MSCI revenue rose 12.2% to $867.0M and diluted EPS 19.6% to $4.69 as a 44.8% jump in average ETF assets lifted index fees 26.6%, while Analytics margins fell and interest costs rose 54%.
Revenue
$867M
+12.2% YoY
Net income
$342M
+12.6% YoY
Diluted EPS
$4.69
+19.6% YoY
Operating margin
56.2%
MSCI Q2 2026: a stock-market rally lifted index fees 27%, while Analytics margins shrank
MSCI's second quarter of 2026 (the three months to June 30) brought in $867.0 million of revenue, up 12.2%, and diluted EPS of $4.69, up 19.6%. More than half of the $94.3 million revenue increase came from one line: asset-based fees, which rose 26.6% to $233.1 million because much more money sat in funds that track MSCI indexes. The subscription business grew too, but more slowly, and the gap between those two growth rates is the main thing to understand about this quarter.
What MSCI does, and how it gets paid
MSCI sells tools that professional investors (asset managers, pension funds, banks, hedge funds) use to build and judge portfolios. It has four reporting lines:
Index: it builds and maintains stock-market indexes such as the MSCI World and MSCI Emerging Markets. Fund companies pay to license them, either as a flat subscription or as an asset-based fee: a small cut of the money invested in an ETF or fund that tracks the index. BlackRock alone made up 11.8% of MSCI's first-half revenue, and 96.6% of that came from fees on assets in BlackRock funds built on MSCI indexes.
Analytics: risk-measurement and portfolio-analysis software.
Sustainability and Climate: ESG ratings (scores for how a company handles environmental, social and governance issues) and climate-risk data.
All Other – Private Assets: data and tools for private equity, private credit and real estate.
Most revenue is recurring, so MSCI also reports two operating measures that this report uses:
Run Rate: the yearly value of all contracts currently in force, assuming they all renew. It is a forward-looking view of revenue, and it moves before reported revenue does.
Retention Rate: the share of existing subscription value that clients kept rather than cancelled, shown as an annualized figure. 95% means clients cancelled contracts worth about 5% of the subscription base at a yearly pace.
Headline figures
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Operating margin is the share of revenue left after running the business, before interest and tax. Adjusted EBITDA also adds back depreciation, amortization and some acquisition costs. "Organic" growth strips out acquisitions and currency moves.
Takeaway: This quarter's acceleration came mostly from markets, not new customers. Average assets in MSCI-linked ETFs rose 44.8%, and asset-based fees supplied $49.0 million of the $94.3 million revenue gain even though they are only about 27% of revenue. The subscription base underneath grew about 8–9% (organic recurring subscription Run Rate +8.1%). That is steady, but it would not have produced a 12% top line on its own. A market pullback would bring MSCI's reported growth back toward that subscription rate quickly.
Index: market gains did most of the work, and the fee rate slipped
Index revenue rose 17.5% to $511.0 million, and the segment's Adjusted EBITDA margin widened to 77.8% from 75.9%.
Asset-based fees +26.6%. Revenue from ETFs linked to MSCI equity indexes rose 36.1%, and revenue from non-ETF index funds rose 11.3%. The 10-Q attributes both to "an increase in average AUM, partially offset by a decrease in average basis point fees". A basis point is one-hundredth of a percent, and this is the fee rate MSCI earns on each dollar invested. Average ETF assets grew 44.8% while ETF fee revenue grew 36.1%, so MSCI earned less per dollar than a year ago. This usually happens when money flows into the cheapest, largest index products.
Most of the asset growth came from price gains, not new money. Assets in MSCI-linked ETFs rose by $415 billion in the quarter to $2,818 billion. Of that, $376 billion was market appreciation and only $39 billion was net cash inflows, down from $103 billion in Q1 2026. This is the main reason to treat the quarter's growth rate with some caution.
Index subscriptions +11.6% to $263.0 million, "primarily driven by growth from market cap-weighted Index products". This is the stronger evidence of underlying demand. Index subscription Run Rate grew 11.4% (11.1% organic), with growth across all client types and regions. Index retention improved to 97.5% from 96.0%, and Index subscription cancellations fell to $6.3 million from $9.2 million.
Analytics: revenue grew but profit fell
Analytics revenue rose 6.6% to $189.4 million, driven by Equity Analytics and Multi-Asset Class subscriptions. The segment's Adjusted EBITDA fell 5.0% to $88.0 million, and its margin dropped to 46.5% from 52.1%, because segment expenses jumped 19.2%. The 10-Q names higher IT and market data costs and "a decrease in the favorable fair value adjustment on contingent consideration related to the Fabric RQ, Inc. acquisition". In other words, part of the margin drop is a comparison effect. Last year's results were helped by a larger accounting gain from lowering the expected earn-out payment for the Fabric acquisition, and that gain was smaller this year. That part is a one-off distortion. The IT and data-cost growth is ongoing.
New sales also slowed. Analytics net new recurring subscription sales (new subscriptions minus cancellations) were $11.2 million, down from $14.8 million. Retention edged up to 94.3% from 93.7%, and Run Rate grew 5.8% (6.6% organic).
Sustainability and Climate: the slowest segment, and retention fell
Revenue grew 3.4% to $91.9 million (3.0% excluding currency moves), and Run Rate grew just 1.9% (3.2% organic). The 10-Q credits Climate products, mainly in EMEA, for the growth, so ESG ratings are adding little. Retention fell to 92.3% from 93.8%, the lowest of the four segments. Segment margin improved to 38.7% from 35.6%, but mainly because expenses fell 1.6%, "primarily driven by increased capitalization of costs related to internally developed software projects". That means some development spending moved from the income statement onto the balance sheet as an asset. It is an accounting shift, not a real cost saving.
MSCI is putting more money into the climate side. On June 24 it agreed to buy First Street Technology, a physical climate-risk data provider, for $120.0 million in cash at closing plus possible earn-out payments over two years. The deal is expected to close in Q3 2026 and will be reported inside this segment.
Private Assets: stronger renewals, thinner margin
Revenue rose 4.9% to $74.7 million (4.4% organic, excluding the Vantager acquisition), and Run Rate rose 8.0% to $302.6 million, led by Total Plan Manager, Private Capital Transparency Data and Private Capital Intel products, mainly sold to asset owners. Retention improved sharply to 93.8% from 91.2%. But expenses rose 12.3% on higher headcount, so the segment's Adjusted EBITDA margin fell to 22.9% from 28.0%. Revenue here is still trailing the Run Rate gains.
From operating profit to EPS: debt and buybacks pull in opposite directions
Operating income grew 14.6%, net income only 12.6%, and diluted EPS 19.6%. Two items explain the gaps:
Interest costs jumped. Interest expense rose 53.7% to $71.0 million, "as a result of higher debt levels". Total debt principal was $6.4 billion at June 30 ($6.0 billion of senior notes plus $475.0 million on the revolving credit line). That is 3.1x trailing adjusted EBITDA, inside MSCI's 3.0–3.5x target range. Pre-tax income grew only 10.5%. A lower tax rate (18.0% vs 19.6%, which the 10-Q attributes to US tax law changes and the mix of where profits were earned) recovered part of that.
Fewer shares. Diluted shares outstanding fell 5.9% to 72.9 million, after heavy buybacks: $544.3 million in the first half at an average $558 per share, including $145.0 million in Q2. Each share therefore claims a bigger slice of profit, so EPS grew about 7 points faster than net income. Much of that buyback was funded with debt, which is why interest expense rose.
Free cash flow (operating cash flow minus capital spending) rose 8.2% to $326.4 million. That is slower than revenue, because MSCI paid more in taxes, operating costs and interest. MSCI also paid $149.2 million in dividends and declared $2.05 per share for Q3.
First-half note: six-month net income rose 26.3% to $748.0 million and diluted EPS to $10.23 from $7.63. Those figures include an $88.0 million one-time tax benefit in Q1 from finishing an internal legal-entity restructuring, which cut the first-half tax rate to 7.3%. Excluding it (MSCI's first-half adjusted EPS was $9.49 vs $8.17, +16.2%), underlying growth was much closer to Q2's pace.
Guidance and outlook
MSCI does not guide on revenue or EPS. It raised its full-year 2026 cost and cash-flow ranges:
Full-year 2026 guidance
Current
Prior
Operating expense
$1,535–1,575M
$1,490–1,530M
Adjusted EBITDA expense
$1,340–1,370M
$1,305–1,335M
Interest expense
$282–286M
$274–280M
Effective tax rate (ex-restructuring)
18.0–20.0%
18.0–20.0%
Free cash flow
$1,485–1,545M
$1,470–1,530M
Management says the higher expense range reflects recent acquisitions including First Street, plus AUM running ahead of the "flat market assumption" in its prior guidance. Higher assets raise revenue, and they also raise incentive-compensation accruals (bonus provisions) and pay for extra investment. The prior guidance assumed flat markets, so the raised ranges already reflect the rally that has happened.
Our read: MSCI's core is still in good shape. Index subscriptions grew in double digits, overall retention improved to 95.3%, and cancellations fell. But the 12% revenue growth and 19.6% EPS growth are both boosted by factors that can reverse. Asset-based fees move with stock prices, and a quarter's inflows are now small next to its market gains. EPS is being lifted by debt-funded buybacks while interest costs rise more than 50% a year. The two segments MSCI is building beyond indexes also lagged. Analytics margins fell even allowing for the Fabric earn-out comparison, and Sustainability and Climate is growing low single digits with falling retention. Beyond equity markets, the numbers to watch in Q3 are whether Analytics margins recover, whether First Street changes the Sustainability and Climate Run Rate trend, and whether the average basis-point fee on ETF assets keeps slipping.
Source: MSCI Inc. Form 10-Q for the quarter ended June 30, 2026 (filed July 21, 2026), and the Q2 2026 earnings release (Form 8-K Exhibit 99.1) for adjusted EPS, free cash flow, segment margins and guidance. Adjusted EBITDA, adjusted EPS and free cash flow are non-GAAP measures defined by MSCI.