MSCI surges on earnings beat, 14% dividend hike, record ETF inflows
Asset-based fees jump 20.7% as index provider posts 11th straight year of double-digit EPS growth
MSCI shares rallied in early trading Wednesday after the index provider reported stronger-than-expected fourth-quarter results, boosted by record inflows into exchange-traded funds tracking its market benchmarks and a significant dividend increase.
The New York-based company reported adjusted earnings per share of $4.66, beating analyst expectations, while operating revenues reached $822.5 million, exceeding the consensus estimate of $797.8 million. The results mark MSCI's 11th consecutive year of double-digit adjusted EPS growth.
The standout performance came from asset-based fees, which surged 20.7% year-over-year, driven by record ETF inflows into products linked to MSCI indexes. In the third quarter alone, ETFs tracking MSCI developed markets ex-U.S. indexes and emerging markets indexes captured $46 billion in inflows, with momentum continuing into the fourth quarter.
"We delivered strong financial results in the fourth quarter, capping another year of double-digit adjusted EPS growth," MSCI said in its earnings announcement. "Our performance was driven by robust growth across our business lines, particularly in our index and analytics segments."
The company's board of directors declared a quarterly dividend of $2.05 per share for the first quarter of 2026, representing a 13.9% increase from the previous payout. The dividend will be payable to shareholders of record as of February 28, 2026.
Looking ahead, MSCI provided strong free cash flow guidance for 2026 of $1.47 billion to $1.53 billion, reflecting confidence in its recurring revenue model and expanding client base. The company is penetrating newer segments including hedge funds, wealth managers, banks, broker-dealers, and asset owners.
For the full year 2025, operating revenues reached $3.13 billion, with organic operating revenue growth of 10.2%. MSCI's adjusted EBITDA margin stood at 62.2% in the fourth quarter, demonstrating the company's pricing power and operational efficiency.
Analysts have been largely positive on MSCI's prospects, with the stock maintaining a consensus rating as analysts cite the company's competitive moat in the index provider market and its exposure to the growing passive investing trend. The company's flagship indexes, including the MSCI World and MSCI EAFE, remain benchmarks for trillions of dollars in global investment assets.
The strong earnings report comes amid continued growth in the ETF industry, which has seen record inflows as investors increasingly favor passive investment strategies. MSCI's indexes underpin many of the world's largest ETFs, giving the company a powerful position to benefit from this structural shift in asset management.
MSCI's performance also reflects its expanding product offerings beyond traditional market cap-weighted indexes, including factor-based, ESG, and custom indexes that cater to sophisticated institutional investors seeking more targeted exposure.