ERM”) program, which evaluates cybersecurity risks alongside other company risks as part of a quarterly and ongoing process designed to identify, assess and manage risk exposures over the short-, intermediate- and long-term.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We recognize the importance of identifying, assessing and managing material risks associated with cybersecurity threats. These risks include, among other things, operational risks; intellectual property theft; fraud; extortion; violation of data privacy or cybersecurity laws and other litigation; legal and regulatory risk; and reputational risks.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We recognize the importance of identifying, assessing and managing material cybersecurity risks, including, among other things, our operations; intellectual property theft; fraud; extortion; violation of data privacy or cybersecurity laws; legal and regulatory risk; and reputational risks.
Although we perform diligence on third parties that have access to our systems, networks, data or facilities that house such systems, networks or data, and we monitor cybersecurity threat risks identified through such diligence, there can be no assurance that we can prevent or mitigate the risk of any compromise or failure in the information systems, software, networks and other assets owned or controlled by third parties.
Although we perform diligence on third parties and monitor cybersecurity threat risks identified through such diligence, we cannot guarantee that we can prevent or mitigate the risk of any compromise or failure in the information systems, software, networks and other assets owned or controlled by third parties.
National Institute of Standards and Technology (“NIST”) cybersecurity framework and International Organization for Standardization (“ISO”) information security standards. Our information security management system has achieved ISO 27001 certification.
Our CISO also provides updates to our Disclosure Committee on material cybersecurity incidents. We also have cybersecurity-specific policies, standards and procedures, and our cybersecurity program aligns with industry standards, including the U.S. National Institute of Standards and Technology (“NIST”) cybersecurity framework and International Organization for Standardization (“ISO”) information security standards. Our information security management system has achieved ISO 27001:2022 certification.
Our cybersecurity team includes managers that have expertise with cybersecurity, as demonstrated by prior work experience, possession of a cybersecurity certification or degrees or other cybersecurity experience. As detailed above, these members of management and management-level committees report to the Audit Committee about cybersecurity threat risks, among other cybersecurity-related matters, at least quarterly. 32 Table of Contents
Our cybersecurity team includes managers that have expertise with cybersecurity, as demonstrated by prior work experience, possession of a cybersecurity certification or degrees or other cybersecurity experience.
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Our CISO is also a member of the Company’s Disclosure Committee and reports to the Disclosure Committee on a quarterly basis on any major cybersecurity incidents. We also have cybersecurity specific policies, standards and procedures, and our cybersecurity program has been developed based on industry standards, including the U.S.
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Additionally, we generally require those third parties that could introduce significant cybersecurity risk to us to agree by contract to manage their cybersecurity risks in specified ways, and to agree to be subject to cybersecurity audits, which we conduct as appropriate.
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Members of the Board are also encouraged to regularly engage in ad hoc conversations with management on cybersecurity-related events and to discuss any updates to our cybersecurity risk management and strategy programs.
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Our CISO oversees a team of approximately 50 professionals charged with the on-going management of our cybersecurity risk and strategy.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties As of December 31, 2023, our principal offices consisted of the following leased properties: Location Square Feet Expiration Date New York, New York 125,811 (1) February 28, 2033 Budapest, Hungary 70,833 (2) February 28, 2029 Mumbai, India 63,143 July 31, 2032 Monterrey, Mexico 56,213 October 31, 2028 London, England 30,519 December 25, 2026 Pune, India 24,434 January 19, 2026 Manila, Philippines 20,904 February 28, 2027 Berkeley, California 19,808 February 28, 2030 Hoboken, New Jersey 19,018 November 30, 2026 Stellenbosch, South Africa 18,611 September 30, 2026 ________________ (1) As of December 31, 2023, 41,759 square feet of this location have been subleased.
Biggest changeProperties As of December 31, 2024, our principal offices consisted of the following leased properties: Location Square Feet Expiration Date New York, New York 125,811 (1) February 28, 2033 Budapest, Hungary 70,833 (2) February 28, 2029 Mumbai, India 63,143 July 31, 2032 Monterrey, Mexico 56,213 October 31, 2028 London, England 30,519 December 25, 2026 Pune, India 24,434 January 19, 2026 Manila, Philippines 20,904 February 28, 2027 Berkeley, California 19,808 February 28, 2030 Stellenbosch, South Africa 18,611 September 30, 2026 Coimbatore, India 12,300 August 27, 2026 ________________ (1) As of December 31, 2024, 41,759 square feet of this location have been subleased.
(2) As of December 31, 2023, 17,059 square feet of this location have been subleased. As of December 31, 2023, we had more than 30 leased and occupied locations of which the principal offices are listed above. We believe that our properties are in good operating condition and adequately serve our current business operations.
(2) As of December 31, 2024, 17,059 square feet of this location have been subleased. As of December 31, 2024, we had more than 30 leased and occupied locations of which the principal offices are listed above. We believe that our properties are in good operating condition and adequately serve our current business operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings Various lawsuits, claims and proceedings have been or may be instituted or asserted against the Company in the ordinary course of business. While the amounts claimed could be substantial, the ultimate liability cannot now be determined because of the considerable uncertainties that exist.
Biggest changeItem 3. Legal Proceedings Various lawsuits, arbitrations, claims, government inquiries, requests for information, subpoenas, regulatory investigations, examinations, inspections and other legal or regulatory processes have been or may be instituted or asserted against the Company in the ordinary course of business.
However, based on facts currently available, management believes that the disposition of matters that are currently pending or asserted will not, individually or in the aggregate, have a material effect on MSCI’s business, operating results, financial condition or cash flows. Item 4. Mine Safety Disclosures Not applicable. 33 Table of Contents PART II
However, based on facts currently available, we believe that the disposition of matters that are currently pending or asserted will not, individually or in the aggregate, have a material effect on MSCI’s business, operating results, financial condition or cash flows. Item 4. Mine Safety Disclosures Not applicable. 32 Table of Content s PART II
Therefore, it is possible that MSCI’s business, operating results, financial condition or cash flows in a particular period could be materially affected by certain contingencies.
While the potential losses could be substantial, due to uncertainties surrounding the potential outcomes, management cannot currently reasonably estimate the possible loss or range of loss that may arise from these matters. Consequently, it is possible that MSCI’s business, operating results, financial condition or cash flows in a particular period could be materially affected by these matters.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeTotal Investment Value Years Ended December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 MSCI Inc. $100 $177 $309 $427 $327 $402 S&P 500 $100 $131 $156 $200 $164 $207 MSCI USA Financials Index $100 $133 $130 $177 $155 $178 Item 6. [Reserved] 35 Table of Contents
Biggest changeTotal Investment Value Years Ended December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 MSCI Inc. $100 $174 $241 $185 $227 $244 S&P 500 $100 $118 $152 $125 $158 $197 MSCI USA Financials Index $100 $98 $133 $117 $134 $176 Item 6. [Reserved] 34 Table of Content s
See Note 11, “Shareholders’ Equity (Deficit),” of the Notes to Consolidated Financial Statements included herein for additional information on our stock repurchase program. The following table provides information with respect to purchases made by or on behalf of the Company of its shares of common stock during the quarter ended December 31, 2023.
See Note 11, “Shareholders’ Equity (Deficit),” of the Notes to Consolidated Financial Statements included herein for additional information on our stock repurchase program. The following table provides information with respect to purchases made by or on behalf of the Company of its shares of common stock during the quarter ended December 31, 2024.
(3) See Note 11, “Shareholders’ Equity (Deficit),” of the Notes to the Consolidated Financial Statements included herein for further information regarding our stock repurchase program. Recent Sales of Unregistered Securities There were no unregistered sales of equity securities in the year ended December 31, 2023.
(3) See Note 11, “Shareholders’ Equity (Deficit),” of the Notes to the Consolidated Financial Statements included herein for further information regarding our stock repurchase program. Recent Sales of Unregistered Securities There were no unregistered sales of equity securities in the year ended December 31, 2024.
Use of Proceeds from Sale of Registered Securities None. 34 Table of Contents FIVE-YEAR STOCK PERFORMANCE GRAPH The following graph compares the cumulative total shareholders’ return on our common stock, the Standard & Poor’s 500 Stock Index and the MSCI USA Financials Index since December 31, 2018 assuming an investment of $100 at the closing price on December 31, 2018.
Use of Proceeds from Sale of Registered Securities None. 33 Table of Content s FIVE-YEAR STOCK PERFORMANCE GRAPH The following graph compares the cumulative total shareholders’ return on our common stock, the Standard & Poor’s 500 Stock Index and the MSCI USA Financials Index since December 31, 2019 assuming an investment of $100 at the closing price on December 31, 2019.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Stock Price and Dividends Our common stock is traded on the New York Stock Exchange under the symbol “MSCI.” As of February 2, 2024, there were 101 shareholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Stock Price and Dividends Our common stock is traded on the New York Stock Exchange under the symbol “MSCI.” As of January 31, 2025, there were 301 shareholders of record of our common stock.
Issuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3) October 1, 2023-October 31, 2023 52 $ 523.17 — $ 845,668,000 November 1, 2023-November 30, 2023 63 $ 526.57 — $ 845,668,000 December 1, 2023-December 31, 2023 — $ — — $ 845,668,000 Total 115 $ 525.03 — $ 845,668,000 ________________ (1) Includes, when applicable, (i) shares purchased by the Company on the open market under the stock repurchase program; (ii) shares withheld to satisfy tax withholding obligations on behalf of employees that occur upon vesting and delivery of outstanding shares underlying restricted stock units; and (iii) shares held in treasury under the MSCI Inc.
Issuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3) October 1, 2024-October 31, 2024 52 $ 605.59 — $ 1,905,412,000 November 1, 2024-November 30, 2024 512,000 $ 585.97 511,980 $ 1,605,412,000 December 1, 2024-December 31, 2024 115,286 $ 607.48 115,081 $ 1,535,507,000 Total 627,338 $ 589.93 627,061 $ 1,535,507,000 ________________ (1) Includes, when applicable, (i) shares purchased by the Company on the open market under the stock repurchase program; (ii) shares withheld to satisfy tax withholding obligations on behalf of employees that occur upon vesting and delivery of outstanding shares underlying restricted stock units; and (iii) shares held in treasury under the MSCI Inc.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table presents our recurring subscription sales, cancellations and non-recurring sales by reportable segment for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) New recurring subscription sales Index $ 116,016 $ 109,699 5.8 % Analytics 79,035 75,584 4.6 % ESG and Climate 55,092 78,980 (30.2 %) All Other - Private Assets 26,175 23,213 12.8 % New recurring subscription sales total 276,318 287,476 (3.9 %) Subscription cancellations Index (32,298) (27,103) 19.2 % Analytics (34,675) (37,171) (6.7 %) ESG and Climate (10,923) (5,618) 94.4 % All Other - Private Assets (15,337) (7,569) 102.6 % Subscription cancellations total (93,233) (77,461) 20.4 % Net new recurring subscription sales Index 83,718 82,596 1.4 % Analytics 44,360 38,413 15.5 % ESG and Climate 44,169 73,362 (39.8 %) All Other - Private Assets 10,838 15,644 (30.7 %) Net new recurring subscription sales total 183,085 210,015 (12.8 %) Non-recurring sales Index 87,775 57,560 52.5 % Analytics 14,379 11,143 29.0 % ESG and Climate 5,625 4,268 31.8 % All Other - Private Assets 2,151 1,264 70.2 % Non-recurring sales total 109,930 74,235 48.1 % Gross sales Index $ 203,791 $ 167,259 21.8 % Analytics 93,414 86,727 7.7 % ESG and Climate 60,717 83,248 (27.1 %) All Other - Private Assets 28,326 24,477 15.7 % Total gross sales $ 386,248 $ 361,711 6.8 % Net sales Index $ 171,493 $ 140,156 22.4 % Analytics 58,739 49,556 18.5 % ESG and Climate 49,794 77,630 (35.9 %) All Other - Private Assets 12,989 16,908 (23.2 %) Total net sales $ 293,015 $ 284,250 3.1 % 51 Table of Contents Retention Rate Another key metric is our “Retention Rate.” The following table presents our Retention Rate by reportable segment for the periods indicated: Index Analytics ESG and Climate (1) All Other - Private Assets (2) Total 2023 Three Months Ended March 31, 96.4% 94.0% 96.1% 92.1% 95.2% Three Months Ended June 30, 95.8% 95.2% 96.9% 92.8% 95.5% Three Months Ended September 30, 96.2% 95.1% 96.0% 91.3% 95.4% Three Months Ended December 31, (3) 95.0% 93.1% 94.7% 88.8% 93.6% Year Ended December 31, (3) 95.8% 94.4% 95.9% 90.4% 94.7% 2022 Three Months Ended March 31, 96.6% 94.4% 98.7% 94.1% 95.9% Three Months Ended June 30, 95.9% 94.3% 97.3% 96.0% 95.5% Three Months Ended September 30, 96.9% 95.9% 97.4% 94.8% 96.4% Three Months Ended December 31, 95.0% 90.0% 95.4% 92.6% 93.0% Year Ended December 31, 96.1% 93.6% 97.2% 94.4% 95.2% ______________________________ (1) Includes Trove’s Run Rate commencing as of the acquisition date of November 1, 2023.
Biggest changeTotal net sales represent the total gross sales net of the impact from subscription cancellations. 51 Table of Content s The following table presents our recurring subscription sales, cancellations and non-recurring sales for the years indicated: Years Ended (in thousands) December 31, 2024 December 31, 2023 Increase/(Decrease) Index New recurring subscription sales $ 118,191 $ 116,016 1.9 % Subscription cancellations (45,730) (32,298) 41.6 % Net new recurring subscription sales $ 72,461 $ 83,718 (13.4 %) Non-recurring sales $ 62,840 $ 87,775 (28.4 %) Total gross sales $ 181,031 $ 203,791 (11.2 %) Total Index net sales $ 135,301 $ 171,493 (21.1 %) Analytics New recurring subscription sales $ 82,419 $ 79,035 4.3 % Subscription cancellations (39,106) (34,675) 12.8 % Net new recurring subscription sales $ 43,313 $ 44,360 (2.4 %) Non-recurring sales $ 16,368 $ 14,379 13.8 % Total gross sales $ 98,787 $ 93,414 5.8 % Total Analytics net sales $ 59,681 $ 58,739 1.6 % ESG and Climate New recurring subscription sales $ 55,397 $ 55,092 0.6 % Subscription cancellations (22,989) (10,923) 110.5 % Net new recurring subscription sales $ 32,408 $ 44,169 (26.6 %) Non-recurring sales $ 9,015 $ 5,625 60.3 % Total gross sales $ 64,412 $ 60,717 6.1 % Total ESG and Climate net sales $ 41,423 $ 49,794 (16.8 %) All Other - Private Assets New recurring subscription sales $ 40,758 $ 26,175 55.7 % Subscription cancellations (23,685) (15,337) 54.4 % Net new recurring subscription sales $ 17,073 $ 10,838 57.5 % Non-recurring sales $ 3,878 $ 2,151 80.3 % Total gross sales $ 44,636 $ 28,326 57.6 % Total All Other - Private Assets net sales $ 20,951 $ 12,989 61.3 % Consolidated New recurring subscription sales $ 296,765 $ 276,318 7.4 % Subscription cancellations (131,510) (93,233) 41.1 % Net new recurring subscription sales $ 165,255 $ 183,085 (9.7 %) Non-recurring sales $ 92,101 $ 109,930 (16.2 %) Total gross sales $ 388,866 $ 386,248 0.7 % Total net sales $ 257,356 $ 293,015 (12.2 %) 52 Table of Content s Retention Rate The following table presents our Retention Rate for the periods indicated: Index (1) Analytics (1) ESG and Climate All Other - Private Assets Total 2024 Three Months Ended March 31, 93.2% 93.5% 90.8% 92.2% 92.8% Three Months Ended June 30, 95.2% 95.8% 94.3% 91.2% 94.8% Three Months Ended September 30, 95.4% 93.8% 93.0% 92.7% 94.2% Three Months Ended December 31, 95.0% 93.3% 93.1% 86.4% 93.1% Year Ended December 31, 94.7% 94.1% 92.8% 90.6% 93.7% 2023 Three Months Ended March 31, 96.4% 94.0% 96.1% 92.1% 95.2% Three Months Ended June 30, 95.8% 95.2% 96.9% 92.8% 95.5% Three Months Ended September 30, 96.2% 95.1% 96.0% 91.3% 95.4% Three Months Ended December 31, 95.0% 93.1% 94.7% 88.8% 93.6% Year Ended December 31, 95.8% 94.4% 95.9% 90.4% 94.7% ______________________________ (1) Retention rate for Index excluding the impact of the acquisition of Foxberry was 95.0% and 94.7% for the three months and year ended December 31, 2024, respectively.
Key Financial and Operating Metrics and Drivers In evaluating our financial performance, we focus on revenue and profit growth, including results accounted for under generally accepted accounting principles in the United States (“GAAP”) as well as non-GAAP measures, for the Company as a whole and by operating segment.
Key Financial and Operating Metrics and Drivers In evaluating our financial performance, we focus on revenue and profit growth, including results accounted for under generally accepted accounting principles in the United States (“GAAP”) as well as non-GAAP measures, for the Company as a whole and by segment.
Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EBITDA expenses are believed to be meaningful measures for management to assess the operating performance of the Company 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 the Company’s ongoing operating performance in the period.
Adjusted EBITDA, Adjusted EBITDA expenses and Adjusted EBITDA margin are believed to be meaningful measures for management to assess the operating performance of the Company 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 the Company’s ongoing operating performance in the period.
For each reportable segment, we present revenues disaggregated by the nature of the revenues, which are recurring subscriptions, asset-based fees and non-recurring revenues. Recurring subscription revenues represent fees earned from clients primarily under renewable contracts and are generally recognized ratably over the term of the license or service pursuant to the contract terms.
For each segment, we present revenues disaggregated by the nature of the revenues, which are recurring subscriptions, asset-based fees and non-recurring revenues. Recurring subscription revenues represent fees earned from clients primarily under renewable contracts and are generally recognized ratably over the term of the license or service pursuant to the contract terms.
Therefore, the All Other – Private Assets segment did not include the Company’s proportionate share of operating revenues and Adjusted EBITDA related to Burgiss. The Company’s proportionate share of the income or loss from its equity-method investment in Burgiss was reported as a component of other (expense) income, net.
Therefore, All Other – Private Assets did not include the Company’s proportionate share of operating revenues and Adjusted EBITDA related to Burgiss. The Company’s proportionate share of the income or loss from its equity-method investment in Burgiss was reported as a component of other (expense) income, net.
The Credit Agreement also contains covenants that limit our and our subsidiaries’ ability to, among other things, incur liens, enter into sale/leaseback transactions and consolidate, merge or sell all or substantially all of our assets, and that limit the ability of our subsidiaries to incur certain additional indebtedness.
The Credit Agreement also contains covenants that limit our and our subsidiaries’ ability to, among other things, incur liens, enter into sale/leaseback transactions and consolidate, merge or sell all or substantially all of our assets, and that limit the ability of our subsidiaries to incur certain indebtedness.
Following the acquisition, the consolidated results of Burgiss are included in the Company’s Private Capital Solutions operating segment (formerly known as Burgiss), which is combined and presented as part of the All Other – Private Assets reportable segment.
Following the acquisition, the consolidated results of Burgiss are included in the Company’s Private Capital Solutions operating segment (formerly known as Burgiss), which is combined and presented as part of All Other – Private Assets.
At the end of any period, we generally have subscription and investment product license agreements in place for a large portion of total revenues for the following 12 months.
At the end of any period, we generally have recurring subscription and investment product license agreements in place for a large portion of total revenues for the following 12 months.
See Note 1, “Introduction and Basis of Presentation” and Note 12, “Income Taxes” of the Notes to the Consolidated Financial Statements included herein for additional information on income taxes. Factors Affecting the Comparability of Results Acquisitions of Burgiss and Trove On October 2, 2023, the Company acquired the remaining 66.4% interest in Burgiss for $696.8 million in cash.
See Note 1, “Introduction and Basis of Presentation” and Note 12, “Income Taxes” of the Notes to the Consolidated Financial Statements included herein for additional information on income taxes. Factors Affecting the Comparability of Results Acquisitions of Burgiss, Trove, Fabric and Foxberry On October 2, 2023, the Company acquired the remaining 66.4% interest in Burgiss for $696.8 million in cash.
This discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The discussion summarizing the significant factors affecting the results of operations and financial condition of MSCI for the year ended December 31, 2022 can be found in Part II, “Item 7.
This discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The discussion summarizing the significant factors affecting the results of operations and financial condition of MSCI for the year ended December 31, 2023 can be found in Part II, “Item 7.
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. Revenues Our revenues are presented by type and by reportable segment.
Approximately three-fifths of the AUM is invested in securities denominated in currencies other than the U.S. dollar, and any such impact is excluded from the disclosed foreign currency-adjusted variances. Revenues Our revenues are presented by type and by segment.
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.
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 termination or non-renewal may not be effective until a later date.
These estimates are inherently uncertain and unpredictable, and if different estimates were used, the purchase price 39 Table of Contents for the acquisition could be allocated to the acquired assets and assumed liabilities of Burgiss differently from the allocation that we have made. We amortize our intangible assets over the estimated period of economic benefit.
These estimates are inherently uncertain and unpredictable, and if different estimates were used, the purchase price for the acquisition could be allocated to the acquired assets and assumed liabilities of Burgiss differently from the allocation that we have made. We amortize our intangible assets over the estimated period of economic benefit.
Amortization of Intangible Assets Amortization of intangible assets expense relates to definite-lived intangible assets arising from past acquisitions and capitalization of internally developed software projects. Intangibles arising from past acquisitions consist of customer relationships, 37 Table of Contents proprietary data, trademarks and trade names and technology and software. We amortize definite-lived intangible assets over their estimated useful lives.
Amortization of Intangible Assets Amortization of intangible assets expense relates to definite-lived intangible assets arising from past acquisitions and capitalization of internally developed software projects. Intangibles arising from past acquisitions consist of customer relationships, proprietary data, trademarks and trade names and technology and software. We amortize definite-lived intangible assets over their estimated useful lives.
Retention Rate is computed by operating segment on a product/service-by-product/service basis.
Retention Rate is computed by segment on a product/service-by-product/service basis.
The Indentures among us and Computershare, National Association, as trustee and successor to Wells Fargo Bank, National Association, contain covenants that limit our and our subsidiaries’ ability to, among other things, incur liens, enter into sale/leaseback transactions and consolidate, merge or sell all or substantially all of our assets, and that limit the ability of our subsidiaries to incur certain additional indebtedness.
The indentures governing our Senior Notes (the “Indentures”) among us and Computershare, National Association, as trustee and successor to Wells Fargo Bank, National Association, contain covenants that limit our and our subsidiaries’ ability to, among other things, incur liens, enter into sale/leaseback transactions and consolidate, merge or sell all or substantially all of our assets, and that limit the ability of our subsidiaries to incur certain additional indebtedness.
While management believes that its forecasts are reasonable, differences between forecasts and actual experience could materially affect the valuations. There were no events or changes in circumstances that would indicate that the carrying value of the definite-lived intangible assets may not be recoverable during the years presented.
While management believes that its forecasts are reasonable, 39 Table of Content s differences between forecasts and actual experience could materially affect the valuations. There were no events or changes in circumstances that would indicate that the carrying value of the definite-lived intangible assets may not be recoverable during the years presented.
The actual amount of recurring revenues we will realize over the following 12 months will differ from Run Rate for numerous reasons, including: • fluctuations in revenues associated with new recurring sales; • modifications, cancellations and non-renewals of existing Client Contracts, subject to specified notice requirements; • differences between the recurring license start date and the date the Client Contract is executed due to, for example, contracts with onboarding periods or fee waiver periods; • fluctuations in asset-based fees, which may result from changes in certain investment products’ total expense ratios, market movements, including foreign currency exchange rates, or from investment inflows into and outflows from investment products linked to our indexes; • fluctuations in fees based on trading volumes of futures and options contracts linked to our indexes; • fluctuations in the number of hedge funds for which we provide investment information and risk analysis to hedge fund investors; • price changes or discounts; • revenue recognition differences under U.S.
The actual amount of recurring revenues we will realize over the following 12 months will differ from Run Rate for numerous reasons, including: • fluctuations in revenues associated with new recurring sales; • modifications, cancellations and non-renewals of existing Client Contracts, subject to specified notice requirements; • differences between the recurring license start date and the date the Client Contract is executed due to, for example, contracts with onboarding periods or fee waiver periods; • fluctuations in asset-based fees, which may result from changes in certain investment products’ total expense ratios, market movements, including foreign currency exchange rates, or from investment inflows into and outflows from investment products linked to our indexes; • fluctuations in fees based on trading volumes of futures and options contracts linked to our indexes; • price changes or discounts; • revenue recognition differences under U.S.
The fees are recognized as we provide the product and service to the client over the license period and are generally billed in advance, prior to the license start date. 36 Table of Contents Asset-based fees represent fees earned that are variable in nature, as they are primarily calculated based on the AUM linked to our indexes.
The fees are recognized as we provide the product and service to the client over the license period and are generally billed in advance, prior to the license start date. Asset-based fees represent fees earned that are variable in nature, as they are primarily calculated based on the AUM linked to our indexes.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”), which was filed with the Securities and Exchange Commission on February 10, 2023. Overview We are a leading provider of critical decision support tools and solutions for the global investment community.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”), which was filed with the Securities and Exchange Commission on February 9, 2024. Overview We are a leading provider of critical decision support tools and solutions for the global investment community.
Significant estimates and judgments made by management include such examples as assessment of impairment of goodwill and intangible assets and income taxes. We believe the estimates and judgments upon which we rely are reasonable based upon information available to us at the time these estimates and judgments are made.
Significant estimates and judgments made by management include such examples as assessment of impairment of goodwill and intangible assets and income 38 Table of Content s taxes. We believe the estimates and judgments upon which we rely are reasonable based upon information available to us at the time these estimates and judgments are made.
The year-over-year change was primarily driven by higher cash collections from customers, partially offset by higher income tax payments and cash expenses, mainly reflecting higher cash compensation. 54 Table of Contents Our primary uses of cash from operating activities are for the payment of cash compensation and benefits costs, income taxes, interest expense, information technology costs, professional fees, market data costs and office rent.
The year-over-year change was primarily driven by higher cash collections from customers, partially offset by higher cash expenses, mainly reflecting higher cash compensation. Our primary uses of cash from operating activities are for the payment of cash compensation and benefits costs, income taxes, interest expense, information technology costs, professional fees, market data costs and office rent.
In those replacement cases, only the net change to the client subscription, if a decrease, is reported as a cancellation.
In those replacement cases, only the net change to the client subscription, if a decrease, is reported as a cancel.
As of December 31, 2023 and 2022, $285.2 million and $344.5 million, respectively, of the cash and cash equivalents were held by foreign subsidiaries. Repatriation of some foreign cash may be subject to certain withholding taxes in local jurisdictions and other distribution restrictions.
As of December 31, 2024 and 2023, $265.5 million and $285.2 million, respectively, of the cash and cash equivalents were held by foreign subsidiaries. Repatriation of some foreign cash may be subject to certain withholding taxes in local jurisdictions and other distribution restrictions.
In our product lines, Retention Rate is generally higher during the first three quarters and lower in the fourth quarter, as the fourth quarter is traditionally the largest renewal period in the year. 52 Table of Contents Liquidity and Capital Resources We require capital to fund ongoing operations, internal growth initiatives and acquisitions.
In our product lines, Retention Rate is generally higher during the first three quarters and lower in the fourth quarter, as the fourth quarter is traditionally the largest renewal period in the year. 53 Table of Content s Liquidity and Capital Resources We require capital to fund ongoing operations, internal growth initiatives and acquisitions.
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.
We remove from Run Rate the annualized fee value associated with products or services under any Client Contract when we (i) have received a notice of termination, non-renewal or an indication the client does not intend to continue their subscription during the period and (ii) have determined that such notice evidences the client’s final decision to terminate or not renew the applicable products or services, even though such termination or non-renewal may not be 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. For example, in the fourth quarter of 2023, we recorded cancellations of $30.6 million.
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. For example, in the fourth quarter of 2024, we recorded cancellations of $36.0 million.
On October 30, 2014, we began paying regular quarterly cash dividends and have paid such dividends each quarter thereafter. On January 29, 2024, the Board of Directors declared a quarterly cash dividend of $1.60 per share for the three months ending March 31, 2024.
On October 30, 2014, we began paying regular quarterly cash dividends and have paid such dividends each quarter thereafter. On January 28, 2025, the Board of Directors declared a quarterly cash dividend of $1.80 per share for the three months ending March 31, 2025.
The Credit Agreement and the Indentures also contain customary events of default, including those relating to non-payment, breach of representations, warranties or covenants, cross-default and cross-acceleration, and bankruptcy and insolvency events, and, in the case of the Credit Agreement, invalidity or impairment of loan documentation, change of control and customary ERISA defaults in addition to the foregoing.
The Credit Agreement and the Indentures also contain customary events of default, including those relating to non-payment, breach of representations, warranties or covenants, cross-default and cross-acceleration, and bankruptcy and insolvency events, and, in the case of the Credit Agreement, invalidity or impairment of loan documentation, change of control and customary Employee Retirement Income Security Act (“ERISA”) defaults in addition to the foregoing.
Our growth strategy includes: (a) extending leadership in research-enhanced content across asset classes, (b) leading the enablement of ESG and climate investment integration, (c) enhancing distribution and content-enabling technology, (d) expanding solutions that empower client customization, (e) strengthening client relationships and growing into strategic partnerships with clients and (f) executing strategic relationships and acquisitions with complementary data, content and technology companies.
Our growth strategy includes: (a) extending leadership in research-enhanced content across asset classes, (b) leading the enablement of sustainability and climate investment integration, (c) enhancing distribution and content-enabling technology, (d) expanding solutions that empower client customization, (e) strengthening client relationships and expanding our presence in key geographic areas and (f) executing strategic partnerships and acquisitions with complementary data, content and technology companies.
Adjusting for the impact of acquisitions and foreign currency exchange rate fluctuations, total operating revenues would have increased 11.4%.
Adjusting for the impact of acquisitions and foreign currency exchange rate fluctuations, total operating revenues would have increased 9.6%.
Recent Accounting Standards Updates See Note 2, “Recent Accounting Standards Updates,” of the Notes to the Consolidated Financial Statements included herein for further information. 55 Table of Contents
Recent Accounting Standards Updates See Note 2, “Recent Accounting Standards Updates,” of the Notes to the Consolidated Financial Statements included herein for further information. 56 Table of Content s
Contractual Obligations Our contractual obligations consist primarily of our debt obligations arising from the issuance of the Senior Notes, Tranche A Term Loans, leases for office space, leases for equipment and other operating leases and obligations to vendors arising out of market data contracts.
Contractual Obligations Our contractual obligations consist primarily of our debt obligations arising from the issuance of the Senior Notes, Revolving Loan Commitments, leases for office space, leases for equipment and other operating leases and obligations to vendors arising out of market data contracts.
Historically, the payment of cash for compensation and benefits is at its highest level in the first quarter when we pay discretionary employee compensation related to the previous fiscal year. Cash Flows From Investing Activities The year-over-year change was primarily driven by the acquisitions of Burgiss and Trove.
Historically, the payment of 55 Table of Content s cash for compensation and benefits is at its highest level in the first quarter when we pay discretionary employee compensation related to the previous fiscal year. Cash Flows From Investing Activities The year-over-year change was primarily driven by the impact of lower cash paid for business acquisitions.
As of December 31, 2023, the Senior Notes and the Prior Credit Agreement were fully and unconditionally, and jointly and severally, guaranteed by our direct or indirect wholly owned domestic subsidiaries that account for more than 5% of our and our subsidiaries’ consolidated assets, other than certain excluded subsidiaries (the “subsidiary guarantors”).
Previously, the Senior Notes and the Prior Credit Agreement were fully and unconditionally, and jointly and severally, guaranteed by our direct or indirect wholly owned domestic subsidiaries that accounted for more than 5% of our and our subsidiaries’ consolidated assets, other than certain excluded subsidiaries.
Subscription Sales Subscription Sales is a key operating metric and is important to management because new Subscription Sales increase our Run Rate and represent future operating revenues that will be recognized over time.
Subscription Sales Subscription Sales is a key operating metric and is important to management because new Subscription Sales increase our Run Rate and represent future operating revenues that will be recognized over time. See “— Operating Metrics — Sales ” below for additional information.
Run Rate from Analytics products increased 7.4% for the year ended December 31, 2023, driven by growth in both Multi-Asset Class and Equity Analytics products and reflecting growth across all regions. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics Run Rate would have increased 7.2%.
Run Rate from Analytics products increased 5.5% for the year ended December 31, 2024, driven by growth in both Equity Analytics and Multi-Asset Class products and reflecting growth across all regions and client segments. Adjusting for the impact of acquisitions and foreign currency exchange rate fluctuations, Analytics Run Rate would have increased 6.5%.
See Note 11, “Shareholders’ Equity (Deficit),” of the Notes to Consolidated Financial Statements included herein for additional information on our stock repurchase program. As of trade date February 8, 2024, a total of $845.7 million of authorization remained available under the share repurchase program.
See Note 11, “Shareholders’ Equity (Deficit),” of the Notes to Consolidated Financial Statements included herein for additional information on our stock repurchase program. As of trade date February 6, 2025, a total of $1.4 billion of authorization remained available under the share repurchase program.
This $122.2 million was then divided by the $1,904.2 million subscription Run Rate at the beginning of the year, which is adjusted to include Burgiss’ and Trove’s Run Rate as of the date of acquisition, to derive a cancellation rate of 6.4%. The 6.4% was then subtracted from 100.0% to derive a Retention Rate of 93.6% for the fourth quarter.
This $144.1 million was then divided by the $2,096.8 million subscription Run Rate at the beginning of the year, which is adjusted to include Fabric’s and Foxberry’s Run Rate as of the date of acquisition, to derive a cancellation rate of 6.9%. The 6.9% was then subtracted from 100.0% to derive a Retention Rate of 93.1% for the fourth quarter.
Operating Expenses Total operating expenses increased 9.9% for the year ended December 31, 2023. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 9.8%.
Operating Expenses Total operating expenses increased 16.0% for the year ended December 31, 2024. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 16.1%.
This increase reflected growth across all regions. Adjusting for the impact of the acquisition of Burgiss and foreign currency exchange rate fluctuations, All Other - Private Assets Run Rate would have increased 4.9%. Sales Sales represents the annualized value of products and services clients commit to purchase from MSCI and will result in additional operating revenues.
Adjusting for the impact of foreign currency exchange rate fluctuations, All Other - Private Assets Run Rate would have increased 6.8%. Sales Sales represents the annualized value of products and services clients commit to purchase from MSCI and will result in additional operating revenues.
Adjusting for the impact of foreign currency exchange rate fluctuations, Index segment Adjusted EBITDA expenses would have increased 8.3%.
Adjusting for the impact of the acquisition of Foxberry and foreign currency exchange rate fluctuations, Index segment Adjusted EBITDA expenses would have increased 7.7%.
This reflects an increase of 15.9% over the quarterly cash dividend declared for the three months ended December 31, 2023. The first quarter 2024 dividend is payable on February 29, 2024 to shareholders of record as of the close of trading on February 16, 2024.
This reflects an increase of 12.5% over the quarterly cash dividend declared for the three months ended December 31, 2024. The first quarter 2025 dividend is payable on February 28, 2025 to shareholders of record as of the close of trading on February 14, 2025.
Adjusting for the impact of acquisitions and foreign currency exchange rate fluctuations, recurring subscriptions Run Rate would have increased 9.9%. Run Rate from Index recurring subscriptions increased 10.8% for the year ended December 31, 2023, primarily driven by market cap-weighted products, custom Index products and special packages as well as factor, ESG and climate products.
Adjusting for the impact of acquisitions and foreign currency exchange rate fluctuations, recurring subscriptions Run Rate would have increased 7.9%. Run Rate from Index recurring subscriptions increased 8.5% for the year ended December 31, 2024, primarily driven by growth from market cap-weighted as well as custom Index and special packages products. The increase reflected growth across all regions.
Run Rate from ESG and Climate products increased 19.6% for the year ended December 31, 2023, primarily driven by strong growth in Ratings, Screening and Climate products. Adjusting for the impact of the acquisition of Trove and foreign currency exchange rate fluctuations, ESG and Climate Run Rate would have increased 16.1%.
Run Rate from ESG and Climate products increased 7.6% for the year ended December 31, 2024, primarily driven by growth in Ratings, Climate, and screening products across all regions. Adjusting for the impact of foreign currency exchange rate fluctuations, ESG and Climate Run Rate would have increased 10.1%.
Cash Flows The following table presents the Company’s cash and cash equivalents, including restricted cash, as of the dates indicated: As of (in thousands) December 31, 2023 December 31, 2022 Cash and cash equivalents (includes restricted cash of $3,878 and $368 at December 31 2023 and December 31 2022 , respectively) $ 461,693 $ 993,564 The following table presents the breakdown of the Company’s cash flows for the periods indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Net cash provided by operating activities $ 1,236,029 $ 1,095,369 Net cash used in investing activities (819,378) (79,335) Net cash provided by (used in) financing activities (953,931) (1,425,380) Effect of exchange rate changes 5,409 (18,539) Net increase (decrease) in cash, cash equivalents and restricted cash $ (531,871) $ (427,885) Cash and Cash Equivalents We typically seek to maintain minimum cash balances globally of approximately $225.0 million to $275.0 million for general operating purposes.
Cash Flows The following table presents the Company’s cash and cash equivalents, including restricted cash, as of the dates indicated: As of (in thousands) December 31, 2024 December 31, 2023 Cash and cash equivalents (includes restricted cash of $3,497 and $3,878 at December 31, 2024 and December 31, 2023, respectively) $ 409,351 $ 461,693 The following table presents the breakdown of the Company’s cash flows for the periods indicated: Years Ended (in thousands) December 31, 2024 December 31, 2023 Net cash provided by operating activities $ 1,501,627 $ 1,236,029 Net cash (used in) investing activities (144,255) (819,378) Net cash (used in) financing activities (1,402,308) (953,931) Effect of exchange rate changes (7,406) 5,409 Net increase (decrease) in cash, cash equivalents and restricted cash $ (52,342) $ (531,871) Cash and Cash Equivalents We typically seek to maintain minimum cash balances globally of approximately $225.0 million to $275.0 million for general operating purposes.
Operating Metrics Run Rate “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.
Adjusting for the impact of the step acquisition of Burgiss and foreign currency exchange rate fluctuations, All Other - Private Assets Adjusted EBITDA expenses would have decreased 1.2%. 49 Table of Content s Operating Metrics Run Rate “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.
Operating revenues from recurring subscriptions increased 12.8% for the year ended December 31, 2023, primarily driven by strong growth in Index products, which increased $84.9 million, or 11.6%, strong growth in ESG and Climate products, which increased $59.2 million, or 26.5%, growth in Analytics products, which increased $36.3 million, or 6.4%, and strong growth in All Other - Private Assets products, which increased $31.4 million, or 22.5%.
Operating revenues from recurring subscriptions increased 13.0% for the year ended December 31, 2024, primarily driven by growth in Index products, which increased $67.8 million, or 8.3%, growth in ESG and Climate products, which increased $36.5 million, or 12.9%, growth in Analytics products, which increased $55.3 million, or 9.2%, and growth in All Other - Private Assets products, which increased $83.6 million, or 48.9%.
Our mission-critical offerings help investors address the challenges of a transforming investment landscape and power better investment decisions. Leveraging our knowledge of the global investment process and our expertise in research, data and technology, we enable our clients to understand and analyze key drivers of risk and return and confidently and efficiently build more effective portfolios.
Our mission-critical offerings help investors navigate the complexities of a dynamic and evolving investment landscape. Leveraging our deep knowledge of the global investment process and our expertise in research, data and technology, we enable our clients to understand and analyze key drivers of risk and return and build portfolios more effectively.
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.
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.
For the year ended December 31, 2023, 32.8% of our cancellations occurred in the fourth quarter.
For the year ended December 31, 2024, 27.4% of our cancellations occurred in the fourth quarter.
Operating revenues from ETFs linked to MSCI equity indexes increased by 7.3%, primarily driven by an increase in average AUM. Operating revenues from non-ETF indexed funds linked to MSCI indexes increased by 5.0%, primarily driven by an increase in average basis point fees.
Operating revenues from ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes increased by 20.0% and 19.4%, respectively, primarily driven by an increase in average AUM.
Non-compensation expenses increased 5.7% for the year ended December 31, 2023, primarily driven by higher information technology, market data and marketing expenses, partially offset by lower professional fees. Adjusting for the impact of foreign currency exchange rate fluctuations and the Burgiss and Trove acquisitions, non-compensation expenses would have increased by 2.9%.
Adjusting for the impact of recent acquisitions and foreign currency exchange rate fluctuations, compensation and benefits costs would have increased by 5.7%. Non-compensation expenses increased 13.2% for the year ended December 31, 2024, primarily driven by higher professional fees, information technology, market data costs, transaction and integration costs related to recent acquisitions.
Adjusting for the impact of foreign currency exchange rate fluctuations, Index operating segment revenues would have increased 11.5%. Revenues from recurring subscriptions increased 11.6% for the year ended December 31, 2023, primarily driven by strong growth from market cap-weighted Index products.
Adjusting for the impact of the acquisition of Foxberry and foreign currency exchange rate fluctuations, Index segment operating revenues would have increased 10.0%. Operating revenues from recurring subscriptions increased 8.3% for the year ended December 31, 2024, primarily driven by growth from market cap-weighted and factor, ESG and climate index products.
Adjusted EBITDA The following table presents non-GAAP Adjusted EBITDA, Adjusted EBITDA expenses and Adjusted EBITDA margin for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Operating revenues: $ 2,528,920 $ 2,248,598 12.5 % Adjusted EBITDA expenses 1,005,969 918,927 9.5 % Adjusted EBITDA $ 1,522,951 $ 1,329,671 14.5 % Operating margin % 54.8 % 53.7 % Adjusted EBITDA margin % 60.2 % 59.1 % The increase in Adjusted EBITDA and Adjusted EBITDA margin reflects a higher rate of growth in operating revenues as compared to the rate of growth of Adjusted EBITDA expenses, driven by the factors previously described. 45 Table of Contents Reconciliation of Net Income to Adjusted EBITDA and Operating Expenses to Adjusted EBITDA Expenses The following table presents the reconciliation of net income to Adjusted EBITDA for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Net income $ 1,148,592 $ 870,573 31.9 % Provision for income taxes 220,469 173,268 27.2 % Other expense (income), net 15,548 163,799 (90.5 %) Operating income 1,384,609 1,207,640 14.7 % Amortization of intangible assets 114,429 91,079 25.6 % Depreciation and amortization of property, equipment and leasehold improvements 21,009 26,893 (21.9 %) Impairment related to sublease of leased property 477 — — % Acquisition-related integration and transaction costs (1) 2,427 4,059 (40.2 %) Consolidated Adjusted EBITDA $ 1,522,951 $ 1,329,671 14.5 % Index Adjusted EBITDA 1,106,973 985,407 12.3 % Analytics Adjusted EBITDA 274,875 247,895 10.9 % ESG and Climate Adjusted EBITDA 91,678 61,094 50.1 % All Other - Private Assets Adjusted EBITDA 49,425 35,275 40.1 % Consolidated Adjusted EBITDA $ 1,522,951 $ 1,329,671 14.5 % ________________ (1) Represents transaction expenses and other costs directly related to the acquisition and integration of acquired businesses, including professional fees, severance expenses, regulatory filing fees and other costs, in each case that are incurred no later than 12 months after the close of the relevant acquisition.
Adjusted EBITDA The following table presents non-GAAP Adjusted EBITDA, Adjusted EBITDA expenses and Adjusted EBITDA margin for the years indicated: Years Ended (in thousands) December 31, 2024 December 31, 2023 Increase/(Decrease) Operating revenues: $ 2,856,128 $ 2,528,920 12.9 % Adjusted EBITDA expenses 1,139,644 1,005,969 13.3 % Adjusted EBITDA $ 1,716,484 $ 1,522,951 12.7 % Operating margin % 53.5 % 54.8 % Adjusted EBITDA margin % 60.1 % 60.2 % The increase in Adjusted EBITDA reflects growth in operating revenues as compared to Adjusted EBITDA expenses, driven by the factors previously described. 46 Table of Content s Reconciliation of Net Income to Adjusted EBITDA and Operating Expenses to Adjusted EBITDA Expenses The following table presents the reconciliation of net income to Adjusted EBITDA for the years indicated: Years Ended (in thousands) December 31, 2024 December 31, 2023 Increase/(Decrease) Net income $ 1,109,128 $ 1,148,592 (3.4 %) Provision for income taxes 247,040 220,469 12.1 % Other expense (income), net 172,350 15,548 n/m Operating income 1,528,518 1,384,609 10.4 % Amortization of intangible assets 164,037 114,429 43.4 % Depreciation and amortization of property, equipment and leasehold improvements 16,978 21,009 (19.2 %) Impairment related to sublease of leased property — 477 n/m Acquisition-related integration and transaction costs (1) 6,951 2,427 186.4 % Consolidated Adjusted EBITDA $ 1,716,484 $ 1,522,951 12.7 % Index Adjusted EBITDA 1,222,054 1,106,973 10.4 % Analytics Adjusted EBITDA 328,295 274,875 19.4 % ESG and Climate Adjusted EBITDA 104,708 91,678 14.2 % All Other - Private Assets Adjusted EBITDA 61,427 49,425 24.3 % Consolidated Adjusted EBITDA $ 1,716,484 $ 1,522,951 12.7 % ________________ (1) Represents transaction expenses and other costs directly related to the acquisition and integration of acquired businesses, including professional fees, severance expenses, regulatory filing fees and other costs, in each case that are incurred no later than 12 months after the close of the relevant acquisition.
Retention rate for All Other – Private Assets excluding the impact of the acquisition of Burgiss was 88.6% and 91.2% for the three months and year ended December 31, 2023, respectively. Retention Rate is an important metric because subscription cancellations decrease our Run Rate and ultimately our future operating revenues over time.
Retention rate for Analytics excluding the impact of the acquisition of Fabric was 93.3% and 94.1% for the three months and year ended December 31, 2024, respectively. Retention Rate is an important metric because subscription cancellations decrease our Run Rate and ultimately our future operating revenues over time.
This information is updated mid-month each month. Information contained on our website is not deemed part of or incorporated by reference into this Annual Report on Form 10-K or any other report filed with the SEC.
This information is updated mid-month each month. Information contained on our website is not deemed part of or incorporated by reference into this Annual Report on Form 10-K 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 1.0% of the AUM amounts presented.
Operating revenues from asset-based fees increased 5.6% for the year ended December 31, 2023, primarily driven by growth in revenues from ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes, partially offset by a decrease in revenues from exchange traded futures and options contracts linked to MSCI indexes.
Operating revenues from asset-based fees increased 17.9% for the year ended December 31, 2024, primarily driven by growth in revenues from ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes.
Cash Flows From Financing Activities The year-over-year change was primarily driven by the impact of lower share repurchases, partially offset by lower proceeds from borrowings.
Cash Flows From Financing Activities The year-over-year change was primarily driven by the impact of higher share repurchases and dividend payments.
Continued growth of our emerging market centers around the world is an important factor in our ability to manage and control the growth of our compensation and benefits costs. As of December 31, 2023, 66.5% of our employees were located in emerging market centers compared to 65.0% as of December 31, 2022.
We had 6,132 employees as of December 31, 2024 compared to 5,794 employees as of December 31, 2023, reflecting a 5.8% growth in the number of employees. Continued growth of our emerging market centers around the world is an important factor in our ability to manage and control the growth of our compensation and benefits costs.
To derive the Retention Rate for the fourth quarter, we annualized the actual cancellations during the quarter of $30.6 million to derive $122.2 million of annualized cancellations.
To derive the Retention Rate for the fourth quarter, we annualized the actual cancellations during the quarter of $36.0 million to derive $144.1 million of annualized cancellations.
Analytics Segment The following table presents the results for the Analytics segment for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Operating revenues: Recurring subscriptions $ 603,291 $ 567,004 6.4 % Non-recurring 12,665 9,103 39.1 % Operating revenues total 615,956 576,107 6.9 % Adjusted EBITDA expenses 341,081 328,212 3.9 % Adjusted EBITDA $ 274,875 $ 247,895 10.9 % Adjusted EBITDA margin % 44.6 % 43.0 % 47 Table of Contents Analytics operating revenues increased 6.9% for the year ended December 31, 2023, primarily driven by growth from recurring subscriptions related to both Equity Analytics and Multi-Asset Class products.
Analytics Segment The following table presents the results for the Analytics segment for the years indicated: Years Ended (in thousands) December 31, 2024 December 31, 2023 Increase/(Decrease) Operating revenues: Recurring subscriptions $ 658,610 $ 603,291 9.2 % Non-recurring 16,479 12,665 30.1 % Operating revenues total 675,089 615,956 9.6 % Adjusted EBITDA expenses 346,794 341,081 1.7 % Adjusted EBITDA $ 328,295 $ 274,875 19.4 % Adjusted EBITDA margin % 48.6 % 44.6 % 48 Table of Content s Analytics operating revenues increased 9.6% for the year ended December 31, 2024, primarily driven by growth from recurring subscriptions related to both Multi-Asset Class and Equity Analytics products.
(2) Includes the impact of payments for the principal amount as well as coupon interest payments at the interest rate in effect as of December 31, 2023 on the variable rate Tranche A Term Loans due 2027.
(2) Includes the impact of payments for the principal amount as well as coupon interest payments at the interest rate in effect as of December 31, 2024 on the revolving loans under the Revolving Credit Facility due 2029.
The following table presents operating expenses using compensation and non-compensation categories, rather than using activity categories, for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Compensation and benefits $ 722,789 $ 652,364 10.8 % Non-compensation expenses 286,084 270,622 5.7 % Amortization of intangible assets 114,429 91,079 25.6 % Depreciation and amortization of property, equipment and leasehold improvements 21,009 26,893 (21.9 %) Total operating expenses $ 1,144,311 $ 1,040,958 9.9 % A significant portion of the incentive compensation component of operating expenses is based on the achievement of a number of financial and operating metrics.
The following table presents operating expenses using compensation and non-compensation categories, rather than using activity categories, for the years indicated: Years Ended (in thousands) December 31, 2024 December 31, 2023 Increase/(Decrease) Compensation and benefits $ 822,789 $ 722,789 13.8 % Non-compensation expenses 323,806 286,084 13.2 % Amortization of intangible assets 164,037 114,429 43.4 % Depreciation and amortization of property, equipment and leasehold improvements 16,978 21,009 (19.2 %) Total operating expenses $ 1,327,610 $ 1,144,311 16.0 % A significant portion of the incentive compensation component of operating expenses is based on the achievement of a number of financial and operating metrics.
The following table presents the value of AUM in ETFs linked to MSCI equity indexes and the sequential change of such assets as of the end of each of the periods indicated: Period Ended 2022 2023 (in billions) March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, AUM in ETFs linked to MSCI equity indexes (1) (2) $ 1,389.3 $ 1,189.5 $ 1,081.2 $ 1,222.9 $ 1,305.4 $ 1,372.5 $ 1,322.8 $ 1,468.9 Sequential Change in Value Market Appreciation/(Depreciation) $ (89.7) $ (207.3) $ (105.7) $ 118.8 $ 75.1 $ 48.4 $ (56.1) $ 130.5 Cash Inflows/(Outflows) 27.4 7.5 (2.6) 22.9 7.4 18.7 6.4 15.6 Total Change $ (62.3) $ (199.8) $ (108.3) $ 141.7 $ 82.5 $ 67.1 $ (49.7) $ 146.1 The following table presents the average value of AUM in ETFs linked to MSCI equity indexes for the periods indicated: Year-to-Date Average 2022 2023 (in billions) March June September December March June September December AUM in ETFs linked to MSCI equity indexes (1) (2) $ 1,392.5 $ 1,338.9 $ 1,295.6 $ 1,267.2 $ 1,287.5 $ 1,310.7 $ 1,332.6 $ 1,340.7 ________________ (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 .
Operating revenues from non-recurring revenues decreased 15.9% for the year ended December 31, 2024, primarily driven by one-time fees for unlicensed usage of our content in historical periods recognized in 2023. 41 Table of Content s The following table presents the value of AUM in ETFs linked to MSCI equity indexes and the sequential change of such assets as of the end of each of the periods indicated: Period Ended 2023 2024 (in billions) March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, AUM in ETFs linked to MSCI equity indexes (1) (2) $ 1,305.4 $ 1,372.5 $ 1,322.8 $ 1,468.9 $ 1,582.6 $ 1,631.9 $ 1,761.8 $ 1,724.7 Sequential Change in Value Market Appreciation/(Depreciation) $ 75.1 $ 48.4 $ (56.1) $ 130.5 $ 92.8 $ 21.2 $ 111.3 $ (85.3) Cash Inflows/(Outflows) 7.4 18.7 6.4 15.6 20.9 28.1 18.6 48.2 Total Change $ 82.5 $ 67.1 $ (49.7) $ 146.1 $ 113.7 $ 49.3 $ 129.9 $ (37.1) The following table presents the average value of AUM in ETFs linked to MSCI equity indexes for the periods indicated: Year-to-Date Average 2023 2024 (in billions) March June September December March June September December AUM in ETFs linked to MSCI equity indexes (1) (2) $ 1,287.5 $ 1,310.7 $ 1,332.6 $ 1,340.7 $ 1,508.8 $ 1,549.7 $ 1,592.1 $ 1,632.9 ________________ (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 .
Trove is a part of the ESG and Climate operating segment. Results of Operations Operating Revenues Our operating revenues are grouped by the following types: recurring subscriptions, asset-based fees and non-recurring.
Foxberry is a part of the Index operating segment. We collectively refer to the acquisitions of Burgiss, Trove, Fabric and Foxberry as the “recent acquisitions”. Results of Operations Operating Revenues Our operating revenues are grouped by the following types: recurring subscriptions, asset-based fees and non-recurring.
See “— Operating Metrics — Retention Rate ” below for additional information on the calculation of this metric. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP.
Retention Rate Retention Rate is a key operating metric and is important to management because subscription cancellations decrease our Run Rate and ultimately our future operating revenues over time. See “— Operating Metrics — Retention Rate ” below for additional information on the calculation of this metric. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP.
Other Expense (Income), Net Other expense (income), net consists primarily of interest we pay on our outstanding indebtedness, including losses on early extinguishment of debt, income and losses associated with our equity method investment, foreign currency exchange rate gains and losses, interest we collect on cash and short-term investments, as well as other non-operating income and expense items that may arise from time to time.
Depreciation and Amortization of Property, Equipment and Leasehold Improvements Depreciation and amortization of property, equipment and leasehold improvements consists of expenses related to depreciating or amortizing the cost of computer and related equipment, leasehold improvements, software and furniture and fixtures over the estimated useful life of the assets. 37 Table of Content s Other Expense (Income), Net Other expense (income), net consists primarily of interest we pay on our outstanding indebtedness, including losses on early extinguishment of debt, income and losses associated with our previous equity method investment, foreign currency exchange rate gains and losses, interest we collect on cash and short-term investments, as well as other non-operating income and expense items that may arise from time to time.
ESG and Climate Segment The following table presents the results for the ESG and Climate segment for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Operating revenues: Recurring subscriptions $ 282,351 $ 223,160 26.5 % Non-recurring 5,217 5,151 1.3 % Operating revenues total 287,568 228,311 26.0 % Adjusted EBITDA expenses 195,890 167,217 17.1 % Adjusted EBITDA $ 91,678 $ 61,094 50.1 % Adjusted EBITDA margin % 31.9 % 26.8 % ESG and Climate operating revenues increased 26.0% for the year ended December 31, 2023, primarily driven by strong growth from recurring subscriptions related to Ratings, Climate and Screening products.
ESG and Climate Segment The following table presents the results for the ESG and Climate segment for the years indicated: Years Ended (in thousands) December 31, 2024 December 31, 2023 Increase/(Decrease) Operating revenues: Recurring subscriptions $ 318,835 $ 282,351 12.9 % Non-recurring 7,766 5,217 48.9 % Operating revenues total 326,601 287,568 13.6 % Adjusted EBITDA expenses 221,893 195,890 13.3 % Adjusted EBITDA $ 104,708 $ 91,678 14.2 % Adjusted EBITDA margin % 32.1 % 31.9 % ESG and Climate operating revenues increased 13.6% for the year ended December 31, 2024, primarily driven by growth from recurring subscriptions related to Ratings, Climate and Screening products.
Discount rates are selected based on discount rates of similar public companies to the reporting unit being valued and terminal growth rates are selected based on consideration of growth rates used during the reporting unit’s forecast period in combination with economic conditions.
Terminal growth rates are selected based on growth rates used during the reporting unit’s forecast period in combination with economic conditions. The market approach utilizes valuation multiples of revenue and cash flows derived from guideline public companies that have similar characteristics to each reporting unit being valued.
The increase reflected growth across all regions and client segments. Run Rate from Index asset-based fees increased 14.9% for the year ended December 31, 2023, primarily driven by higher AUM in ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes, partially offset by lower exchange traded futures and options volume.
Run Rate from Index asset-based fees increased 14.8% for the year ended December 31, 2024, primarily driven by higher AUM in ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes.
Compensation and benefits costs increased 10.8% for the year ended December 31, 2023, primarily driven by an increase in wages and salaries and incentive compensation costs due to headcount growth, partially offset by lower severance costs and increased 43 Table of Contents capitalization of expenses related to internally developed software projects Adjusting for the impact of foreign currency exchange rate fluctuations and the Burgiss and Trove acquisitions, compensation and benefits costs would have increased by 8.0%.
Compensation and benefits costs increased 13.8% for the year ended December 31, 2024, primarily driven by an increase in wages and salaries, incentive compensation and benefits costs due to headcount growth, partially offset by increased capitalization of expenses related to internally developed software projects.
The following table presents the reconciliation of operating expenses to Adjusted EBITDA expenses for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Total operating expenses $ 1,144,311 $ 1,040,958 9.9 % Amortization of intangible assets 114,429 91,079 25.6 % Depreciation and amortization of property, equipment and leasehold improvements 21,009 26,893 (21.9 %) Impairment related to sublease of leased property 477 — — % Acquisition-related integration and transaction costs (1) 2,427 4,059 (40.2 %) Consolidated Adjusted EBITDA expenses $ 1,005,969 $ 918,927 9.5 % Index Adjusted EBITDA expenses 344,842 317,802 8.5 % Analytics Adjusted EBITDA expenses 341,081 328,212 3.9 % ESG and Climate Adjusted EBITDA expenses 195,890 167,217 17.1 % All Other - Private Assets Adjusted EBITDA expenses 124,156 105,696 17.5 % Consolidated Adjusted EBITDA expenses $ 1,005,969 $ 918,927 9.5 % ________________ (1) Represents transaction expenses and other costs directly related to the acquisition and integration of acquired businesses, including professional fees, severance expenses, regulatory filing fees and other costs, in each case that are incurred no later than 12 months after the close of the relevant acquisition. 46 Table of Contents Segment Results The results for each of our four reportable segments for the years ended December 31, 2023, and 2022 are presented below: Index Segment The following table presents the results for the Index segment for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Operating revenues: Recurring subscriptions $ 814,582 $ 729,710 11.6 % Asset-based fees 557,502 528,127 5.6 % Non-recurring 79,731 45,372 75.7 % Operating revenues total 1,451,815 1,303,209 11.4 % Adjusted EBITDA expenses 344,842 317,802 8.5 % Adjusted EBITDA $ 1,106,973 $ 985,407 12.3 % Adjusted EBITDA margin % 76.2 % 75.6 % Index operating revenues increased 11.4% for the year ended December 31, 2023, driven by strong growth from both recurring subscriptions and non-recurring revenues, as well as growth from asset-based fees.
The following table presents the reconciliation of operating expenses to Adjusted EBITDA expenses for the years indicated: Years Ended (in thousands) December 31, 2024 December 31, 2023 Increase/(Decrease) Total operating expenses $ 1,327,610 $ 1,144,311 16.0 % Amortization of intangible assets 164,037 114,429 43.4 % Depreciation and amortization of property, equipment and leasehold improvements 16,978 21,009 (19.2 %) Impairment related to sublease of leased property — 477 n/m Acquisition-related integration and transaction costs (1) 6,951 2,427 186.4 % Consolidated Adjusted EBITDA expenses $ 1,139,644 $ 1,005,969 13.3 % Index Adjusted EBITDA expenses 374,091 344,842 8.5 % Analytics Adjusted EBITDA expenses 346,794 341,081 1.7 % ESG and Climate Adjusted EBITDA expenses 221,893 195,890 13.3 % All Other - Private Assets Adjusted EBITDA expenses 196,866 124,156 58.6 % Consolidated Adjusted EBITDA expenses $ 1,139,644 $ 1,005,969 13.3 % ________________ (1) Represents transaction expenses and other costs directly related to the acquisition and integration of acquired businesses, including professional fees, severance expenses, regulatory filing fees and other costs, in each case that are incurred no later than 12 months after the close of the relevant acquisition. 47 Table of Content s Segment Results The results for each of our three reportable segments and All Other - Private Assets for the years ended December 31, 2024, and 2023 are presented below: Index Segment The following table presents the results for the Index segment for the years indicated: Years Ended (in thousands) December 31, 2024 December 31, 2023 Increase/(Decrease) Operating revenues: Recurring subscriptions $ 882,367 $ 814,582 8.3 % Asset-based fees 657,501 557,502 17.9 % Non-recurring 56,277 79,731 (29.4 %) Operating revenues total 1,596,145 1,451,815 9.9 % Adjusted EBITDA expenses 374,091 344,842 8.5 % Adjusted EBITDA $ 1,222,054 $ 1,106,973 10.4 % Adjusted EBITDA margin % 76.6 % 76.2 % Index operating revenues increased 9.9% for the year ended December 31, 2024, driven by growth from asset-based fees and recurring subscriptions, partially offset by a decrease in non-recurring revenue.
The Credit Agreement makes available an aggregate of $1,250.0 million of revolving loan commitments under the Revolving Credit Facility, which may be drawn until January 26, 2029. The Revolving Credit Facility under the Credit Agreement was drawn at closing in an amount sufficient to prepay all term loans outstanding under the TLA Facility under the Prior Credit Agreement.
The Credit Agreement makes available an aggregate of $1,250.0 million of revolving loan commitments under the Revolving Credit Facility (“Revolving Loan Commitments”), which may be drawn until January 26, 2029.
Income Taxes The following table shows our income tax provision and effective tax rate for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Provision for income taxes $ 220,469 $ 173,268 27.2 % ETR 16.1 % 16.6 % (3.0 %) The effective tax rate of 16.1% for the year ended December 31, 2023 reflects a benefit of $21.5 million from the non-taxable gain on Burgiss, partially offset by the remeasurement of the deferred tax liability on the Company’s previous equity method investment in Burgiss.
The effective tax rate of 16.1% for the year ended December 31, 2023 reflects a benefit of $21.5 million from the non-taxable gain on Burgiss, partially offset by the remeasurement of the deferred tax liability on the Company’s previous equity method investment in Burgiss.
Operating revenues from ETFs linked to MSCI equity indexes increased by 7.3%, primarily driven by an increase in average AUM. Operating revenues from non-ETF indexed funds linked to MSCI indexes increased by 5.0%, primarily driven by an increase in average basis point fees.
Operating revenues from ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes increased by 20.0% and 19.4%, respectively, primarily driven by increases in average AUM.
Adjusting for the impact of the acquisition of Trove and foreign currency exchange rate fluctuations, ESG and Climate operating revenues would have increased 24.8%. ESG and Climate segment Adjusted EBITDA expenses increased 17.1% for the year ended December 31, 2023, primarily driven by higher compensation and non-compensation expenses across all expense activity categories.
Adjusting for the impact of the acquisition of Fabric and foreign currency exchange rate fluctuations, Analytics operating revenues would have increased 9.8%. Analytics segment Adjusted EBITDA expenses increased 1.7% for the year ended December 31, 2024, primarily driven by increases in non-compensation expense, relating to higher information technology and professional fees.
The AUM in ETFs also includes AUM in Exchange Traded Notes, the value of which is less than 1.0% of the AUM amounts presented. 41 Table of Contents (2) The value of AUM in ETFs linked to MSCI equity indexes is calculated by multiplying the equity ETF net asset value by the number of shares outstanding.
(2) The value of AUM in ETFs linked to MSCI equity indexes is calculated by multiplying the equity ETF net asset value by the number of shares outstanding.
To the extent there are material differences between these estimates and actual results, our consolidated financial statements will be affected. Goodwill Goodwill is recorded as a result of business combinations undertaken by the Company when the purchase price exceeds the fair value of the net tangible assets and separately identifiable intangible assets acquired.
To the extent there are material differences between these estimates and actual results, our consolidated financial statements will be affected. Goodwill We recognize goodwill in business combination transactions when the purchase price exceeds the fair value of the acquired net tangible and separately identifiable intangible assets. We test goodwill for impairment annually on July 1 or when interim triggers arise.
Weighted Average Shares and Common Shares Outstanding The following table shows our weighted average shares and common shares outstanding for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 % Change Weighted average shares outstanding: Basic 79,462 80,746 (1.6 %) Diluted 79,843 81,215 (1.7 %) The following table shows our common shares outstanding for the periods indicated: As of % Change (in thousands) December 31, 2023 December 31, 2022 Common shares outstanding 79,091 79,960 (1.1 %) The decrease in weighted average shares and common shares outstanding primarily reflects the impact of share repurchases made pursuant to the Company’s stock repurchase program.
Net Income The following table shows our net income for the years indicated: Years Ended (in thousands) December 31, 2024 December 31, 2023 Increase/(Decrease) Net income $ 1,109,128 $ 1,148,592 (3.4 %) As a result of the factors described above, net income decreased 3.4% for the year ended December 31, 2024. 45 Table of Content s Weighted Average Shares and Common Shares Outstanding The following table shows our weighted average shares and common shares outstanding for the years indicated: Years Ended (in thousands) December 31, 2024 December 31, 2023 % Change Weighted average shares outstanding: Basic 78,710 79,462 (0.9 %) Diluted 78,960 79,843 (1.1 %) The following table shows our common shares outstanding for the periods indicated: As of % Change (in thousands) December 31, 2024 December 31, 2023 Common shares outstanding 77,745 79,091 (1.7 %) The decrease in weighted average shares and common shares outstanding primarily reflects the impact of share repurchases made pursuant to the Company’s stock repurchase program.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe recognized total foreign currency exchange losses of $4.5 million for the year ended December 31, 2023 and foreign currency exchange gains of $0.5 million for the year ended December 31, 2022. 56 Table of Contents
Biggest changeWe recognized total foreign currency exchange losses of $4.8 million and $4.5 million for the year ended December 31, 2024 and 2023, respectively. 57 Table of Content s
Revenues from asset-based fees represented 22.0% and 23.5% of operating revenues for the years ended December 31, 2023 and 2022, respectively. While a substantial portion of our asset-based fees are invoiced in U.S. dollars, the fees are based on the assets in investment products, of which approximately three-fifths are invested in securities denominated in currencies other than the U.S. dollar.
Revenues from asset-based fees represented 23.0% and 22.0% of operating revenues for the years ended December 31, 2024 and 2023, respectively. While a substantial portion of our asset-based fees are invoiced in U.S. dollars, the fees are based on the assets in investment products, of which approximately three-fifths are invested in securities denominated in currencies other than the U.S. dollar.
We are exposed to additional foreign currency risk in certain of our operating costs. Approximately 42.4% and 42.1% of our operating expenses for the years ended December 31, 2023 and 2022, respectively, were denominated in foreign currencies, the significant majority of which were denominated in British pounds sterling, Indian rupees, Euros, Hungarian forints, Mexican pesos and Swiss francs.
We are exposed to additional foreign currency risk in certain of our operating costs. Approximately 40.9% and 42.4% of our operating expenses for the years ended December 31, 2024 and 2023, respectively, were denominated in foreign currencies, the significant majority of which were denominated in British pounds sterling, Indian rupees, Euros, Hungarian forints, Mexican pesos and Swiss francs.
For the years ended December 31, 2023 and 2022, 16.7% and 15.9%, respectively, of our revenues were subject to foreign currency exchange rate risk and primarily included clients billed in foreign currency as well as U.S. dollar exposures on non-U.S. dollar foreign operating entities.
For the years ended December 31, 2024 and 2023, 16.6% and 16.7%, respectively, of our revenues were subject to foreign currency exchange rate risk and primarily included clients billed in foreign currency as well as U.S. dollar exposures on non-U.S. dollar foreign operating entities.
Of the 16.7% of non-U.S. dollar exposure for the year ended December 31, 2023, 41.9% was in Euros, 32.5% was in British pounds sterling and 17.7% was in Japanese yen. Of the 15.9% of non-U.S. dollar exposure for the year ended December 31, 2022, 41.4% was in Euros, 30.4% was in British pounds sterling and 18.8% was in Japanese yen.
Of the 16.6% of non-U.S. dollar exposure for the year ended December 31, 2024, 41.9% was in Euros, 32.9% was in British pounds sterling and 17.8% was in Japanese yen. Of the 16.7% of non-U.S. dollar exposure for the year ended December 31, 2023, 41.9% was in Euros, 32.5% was in British pounds sterling and 17.7% was in Japanese yen.

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