Q1 2024 MSCI Inc Earnings Call

Speaker Change: [music].

Operator: Good morning, ladies and gentlemen, and welcome to the MSCI 1st Quarter 2024 Earnings Conference Call. As a reminder, this call is being recorded. This time, all participants are in listen-only mode.

Good day, ladies and gentlemen, and welcome to Diana S. T. I first Arthur I think 94 earnings conference call.

As a reminder, this call is being recorded.

At this time all participants are in listen only mode. Later, we will conduct a question and answer session where participants.

Operator: Later, we will conduct a question-and-answer session where participants are requested to ask one question at a time, then add themselves back to the queue for any additional questions. We will have further instructions for you later on. I would now like to turn the call over to Jeremy Ulan, Head of Investor Relations and Treasurer.

But to ask one question at that time, then add themselves back to the queue for any additional questions.

Will have further instructions for you later on.

With that I would now like to turn the call over to Jeremy <unk> head of Investor Prelims, and Treasurer you may begin.

Jeremy H. Ulan: Thank you. Good day, and welcome to the MSCI First Quarter 2024 earnings conference call. Earlier this morning, we issued a press release announcing our results for the first quarter of 2024. This press release, along with an earnings presentation and brief quarterly update, is available on our website msci.com under the investor relations tab. Let me remind you that this call contains forward-looking statements which are governed by the language on the second slide of today's presentation.

Jeremy: Thank you good day and welcome to the MSCI first quarter 2024 earnings Conference call earlier. This morning, we issued a press release announcing our results for the first quarter 2024. This press release, along with an earnings presentation.

Jeremy: A brief quarterly update are available on our website MSCI dot com under the Investor Relations tab, let.

Jeremy: Let me remind you that this call contains forward looking statements, which are governed by the language on the second slide of today's presentation. You are cautioned not to place undue reliance on forward looking statements, which speak only as of the date on which they are made are based on current expectations and current economic conditions and are subject to risks.

Jeremy H. Ulan: You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made, are based on current expectations and current economic conditions, and are subject to risks and uncertainties that may cause actual results to differ materially from the results anticipated in these forward-looking statements. For a discussion of additional risks and uncertainties, please see the risk factors and forward-looking statements disclaimer in our most recent Form 10-K and in our other FTC filings.

And uncertainties that may cause actual results to differ materially from the results anticipated in these forward looking statements.

Jeremy: For a discussion of additional risks and uncertainties. Please see the risk factors and forward looking statements disclaimer in our most recent Form 10-K, and our other SEC filings.

Jeremy H. Ulan: During today's call, in addition to results presented on the basis of U.S. GAAP, we will also refer to non-GAAP measures. You'll find a reconciliation of our non-GAAP measures to the equivalent GAAP measures in the appendix of the earnings presentation. We will also discuss operating metrics such as run rate and retention rate. Important information regarding our use of operating metrics, such as run rate and retention rate, is available in the earnings

Jeremy: During today's call. In addition to results presented on the basis of U S. GAAP. We also refer to non-GAAP measures, you'll find a reconciliation of our non-GAAP measures to the equivalent GAAP measures in the appendix of the earnings presentation.

Jeremy: We will also discuss operating metrics, such as run rate and retention rate <unk>.

Jeremy: Important information regarding our use of operating metrics such as run rate and retention rate are available in the earnings presentation.

Henry A. Fernandez: On the call today are Henry Fernandez, our Chairman and CEO, Bear Pettit, our President and COO, and Andy Wiechmann, our Chief Financial Officer. As a final housekeeping item, we want to remind our analysts to ask one question at a time during the Q&A portion of our call. We do encourage you to ask more questions by adding yourself back to the queue. With that, I now turn the call over to Henry Fernandez. Henry?

Jeremy: On the call today are Henry Fernandez, our chairman and CEO Baer, Pettit, our president and CFO and Andy Wichmann, Our Chief Financial Officer.

Speaker Change: As a final housekeeping item, we wanted to remind our analysts to ask one question at a time during the Q&A portion of our call. We do encourage you to ask more questions by adding yourself back to the queue with that let me now turn the call over to Henry Fernandez Henry.

Henry A. Fernandez: Jeremy, good day everyone, and thank you for joining us. In the first quarter, MSCI delivered solid financial results that demonstrate the resilience of our business and our ability to maintain profitable growth, supported by Durable Secular Trends. Our operating metrics included some key product and segment milestones, but new recurring sales were flat from last year's levels and reflect the lagging effect of market pressures on client budgets, and Cancels were meaningfully elevated in some concentrated areas.

Henry A. Fernandez: Thank you Jeremy Good day, everyone and.

And thank you for joining us.

Henry A. Fernandez: In the first quarter MSCI delivered solid financial results that demonstrate the resilience of our business.

Henry A. Fernandez: And our ability to maintain profitable growth.

Henry A. Fernandez: By durable secular trends.

Henry A. Fernandez: Our operating metrics, including some key put arlo segment milestones.

Henry A. Fernandez: Bob.

Henry A. Fernandez: New recurring sales were flat from last year's levels and reflect the lagging effect of.

Henry A. Fernandez: Market pressures on client budgets.

Henry A. Fernandez: And cancels were meaningfully elevated in some concentrated areas.

Henry A. Fernandez: On the financial side, MSCI achieved organic revenue growth of 10%, Justin earnings per share growth of 12%, and free cash flow growth of 14%. Meanwhile, our ABF revenue grew by 13%, powered by record AUM balances in both ETFs and non-listed products linked to MSCI indices. We consider AUM levels in MSCI index link products as a leading indicator of improving client conditions. Operationally, we delivered our highest Q1 recurring sales in analytics in a decade at $14 million, our best ever Q1 of recurring sales among hedge funds and nearly 11 million doctors, and another quarter of double-digit subscription run rate growth of 11% among asset owners. Driven by index analytics, non-recurring sales of $18 million were up 16%.

Henry A. Fernandez: On the financial side, MSCI achieved organic revenue growth of 10%.

Henry A. Fernandez: Our adjusted earnings per share growth of 12%.

Henry A. Fernandez: And free cash flow growth of 14%.

Henry A. Fernandez: Meanwhile, our ABF revenue grew by 13%.

Henry A. Fernandez: Power by record AUM balances in both Etfs and non listed products linked to MSCI indices.

Henry A. Fernandez: We can see their AUM levels in MSCI index linked products as a leading indicator of improving flying conditions.

Henry A. Fernandez: Operationally, we delivered our highest Q1 recurring sales in analytics in a decade at $40 million.

Henry A. Fernandez: Our best ever Q1, our recurring sales home on hedge funds.

Henry A. Fernandez: Nearly $11 million.

Henry A. Fernandez: On another quarter of double digit subscription run rate growth of 11%.

Henry A. Fernandez: On asset owners driven.

Henry A. Fernandez: Driven by index and analytics.

Henry A. Fernandez: Non recurring sales from $18 million were up 16%.

Henry A. Fernandez: At the same time, our first quarter results show the lingering impact of market volatility, changes in interest rate expectations, and pressures on investment and financial firms, especially active equity managers. Notably, MSCI witnessed elevated client cancellations, which reflected a concentration of unusual client events. Roughly $7 million worth of cancels came from a single client event, a historic merger of two major global banks in Europe that affected us across index, ESG, and analytics. While some client pressures may continue, we do not expect this high level of councils to continue.

Henry A. Fernandez: At the same time, our first quarter results show the lingering impact of market volatility.

Henry A. Fernandez: Changes in interest rate expectations.

Henry A. Fernandez: <unk> on investment and financial firms.

Henry A. Fernandez: Especially active equity managers.

Henry A. Fernandez: Notably MSCI witnessed elevated cancels, which reflected a concentration of unusual client events.

Henry A. Fernandez: Roughly $7 million worth of cancels came from a single client event.

Henry A. Fernandez: Our historic merger of two major global banks in Europe that affected all across index ESG analytics.

Henry A. Fernandez: While some client pressures may continue.

Henry A. Fernandez: We do not expect this high level of cancels to compete.

Henry A. Fernandez: In fact, we remain greatly encouraged by our high levels of engagement across all client segments and all geographies. Despite the tough Q1 operating environment for us, we delivered double-digit organic subscription run rate growth among asset owners, hedge funds, wealth managers, and corporations, among other managers. Redemption, ad flow, and feed pressures continue to weigh on some managers, but we were able to deliver 7% organic subscription run rate growth in that segment. In addition, we achieved 39% climate run rate growth across our product line, driven by AIPAC and EMEA regions.

Henry A. Fernandez: In fact, we remain greatly encouraged by our high levels of engagement across all client segments.

Henry A. Fernandez: All geographies.

Henry A. Fernandez: Despite the soft Q1 operating environment for Ross, we deliver double digit organic subscription run rate growth hormone asset owners hedge funds wealth management managers and corporate.

Henry A. Fernandez: Among asset managers.

Henry A. Fernandez: Redemption.

Henry A. Fernandez: Flow and fee pressures continue to weigh on some managers, but.

Henry A. Fernandez: We were able to deliver 7% organic subscription run rate growth with that segment.

Henry A. Fernandez: In addition, we achieved 39% <unk> run rate growth across.

Henry A. Fernandez: Gross our product lines.

Henry A. Fernandez: Even by APAC and EMEA regions.

Henry A. Fernandez: Likewise, APAC and EMEA helped stabilize our ESG run rate growth at 12% amid continued headwinds in the Americas. Meanwhile, amid a strong U.S. dollar, the benefits of our non-dollar expenses help offset FX-related revenue headwinds. MSCI's all-weather franchise supports our financial resilience. Our diverse mix of clients, products, and geographies helps stabilize our performance in difficult environments, as we experienced in the first quarter. Looking ahead, to the extent equity markets and high AUM balances and liquidity levels remain supportive, that should mitigate certain pressures that have weighed on client spending on an SEI product.

Henry A. Fernandez: Likewise, APAC and EMEA helped establish <unk>, our ESG run rate growth at 12%.

Henry A. Fernandez: Continued headwinds in the Americas.

Henry A. Fernandez: Meanwhile, EMEA.

Henry A. Fernandez: A strong U S dollar the benefits of our non dollar expenses helped offset FX related revenue headwinds.

Henry A. Fernandez: MSCI is all weather franchise supports our financial resilience.

Henry A. Fernandez: Our diverse mix of clients.

Henry A. Fernandez: Ups and geographies.

Henry A. Fernandez: <unk> stabilized our performance in difficult environments.

Henry A. Fernandez: As we experienced in the first quarter.

Henry A. Fernandez: Looking ahead to the extent equity markets on high AUM balances and liquidity levels remain supporting.

Henry A. Fernandez: That should mitigate certain pressures that have weighed on client spending on MSCI products.

Henry A. Fernandez: We remain keenly focused on capitalizing on the biggest secular trends reshaping our industry, such as portfolio customization and indexation, the growth of and increasing allocations to private assets, and the Global Sustainability Revolution. Just last week, we closed our acquisition of the London-based index provider, Foxbear.

Henry A. Fernandez: We remain keenly focused on capitalizing on the biggest secular trends reshaping our industry.

Henry A. Fernandez: Such as portfolio customization and indexation.

The growth and increasing allocations to private assets.

Henry A. Fernandez: And the global sustainability Revolution.

Henry A. Fernandez: Just last week, we closed our acquisition of the London based index provider Fox Barrick.

Henry A. Fernandez: This will give us a new technology platform to accelerate custom index production while providing simulation and backtesting capabilities for the creation of indices for institutional investors and intermediaries. Now, turning to our other recent acquisitions. Combining the Fabric Platform with MSCI's Factor Risk Models, ESG and Climate Data, and Indices has dramatically enhanced our capabilities and solutions for the wealth segment. Finally, the MSCI carbon markets team, formerly Trout Research, has expanded our climate solutions and deepened our engagement with existing and prospective clients beyond institutional investors, such as corporates, trading desks, and banks.

Henry A. Fernandez: This will give us a new technology platform to accelerated costume index production, while providing simulation and back testing capabilities for the creation of a business for institutional investors and intermediaries.

Henry A. Fernandez: Turning to our other recent acquisitions.

Henry A. Fernandez: Combining the fabric platform with MSCI factor risk models, ESG and climate data and indices.

Henry A. Fernandez: Has dramatically enhanced our capabilities and solutions for the wealth segment.

Henry A. Fernandez: Finally, the MSCI carbon markets theme, formerly drove research Hudson.

Henry A. Fernandez: <unk> expanded our climate solutions, and deepen our engagement with existing and prospective clients beyond institutional investors, such as corporate trading desks and banks.

Henry A. Fernandez: Considering the lagging effect of market volatility that our clients and MSCI have faced, we expect our all-weather franchise to continue to withstand external challenges, such as the client events we saw in Q1. This makes us confident that MSEI can maintain high levels of revenue growth and profitability in 2024 and beyond.

Henry A. Fernandez: Considering the lagging effect of market volatility that our clients on MSCI outpaced.

We expect our all weather franchise to continue to withstand external challenges switch.

Henry A. Fernandez: Such as the client events, we saw in Q1.

Henry A. Fernandez: This makes us confident that may MSCI can maintain high levels of revenue growth.

Im profitability in 2024 and beyond.

Bear: And with that, let me turn the call over to Bear. Okay?

Bear: And with that let me turn the call over to bear bear.

Alexander Kramm: Thank you, Henry, and greetings to everyone. In my remarks today, I will discuss some of the key sources of strength in our first quarter results at both the product and segment levels while putting our results in a broader strategic perspective. First, I would like to expand a bit on Henry's comments about our elevated capacity. As he noted, the vast majority of our first quarter meetings stem from client events, such as industry consolidation, cost pressures, fund closures, and reorganization.

Bear Bear: Thank you Henry and greetings everyone in my remarks today I will discuss some of the key sources of strength in our first quarter results at both the product and segment levels, while putting our results in a broader strategic perspective.

Bear Bear: First I would like to expand a bit on Henry's comments about our elevated cancels.

Bear Bear: As you noted the vast majority of our first quarter kastle stemmed from client events, such as industry consolidation cost pressures fund closures and reorganization.

Alexander Kramm: Excluding the single client event from a bank merger, our Q1 retention rate across MSCI was 94%. Clients who use multiple MSCI product lines account for 85% of our total subscription run rate. The Q1 retention of those clients is, on average, 93% or higher. Now, turning to our product and segment results. As demand for index investments continues to grow, the product ecosystem linked to MSCI indexes remains a competitive advantage, especially as more and more investors push for customized products. In the first quarter, assets under management in equity ETF products linked to MSCI indexes hit a new record high of $1.58 trillion.

Bear Bear: Excluding the single client event from a bank merger.

Bear Bear: Our Q1 retention rate across MSCI was 94%.

Bear Bear: Clients, who use multiple MSCI product lines account for 85% of our total subscription run rate.

Bear Bear: The Q1 retention of those clients on average is 93% or higher.

Bear Bear: Turning to our product and segment results.

Bear Bear: As demand for index investments continues to grow the product ecosystem linked to MSCI indexes remains a competitive advantage.

Bear Bear: Especially as more and more investors push for customized products.

Bear Bear: In the first quarter assets under management in equity ETF products linked to MSCI indexes hit a new record high of 158 trillion.

Alexander Kramm: While AUM and non-listed products linked to MSCI indexes also set a record of $3.23 trillion, we also delivered index subscription run rate growth of 9.3%, including 12% growth in Asia-Pacific and 24% growth among hedge funds. The 24% subscription run rate growth and growth among hedge funds was driven primarily by our float data products and custom index sales. Meanwhile, our custom and special index run rate growth was 19%.

Bear Bear: While <unk> and non listed products linked to MSCI indexes also set a record of 323 trillion.

Bear Bear: We also delivered index subscription run rate growth of nine 3%, including 12% growth in Asia Pacific and 24% growth among hedge funds.

Bear Bear: The 24% subscription run rate growth in index among hedge funds was driven primarily by our flow data products and custom index sales.

Bear Bear: Meanwhile, our custom and special index run rate growth was 19%.

Alexander Kramm: MSCI's recent acquisition of Foxbury will further enhance our wide range of custom index solutions and provide a new client-centric interactive experience. The trend towards greater customization cuts across all product lines and client segments. For example, wealth managers increasingly want to customize their clients' portfolios using advanced technology platforms. That is what motivated MSCI's acquisition of Fabric, whose platform is now part of our analytics office. Combined with our Total Portfolio Toolkit, the Fabric platform has already boosted our ability to serve the wealth segment, and the feedback from clients has been extremely positive.

Bear Bear: Msci's recent acquisition of Foxberry will further enhance our wide range of custom index solutions and provide a new client centric interactive experience.

Bear Bear: The trend towards greater customization cuts across all product lines and client segments.

Bear Bear: For example.

Bear Bear: Wealth managers increasingly want to customize their clients' portfolios using advanced technology platforms that is what motivated msci's acquisition of fabric, whose platform is now part of our analytics offering.

Combined with our total portfolio toolkit the fabric platform has already boosted our ability to serve the wealth segment and the feedback from clients has been extremely positive.

Alexander Kramm: Our run rate among wealth managers has now surpassed $100 million, growing over 15% year on year. The push for customization is closely related to another shift in the analytics space. Clients have always depended on us for risk and performance attribution tools, but they now want highly specialized insights and deeply integrated content, all supported by leading-edge technology, including generative AI. Our analytics team has met this demand through products such as our multi-asset class factor models, our risk insights and risk manager solutions, and our MSCI One platform built on Microsoft Azure. As we have recently seen, these tools can become even more relevant amid market volatility, technical pressures, and geopolitical uncertainty.

Bear Bear: Our run rate among wealth managers has now surpassed $100 million Brian.

Bear Bear: Brian over 15% year on year.

Bear Bear: The push for customization is closely related to another shift in the analytics space.

Clients have always dependent on us for risk and performance attribution tools, but they now want highly specialized insights and deeply integrated content.

Bear Bear: All supported by meeting technology, including generative AI.

Bear Bear: Our analytics team has met the demand through products, such as our multi asset class factor models, our risk insights and risk manager solutions and our MSCI one platform built on Microsoft Azure.

Bear Bear: As we have recently seen these tools can become even more relevant amid market volatility cyclical pressures and geopolitical uncertainty.

Alexander Kramm: In the first quarter, Analytics posted revenue growth of 12% and our highest Q1 in a decade for recurring news sales. At the product level, recurring sales of our risk manager tool were up by 60% and included a large strategic win with a major global alternative asset manager facilitated by our risk insights offer. At the segment level, Analytics achieved recurring sales growth of 27% among banks, 20% among hedge funds, and 15% among asset owners.

Bear Bear: In the first quarter analytics posted revenue growth of 12% and our highest Q1 in a decade for recurring new sales.

Bear Bear: At the product level recurring sales of our risk manager tool were up by 60% and included a large strategic win with a major global alternative asset manager facilitated by our risk insights offering.

Bear Bear: At the segment level analytics achieved recurring sales growth of 27% among banks, 20% among hedge funds and 15% among asset owners.

Alexander Kramm: Rising demand for highly specialized analytics tools intersects with growing client needs for climate and sustainability regulatory solutions. This represents an attractive opportunity for MSCI, and we have doubled down on our efforts to capture it. Our first quarter run rate growth for ESG regulatory solutions was 33%. To build on this momentum, we have enhanced our solutions for the EU's Sustainable Finance Disclosure Regulation while developing a new solution for the Corporate Sustainability Reporting Directive, or CSRD.

Bear Bear: Rising demand for highly specialized analytics tools interest tax with growing client needs for climate and sustainability regulatory solution.

Bear Bear: This represents an attractive opportunity for MSCI.

Bear Bear: We have doubled down on our efforts to capture it.

Bear Bear: Our first quarter run rate growth for ESG regulatory solutions was 33%.

Bear Bear: To build on this momentum we have enhanced our solutions for the EU sustainable finance disclosure regulations, while developing a new solution with a corporate sustainability reporting directive or CSR D.

Alexander Kramm: In addition, we will continue exploring untapped opportunities in APAC, where we achieved 18% ESG run rate growth in the first quarter. In MSCI Private Capital Solutions, we achieved a run rate growth of 17% over Burgess's performance in the same period last year prior to the acquisition, and a retention rate of close to 96%. We had early momentum in EMEA, which accounted for over half of new client wins in the product segment.

Bear Bear: In addition, we will continue exploring untapped opportunities in APAC, where we achieved 18% ESG run rate growth in the first quarter.

And MSCI private capital solutions, we achieved a run rate growth of 17% over <unk> performance in the same periods last year prior to the acquisition.

Bear Bear: And a retention rate of close to 96%.

Bear Bear: We had early momentum in EMEA, which accounted for over half of new client wins in the products segment.

Alexander Kramm: We continue to drive new recurring sales of key existing products, such as private capital transparency data and total plan portfolio management. We're also making progress on our integrated product roadmap, including evaluated pricing for LPs and GPs, leveraging MSCI's data, models, and resources. In summary, MSCI remains laser-focused on translating our long-term strategy into near-term delivery while harnessing competitive advantages and secular trends.

We continue to drive new recurring sales of key existing products, such as private capital transparency data and total planned portfolio managers.

Bear Bear: We're also making progress on our integrated product roadmap, including evaluated pricing for Lps and GPS leveraging MSCI data models and research in summary, MSCI remains laser focused on translating our long term strategy into near term delivery.

Bear Bear: While harnessing competitive advantages and secular trends.

Andy: And with that, let me turn the call over to Andy.

Bear Bear: And with that let me turn the call over to Andy Andy.

Andrew Wiechmann: Thanks, and hi everyone. In the first quarter, we delivered double-digit organic revenue growth, 11% adjusted EBITDA growth, and 12% adjusted EPS growth. We delivered 10% organic revenue growth, as well as record asset-based fee revenue driven by record AUM balances in ETF and non-ETF products linked to the MSCI index. This solid financial performance highlights the resilience of our business model, even in the face of headwinds reflected in our operating metrics. As we have mentioned previously, we are seeing the impacts of a slow-moving business cycle.

Andrew Wiechmann: Thanks, Baer and hi, everyone.

Andrew Wiechmann: In the first quarter, we delivered double digit organic revenue growth, 11% adjusted EBITDA growth and 12% adjusted EPS growth.

Andrew Wiechmann: We delivered 10% organic revenue growth as well as record asset based fee revenue driven by record AUM balances and Etfs and non ETF products linked to MSCI indexes.

Andrew Wiechmann: The solid financial performance highlights the resilience of our business model, even in the face of headwinds reflected in our operating metrics.

Andrew Wiechmann: As we have mentioned previously we are seeing the impact of a slow moving business cycle is.

Andrew Wiechmann: As the prolonged period of muted flows into active equity strategies has resulted in a lengthening of sales cycles and, in this quarter, a concentration of client events. On top of what is typically a seasonally softer quarter for us, to provide a bit more color, if we compare our cancels to the first quarter of 2023, the two product segments with the biggest increases were index and ESG inclined. Within the index, nearly the entirety of the increase, or roughly $7 million of the increase, related to a higher contribution from corporate events.

Andrew Wiechmann: The prolonged period of muted flows into active equity strategies have resulted in a lengthening of sales cycles and in this quarter a concentration of client events.

Andrew Wiechmann: On top of what is typically a seasonally softer quarter for us.

Andrew Wiechmann: To provide a bit more color.

Andrew Wiechmann: We compare our cancels for the first quarter of 2023 to two product segments with the biggest increases were index and ESG and climate.

Andrew Wiechmann: Within index nearly the entirety of the increase were roughly $7 million of the increase related to a higher contribution from corporate events.

Andrew Wiechmann: From a client segment lens and index, $5.2 million of the year-over-year increase in cancels came within the broker-dealer and hedge fund client segments, including roughly $4 million from the previously mentioned large global bank merger. Similarly, within ESG and climate, nearly $4 million, or 80% of the increase in cancels, came from a higher level of corporate events, including $2.5 million from the large global bank merger. The large majority of cancels related to this global bank merger occurred in Q1.

Andrew Wiechmann: From a client segment lens and index $5 $2 million of the year over year increase in cancels came within the broker dealer and hedge fund clients segments, including roughly $4 million from the previously mentioned large global bank merger.

Andrew Wiechmann: Similarly, within ESG and climate, nearly $4 million or 80% of the increase in cancels came from a higher level of corporate events, including $2 5 million from the large global bank merger event.

Andrew Wiechmann: The large majority of cancels related to this global bank merger occurred in Q1.

Andrew Wiechmann: Although there could be some smaller items that come through in future quarters as the integration is complete, across all product segments, the retention rate with asset owners and asset managers is 95% and 97% respectively. Well, we do expect some elevated levels of client events to continue in the near term. However, we do not expect to see cancels continue at this level in the coming quarters.

Andrew Wiechmann: Although there could be some smaller items that come through in future quarters that the integration is completed.

Andrew Wiechmann: Across all product segments, the retention rate with asset owners and asset managers with a 95% and 97% respectively.

Andrew Wiechmann: While we do expect some elevated level of client events to continue in the near term, we do not expect to see cancels continue at this level in the coming quarters, and we expect retention rates to rebound through the year.

Andrew Wiechmann: And we expect retention rates to rebound through the year. Additionally, we have a solid pipeline of new sales opportunities. In the index, we had 8% subscription run rate growth in our market cap weighted modules and 19% growth in custom indexes and special packages. As a reminder, in Q2 of last year, we had a large non-recurring revenue item related to unlicensed usage of our indexes, which drove an unusually large level of non

Andrew Wiechmann: Additionally, we have a solid pipeline of new sales opportunities.

Andrew Wiechmann: In index, we had 8% subscription run rate growth in our market cap weighted modules and 19% growth in custom indexes and special packages.

Andrew Wiechmann: As a reminder, in Q2 of last year, we had a large nonrecurring revenue item related to unlicensed usage of our indexes, which drove an unusually large level of nonrecurring revenue.

Andrew Wiechmann: ABF revenues were up 13% year over year, benefiting from about $21 billion of cash inflows and about $93 billion of market appreciation so far in 2024 with an ETS linked to the MSCI Equity Index. Most of the MSCI-linked ETF flows were in developed markets outside the U.S. and emerging markets products, which together were over $22 billion.

Andrew Wiechmann: ABF revenues were up 13% year over year benefiting from about $21 billion of cash inflows and about $93 billion of market appreciation. So far in 2024 within Etfs linked to MSCI equity indexes.

Andrew Wiechmann: Most of the MSCI linked ETF flows were in developed markets outside the U S and emerging markets products, which together were over $22 billion.

Andrew Wiechmann: In analytics, organic subscription run rate growth was 7%, which reflects the benefits from the investments we've made in innovation, such as our next-gen models and our insights offering. These have helped us to drive strong sales and enterprise risk in multi-asset class models across coin sectors. We also have several client wins and fixing coming.

Andrew Wiechmann: In analytics organic subscription run rate growth was 7%, which reflects the benefits from the investments we've made and the innovations such as our next Gen models and our insights offering.

Andrew Wiechmann: These have helped us to drive strong sales and enterprise risk and multi asset class models across client segments.

Andrew Wiechmann: We also have several client wins in fixed income analytics analytics revenues. This quarter included a large contribution from catch up revenue items much of which related to large client implementations.

Andrew Wiechmann: Analytics revenue this quarter included a large contribution from catch-up revenue items, much of which related to large client implementation. In our ESG and climate reportable segment, organic run rate growth was 13%, which excludes about $4.8 million of run rates from Trove and the impact of ESSEC. And run rate growth for the reportable ESG and climate segment was nearly 18% within Europe and close to 22% in Asia, while Americas growth was 9%. In real assets, run rate growth was about 4%, with subdued net new subscription sales continuing to reflect lower transaction activity and other commercial real estate pressures.

Andrew Wiechmann: And our ESG and climate reportable segment organic run rate growth was 13%.

Andrew Wiechmann: Which exclude about $4 8 million of run rate from <unk> and the impact of FX.

Andrew Wiechmann: Run rate growth for the reportable ESG and climate segment was nearly 18% within Europe, and close to 22% and Asia, while the Americas growth was 9%.

Andrew Wiechmann: In real assets run rate growth was about 4% with subdued net new subscription sales continuing to reflect lower transaction activity and other commercial real estate pressures.

Andrew Wiechmann: We continue to be pleased with our progress on the integration of Burgess, which, as a reminder, is referred to as the private capital solutions operating segment within our all other private assets reportable segment. Your attention was strong at nearly 96% and contributed over $24 million of revenue for the quarter. We continue to have a vigilant focus on disciplined capital allocation, and our cash balance at the end of March was over $500 million, including readily available cash in the U.S. of over $200 million.

Andrew Wiechmann: We continue to be pleased with our progress on the integration of purchase which as a reminder is referred to as the private capital solutions operating segment within our all other private assets reportable segment.

Andrew Wiechmann: Retention was strong at nearly 96% and contributed over $24 million of revenue for the quarter.

Andrew Wiechmann: We continue to have a vigilant focus on disciplined capital allocation and our cash balance at the end of March was over $500 million.

Andrew Wiechmann: Including readily available cash in the U S of over $200 million.

Andrew Wiechmann: Last week, we closed on the acquisition of Soxbury for approximately $22 million of upfront consideration. The transaction also has the potential for additional performance-related payments tied to the achievement of key miles. Our 2024 guidance across all categories remains unchanged and assumes that AUM declined slightly in Q2, and rebounds gradually in the second half of the year. I would note that our first quarter effective tax rate of 13.5% benefited from favorable discrete items and higher excess tax benefits recognized on stock-based comp tested in the period.

Andrew Wiechmann: Last week, we closed on the acquisition of Fox Barry for approximately $22 million of upfront consideration.

Andrew Wiechmann: The transaction also has the potential for additional performance related payments tied to the achievement of key milestones.

Andrew Wiechmann: Our 2024 guidance across all categories remains unchanged and assumes that AUM declined slightly in Q2.

Andrew Wiechmann: And rebounds gradually in the second half of the year.

Andrew Wiechmann: I would note that our first quarter effective tax rate of 13, 5% benefited from favorable discrete items and higher excess tax benefits recognized on stock based comp tested in the period.

Andrew Wiechmann: For the remainder of the year, we expect a quarterly effective tax rate of 21% to 22% each quarter before any discrete item. Overall, our client centricity and multi-year investments position us well to drive growth throughout 2020. And we look forward to keeping you posted on our progress. With that, Operator, please open the line for questions.

Andrew Wiechmann: For the remainder of the year, we expect the quarterly effective tax rate of 21% to 22% each quarter before any discrete items.

Andrew Wiechmann: Overall, our client Centricity and multiyear investments position us well to drive growth throughout 2024, and we look forward to keeping you posted on our progress with that operator. Please open the lines for questions.

Operator: We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening through a loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Speaker Change: We will now begin the question and answer session.

Speaker Change: Do you have dialed in I would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question simply press Star one again.

Speaker Change: Called upon to ask your question and our listening via loud speaker in your device. Please pickup your handset and ensured that your phone is not on mute when asking your question.

Operator: We ask that you limit yourself to only one question at a time and queue back for any additional questions. Again, press star 1 to join the... And your first question comes from Toni Kaplan with Morgan Stanley. Please go ahead.

Speaker Change: We ask that you limit yourself to only one question at that time and you back Brian.

Any additional question again, Chris <unk> to join the queue.

Speaker Change: And your first question comes from the line of Toni Kaplan.

Toni Kaplan: With Morgan Stanley. Please go ahead.

Toni Kaplan: Terrific. I wanted to talk about the closures. You know, thank you for giving the segment breakout for the large client event. You know, just it sounds to me like that is now in the numbers, but wanted to just confirm that there aren't going to be more, and just more in general. UBS event, like, you know, it sounded like maybe there were more closures of asset managers that you saw in the quarter. So do you expect that to, you know, improve, you know, throughout the year? Sure.

Toni Kaplan: Sure event.

Toni Kaplan: I wanted to talk about the closures.

Toni Kaplan: Thank you for giving the segment breakout for that large client events.

Toni Kaplan: Just.

Speaker Change: It sounds to me like that is now in the numbers, but wanted to just confirm.

Speaker Change: That there isn't going to be more and more in general around the non.

Speaker Change: UBS.

Speaker Change: Alright.

Speaker Change: It sounded like maybe there were more closures of of asset managers that you saw in the quarter. So you ask seller expect that.

Speaker Change: Improves.

Speaker Change: Throughout the year.

Andy: Sure. Hey Toni, it's Andy.

Speaker Change: Sure Hey, Toni it's Andy so on the large global bank merger as we mentioned the large bulk of the cancels related to the merger occurred in Q1, we did have some small items in previous quarters and there could be some smaller items that trickle through as the integration continues later in the year.

Andrew Wiechmann: So on the large global bank merger, as we mentioned, the large bulk of the cancellations related to that merger occurred in Q1. We did have some small items in previous quarters, and there could be some smaller items that trickle through as the integration continues later in the year. But we don't expect it to be anywhere close to what we saw in Q1 here. Asset managers and asset owners remain healthy. So at 95 and 97%, respectively.

Andrew Wiechmann: But we don't expect it to be anywhere close to what we saw in Q1 here.

Speaker Change: Just more generally I would underscore that retention rates among.

Speaker Change: Asset managers and asset owners remain healthy you so at 95% to 97% respectively.

Andrew Wiechmann: And maybe I can provide a little bit more color on the elevation and cancels that we saw in Q1. In addition to what I mentioned in my prepared remarks here, so of the 7.6 million increase, we saw an index increase of $7 million.

Speaker Change: Maybe I can provide a little bit more color on the elevation in cancels that we saw in Q1. In addition to what I mentioned on the prepared remarks here. So of the seven 6 million an increase we saw in the index.

Speaker Change: $7 million. So the large majority of that came from client events or these corporate events that we alluded to $4 million of that attributable to this global bank merger.

Andrew Wiechmann: So the large majority of that came from client events or these corporate events that we alluded to, $4 million of that attributable to this global bank merger. Beyond that, we did see a concentration of hedge fund-related events. So strategy changes, closures, team departures, that all came together in the first quarter here. Similarly, the area that we saw, the other area where we saw an increase in cancellations year over year, was ESG and climate.

Speaker Change: Beyond that we did see a concentration of hedge fund related events. So strategy changes closures team departures that.

Speaker Change: That all came together in the first quarter here. Similarly, the area that we saw the other area, where we saw a increase in cancels.

Speaker Change: Over year, with ESG and climate and as I mentioned, 80% of the increase year over year came from higher level of corporate events, including $2 5 million from the global bank merger that we've been alluding to.

Andrew Wiechmann: And as I mentioned, 80% of the increase year over year came from a higher level of corporate events, including two and a half million from the global bank merger that we've been alluding to. And so there really was this acute bunching of events that occurred during the first quarter here. And as we alluded to, we don't expect this level of cancels to continue going forward.

Speaker Change: And so there really was this acute bunching of events that occurred during the first quarter here.

Speaker Change: And as we alluded to we don't expect this level of cancels to continue going forward.

Alex Kramm: Your next question comes from the line of Alex Kramm with UBS.

Speaker Change: Your next question comes from the line of Alex Kramm with UBS.

Andrew Wiechmann: Yes, hey, good morning everyone. You know, at the risk of almost asking the same thing, I'm wondering, in particular, as it comes to asset management and the market, which is still your largest client set, what you're seeing and what gives you confidence that things are getting better. I mean, it sounds like the markets are getting better, and that should be a leading indicator. But at the same time, it seems like you guys have historically said that you're doing really, really well with the largest asset managers.

Alex Kramm: Yes, Hey, good morning, everyone.

Alex Kramm: At the risk of kind of almost asking the same thing.

Alex Kramm: Wondering in particular as it comes to the asset management at market, which is still your largest clients at what what you're seeing and what gives you confidence that things are getting better I mean, it sounds like markets are getting better and that should be a leading indicator, but at the same time. It seems like you guys.

Alex Kramm: We have historically said that youre doing really really well with the largest asset managers, but theres a smaller set that I think continues to really struggle with flows and just the overall environment. So I guess the question is why are you not worried that that smaller end of the asset management market is structurally challenged and could structurally hit you.

Andrew Wiechmann: But there's a smaller set that I think continues to really struggle with flows and just the overall environment. So I guess the question is, why aren't you worried that that smaller end of the asset management market is structurally challenged and could structurally hit you? And that it comes back? I mean, you talk to a lot of clients all the time. So just wondering what you're hearing.

Alex Kramm: And then it comes back I mean, you talked a lot of the clients all the time, so just wondering what youre hearing.

Andrew Wiechmann: Sure. Yeah, and as we've mentioned before, Alex, budgets were set for this year and last year when it was a tough environment. And so we are seeing the impacts of tighter budgets on sales cycles, buying decisions, and the overall selling environment on top of what is typically a seasonally soft quarter for us in Q1. As we've alluded to, we are seeing strong engagement among asset managers, and we are focused on helping them where we can, which means selling more to them.

Alex Kramm: Sure.

Speaker Change: Yes, so as we've mentioned before Alex budgets were set for this year last year. When it was a tough environment and so we are seeing the impacts of tighter budgets on sales cycles buying decisions in the overall selling environment on top of what is typically a seasonally soft quarter.

Speaker Change: For us.

Speaker Change: In Q1, as we've alluded to we are seeing strong engagement.

Speaker Change: Long asset managers, and we are focused on helping them, where we can which means selling more to them.

Andrew Wiechmann: And so we continue to view them as a key opportunity for us and a key area where we see attractive growth as they reposition their business models for the future. And you can see that in the elevated growth in areas like our custom and special packages. And so we continue to have this steady growth of 8% with asset managers. And when you look across the module types, we've got outsized growth in some of these key areas that asset managers are moving towards.

And so we continue to view them as a key opportunity for us and a key area, where we see attractive growth as they reposition their business models.

Speaker Change: <unk> for the future and you can see that in the elevated growth in areas like our custom and special packages.

Speaker Change: And so we continue to have this steady growth of 8% with asset managers.

Speaker Change: And when you look at across the module types, we've got the outsize growth in some of these key areas that asset managers are moving towards so we would expect as you alluded to sustained momentum in equity markets.

Andrew Wiechmann: So we would expect, as you alluded to, sustained momentum in equity markets to be a positive factor and something that continues to be constructive to buying behavior. But this has been a slow-moving cycle, and I think it will take some time to work through. But I would also highlight that we see large and growing demand across other segments, and we see that with new solutions and existing solutions, and we hope that'll continue to grow as well.

Speaker Change: To be a positive factor and be something that continues to be constructive to buying behavior, but this has been a slow moving cycle and I think it will take some time to work through but I would also highlight that we see large and growing demand across other segments, and we see that with new solutions and existing solutions and we hope.

Speaker Change: That will continue to build as well.

Speaker Change: Your next question comes from the line of Manav Patnaik with Barclays.

Manav Patnaik: Thank you and good morning, I guess my question is broadly on visibility. So maybe just a two parter first in all of these elevated cancellations that occurred in the first quarter when I guess did.

Manav Patnaik: Your next question comes from the line of Manav Patnaik with Barclays.

Manav Patnaik: Did you know that was going to hop on like how much in advance do they typically give me notice and then similarly like looking ahead and you've talked about getting a lot of client engagements are in your business.

Manav Patnaik: Thank you. Good morning.

Andrew Wiechmann: I guess my question is broadly on visibility, so maybe just a two-parter. First, you know, all these elevated cancellations that occurred in the first quarter. When, I guess, did you guys know that was going to happen? Like how much in advance did they typically, you know, give you notice? And then similarly, like looking ahead, you've talked about, you know, a lot of client engagement, selling them new business, but then you also talked about lengthening sales cycles. So maybe just your thoughts on when we could see these engagements convert to bookings and show a pickup in the numbers.

Manav Patnaik: And you also talked about lengthening sales cycles. So maybe just your thoughts on when we could see these engagements convert to bookings and show a pick up in the numbers.

Speaker Change: Yes, so on the first point about visibility.

Speaker Change: Listen we do have some visibility into the overall level of activity and so as we've alluded to in the past we've been seeing some elevated levels of pressure from our clients and we've been expecting and elevated contribution from client events.

Speaker Change: But the exact timing of when they occur we don't always know and so we did not expect this type of concentration in the first quarter here. We had this bunching of cancels that ended up occurring altogether.

Speaker Change: And as a result, we don't expect this level of cancels to continue going forward. We do expect some elevated level of client activity just given the environment.

Andrew Wiechmann: Yeah, so on the first point about visibility, you know, listen, we do have some visibility into the overall level of activity. And, as we've alluded to in the past, we've been seeing some elevated levels of pressure from our clients. And we've been expecting an elevated contribution from client events, but the exact timing of when they occur isn't always known. And so we did not expect this type of concentration in the first quarter here. We had this bunching of cancels that ended up occurring altogether. And as a result, we don't expect this level of cancellations to continue going forward.

Speaker Change: But we are expecting retention rates to rebound through the year here.

Speaker Change: And move more towards what we saw last year as we move towards the latter part of this year.

Speaker Change: Terms of outlook on the sales side and visibility into the longer term pipeline.

Speaker Change: Listen as I mentioned, we do have a solid pipeline, we've got solid engagement from clients.

Speaker Change: And at the same time, we are seeing just longer sales cycles, and these budget constraints and so.

Speaker Change: To the extent and win.

Speaker Change: The pressures begin to alleviate that should translate through into I think encouraging growth for us and as I alluded to on the last question.

Andrew Wiechmann: We do expect some elevated levels of client activity, just given the environment. But we are expecting retention rates to rebound through the year here and move more towards what we saw last year as we move towards the latter part of this year. You know, in terms of outlook on the sale side and visibility into the longer-term pipeline. Listen, as I mentioned, we do have a solid pipeline, and we've got solid engagement from clients.

Speaker Change: Not just in our core products, but we do see opportunities in newer solutions that we have as well as in many of these client segments that are a little less exposed.

Speaker Change: To some of the cyclical dynamics that we're talking about.

Your next question comes from the line of Alexander Hall with JP Morgan.

Alexander Kramm: Yes, hi.

Alexander Kramm: I was wondering if you can break down the growth in index subscription run.

Alexander Kramm: Run rate year on year into sort of pricing upsell cross sell new business wins, and then maybe some comments what you expect for those line items to your progresses. Thank you.

Andrew Wiechmann: And at the same time, we are seeing just longer sales cycles and these budget constraints. And so to the extent and when, you know, the pressures begin to alleviate, that should translate through into, I think, encouraging growth for us. And as I alluded to in the last question, it's not just in our core products, but we do see opportunities in the newer solutions that we have, as well as in many of these client segments that are a little less exposed to some of the cyclical dynamics that we're talking about. Your next question comes from the line of Alexander Hess with J.P. Morgan. Yes. Hi. Um, I was

Speaker Change: Sure sure Hey, Alex so.

Speaker Change: On the pricing front.

Speaker Change: I would highlight that we.

Speaker Change: And we've alluded to this in the past.

Speaker Change: That we had a lower contribution.

Speaker Change: On a dollar amount and on a percentage level from price increases within new subscription sales.

Speaker Change: It is important to underscore that we continue to be very measured with our increases. It is an important lever for us and we do want to make sure. We're capturing the value that we are delivering to clients, but we do factor in the overall pricing environment as well as client health.

Operator: Your next question comes from the line of Alexander Hess with J.P. Morgan. Yes, hi.

Speaker Change: And so the contribution from price increase was a little bit more modest relative to what we saw last year.

Operator: Sure, sure. Hey Alex.

Andrew Wiechmann: So, on the pricing front, I would highlight that we, and we've alluded to this in the past, that we had a lower contribution on a dollar amount and on a percentage level from price increases within new subscription sales. It's important to underscore that we continue to be very measured with our increases. It is an important lever for us, and we do want to make sure we're capturing the value that we are delivering to clients, but we do factor in the overall pricing environment as well as client health. And so, the contribution from price increases was a little bit more modest relative to what we saw last year.

Speaker Change: The balance of new subscription sales was largely related to what we would call cross selling or up selling so delivering more solutions to existing clients.

Speaker Change: That is the bulk of.

Speaker Change: Sales in the quarter and we believe are key to our growth going forward and so that's strong engagement with clients is encouraging because we do believe we can continue to sell more to them.

Speaker Change: As we've alluded to when you break down the <unk>.

Speaker Change: Components of growth here.

Speaker Change: 8% growth within our market cap modules, we saw a 19% growth in custom and special packages.

Andrew Wiechmann: The balance of new subscription sales was largely related to what we would call cross-selling or up-selling, so delivering more solutions to existing clients. That is the bulk of what we're doing in sales in the quarter, and we believe it is key to our growth going forward. And so that strong engagement with clients is encouraging because we do believe we can continue to sell more to them. As we've alluded to, when you break down the components of growth here, we saw 8% growth within our market cap modules.

Speaker Change: And we saw across client segments outsize growth continue to see outsized growth with asset owners and wealth managers and very strong growth.

Speaker Change: Despite this this bunching of some hedge fund events, despite that bunch and we continue to see strong growth among hedge funds as well so that the growth is multifaceted and.

Speaker Change: Like many of the drivers of long term opportunity.

Speaker Change: Yeah.

Speaker Change: Your next question comes from the line of Ashish <unk> with RBC capital.

Andrew Wiechmann: We saw 19% growth in custom and special packages, and across client segments, outsized growth. We continue to see outsized growth with asset owners and wealth managers and very strong growth. Despite this bunching of some hedge fund events, despite that bunching, we continue to see strong growth among hedge funds as well. So the growth is multifaceted, and I think many of the drivers of long-term opportunity. Your next question comes from the line of Ashish Sabadra with RBC Capital. Thanks for taking my question. I just wanted to drill down further on the ESG and climate segment. I was wondering if you could talk about how some of the...

ashish: Hi, Thanks for taking my question I, just wanted to drill down further on the ESG and climate segment. I was wondering if you could talk about how some of the new regulations in Europe, particularly C D.

Could potentially help influence the demand for the products going forward, but also have you seen any incremental headwinds of quality segregation of ESG in the U S and lastly on the climate side, how should we think about the growth momentum there. Thanks.

ashish: Yeah.

ashish: Yeah.

ashish: This is a very important tailwind for us in notably in EMEA.

Speaker Change: Got it.

Speaker Change: Where it is.

Speaker Change: The broadest in a variety of directors are coming in which affect our clients, but it's also in many other jurisdictions, notably there has been news in Australia about the regulator being very focused on disclosure on ESG and climate and I won't go through.

Operator: Your next question comes from the line of Ashish Sabadra with RBC Capital. Thanks for taking my question. I just wanted to drill down further on the...

Speaker Change: A laundry list.

Speaker Change: Jurisdictions, but this is a very important continued driver for growth and for sure not merely is it not going away, but we see it increasing.

Andrew Wiechmann: is a very important tailwind for us, notably in EMEA. But, you know, where it is the broadest, and a variety of directives are coming in, which affect our clients. But it's also, you know, in many other jurisdictions; notably, there's been news in Australia about the regulator being very focused on disclosure and ESG and climate. And I won't go through, you know, a laundry list of jurisdictions.

Speaker Change: With new regulations, appearing in different jurisdictions and we're we're convinced that we can add a lot of value. There. The second thing is.

Speaker Change: We want to put a great emphasis that in our ESG, we're focused on financial materiality.

Speaker Change: Which is not a political issue.

Speaker Change: And as we go into the rest of this year and notably with our sales and marketing in the United States, we're going to key be bringing this central to our communication with clients in the market and we're confident that we can bring a lot of value to investors with these type of insights. So so those are.

Andrew Wiechmann: But this is a very important continued driver for growth. And for sure, not merely is it not going away, but we see it increasing with new regulations appearing in different jurisdictions. And we are, you know, we're convinced that we can add a lot of value there. The second thing is, you know, we want to put a great emphasis on the fact that in our ESG, we're focused on financial materiality, which is not a political issue.

Speaker Change: Those are my observations both related to regulation and the way that we want to bring our ESG focus back to financial materiality, where it start.

Speaker Change: Your next question comes from the line of Owen.

Andrew Wiechmann: And as we go into the rest of this year, and notably with our sales and marketing in the United States, we're going to be bringing this central to our communication with clients in the market. And we're confident that we can bring a lot of value to investors with these types of insights. So those are, you know, those are my observations, both related to regulation and the way that we want to bring our ESG focus back to financial materiality where it starts. Your next question comes from Owen Lau with Open Hyman. Good morning, and thank you for taking my question.

Owen: <unk> with Oppenheimer.

Owen: Good morning, and thank you for taking my question, so going back to slide nine and thank you for putting together this slide mention.

Owen: You mentioned that 85% of subscription run rate subscribing to multiple product lines could you. Please talk about the historical pattern for this percentage has it been going up or down or relatively flat also what does it take to increase the engagement with our clients to increase their product line from.

Operator: Your next question comes from the line of Owen Lau with Open Hyman.

Owen: One product to let's say more than one.

Owen: Yeah.

Andrew Wiechmann: Yeah, I would say, Owen, that we have historically seen outsized retention with our largest clients, as well as those clients that are subscribing to multiple products. It's a key part of our strategy and has been a key part of our strategy. For many years, as you're probably aware, we have had a more strategic selling effort. With these large accounts, we have what we call senior account managers and key account managers across the organization where we engage holistically with them.

Speaker Change: Yes, I would say oh in that.

Speaker Change: We have historically seen outsized retention with our largest clients as well as those clients that are subscribing to multiple products.

Part of our strategy and has been a key part of our strategy.

For many years.

Speaker Change: As Youre, probably aware, we have had a more strategic selling effort with these large accounts.

Have what we call senior account managers and key account managers across the organization, where we agree we engage holistically with them and so we're engaging typically at the fee levels of these organizations talking to them about what their objectives are and how MSCI can help them achieve those objectives and that not only leads to.

Andrew Wiechmann: And so we're engaging typically at the C levels of these organizations, talking to them about what their objectives are and how MSCI can help them achieve those objectives. And that not only leads to higher engagement and retention rates over time, but it also leads to additional selling opportunities. And so the beauty of MSCI is that our solutions are interoperable. We run an integrated franchise, where our indexes are built on the same frameworks as our risk models and our ESG ratings and research.

Speaker Change: Higher engagement and retention rates over time.

Speaker Change: But it also leads to additional selling opportunities and so the beauty of MSCI is our solutions are interoperable, we run an integrated franchise.

Where our indexes are built on the same framework is our risk models in our ESG ratings and research.

Speaker Change: And so we can more effectively help these clients achieve their investment objectives over time and help them operate more efficiently and so this strategic selling effort has been integral to that and as you can see by the figures do we put on slide nine here. It is critical to driving that higher level of retention.

Andrew Wiechmann: And so we can more effectively help these clients achieve their investment objectives over time and help them operate more efficiently. And so this strategic selling effort has been integral to that. And as you can see, by the figures we put on slide nine here, it's critical to driving that higher level of retention and continued growth among these larger, larger organizations around the globe. Your next question comes from Kelsey Zhu with Autonomous Research. Hi, good morning. Thanks for taking my question. I want to talk to you.

Speaker Change: And continued growth among these larger and larger organizations around the globe.

Speaker Change: Your next question comes from the line of Kelsey <unk> with autonomous research.

Kelsey: Hi, Good morning, Thanks for taking my question I wanted to talk about index products for a second that this segment saw really strong rent growth percent was wondering if we can get your thoughts around the total addressable market for this product and kind of medium term run rate growth.

Operator: Your next question comes from Kelsey Zhu with Autonomous Research.

Kelsey: Thanks.

Kelsey: Yeah.

Alexander Kramm: Yeah, I don't have an exact number for the total addressable market in front of me right now, but what I would say is that the range of use cases for customization is very broad. It ranges from asset owners of various different descriptions who require customized benchmarks for their portfolios. And, in turn, those could be very different depending on the client type, whether it's an insurance company or a pension fund or an endowment.

Speaker Change: Yes, I don't have an exact number for total addressable market in front of me right now, but what I would say is that the range of use cases for customization is very broad.

Speaker Change: It ranges from asset owners at various different descriptions, who require customized benchmarks for their portfolios and in turn those could be very different depending on the client type whether its an insurance company or pension fund or an endowment.

Alexander Kramm: It then, of course, links to asset managers, both for those institutional mandates and for mutual funds. There is a very large market for structured products, which is, in turn, linked to our wealth segment strategy. So it's really the structured products where the investment banks are building products for wealth distribution. And so when we look across the entire sort of ecosystem, this demand for customization is driven by different client types, different use cases, but also by different underlying ingredients.

Speaker Change: Then of course linked to asset managers, both for for those institutional mandates and or for mutual funds.

Speaker Change: It's a very large market for structured products.

Speaker Change: Which which in turn is linked to our wealth segment strategy. So it's really the structured products, where the investment banks are building products or wealth distribution.

Speaker Change: And.

Speaker Change: And so when we look across.

Speaker Change: The entire set of ecosystem.

Speaker Change: This demand for customization is driven by different client types different use cases, but also by different underlying.

Alexander Kramm: And so as we have more components, different asset classes, different types of content, such as ESG and climate, and different types of strategies, there's a very large upside here. So we're very excited about this. And our relatively modest acquisition of Foxbury, which we think will be a great addition, is going to help us accelerate that by building on our sort of, you know, our great industry quality and reputation with a nimble new software interface, which will help us bring products to market even faster. Your next question comes from the line of George Tong with Goldman Sachs. Hi, thanks. Good morning. This question is for Henry. Henry, can you discuss how your strategy?

Speaker Change: Ingredients and so as we have more components different asset classes.

Speaker Change: Different types of content, such as ESG and climate.

Speaker Change: And different types of strategies.

Speaker Change: Very large upside here. So we're very excited by this and are relatively modest sized acquisition to Fox Barry.

Speaker Change: Which we think will be a great addition is going to help us accelerate that by building on our sort of.

Speaker Change: Our great industry quality and reputation with a nimble new software interface, which will help us bring product to market even faster.

Speaker Change: Your next question comes from the line of George Tong with Goldman Sachs.

George Tong: Alright. Thanks. Good morning. This question is for Henry.

George Tong: And we can you discuss how you're strategically balancing reinvestments to support long term growth initiatives with near term margin performance.

Operator: Your next question comes from the line of George Tong with Goldman Sachs.

Keen Fai Tong: To what extent do you believe MSCI will be entering a new investment cycle that could fuel strong pursuit of new growth initiatives at the potential expense of near term margins.

Henry A. Fernandez: That's definitely the key balancing act that we face at MSCI every year. How do we balance high levels of profitability for our show holders with investments that are going to drive significant revenue growth in the future? So the first thing that we do, George, is that the first thing we try to do is we try to keep the level of investment every year, despite any health, and we do that by creating even more efficiency and, at some point, hitting our compensation, you know, expenses, to keep that high level of investment within the year.

Speaker Change: That's definitely the bill.

Speaker Change: The key balancing act that we.

We think at.

Speaker Change: That MSCI every year.

Speaker Change: How do we balance.

Speaker Change: Continue.

Speaker Change: High levels of Brooklyn ability.

Speaker Change: For our shareholders.

Speaker Change: With.

Speaker Change: Investments that are.

Speaker Change: Gone up.

Speaker Change: While significant revenue growth in the future.

Speaker Change: So the first thing that we do George is.

Speaker Change: That first of all we tried to do is we try to keep.

Speaker Change: The level of it.

Speaker Change: Best months every year.

Speaker Change: Anyhow.

Speaker Change: And we do that by creating more efficiency.

Speaker Change: And at some point, you know hitting our compensation.

Speaker Change: Thanks.

Speaker Change: To keep that high level.

Speaker Change: Oh the investment.

Speaker Change: And the year.

Henry A. Fernandez: The second thing that we do is that we try to increase that level of rate of growth of investment, on a year-over-year basis at a rate, say, double the non-investment expenses in the company, so that we continue to feed the funding of significant growth opportunities we have ahead of us. The third thing that we do is we believe that, having short term pressures. And having short-term, meaning within a year or so, within a few quarters of a year, discipline of maintaining high levels of profitability is actually a positive, not a negative, because it helps us, focus on the highest return investment, on the ones that are going to be paying off shorter term rather than long term, and making sure that the whole company is mobilizing to continue to do what we currently do, not what we're investing in, but what we currently do much more efficiently and much more productively.

Speaker Change: One thing that we do.

Speaker Change: Is that we try to increase that level of rate of growth of investment.

On a year over year basis at a rate say double the non investment expenses in the company.

Speaker Change: So that we continue to be.

Speaker Change: The funding.

Speaker Change: Significant growth opportunities, we have ahead of us.

Speaker Change: The third thing that we do is we believe that.

Speaker Change: Alright.

Speaker Change: Sure sure short term.

Speaker Change: Thanks Bruce.

Speaker Change: And how big short term, meaning within a year or so within a few quarters or year discipline of maintaining high levels.

Speaker Change: That ability is actually a positive not a negative.

Speaker Change: Because it helps us.

Speaker Change: Focus on the highest return on investment on the ones that are going to be.

Speaker Change: Hang off shorter term rather than long term.

Speaker Change: Making sure that the whole company is mobilizing to continue to do.

Speaker Change: What we do know what we're investing in but what we currently build much more efficiently.

Speaker Change: And much more productively. So that's kind of the balancing act. So I don't think that that's going to dramatically change.

Henry A. Fernandez: So that's the balancing act. So I don't think that that's going to dramatically change, given it's almost like a dual mandate if you were the Fed, right? Employment and inflation are a little bit of that. We have a dual mandate to maintain high levels of short-term profitability versus long-term growth. So that's, you know, now, there are outside possibilities that we have discarded. We're not going to run the EBITDA margin significantly higher in the company unless there is a flow, an incredible amount of money that flows through the P&L because of higher equity values in our indexing products. And on the other hand, we're not going to, you know, meaningfully lower at all the levels of margins that we currently have.

Speaker Change: Given it's almost like a dual mandate if you were at the fed right graph.

Broadband and inflation and so little by little.

Speaker Change: That's you know we have a dual mandate to maintain high levels of short term profitability versus.

Speaker Change: Long term growth.

Speaker Change: Yeah.

So that's now there are outside possibilities that we have this got it we're not gonna wrong.

Speaker Change: The EBITDA margin significantly higher than the company unless there is a flower.

Speaker Change: Credible amount of money that flows.

Through the P&L because of higher equity values.

Speaker Change: The index linked products.

Speaker Change: And on the other had gone up.

Speaker Change: Linda or at all the levels of margins that we currently have so that's the objective.

Operator: So that's the objective that we have so far. Thank you for that question. Your next question comes from the line of Heather Balsky with Bank of America. Hi, thank you for taking my question. I just wanted to piggyback on.

Speaker Change: We have so far thank you for that question.

Speaker Change: Your next question comes from the line of Heather <unk> with Bank of America.

Heather: Hi, Thank you for taking my question I just wanted to piggyback on the last question and just ask you as you think about areas of investment in areas, where you'd like to accelerate investment.

Operator: Your next question comes from the line of Heather Balsky with Bank of America.

Henry A. Fernandez: There are a number of areas. I mean, pretty much everything that we do at MSCI has a tail in its back and incredible long-term potential. We're very fortunate about that.

Heather: To drive growth longer term, what where are you most focused.

Heather: What type of products what segments of your business. Thank you.

Heather: So.

Heather: There are a number of areas.

Heather: I mean pretty much everything that we do at MSCI.

Heather: Hi.

Heather: He has a tail and its back.

Henry A. Fernandez: Now, some things materialize faster, you know, in the short term, and some things are going to take, you know, a few quarters, maybe a few years to materialize in a big way. The first thing that we always focus on is the continual growth of our index findings, because despite what some people think about indexation, whether it's, you know, in a benchmarking this assault on active managers, active equity managers, or the pace of growth of passive investing, we see enormous possibilities for everybody products, both listed options with futures and structured products.

On long term incredible long term potential.

Speaker Change: We're very fortunate.

Speaker Change: About that now some things.

Speaker Change: They realize faster.

Speaker Change: In the short term and some things are going to take a few quarters may be a few years to materialize in a big way.

Speaker Change: The first thing that we always focus on is the continual growth of our index franchise.

Speaker Change: Because despite what people think.

Speaker Change: About <unk>.

Speaker Change: Indexation.

Speaker Change: Whether it's.

Speaker Change: Benchmark indices, all collected managers active equity managers or or the pace of growth of passive the best thing, we see enormous possibilities of everybody products.

Speaker Change: The list of options that the futures.

Speaker Change: Structural problems with.

Henry A. Fernandez: We see enormous potential for non-market cap indices in ESG and thematics and climate in factors and all of that. And now we have a new wave of growth coming from direct indexing in wealth management, which is an ability to basically customize an individual's portfolio in a way that is scalable with indices rather than active management. So, on top of that, there is the equity part. And on top of that, we see a lot of potential in fixed income indexation. So, this is all part of the bar bill, the investment world.

Speaker Change: Enormous potential for bone market cap indices.

Speaker Change: And USG Biotics in climate in factors and all.

Speaker Change: All of that.

Speaker Change: And now we have a new wave of growth coming from direct indexing.

Speaker Change: Wealth management, which is an ability to basically costa buys and individuals' portfolio in a way that is scalable within that sense, rather than active management, so and on top of that.

Speaker Change: Thats the equity part on top of that we see a lot of potential in fixed income indexation. So so this is all part of the bar Belling the investment world on one hand, its eye level substitutes, the biotic investing in which index investing has bottomed out and the other part is very high levels of active banners.

Henry A. Fernandez: On the one hand, it's high levels of systematic investing, of which index investing is part of that. And the other part is very high levels of active management, of which obviously private asset management is the most important one. But also, concentrated portfolios and things like that. So, that's where we're positioning the company. So, we start with definitely index investing. Then we look at.

Speaker Change: Men, which obviously private asset management as the most.

Speaker Change: Most of that in <unk>.

Speaker Change: But also concentrated portfolios and things like that so so that's what we're positioning the company. So we start with definitely index then we'll look at.

Henry A. Fernandez: The next level, which is sustainability, ESG, obviously, but climate, we think ESG will continue to grow. ESG is not a political philosophy; it's an investment risk and investment opportunity, period. No matter what people say, what people politicize or whatever, it's part of the fabric of investing as to how you're going to manage a portfolio with respect to all these factors, in addition to financial factors and other market factors. So we're in an, obviously, down cycle on that, given the political situation in the U.S., given the reset of regulations in Europe, but we're beginning to see a significant growth of that in Asia.

Speaker Change: The next level with just the sustainable sustainability within sustainability.

Speaker Change: ESG, obviously, both climate, we think ESG will continue to grow in ESG.

Speaker Change: ESG is not a political philosophy is not a no.

Speaker Change: Is that is that investment risks and investment opportunity peer Perry no matter what people say.

Speaker Change: What people call it the politicize of whatever is bottle the fabric of investing.

As to as to.

Speaker Change: How are you going to manage the portfolio with respect to all these factors. In addition to financial factors on other market factors. So that that we're not obviously down cycle on that given the political situation in the U S. Given the risk that the regulations.

Speaker Change: Regulations in Europe, but we're beginning to see a significant growth of that in <unk>.

Henry A. Fernandez: So that's a second component. The third component, which we're now positioning ourselves enormously, is our ability to be a large provider of transparency and performance and risk tools and benchmark indices and asset allocation, et cetera, in the private asset class. The biggest revolution going on in the world right now is private credit. It's going from balance sheet driven things, you know, on the balance sheets of banks, and the balance sheets of insurance companies to a fund structure. So if that revolution in private credit into a fund structure has an investor in it, whether it's an institutional or wealth management, you know, individual investor, they're going to need transparency tools.

Speaker Change: In Asia. So that's a second component that circle bonding, which we're now positioning ourself enormously is our ability to be a large provider of transparency.

Speaker Change: Performance and risk tools and benchmarking.

Speaker Change: And also have a location et cetera.

Speaker Change: With assets.

Speaker Change: The biggest revolution going on in the World right now is private cloud is going from balance sheet driven things.

Speaker Change: On the balance sheet of banks and insurance companies.

Fund structure.

Speaker Change: So.

Speaker Change: That revolution in private credit to a fund structure has an investor in it whether it's institutional or wealth management.

Speaker Change: Individual investor, they're gonna need transparency tools, they're going to need they're going to have to understand performance and risks and all of that which will be a lot different.

Henry A. Fernandez: They're going to need, they're going to have to understand performance and risks and all that, which will be a lot different than, you know, on the balance sheet of a bank or an insurance company. And this is where we come in.

Speaker Change: On the balance sheet of a bank or an insurance company and this is what we call them in those.

Henry A. Fernandez: Those are three big areas that we're focused on. There are other areas that, you know, obviously, our role in fixing portfolio management is a big one. Our role is to provide even more tools for the analytics insights, for example, into portfolios and climate risk within analytics. So those are basically the broad areas that we're focusing on on the product side. Of course, all of that has a huge corollary in the areas that we're expanding on the client side beyond active management.

Speaker Change: So those are three big areas that we're focused on their all their areas.

Speaker Change: Obviously, our role in fixed income portfolio management is a big one our role in providing even more tools to the on analytics.

Speaker Change: Insights for example into portfolios.

Speaker Change: Climate risk within analytics. So those are basically the broad areas that we're focusing on on the product side.

Speaker Change: Of course, all of that as a huge corollary of the area that we're expanding into the client side beyond active managers.

Henry A. Fernandez: You know, as I said before, you hear quite often the balance sheet of banks, hedge funds, corporations, asset owners, you know, and so on and so forth. So that is an area where, on the client side, we see enormous growth opportunities in the non-asset management segment. So that's a little bit of an overview. Your next question comes from Scott Wurzel with Wolf Research. Hey, good morning, and thanks for taking my call.

Speaker Change: As it was said before you'll hear quite often the balance sheet back to the hedge funds the corporates.

Speaker Change: Owners.

And so on and so forth so bodies.

Speaker Change: On the client side was the enormous growth opportunities in the dawn.

Speaker Change: <unk> asset management segment.

Speaker Change: That's a little bit of an overview.

Speaker Change: Your next question comes from the line of Scott <unk> with Wolfe Research.

Scott: Hey, good morning, and thanks for taking my question here just wanted to touch on the basis point fees on within the index segment and kind of seeing that steadily decline over the last few quarters are there any mix dynamics. There we should be aware of as it relates to the current market environment and how should we be thinking about that.

Operator: Your next question comes from the line of Scott Wurzel with Wolf Research.

Andrew Wiechmann: Sure, yeah, so we did see a modest decline in the basis points from the prior quarter from 2.50 down to 2.48 basis points that was driven almost entirely by makeshift. Most of that resulted from a lower contribution of higher fee international products and a higher contribution to AUM from lower fee products with US exposure. I would say there's nothing new to call out here.

Speaker Change: At this point for you going forward. Thanks.

Speaker Change: Sure, Yes, so we did see a modest decline in the basis points from the prior quarter from $2 five zero down to $2 four eight basis points that was driven almost entirely by mix shift.

Speaker Change: Most of that resulted from a lower contribution of higher fee international products and a higher contribution.

Speaker Change: AUM from lower fee products with with U S exposure.

I would say there is nothing nothing new to call out here or there can be.

Andrew Wiechmann: There can be some dynamics with AUM levels, and you saw this when AUM levels dropped; there was more stability in the fee. So there are some fee arrangements we have where the fees step up at lower AUM levels, and vice versa; they step down at higher AUM levels. And so that can be one small factor to point out. But I'd say nothing out of the ordinary or nothing new relative to what we've seen in the past.

Speaker Change: Some dynamics with AUM levels and you saw this win AUM levels dropped there was more stability in the fee. So there are some fee arrangements we have.

Speaker Change: Where the fees do step up at lower AUM levels, and vice versa. They stepped down at higher AUM levels.

Speaker Change: And so that can be one small factor to point out, but I'd say nothing out of the ordinary or nothing new relative to what we've seen in the past we do expect over time fees to gradually come down driven by mix shift, although we expect the growth in assets and the tremendous opportunity we have across so many different frontier is to more than offset that decline.

Andrew Wiechmann: We do expect, over time, fees to gradually come down, driven by makeshift, although we expect the growth in assets and the tremendous opportunity we have across so many different frontiers to more than offset that decline, which is what we've seen. And as you can tell by the healthy overall ETF revenue contribution but also the overall ABF revenue growth. And so I would highlight that within non-ETF passive, the fee dynamics have been much more stable there.

Speaker Change: <unk>, which is what we've seen and as you can tell by the healthy overall ETF revenue contribution, but also the overall ABF.

Speaker Change: Revenue growth and so I would highlight that within non ETF passive.

Speaker Change: The fee dynamics have been much more stable there and that's going back to the question about custom indexes in the non ETF passive category that is an area, where we see tremendous engagement and growth around areas like custom indexes and many times those can be higher fee type mandates that we see.

Andrew Wiechmann: And that's going back to the question about custom indexes in the non-ETF passive category. That is an area where we see tremendous engagement and growth around areas like custom indexes. And many times, those can be higher-fee type mandates that we see.

Operator: Your next question comes from the line of Craig Huber with Huber Research Park. Thank you. Can you touch on...

Speaker Change: Your next question comes from the line of Craig Huber with Huber Research partners.

Craig Anthony Huber: Thank you can you touch on AI and the benefits that you can see going forward here to benefit your products over time.

Operator: Your next question comes from the line of Craig Huber with Huber Research Partners.

Craig Anthony Huber: Potentially so.

Craig Anthony Huber: <unk> significantly higher price point, what excites you on that front and also touch on if you will the cost cutting opportunity going forward on that front. Thank you.

Alexander Kramm: Sure, I'll make a few observations on that. So I'll start with the first point, which is, you know, about efficiencies. So I think we prefer to see it as efficiencies rather than cost-cutting per se, because a lot of our goal is to try to get things done faster and to reinvest a lot of that in these growth opportunities that we're talking about. But we're, you know, we're very focused on that aspect of things across, you know, a variety of projects that we have going on.

Speaker Change: Sure I'll make a few observations on that so I'll start with the first point, which is about efficiency. So I think we prefer to see if it is efficiencies rather than cost cutting per se because a lot of our goal is to try to get things done faster and to reinvest a lot of that in these growth opportunities.

Speaker Change: That we're talking about but we're we're very focused on that aspect of things across a variety of projects that we have going on so in turn we're also.

Alexander Kramm: So in turn, we're also, you know, working to apply AI in a variety of product areas. We have some, actually, a launch coming up during the course of this quarter on analytic insights, where we, in essence, take an enormous amount of complex data for clients, which they normally would have to, you know, parse through in rather inefficient ways, and bring them, you know, direct insights using, you know, AI. So I think that will just be the beginning of that.

Speaker Change: Working to apply AI and a variety of product areas.

Speaker Change: We have some actually in launch coming up during the course of this quarter.

Speaker Change: On an analytic insights where we in essence take an enormous amount of complex data for clients, which they normally would ask you.

Through in rather inefficient way and bring.

Speaker Change: Direct insights using.

Speaker Change: So I think that will just be the beginning of that.

Alexander Kramm: We have to really be focused on thinking about this in a competitive environment. And so, you know, as we go forward, I think the real benefit of AI for us is that we are a very data-rich environment, and our clients are always trying to get greater insights out of all of those capabilities that we deliver to them. And so, you know, in terms of new product development, you know, that's where we'll definitely be keeping you updated during the rest of this year as we bring out, as I said, both in this quarter and quarters ahead, capabilities to bring our clients greater insight and faster and differentiated calculations using AI. Your next question comes from the line of Faiza Alwy with Docha Bank. Yes, hi, good morning. Thank you. I wanted to touch on capital allocation. You know, just a little.

Speaker Change: We have to really be focused on thinking about this in a competitive environment.

Speaker Change: And so as we go forward I think the real benefit of AI for US is that we are a very data rich environment and our clients are always trying to get greater insights out.

Speaker Change: Out of all of those capabilities that we deliver to them and so in terms of new product development, that's where we will definitely be keeping you have more news during the rest of this year as we bring out as I said, both in this quarter and the quarters ahead capabilities about bringing our clients greater insight and.

And faster and differentiated.

Speaker Change: Calculation using AI.

Speaker Change: Your next question comes from the line of Faiza <unk> with Deutsche Bank.

Faiza: Yes, hi, good morning, Thank you I wanted to touch on capital allocation.

Faiza: Give them.

Faiza: But the stock has been doing over the last year or more recently I'm curious if your views on capital allocation have evolved and how you would prioritize share buybacks versus potential M&A opportunities and other things. Thank you.

Operator: Your next question comes from the line of Faiza Alwy with Deutsche Bank.

Andrew Wiechmann: Sure. Yeah, so I'd say, generally, our approach to capital allocation has not changed. So we pay a steady dividend that grows with the EPS of the company, and then we look to generate value with excess capital and cash beyond that. And so we are continually looking for opportunities to do that while we do monitor the market for potentially strategic, attractive MP&A. Sometimes the best opportunity for us to create value is investing in MSCI, so buying our stock back.

Speaker Change: Sure Yeah. So I would say generally our approach to capital allocation has not changed so we pay a steady dividend that grows with the EPS of the company.

Speaker Change: And then we look to generate value with excess capital and cash beyond that.

And so we are continually looking for opportunities to do that while we do monitor the market for <unk>.

Speaker Change: Potentially strategic attractive M PNA, sometimes the best opportunity for us for creating value is investing in MSCI, so buying our stock back and so we are long term believers.

Andrew Wiechmann: And so we are long-term believers in the company and its future value. And so our approach to share repurchases has not changed, and we'll look to use available cash when we see attractive opportunities in the stock. Your next question comes from the line of:

Speaker Change: In the company and the future value and so our approach to share repurchases has not changed and we will look to use our available cash when we see attractive opportunities in the stock.

Speaker Change: Your next question comes from the line of Russell Welch that burn Atlantic.

Operator: Your next question comes from the line of Russell Quelch with Zedburn, Atlanta. Russell, I think you're on mute. Your next question comes from the line of Craig Simpson with BNP Paribas. Hi there.

Russell Quelch: Russell I think you're on mute.

Russell Quelch: Your next question comes from that.

Russell Quelch: The line of Greg Simpson with BNP Paribas.

Gregory Simpson: Hi, there I just wanted to just checking on private markets can you talk about the run rate.

Do you think the 20% topline growth you talked about the 2024 and beyond still looks on track or are there any challenges in the sales environment within private markets. Thank you.

Andrew Wiechmann: Sure. Yeah, so as Bear alluded to, we saw 17% run rate growth in private capital solutions. I would say, generally, our integration is largely on track from both a go-to-market and a technology and data infrastructure standpoint. We have seen encouraging signs in the areas where we think we can add value. So we've seen outsized growth in EMEA and are getting good traction in Asia, so areas where I think MSCI can help on the go-to-market. I would say more generally that we continue to be optimistic about the long-term opportunities across private capital solutions and continue to see big long-term opportunities there.

Speaker Change: Sure Yeah. So it is a bare alluded to we saw 17% run rate growth.

Speaker Change: In private capital solutions.

I would say generally our integration is largely on track from both a go to market and the technology and data infrastructure standpoint, we have seen encouraging signs in the areas, where we think we can add Val.

Speaker Change: Value so.

Speaker Change: We've seen outsized growth in EMEA and getting good traction in Asia, so areas where I.

Speaker Change: I think MSCI can.

Speaker Change: Help on the go to market.

Speaker Change: I would say more generally we continue to be optimistic about the long term opportunity across <unk>.

Speaker Change: Private capital solutions and continue to see big long term opportunities there.

Henry A. Fernandez: That concludes our Q&A session. I will now turn the conference back over to Henry Fernandez, Chairman and CAO of MSEI.

Speaker Change: That concludes our Q&A session I will now turn the conference back over to Henry Fernandez, Chairman and CEO of MSCI.

Henry A. Fernandez: Thank you for joining us today, and for those very insightful questions that you had. As we have said in the past, our operating structure at MSCI is to continue to be a long-term compound of our earnings and our share price and our revenues and all of that, and there is absolutely no change in our objectives to achieve. Despite the operating environment challenges that we have had in the last few quarters, we remain confident in this secular tailwind and Opportunity that we see ahead and that will continue to power, you know, our business. The elevator cancels we experienced in the first quarter were as a result of a concentration of planned events that we do not expect to continue at these levels and in quarters to come.

Speaker Change: Okay.

Henry A. Fernandez: Thank you for joining us today.

Henry A. Fernandez: And for those.

Henry A. Fernandez: Very insightful questions.

Speaker Change: That you'll have.

Speaker Change: As we have said in the past.

Speaker Change: Our operating.

Speaker Change: Our operating structure at MSCI.

Speaker Change: Is to continue to be long term.

Speaker Change: <unk>.

Speaker Change: Of our earnings from our share price and our revenues all of that.

Speaker Change: There is absolutely no change.

And our objectives are to achieve that.

Speaker Change: Despite the.

Speaker Change: Operating environment challenges.

Speaker Change: Though we have had in the last few quarters, we remain confident in this secular tailwind.

Speaker Change: And opportunities.

Speaker Change: There we see ahead.

And that will continue to power our business.

Speaker Change: The elevated cancels we experienced in the first quarter.

Speaker Change: Where as a result of a concentration of client events.

Speaker Change: That we do not expect.

Speaker Change: To continue at these levels in quarters to come.

Henry A. Fernandez: And as we said, our level of engagement with clients is unparalleled. It's at a record high. The level of things that they want us to do, solutions that they want us to come up with, is totally unprecedented. And it is increasing pretty much every day, every week, every quarter. And therefore, we are very committed to helping them achieve those objectives, whether it's capitalizing on opportunities or dealing with problems in their portfolios.

Speaker Change: And as we've said our level of engagement with clients is unparalleled.

Is that a regular high bill.

Speaker Change: The level of a thing.

Speaker Change: Things that they want us to do solutions that they want us to come up with is totally on barrel.

Speaker Change: Increasing pretty much every day every week every quarter.

Speaker Change: And therefore, we are very committed and helping them achieve those objectives, whether it's capitalizing on opportunities or dealing with with problems in their portfolios.

Henry A. Fernandez: Therefore, our all-weather franchise is pretty resilient, and it supports the best through good times and bad times, and we would like to thank you again for joining us this morning, and we look forward to speaking with you in the next few days and weeks.

Speaker Change: Therefore, our all weather franchises, but are resilient.

Speaker Change: It supports the business.

Speaker Change: Through good times and bad times.

Speaker Change: And we would like to thank you again for joining US. This morning, and we look forward to speaking with you in the next few days and weeks.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining us. You may now disconnect.

Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.

Speaker Change: [music].

Yes.

Speaker Change: [music].