Q2 2025 MSCI Inc Earnings Call
Good day, ladies and gentlemen, and welcome to the msci. Second quarter 2025 earnings conference call. As a reminder, this call is being recorded at this time, all participants are in listen-only mode. Later, we will conduct a question and answer session where participants are requested to ask 1 question at a time. Then add themselves back to the queue for any additional questions. We will have further instructions for you later on. I would now like to turn the call over to Jeremy Yulan head of investor relations and Treasurer. Sir, you may begin
Thank you, operator, good day and welcome to the msci, second quarter 2025 earnings conference. Call earlier this morning, we issued a press release announcing our results. For the second quarter 2025, this press release along with an earnings presentation and brief. Quarterly update are available on our website, msci.com under the investor relations tab.
Let me remind you that this call contains forward-looking statements which are governed by the language on the second slide at today's presentation your caution 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 of anticipated. In these forward-looking statements,
Reconciliation of our non-gaap measures to the equivalent Gap. 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 are available in the earnings presentation.
Henry Fernandez: On the call today, our Henry Fernandez, our chairman and CEO bear Pettit our president and coo and Andy wishman, our Chief Financial Officer with that. Let me now turn the call over to Henry, Fernandez, Henry.
Henry Fernandez: Thank you, Jeremy, good day, everyone and thank you all for joining us.
In the second quarter msci, deliver another strong financial performance.
Henry Fernandez: Including Revenue growth of over 9%.
Henry Fernandez: Adjusted ebit growth.
Henry Fernandez: Of over 10%.
Adjusted earnings per share. Growth of almost 15%.
Henry Fernandez: And free cash flow of over $300 million.
Year to date. We have repurchased 286 Million worth of msci shares.
Henry Fernandez: At an average price of 557 per share.
Henry Fernandez: Demonstrating our long-term conviction, in the value of our franchise.
Henry Fernandez: Our second quarter, operating metrics included, total, run rate growth of 11%.
Henry Fernandez: Fuel by record AUM levels in ETF products linked to msci. Indices
Henry Fernandez: And asset based fee, run rate growth of 17%.
Henry Fernandez: Among client segments, we recorded double digit subscription, run rate growth.
Henry Fernandez: With banks and broker dealers.
Henry Fernandez: Wealth managers.
Henry Fernandez: Hedge funds.
Henry Fernandez: And asset owners.
Henry Fernandez: Despite the well-known ongoing pressures on active asset managers.
Henry Fernandez: Msci, subscription run rate growth with this client segments held steady at 6%.
Henry Fernandez: While retention with active asset, managers stay high at 96%.
Henry Fernandez: Across all client segments. MSI is rapidly developing Innovative. Use cases for our existing Solutions.
Henry Fernandez: While developing new solutions for our increasingly diverse client base.
Henry Fernandez: Turning to our product lines.
Mci's Q2 performance affirm that index in general and our asset base fee franchise in particular is the key growth engine for us with enormous opportunities.
Henry Fernandez: Most notably our strong ABF run rate, growth reflects the vital importance of msci, indices to Global investing.
Speaker Change: Especially in non US market exposures?
Speaker Change: In fact, MSI capture more indexed, Equity ETF, cash flows, that any other index provider, during the quarter total Equity index, ETF AUM, linked to msci, indices surpassed 2 trillion dollars for the first time.
Speaker Change: Driving total index ETF and non-etf. Awe, and balances tracking, msci. Indices to 6 trillion dollars.
In addition, fixing come index ETF AUM linked to indices created entirely by MCI or in partnership with Partners. Reach 84 billion dollars,
Speaker Change: All of this helped us achieve our highest ever level of quarterly ABF Revenue.
Speaker Change: Msci's index progress was also underpin by several product launches.
Speaker Change: Including new Data Solutions, that offer deeper insights into the building blocks of our indices.
Speaker Change: Such as our constituent AUM and index liquidity data sets.
Speaker Change: For all these reasons, we are very excited about the tremendous potential of our index franchise.
Speaker Change: value of our risk and performance analytics, tools during periods of fast, moving market conditions, and volatility,
Speaker Change: We achieve our highest ever.
Speaker Change: Q2 recurring sales in Analytics.
Speaker Change: Driven mainly by Equity risk models.
Bear: Meanwhile we completed our largest ever deal for msci, wealth manager, which bear will cover in Greater detail.
Bear: Let us shift to private assets.
Bear: Which is an attractive long-term opportunity where MSI is expanding our tools to drive adoption across the investment community.
We have made significant progress in boosting our capabilities for private Capital Solutions.
Bear: With Q2 run rate growth of nearly 13% while launching or enhancing a number of Key Products.
Bear: For example, we introduced msci, asset and Dome metrics.
Bear: Which include data from over 26,000 private Equity deals, covering 2 trillion dollars in net as a value.
Bear: We recently unveiled. The msci World Private Equity, return tracker index.
Bear: Which offers an approximation of private Equity Investments by replicating region sector and a style exposures through public equities.
Speaker Change: Leveraging, fundamental data from msci, private Capital universe?
Speaker Change: Already we see strong interest from clients in launching tradable products, linked to this index.
Speaker Change: Our first phase of private credit risk, assessments and partnership with Moody's is expected in the coming weeks.
Speaker Change: And we're very excited about the dialogue that we're been having with clients on this product.
Speaker Change: In addition, we now have more than 30 LP clients using our private Capital indices as their policy or performance benchmark.
Speaker Change: These offerings underscore our Innovation and the benefits of our integrated franchise.
Speaker Change: Which enhances all the MCI product lines, creating powerful Network effects for our clients.
Speaker Change: In real assets, new recurring sales were challenged.
And down from Q2 of last year.
However, we introduced new products targeted to the areas of relative relative acceleration in commercial real estate.
Speaker Change: Including our new data centers product.
Speaker Change: And RCA funds.
Speaker Change: A new intelligence offering covering over 8,000, real estate funds to empower GPS and LPS to optimize fundraising investor engagement and capital allocation decisions.
Speaker Change: Moving on to sustainability and climate.
Despite the current cyclical Slowdown.
Speaker Change: Our tools have become a permanent feature of the global investment process.
An msci is and will continue to be a leader in this uh space.
Speaker Change: We recently won valuable climate mandates in index.
Speaker Change: And our climate physical risk and Reporting Solutions are helping us. Expand our footprint with newer client segments, such as insurance companies,
Well, we expect sustainability to remain challenged. We're adapting and repositioning our tools to capture New Opportunities when they arise.
In conclusion, our Solutions are strongly embedded in the global investment ecosystem.
We're always intensely focused on anticipating and investing in the biggest Trends, across our industry, to serve a broad base to client segments, while delivering, an attractive financial model, for our shareholders.
Speaker Change: And with that, let me turn things over to bear.
Speaker Change: It's rapidly moving markets msci, benefited from both traditional and newer product offerings, deepening our role in the global investment ecosystem, while further diversifying, our client base.
Among Banks and broker dealers. We delivered subscription run rate growth of 10% with strong Traction in index and Analytics.
Speaker Change: We are supporting these clients with msci's Equity, derivatives and trading Solutions. Amid Market volatility, which is helping to fuel new wins in index
Speaker Change: In Q2, for example, msci completed a large deal with the bank in the US for ETF linked. Custom index data sets.
Speaker Change: This deal captures, not only our work on customization.
Speaker Change: But also Rising Capital markets activity. Tied to the ETF ecosystem, which is creating demand for Advanced Data on our index content.
Speaker Change: Meanwhile, another US Bank signed a global deal to use our Equity analytics solutions for sell Side Market, making and quantitative investment strategies to support their clients. Increasing interest in deploying Capital to International markets.
Speaker Change: Feels like that helped msci, Drive Equity analytics, growth of nearly 13% with our total run rate, reaching almost 244 million across client segments.
Speaker Change: Supporting the asset liability Management program within Banks is another opportunity. For MCI, most notably we completed a large deal with the treasury division of the US Bank for our fixed income, portfolio Management Solutions.
Turning to hedge funds. We achieved subscription run rate, growth of 12% driven largely by analytics, which posted a record quarter in recurring sales with that segment.
Speaker Change: Long short Equity managers and multi-strategy hedge funds, alike demand, best of breed Equity models, data, and risk insights, to support their various Alpha generation strategies across all market conditions.
Speaker Change: Mitty is focused on growing our footprint with this fast, money investor community,
Speaker Change: For example, in Q2.
We completed a large deal with a hedge fund in the US, that expanded their relationship with MSI to access, our full Suite of equity Factor models and our security Master crowding and Factor lab data sets.
Speaker Change: Likewise another prominent us hedge fund expanded, their use of our Equity models to help. Build out a factor model risk dashboard for portfolio, construction and risk hedging.
Speaker Change: Moving on to asset owners. Msci posted subscription run rate growth of 12%.
Speaker Change: Driven primarily by analytics and private Capital Solutions.
Speaker Change: Across regions asset owner clients increasingly need unified risk tools to help them consistently analyze different types of portfolios. This need has been Amplified by The increased volatility in global markets, the shift to private assets, and the growing adoption of a total portfolio approach.
Speaker Change: In Q2, for example, msci completed a large deal with the US pension fund that plans to use our private asset tools. And our total portfolio solutions to improve oversight and efficiency for placing 2 incumbent providers.
Speaker Change: Msdi is also winning additional climate index mandates with asset owners across the world. In Q2, for example, we want a pair of mandates with European Pension funds that are contributing to a combined, 25 billion dollars of new AUM, Benchmark to an MSI climate index.
All of this underscores the enduring value of climate data models and tools to asset owners, along with the value of msci's integrated franchise.
Which helps our index and climate teams develop stronger products.
Turning to wealth managers. We achieve subscription run rate growth of 17% driven, mainly by index and Analytics,
Speaker Change: Importantly, we completed our largest msei wealth deal ever.
Speaker Change: Covering our msci, wealth manager, and borrow 1 platforms.
Speaker Change: This win among others demonstrates, how msci can deliver unified Solutions with Advanced tools spanning the home office and advisors including tools for model construction. Proposal generation personalized client portfolios and Regulatory support.
Speaker Change: With msci, wealth manager. We have a foundational framework for driving similar wins in the future.
Speaker Change: In Q2, we also finalized the number of index deals where the key drivers of wealth, demand, remained discretionary portfolio management. Chief investment officer Solutions and related content.
Speaker Change: If we look at another wealth, Focus area, direct indexing AUM based. On msci. Indexes.
It grew by 20% globally, to reach 135 billion dollars in total.
Speaker Change: Shifting to asset managers msci, delivered subscription, run rate, growth of 6% driven, mostly by index.
Looking ahead. We see a steady growth trajectory with asset managers
Speaker Change: In Q2 we completed a 7 figure, multi-year deal with a large European asset manager. As part of this deal msi's fixed income. Indexes displaced a major competitor for our clients, corporate bond ETF products.
Speaker Change: We are supporting a growing list of asset managers with active ETFs a fast growing Market as active managers seek to innovate their products distribution and business models, using the highly efficient ETF router.
Speaker Change: Year to date. We have licensed a number of such new active ETFs,
Speaker Change: finally turning to insurance companies, we posted subscription run rate growth of 12% driven, mainly by index and climate
Speaker Change: While msci's footprint among insurance companies remain small, we see promising growth potential, especially for products that support index linked annuities, and for climate tools that support integration and Reporting.
Speaker Change: In Q2, for example, we scored a key index mandate when with a leading us annuity provider, which be expect to result in 5 to 10 billion dollars of AUM, Benchmark to msci, index.
We also finalized a large sustainability and climate deal for the European location of a top, a pack insurer in which msci displaced multiple competitors.
Speaker Change: As part of this deal, we will deliver our climate biodiversity and geospatial tools along with our ESD ratings for both climate.
Speaker Change: Reporting and Commercial uses in summary. Msci, is best for fitting from our resilience financial model, and the mission critical repeatable and scalable applications of our solutions for a wide range of client segments across the investment ecosystem.
Andy: And with that, let me turn it over to Andy, Andy.
Andy: Thanks bear.
Andy: Hello everyone.
Andy: Our second quarter results, demonstrate the strong momentum of our business model and the compounding impact of our investments,
Andy: This is particularly evident in index where asset based fee run rate. Growth was 17% benefiting from broad investor appetite for Global Market exposures
Andy: We experienced another quarter of strong flows into ETFs linked to our indexes.
Andy: Equity ETFs linked to msci, indexes experienced 49 billion dollars of inflows during the second quarter.
Andy: Capturing 29% of all inflows into indexed Equity ETFs and representing the largest level of quarterly inflows since 2021.
Andy: Fueling the strength where ETF products linked to msci. Developed markets, xus indexes which captured 32 billion dollars more than 50% of all flows into the DMX us indexed Equity ETFs in the quarter.
Andy: We also saw solid inflows into Equity, ETFs linked to our Factory indexes.
Andy: Capturing 9 billion dollars of inflows, with strong traction and quality and value and growth products.
Andy: Index subscription run rate growth was 9% reflecting a continuation of the Dynamics. We have seen in recent periods
Andy: We saw 16% 14% 12 in 9x, subscription run rate growth from wealth managers, hedge funds, Banks and asset owners respectively.
Andy: Asset managers delivered index subscription run rate growth slightly below 7%.
Andy: Supported by Steady performance in our DM and EM core index modules.
Andy: Subscription run rate growth remained in the teens with traction, across asset, managers Banks and hedge funds.
Our custom indexes are enabling our clients to create custom benchmarks. Develop structure Products, Research markets and back test strategies. We're also directly seeing the commercial benefits for ongoing investments in new product Innovations.
Andy: Year to date, we've generated over 4 million dollars of total sales from new product areas released in the last 6 months.
Andy: such as our ETF link, custom index, module constituent, AUM data sustainability index, methodology data, msci, investability data, and our venture-backed index module
Andy: An analytics, we had subscription run rate growth of 8% and our strongest second quarter ever for new recurring sales as well as recurring, net new sales, this included our largest deal ever for MCI wealth manager, several fixed income wins and strong sales for Equity, models to hedge funds, Banks and asset owners.
Andy: In sustainability and climate. We drove 11% subscription, run rate growth for the reportable segments with roughly 9% subscription, run rate, growth from sustainability Solutions and almost 20% subscription run rate growth from climate Solutions.
Andy: From a regional lens sustainability and climate subscription run rate growth in Europe. Was 18% with about 3% growth in the Americas and 6% growth in Asia.
Andy: As a reminder last year's recurring, sales included, meaningful contributions from our sustainability partnership with Moody's Analytics.
Clients use sustainability and climate considerations as critical inputs into their investment strategies and we see numerous attractive opportunities, Although our through the cycle, long term Target is still under review, as we assess the impact of this period of media Demand on the longer term trajectory.
Andy: We expect the current Dynamics to persist for the next several quarters.
In private Capital Solutions, we had strong traction, with GPS, Banks, and wealth clients.
Andy: In real assets, we see early momentum in some recently launched products, including our fund performance data set.
Andy: The retention rate for private assets remained stable from last year's level, it's slightly over 91%.
Andy: And finally, our guidance remains unchanged across all categories.
Andy: Overall, our Q2 performance adds to msci's track record of consistent durable Financial results.
Andy: We have many opportunities across client segments regions new products and capabilities that we are unlocking to drive attractive growth for the second half of 20125.
We look forward to keeping you posted on our progress and with that operator, please open the line for questions.
Andy: certainly and as a reminder, ladies and gentlemen, if you
Have more than 1 question. Get back in the queue as time allows our. First question comes from the line about Alex cran from UBS your question, please.
Alex Cran: Yeah. Hey, good morning everyone. Um, I think I'm going to ask the same question that I asked last quarter which was really about the potential help you should get as assets flow more into uh, International markets from the US obviously you're starting to see it on the ABF sites. Uh we can all track that. Uh, but I think we're seeing it on the active side already too in terms of flows picking up there. So just wondering what your conversations with with clients over there have been and and what you and how you expect that to hopefully manifest itself in an acceleration of the subscription side and index as well? Thank you.
Speaker Change: Um, yeah, like, thanks for the question now. So clearly, uh, the uh rotation
Alex Cran: Of assets. Uh,
you know, from the US market, to the international to the non us markets
Alex Cran: Uh is a huge boost to our asset base fee, a business. Um and just as a reminder, you know, there are 6 trillion dollars.
Alex Cran: Of, uh, of of our clients assets that are indexed to our, um, to our indices.
Alex Cran: You know on it and uh but we don't believe that this is just going to be a huge sort of short-term catalyst.
Alex Cran: and um, you know, in our subscription because
Alex Cran: You know, when you look at the, you know, when you look at our client base, we already have a large client base in a pack, which is invested globally. We have a large client base in the media, which is invested globally.
Alex Cran: And a large client base in the US, which is invested, uh, globally. So what we're hoping for, is that the rotation to International markets, brings other asset managers to, um, to, um, launch funds on enhance their products. And that that's what we'll see the incremental demand, but it's going to be incremental on top of. We're not really high uh installed base of um of our data and our analytics. You know our data are indices as analytics with the with Global Investors. Um but you know as I said it's certainly going to help a great deal is is just going to take time and it's not going to be like a galloping type of a boost.
Alex Cran: Thank you. And our next question comes from the line of manic from Sparkles, your question, please.
Thank you. Um, Henry, you know, you you talked a lot but your asset manager base, you know, kind of distinct stable in that mid single is a growth range. It sounds like you know, for you guys to get back to faster growth, you need to get that growth. Uh accelerated again and I was just wondering, you know, based on your conversations. Clearly, you know, budgets, spend Etc. Is typed there, like, you know, is it Innovation or how do you think you can get that piece of the puzzle, you know, growing faster again.
Alex Cran: So man, that's truly the Crux of the question on the subscription business, right? When you look at it from a, you know, client segments uh perspective, not just the product perspective.
Speaker Change: As as a reminder.
You know, we have uh, 2.35 uh, billion dollars in run rate.
Speaker Change: In subscription run rate of which about 50% is active as a managers.
and the other 50%, you know, just broken down, you know, into Banks and hedge funds and asset owners and wealth managers and others
Speaker Change: So just going through the facts a bit and then I'll answer your question is that 50% of uh of active asset managers basically stock Pickers is growing at a little over 6%.
Speaker Change: And the other 50% uh, is growing at 11 and a half percent.
Speaker Change: so uh, so therefore in order for us to accelerate the total subscription run rate,
Speaker Change: 2 things, we need to happen.
Speaker Change: 1 is which we're working really hard on is the known as the, the 50% that is known active as a managers need to grow at a faster pace.
Speaker Change: You know, than than, uh, we've had in the past. You know, as, as I said, right now, it's 11 and a half percent and we're creating a lot of new products, you know, you know, relocating up sort of people and sales people and Consultants into these client segments in order to grow faster. The most promising part of that is what we call the fast money segment. So, uh, you know, Banks and hedge funds and market makers and people like that because they feed off the the indexed uh, AUM ecosystem. And uh, you know, and there's a huge amount of liquidity, a huge amount of flows that they can, you know, make money off. So um so we're very focused on that for sure. We're as I said we said in the past where we continue to be very focused on asset owners and and of course the wealth uh segment. Um which is, you know, in the in the last quarter of the world segment, you know, grew at, you know, over 17% and the asset owners grew over 12%. So
Speaker Change: That's the first thing that needs to happen.
Speaker Change: The second thing that needs to happen is is to either remain steady or gradually accelerate the asset management subscription run rate.
Speaker Change: That part is not as easy, you know? Uh because it is a, it is a, it's part of the industry that it is still challenged with, you know, flows outflows from with the fund, outflows with the cost pressures and with consolidation. So what we're doing is we are clearly, you know, maintaining and enhancing our rotation rates in, in that client segments, trying to sell them incremental things. But we're we have a
Speaker Change: You know, across the board but especially index analytics that can help them, you know, uh, become better at what they do. 1 of those promising things is activate the apps
Speaker Change: I think a big part of this active, as a management industry needs to move from Mutual Funds, you know, for retail investors, you know, into into activity fs and we have a large role to play there. And you know, we already have 50 clients that represent about 10, 10 billion dollars in AUM inactivity F. So that's something that we're pushing pretty hard, but I don't see in the near future a major catalyst.
Speaker Change: For acceleration of growth or rapid acceleration of growth on the active Asset Management industry. That is something that will continue to take time and well, that is happening. We are greatly focused on growing as much as we can. The other 50% of the client segments, uh, and accelerate that growth
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Tony Kaplan, from Morgan, Stanley. Your question, please.
Speaker Change: Thanks so much. And maybe this sort, of dovetails on the last part of the last question, but just hoping to get an update on consolidation that you're seeing and how much, um, that you're aware of, uh, will impact your results. Um, in sort of the upcoming quarters, um, if there's any way to sort of quantify them,
Speaker Change: And talk about if if you're seeing that Trend, maybe uh, you know, start to dissipate or if, or if that's an ongoing thing that we should expect over the next number of quarters. Thanks.
Tony Kaplan: so Tony, I think the uh, you know, the consolidation
Speaker Change: is um,
Speaker Change: you know, there are periods in which, you know, we see 2 3 deals happening, you know, large deals.
Speaker Change: Uh, in a particular year and periods in which, you know, we don't see a lot happening.
So uh on a trended basis, it it will continue but we are not.
Speaker Change: Uh yet you know, worrying that that is going to accelerate and that will hurt us a lot, you know. And, and therefore you know, we're not we're not putting that into our into our forecast, we're not putting that into our pipelines and and things like that, you know, that obviously could be. We could be surprised by you know too big as a manager, you know uh you know uh acquiring 1, another or merging with 1 another and the like we we are already assuming that they will continue to be a secular Trend you know to some level of consolidation. What we're excited about is that the that industry needs to transform
Speaker Change: And and a big part of that transformation is the movement that I was mentioning before, from from non-listed, you know, mutual funds to any every kind of exchange traded fund. Whether it's a, uh, you know, market cap which is what we've been doing, uh, passive market cap or an a passive non-market cap with some themes around it, whether it's fixed income, uh, and now for sure on active as a management. So, we are beginning to see, uh, early signs of a major transformation in the, in the industry, by by those, you know, participants reconfiguring their product line into a into activity apps.
Thank you. And our next question comes from the line of zedra from RBC Capital markets your question, please.
Speaker Change: Sure. Sure, this is, this is Andy here. So as you know, cancels can be a little bit lumpy quarter to quarter. Um, if we look at Q2 and dive into what drove, the lower retention, uh, in this Q2 versus Q2, a year ago, as you alluded to, we had lower retention in Analytics.
Speaker Change: Um, that's an area that tends to be lumpy and and actually a year ago period, we had quite High retention for the segment.
And then we had slightly lower retention in sustainability and climate, uh, which you alluded to. And I'd say the main drivers of cancels continue to be client events. Um, and some financial budget pressures that Henry, Henry alluded to
Speaker Change: If we look from a client segments lens, it's um, really from hedge funds. So we've seen some elevated cancels from hedge funds which as you know represent a larger portion of our run rate now. Um, we've also seen some higher uh cancels from corporate advisors.
Speaker Change: Within the sustainability and climate segment.
Uh, and so, uh, I'd say that the place where we've seen the slightly elevated, cancels being real assets and sustainability and climate. And then with hedge funds which just naturally tend to run at a slightly lower retention rate, we would expect those Dynamics to continue uh, in the near term. I would highlight that the um linking it to the prior question, retention rate with asset asset managers continues to be quite solid at around 96%. Um but in some of these other areas we're seeing slightly lower retention rates relative to where we were a couple years ago.
Speaker Change: Thank you. Our next question comes from the line of Owen. Now from Oppenheimer, your question, please?
The morning and thank you for taking my question. I do want to go back to the sales environment in the second quarter and also so far in the third quarter I think it was 44 million dollars in the in the second quarter and down a little bit uh year-over-year. But I do think you have a a 1-off item in the second quarter of 2024. So if you can unpack a little bit more on the sales environment and the Outlook, that would be great. Thanks.
Speaker Change: Sure. Yeah. If you alluded to um in the second quarter of last year, we had a meaningful contribution from the Moody's uh ESG partnership. That we signed we didn't quantify that but we did uh say that it was a a meaningful contributor to the sales a year ago. And so obviously we didn't have that in this second quarter.
Speaker Change: Um, you know, just taking a step back and looking at the overall environment.
Speaker Change: The markets are in a, a good spot now, but but it was a volatile quarter, uh, the first half of the second quarter, we saw heightened, uncertainty volatility, General cautiousness from clients as as you all know, um, we're now in a position where the markets are hitting new highs and and we're clearly benefiting on the ABS side.
Speaker Change: Um, I'd say we're fortunate that most of our clients don't change their buying decisions in the short term based on Market swings up and, and Market swings down. So overall, I would, I would characterize, uh, the environment as remaining fairly consistent to what we've been seeing in, in recent quarters.
Speaker Change: Um, as Henry, alluded to, if we see sustained favorable, market, dynamics and momentum on the, the international front continuing, that can be constructive for us, um, and we continue to be overall encouraged by the the client engagement that we were seeing. As you heard us, talk about the healthy pipeline of of products that we have. But I'd say at this stage overall, we're seeing consistent Dynamics, with, uh, with what we've seen in recent quarters.
Thank you. And our next question comes from the line of Alexander Hess from JP Morgan your question, please.
hey everybody, uh, you know,
Speaker Change: Maybe you could just help us puzzle in the, you know, the the various moving pieces here and, and understand a bit more, you know, especially with some of Henry's comments to lead off the the call, you know, if asset managers are going to remain tricky, you know, um, does that mean, that sort of that 10% Revenue, you know, low double digits?
Speaker Change: Uh, ABF Revenue growth. Uh, Target is sort of. Now a bit of a stretchier Target. Uh, and then I have a follow-up question on that as well.
Speaker Change: look, I think the the way that we uh the way we look at the totality of the company,
Speaker Change: And we actually encourage you, you know, to look at that.
Speaker Change: Is that, uh, you know, a very meaningful part of our company.
Speaker Change: You know, over 20% 22 23%.
Speaker Change: In, uh, in asset based fees.
Is on a tear.
Speaker Change: and uh, not only cyclically
Speaker Change: But secularly.
Speaker Change: I think the trend to uh, to do systematic investing in the form of
Speaker Change: of either, you know, non-listed products or listed products like ETF
Speaker Change: Um, is uh, it's just stunning, you know, we started with market cap. We're now going to non-market cap going to fix income. We're going to activate the S active fix income uh, and all of that. So,
Speaker Change: uh, frankly, I think, you know, people are not focused on that in the success of the company, you know? And uh, and that is that will continue to grow.
The other part of the business is subscription.
Speaker Change: Uh, which is, as I mentioned, half of it is active management, you know? Uh, the half of it is depending on the active management, industry on the other. Half is dependent on other other client, segments, the other client segments, like wealth management gaps for private assets. Um, you know, at the at the, the fast money segment, as we told the market makers, you know, those people are on a tear, you know, they, they they have a normal capital and then the fast money segment, hedge funds and market, makers, and all of that. And and they did a lot of our products. The wealth management industry is expanding be because of the wealth accumulation in the world and the professional management of assets and now even the defined contribution, you know, management of assets in in in, in a lot of, you know, private equities and a lot of segments. So we are, we have enormous potential, you know, in all of that. So, MSI started life in which we had, you know, 2
Speaker Change: 3, different product lines, okay benchmarks and you know, Equity analytics and things like that. So all to the active Asset Management industry and we've enjoyed that and we will continue to enjoy that. That is a core of our, what we do and it will grow, it will turn around uh in a bigger way, you know? But but I think there are 2 things that we're missing, you know, uh, from from a lot of people, we're missing the focus on the asset base fee.
Speaker Change: And the Futures and the options and all of that. And and we're missing the non, the non Asset Management client segments and and the enormous potential that the company has in there. We haven't even talked about, you know, the private assets, uh, with user owners, you know, LPS and as a man as a manager, the GPS, which we're only getting started, you know, we're not talking about, you know, climate for banks balance sheets, you know, and, and climate climate change for, you know, for insurance companies. You know, we, uh, you know, clearly we know risk management across the board, you know, and all of that. So, the company has a normal potential. It's just that we're in that process of of, uh, of of, of, of going from, you know, a lot of product lines, uh, relying on active as a managers, uh, with this huge other business of, you know, as a base fees to a transformation of the company, you know, to, uh, you know, to a lot of other clients segments, that use the same tools that, that, that a lot of people use. So that's the
Speaker Change: Way. We're looking at the company.
Speaker Change: Thank you. Our next question comes from the line of phase. That always from doe Bank. Your question, please.
Speaker Change: Yes. Hi, thank you. Um, I wanted to ask about the demand environment for custom indexes because there was a slight slowdown in uh, in custom indexes subscription sales. And I would have thought that given, you know, the Foxberry acquisition. And some of the uh technology advancements that you've talked about uh that you know, we could see potentially accelerating growth. So just wanted to hear more about what's going on there.
Speaker Change: Yeah, thanks for that look fundamentally. There's no change, right? I think that the direction that we're headed with this, we're very confident about it. I think, you know, the nature of, um, of these type of quarterly numbers there can sometimes be a slight, you know, change or hiccup, depending on what's Happening, you know, with specific deals. But our Outlook
Remains exactly the same. Um, we're very positive on this. Um, we're building out capabilities and so long story short, the story is unchanged and this remains a very important uh growth opportunity for us unequivocally.
Thank you. And our next question comes from the line of Kelsey. Zul from autonomous your question, please.
Kelsey Zul: Hi, good morning, thanks for taking my question. Hi, I'm glad you mentioned active ETFs, um, a few times and prepared remarks. And in, in the Q&A, you know, I what we really see is there's been a wave of active ETF launches globally since the start of 2024, and a lot of them are, are based in the US, which I understand is a very big market for MCI, but maybe not the strongest market. So just curious to hear more about how msci's position with activity he apps. And if, if you could talk a little bit more about the economics of the products and services, you provide there, that would be really helpful as well.
Kelsey Zul: This is an area of significant uh growth opportunity for us.
Speaker Change: Um, is High. Um,
Speaker Change: the um the active ETF product uh line with with our clients is a range uh you know, is a range from
Speaker Change: Almost like enhanced indexation.
Speaker Change: uh, to, uh, to uh, to targeting a particular Universe with the stock picking
Speaker Change: To a little bit more unconstrained and a stock picking, uh, which is, you know what? Typically happens in mutual funds nowadays. So therefore
Speaker Change: We have, uh, we we, we play, we can play a, a large role across all of that. In an unconstrained, sort of a stock picking environment. You know, we can sell more of our data and our benchmarks and all of that at the other end on an almost like enhanced indexation or with overlays. You know, we have, we we are, you know, this our business model is not dramatically different to the passive model, in which we license our universe, we license our indices and we get, you know, AUM fees, you know, on that, and similarly, in, in, in between right when when they do, and they do that. So, I, I
Speaker Change: When you look at what what script what typically happening in a in an activist inactivity f is people are looking for a theme. They're looking for uh an investment thesis and we are doing the work for them and and quantitatively you know, coming up with investment thesis and and putting it into an index and also that they can pick from and and go out and build their their activity apps. So um, so we have a lot of dialogue in the US. As I said, we have 50 clients all over the world. There is a lot of dialogue in Europe about this.
Speaker Change: Many of the captive the the bank on as a managers and wealth managers we want to play a large role in here and some of them with own proprietary products, some of them with third-party products and the like. So I think that gradually the active as a the the active as a management industry especially in the mutual fund industry is going to revive itself under this Tapo category and it's going to create growth uh and that growth is going to be very beneficial to MCI.
Speaker Change: Thank you.
And our next question comes to the line of Craig. Huber, from Huber research Partners, your question, please?
Craig Huber: Uh, great. Thank you, Andy. I want to ask you um, what's sort of the puts and takes here? How we should think about uh, getting to the high end of your outlook for costs, for the year versus getting to the low end of the guidance range there. And then with with that. So if you could answer the question please about, I think, 3 months ago, you guys said you were suing stock markets would would gradually increase over the course of the year. Um, obviously, this last 3 months, they were quite strong. What do you guys assuming right now is for your base case, when you think about your internal investment spending and cost overall, thank you
Sure sure. Yeah, thanks Greg. Um,
Craig Huber: yeah, you know, we're continually calibrating the the pace of spend
Craig Huber: Um, we do look at a wide range of factors and it has been a volatile Market backdrop over the last quarter. So,
Um, as we stated our, our expense guidance, ranges remain the same. Um so we're still committed to delivering within that range. And there are still a lot of moving pieces that at this point in the year but maybe to provide a bit more color.
Craig Huber: On kind of where we are and and what we're seeing. Um, if you alluded to we mentioned last quarter that if AUM levels remained around there, then current levels.
Craig Huber: We would have been towards the lower end of our expense guidance ranges, um, again, that that was just giving you a reference point as, to based on that factor. Um, not necessarily our forecast for the year, but if AUM levels remained at that that level, um, we would have been towards the lower end of our expense guidance ranges. I would say, um, that if AUM levels remain around the current levels which as you know, are quite a bit higher than they were a quarter ago.
Craig Huber: Um, for the, the remainder of the year, we would expect to come in towards, probably the middle of our expense, uh, guidance ranges. Again, I would caveat that by saying, there are a whole host of other things that feed into expense growth Beyond just the the, um, levels from business performance to FX movements comp adjustments.
Craig Huber: Severance and and other expense variations. Um, but um, you know, all else equal, if AUM levels remain around their current, um, current level, we'd probably be towards the the middle of our range
Speaker Change: Thank you. And our next question comes from the line of Scott. Warts from Wolfe research. Your question, please.
Scott Warts: Um, I wanted to touch on some of the um, emerging growth opportunities, in particular, fixed income, and wealth management and seeing the Run rate growth accelerate, um, you know, up to the High Teens, uh, this quarter versus last and just wondering how you guys kind of view, the, you know, sustainability, um, of those growth rates. Um, as we look out over the near to medium-term here,
Scott Warts: Sure. So look we're we're clearly um pleased with the results in both of those categories.
Um, and fixing come had a, had a nice growth in in analytics. And the wealth numbers that I mentioned, in my prepared remarks,
Scott Warts: so um while I don't want to, you know, reference a particular percentage, I think we've been pretty consistent, you know in saying that these are important investment areas for us
We continue to add to our capabilities. Um, we're very focused. Also on not merely just the product capabilities that the go to market capabilities, in terms of, um, marketing training, all our client coverage people, Etc. So, so, you know, we were, we, we believe that, you know, allowing for the Broadway that we've characterized the environment and both the the, you know, the challenges, some of those challenges, you know, by by segment, that's more of a comment on fixed income, but in terms of wealth, um, you know, we're, we're, we're confident that.
Scott Warts: We're making the right steps. So I think generally the, the the answer to your question is we we are both, um, planning to see these growth rates continued and assume that they will do. So.
Speaker Change: Thank you. And our next question comes from the line of David Molen from evercore isi. Your question, please?
David Molen: Hey, thanks. Good morning. Um, totally hear you on the asset managers and, and the steady growth there, um, 1, 1 of the other areas of opportunity just that you had mentioned was on hedge funds, um, and I was surprised to hear um the subscription run rate growth continued to decelerate. I think it was 12%, this quarter. So like 14 or 15, the past few quarters. Can you just unpack about what's driving that deceleration?
David Molen: Sure sure. Yeah. So
David Molen: Within the, the hedge fund segment is by its nature, lumpy. I alluded to this earlier, but tends to run at a lower, um, a lower retention rate. And so,
David Molen: we can see that growth rate skewed by, um, a cancel here or there, and actually in the current quarter, we, we did have, um,
David Molen: A client event driven cancel of of uh, on the index side.
David Molen: Um, that fed into the index hedge fund growth rate. Um, more generally, we can have large sales to hedge funds on the, um, both the index and the analytic side. Um, it can also be driven by the pace of new content and modules that we we release. So, um, in the past we've had periods when we release things like our free float data set, um, which was in strong demand from hedge funds, drove the acceleration there. Um, you know, we have a number of product offerings uh that that we alluded to in the prepared remarks that um we are releasing now that that similarly should be helpful to that fast money Community including hedge funds. Um, and so it, it will vary period to period as Henry alluded to, we continue to have conviction. This is an attractive, long-term growth opportunity for it for us. Um, we've seen strong momentum across our Equity models, much of our index content. And as the um, index ecosystem,
Henry Fernandez: Continues to grow um this trading Community between hedge funds market makers, broker dealers. Um we continue to see a number of opportunities and it's an area where we have a lot of innovation uh taking place. Um but it will be lumpy period to period so I wouldn't read too much into a Slowdown in 1 quarter there.
Speaker Change: Thank you. And our next question comes from the line of George Tong from Goldman Sachs your question, please.
George Tong: Hi thanks. Good morning Henry. You talked about a goal of accelerating your non-active subscription growth Beyond 11 and a half percent by creating new products and relocating sales and Consultants into the segment. Can you comment on how long it would take to be meaningful acceleration here based on these initiatives and how much faster non-active subscriptions can grow?
George Tong: In the next few quarters, right?
George Tong: Uh, on it. But when you look at
George Tong: the uh,
George Tong: The set of opportunity that that we have.
George Tong: There. Um, they're very significant, very significant. So, uh, we talked about the, the, what we call the, the fast money segment, you know, market makers, hedge funds, and all of that. And
George Tong: that will uh that will accelerate at some point and continue to grow because when you have 6 trillion dollars
And about 17 18 trillion dollars of all Benchmark, either active or passive that generates an incredible flow of capital that needs to be understood in terms of how it flows needs to be. You know, people have to buy into the index, uh, you know, uh, uh balancing, you know, portfolios and all of that. So that we talked a little bit about that the the other 1 Is wealth management, you know, the the wealth management industry.
is, um, you know, is uh,
Is uh, institutionalizing sort of thing, you know, is is the wealth management advisors are looking for institutional quality portfolio, construction tools, uh, portfolio management software, you know, models and all of that. And that's why this, uh, msei wealth manager, which is a software platform that
George Tong: You know, put in all of our data analytics and all of that we're very excited about that. We got a large sales, this this quarter and and it has significant growth in their the same thing that these people also buy enormous amounts of ETFs as we know. Well, as a, as a basis for their portfolios and uh, and many of them are going into direct indexing and and need those, uh, you know, custom index capabilities that that we build. That's the that's the world management segment. The GP is remember that when you look at our private Capital Solutions business, you know, excluding real assets, just the private Capital Solutions part. The vast majority of that run rate come from institutional uh limited partners.
George Tong: So there are 2 major initiatives that we have underway. There 1 is to make the wealth managers, also a limited partner so that their allocations can increase dramatically, but for that, they need the transparency of of, of the tools. You know, the tools that provide transparency, such as understanding the fund, understanding the performance, the credit worthiness, the risk assessment of the funds and all of that, you know, uh, and and then the other initiative is to develop product for the GPS, which is we right now are are private Capital sales.
2G to GP are very low, very low. Uh so that presents enormous opportunities to help the GPS connect more with wealth managers and other institutional, you know, LPS and all of that. So that's another area on climate. We're seeing quite a lot of demand uh you know from you know, first of all asset owners that are looking to to Overlay climate into an index portfolio and they put in this portfolio or a fixed income portfolio, you know, but also the, the banks, in their own balance sheet, given the physical risks, that are going on in the world are concerned that, you know, about the the the the the climate change riskiness of their loans. And they're looking for solutions from us to, uh, to to understand what, you know, how they deal with that risk. Similarly, the insurance companies not only on their assets, but a lot of the insurance companies are even coming to us and say can you help me understand, you know, how do I
George Tong: Price risk on the underwriting, part of the insurance company. So
George Tong: so we have all these opportunities and therefore, we're prioritizing 1 by 1 H. What I can tell you is, you know, since the beginning of the year,
I've seen about a 100 CEOs or sea level people in about 15 countries.
George Tong: And the level of dialogue that we have the demands of what we do are enormous.
Well, we now have to, you know, we we deal with an issue of, we have all that Demand on the think of that as the known Asset Management part of the business. What we're trying to do is how do we prioritize it? How do we build it up? How do we put a value proposition on it, and how do we sell it? But it's just a matter of time before a lot of the stuff begins to show on the numbers.
Into our next question, comes from the line of Jason Hof from Wells. Fargo your question, please.
George Tong: This is Jenny on for Jason Hof. Um, so you talked about this briefly but can you maybe give some more color on how adoption is trending or private Capital Solutions in the US? And also internationally where I think you're more underpenetrated and what you're doing to grow that adoption. Thank you.
Speaker Change: so let me let me, uh, take a crack at that the uh
Speaker Change: So we we closed on the uh on the Burgess acquisition, you know, 2 and a half or so years ago.
Speaker Change: The first year plus.
The year and a quarter year and a half. We were intensely focused inward in making sure that we integrated the data sets, the technology, you know, the people and all of that and uh in a way that was not going to be disruptive you know, to a to our clients.
Speaker Change: And uh, and and we focus on enormous amount of effort there. Another big focus of ours was, you know, how do we ramp up AI in terms of data capture? Because there is a massive amount of data that we collect from private assets. So documents, and emails, and reports and, you know, and, you know, tables and all of that. So we've been
Speaker Change: Very busy in in, in doing all of that.
Speaker Change: So, about about a year ago or so, you know, we started the process of building a, a business plan and how do we expand the business?
Speaker Change: So that took about 6, 9 months, you know, uh, we went through all of those business plans at the beginning of the of this year. Let's say in the first quarter and now we're in the process of implementing that none of that.
Is.
Speaker Change: At this point.
Sean on the number that we can see. So everywhere we go up every asset manager, in the planet wants to allocate more assets to, um, to private assets. You know, they always tell us the same thing. The reason we have a lot of assets into the public markets is because of 2 Reasons,
You know transparency and liquidity and in order for us to go bigger in private assets when it transparency and liquidity. So our answer to them is we're going to give you all the transparency in the world. We cannot give you the liquidity because we are not the market maker but we will give you an assessment of values so we're working on creating evaluated prices, you know, across some of this as a classes, starting with private Credit in order to give them a sense of value. So that there is more transactions among uh, among LPS and all of that. So all of that is, you know. So, you know, you see that we've had consistent growth on this, you know, private Capital solution over the last couple of years, but the acceleration of the growth is going to come as we begin to roll out.
Speaker Change: All these business plans, all this new product development and all of that. And that's going to take a little bit of time. But so we're at the cost of beginning that
Waheed: Thank you. And our next question comes from the line of Waheed. I'm in from Bank of America. Your question, please.
Hi, good morning. Could you talk about how you're thinking about the pricing environment as you begin? Having conversations with your clients?
Speaker Change: Especially more. So now since the macro is still uncertain, uh, just sort of what the conversations are like and are there any areas where people are more not as receptive compared to Prior years?
Speaker Change: Yeah, I'd say no no major changes in our approach. Um, consistent with what I alluded to earlier that, that, um, we're seeing a fairly consistent environment and our approach to pricing Remains the Same
Speaker Change: Uh, I would say the contribution of price increases to new. Recurring sales is roughly in line with what we've seen over the last 4 quarters. Um, so consistent with what uh, I've mentioned recently.
Speaker Change: It does vary a bit across product lines, and, and client segments. So maybe compared to the second quarter of last year,
Speaker Change: We can we can unlock from uh, the solutions we deliver to our clients.
Do you and our next question comes from the line of Russell. Quelch, from Ross childen. Company your question, please.
Russell Quelch: Yeah, thank you for having me on. Um, you mentioned earlier that you're not relying on Partnerships with the GP for private fund data. But if I'm not mistaken, you are restricted from selling aggregated LP data without GP GP permission. So, can you update in your thinking here? Any progress in the conversation which GP is around opening up on the data side and what products you might be able to offer to GPS that would drive. So with greater engagement and growth from this sort of potential customer base.
Russell Quelch: yeah, just to uh, to clarify, you know, we are
A.
Speaker Change: When we work for the lp.
Speaker Change: The lp instructs the GP to give us every piece of information and data that that is given to the lp.
Speaker Change: so that puts us,
At an incredibly advantageous position of capturing.
Speaker Change: A massive amounts of data, you know, and the underlying portfolios and the and the funds and all of that.
Speaker Change: Now, the flips out of that is that that data, you know, is proprietary
Speaker Change: To, uh, to the GP and and and obviously, you know, the lp that invest in those funds is entitled to that to that data. But if you have a, an LP that is not invested in those funds,
Speaker Change: Currently, uh, they're not entitled to see that data.
Speaker Change: You know, our contracts call for a for a fairly generous. Uh, anonymize rules aggregated rules to uh, to put all that data together, and show it to people that are not invested in those in those funds, which we do. And is, is pretty valuable, you know, to a lot of those people. And the, the, the that that is a, A system that has worked well for the, uh, institutional Market. Because a lot of the relationships are 1 to 1.
And that system is not going to work well, uh, for the wealth management space because, you know, the the, you know, there are tens of thousands hundreds of thousands of wealth managers that we want to see the data ahead of time, even if if their clients are not invested in those funds. So we're having discussions with, with the uh, with the GPS about liberalizing those data rights. Uh so that uh so that can be shown
Speaker Change: Want to, uh, to that client base or or the tale of the LPS, the smaller LPS and uh given the enormous interest in capital, raising by the GPS uh in the wealth management space and in the long tail of institutional lbs.
Speaker Change: Um you know, sooner or later uh they will liberalize those data rights so that we can we can uh you know uh show that that the more specific parts of those data to uh to a wider audience. So that's work in progress. But we're pretty hopeful that, you know, that will be a a great Avenue of success for us.
Speaker Change: Thank you. And our next question comes from the line of Gregory Simpson from BMP paraba your question, please?
Gregory Simpson: Hi. Just on the asset base fee side. The ETF licensing yield has been uh, quite stable for a few quarters. Now as I just just want to check in on what you're seeing around pricing trends of ETF issuers. Do you think we're more stable uh from here on and are also asset based fees uh quite stable on the yields. Quite stable on the non-etf passive side too. Thank you.
Yeah so um to your point we've seen stable fees here, the last several quarters on the ETF side, the fees have similarly been stable on the non-etf side um just to put a finer point on the 2.43 bips we saw in the second quarter, there was a small impact from contractual fee changes as aums moved into higher tiers.
As as certain products grew. Um, we also saw offsetting that some positive mix shift from growth in international markets. And so uh, there are many International products that that carry a higher fee load and and our fees are higher on those. And so the, you know, International rotation has has been helpful. Um, listen. I wouldn't I wouldn't, um,
Gregory Simpson: Is a growth area for us. A very strong growth area for us.
On the non-etf side, um, we've seen stability in fees for some time. Um, that's an area where, um, we are seeing strong traction of non-market cap, weighted products, um, custom index mandates, um, passive mandates and those can carry a, a higher fee load. So, um, the growth we've seen in the non-market cap weighted products in the non-etf space has has offset pressure on the um, market cap, weighted side. And I think that's a dynamic that we've seen for some time here.
Speaker Change: Thank you. And our next question, is a follow-up from the line of Alexander hes from JP Morgan your question, please?
Hey, thanks for letting me back in the call. Uh, I just want to touch on, uh, Henry, uh, and and team you you, you guys discussed the massive sort of secular opportunity in ABF. You know, your largest client is out there saying that their msci world backed product. And I'm going to quote uh, is the darling of ETF savings plans in Europe. Um, do you guys foresee? Sort of the ability to, you know, for the uh msci World maybe over the course of the next? I don't know. Decade to look a bit like your competitor has here in the US. You know, where you sort of have that, that DB ecosystem, is that something you guys are actively trying to build towards? You know, I'm just trying to think if, if we're going to be leading a bit more on ABF going forward. You know what that Vision might look like? Uh, uh,
Speaker Change: In particular.
Speaker Change: Yeah, certainly, uh, for sure. Uh uh, we are when you look at our global
You know, all country uh uh or most countries, benchmarks MCI World, which is obviously the developed world, but also MCI acqui, which is to develop and emerging world.
Speaker Change: This. Um, this um,
Speaker Change: This sort of broad Global uh benchmarks are increasingly becoming the core Foundation of portfolio. So I was just in Japan as, you know, a couple of months ago and the Mackie, uh, is is used by 1 of our clients and they raised I think 5075 billion dollars.
Of AUM, you know, on on a mutual fund. I actually, you know, they they the client wanted to develop a A Book Like A travel, you know, had like a tourist travel book that will have, you know, all the different countries and the stock that they will be investing in. So we work together on the publishing or of of our supported them on the polishing of that book. So as an example of a big client in Japan who is benefiting from that and all the other competitors of them are very jealous and are trying to catch catch up to them. So I think we see a normal potential on this as the as the world globalized, no matter what people say, you know, they they world will continue.
Continue to globalize especially in the capital markets.
Speaker Change: you know, uh, people are looking for
Speaker Change: for for Global exposure, not just Regional, not just country, not just, you know, the us. But Global exposures and I think the role that this page works play is going to be larger and larger as time goes by.
Thank you.
Speaker Change: This does conclude the question and answer session of today's program. I'd like to hand the program back to Henry Fernandez for any further remarks.
Speaker Change: Well, thanks everyone. Uh, for going
Speaker Change: you know, as we have uh,
Demonstrated here uh by our remarks and our financial results. You know, MCI is an old weather franchise.
Speaker Change: Delivering very strong performance, uh, uh, uh, sometimes in 1 part of our business like kbf. And sometimes in another part of our business and subscription or or parts of the subscription is we're benefiting from uh, you know, very balanced approach to our business model and and uh, when 1 part of it is growing strongly and the other 1 is not. It gives us incredible benefits.
Speaker Change: So our our footprint, uh, is growing uh fast uh, with all clients segments, you know, existing products with uh with a lot of the existing clients segments and a lot of new client segments that were very focused on uh that are part of the the whole investment industry that we're we're expanding on. So our franchise
Speaker Change: Remains great and you know and remains undervalued uh in my view uh the large shareholder of the company and uh and we are looking forward to continuing to be a long-term compounder of of earnings and growth. You know, in the years and decades to come, thank you for listening to us.
Speaker Change: Conference, this does conclude the program. You may now disconnect good day.