Q2 2024 MSCI Inc Earnings Call

Operator: Good morning, ladies and gentlemen, and welcome to the MSCI 2nd Quarter 2024 Earnings Conference Call. As a reminder, this call is being recorded. At this time, all participants are in a listen-only mode.

Operator: Q-Day, ladies and gentlemen, and welcome to MSCI's second quarter 2020 for Ernie's conference call. As a reminder, this call is being recorded. At this time, all participants are in a listen on the mode.

Good day, ladies and gentlemen, and welcome to the MSCI second quarter 2000, and spending for earnings Conference call. As a reminder, this call is being recorded at this time all participants are in a listen only mode. Later, we'll conduct a question and answer session, where participants are requested to ask one question at a time then.

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.

Add themselves back to the queue for any additional questions that'll have pretty instructions for you later on I.

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 like to now turn the call over to Jeremy Ulan, Head of Investor Relations and Treasurer. You may begin. Thank you.

Jeremy Ulan: I would like to now turn the call over to Jeremy Ulan, Head of Investor Relations and Treasurer. You may begin. Thank you.

Jeremy H. Ulan: I would like to now turn the call over to Jeremy ULIN head of Investor Relations and Treasurer you may begin.

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

Speaker Change: Thank you good day and welcome to the MSCI second quarter 2024 earnings Conference call earlier. This morning, we issued a press release announcing our results for the second quarter 2024. This press release, along with an earnings presentation. A brief quarterly update are available on our website.

Jeremy Ulan: Good day and welcome to the MSCI's second quarter 2024 earnings conference call. Earlier this morning, we issued a press release announcing our results for the second quarter of 2024. This press release, along with an earnings presentation and brief quarterly update, are available on our website, MSCI.com, under the Investor Relations tab.

Speaker Change: MSCI dot 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. 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 <unk>.

Jeremy Ulan: 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 to the date on which they are made or 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 the most recent Form 10-K and in our other SEC filings.

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 SEC filings.

Speaker Change: 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.

Speaker Change: <unk> Form 10-K and in our other SEC filings 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. We will also discuss opt.

Jeremy Ulan: During today's call, in addition to results presented on the basis of US GAAP, we also refer to non-GAAP measures. You'll find a reconciliation of our non-GAAP measures to the equivalently 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 presentation.

Jeremy H. Ulan: 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 H. Ulan: 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 presentation. On the call today are Henry Fernandez, our Chairman and CEO, Bear Pettit, our President and CLO, and Andy Wiechmann, our Chief Financial Officer. As a 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, I now turn the call over to Henry Fernandez. Henry?

Speaker Change: Rating metrics, such as run rate and retention rate important information regarding our use of operating metrics such as run rate and retention rate are available in the earnings presentation.

Jeremy Ulan: On the call today, our Henry Fernandez, our chairman and CEO, Bear Pettit, our president and COL, and Andy Wishman, our chief financial officer. As a 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 yourselves back to the queue.

Speaker Change: 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: The housekeeping items, 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 yourselves back of the queue with that let me now turn the call over to Henry Fernandez Henry.

Henry Fernandez: With that, let me now turn the call over to Henry Fernandez. Henry?

Henry Fernandez: Thank you, Jeremy.

Henry A. Fernandez: Thank you, Jeremy. Good day, everyone, and thank you for joining us. In the second quarter, MSCI achieved strong results, thanks to our all-weather franchise, our blue chip client base, our wide range of mission critical solutions, and our intense focus on execution. We deliver adjusted earnings per share growth of 12%, organic revenue growth of 10% with asset-based fee revenue growth of 18% driven by record AUM balances in both ETFs and non-listed products linked to the MSCI industry, and free cash flow growth of 21%.

Henry A. Fernandez: Thank you Jeremy.

Henry Fernandez: Good day, everyone, and thank you for joining us. In the second quarter, MSEI achieved strong results thanks to our all-weather franchise, our blue chip client base, our wide range of mission critical solutions, and our intent focus on execution. We deliver adjusted earnings per share growth of 12 percent, organic revenue growth of 10 percent, with us as a base-dead revenue growth of 18 percent, driven by record AUM balances in both EDFs and known listed products linked to MSEI index. Francis, Free Cash Low Growth of 21%. In our operating metrics, we deliver subscription run rate growth of 14%, including organic growth of 9%.

Henry A. Fernandez: Good day, everyone and thank you for joining us.

Henry A. Fernandez: In the second quarter MSCI achieved strong results.

Henry A. Fernandez: Two our all weather franchise.

Henry A. Fernandez: Our blue chip client base.

Henry A. Fernandez: Why range of mission critical solutions.

Henry A. Fernandez: And our intense focus on execution.

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

Henry A. Fernandez: Organic revenue growth of 10% with asset based fee revenue growth of 18%.

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

Henry A. Fernandez: Free cash flow growth of 21%.

Henry A. Fernandez: In our operating metrics, we deliver subscription run rate growth of 14%, including organic growth of 9%, our highest second quarter on record, for new recurring subscription sales of $83 million, up 22% year over year, and a retention rate of almost 95% across MSCI. Through yesterday, we repurchased $290 million worth of MSCI shares at an average price of $484 per share.

Henry A. Fernandez: And our operating metrics, we deliver subscription run rate growth of 14%, including organic growth of 9%.

Henry Fernandez: Our highest second quarter on record for new recurring subscription sales of $83 million, up 22% year over year, and a retention rate of almost 95% across MSCI. Through yesterday, we repurchased $290 million worth of MSCI shares at an average price of $484 per share. We have now bought back more than 50 million MSCI shares since 2012 at an average price of $122 per share for a total consideration of roughly $6.1 billion. Our combined repurchases represent almost 40% of the total outstanding shares of MSCI. These actions are consistent with our own change and relentless focus on capital allocation.

Henry A. Fernandez: Our highest second quarter on record.

Henry A. Fernandez: Our new recurring subscription sales of $83 million up 22% year over year.

Henry A. Fernandez: And based on rate of almost 95% across MSCI.

Henry A. Fernandez: Through yesterday, we repurchased $290 million worth of MSCI shares at an average price of $484 per share.

Henry A. Fernandez: We have now bought back more than 50 million MSCI shares since 2012, at an average price of $122 per share, for a total consideration of roughly $6.1 billion. Our combined repurchases represent almost 40% of the total outstanding shares of MSCI. These actions are consistent with our own change and relentless focus on capital allocation. Year in and year out, we are obsessively focused on creating value for our shareholders. Value creation starts with strategy, and our strategy has not changed.

Henry A. Fernandez: We have now bought back more than 50, mainly MSCI shares since 2012.

Henry A. Fernandez: At an average price of $122 per share.

Henry A. Fernandez: For a total consideration of roughly $6 $1 billion.

Henry A. Fernandez: Our combined repurchases represent almost 40% of the total outstanding shares of MSCI.

Henry A. Fernandez: Okay.

Henry A. Fernandez: These actions are consistent with our on change and relentless focus on capital allocation.

Henry Fernandez: Here and here out, we are obsessively focused on creating value for our shareholders.

Henry A. Fernandez: <unk> and.

Henry A. Fernandez: Year out we are obsessed really focused on creating value for our shareholders.

Henry Fernandez: Value creation starts with strategy, and our strategy has not changed. We are determined to capture the long-term secular trend disrupting the investment industry, such as rising demand for high-quality data-driven models and insights, increased transparency across asset classes, and a more out-oriented investment solutions. MSCI is commercialized in these trends by providing index and rules-based solutions, establishing standards and private assets, delivering comprehensive climate and sustainability tools, transforming risk and portfolio management, and enabling personalized wealth management at scale. The evidence of our progress can be seen not only in MSCI's financial results, but also in our high levels of client engagement.

Henry A. Fernandez: Value creation starts with strategy.

Henry A. Fernandez: And our strategy has not changed.

Henry A. Fernandez: We are determined to capture the long-term secular trend disrupting the investment industry, to just rising demand for high-quality data driven models and insights, increased transparency across ACET classes, and a more outcome-oriented investment solution. MSCI is commercializing this trend by providing indexed and rules-based solutions, establishing standards for private assets, and delivering comprehensive climate and sustainability tools.

Henry A. Fernandez: We are determined to capture the long term secular trends disrupting the investment industry.

Henry A. Fernandez: Such as rising demand for high quality data that agreement models and insights.

Henry A. Fernandez: Increased transparency across asset classes.

Henry A. Fernandez: On a more outcome oriented and investment solutions.

Henry A. Fernandez: MSCI is commercialized in these trends.

Henry A. Fernandez: Providing index and route based solutions.

Henry A. Fernandez: Establishing standards in private assets.

Henry A. Fernandez: The memory comprehensive climate.

Henry A. Fernandez: Staying ability tools.

Henry A. Fernandez: Transforming Risk and Portfolio Management, on enabling personalized wealth management at scale. The evidence of our progress can be seen not only in MSCI's financial results but also in our high levels of client engagement. Over the past few months, Bear and I have met with clients across the United States, Europe, and Asia. Everywhere we traveled, our clients and prospects were eager to talk about new areas of collaboration with MSCI. Our recent announcements and product launches highlight our strategy in action.

Henry A. Fernandez: Transforming risk and portfolio management.

Henry A. Fernandez: On enabling personalized wealth management at scale.

Henry A. Fernandez: The evidence of our progress can be seen not only in MSCI financial results.

Henry A. Fernandez: But also in our highest level of client engagement.

Henry Fernandez: Over the past few months, Bear and I have met with clients across the United States, Europe, and Asia. Everywhere we travel, our clients and prospects were eager to talk about new areas of collaboration with MSCI. Our recent announcements and product launches highlight our strategies in action. For example, our strategic partnership with Moody's meaningfully expands the reach of our sustainability content among banks, insurance companies, and corporates. It would also help us broaden our private company's history coverage and expand our capabilities within private credit. Likewise, our recently launched MSEI Private Capital, close 10 fund indices, will complement our real access fund and property indices to deliver a wider view of private markets.

Henry A. Fernandez: Over the past few months.

Henry A. Fernandez: And I have met with clients across the United States.

Henry A. Fernandez: Europe and Asia.

Henry A. Fernandez: Everywhere we've traveled.

Henry A. Fernandez: Our clients and prospects were eager to talk about new areas of collaboration with MSCI.

Henry A. Fernandez: Our recent announcements and product launches.

Henry A. Fernandez: Our strategy in action.

Henry A. Fernandez: For example, our strategic partnership with Moody's meaningfully expands the reach of our sustainability content among banks, insurance companies, and corporations. It would also help us broaden our private company ESG coverage and expand our capabilities within private credit. Likewise, our recently launched MSCI private capital closed-end fund indices will complement our real asset foreign and property indices to deliver a wider view of the private market. This can also help us achieve our goal of becoming the global leader in the private market industry.

Henry A. Fernandez: For example, our strategic partnership with Moody's.

Henry A. Fernandez: Liam fully expand the reach of our sustainability content, among banks insurance companies and corporate rates.

Henry A. Fernandez: It would also help us broaden our private company ESG coverage.

Henry A. Fernandez: And they expand our capabilities within private credit.

Henry A. Fernandez: Likewise, our recently launched MSCI private capital loss span Bon in SaaS.

Henry A. Fernandez: Will complement our real asset borrowing and property in the centers to deliver a wider view of private markets.

Henry Fernandez: This can also help us achieve our goal of becoming the global leader in private market indices. Meanwhile, MSEI AI portfolio insights combines generative artificial intelligence with advanced analytical tools and modeling capabilities to make it easier for clients to pinpoint the most important factors shaping investment risk and performance. We see tremendous potential across our newer client segments such as wealth managers, general partners, insurance companies, corporate, and corporate advisors. Wealth managers, in particular, have been excited to learn about our new technology platform acquired from Fabric earlier this year, which has dramatically increased our ability to support personalization at scale.

Henry A. Fernandez: This can also help us achieve our goal of becoming the global leader in private market indices.

Henry A. Fernandez: Meanwhile, MSCI AI Portfolio Insights combines generative artificial intelligence with advanced analytical tools and modeling capabilities to make it easier for clients to pinpoint the most important factors shaping investment risk and performance. We see tremendous potential across our newer client segments, such as wealth managers, general partners, insurance companies, and corporate advisors.

Henry A. Fernandez: Meanwhile, MSCI AI portfolio 80 sites combined generate by Proficiently intelligence with advanced analytical tools and modeling capabilities to make it easier for clients to pinpoint the most important factor.

Henry A. Fernandez: <unk> shaping investment risk and performance.

Henry A. Fernandez: We see tremendous potential across our newer client segments, such as wealth managers General partners insurance companies.

Henry A. Fernandez: Corporate and corporate advisors.

Bear Pettit: Wealth managers in particular have been excited to learn about our new technology platform acquired from Fabric earlier this year, which has dramatically increased our ability to support personalization at scale. This enabled us to close a large deal for these solutions during the second quarter. Meanwhile, our wealth subscription run rate across product lines grew by 12%, reaching $107 million. We had a strong quarter with asset owners and hedge funds as well, boasting organic subscription run rate growth of 12% and 15%, respectively.

Henry A. Fernandez: Wealth managers in particular have been excited to learn about our new technology platform acquired from fabric earlier this year.

Henry A. Fernandez: Which has dramatically increased our ability to support bearish for monetization at scale.

Henry Fernandez: This enabled us to close a large deal for these solutions during the second quarter. Meanwhile, our wealth subscription run rate across product lines grew by 12%, reaching $107 million. We had a strong quarter with asset owners and hedge funds as well, posting organic subscription run rate growth of 12% and 15%, respectively. All of these illustrates a key part of our strategy. We want to expand our footprint among large and rapidly growing clients segment, while strengthening our position among our more mature and traditional clients segment such as asset managers. To maximize that strategy, MSEI will continue developing mission-critical solutions powered by advanced models, data, and technology, including generative AI.

Henry A. Fernandez: This enabled us to close a large deal for these solutions during the second quarter.

Henry A. Fernandez: Meanwhile, our wealth subscription run rate across product lines grew by 12% reaching $107 million.

Henry A. Fernandez: We had a strong quarter with asset owners on hedge funds as well.

Henry A. Fernandez: Both the organic subscription run rate growth of 12% and 15% respectively.

Bear Pettit: All of these illustrate a key part of our strategy. We want to expand our footprint among large and rapidly growing client segments while strengthening our position among our more mature and traditional client segments, such as as a manager. To maximize that strategy, MSCI will continue developing mission-critical solutions powered by ADVANCE Models, data, and technology, including generative AI. All of this enables us to drive compounding growth and profitability for shareholders. And with that, I'll turn the call over to Bear.

Henry A. Fernandez: All of these illustrate a key part of our strategy, we want to expand our footprint among large and rapidly growing client segment.

Henry A. Fernandez: While strengthening our position among our more mature and traditional client segments, such as asset managers.

Henry A. Fernandez: To maximize our strategy MSCI will continue developing mission critical solutions.

Henry A. Fernandez: Powered by advanced models data and technology, including <unk> AI.

Henry Fernandez: All of these enables us to drive compounding growth and profitability for shareholders.

Henry A. Fernandez: All of this enables us to drive compounding growth and profitability for shareholders.

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

Henry A. Fernandez: With that let me turn the call over to Mary Barra.

Bear Pettit: Thank you, Henry, and greetings everyone. In my remarks today, I will discuss our second quarter performance in greater detail with a focus on both product lines and client segments. Our performance shows how MSCI continues to balance long-term strategy and short-term execution. We design our business plans for extended time horizons, but we also do the hard work necessary to deliver for shareholders in the short term. Looking at our second quarter results, in index, MSCI achieved 9% description run rate growth, including 10% growth in both MIA and APAC, and 17% growth in custom indexes and special packing.

Bear Pettit: Thank you, Henry, and greetings, everyone. In my remarks today, I will discuss our second quarter performance in greater detail, with a focus on both product lines and client segments. Our performance shows how MSCI continues to balance long-term strategy and short-term execution. We design our business plans for extended time horizons, but we also do the hard work necessary to deliver for shareholders in the short term. Looking at our second quarter results, MSCI achieved 9% subscription run rate growth, including 10% growth in both EMEA and APAC, and 17% growth in custom indexes and special packages.

Mary Barra: Thank you Henry and greetings everyone.

Bear Pettit: In addition, direct indexing AUM based on MSCI indexes is now $113 billion, up 28% year over year. We are also encouraged by our product, the Custom Index. In Q2, we supported a large asset manager client in their launch of a new custom ETF climate series linked to the MSDI Transition Aware Select Index. Meanwhile, we closed on our acquisition of Foxbury with an enhanced custom index platform launch underway for the second half of the year.

Mary Barra: In my remarks today, I will discuss our second quarter performance in greater detail with a focus on both product lines and client segments.

Speaker Change: Our performance shows how MSCI continues to balance long term strategy and short term execution we.

Mary Barra: We designed our business plans for extended time horizons, but we also do the hard work necessary to deliver for shareholders in the short term.

Mary Barra: Looking at our second quarter results.

Mary Barra: MSCI achieved 9% subscription run rate growth.

<unk>, 10% growth in both EMEA and Asia.

Mary Barra: And 17% growth in custom indexes and special package.

Bear Pettit: In addition, direct indexing AUM based on MSCI indexes is now $113 billion, an increase of 28% year over year. We are also encouraged by our product with custom indexes. In Q2, we supported a large asset manager client in their launch of a new custom ETF climate theory linked to the MSCI Transition Aware of select indexes. Meanwhile, we closed on our acquisition of Foxberry, with an enhanced custom index platform launch underway for the second half of the year. Looking at global investment flows, we are encouraged that ETF products linked to MSCI indexes captured the highest cash flows in over two years, with over $28 billion of inflows during the second quarter.

Mary Barra: In addition, direct indexing.

Mary Barra: Based on MSCI indexes is now a $113 billion up 28% year over year.

Mary Barra: We are also encouraged by our product with custom indexes.

Mary Barra: In Q2, we supported a large asset manager and their launch of a new custom ETF climate dairy linked to the MSCI transition aware select index.

Mary Barra: Meanwhile, we closed on our acquisition of Fox, Barry with an enhanced custom index platform launch underway for the second half of the year.

Bear Pettit: Looking at global investment flows, we are encouraged that ETF products linked to MSDI indexes captured the highest cash flows in over two years, with over $28 billion of inflows during the second quarter. In general, the depth and scale of tradable products linked to MSBI indexes continue to grow. During the quarter, we strengthened our position as a top index provider for ETF products, as the number of launches of equity ETFs linked to MSCI indexes nearly doubled year over year, translating to $2.5 billion in cash flows and nearly 30% share of new equity ETF fund flows. Open interest in derivatives linked to MSCI indexes is now nearly $300 billion, up 9% for the same period last year.

Mary Barra: Looking at global investment flows we are encouraged that ETF products linked to MSCI indexes captured the highest cash flows in over two years with over $8 billion of inflows during the second quarter.

Bear Pettit: In general, the depth and scale of credible products linked to MSCI indexes continues to grow. During the quarter, we strengthened our position as a top index provider for ETF products, as the number of launches of equity ETFs linked to MSCI indexes nearly doubled year over year, translating to $2.5 billion in cash flows and nearly 30% share of new equity ETFs. Over the interest in derivatives linked to MSCI indexes is now nearly $300 billion, up 9% for the same period last year. Shifting to analytics, we delivered another strong quarter across regions and business areas. Most notably, analytics achieved our best ever Q2 for new recurring subscription sales at over $21 million and our best ever Q2 retention rate at close to 96%.

Mary Barra: In general the depth and scale of Accretable products linked to MSCI indexes continues to grow.

Mary Barra: During the quarter, we strengthened our position as a top index provider for ETF products as the number of launches of equity Etfs linked to MSCI indexes nearly doubled year over year translating.

Mary Barra: <unk> to $2 $5 billion in cash flows and nearly 30% share of new equity ETF Fund flows.

Mary Barra: Open interest in derivatives linked to MSCI indexes is now nearly $300 billion.

Mary Barra: Up 9% from the same period last year.

Bear Pettit: Moving to analytics, we delivered another strong quarter across regions and business areas. Most notably, Analytics achieved our best-ever Q2 for new recurring subscription sales at over $21 million and our best-ever Q2 retention rate at close to 96%. We had a strong quarter with hedge funds, including a large win for our equity risk models to support a new client's recent fund loss. Our offerings are supporting broad use cases such as market risk, regulatory capital management, counterparty credit risk management, liquidity monitoring, and investor reporting.

Mary Barra: Shifting to analytics, we delivered another strong quarter across regions and business areas.

Mary Barra: Most notably analytics to achieve our best ever Q2 for new recurring subscription sales and over $21 million and our best ever Q2 retention rate at close to 96%.

Bear Pettit: We have a strong quarter with hedge funds, including a large win for our equity risk models to support a new client's recent fund launch. Our offerings are supporting broad use cases such as market risk, regulatory capital management, counter-party credit risk management, liquidity monitoring, and investor reporting. We also drove $3.6 million in new recurring sales from asset owners, up 63% year over year, to support their enterprise risk management. I made an industry re-imagining of risk management, risk teams that global investment firms are a hundred pressure to find efficiencies, modernize services, all while harnessing the potential power of generative AOP.

Mary Barra: We had a strong quarter with hedge funds, including a large win or our equity risk models to support a new clients recent fund launch.

Mary Barra: Our offerings are supporting broad use cases, such as market risk regulatory capital management.

Mary Barra: Third party credit risk management liquidity monitoring and investor reporting.

Bear Pettit: We also grow $3.6 million in new recurring sales from asset owners, up 63% year over year, to support their enterprise risk management. Amid an industry reimagining of risk management, risk teams and global investment firms are under pressure to find efficiencies, modernize services, all while harnessing the potential power of generative AI.

Mary Barra: We also drove $3 $6 million in new recurring sales from asset owners up 63% year over year to support their enterprise risk management.

I made an industry re imagining of risk management risk team that global investment firms are under pressure to find efficiencies modernized services, all while harnessing the potential power of January to date.

Bear Pettit: We launched a new Future of Risk products week during Q2, including our MSDI AI portfolio insight tool, as Henry mentioned. This tool demonstrates how we can leverage our existing strengths and IP to drive innovation. It combines MSDI deep history in natural language processing and machine learning with our industry-leading data and risk impact amounts. Turning Q2 and climate, we delivered 14% run rate growth for the combined segment, along with 30% climate run rate growth across our product law. Our new game trading partnership with Moody's to offer MSDI ESG sustainability data to Moody's broad base of global clients reinforces MSDI as the market standard greedy.

Bear Pettit: We launched a new future of risk product suite during Q2, including our MSCI AI Portfolio Insights tool, as Henry mentioned. This tool demonstrates how we can leverage our existing strengths and IT to drive innovation. It combines MSCI's deep history in natural language processing and machine learning with our industry-leading data and risk and factor analysis. Turning to ESG and climate, we delivered 14% run rate growth for the combined segment, along with 30% climate run rate growth across our products.

Mary Barra: We launched a new future risk products suite during Q2, including our MSCI AI portfolio insights tool as Andrew mentioned.

Andrew: This tool demonstrates how we can leverage our existing strengths and IP to drive innovation.

Andrew: Combined MSCI deep history in natural language processing and machine learning with our industry, leading data and risk and factor.

Andrew: Turning to ESG and climate, we delivered 14% run rate growth for the combined segment.

Andrew: Along with 30% climate run rate growth across our product lines.

Bear Pettit: Our new game-changing partnership with Moody's to offer MSCI's ESG and sustainability data to Moody's broad base of global clients reinforces MSCI as the market standard for ESG. The partnership will also help us expand our ESG and sustainability coverage for private companies. In addition, the Moody's partnership also confirms the continuing importance of sustainability considerations in global investment.

Andrew: Our new game changing partnership with Moody's to offer MSCI ESG and sustainability.

Andrew: Moody's broad base of global clients reinforces MSCI as the market standard for ESG.

Bear Pettit: The partnership will also help us expand our ESG sustainability coverage for private companies. In addition, the Moody's partnership also confirms the continuing importance of sustainability considerations in global investing. MSDI continues to advance our product roadmap, including for regulatory solutions. Last month, for example, we launched a new data set to help issuers, advisors, and corporate to line with Corporate Sustainability Reporting Directive for CSRD in Europe. In climate, we released an important new product, MSDI geospatial asset intelligence, which will help clients identify physical and nature-based risks on more than 1 million locations for 70,000 public and private companies.

Andrew: The partnership will also help us expand our ESG and sustainability coverage for private companies.

In addition, the Moody's partnership also confirms the continuing importance of sustainability consideration in global investing.

Bear Pettit: MSPI continues to advance our product roadmap, including for regulatory solutions. Last month, for example, we launched a new data set to help issuers, advisors, and corporates align with the Corporate Sustainability Reporting Directive, or CSRD, in Europe. In the area of climate, we released an important new product, MSCI Geospatial Asset Intelligence, which will help clients identify physical and nature-based risks at more than one million locations for 70,000

Andrew: MSCI continues to advance our product roadmap, including for our regulatory solutions.

Andrew: Last month for example, we launched a new data set to help issuers advisers and corporate alignment corporate sustainability reporting directive or CSR D in Europe.

Andrew: In climate, we released an important new product MSCI geospatial asset intelligence, which will help clients identify physical in nature based risk on more than 1 million locations for 70000 public and private companies.

Bear Pettit: With this product, we are once again using AI for data collection and mapping so that investors and lenders can better assess climate risks in their portfolios and loan books. Initial client interests is encouraging, and we've already signed two yields, including with the large prominent private credit GPs. In private assets, we're driving important products and client milestones. MSDI Private Capital Solutions subscription run rate is almost $106 million, which represents growth of 17% over Burgess's performance in the same period last year prior to the acquisition, and the retention rate was almost 93%. On the product side, we achieve a key milestone with a launch of MSDI Private Capital Indexes, which will accelerate our push to become a standard, better, and private markets, supporting investors seeking standardized taxonomies and benchmarks to measure and evaluate private asset classes consistently.

Bear Pettit: With this product, we are once again using AI for data collection and mapping, so that investors and lenders can better assess climate risk in their portfolios and loan books. Initial client interest is encouraging, and we've already signed two deals, including with a large, prominent private credit dealer. In private assets, we're driving important products and client models. The MSCI Private Capital Solutions subscription run rate is almost $106 million, which represents growth of 17% over Burgess's performance in the same period last year prior to the acquisition, and the retention rate was almost 93%.

Andrew: With this product we are once again using AI for data collection and mapping so that investors and lenders can better assess climate risks in their portfolios and loan books initial.

Andrew: The initial client interest is encouraging and we have already signed two deals, including a large prominent private credit GDP.

Andrew: In private assets.

Andrew: Driving important products and client milestones.

Speaker Change: MSCI private capital solution subscription run rate is almost a $106 million, which represents growth of 17% over <unk> performance in the same period last year prior to the acquisition.

Speaker Change: And the retention rate was almost 93%.

Bear Pettit: On the product side, we achieved a key milestone with the launch of MSCI's Private Capital Index, which will accelerate our push to become a standards setter in private markets, supporting investors seeking standardized taxonomies and benchmarks to measure and evaluate private asset classes consistently.

Speaker Change: On the product side, we achieved a key milestone with the launch of MSCI private capital indexes, which will accelerate our push to become a standard better in private markets supporting.

Speaker Change: Investors seeking standardized taxonomies and benchmarks to measure and evaluate private asset classes consistent consistently.

Bear Pettit: Given MSDI's global leadership and track record of success in indexing and benchmarking, clients have expressed significant interest in having us create benchmark indexes for private markets. Finally, in real assets, we posted a run rate growth of 3% and a retention rate of 90%.

Bear Pettit: Given MSCI's global leadership and track record of success in indexing and benchmarking, clients have expressed significant interest in having us create benchmark indexes for private markets. Finally, for real assets, we posted a run rate growth of 3% and a retention rate of 90%. While the commercial real estate market remains challenging, we are encouraged by client demand for products uncorrelated with transaction volumes, including portfolio services, index insights, and climate, which enabled us to land almost $3 million of new recurring sales in Europe, growing 16% year over year.

Speaker Change: Given msci's global leadership and track record of success in indexing and benchmarking.

Speaker Change: <unk> have expressed significant interest in having us create benchmark indexes private mark.

Speaker Change: Finally in real assets, we posted a run rate growth of 3% and a retention rate of 90%.

Bear Pettit: and Seth. While the commercial real estate market remains challenging, we are encouraged by client demand for products unrelated to the transaction volumes, including portfolio services, index insights, and climate, which enable us to lend almost $3 million of new recurring sales in Europe, growing 16% year over year. Looking ahead, we will continue aligning M.S.E.I's long-term strategy with secular friends and our competitive advantages while staying laser-focused on short-term execution.

Speaker Change: While the commercial real estate market remains challenging we are encouraged by client demand for our products uncorrelated with transaction volumes, including portfolio services index insights and climate, which enabled us to land almost $3 million of new recurring sales in Europe growing 16%.

Speaker Change: Year over year.

Bear Pettit: Looking ahead, we will continue aligning MSDI's long-term strategy with secular trends and our competitive advantages while staying laser-focused on short-term execution. And with that, let me turn the call over to you, Alex. Thanks, Farah, and hi, everyone.

Ed: Looking ahead, we will continue aligning <unk> long term strategy with secular trends and our competitive advantages, while staying laser focused on short term execution and with that let me turn the call over to you Ed.

Andy Wishman: And with that, let me turn the call over to you. Thanks, Bear, and hi, everyone.

Ed: Thanks, Baer and hi, everyone in.

Andy Wishman: In the second quarter, we delivered 10% organic revenue growth, 14% adjusted EBITDA growth, and 21% pre-cast flow growth. We are encouraged by the results, which reflect our unrelenting dedication to execution, even in the face of market headwinds, which may persist in the short-term. We are encouraged by the rebound and retention rates from the first quarter, which we did expect, and we have not seen any deterioration in conditions.

Andrew Wiechmann: In the second quarter, we delivered 10% organic revenue growth, 14% adjusted EBITDA growth, and 21% free cash flow growth. We are encouraged by the results, which reflect our unrelenting dedication to execution, even in the face of market headwinds, which may persist in the short term. We are encouraged by the rebound and retention rates from the first quarter, which we did expect, and we have not seen any deterioration in condition.

Ed: In the second quarter, we delivered 10% organic revenue growth, 14% adjusted EBITDA growth and 21% free cash flow growth.

Ed: We are encouraged by the results, which reflect our unrelenting dedication to execution, even in the face of market headwinds, which may persist in the short term.

Ed: We are encouraged by the rebound in retention rates from the first quarter, which we did expect and we have not seen any deterioration in conditions. Although we expect capsules to remain elevated in Q3 compared to last year, and we expect somewhat longer sales cycles to persist in the short term.

Andy Wishman: Although we expect councils to remain elevated in Q3 compared to last year, and we expect somewhat longer sales cycles to persist in the short term. I also want to note that Q3 tends to be a seasonally softer quarter for us on the sales front. Within index, we grew our subscription run rate among asset managers and asset owners at 8% and 12%, respectively. The segments collectively represent 68% of our index subscription run rate. Meanwhile, our index subscription run rate with wealth managers and hedge funds grew 11% and 24%, respectively. Across index subscription modules, we saw another strong quarter from custom and special packages growing 17%.

Andrew Wiechmann: Although we expect cancels to remain elevated in Q3 compared to last year, and we expect somewhat longer sales cycles to persist in the short term, I also want to note that Q3 tends to be a seasonally softer quarter for us on the sales front. Within the index, we grew our subscription run rate among asset managers and asset owners at 8% and 12%, respectively. These segments collectively represent 68% of our index subscription run rate.

Ed: I also want to note that Q3 tends to be a seasonally softer quarter for us on the sales front.

Ed: Within index, we grew our subscription run rate among asset managers and asset owners at 8% and 12% respectively.

Ed: These segments collectively represent 68% of our index subscription run rate.

Andrew Wiechmann: Meanwhile, our index subscription run rate with wealth managers and hedge funds grew 11% and 24%, respectively. Across index subscription modules, we saw another strong quarter from custom and special packages, growing 17%. EBF revenues were up 18% year-over-year, benefiting from $28 billion of cash inflows and about $21 billion of market appreciation in ETFs linked to MSCI equity indexes during the second quarter. ETFs linked to our indexes continue to attract flows in non-US exposures, particularly in developed markets outside the US and in emerging markets, as we have seen a pickup in flows into ETFs with exposures outside the U Fixed income ETF AUM linked to MSCI and Bloomberg partnership indexes is now at $64 billion, with year-to-date inflows of over $6 billion.

Ed: While our index subscription run rate with wealth managers and hedge funds grew 11% and 24% respectively.

Ed: Across index subscription modules, we saw another strong quarter from custom and special packages growing 17%.

Andy Wishman: EDF revenues were up 18% year-over-year, benefiting from $28 billion of cash inflows and about $21 billion of market appreciation and ETFs linked to MSCI equity indexes during the second quarter. ETFs linked to our indexes continue to attract flows in non-U.S. exposures, particularly in developed markets outside the U.S., and in emerging markets, as we have seen a pickup in flows into ETFs with exposures outside the U.S. Fixed-income ETF AUM linked to MSCI in Bloomberg Partnership Indexes is now at $64 billion, with year-to-date inflows of over $6 billion. Given strong recent equity market performance, non-ETF revenue in this quarter included the impact of true-ups related to higher reported client AUM and newly reported product launches.

Ed: ABF revenues were up 18% year over year benefiting from $28 billion of cash inflows and about $21 billion of market appreciation and Etfs linked to MSCI equity indexes during the second quarter.

Ed: Etfs linked to our indexes continue to attract flows in non U S exposures, particularly in developed markets outside the U S and in emerging markets.

Ed: As we have seen a pickup in flows into etfs with exposures outside the U S.

Ed: Fixed income ETF AUM linked to MSCI in Bloomberg partnership indexes are now at 64 billion.

Ed: With year to date inflows of over $6 billion.

Andrew Wiechmann: Given strong recent equity market performance, non-ETF revenue in this quarter included the impact of true-ups related to higher reported client AUM and newly reported product launches. We reached a significant milestone in the quarter, with AUM and ETFs and non-ETF passive products tracking MSCI indexes now surpassing $5 trillion. In analytics, organic subscription run rate growth was 7%, and revenue growth was 11%. The difference is largely attributable, once again, to the impact of recent client implementations, which continued from the last couple of quarters.

Ed: Given strong recent equity market performance non ETF revenue in this quarter included the impact of true ups related to higher reported client AUM in newly reported product launches.

Andy Wishman: We reached a significant milestone in the quarter with AUM and ETFs and non-ETF passive products tracking MSCI indexes now surpassing $5 trillion. In analytics, organic subscription run rate growth was 7%, and revenue growth was 11%. The difference is largely attributable once again to the impact of recent client implementations, which continued from the last couple of quarters.

Ed: We reached a significant milestone in the quarter with AUM and Etfs and non ETF passive products tracking MSCI indexes now surpassing five trillion dollars.

Ed: And analytics organic subscription run rate growth was 7% and revenue growth was 11%. The difference is largely attributable once again to the impact of recent client implementations, which continued from the last couple of quarters.

Andy Wishman: As we've noted in the past, analytics revenue growth can be lumpy because of items such as these implementations, and we expect revenue growth rates to more closely align with run rate growth in Q3. In our ESG and climate reportable segment, organic run rate growth was 13%, which excludes the impact of FX and about $5 million of run rate from True. Q2, new recurring subscription sales for the segment included a significant contribution from the Moody's partnership. Regionally, the subscription run rate growth for the segment was 17% within Europe, 20% in Asia, and 9% in the Americas.

Andrew Wiechmann: As we've noted in the past, analytics revenue growth can be lumpy because of items such as these implementations, and we expect revenue growth rates to more closely align with run rate growth in Q3. For our ESG and climate reportable segment, organic run rate growth was 13%, which excludes the impact of FX and about $5 million of run rate growth from Trove. Q2 new recurring subscription sales for the segment included a significant contribution from the Moody's Partnership. Regionally, the subscription run rate growth for the segment was 17% within Europe, 20% in Asia, and 9% in the Americas.

Ed: As we've noted in the past analytics revenue growth can be lumpy because of items such as these implementations and we expect revenue growth rates to more closely align with run rate growth in Q3.

Ed: In our ESG and climate reportable segment organic run rate growth was 13%, which excludes the impact of FX and about $5 million of run rate from trove.

Ed: Two new recurring subscription sales for this segment included a significant contribution from the Moody's partnership regionally.

Ed: Regionally the subscription run rate growth for the segment was 17% within Europe, 20% in Asia and 9% in the Americas.

Andy Wishman: In private capital solutions, year-over-year run rate growth was 17%, and we continue to gain traction in key markets. New recurring sales in Europe reached a record, and we also saw solid traction in sales with our GP client base. The private capital solutions retention rate was approximately 93%, and we recorded almost 27 million dollars of revenue in the quarter. In real assets, run rate growth was roughly 3% with the retention rate slightly above 90%.

Andrew Wiechmann: In private capital solutions, year-over-year run rate growth was 17%, and we continue to gain traction in key markets. New recurring sales in Europe reached a record, and we also saw solid traction in sales with our GP client base. The private capital solutions retention rate was approximately 93%, and we recorded almost $27 million of revenue in the quarter.

Ed: And private capital solutions year over year run rate growth was 17% and we continue to gain traction in key markets.

Ed: New recurring sales in Europe reached a record and we also saw solid traction in sales with our GP client base.

Ed: The private capital solutions retention rate was approximately 93% and we recorded almost $27 million of revenue in the quarter.

Andrew Wiechmann: In real assets, run rate growth was roughly 3%, with a retention rate slightly above 90%. We continue to have solid momentum in our index intel and our income and climate insights offerings, while we continue to see industry pressure impacting our transaction data offerings, including our RCA and property intel products, which we expect to continue to face headwinds in the near term. Our rigorous approach to capital allocation remains unchanged.

Ed: In real assets run rate growth was roughly 3% with a retention rate slightly above 90% we.

Andy Wishman: We continue to have solid momentum in our index intel and our income and climate insights offerings, where we continue to see industry pressure impacting our transaction data offerings, including our RCA and property intel products, which we expect to continue to face headwinds in the near term.

Ed: We continue to have solid momentum in our index, Intel and our income and climate insights offerings, while we continue to see industry pressure impacting our transaction data offerings, including our RCA and property Intel products, which we expect to continue to face headwinds in the near term.

Andy Wishman: Our rigorous approach to capital allocation remains unchanged. Through yesterday, we've repurchased over $290 million, roughly 600,000 shares since late April. Our cash balance remains over $450 million, including readily available cash in the U.S. of more than $200 million.

Ed: Our rigorous approach to capital allocation remains unchanged through yesterday, we've repurchased over $290 million roughly 600000 shares since late April.

Andrew Wiechmann: Through yesterday, we've repurchased over $290 million, or roughly 600,000 shares since late April. Our cash balance remains over $450 million, including readily available cash in the U.S. of more than $200 million. Turning to our 2024 guidance, we've increased our guidance for depreciation and amortization expense and operating expenses by $5 million, reflecting in part the impact of acquired intangible amortization expense from the Soxbury acquisition, which closed in April. I would note that our guidance assumes that ETF AUM levels increase slightly from June 30th levels through the end of the year.

Ed: Our cash balance remains over $450 million, including readily available cash in the U S of more than $200 million.

Andy Wishman: Turning to our 2024 guidance, we've increased our guidance for depreciation and amortization expense and operating expenses by $5 million, reflecting, in part, the impact of acquired intangible amortization expense from the Soxbury acquisition, which closed in April. I would note that our guidance assumes that ETF AUM levels increase slightly from June 30th levels through the end of the year. To the extent AUM levels track higher than this, we've expect to be towards the higher end of our expense guidance ranges.

Ed: Turning to our 2024 guidance, we've increased our guidance for depreciation and amortization expense and operating expenses by $5 million, reflecting in part the impact of acquired intangible amortization expense from the Fox very acquisition, which closed in April.

Speaker Change: I would note that our guidance assumes that ETF AUM levels increased slightly from June 30 levels through the end of the year to the extent AUM levels track higher than this we'd expect to be towards the higher end of our expense guidance ranges.

Andrew Wiechmann: To the extent AUM levels track higher than this, we would expect to be towards the higher end of our expense guidance right now. As of right now, we expect the quarterly effective tax rate in both Q3 and Q4 to be in the range of 20% to 22% before any additional discrete item.

Andy Wishman: As of right now, we expect the quarterly effective tax rate in both Q3 and Q4 to be in the range of 20% to 22% before any additional discrete items. Before we open it up for questions, I want to underscore that we see tremendous opportunities with compelling secular trends. We see strong client engagement and tangible opportunities to drive growth.

Speaker Change: As of right now we expect the quarterly effective tax rate in both Q3 and Q4 to be in the range of 20% to 22% before any additional discrete items.

Operator: Before we open it up for questions, I want to underscore that we see tremendous opportunities with compelling secular trends. We see strong client engagement and tangible opportunities to drive growth. We see near-term headwinds and client pressures, but we continue to execute and drive leadership in these large addressable markets that will drive long-term growth for us. We look forward to keeping you posted on our progress, and with that, Operator, please open the line for questions.

Before we open it up for questions I want to underscore that we see tremendous opportunities with compelling secular trends.

Speaker Change: We see strong client engagement and tangible opportunities to drive growth, we see near term headwinds and client pressures, but we continue to execute and drive leadership in these large addressable markets that will drive long term growth for us.

Andy Wishman: We see near-term headwinds and client pressures, but we continue to execute and drive leadership in these large addressable markets that will drive long-term growth for us.

Operator: We look forward to keeping you posted on our progress, and with that operator, please open the line for questions. Thank you.

Speaker Change: We look forward to keeping you posted on our progress and with that operator. Please open the line for questions.

Operator: Thank you. Ladies and gentlemen, we will now begin our question and answer session. If you have dialed in and would like to ask a question, please press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again.

Speaker Change: Thank you ladies and gentlemen, we will now begin our question and answer session. If you have dialed in and would like to ask a question. Please press star followed by the number one on your telephone keypad. If you would like to withdraw your question. Thank you Brad Star One again as a reminder, please limit your.

Operator: Ladies and gentlemen, we will now begin our question-and-answer session. If you have dialed in and would like to ask a question, please press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star one again. As a reminder, please limit yourself to one question only. Afterwards, you may add yourself back to the queue for any additional questions. We'll pause for a moment to compile the Q&A roster. Thank you.

Speaker Change: Self to one question only afterwards, you may add yourself back to the queue for any additional questions, we'll pause for a moment to compile the Q&A roster. Thank you.

Operator: As a reminder, please limit yourself to one question only. Afterwards, you may add yourself back to the queue for any additional questions. We'll pause for a moment to compile the Q&A roster. Thank you. The first question comes from the line of Alex Kramm from UBS. Please go ahead. Yes. Hey, good morning, everyone.

Alex Kramm: The first question comes from the line of Alex Krem from UBS. Please go ahead. Yes, hey, good morning, everyone. I just wanted to maybe unpack the strong sales growth in the quarter a little bit more. Last quarter, obviously, fairly soft. I think the tone, even look forward, still fairly somber. Maybe you can just help us what happened across the different segments. Did you gain more pricing? Was it just timing that a lot of these maybe longer sales cycle deals closed? Or was the sales force really engaged after what happened? Trying to understand the really strong results here after what's been a challenging environment.

Speaker Change: The first question comes from the line of Alex Kramm from UBS. Please go ahead.

Alex Kramm: Just wanted to maybe unpack the strong sales growth in the quarter a little bit more. Last quarter, obviously, fairly soft, and I think the tone, even if you look forward, is still fairly somber. So maybe you could just help us understand what happened across the different segments. I mean, did you gain more pricing? Was it just timing that a lot of these maybe longer sales cycle deals closed?

Brad: Yes, Hey, good morning, everyone.

Speaker Change: Just wanted to.

Alex Kramm: Maybe maybe unpack the strong sales growth in the quarter a little bit more.

Speaker Change: Last quarter, obviously fairly soft and I think the tone even.

Speaker Change: Look forward still fairly somber. So maybe you can just help us what happens across the different segments that you did you gain while pricing was it just timing that a lot of these maybe longer sales cycle deals closed or was the sales force really engaged after what happened last quarter just trying to understand.

Andrew Wiechmann: Or was the sales force really engaged after what happened last quarter? Just trying to understand the really strong results here after what's been a challenging environment. Thank you.

Speaker Change: Really strong results here after after what's been a challenging environment. Thank you.

Andy Wishman: Thank you.

Andy Wishman: Sure, thanks Alex, it's Andy.

Andrew Wiechmann: Sure. Thanks, Alex. It's Andy.

Sure. Thanks, Alex it's Andy So a few observations here firstly I would remind you and I think you know this sales and cancels can both be lumpy quarter to quarter I.

Andy Wishman: So a few observations here. Firstly, I would remind you, and I think you know this: sales and cancels can both be lumpy, quarter to quarter. I would say that we haven't seen a deterioration in conditions, and I would say the sales in Q2 were solid, as you pointed out.

Andrew Wiechmann: So a few observations here. Firstly, I would remind you, and I think you know this, sales and cancels can both be lumpy quarter to quarter. Secondly, I would say that we haven't seen a deterioration in conditions.

Speaker Change: I would say that we haven't seen a deterioration in conditions and I would say the sales in Q2 were solid as you pointed out.

Andrew Wiechmann: And I would say the sales in Q2 were solid, as you pointed out. But I would also say that we haven't seen an inflection yet. Overall, we still see pressures on clients. We still see longer sales cycles. So we would expect the lumpiness in sales and cancels to continue. And, as I mentioned in the prepared remarks, Q3 can be a seasonally softer quarter for us. But, as we've highlighted before, sustained momentum in equity markets is helpful to overall buying dynamics.

Andy Wishman: I would also say that we haven't seen an inflection yet. Overall, we still see pressures on clients; we still see the longer sales cycles, so we would expect the lumpiness and sales and cancels to continue here.

Speaker Change: I would also say that we haven't seen an inflection yet.

Speaker Change: Overall, we still see pressures on clients, we still see the longer sales cycles. So we would expect the lumpiness in sales and cancels to continue here and as I mentioned in the prepared remarks Q3 can.

Andy Wishman: And, as I mentioned in the prepared remarks, Q3 can be a seasonally softer quarter for us. But, as we've highlighted before, sustained momentum in equity markets is helpful to overall buying dynamics. Although the impact on our subscription sales and not metrics more generally tends to lag the markets, I would highlight that we are seeing strong client engagement across the globe, and we see it across most product areas and client segments. I think both the momentum in the equity markets and the strong client engagement should eventually lead to some momentum on the sales front.

Speaker Change: It can be a seasonally softer quarter for us.

Speaker Change: As we've highlighted before sustained momentum in equity markets is helpful to overall buying dynamics.

Andrew Wiechmann: Although the impact on our subscription sales and operational metrics more generally tends to lag the markets, I would highlight that we are seeing strong client engagement across the globe. And we see it across most product areas and client segments. I think both the momentum in the equity markets and the strong client engagement should eventually lead to some momentum on the sales front. And so we're encouraged here, but we remain cautious and expect some continued lumpiness. The next question comes from the line of Manav Patnaik from Barclays. Please go ahead.

Speaker Change: Though the impact on our subscription sales not metrics more generally tends to lag the market.

Speaker Change: I would highlight that we are seeing strong client engagement across the globe.

Speaker Change: And we see it across across most product areas and client segments.

Speaker Change: I think both the momentum and the equity markets and the strong client engagement should eventually lead to some momentum on the sales front.

Andy Wishman: And so we're encouraged here, but we remain cautious and expect some continued lumpiness.

Speaker Change: And so we're encouraged here, but we remain cautious and expect some continued lumpiness.

Manav Patnaik: The next question comes from the line of Man of That Night from Barclays. Please go ahead. Thank you.

Speaker Change: The next question comes from the line of Manav Patnaik from Barclays. Please go ahead.

Manav Patnaik: Thank you. I wanted to ask about Moody's partnership. It's a very interesting partnership, sounds like a win-win. I know you alluded to it a bit, Henry, but maybe just some context on why now and how the mechanics of the agreement work between the two of you. I presume there's revenue sharing going on. And just quickly, Andy, I think you mentioned in your remarks that there was already some contribution from Moody's. I apologize; I missed that. If you could just help with that, Hey, Manav. Bear here.

Manav Patnaik: Thank you.

Manav Patnaik: I wanted to ask about the Buddhist partnership. Actually, it's a very interesting partnership. Sounds like a win-win.

Manav Patnaik: I wanted to ask about the Moody's partnership actually.

Manav Patnaik: Very interesting partnership it sounds like a win win I know you alluded to a bit <unk>, but maybe just.

Manav Patnaik: I know you alluded to a bit, Henry, but maybe just some context on why now and how the mechanics of the agreement works between the two of you have presumed as like revenue sharing.

Manav Patnaik: Context on why now and how the mechanics of the agreement works between the two if you presume that revenue sharing going on and just quickly Andy I think you mentioned in your remarks that there was already some contribution as annuities I apologize I missed that if you could just help us with that.

Bear Pettit: Going on and just quickly, Andy, I think you mentioned in your remarks that there was already some contribution from the leaves that apologize and missed that. If you could just help with that.

Bear Pettit: Hey, man, I have a bear here. Yeah, so look, simply put, the deal is, so first of all, maybe on a higher level, we've stated repeatedly here in the call and in various meetings with many of you. Then we're constantly on the lookout for partnerships.

Bear Pettit: Yeah, so look, simply put, the deal is, first of all, maybe on a higher level, we've stated repeatedly here on this call and in various meetings with many of you that we're constantly on the lookout for partnerships. And I think this is a critical thing, which we hope will have a positive impact across our business in a variety of ways. So we started exploring with Moody's on a variety of fronts.

Man bear: Hey Man bear here, yes, so look simply put.

Speaker Change: The deal is so first of all maybe on a higher level. We've stated repeatedly here in the call and in various meetings with many of you that were constantly on the lookout for partnerships and I think this is a critical thing, which we hope will have a positive impact across our business in a variety of ways. So so we started exploring with Moody's.

Bear Pettit: And I think this is a critical thing, which we hope will have a positive impact across our business in a variety of ways. So we started exploring with Moody's on a variety of fronts. And in essence, what we've come up with here is Moody's felt that us being a leader in ESG, that they could use us significantly across a variety of their products. Their services to their clients. And in turn, you know, Moody's hasn't had an extraordinary private company database with the product they now call Orbus. And that's an area where we at MSEI have been really focused on trying to get better data and information for a variety of use cases.

Speaker Change: On a variety of fronts and in essence, what we've come up with year.

Bear Pettit: And in essence, what we've come up with here is, you know, Moody's felt that we were, that us being a leader in ESG, that they could use us, you know, significantly across a variety of their products, their services to their clients. And in turn, Moody's has an extraordinary private company database with a product they now call Orbis. And that's an area where we at MSCI have been really focused on trying to get better data and information for a variety of use cases, but notably for ESG and climate, where that sort of company information can be very hard to get hold of. So that's kind of the two parts, the two sides, if you like, of the deal.

Speaker Change: Is moody's felt that we're being that's us being a leader in ESG that they could use us significantly across a variety of their their products their services to their clients and in turn.

Speaker Change: Moody's hasn't as an extraordinary.

Speaker Change: Private company database with the product they not call Orbis.

Speaker Change: And that scenario, where we at MSCI have been really focused on trying to get better data and information for a variety of use cases, but notably for in ESG and climate, where where that does that.

Bear Pettit: But notably for any ESG inclinement, where that sort of company information can be very hard to get hold of.

Speaker Change: Sort of company information can be very hard to get all of those.

Andrew Wiechmann: You know, we're very pleased with it, mostly because, well, overall, we think it's a great deal for both parties. But specifically, we were able to put this together very quickly in just a number of months, you know, with a true spirit of partnership with Moody's. So we see a lot of upside from this in the future. And maybe I could just touch on the second part of that question, Manav, about the economics.

Bear Pettit: So that's kind of the two part, the two sides, if you like, the deal. You know, we're very pleased with it. Mostly because overall, we think it's a great deal for both parties, but specifically, we were able to put this together very quickly. In just a number of months, you know, with a true spirit of partnership with Moody's. So we see a lot of upside from this in the future.

Speaker Change: So that's kind of the two part the two sides if you like of the deal.

Speaker Change: We're very pleased with it.

Speaker Change: Mostly because overall, we think it's a great deal for both parties.

Speaker Change: But specifically we were able to put this together very quickly in just a number of months with the true spirit of partnership with Moody's. So we see a lot of upside from this in the future.

Andy Wishman: And maybe if I can just touch on the second part of that question, Manav, about the economics. As I mentioned in the prepared remarks, the partnership has resulted in a significant contribution to newer current sales in Q2.

Andrew Wiechmann: As I mentioned in the prepared remarks, the partnership resulted in a significant contribution to new recurring sales in Q2. Unfortunately, I can't give more specifics, but I would highlight that we haven't seen any notable changes to the segment trends that we've been seeing in recent quarters. The next question comes from Toni Kaplan from Morgan Stanley. Please go ahead. Thanks so much.

Speaker Change: And maybe if I can just touch on the second part of that question Manav about the economics as I mentioned in the prepared remarks. The partnership has resulted in a significant contribution to new recurring sales in Q2.

Andy Wishman: Unfortunately, I can't give more specifics, but I would highlight that we haven't seen any notable changes to the segment trends that we've been seeing in reaching quarters.

Speaker Change: Unfortunately, I can't give more specifics, but I would highlight that we haven't seen any notable changes to the segment trends that we've been seeing in recent quarters.

Toni Kaplan: The next question comes from the line of Toni Kaplan from Morgan Stanley. Please go ahead. Thanks so much.

Speaker Change: The next question comes from the line of Toni Kaplan from Morgan Stanley. Please go ahead.

Toni Kaplan: In the past couple of quarters, I think one of the debates that have emerged is this cyclical versus secular debate around asset managers and the market. And, you know, you've spoken about the challenges of tight budgets, which have intensified, I guess, over the past roughly two years. It seems like it's still going to be a little bit tough, you know, in 3Q. I guess, what do you think the catalyst is for the change that we'll see at some point? Because I think that you are sort of alluding to this being more of a cyclical issue. And, you know, what so drives that change?

Toni Kaplan: Thanks, so much.

Toni Kaplan: In the past couple of quarters, I think one of the debates that has emerged is the cyclical versus secular debate around the asset manager and market. And you've spoken about the challenges of tight budgets, which have intensified, I guess, over the past roughly two years, and it seems like it's still going to be a little bit tough in 3Q. I guess what do you think the catalyst is for the change that we'll see at some point, because I think that you are sort of alluding to this being more of a cyclical issue. So what drives that change?

Speaker Change: In the past couple of quarters I think one of the debates that has emerged as the cyclical versus secular debate around that asset manager and market and.

Toni Kaplan: Spoken about the challenges of tight budgets switches intensified I guess over the past roughly two years and it seems like it's still going to be a little bit tough.

Speaker Change: Q I guess, what do you think the catalyst is for the change that we'll see at some point.

Speaker Change: Because I think that you are sort of alluding to this being more of a cyclical.

Speaker Change: And.

Speaker Change: So what drives that change and.

Toni Kaplan: And can you sustainably grow double digits in an environment that continues to be challenged, or do you need that end market to sort of pick up? Thanks. Yeah, thanks, Toni.

Henry A. Fernandez: And, you know, can you sustainably grow double digits in an environment that continues to be challenged? Or do you need that end market to sort of pick up? Yeah, thanks, Toni.

Speaker Change: Can you sustainably grow double digits in an environment that continues to be challenged or.

Speaker Change: Do you need that end market to sort of pick up.

Henry A. Fernandez: There are three big buckets, and in the global investment industry, there are barbells on both sides. One is rules-based, systematic index investing, which continues to grow. And at the other end is very active, concentrated management, which obviously the ultimate expression of that is private asset class management, private equity, private credit, private real estate, et cetera. But it does include concentrated portfolios, very thematic portfolios, and things like that.

Tony: Thanks, Tony.

Henry Fernandez: There are three big buckets in the global investment industry. There are the barbells on both sides. You know, one is rules pay systematic index investing, which continues to grow on a basis. And at the other end is very active concentrated management, which obviously the ultimate expression of that is private asset class management, private equity, private credit, private real estate, etc. But it does include concentrated portfolios, very semantic portfolios, and things like that. And in the middle, it's the largest segment, the more traditional, you know, active management diversify widely, you know, what a large number of shares active management.

Speaker Change: There is there.

Speaker Change: There are three big buckets.

Speaker Change: And the global investment industry.

Speaker Change: There are the bar bells on both sides.

Speaker Change: One is.

Speaker Change: Rules based systematic index investing which continues to grow unabated.

Speaker Change: On the other end is very active concentrated in management.

Speaker Change: Which obviously the ultimate exploration of that is private asset class management private equity private credit private real estate et cetera.

Speaker Change: But it does include concentrated portfolios very thematic portfolio and things like that and in the middle is the largest segment.

Henry A. Fernandez: And in the middle is the largest segment, the more traditional, you know, active management, diversify widely, you know, large number of shares, active management. That segment will continue to grow, but at a slower pace than the other two. And, you know, you'll go through ups and downs, you will go through challenges and all of that.

Speaker Change: The more traditional active management diversify wildly while a large number of shares active management.

Henry Fernandez: And that segment will continue to grow, but at a slower pace than the two other ones. And you know, you'll go through ups and downs; you will go through challenges and all of that. And we're going through a challenge with that segment right now. And we clearly have been relying on that segment for about 50 plus percent of our subscription revenues. But rapidly increasing our penetration on index, systematic rules-based index management, which includes quantitative investing and index investing and all that. And on the other hand, you know, very active management, including our, you know, our foray into into private asset.

Speaker Change: That segment will continue to grow but on a slower pace than the two other ones.

Speaker Change: And you'll go through ups and downs and we will go through challenges and all of that.

Henry A. Fernandez: And we're going through a challenge with that segment right now, and we clearly have been relying on that segment for about 50 plus percent of our subscription revenues, but rapidly increasing our penetration on that index. So systematic rules-based index management, which includes quantitative investing and index investing and all of that. And, on the other hand, very active management, including our foray into private assets. So, as we look into the future, I don't see us going down in our growth rate because we will definitely penetrate traditional active management more and more.

Speaker Change: And we're going through a challenge.

Speaker Change: With that segment right now and we clearly have been relying on that segment for about 50 plus percent of our subscription revenues, but rapidly increasing our penetration on index. So systematic rules based index management, which includes quantitative investing in index.

Speaker Change: <unk> and all of that and on the other hand, very active management, including our.

Speaker Change: Our foray into into private asset. So so as we look into the future I don't see ores.

Henry Fernandez: So as we look into the future, I don't see us going down in our growth rate because we will, it will definitely penetrate the traditional active management more and more. They're going to rely on us more and more in what they do, even though it's an industry that is going through some difficulties right now cyclically. And we will increase our growth significantly in the other two sides, which is, you know, systematic rules-based investing and private asset class investment.

Speaker Change: Down in our growth rate, because we will we will definitely penetrate the traditional active management more and more they are going to rely on us more and more in what they do even though it's an industry that is going through some difficulties right now cyclically.

Henry A. Fernandez: They're gonna rely on us more and more in what they do, even though it's an industry that is going through some difficulties right now, cyclically, and we will increase our growth significantly in the other two sides, which is systematic rules-based investing and private asset class investing. The next question comes from the line of Ashish Sabadra from RBC Capital. Please go ahead. Thanks for taking my question.

We will increase our growth significantly in the other two sides, which is systematic rules based investing and private asset class investing.

Ashish Sabadra: Balsky. The next question comes from the line of Ashish Sabadra from RBC Capital. Please go ahead. Thanks for taking my question.

Speaker Change: Okay.

Speaker Change: The next question comes from the line of Ash the back row from RBC capital. Please go ahead.

Speaker Change: Thanks for taking my question.

Ashish Sabadra: Henry, I just wanted to drill down further on the index front, and particularly the slowdown in subscription growth that is understood. But as we think about marching back into low-double-digit growth over the midterm, I was wondering if you could help us parse how you think about market cap versus custom and direct indexing versus factor and thematic indices, and how you think about those growth profiles. And thanks for flagging some of those wins for Fabric as well as the AUM for direct indexing. What should we think about direct indexing?

Ashish Sabadra: Any I just wanted to drill down further on the index rank and particularly look the slowdown and subscription growth there is understood but as we think about marching back into the load up as digit growth over the mid term I was wondering if you could help us parse how do you think about the market cap versus customer direct indexing versus factor and thematic indexes and how do you think about those growth profiles and thanks for logging some of those wins or fabric as well as the AUM for direct indexing how should we think about the direct indexing right now these direct customer indices are only 15% of index subscription revenue but how do we think about that all in the next three to five years thanks.

Ash: Andy I, just wanted to get it down slightly on the index right.

Speaker Change: But clearly the slowdown in subscription growth that as I guess as we think about marching back into the low double digit growth over the midterm I was wondering if you could help us parse how do you think about the market cap.

Speaker Change: Customer direct indexing was the fact that in <unk> and how do you think about those growth profile and thanks, Ross logging some of those wins, while fabric as well as the Aes for direct indexing, how should we think about the direct indexing and nice now is good.

Andrew Wiechmann: Right now, these direct custom indices are only 15% of index subscription revenue, but how do we think about that over the next three to five years? Sure, Ashish, there are a number of questions there. I'll try to touch on several of them. I would say, and I think you alluded to this, if we focus on the index subscription growth rate, we are seeing a slowdown now from softer recurring net new over the last few quarters, which is a reflection of the tougher environment and the pressures that we've talked about, although I would highlight that we are seeing resilience and momentum based on the second quarter results, which I think reinforces the long-term opportunity for us.

Speaker Change: Custom indices that only 15% of index subscription revenue, but how do we think about that over.

Over the next three to five years. Thanks.

Ashish Sabadra: Sure as Ashish, number of questions there I'll try to touch on several of them. I would say, and I think you alluded to this, if we focus on the index subscription growth rate, we are seeing the slowdown now from softer recurring net new over the last few quarters, which is a reflection of the tougher environment and the pressures that we've talked about. Although I would highlight that we are seeing resilience and momentum based on the second quarter results, which I think reinforces the long-term opportunity for us. And if we double click on what's driving the growth and the outsized areas of growth across the index franchise, and they get similar to the drivers that we've seen in recent quarters. So we saw 8% growth in our market cap modules, but as you highlighted, 17% growth in our custom and special packages, which is a reflection of this move towards rules-based, systematic, customer outcome-oriented type investing, where indexes are a very effective and efficient mechanism to develop those strategies. We are well positioned to benefit there. If we look across client segments, we saw 8% growth with asset managers and more than 11 and 12 percent growth with wealth managers and asset owners, and 24 percent growth with hedge funds. And so it's Henry alluded to, we see tremendous opportunities in large part related to this move towards indexation in many different large client segments, and that trend is continuing. And I think a reflection of a long-term compelling secular opportunity for us. You know, if we're going to focus on direct indexing, as you alluded to or asked about, I think direct indexing is mainly showing up in the non-ETF passive line for us. It is still very early in its evolution, and it's a place where we are, I think, well positioned to help both wealth managers and asset managers that are serving wealth managers with direct indexing solutions to provide them not only the underlying indexes, which is where most of our run rate comes from today and most of our revenue comes from in that non-ETF passive line, but also broader solutions that help them on that customization journey at scale. Fabric is an enabler there. There are broader analytics tools like our optimizers and risk models and things like our ESG content and climate content, so we are uniquely positioned to benefit from direct indexing, which I believe is still in its early days and will be a big opportunity. The next question comes from the line up Alexander Hess from J.D.

Andrew Wiechmann: And if we double-click on what's driving the growth and the outsized areas of growth across the index franchise, I think it's similar to the drivers that we've seen in recent quarters. So we saw 8% growth in our market cap modules, but, as you highlighted, 17% growth in our custom and special packages, which is a reflection of this move towards rules-based, systematic customer outcome-oriented type investing where indexes are a very effective and efficient mechanism to develop those strategies.

Speaker Change: Sure Ashish number of questions there I'll try to touch on several of them.

I would say and I think you alluded to this if we focus on the index subscription growth rate. We are seeing the slowdown now from a softer recurring net new over the last few quarters, which is a reflection of the tougher environment and the pressures that we've talked about although I would highlight that we are seeing resilience and momentum.

Speaker Change: Based on our second quarter results, which I think reinforces the long term opportunity for us and if we double click on what's driving the growth and the outside areas of growth across the index franchise and they get similar too.

Speaker Change: The drivers that we've seen in recent quarters.

Speaker Change: So we saw 8% growth in our market cap modules, but as you highlighted 17% growth in our custom and special packages, which is a reflection of this move towards rules based systematic customer outcome oriented type investing where indexes are a very effective and efficient mechanism to to develop there.

Speaker Change: Strategies.

Andrew Wiechmann: We are well positioned to benefit from them there. If we look across client segments, we saw 8% growth with asset managers, more than 11 and 12% growth with wealth managers and asset owners, and 24% growth with hedge funds. And so, as Henry alluded to, we see tremendous opportunities, in large part related to this move towards indexation in many different large client segments, and that trend is continuing, and I think it is a reflection of a long-term compelling secular opportunity for us. You know, if we're going to focus on direct indexing, as you alluded to or asked about, I think direct indexing is mainly showing up in the non-ETF passive line for us.

Speaker Change: We are well positioned to benefit there if we look across client segments, we saw 8% growth with asset managers and more than 11% and 12% growth with wealth managers and asset owners and 24% growth with hedge funds and so as Henri alluded to we see tremendous opportunities.

Henri: In large part related to this move towards indexation and many different large clients segments and that trend is continuing and I think a reflection of a long term compelling secular opportunity for us.

Speaker Change: If we're going to focus on direct indexing as you alluded to.

Speaker Change: Or asked about I think direct indexing is mainly showing up in the non ETF passive line for us.

Andrew Wiechmann: It is still very early in its evolution, and it's a place where we are, I think, well positioned to help both wealth managers and asset managers that are serving them with direct indexing solutions to provide them not only the underlying indexes, which is where most of our run rate comes from today and most of our revenue comes from in that non-ETF passive line, but also broader solutions that help them on that customization journey at scale. Fabric is an enabler there, along with our broader analytics tools like our optimizers and risk models and things like our ESG content and climate content.

Speaker Change: It is still very early in its evolution and its a place where we are I think well positioned to help help both wealth managers and asset managers that are serving wealth managers with direct indexing solutions to provide them not only the underlying indexes, which is where most of our run rate.

Speaker Change: From today in most of our revenue comes from and that non ETF passive line, but also broader solutions that help them on that customization journey at scale fabric is an enabler there are broader.

Speaker Change: Tools like our optimizer and risk models and things like our ESG content and climate content. So we are uniquely positioned to benefit from direct indexing, which I believe is still in its early days and we will be a big opportunity longer term.

Andrew Wiechmann: So, we are uniquely positioned to benefit from direct indexing, which I believe is still in its early days and will be a big opportunity longer term. The next question comes from the line of Alexander Hess from J.P. Morgan. Please go ahead.

Alexander <unk>: The next question comes from the line of Alexander <unk> from Jpmorgan. Please go ahead.

Alexander Hess: Morgan. Please go ahead. Hi, everyone. So there was a large deal in the private assets space involving one of your larger clients this quarter. One of the points touched on that was the opportunity for private indexes. Now, you know, MSCI is out talking about your own private index business, your own opportunity for private capital indexes. But how do you think about the technical challenges to creating those sorts of indexes and gathering the data, and how has private capital solutions been able to tackle some of those? Any comments about how to frame the demand and opportunity for that business would be appreciated as well.

Alexander Eduard Maria Hess: There was a large deal in the private assets space involving one of your larger clients this quarter, and one of the points touched on in that was the opportunity for private indexes. Now MSCI is out talking about your own private index business and your own opportunity for private capital indexes, but how do you think about the technical challenges to creating those sorts of indexes and gathering the data, and how has Private Capital Solutions been able to tackle some of those?

Speaker Change: Hi, everyone.

Speaker Change: There was a large deal in the private asset space involving.

Speaker Change: One of your larger clients this quarter.

Alexander <unk>: Can you and what are the puts touched on that was the opportunity for private index is now.

Speaker Change: <unk> is out talking about your own private index business.

Speaker Change: One opportunity for private capital indexes, but how do you think about the technical challenges to creating those sorts of indexes and in gathering the data and how is private capital solutions has been able to to tackle some of those in.

Speaker Change: Any comments about how to frame the demand and opportunity for that business would be appreciated as well. Thank you.

Alexander Hess: Thank you.

Henry Fernandez: So thanks for that question now, because we're very excited about what we're doing in private assets. In private capital and real assets, as we look at the differences between the two of them. So, as you know, we announced yesterday the launch of a hundred and thirty private capital indices. Private equity, private debt, private credit, private infrastructure, etc. And we already have about 80 or so real property or real asset indices, both at the fund level and at the asset level. So we're very excited about that launch. The technical challenges and opportunities first come with the data access to the data.

Henry A. Fernandez: Any comments about how to frame the demand and opportunity for that business would be appreciated as well. So thanks for that question, because we're very excited about what we're doing with private assets, including private capital and real assets, as we look at the differences between the two of them. So, as you know, we announced yesterday the launch of 130 private capital indices, private equity, private debt, private credit, private infrastructure, et cetera.

Speaker Change: So thanks for that question.

Speaker Change: Because we're very excited about what we're doing in private assets.

Speaker Change: Private capital on real assets.

Speaker Change: As we look at the differences between the two of them.

Henry A. Fernandez: And we already have about 80 or so real property or real asset indices, both at the fund level and at the asset level. So we're very excited about that launch. The technical challenges and opportunities first come with the data, access to the data. So MSCI now has access to about $15 trillion worth of underlying data across all private assets, and that is the highest quality data that exists on the planet because it comes directly from the GP at the request of the LP.

So as you know.

Speaker Change: As announced yesterday the launch of 130 private capital.

Speaker Change: And this is.

Speaker Change: Private equity and private debt private credit private infrastructure et cetera.

Speaker Change: And we already have about 80 or so.

Real property or real asset in this is both at the fund level and at the asset level.

Speaker Change: So we're very excited about.

That launch.

Speaker Change: The daily challenges and opportunities first thumb with the data access to the data. So MSCI now has access to about 15 trillion dollars worth of underlying data across all private assets and that is the highest quality data that exist in the in the planet.

Henry Fernandez: So MSCI now has access to about fifteen trillion dollars' worth of underlying data across all private assets. And that is the highest quality data that exists on the planet because it comes directly from the GP as the request of the LP. So we have that enormous amount of data. So the private capital indices that we announced yesterday are built on about eleven trillion dollars of that fifteen trillion. And the other three, four say trillion dollars is what the other real asset indices are built upon. So it starts with that, then secondly is the your understanding of the investment process and the methodologies that you need to do to create this in the center.

Speaker Change: Because it comes directly from the <unk>.

Speaker Change: GP.

Speaker Change: West of the LP.

Henry A. Fernandez: So we have that enormous amount of data. So the private capital indices that we announced yesterday are built on about $11 trillion of that $15 trillion. And the other $3, $4 trillion is what the other real asset indices are built upon.

Speaker Change: So up until we have that enormous amount of data not the private capital in this is that we announced yesterday.

Speaker Change: <unk> built on about $11 million.

Speaker Change: About 15 3 million and the other three four trillion is what the dealer real asset in visits are built upon.

Henry A. Fernandez: So it starts with that. Then, secondly, is your understanding of the investment process and the methodologies that you need to do to create these indices. We've written the book about index construction and index methodologies over the last 50 or so years, so there is no question that we're an expert on that. And the third technical challenge is, do you have the distribution associated with that in terms of the asset owners and the asset managers and the allocators and the managers of assets? And we have 1,200 people at MSCI calling on pretty much every one of those clients around the world. So that is important. I think a key part of this thing is, obviously, as well, independence.

Speaker Change: I'll start with that and then secondly is the.

Speaker Change: Your understanding of the investment process and the methodology that you need to do to create this.

Henry Fernandez: We've written the book about index construction and index methodologies throughout the last fifty or so years. So there's no question that we're an expert on that. And the third technical challenge is do you have the distribution, you know, associated with that in terms of the asset owners and the asset managers and the allocators and the managers of assets? And we have one thousand two hundred people at MSCI falling on pretty much every, every one of those clients, you know, around the world. So that is that is important. I think a key part of this thing is obviously, as well, independence.

Speaker Change: We have written the bulk about index construction and index methodologies throughout throughout the last 50 or so years. So there is no question that we're an expert on that and the third technical challenges do you have the distribution.

Speaker Change: Associated with that in terms of the asset owners and the asset managers.

Speaker Change: Allocators and the managers of assets and we have 1200 people at MSCI balling on pretty much every every one of those clients around the world. So that is not as important I think a key part of this thing is obviously as well independence.

Henry Fernandez: People want to see their indices and other tools come from an independent source, and obviously you know MSCI has excelled on that in terms of quality and in terms of independence and in terms of robust and transparent methodology, et cetera. So we we feel pretty confident that we will be the leader in all aspects of private assets from the data to the tools and the tools, including the bench market. This is in the performance attribution, the risk of the risk models, liquidity evaluated prices, portfolio construction, asset allocation, et cetera, et cetera. And that's what we're saying out to do with the completion of the purchase acquisition on top of the RCA acquisition and on top of our position in real assets before that. We feel pretty good about where we are.

Henry A. Fernandez: People want to see their indices and other tools come from an independent source, and obviously, MSCI excels at that in terms of quality and independence and a robust and transparent methodology, et cetera. So we feel pretty confident that we will be the leader in all aspects of private assets, from the data to the tools. And the tools include the benchmark indices, the performance attribution, the risk models, liquidity, evaluated prices, portfolio construction, asset allocation, et cetera, et cetera.

Speaker Change: Want to see their indices and other tools come from an independent source and obviously.

<unk> has excelled that in terms of quality and in terms of independent and in terms of a robust and transparent methodology et cetera. So we feel pretty confident that we will be the leader in all aspects of private asset from the data to leave to the tools and the tools include the benchmark indices.

The performance attribution the risk the risk models liquidity.

Speaker Change: Evaluated prices for.

Speaker Change: New construction and asset allocation etcetera, etcetera, and that's what we're setting out to do.

Henry A. Fernandez: And that's what we're setting out to do with the completion of the Burgess acquisition on top of the RCA acquisition and on top of our position in real assets. Before that, we feel pretty good about where we are. Next question comes from the line of Owen Lau from Oppenheimer. Please go ahead.

Speaker Change: With the completion of the Burgess acquisition on top of the RCA acquisition and on top of our position in real assets before that we feel pretty good about where we are.

Next question comes from the line of our now from Oppenheimer. Please go ahead.

Heather Volsky: Good morning, and thank you for taking my question. So the broader market was quite strong in the first half and probably better than the initial market assumption. And I'm just wondering what else you would like to see so that you can raise your full year three cash flow guidance.

Owen Lau: Good morning, and thank you for taking my question. So the broader market was quite strong in the first half, probably better than the initial market assumption. And I'm just wondering what else you would like to see so that you can raise your full year free cash flow guidance. Thanks.

Speaker Change: Good morning, and thank you for taking my question.

Speaker Change: So the broader market was quite strong in the first half and probably better than the initial market assumption.

Speaker Change: Im just wondering what else you would like to see so that you can raise your full year free cash flow guidance. Thanks.

Andy Wishman: Thanks. Sure. Yeah, so that the cash flow performance has been strong for us. It was strong in the second quarter. I think we've benefited from both high collections compared to a year ago and lower cash tax payments. I would highlight on the guidance front that there are a lot of factors that can impact free cash flow. Everything from buildings and collections across both subscription and ABF, obviously a higher ABF environment does help us, although ABF we tend to bill on a lag. And then cash expenses and cash tax payments can swing quite a bit. We're only halfway through the year, and we are continually focused on driving strong free cash flow growth and strong free cash flow conversion, but would highlight that it can swing quarter to quarter.

Andrew Wiechmann: Sure. Yeah, so cash flow performance has been strong for us. It was strong in the second quarter.

Speaker Change: Sure Yes.

Speaker Change: <unk>.

Andrew Wiechmann: I think we've benefited from both high collections compared to a year ago and lower cash tax payments. However, on the guidance front, I would highlight that there are a lot of factors that can impact free cash flow. Everything from billings and collections across both subscription and ABF. Obviously, a higher ABF environment does help us, although we tend to bill on a lag. And then cash expenses and cash tax payments can swing quite a bit.

Speaker Change: Cash flow performance has been strong for us it was strong in the second quarter I think we benefited from both.

Speaker Change: Hi collections compared to a year ago, and lower cash tax payments.

Speaker Change: I would highlight on the guidance front that there are a lot of factors that can impact free cash flow.

Speaker Change: Everything from billings and collections across both subscription and ABF, obviously, a higher ABF environment does help us although ABF, we tend to bill on a lag.

Speaker Change: And then cash expenses and cash tax payments can swing quite a bit we're only halfway through the year.

Andrew Wiechmann: We're only halfway through the year, and we are continually focused on driving strong free cash flow growth and strong free cash flow conversion. But I would highlight that it can swing quarter to quarter. The next question comes from the line of Heather Balsky from Bank of America. Please go ahead.

Speaker Change: And we are continually focused on driving strong free cash flow growth and strong free cash flow conversion.

Speaker Change: I would highlight that it can swing quarter to quarter.

Faiza Alwy: The next question comes from the line of Heather Volsky from Bank of America. Please go ahead. Hi, thank you for taking my question. I appreciate it.

Heather Balsky: The next question comes from the line of Heather <unk> from Bank of America. Please go ahead.

Heather Balsky: Hi, thank you for taking my question. I appreciate it. Last quarter, during the call, you talked about your thoughts around margin expansion going forward, and I think the message was that you expected more modest expansion. As we think through the strong growth you're seeing with regard to AUM, how are you thinking about reinvesting that? Have your thoughts changed from last quarter?

Heather Balsky: Hi, Thank you for taking my question I appreciate it.

Faiza Alwy: Last quarter during the call, you talked about you thought around margin expansion going forward, and I think the message was you expect sort of more modest expansion. And as we think through the strong growth you're seeing with regards to AUM, how are you thinking about reinvesting? Has your thoughts changed anyway from last quarter? And if you were to sort of accelerate investments, where are you most focused?

Heather Balsky: Last quarter during the call you talked about your thoughts around margin expansion.

Heather Balsky: Going forward and I think the message when do you expect more modest expansion.

Speaker Change: As we think through the strong growth you're seeing with regards to.

Speaker Change: How are you thinking about reinvesting that.

Speaker Change: Your thoughts.

Speaker Change: <unk> changed in any way from last quarter.

Speaker Change: And if you were to sort of accelerate investments where are you most okay.

Faiza Alwy: Sure. So Heather, I would say we are not focused on, and we don't target a specific margin expansion or margin level. What we are continually doing is balancing investing for the long term, while driving attractive profitability and free cash flow growth. And so that is the calibration that we are continually focused on and driving. I would highlight the comments that I made in the prepared remarks here, where, as you alluded to, AUM levels have been running higher than what underlight our guidance in previous quarters, and we've assumed for the current guidance that AUM levels increase slightly from the 630 balances.

Andrew Wiechmann: If you were to accelerate investments, where would you most focus? Sure. So, Heather, I would say we are not focused on, and we don't target, a specific margin expansion or margin level. What we are continually doing is balancing investing for the long term while driving attractive profitability and free cash flow growth. And so that is the calibration that we are continually focused on and driving. I would highlight the comments that I made in my prepared remarks here, where, as you alluded to, AUM levels have been running higher than what underlied our guidance in previous quarters. And we've assumed for the current guidance that AUM levels have increased slightly from the 630 balances.

Speaker Change: Sure.

Speaker Change: Heather I would say we are not focused on and we don't target a specific margin expansion or margin level.

Speaker Change: What we are continually doing is balancing investing for the long term, while driving attractive profitability and free cash flow growth and so that is the calibration that we are continually focused on.

Speaker Change: And driving.

Speaker Change: Highlight the comments that I made in the prepared remarks here.

Speaker Change: <unk> as you alluded to AUM.

Speaker Change: AUM levels have been running higher than what underlying our guidance in previous quarters, and we've assumed for the current guidance.

Speaker Change: AUM levels increased slightly from the 630 balances.

Andy Wishman: And if AUM's track above that, we will likely be at the high end of our expense guidance ranges. We would use the higher growth to investing key areas in the business as we have in the past. And those key areas tend to cut across the big growth frontiers that we're talking about. And so from a solutions standpoint, very focused on the custom index front, and that's a broad topic involving everything from technology to researchers to go to market. We do have investments in the climate front. There are a number of opportunities across private assets and private capital that we are investing in.

Speaker Change: And if MS track above that we will likely be at the high end of our expense guidance ranges.

Andrew Wiechmann: And if AUMs track above that, we will likely be at the high end of our expense guidance ranges. We would use the higher growth to invest in key areas in the business as we have in the past, and those key areas tend to cut across the big growth frontiers that we're talking about. And so from a solutions standpoint, we are very focused on the custom index front, and that's a broad topic involving everything from technology to researchers to go to market. We do have investments in the climate front.

Speaker Change: Yes.

Speaker Change: We would use.

Speaker Change: The higher growth to invest in key areas in the business as we have in the past and those key areas tend to cut across the big growth frontiers that we're talking about and so from a solutions standpoint very focused on.

Speaker Change: The custom index front and Thats a broad topic.

Speaker Change: Moving everything from technology to researchers to go to market.

Speaker Change: We do have.

Speaker Change: Investments in the climate front, there are a number of opportunities across private assets and private capital that we were investing in.

Andy Wishman: And so we are laser focused on continuing to drive these long term growth drivers, while at the same time continuing to squeeze the run of business expenses and identify efficiencies in the business. But it's a constant calibration for us. And we are calibrating based on not only AUM levels, but overall business performance outlook and financial dynamics more generally.

Speaker Change: And so we are laser focused on continuing to drive these long term growth drivers while at the same time continuing to squeeze the run the business expenses and identify efficiencies in the business, but it's a constant calibration for us.

Andrew Wiechmann: There are a number of opportunities across private assets and private capital that we are investing in. And so we are laser focused on continuing to drive these long-term growth drivers while at the same time continuing to squeeze the run of business expenses and identify efficiencies in the business. It's a constant calibration for us, and we are calibrating based on not only AUM levels but overall business performance outlook and financial dynamics more generally, and we'll keep you posted on that. The next question comes from Faiza Alwy from Deutsche Bank. Please go ahead.

And we are calibrating based on not only AUM levels, but overall business performance outlook.

Financial dynamics more generally and we'll keep you posted on that.

Andy Wishman: And we'll keep you posted on that.

Faiza Alwy: The next question comes from the line of Faiza Alwy from Deutsche Bank. Please go ahead. Yes, hi, thank you.

Faiza Alwy: The next question comes from the line of Faiza <unk> from Deutsche Bank. Please go ahead.

Faiza Alwy: Yes, hi, thank you. So I wanted to follow up on the environment that you're seeing out there, specifically in ESG and climate, because it sounds like there was a pretty significant increase in new recurring subscription sales growth. And I know you alluded to the Moody's partnership that may have driven a chunk of that growth. But then I also heard you talk about sort of new products around CSRD. So give us a bit more around what you're expecting for ESG and if the underlying environment is any different or has improved.

Faiza Alwy: Yes, hi, Thank you. So I wanted to follow up on ball environment that youre seeing out there specifically in ESG and climate because it sounds like there was a pretty significant increase.

Faiza Alwy: So I want to follow up on the environment that you're seeing out there specifically in ESG and climate, because it sounds like there was a pretty significant increase in new recurring subscription sales world. And I know you alluded to the Moody's partnership that may have driven a chunk of that growth. But then I also heard you talk about those new products around CSRD. So give us a bit more around what you're expecting ESG and at the underlying environment is, you know, any different has improved. Sure. So I would say we've seen a continuation of the dynamics that we've been seeing in recent quarters.

Speaker Change: New recurring subscription sales world and I know you alluded to the Moody's partnership that may have driven a chunk of that growth.

But then I also heard you talk about sort of newer products around CSR. These will give us a bit more around what you're expecting for ESG and at the underlying environment is any different.

Speaker Change: It's improved.

Andrew Wiechmann: So I would say we've seen a continuation of the dynamics that we've been seeing in recent quarters. There haven't been any major changes to the trends that you've been seeing and we've been seeing. I think we highlighted this, but from a regional standpoint, within the segment, run rate growth in the Americas was about 9%. It was about 17% in EMEA and 20% in APAC, which is generally in line with what we saw last quarter.

Speaker Change: Sure. So I would say we've seen a continuation of the dynamics that we've been seeing in recent quarters. There haven't been major changes to the trends that you've been seeing and we've been seeing I think we highlighted this but from a regional standpoint segment within the segment run rate growth in the Americas was about 9%.

Faiza Alwy: There haven't been major changes to the trends that you've been seeing and we've been seeing. I think we highlighted this, but from a regional standpoint, segment within the segment, run rate growth in the Americas was about 9%, is about 17% in AMIA, and 20% in APAC, which is generally in line with what we saw last quarter. And the theme that we're seeing in each of the regions is fairly consistent with what we've seen in the past. In the US, we're still seeing investors take a more measured pace on how they're integrating ESG. That's causing longer sales cycles and more deliberate purchasing decisions.

Speaker Change: It's about 17% in EMEA and 20% in APAC, which is generally in line with what we saw last quarter.

Speaker Change: And the themes that we're seeing in each of the regions is fairly consistent with what we've seen in the past in the U S. We're still seeing the investors take a more measured pace on how they are integrating ESG.

Andrew Wiechmann: And the themes that we're seeing in each of the regions are fairly consistent with what we've seen in the past. In the U.S., we're still seeing investors take a more measured pace on how they're integrating ESG. That's causing longer sales cycles and more deliberate purchasing decisions. In EMEA, we do see opportunities, as you alluded to, in areas like regulation. So we've had some early wins with things like CSRD and EBA Pillar 3, but regulation, at the same time, is creating some complexity and confusion as it cuts across many different objectives, from financial materiality to do no harm to specific climate objectives.

Speaker Change: That's causing longer sales cycles and more deliberate purchasing decisions.

Faiza Alwy: In AMIA, we do see opportunities, as you alluded to, in areas like regulations. So we've had some early wins with things like CSRD and EPA pillar three, but regulation at the same time is creating some complexity and confusion as it cuts across many different objectives from financial materiality to do no harm to specific climate objectives. And so that is resulting in some hesitancy from for many clients. And then in Asia, we are seeing solid engagement, and it feels like Asia is earlier in its adoption of ESG. And so very similar trends to what we've seen in the past.

Speaker Change: We do see opportunities as you alluded to in areas like regulations. So we've had some early wins with things like CSR D and EPA pillar three but regulation at the same time is creating some complexity and confusion as it cuts across many different objectives from financial materiality to.

Speaker Change: Do no harm to specific climate objectives and.

Andrew Wiechmann: And so that is resulting in some hesitancy from many clients. And then, in Asia, we are seeing solid engagement, and it feels like Asia is earlier in its adoption of ESG. And so, very similar trends to what we've seen in the past. However, I would highlight that the industry pressures that impact all parts of the business are probably more impactful within the ESG and climate segment, where we serve such a wide range of client types, use cases, and users that there probably are some more nice-to-have type use cases that will get impacted more significantly from environmental pressures.

Speaker Change: So that is resulting in some hesitancy from for many clients and then in Asia, We are seeing solid engagement and it feels like Asia is earlier in its adoption.

Speaker Change: Of ESG and so very similar trends to what we've seen in the past I would highlight that the industry pressures that impact all parts of the business are probably more impactful within the ESG and climate segment, where we serve such a wide range of client types and use cases and <unk>.

Faiza Alwy: I would highlight that the industry pressures that impact all parts of the business are probably more impactful within the ESG and climate segment where we serve such a wide range of client types. And use cases and users that there probably are some more nice-to-have type use cases that will get impacted more significantly from environmental pressures. We expect these dynamics to persist in the short term, but we remain encouraged by the long term dynamics here. And so, as I alluded to, areas like regulation are compelling opportunities, and we've seen some early wins. But also opportunities in some of the new offering areas that bear highlighted around our asset level physical risk and nature data sets are offering with the geospatial explorer is quite exciting. Very early days, but these are things that continue to add value to our clients.

Speaker Change: Users that there probably are some more nice to have type use cases that will get impacted more significantly from environmental pressures.

Andrew Wiechmann: We expect these dynamics to persist in the short term, but we remain encouraged by the long-term dynamics here. And so, as I alluded to, areas like regulation are compelling opportunities, and we've seen some early wins, but also opportunities in some of the new offering areas that Bear highlighted around our asset-level physical risk and nature datasets. Our offering with the geospatial explorer is quite exciting; it's very early days, but these are things that continue to add value to our clients.

Speaker Change: We expect these dynamics to persist in the short term, but we remain encouraged by the long term dynamics here and so as I alluded to areas like regulation are compelling opportunities than we've seen some early wins, but also opportunities and some of the new new offering areas that <unk> highlighted around our asset left.

Speaker Change: <unk> physical risk nature datasets.

Our offering with the geospatial explore.

Speaker Change: It was quite exciting very early days, but these are things that continue to add value to our clients and on top of that we still see climate is a very dynamic area that has tremendous opportunities across not only new solution sets, but client segments for us and so as Henri alluded to.

Faiza Alwy: And on top of that, we still see climate as a very dynamic area that has tremendous opportunities across not only new solutions sets, but client segments for us. And so Henry alluded to opening up opportunities in areas like banks, insurance companies, corporates directly, even opportunities with GPs. And so there are a wide range of opportunities we are excited about in the long term, but in the short term, no change in the dynamics. And we expect it to continue in the short term.

Andrew Wiechmann: And on top of that, we still see climate as a very dynamic area that has tremendous opportunities across not only new solution sets but client segments for us. And so, as Henry alluded to, opening up opportunities in areas like banks, insurance companies, corporates directly, and even opportunities with GPs. And so, there are a wide range of opportunities we are excited about in the long term, but in the short term, there has been no change in the dynamics, and we expect it to continue in the short term. The next question comes from the line of George Tong from Goldman Sachs; please go ahead. Hi, thanks. Good morning.

Henri: Opening up opportunities in areas like banks insurance companies corporates directly.

Henri: Even opportunities with GPS and so there are wide range of opportunities. We are excited about the long term, but in the short term no change in the dynamics and we expect it to continue in the short term.

George Thong: The next question comes from the line of George Thong from Goldman Sachs. Please go ahead. Hi, thanks. Good morning. Your analytics business had another strong quarter, including strong recurring subscription sales and retention rates.

Henri: The next question comes from the line of George Tong from Goldman Sachs. Please go ahead.

Keen Fai Tong: Your analytics business had another strong quarter, including strong new recurring subscription sales and retention rates. What are the top factors enabling this performance, and how sustainable is double-digit organic growth in analytics? Yeah, so I would say, and you've noticed this in the results the last several quarters, we've seen some good momentum. So we're seeing strong client engagement across many different parts of our analytical tools. There's probably some benefit from the environment driving an intense focus on investment risk, credit risk, and liquidity risk, and we are a leader on all fronts.

Keen Fai Tong: Hi, Thanks, Good morning, your analytics business had another strong quarter, including strong recurring subscription sales and retention rates what are the top factors, enabling this performance and how sustainable is double digit organic growth in analytics.

Bear Pettit: What are the top factors enabling this performance and how sustainable is double-digit organic growth in analytics? Yes, so I would say, and you've noticed this in the results of the last several quarters, we've seen some good momentum. So we're seeing strong client engagement across many different parts of our analytical tools. There's probably some benefit from the environment, driving an intense focus on investment risk, credit risk, and liquidity risk, and we are a leader on all fronts. And so that definitely has been helpful to us in certain areas. The performance is also driven in part by the enhancements and innovations that we've continued to deliver.

Speaker Change: Yes, so I would say.

Speaker Change: Noticed this in the results the last several quarters, we've seen some good momentum so we're seeing strong client engagement across.

Speaker Change: Many different parts of our analytical tools, there's probably some benefit from the environment driving an intense focus on.

Speaker Change: Investment risk credit risk and liquidity risk and we are a leader.

Speaker Change: All fronts and so that definitely has been helpful to us in certain areas.

Andrew Wiechmann: And so that definitely has been helpful to us in certain areas. The performance is also driven in part by the enhancements and innovations that we've continued to deliver. For example, we've been seeing traction with our insights offering, which delivers risk analytics through a modern data architecture with enhanced visualization. And as you know, we've now integrated AI capabilities into that.

Speaker Change: The performance has also driven in part by the enhancements and innovations that we've continued to deliver so we've been seeing traction with our insights offering which delivers our risk analytics through a modern data architecture with enhanced visualization and as you know, we've now integrated AI capabilities into that and that's <unk>.

Bear Pettit: So we've been seeing traction with our insights offering, which delivers our risk analytics through a modern data architecture with enhanced visualization. And as you know, we've now integrated AI capabilities into that, and that's an area where we do see strong client engagement. And we've seen some traction in enabling new sales for us. We've seen solid sales within our 16-come offering and see opportunities continue to see opportunities there. And we continue to see strong momentum with our equity analytics business, our equity risk models, which is something we've highlighted in recent quarters. So a lot of the same drivers, we've talked about in the past that has been encouraging.

Where we do see strong client engagement and we've seen some traction in enabling new sales for us we've seen solid sales within our fixed income offering and see opportunities continue to see opportunities there and we continue to see strong momentum with our equity analytics business, our equity risk models, which is something we've highlight.

Speaker Change: In recent quarters. So a lot of the same drivers we've talked about in the past that has been encouraging.

Andrew Wiechmann: And that's an area where we do see strong client engagement, and we've seen some traction in enabling new sales for us. And we continue to see opportunities, although I will say that it's likely to be lumpy, and some of the pressures that have impacted the broader company are likely to impact analytics as well. The next question comes from the line of Scott Wurtzel from Wolf Research. Please go ahead.

Bear Pettit: And we continue to see opportunities, although I will say that it's likely to be lumpy, and some of the pressures that have impacted the broader company are likely to impact analytics as well.

Speaker Change: And we continue to see opportunities, although I will say that it's likely to be lumpy and some of the pressures that have impacted the broader company are likely to impact analytics as well.

Scott Berzel: The next question comes from the line of Scott Berzel from Wolf Research. Please go ahead. Great. Good morning, guys. And thanks for taking my question. I wanted to stay on the analytics segment and maybe talk about the margin that you were seeing there. Obviously, it's a pretty notable expansion, both sequentially and on a year-over-year basis.

Scott Darren Wurtzel: The next question comes from the line of Scott <unk> from Wolfe Research. Please go ahead.

Scott Darren Wurtzel: Good morning guys, and thanks for taking my question. I wanted to stay on the analytics segment and maybe talk about the margin that you were seeing there. Obviously, it was a pretty notable expansion both sequentially and on a year-over-year basis. So, just wondering if you could maybe walk us through and maybe drill down into the drivers of that notable margin expansion in analytics. Thanks.

Scott: Hey, good morning, guys and thanks for taking my question I wanted to stay on the analytics segment and maybe talk about the margin that you were seeing there obviously is pretty notable expansion both sequentially and on a year over year basis. So just wondering if you can maybe walk us through maybe drill down into the drivers of that notable margin expansion in analytics.

Andy Wishman: So just wondering if you can maybe walk us through and maybe drill down to the drivers of that notable margin expansion analytics. Thanks.

Andy Wishman: Sure. Yeah, we've come into it on this in the past. There are several factors that drive the analytics margin and have driven it higher over the last several years. So one is we have been capitalizing Software. And so the level of capitalized software has picked up a bit, which will drive the EBITDA margin up. It doesn't impact the operating margin, but does impact the EBITDA margin. You know, broader expense efficiencies and expense discipline that we have across the company tends to impact analytics segment, just given how we do many of our allocations. I would also highlight there are parts of the analytics business that we have invested less in as well.

Andrew Wiechmann: Sure. Yeah, we've commented on this in the past. There are several factors that drive the analytics margin and have driven it higher over the last several years. So one is that we have been capitalizing on software.

Speaker Change: Sure. Yes, we've commented on this in the past there are several factors that drive the analytics margin and have driven it higher.

Scott Darren Wurtzel: Over the last several years.

Speaker Change: No one is.

Speaker Change: We have been capitalizing.

Andrew Wiechmann: And so the level of capitalized software has picked up a bit, which will drive the EBITDA margin up. You know, it doesn't impact the operating margin but does impact the EBITDA margin. You know, broader expense efficiencies and expense discipline that we have across the company tend to impact the analytics segment, just given how we do many of our allocations. But I would also highlight there are parts of the analytics business that we have invested less in as well.

Speaker Change: Capitalizing software and so the level of capitalized software has picked up a bit which will drive the EBITDA margin up it.

Speaker Change: It doesn't it doesn't impact the operating margin, but does impact the EBITDA margin.

Speaker Change: Broader expense efficiencies and expense discipline that we have across the company.

Speaker Change: Tends to impact the analytics segment.

Speaker Change: Just given how we do many of our allocations I would also highlight there are parts of the analytics business that we have invested lesson as well, we've been very strategic and targeted with the parts of analytics that we have been investing in but there have been some parts that we have invested less in to allow us to invest in other.

Andrew Wiechmann: We've been very strategic and targeted with the parts of analytics that we have been investing in, but there have been some parts that we have invested less in to allow us to invest in other parts of the company that are very strategic for us.

Andy Wishman: We've been very strategic and targeted with the parts of analytics that we have been investing in, but there have been some parts that we have invested less in to allow us to invest in other parts of the company that are very strategic for us. And so all those factors have contributed to the analytics margin increasing over time. As you can tell by the growth, we do see very compelling opportunities within analytics that are not only attractive growth opportunities in their own right, but they are very strategic for driving growth across the company. And so we do have investment opportunities in analytics that we will be putting money into and continue to invest.

Speaker Change: For the company.

Speaker Change: Our very strategic for us.

Speaker Change: And so all of those factors have.

Andrew Wiechmann: And so all those factors have contributed to the analytics margin increasing over time. As you can tell by the growth, we do see very compelling opportunities within analytics that are not only attractive growth opportunities in their own right, but they are very strategic for driving growth across the company. And so we do have investment opportunities in analytics that we will be putting money into and continue to invest in. This next question comes from Craig Huber from Huber Research Partners. Please go ahead. Oh, great. Thank you.

Speaker Change: Contributed to the analytics margin increasing over time as you can tell by the growth we do see very compelling opportunities within analytics that are not only attractive growth opportunities in their own right, but they are very strategic for driving growth across the company and so we do have investment opportunities the opportunities in <unk>.

Speaker Change: Analytics that we will be.

Speaker Change: Be putting money into and continue to invest in.

Craig Huber: then. This question comes from the line of Craig Huber from Youver Research Partners. Please go ahead. Great. Thank you. Just wanted to ask you guys a question on AI here.

Speaker Change: Question comes from the line of Craig Huber from Huber Research Partners. Please go ahead.

Craig Anthony Huber: Just wanted to ask you guys a question on AI here. Can you give us some examples of where you're really excited about uses of AI to help drive revenues long term? And also, similar questions on the cost efficiency side, where AI can help your margins out even better. Sure.

Craig Anthony Huber: Great. Thank you I just wanted to ask you guys. A question on AI here can you give us some examples of where you're really excited about the uses of AI to help drive revenues long term and also a similar question on the cost efficiency side, where AI can really help you on the cost side help your margins out even better.

Henry Fernandez: Can you give us some examples of where you're really excited about the uses of AI to help drive revenues long-term and also a similar question on the cost efficiency side where AI can really help you on the cost side help your margins out even better? Sure. So look, both of those areas are really critical, and we're engaging on both fronts quite dramatically. So first of all, in terms, and I would say that within the efficiency, the cost efficiency, there's also even what you could call a quality efficiency story, notably in our whole data environment. So we're doing tremendous amounts of work across the board in data, data calculations, production, extraction, whether that be in private markets, in ESG and climate, across the board, notably in areas that can be difficult to find hard data in, such as controversies.

Speaker Change: Okay.

Bear Pettit: So look, both of those areas are really critical, and we're engaging, you know, on both fronts, you know, quite, quite dramatically. So first of all, in terms of efficiency, the cost efficiency, there's also what you could call a quality efficiency story, notably in our whole data environment. So we're doing tremendous amounts of work across the board in data, data calculations, production, extraction, whether that be in the private market, in ESG, and climate across the board, notably in areas that can be difficult to find hard data on, such as controversies.

Sure.

Speaker Change: Both of those areas are really critical and we're engaging on both fronts quite quite dramatically. So first of all in terms of and I would say that within the efficiency. The cost efficiency. There's also even what you could call like a quality efficiency.

Speaker Change #100: Story, notably in our whole data environment.

We're doing tremendous amounts of work across the board in data data calculations production extraction, whether that be in private markets.

Speaker Change #100: In ESG and climate across the board, notably in areas that.

Speaker Change #100: Can be difficult to find our data and such as controversies. So we are so we're moving ahead in all of those areas.

Bear Pettit: So we are, you know, moving ahead in all those areas and we have had a really special focus on this both internally and with certain members of our boards of directors who happily have some expertise in this area. So the efficiency area is one where we're starting to see some pretty attractive numbers. But, you know, as Andy mentioned, this is a continuous effort.

Henry Fernandez: So we're moving ahead in all those areas. And we've had a really special focus on this both internally and with certain members of our boards of directors, who happily have some expertise in this area. So the efficiency area is one where we're starting to see some pretty attractive numbers. As Andy mentioned, this is a continuous effort. And as we typically go into the end of the year here and start setting budgets for next year, we're starting to see that AI efficiencies for probably for the first year next year will be a non-trivial part of our budgeting exercise and the efficiencies we can make.

Speaker Change #100: And we have been we had a really special focus on this.

Speaker Change #100: It both internally and with certain members of our board of directors, who happily have some expertise in this area.

Speaker Change #100: So the efficiency area is one where we're starting to see some pretty attractive numbers.

Speaker Change #100: As Andy mentioned this is this is a continuous effort.

Andrew Wiechmann: And as we typically go into the <unk>.

Andrew Wiechmann: The end of the year here and start setting budgets.

Bear Pettit: And as we typically go into the end of the year here and start setting budgets for next year, we're starting to see that AI efficiencies, for probably the first time next year, will be a non-trivial part of our budgeting exercise and the efficiencies we can make. In terms of new product development, you know, this is also very much across the board. We clearly have two examples, which we've brought out today, which are sort of live, if you like, which is the work on geospatial data, where really we wouldn't have been able to do that without the use of AI, and the recent launch as part of our future of risk.

Andrew Wiechmann: For next year, we're starting to see that AI efficiencies.

Andrew Wiechmann: For the first year next year will be a non trivial part of our budgeting exercise and the efficiencies we can make it.

Henry Fernandez: In terms of new product development, you know, this is also very much across the board. We clearly have two examples which we brought up today, which are sort of live if you like, which is the work on geospatial data where really we wouldn't be able to do that without the use of AI. And the recent launch as part of our Future of Risk, by the way, you may want to just Google Future Risk MSCI. There's a very interesting paper on our website which goes into the whole use of AI in the future of risk, and you can download it for free.

Andrew Wiechmann: In terms of new product development.

Speaker Change #102: This is also very much across the board. We clearly have two examples which we brought out today, which are sort of live if you like which is the work on geospatial data.

Speaker Change #102: There were really we wouldn't been able to do that without the use of AI.

Speaker Change #102: And the recent launch.

Speaker Change #102: As part of our future of risk by the way you may want to just Google future risk MSCI, there's a very interesting paper on our web site, which goes into the whole use of AI in the future of risk and you can downloaded for free so in analytics.

Bear Pettit: By the way, you may want to just Google the future of risk MSCI; there's a very interesting paper on our website, which goes into the whole use of AI in the future of risk, and you can download it for free. So, you know, in analytics, in ESG and climate, you know, and pretty much in private markets. So, there's no part of the business where we're not using AI, and I think both in terms of new product development and efficiency, we hope to be able to give you, you know, increasingly specific information in the quarters ahead and going into next year. The next question comes from the line of Russell Quelch from Redburn Atlantic. Please go ahead. Hello, gents.

Henry Fernandez: So, you know, in analytics, in ESG and climate, you know, and pretty much in private markets. So there's no part of the business where we're not using AI. And I think both in terms of a new product development and an efficiency story, we hope to be able to give you, you know, increasingly specific information, you know, in the quarters I had and going into next year.

Speaker Change #102: In ESG and climate.

Speaker Change #102: And pretty much in private markets. So there is no. There is no part of the business, where where we're not using AI and I think both in terms of our new product development and an efficiency story, we hope to be able to give you increasing the specific.

Speaker Change #102: Information in the quarters ahead and going into next year.

Russell Quelch: The next question comes from the line of Russell Quelch from Redburn Atlantic; please go ahead. Congratulations on a strong key to result.

Russell Quelch: The next question comes from the line of Russell coach from Redburn Atlantic. Please go ahead.

Russell Quelch: Congratulations on a strong Q2 result. I wanted to focus on private asset benchmarks, if I could. I wondered if you could size the current addressable market you see there and the rate at which you think that market is growing. And also, if you could talk about the competitive dynamics, is this mainly white space for you guys, or are there others that you'll be looking to display as you grow? And finally, do you have all the data assets you need to grow now, or will you be looking further for sort of inorganic growth opportunities, particularly around data, in this area?

Russell Quelch: Yes, Hello, gentlemen.

Russell Quelch: Gratulation on a strong Q2 results.

Andy Wishman: I wanted to focus on private asset benchmarks, if I can, wondered if you could size the current addressable market you see there and the rate at which you think that market is growing. And also, if you could talk to the competitive dynamics, is this mainly white space for you guys, or are there others that you'll be looking to display as you grow. And finally, do you have all the data assets you need to grow now, or will you be looking further to the end organic growth opportunities, particularly around data in this area. So, there are, on the benchmarks themselves, two sources of value to us.

Russell Quelch: I wanted to focus on private asset benchmark with ICANN wondered if you could size the.

Howard: Howard addressable market you see there.

Howard: And the rates at which you think that market growing and you'll see if you could talk to the competitive dynamics is this mainly white space for you guys or is that.

Howard: That you'd be looking to displace <unk> growth and finally do you have all the data you need to grow now or you'd be like Keith said that the sort of inorganic growth opportunities, particularly around data in this area.

Russell Quelch: So on the benchmark themselves, there are two sources of value to us. The first one is the sales themselves, in benchmarking for LPs and GPs in the various subsectors of society, various asset classes within private assets. You know, one of the biggest providers of private credit in the world that I met with recently said, I need a benchmark to be able to get more assets from both the institutional LPs and the wealth management, you know, part.

Speaker Change #105: So there are.

Speaker Change #106: On the benchmark themselves there are two sources.

Of value to us.

Henry Fernandez: The first one is the sales themselves in benchmarking for LPs and GPs in the various subsectors. The various asset classes within private assets, one of the biggest providers of private credit in the world that I met with recently said, I need benchmarks to be able to get more assets from both the institutional LPs and the wealth management in our heart. So that will create revenue opportunities; we haven't yet created a dimension of how much that will be and the timing of that, but that's clearly one area. The second one and probably even bigger area is that if we become, by becoming the leading provider of private asset class benchmarks, you know, it puts us right in the center of the ecosystem.

Speaker Change #106: The first one is.

Speaker Change #107: The sales themselves.

In.

Speaker Change #107: And in benchmark gained four.

Speaker Change #107: For Lps, and GPS and the various subsectors.

Speaker Change #107: I'd say, the various asset classes within private assets.

Speaker Change #107: <unk>.

Speaker Change #108: One of the biggest providers in private credit in the world that I met with recently said I need a benchmark to be able to get more assets from both the institutional Lps and the wealth management part. So so that that will create revenue opportunities we havent yet.

Henry A. Fernandez: So that will create revenue opportunities. We haven't yet created a dimension of how much that will be and the timing of that, but that's clearly one area. The second one, and probably an even bigger area, is that if we become the leading provider of private asset class benchmarks, it puts us right in the center of the ecosystem of the LPs and the GPs and the underlying assets that they invest in. And on that center stage, inside the tent, so to speak.

Speaker Change #108: We ended up.

Speaker Change #108: Dimension of how much that will be and the timing of that but thats clearly one area. The second one and probably even bigger area is.

Speaker Change #108: If we become by becoming the leading provider of private asset class benchmark.

Speaker Change #108: It's us right in the center of the ecosystem.

Henry Fernandez: Of the LPs and the GPs and the underlying assets that they invest in. And in that center stage, inside the 10, sort of speaks, then we're able to then expand from there to provide performance attribution models, risk management models, liquidity models, valuation models, obviously asset allocation models, and all of that. Of course, it will put a key position to provide the underlying data as well, but that's part of what I'm called the benchmark sale. And therefore, it puts us in an enormously advantageous position. And that's what we've done, you know, throughout our 50 close year history.

Speaker Change #108: Hey.

Speaker Change #108: Of the Lps and the GPS and the underlying assets that they invest in.

Speaker Change #108: On that center stage.

Speaker Change #108: Inside the tent so to speak.

Henry A. Fernandez: Then we're able to expand from there to provide performance attribution models, risk management models, liquidity models, valuation models, obviously asset allocation models, and all of that. Of course, it will put us in a key position to provide the underlying data as well, but that's part of what I'm calling the benchmark sale. And therefore, it puts us in an enormously advantageous position. And that's what we've done throughout our 50-plus year history.

Speaker Change #108: Then we're able to then expand from there to provide.

Speaker Change #108: Performance attribution models, and our risk management models liquidity models valuation models.

Obviously asset allocation models and all of that and of course, it will put us positioned to provide the underlying data as well.

Speaker Change #108: But that's part of what I'll call the benchmark sale, and therefore, and therefore, it puts us in an enormously advantageous position and Thats, what we have done throughout our 50 plus year history and Thats why we expanded since I created the company.

Henry Fernandez: That's what we expanded since I created the company 30 years ago, and we built it up on the market cap businesses created by the Capital Group and Morgan Stanley. So we're very excited about, you know, what we can do in the overall private capital, private assets, investing world. Obviously, all of this is totally alluding to transparency, to understanding what you bought, to understand the risk, the resources of risk and return on what you got. And to create a seamless understanding of asset allocation across private assets and public assets. So, you know, a unit of risk in a building, in a bridge, or in private credit, or in a venture capital company can be, can be identified easily and compared easily with a unit of risk in a public company, in a public bond, or in a hedge fund.

Henry A. Fernandez: That's what we have expanded since I created the company 30 years ago, and we built it upon the market cap indices created by the Capital Group and Morgan Stanley. So we're very excited about what we can do in the overall private capital and private assets investing world. Obviously, all of this is totally alluding to transparency, to understanding what you bought, to understanding the sources of risk and return on what you got, and to creating a seamless understanding of asset allocation across private assets and public assets.

Speaker Change #108: At 30 years ago, and we're building upon the the market cap indices created by the capital group on Morgan Stanley. So we're very excited about what we can do in the overall private capital private asset investing world.

Speaker Change #109: All of this is thoroughly alluding to transparency to understanding why you bought to understanding the risks and sources of risk and return on what you got and to create a seamless understanding of.

Henry A. Fernandez: So a unit of risk in a building, in a bridge, or in private credit, or in a venture capital company can be identified and compared easily with a unit of risk in a public company, in a public bond, or in a hedge fund.

Speaker Change #109: Asset allocation across private assets and public assets. So a unit the risk in our building.

Speaker Change #109: The bridge or in private credit or in a venture capital company can be it can be identified easily and compare easily with a unit the risks in a public company and a public bond or a hedge fund. So that's what we're going after.

Henry Fernandez: So that's what we're going to.

Henry Fernandez: Huber.

Gregory Simpson: The next question comes from the line of Gregory Simpson from BNP Paribas. Please go ahead. Hi, Beck, can I just quickly check in on the latest contribution of pricing to new sales across index, and the other segments, and if there's any client behavioral changes around pricing, you can call it that. Thank you. Sure, yeah, so I would say across the company, the contribution of pricing increases is slightly smaller than last year, so very consistent with what we said last quarter. We have been slightly moderating our pricing increases, and many places, giving the pricing and economic environment, which is very much in line with what we said last quarter.

Henry A. Fernandez: So that's what we're going after. The next question comes from the line of Gregory Simpson from BNP Paribas. Please go ahead.

Speaker Change #109: The next question comes from the line of Gregory Simpson from BNP Paribas. Please go ahead.

Gregory Simpson: Hi there, can I just quickly check in on the latest contribution of pricing to new sales across index and the other segments, and if there's any client behavioral changes around pricing you'd call out. Thank you. Sure. Yeah, so I would say across the company, the contribution of price increases was slightly smaller than last year. So, very consistent with what we said last quarter. We have been slightly moderating our price increases in many places, given the pricing and economic environment, which, you know, is very much in line with what we said last quarter.

Gregory Simpson: Hi, just a quick.

Gregory Simpson: Quickly check in on the latest contribution of pricing to new sales across index and the other segments does that any client behavioral changes around pricing.

Speaker Change #111: Thank you.

Speaker Change #112: Sure, Yes, so I would say.

Speaker Change #113: Across the company the contribution of price increases was slightly smaller than last year, so very consistent with what we said last quarter.

Speaker Change #113: We have been slightly moderating our price increases in many places given the pricing and economic environment.

Speaker Change #113: Which is very much in line with what we said last quarter.

Andy Wishman: I'd say importantly, and I want to underscore this, we are focused on a line in price increase with the value that we are delivering. And so we do factor in the overall pricing environment and client health, but we also are focused on ensuring that we're capturing the value for the enhancements that we make to our solutions and our service, and balancing that as well with the long-term relationship with our clients. So most of our growth is going to come from existing clients, and so we are very focused on being a strong long-term partner to our clients. That means adding value, that means selling more to them, providing enhanced services to them, and that will translate through to enhanced price increases, but also translates through to additional services that we can deliver to them.

Gregory Simpson: I'd say importantly, and I want to emphasize this, we are focused on aligning price increases with the value that we are delivering. And so we do factor in the overall pricing environment and client health, but we also are focused on ensuring that we're capturing the value for the enhancements that we make to our solutions and our services and balancing that as well with the long-term relationship with our clients. So most of our growth is going to come from existing clients, and we are very focused on being a strong, long-term partner to our clients. And that means adding value.

Speaker Change #114: I would say importantly, I want to underscore. This we are focused on aligning price increase with the value that we're delivering and so we do factor in the overall pricing environment and client <unk>, but we also are focused on ensuring that we're capturing the value for the enhancements that we make to our solutions and our service and <unk>.

Speaker Change #114: Wincing that as well with the long term relationship with our clients. So most of our growth is going to come from existing clients and so we are very focused on being a strong long term partner to our clients and that means adding value that means selling more to them, providing enhanced services to them.

Andrew Wiechmann: That means selling more to them, providing enhanced services to them. And that will translate through to enhanced price increases, but it also translates through to additional services that we can deliver to them. And so we're continually balancing that value with price increases. The next question comes from the line of Alex Kramm from UBS. Please go ahead. Yes, hello again.

Speaker Change #114: And that will translate through to enhanced price increases, but also translates through to additional services that we can deliver to them and so we're continually balancing that value with with price increases.

Andy Wishman: And so we're continually balancing that value with price increases.

Alex Kramm: The next question comes from the line of Alex Kram from UBS. Please go ahead. Yes, hello again. Just a quick follow-up on the sales environment, as I asked about earlier.

Speaker Change #114: The next question comes from the line of Alex Kramm from UBS. Please go ahead.

Alex Kramm: Just a quick follow-up on the sales environment, as I asked about earlier. When you think about the second half, and I know it's maybe a little bit too specific, but if you compare to last year's maybe sales in dollars, are you still comfortable, or are you comfortable that you can do more sales this year in the second half or anything specific to 3Q or 4Q? So, yeah, that's the question. Thanks.

Alex Kramm: Yes, Hello, again, just quick follow up on the sales environment is I asked about earlier.

Andy Wishman: When you think about the second half, and I know it's maybe a little bit too specific, but if you compare to last year's maybe sales and dollars, are you still comfortable, or are you comfortable that you can do more sales this year in the second half or in anything specific to 3Q or 4Q? So yeah, that's the question. Thanks. Sure. So, as I mentioned, 3Q, and I know you're aware of this, Alex, 3Q is typically a softer quarter for us, a seasonally softer quarter for us from a sales perspective. Q4 tends to be a seasonally strong quarter for us.

Alex Kramm: When you think about the second half and I know, it's maybe a little bit specific but if you compare to last year's maybe sales in dollars are you still comfortable or are you comfortable that you can.

Speaker Change #115: Do more sales this year in the second half or anything specific to <unk>. So yes. That's the question. Thanks.

Andrew Wiechmann: Sure. So, as I mentioned, 3Q, and I know you're aware of this, Alex, 3Q is typically a softer quarter for us, a seasonally softer quarter for us from a sales perspective. Q4 tends to be a seasonally strong quarter for us. I don't want to be too specific or prescriptive about what can happen.

Speaker Change #116: Sure so.

Alex Kramm: As I mentioned <unk> and I know you are aware this Alex <unk> is typically a softer quarter for us seasonally softer quarter for us from a sales perspective.

Speaker Change #117: Q4 tends to be a seasonally strong quarter for us.

Andy Wishman: I don't want to be too specific or prescriptive about what can happen. As I mentioned, sales and cancels can both be lumpy, and we do see some challenging dynamics out there. But, as I alluded to earlier, we are seeing strong client engagement. We see opportunities out there, and as we've seen in past cycles, if there is sustained momentum in the equity markets, that tends to translate through over time into more favorable, favorable buying dynamics for clients. But, as I said earlier, we are cautious. We still see some pressures on clients, but overall we do see opportunities as well.

Alex Kramm: I don't want to be too specific.

Andrew Wiechmann: As I mentioned, sales and cancels can both be lumpy, and we do see some challenging dynamics out there. But, as I alluded to earlier, we are seeing strong client engagement. We see opportunities out there, and as we've seen in past cycles, if there is sustained momentum in equity markets, that tends to translate over time into more favorable buying dynamics for clients. But, as I said earlier, we are cautious. We still see some pressures on clients.

Alex Kramm: Prescriptive about.

Alex Kramm: What can happen.

Alex Kramm: As I mentioned sales and cancels can both be lumpy.

Alex Kramm: And we do see some challenging dynamics out there, but as I alluded to earlier.

Alex Kramm: We're seeing strong client engagement.

Alex Kramm: We see opportunities out there and.

Alex Kramm: As we've seen in past cycles. If there is sustained momentum in the equity markets that tends to translate through over time into more favorable favorable buying dynamics for for clients.

Alex Kramm: But as I said earlier, we are cautious.

Alex Kramm: We still see some pressures on clients.

But overall, we do see opportunities as well.

Henry Fernandez: And that does conclude the question and answer session.

Operator: But overall, we do see opportunities as well. And that concludes the question and answer session. I would like to turn the floor back over to Henry Fernandez, Chairman and CEO, for closing remarks. So, as you heard in our commentary, we're intensely focused on executing our grand strategy and compounding growth, quarter to quarter, year to year. And that's what we do. We're not an entity, as you know well, that flares up and flares down.

Speaker Change #118: And that does conclude the question and answer session I would like to turn the floor back over to hand, you Fernandez Chairman and CEO for closing remarks.

Henry Fernandez: I would like to turn the floor back over to Henry Fernandez, Chairman and CEO, for closing remarks. So, as you heard in our commentary, we are intensely focused on executing our grand strategy and compounding growth quarter to quarter, year to year. And that's what we do. We're not entities, you know, well, that players up and players down. And there'll be some orders that are going to be very strong relative to expectations. So the orders that are going to be weaker, but the longer trend for rice on of this company is extremely powerful compounding of growth and compounding of profitability.

So as you heard in our commentary.

Fernandez: We are intently focused on executing our grand strategy.

Speaker Change #118: And compounding growth.

Speaker Change #118: Quarter to quarter year to year.

Speaker Change #120: And that's what we do what we do we do we were not entity as you know well that layers layers down.

Operator: We are consistently executing and executing. And there'll be some quarters that are going to be very strong relative to expectations, other quarters that are going to be weaker. But the longer-term horizon of this company is extremely powerful, compounding growth and compounding profitability.

Speaker Change #118: We are consistently executing.

Speaker Change #118: And executing and there'll be some orders that are going to be very strong relative to expectations for the quarter is that we're going to be weaker but the longer Graham horizon of this company is extremely powerful.

Speaker Change #118: Bounding of growth and compounding on profitability.

Henry A. Fernandez: We're very excited by the very large growth opportunities in front of us, as you heard in the commentary and answers to your questions, and are encouraged by a very high level of client engagement, which is typically a leading indicator of sales in the future. So we look forward to engaging with all of you over the next few months. And thank you again for joining us. And I hope you all enjoy the summer and take some time off. This concludes today's conference call. Thank you for your participation. You may now disconnect.

Henry Fernandez: We're very excited by the very large growth opportunities in front of us, as you heard in the commentary and answer to your questions, and are encouraged by a very high level of client engagement. That is typically a leading indicator of sales in the future. So we look forward to engaging with all of you over the next few months.

Speaker Change #121: We're very excited by the very large growth opportunities in front of loss as you heard in the commentary and answers to your questions and are encouraged by a very high level of client engagement that is typically a leading indicator of sales in the future. So we look forward to engaging with.

Speaker Change #121: All of you over the next few months.

Operator: And thank you again for joining us, and I hope you all enjoyed this summer and take some time off.

Speaker Change #121: Thank you again for joining us and I hope, you're all enjoying the summer and take some time off.

Operator: This concludes today's conference call. Thank you for your participation.

Speaker Change #122: This concludes today's conference call. Thank you for your participation you may now disconnect.

You may now disconnect. Thank you.

Speaker Change #121: Yes.

Speaker Change #121: [music].

Speaker Change #121: Okay.

Speaker Change #121: [music].

Speaker Change #121: Okay.

Speaker Change #121: Yes.

Speaker Change #121: [music].

Speaker Change #121: Okay.

Speaker Change #121: Yes.