MSCI (NYSE: MSCI) reported Q3 EPS of $1.35, $0.05 better than the analyst estimate of $1.30. Revenue for the quarter came in at $357.93 million versus the consensus estimate of $359.91 million.

• Operating revenues up 11.1%; recurring subscription revenues up 9.9%; asset-based fees up 12.6%.
• Diluted EPS of $1.36, up 46.2%; Adjusted EPS of $1.35, up 35.0%.
• Quarter‐end AUM of $765.5 billion in ETFs linked to MSCI indexes; up 13.5% compared to prior year.
• Total Run Rate up 10.0% to $1,435.3 million, driven by asset-based fees Run Rate, up 12.5%, and subscription Run Rate, up 9.3%. Organic subscription Run Rate growth of 10.5%.
• Segment organic subscription Run Rate growth: Index up 11.4%, Analytics up 7.4%, All Other up 20.7%.
• Operating income growth of 18.6%, with operating margin of 49.3%.
• Adjusted EBITDA growth of 15.9%, with Adjusted EBITDA margin of 54.6%.
• Continued strong retention with total Retention Rate at 95.0%.
• During third quarter 2018 and through October 31, 2018, a total of 1.0 million shares were repurchased at an average price of $159.40 per share for a total value of $165.2 million.

“We are excited to deliver another quarter of exceptional results for our shareholders driven by strength in our core subscription offerings. Our recurring subscription revenue grew 10% in a highly dynamic and shifting investment landscape, reflecting our increasing ability to provide tools that help clients adapt for the future,” commented Henry A. Fernandez, Chairman and CEO of MSCI.

“The strength we have seen in our net new recurring subscription sales and subscription Run Rate growth bolsters our confidence in the bets we have made to produce innovative research-driven content, develop flexible, cutting edge technology and enhance our client go-to-market approach. We continue to see a wide range of attractive investment opportunities to help fuel top-line growth,” added Mr. Fernandez.

Full-Year 2018 Guidance

MSCI’s guidance for full-year 2018 remains as follows:

• Total operating expenses are now expected to be in the range of $743 million to $750 million.
• Adjusted EBITDA expenses are now expected to be in the range of $658 million to $665 million.
• Interest expense, including the amortization of financing fees, is expected to be approximately $133 million, assuming no additional financings.
• Capex is expected to be in the range of $40 million to $50 million.
• Net cash provided by operating activities and free cash flow is now expected to be in the ranges of $520 million to $550 million and $470 million to $510 million, respectively.
• The effective tax rate is now expected to be in the range of 19% to 21%.

For earnings history and earnings-related data on MSCI (MSCI) click here.