Given budget challenges for customers, are MSCI's strong net new sales due to market share gains, wallet share expansion, or product innovation?

Henry Fernandez attributed the strong performance to three factors: more aggressive selling of existing products, significant acceleration in new product launches (as many in Q1 as all of 2025), and accelerated adoption of AI tools. He confirmed market share gains, especially in sustainability and climate. “What has changed in terms of this performance of Q1 and also the past performance of Q4 of last year is a stronger execution across MSCI in 2 -- in 3 big categories.”

Has AI led to specific revenue upticks or quantifiable expense savings?

Henry Fernandez explained that every new product has an AI component, making it hard to isolate AI-specific revenue, but clients are licensing more content for AI-driven use cases. Significant early efficiencies are seen in data capture (private assets, sustainability) and software development, allowing increased output without headcount growth. “We are seeing significant early efficiencies in the use of AI across the ball board. It started in earnest in AI data -- I'm sorry, applying AI to the data capture and the data development in private assets and in sustainability and climate.”

Is the strong growth in custom indices driven by MSCI's processing ability or end-market demand, and is it sustainable?

Henry Fernandez stated that end-market demand for non-market cap systematic investing is very significant and growing across asset classes (equities, fixed income, private assets). MSCI is uniquely positioned due to its data, methodologies, and AI-accelerated production capabilities, making the growth sustainable. “What is now happening is that the door is now wide open to do systematic investing and rules-based investing and index investing in what we call nonmarket cap...”

MSCI

MSCI (MSCI) Q1 FY26 earnings call: guidance and Q&A

Q: Did market volatility in March affect sales, and what's the outlook for Q2 sales momentum, especially in Index and Analytics?

Henry Fernandez stated that except for a slowdown in the Gulf region, they have not seen any effect of market volatility or the 'run war' (likely ASR for 'Russia-Ukraine war') on client behavior, with business operating as usual. “Except for a slowdown in dialogue and presentations and obviously, demos in the Gulf region, the countries in the Gulf -- the Arabian Gulf region, we have not seen any effect of the run war anywhere else in the world.”

Earnings call· Mar 2026 (Q1 FY26)· Financials· Apr 21, 2026

Source: earnings call transcript

Executive summary

MSCI Q1 FY26 — Strong Organic Growth and AI-Driven Momentum

MSCI delivered a strong Q1 FY26, driven by robust organic growth across its diversified business lines and increasing adoption of AI in product development and operations. The company saw significant momentum in net new recurring subscription sales and asset-based fees, reinforcing its mission-critical role in global investing. Strategic bolt-on acquisitions and a focus on AI-driven innovation are accelerating product launches and enhancing client engagement.

Highlights

Organic revenue growth of over 13%.
Adjusted EPS growth of nearly 14%.
Adjusted EBITDA growth of almost 19%.
Total run rate growth of nearly 13%, fueled by a record asset-based fee run rate of $872 million, growing 25%.
Recurring subscription run rate growth of 9%, fueled by net new recurring subscription sales of $39.6 million, growing 52%.

Concerns

Sustainability and climate new recurring sales were offset by higher cancels, with muted growth expected to continue in the near term.
Analytics year-over-year revenue growth expected to be roughly 5% for Q2 2026, down from over 10% in Q1 due to non-recurring implementation revenues.

Guidance & targets

Category	Target	Timeline	Confidence
Analytics revenue growth	roughly 5% medium materiality	Q2 · FY26	High
Effective tax rate	between 18% and 20% medium materiality	Q2 · FY26	High
Free cash flow outlook	unchanged high materiality	FY26	High

MSCI operating KPIs by quarter

MSCI operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Sep 2025 Q3 FY25	Dec 2025 Q4 FY25	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Retention rate	93% In the fourth quarter, our operating metrics included organic subscription run rate growth of 8%, excluding FX headwinds and 7% on a reported basis, asset-based fee run rate growth of 15% and a retention rate of 93%. Source: earnings call transcript	95%+ More specifically, MSCI delivered a retention rate of over 95%, organic subscription run rate growth of 8% and asset-based fee gross revenue growth of 18%. Source: earnings call transcript	—	—	—	95%+ MSCI achieved organic subscription run rate growth of over 8% with a retention rate of over 95%. Source: earnings call transcript	—
Assets under management (AUM) Direct indexing	<$130B We also saw direct indexing AUM based on MSCI Indices increased by 31% to nearly $130 billion. Source: earnings call transcript	$131B+ Meanwhile, direct indexing AUM based on MSCI indexes increased by 30% to more than $131 billion. Source: earnings call transcript	—	—	—	—	—
Retention rate Asset managers	—	96% We achieved a retention rate of 96% with asset managers in Q1, up from 95% a year earlier. Source: earnings call transcript	~97% But generally, overall, we're seeing quite stable results, and we are also pretty encouraged by the solid retention rate with asset managers, which is about 97% across the company in the third quarter. Source: earnings call transcript	—	—	—	—
Retention rate Index	95% An overall retention rate and index was 95%, with a retention rate of almost 96% with asset managers. Source: earnings call transcript	96.5% So within Index, it was 96.5% and within Analytics, 95.5%. Source: earnings call transcript	<96% And the Index retention rate remained durable at nearly 96%. Source: earnings call transcript	95% Index retention remained strong at nearly 96% for the full year and 95% for the quarter. Source: earnings call transcript	<97% Index retention was nearly 97% for the quarter, further improving from last year's levels. Source: earnings call transcript	97%+ In index, we delivered 41% growth in recurring net new sales, 17% growth in total run rate more than 11% growth in subscription run rate and a retention rate of more than 97%. Source: earnings call transcript	—
Retention rate ESG and Climate	93%+ Our retention rate for the segment was over 93% with most of the cancels reflecting client down sales and not outright terminations. Source: earnings call transcript	94.5% The retention rate of 94.5% for the segment highlights that our Sustainability and Climate tools remain mission-critical. Source: earnings call transcript	<94% The Sustainability and Climate retention rate was almost 94%, slightly higher than last year's level of 93% and reflecting the must-have nature of our tools. Source: earnings call transcript	—	—	—	—
Assets under management (AUM) Fixed Income ETF	—	$76B+ Fixed Income ETF AUM linked to MSCI and partner indexes is now over $76 billion, growing 20% from a year ago. Source: earnings call transcript	~$90B On the fixed income side, the AUM and ETFs linked to fixed income indexes or fixed income indexes and partnership indexes is around $90 billion. Source: earnings call transcript	—	—	—	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline
Index AI Insights Connector	launch	late February 2026
Daily private valuation indices and benchmarks	launch	Q1 FY26
Private Asset Diligence Platform	update	Q1 FY26
Next-gen models (Analytics)	update	Q1 FY26
Basket building solutions (Analytics)	launch	Q1 FY26
Private credit risk models (Analytics)	launch	Q1 FY26
ESG rating system	roadmap	In process (Q1 FY26)

Deals & partnerships

Compass Financial Technologies acquisition

Swiss-based provider of index calculation services. Completed during Q1 FY26.

Vantage acquisition

Platform built entirely on AI. Completed during Q1 FY26.

PM Insights acquisition

Completed earlier this month (April 2026).

New York Stock Exchange licensing

New licensing agreement for options on MSCI indices listed on the NYSE.

Moody's partnership

Partnership for credit assessments in private credit.

Risks & headwinds

Muted growth in Sustainability and Climate segment Near term

New recurring sales grew modestly, offset by higher cancels.

Mitigation:Clients focusing spend on critical sustainability priorities, leading to some down sales but also competitive wins. Differentiating between sustainability and climate. Focusing on physical risk in climate.

Q&A highlights

Did market volatility in March affect sales, and what's the outlook for Q2 sales momentum, especially in Index and Analytics?

Henry Fernandez stated that except for a slowdown in the Gulf region, they have not seen any effect of market volatility or the 'run war' (likely ASR for 'Russia-Ukraine war') on client behavior, with business operating as usual.

“Except for a slowdown in dialogue and presentations and obviously, demos in the Gulf region, the countries in the Gulf -- the Arabian Gulf region, we have not seen any effect of the run war anywhere else in the world.”

asked by Alex Kramm · answered by Henry Fernandez

2 min read 6 chapters

Detailed narrative

AI Integration and Impact

MSCI is deeply integrating agentic AI across its operations, from data capture and model building to product launch and marketing. This has led to significant early efficiencies in data development for private assets and sustainability, allowing for increased data gathering without additional headcount.

AI is also accelerating software development and the creation of models and methodologies, particularly in custom indices and ESG rating systems. The company noted that the use of AI by its employees has dramatically increased over the past year.

Strategic Acquisitions

The company completed three small, strategic bolt-on acquisitions: Compass Financial Technologies (index calculation services for commodities, digital assets, equity derivatives), Vantage (AI platform for private market due diligence), and PM Insights (secondary market pricing, liquidity, and reference data for private markets). These acquisitions extend capabilities and accelerate client solutions in key growth areas, contributing modestly to run rate and ongoing expenses.

Geographic and Client Segment Strength

MSCI experienced broad-based momentum across geographic regions, product lines, and client segments. APAC was a standout, posting its strongest ever Q1 for recurring sales at $15 million, up 46% year-over-year. Hedge funds and banks/broker-dealers also showed strong subscription run rate growth and net new sales, with hedge fund subscription run rate growth at 17% and banks/broker-dealers at almost 11%.

Index Ecosystem Expansion

The ecosystem around MSCI indices continues to scale, with over $21 trillion in AUM benchmarked to them, including $7.4 trillion in indexed equity AUM. The company saw its best Q1 since 2023 for traded volumes and run rate from listed futures and options, reinforced by a new licensing agreement for options on MSCI indices listed on the NYSE.

Equity ETFs linked to MSCI indexes captured a record $103 billion of inflows in Q1.

Sustainability and Climate Focus

While sustainability and climate faced some headwinds with higher cancels and client focus on critical priorities, MSCI is differentiating between sustainability and climate. The company secured an important competitive win with the Central Bank of Germany for climate risk tools, indicating potential for reacceleration, especially in physical risk.

Management believes the 'run war' (Russia-Ukraine war) will underscore the need for energy transition, benefiting their climate tools.

Active ETF Opportunity

MSCI is very bullish on the active ETF market, viewing it as a significant expansion area for active asset managers. The company believes its data sets, indices, and quantitative tools are highly relevant, especially since 70-80% of active ETFs incorporate systematic or index investing elements.

This presents opportunities for additional content licensing and potential asset-based fee revenue, with MSCI actively used as a benchmark on active ETFs.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.