Key Highlights

  • Operating revenue was $867.0 million, up 12.2%.
  • Adjusted EBITDA margin was 62.1% and retention was 95.3%.
  • Total recurring subscription run rate was $2,531.5 million, up 7.8%.
  • Free cash flow guidance rose to $1.485–$1.545 billion.

MSCI Inc. (NYSE:MSCI), a constituent of the S&P 500 and itself a major index provider, reported second-quarter 2026 results on July 21 with revenue growth above 12%, a 62% adjusted EBITDA margin and a higher retention rate, while raising its expense outlook to reflect acquisitions and incentive compensation. CEO Henry Fernandez said the company is building momentum heading into the back half of 2026.

Latest Company Context

Operating revenue for Q2 2026 was $867.0 million, up 12.2%, with organic growth also 12.2%. Diluted EPS was $4.69, up 19.6%, and adjusted EPS was $4.94, up 18.5%. Adjusted EBITDA was $538.5 million, up 13.5%, with a 62.1% margin. Total recurring subscription run rate was $2,531.5 million, up 7.8% (8.1% organic), and the retention rate was 95.3%, up from 94.4% a year earlier.

Management raised 2026 expense guidance: operating expense of $1.535 billion to $1.575 billion (previously $1.490 billion to $1.530 billion) and adjusted EBITDA expense of $1.340 billion to $1.370 billion (previously $1.305 billion to $1.335 billion). Free cash flow guidance rose to $1.485 billion to $1.545 billion from $1.470 billion to $1.530 billion, and capex of $160 million to $170 million is unchanged. MSCI attributed higher expenses to recent acquisitions, including First Street, and to incentive compensation tied to stronger asset-linked revenue. It repurchased $147.2 million of stock from the start of Q2 to July 20 and declared a $2.05 per share dividend payable August 28, 2026.

Key Business and Index Drivers

Recurring subscriptions, which grew 7.8%, are the stable base of the business, while asset-based fees depend on assets under management in index-linked products and can rise or fall with equity markets. The gap between operating revenue growth of 12.2% and run-rate growth of 7.8% points to the contribution of asset-based fees and other non-recurring items.

The retention rate improvement suggests customers are renewing at a higher rate, which may support recurring revenue. Higher expense guidance could narrow margin expansion if revenue growth does not keep pace. The acquisition of First Street adds climate and risk analytics. As an S&P 500 member, MSCI is widely held by index funds; membership does not determine returns. Analyst estimates are expectations and may change.

What Investors Should Watch

The third-quarter report may show whether run-rate growth accelerates and whether retention stays above 95%. Investors may also watch asset-based fee trends, expense growth relative to revenue, cash flow and the pace of buybacks.

Equity market levels, flows into index-linked ETFs, competitive pricing in index licensing and developments in private-asset and climate analytics could also be relevant. Management commentary on the back half of 2026 may provide further context.

Index-Licensing Growth With Higher Costs From Acquisitions and Incentives

MSCI paired 12.2% operating revenue growth and higher retention with a raised expense outlook driven by acquisitions and incentive compensation. Run-rate growth is where the subscription story shows up.