MSCI 10-Q: Smart Summary

• Presentation change: In the first quarter of 2026, the Company changed the presentation of its financial statements and accompanying footnote disclosure from thousands to millions, with rounding adjustments made to prior period disclosed amounts.
• Customer concentration: BlackRock, Inc. (BlackRock) accounted for 11.7% and 10.3% of consolidated operating revenues for the three months ended March 31, 2026 and 2025, respectively, and for 19.7% and 17.8% of the Index segment's operating revenues for the same periods; no single customer represented 10.0% or more of operating revenues within Analytics, Sustainability and Climate or All Other – Private Assets in either period.
• Allowance for credit losses: The allowance rose from $5.3M as of December 31, 2024 to $6.4M as of December 31, 2025 (additions of $4M, net write-offs of $2.9M), then to $7.1M as of March 31, 2026 (additions of $800,000, net write-offs of $100,000).

• ASU 2024-03 (Expense Disaggregation): Issued November 2024, requires additional disclosure of the nature of expenses in the income statement; effective for the Company's Annual Report on Form 10-K for the year ended December 31, 2027 and interim periods beginning in 2028 on a prospective basis; the Company is currently evaluating the impact.
• ASU 2025-05 (Credit Losses): Issued July 2025, permits a practical expedient allowing entities to assume current conditions as of the balance sheet date do not change for the remaining life of accounts receivable and contract assets when estimating expected credit losses; the Company adopted this standard effective January 1, 2026, with no material effect on its consolidated financial statements.
• ASU 2025-06 (Internal-Use Software): Issued September 2025, removes prescriptive software development stage references and requires capitalization to begin when management has authorized and committed to funding the project and completion is probable; effective for the Company's Annual Report on Form 10-K for the year ended December 31, 2028 and interim periods beginning in 2028, with early adoption permitted; the Company is currently evaluating the impact.
• ASU 2025-09 and ASU 2025-11: ASU 2025-09 (Derivatives and Hedging, issued November 2025) clarifies hedge accounting guidance related to global reference rate reform, effective for the year ended December 31, 2027, and the Company does not expect a material effect; ASU 2025-11 (Interim Reporting, issued November 2025) clarifies interim disclosure requirements, effective for interim periods for the year ended December 31, 2028, and the Company is currently evaluating the impact.

• Deferred revenue recognized: For the three months ended March 31, 2026 and 2025, the Company recognized $491.9M and $447.3M, respectively, of revenue that was included in the deferred revenue balance as of the beginning of each period; deferred revenue primarily represents subscription fees billed in advance of the related performance period.
• Deferred revenue balance: Current deferred revenue declined by $47.8M (from $1.2B at December 31, 2025 to $1.2B at March 31, 2026), with the decrease primarily driven by revenue recognized on existing contracts, partially offset by new billings; long-term deferred revenue included in 'Other non-current liabilities' was $33M as of March 31, 2026 and $34M as of December 31, 2025.
• Accounts receivable: Net of allowances, accounts receivable declined $103.5M from $986.7M at December 31, 2025 to $883.2M at March 31, 2026 (vs. a decline of $71.5M in the comparable prior-year period).
• Remaining performance obligations: For contracts with duration greater than one year, total remaining performance obligations as of March 31, 2026 were $2.5B, with $1.2B expected in the first 12-month period, $751M in the second, $348.5M in the third, and $213M thereafter.

EPS methodology: Basic EPS divides net income by weighted average common shares outstanding; diluted EPS reflects assumed conversion of all dilutive securities, including stock options, restricted stock units, performance stock units, and performance stock options.

• MSCI acquired Vantager (completed February 27, 2026): Vantager is an AI-enabled platform supporting pre-investment due diligence, data extraction, and reporting for private markets investors; the acquisition is part of the Private Capital Solutions operating segment, with goodwill reflecting expected synergies from the acquired technology platform and not deductible for income tax purposes.
• MSCI acquired Compass Financial Technologies (completed March 2, 2026): Compass is an index services provider supporting calculation and development of multi-asset and alternative asset class indexes; the acquisition is part of the Index operating segment, with goodwill reflecting expected synergies and not deductible for income tax purposes.
• Combined acquisition terms: Aggregate purchase price was $71.4M, including contingent consideration for both deals; preliminary acquired balances consisted of $36.5M in intangible assets (weighted average amortization period of 7.1 years) and $42.7M in goodwill; as of March 31, 2026, total contingent consideration fair value was $34.3M, with $17.9M in 'Other accrued liabilities' and $16.4M in 'Other non-current liabilities,' classified as Level 3 within the fair value hierarchy.

• Goodwill rollforward: Total goodwill rose from $2.9B at December 31, 2025 to $3B at March 31, 2026, driven by $42.7M of additions from the acquisitions of Vantager and Compass (split $31.1M to Index and $11.6M to All Other - Private Assets), partially offset by a $3.8M unfavorable foreign exchange translation adjustment.
• Amortization expense: Total amortization of intangible assets was $41.9M for the three months ended March 31, 2026, versus $43.9M in the prior-year period; acquired intangible asset amortization declined to $19.6M from $25.8M, while internally developed capitalized software amortization increased to $22.3M from $18.1M.
• Net intangible assets: Gross intangible assets grew from $2B at December 31, 2025 to $2.1B at March 31, 2026, with accumulated amortization of ($1.3B), leaving net intangible assets of $851M; the largest net components were customer relationships ($311.7M), proprietary data ($304.2M), and internally developed capitalized software ($154.8M).
• Future amortization: Estimated remaining amortization totals $851M, with $122.6M in the remainder of 2026, $135.3M in 2027, $104.3M in 2028, $78.4M in 2029, $72.1M in 2030, and $338.3M thereafter.

• Debt structure: As of March 31, 2026, total principal debt outstanding was $6.5B ($6B in Senior Notes plus $500M in revolving loans), with total carrying value of $6.4B versus $6.2B at December 31, 2025; aggregate fair value was $6.1B at March 31, 2026 versus $6.1B at December 31, 2025, classified as Level 2 using the market approach with broker quotes and third-party pricing services.
• Maturity profile: No principal payments are due in 2026–2028; $1B matures in 2029, $1.4B in 2030, and $4B thereafter.
• Revolving Credit Facility: On August 20, 2025, the Company entered into a Third Amended and Restated Credit Agreement increasing the Revolving Credit Facility to $1.6B (from $1.3B) and extending availability to August 20, 2030; as of March 31, 2026, $500M was drawn at an interest rate of 5.2%, with the applicable margin at 0.50% for Base Rate loans and 1.50% for SOFR loans.
• Deferred financing fees: At March 31, 2026, $51.4M of deferred financing fees and premium remain unamortized — $1.2M in 'Prepaid and other assets,' $4.1M in 'Other non-current assets,' and $46.1M in 'Long-term debt'; separately, $5.3M in unamortized deferred financing fees are associated with the revolving loan commitments specifically.

• Lease costs: Total operating lease costs were $8.7M for the three months ended March 31, 2026, versus $7.1M in the prior-year period, composed of $8.2M operating lease expenses, $1M variable lease costs, $200,000 short-term lease costs, and ($700,000) sublease income.
• Lease liability maturity: As of March 31, 2026, total undiscounted lease payments were $196.4M, with $24.5M remaining in 2026, $29.9M in 2027, $34.5M in 2028, $24.8M in 2029, $21.3M in 2030, and $61.4M thereafter; after deducting $27.4M of interest, the present value of lease liabilities was $169M, split between $25.1M in other accrued liabilities and $143.9M in long-term operating lease liabilities.
• Lease term and discount rate: The weighted-average remaining lease term increased to 6.4 years as of March 31, 2026 from 5.5 years as of December 31, 2025, and the weighted-average discount rate rose to 4.4% from 4.2%.
• Cash flows and new leases: Operating cash flows used for operating leases were $8.9M in Q1 2026 versus $8.2M in Q1 2025; right-of-use assets obtained in exchange for new operating lease liabilities were $42.2M in Q1 2026, a significant increase from $4.2M in Q1 2025.

• 2025 Repurchase Program: On October 25, 2025, the Board authorized repurchases of up to $3B of MSCI common stock, superseding the prior program; as of March 31, 2026, $1.7B of authorization remained.
• Open-market repurchases: In the three months ended March 31, 2026, MSCI repurchased 0.7 million shares at an average price of $558 per share for $399.3M, compared to 0.3 million shares at $591 per share for $155.4M in the three months ended March 31, 2025; values exclude the 1% excise tax under the Inflation Reduction Act, which is recognized as part of the cost of shares acquired.
• Dividends declared: Dividends declared per common share were $2.05 ($148.9M total) for the three months ended March 31, 2026, up from $1.80 ($141.4M total) for the three months ended March 31, 2025.
• Share count: Common shares outstanding decreased from 73.6 million at December 31, 2025 to 72.9 million at March 31, 2026, driven by 0.7 million shares repurchased under the stock repurchase program, with shares issued remaining flat at 134.4 million and treasury shares increasing from 60.8 million to 61.5 million.

• Effective tax rate: The effective tax rate swung from 12.8% for the three months ended March 31, 2025 to (4.3)% for the three months ended March 31, 2026, driven primarily by completion of a multi-phased internal legal entity restructuring that commenced in Q4 2025 and was completed during the three months ended March 31, 2026, resulting in an $88M discrete tax benefit recognized in the current quarter.
• Prior-period rate drivers: The 12.8% effective rate in the prior-year period was primarily attributable to excess tax benefits recognized on the vesting of stock-based compensation and the benefit of prior year refund claims.

• Segment structure: MSCI has five operating segments — Index, Analytics, Sustainability and Climate, Real Assets, and Private Capital Solutions — presented as three reportable segments (Index, Analytics, and Sustainability and Climate). Real Assets and Private Capital Solutions do not individually meet segment reporting thresholds and are combined into 'All Other – Private Assets.'
• CODM metric: The Chief Executive Officer, serving as CODM, measures and evaluates segments based on operating revenues and Adjusted EBITDA; total assets are not provided to the CODM on a segment basis.
• Exclusions from Adjusted EBITDA: Provision for income taxes; other expense (income), net; depreciation and amortization of property, equipment and leasehold improvements; amortization of intangible assets; and at times certain acquisition-related integration and transaction costs are excluded from segment Adjusted EBITDA but included in consolidated net income.
• Intersegment revenues: Operating segments do not record intersegment revenues; therefore, none are reported. Expense allocations across segments use methodologies such as time estimates, revenue, headcount, sales targets, data center consumption and other relevant usage measures.

• Dividend declared: On April 20, 2026, the Board of Directors declared a quarterly cash dividend of $2.05 per share for the three months ending June 30, 2026, payable on May 29, 2026 to shareholders of record as of the close of trading on May 15, 2026.

• Revenue groupings: Operating revenues are classified by type (recurring subscriptions, asset-based fees, non-recurring) and by major product (Index, Analytics, Sustainability and Climate, All Other – Private Assets).
• Index segment standout: Index non-recurring revenue grew 60.0% and asset-based fees grew 26.6%, driving Index total up 17.7% to $496.3M from $421.7M — the largest absolute gain across all segments.
• Analytics non-recurring surge: Analytics non-recurring revenue grew 183.3% to $6.8M, though from a small base of $2.4M; Analytics total rose 10.3% to $190M.
• Sustainability and Climate mixed: Recurring subscriptions grew 9.9% to $90.9M, but non-recurring declined 47.4% to $1M, leaving segment total up 8.6% to $91.9M.

• Revenue growth: Total operating revenues increased 14.1% to $850.8M for the three months ended March 31, 2026, with the $105M increase driven by $47.6M higher recurring subscription revenues, $47.1M higher asset-based fees, and $10.3M higher non-recurring revenues.
• Organic growth: Adjusting for acquisitions and foreign currency exchange rate fluctuations, total operating revenues would have increased 13.3%.

• Total operating expenses: Rose 6.8% to $393.9M in the three months ended March 31, 2026 from $368.8M in the prior-year period; excluding the impact of acquisitions and foreign currency exchange rate fluctuations, the increase would have been 3.8%.
• G&A and D&A: General and administrative was the fastest-growing compensation-inclusive category, up 20.8% to $69M, while depreciation and amortization of property, equipment and leasehold improvements rose 25.5% to $5.9M.
• Amortization of intangibles: The only line item to decline, falling 4.6% to $41.9M from $43.9M.
• Cost structure: Costs are assigned to activity categories based on the nature of the expense or, when not directly attributable, an estimated allocation based on the type of effort involved; cost of revenues, selling and marketing, R&D, and G&A each include both compensation and non-compensation expenses.

• Cost of revenues: Cost of revenues increased 3.7%, primarily driven by increases in non-compensation costs as a result of higher professional fees and market data costs.

Expense growth: Selling and marketing expenses increased 8.9%, primarily driven by increases in compensation and benefits costs as a result of increased headcount costs.

• Expense growth: R&D expenses increased 4.2%, driven primarily by higher compensation and benefits costs from increased headcount, partially offset by increased capitalization of costs related to internally developed software projects.
• Non-compensation costs: The increase was also driven by higher non-compensation costs, primarily as a result of higher professional fees.

• G&A expense driver: G&A expenses increased 20.8%, primarily driven by increases in compensation and benefits costs as a result of increased headcount costs.

• Headcount: 6,319 employees as of March 31, 2026, up from 6,184 as of March 31, 2025, a 2.2% increase, with 71% located in emerging market centers (vs. 70% a year earlier).
• Cost growth: Compensation and benefits costs increased 5.1%, driven by higher headcount costs and partially offset by lower severance costs; on a constant-currency, ex-acquisition basis, the increase was 1.8%.

• Non-compensation expenses: Increased 17.0% in the period, primarily driven by higher professional fees, information technology, and market data costs; excluding the impact of acquisitions and foreign currency exchange rate fluctuations, the increase would have been 14.0%.

Amortization decline: Amortization of intangible assets expense decreased 4.6%, driven by certain intangible assets becoming fully amortized during the prior year, partially offset by higher amortization of internal use software.

Depreciation and amortization: Depreciation and amortization of property, equipment and leasehold improvements increased 25.5%, primarily driven by higher depreciation on computer and related equipment.

• Total other expense (income), net: Increased 47.5% to $67.7M in the three months ended March 31, 2026 from $45.9M in the prior-year period, primarily driven by higher interest expense as a result of higher debt levels.
• Interest expense: Rose 48.6% to $69.1M from $46.5M, the primary driver of the year-over-year increase.
• Interest income: Declined 28.2% to $2.8M from $3.9M; Other expense (income) improved 57.6% to $1.4M from $3.3M.

• Effective tax rate: The rate fell to (4.3)% for the three months ended March 31, 2026 from 12.8% for the three months ended March 31, 2025, driven primarily by the completion of a multi-phased internal legal entity restructuring that commenced in fourth quarter 2025.
• Discrete tax benefit: Upon completion of the restructuring, the Company recognized an $88M discrete tax benefit during the three months ended March 31, 2026.

• Net income: Net income for the three months ended March 31, 2026 was $406M, compared to $288.6M for the three months ended March 31, 2025, representing an increase of 40.7%, driven by the factors described above.

• Share count decline: Common shares outstanding fell to 72.9 million as of March 31, 2026 from 73.6 million as of December 31, 2025, a decrease of 1.0%, driven by share repurchases under the Company's stock repurchase program, partially offset by vesting of stock-based awards.

• Definition: Adjusted EBITDA is defined as net income before (1) provision for income taxes, (2) other expense (income), net, (3) depreciation and amortization of property, equipment and leasehold improvements, (4) amortization of intangible assets and, at times, (5) certain acquisition-related integration and transaction costs; Adjusted EBITDA margin is Adjusted EBITDA divided by operating revenues.
• Comparability caveat: Management notes that all companies do not calculate adjusted EBITDA in the same way, and the Company's computation may not be comparable to similarly titled measures at other companies due to differences in capital structure, tax jurisdictions, and capital investment decisions.
• Period results: Adjusted EBITDA grew to $504.7M in the three months ended March 31, 2026 from $425.6M in the prior-year period, on operating revenues of $850.8M vs. $745.8M, with Adjusted EBITDA margin expanding to 59.3% from 57.1% and GAAP operating margin at 53.7% vs. 50.6%.

• Consolidated Adjusted EBITDA: Grew from $425.6M in Q1 2025 to $504.7M in Q1 2026, reconciled from net income of $406M (Q1 2026) and $288.6M (Q1 2025) by adding back income taxes, other expense/income net, and D&A/amortization of intangibles.
• Segment Adjusted EBITDA mix: Index was the largest contributor at $375.2M (Q1 2026) vs. $311.6M (Q1 2025); Analytics contributed $82.8M vs. $76M; Sustainability and Climate contributed $33M vs. $23.8M; All Other - Private Assets contributed $13.7M vs. $14.2M.
• Consolidated Adjusted EBITDA expenses: Rose from $320.2M to $346.1M, reconciled from total operating expenses of $393.9M (Q1 2026) and $368.8M (Q1 2025) by excluding amortization of intangibles ($41.9M and $43.9M) and D&A of property/equipment/leasehold improvements ($5.9M and $4.7M).
• Segment expense breakdown: Index Adjusted EBITDA expenses were $121.1M vs. $110.1M; Analytics $107.2M vs. $96.2M; Sustainability and Climate $58.9M vs. $60.8M; All Other - Private Assets $58.9M vs. $53.1M.

• Revenue growth: Index operating revenues increased 17.7% to $496.3M, driven by asset-based fees (+26.6%), recurring subscriptions (+9.0%), and non-recurring revenue (+60.0%); adjusting for the Compass acquisition and foreign currency exchange rate fluctuations, growth would have been 17.6%.
• Asset-based fees drivers: ETF revenues linked to MSCI equity indexes grew 33.1% and non-ETF indexed fund revenues grew 13.1%, both primarily driven by increases in average AUM, partially offset by decreases in average basis point fees.
• Recurring subscriptions: Growth of 9.0% was primarily driven by market cap-weighted Index products.
• Profitability: Adjusted EBITDA grew 20.4% to $375.2M, with Adjusted EBITDA margin expanding to 75.6% from 73.9%.

• AUM in ETFs (quarterly average): The average value of AUM in ETFs linked to MSCI equity indexes for the three months ended March 31, 2026, was $2471B, up $677B, or 37.7%, compared to the three months ended March 31, 2025.
• AUM sequential change: As of March 31, 2026, AUM in ETFs linked to MSCI equity indexes stood at $2403B, reflecting market depreciation of $41B and cash inflows of $103B in Q1 2026, for a total sequential change of $62B.
• Index segment Adjusted EBITDA expenses: Increased 10.0%, primarily driven by higher professional fees within non-compensation expenses and higher headcount costs within compensation and benefits; excluding the impact of the Compass acquisition and foreign currency exchange rate fluctuations, the increase would have been 6.5%.

• Revenue drivers: Analytics operating revenues grew 10.3% to $190M (from $172.2M), primarily driven by growth in recurring subscriptions related to both Multi-Asset Class and Equity Analytics products; on a constant-currency basis, growth would have been 10.5%.
• Non-recurring surge: Non-recurring revenues jumped 183.3% to $6.8M from $2.4M, though recurring subscriptions at $183.2M remained the dominant revenue component, up 7.9%.
• Expense pressure: Adjusted EBITDA expenses rose 11.4% to $107.2M, driven by higher compensation and benefits from increased headcount costs and higher information technology costs; on a constant-currency basis, expense growth would have been 9.1%.
• Margin compression: Adjusted EBITDA grew 8.9% to $82.8M, but margin contracted slightly to 43.6% from 44.2% as expense growth outpaced revenue growth.

• Revenue growth: Sustainability and Climate operating revenues grew 8.6% to $91.9M in the three months ended March 31, 2026 (from $84.6M), primarily driven by growth from recurring subscriptions related to Ratings and Climate products; on a constant-currency basis, revenue would have increased 3.7%.
• Recurring vs. non-recurring mix: Recurring subscriptions rose 9.9% to $90.9M, while non-recurring revenues declined 47.4% to $1M.
• Expense decline: Adjusted EBITDA expenses decreased 3.1% to $58.9M (from $60.8M), primarily driven by lower severance costs; on a constant-currency basis, expenses would have decreased 5.9%.
• Margin expansion: Adjusted EBITDA grew 38.7% to $33M (from $23.8M), with Adjusted EBITDA margin expanding to 35.9% from 28.2%.

• Revenue drivers: All Other – Private Assets operating revenues grew 7.9% to $72.6M in Q1 2026 from $67.3M in Q1 2025, primarily driven by growth from recurring subscriptions in Private Capital Solutions related to Private Capital Intel and Total Plan Manager products; on a constant-currency, ex-Vantager acquisition basis, revenue growth would have been 5.3%.
• Margin compression: Adjusted EBITDA declined 3.5% to $13.7M from $14.2M, with Adjusted EBITDA margin contracting to 18.9% from 21.1%, as Adjusted EBITDA expenses rose 10.9% to $58.9M from $53.1M primarily due to higher compensation and benefits costs from increased headcount; on a constant-currency, ex-Vantager basis, expense growth would have been 6.0%.

• Definition: Run Rate estimates the annualized value of the recurring portion of executed Client Contracts expected to generate revenues over the next 12 months, assuming all such contracts are renewed and using fixed foreign exchange rates; it includes new contracts upon execution even if revenue recognition occurs later, and excludes one-time or non-recurring fees.
• Asset-based fee methodology: For ETFs, the calculation uses AUM as of the last trading day of the period; for non-ETF products, the most recent client-reported AUM; and for listed futures and options contracts, the most recent quarterly volumes and/or reported exchange fees.
• Subscription Cancellations: Run Rate removes the annualized fee value when MSCI has received a termination, fee-reduction, or non-renewal notice and management has determined it reflects the client's final decision, even if not yet effective; netting of product switches to replacements applies broadly in Analytics and Sustainability and Climate, but only in limited circumstances in Index, Real Assets, and Private Capital Solutions.
• Total Run Rate growth: Total Run Rate grew 12.7% (12.1% organic) to $3.4B as of March 31, 2026 from $3B as of March 31, 2025, driven by an 8.9% increase in recurring subscriptions and a 25.1% increase in asset-based fees; Index asset-based fee growth of 25.1% was driven by higher AUM in ETFs linked to MSCI equity indexes and non-ETF indexed funds, while Analytics grew 7.9% led by hedge fund managers, banking and brokerages, and asset managers across all regions.

• Definitions: Sales represents the annualized value of client commitments expected to generate additional operating revenues; new recurring subscription sales capture new contracts, expansions, and price increases contributing to Run Rate; net new recurring subscription sales deduct Subscription Cancellations; non-recurring sales cover agreements generating non-recurring fees not included in Run Rate; total gross sales is the sum of new recurring subscription and non-recurring sales; total net sales is total gross sales minus cancellations.
• Consolidated performance: Total net sales grew to $60.8M in the three months ended March 31, 2026 from $43.7M in the three months ended March 31, 2025, driven by new recurring subscription sales of $67.6M (vs. $52.6M) and non-recurring sales of $21.2M (vs. $17.6M), partially offset by subscription cancellations of $28M (vs. $26.5M).
• Index segment: The strongest contributor, with net new recurring subscription sales of $24.8M (vs. $14.2M) and total Index net sales of $41.5M (vs. $26.6M), reflecting new recurring subscription sales of $32.8M and non-recurring sales of $16.7M.
• Sustainability and Climate: The only segment showing year-over-year deterioration in net sales, with total Sustainability and Climate net sales of $1.9M (vs. $4.4M), as subscription cancellations rose to $6.6M from $4.7M while new recurring subscription sales were roughly flat at $7.5M vs. $7.2M.

• Retention Rate definition: Retention Rate measures the stability of MSCI's recurring subscription revenue base; for interim periods it is presented on an annualized basis, calculated by dividing annualized subscription cancellations by the subscription Run Rate at the beginning of the fiscal year and subtracting from 100%. It is not calculated for the portion of Run Rate attributable to Asset-based Fees.
• Segment movements: Index improved to 96.9% from 96.5%; Analytics declined slightly to 95.3% from 95.5%; Sustainability and Climate declined to 93.0% from 94.5%; All Other - Private Assets improved to 93.8% from 91.5%.
• Total retention: Total Retention Rate was 95.4% for the three months ended March 31, 2026, versus 95.3% for the three months ended March 31, 2025.

• Senior Notes outstanding: As of March 31, 2026, the company had an aggregate of $6B in Senior Notes outstanding.
• Revolving Credit Facility borrowings: As of March 31, 2026, $500M was outstanding under the Revolving Credit Facility, which was established under the Third Amended and Restated Credit Agreement entered into on August 20, 2025; that agreement increased aggregate revolving commitments to $1.6B (from $1.3B under the prior agreement) and extends the availability period until August 20, 2030.
• Obligation structure: Obligations under the Credit Agreement are unsecured senior obligations of the Company.

• Covenant structure: The Indentures governing the Senior Notes and the Credit Agreement restrict the company and its subsidiaries from incurring liens, entering into sale/leaseback transactions, consolidating, merging or selling all or substantially all assets, and restrict subsidiaries from incurring certain indebtedness; both instruments include customary events of default (non-payment, breach of representations/warranties/covenants, cross-default, cross-acceleration, bankruptcy/insolvency), with the Credit Agreement adding invalidity or impairment of loan documentation, change of control, and customary ERISA defaults.
• Financial ratio covenants: The Credit Agreement requires maintenance of (1) a maximum Consolidated Leverage Ratio not to exceed 4.25:1.00 (or 4.50:1.00 for four fiscal quarters following a material acquisition), measured quarterly on a rolling four-quarter basis, and (2) during any Non-Investment Grade Covenant Period, a minimum Consolidated Interest Coverage Ratio of at least 3.00:1.00 on the same basis.
• Current compliance: As of March 31, 2026, the Consolidated Leverage Ratio was 2.94:1.00, well inside the 4.25:1.00 limit; management states none of the restrictions are expected to impact the company's ability to effectively operate the business.

Share repurchase activity: For the quarter ended March 31, 2026, the company repurchased shares at a cost of $558M (0.7 million shares) at an average price of $399.3 per share, compared to $591M (0.3 million shares) at $155.4 per share in the quarter ended March 31, 2025; excise tax under the Inflation Reduction Act is excluded from these figures and recognized separately in the Condensed Consolidated Statement of Shareholders' Equity (Deficit).

• Remaining authorization: As of March 31, 2026, $1.7B of available authorization remained under the 2025 Repurchase Program, which the Board of Directors may modify, suspend, or terminate at any time without prior notice.

• Dividend declared: The Board of Directors declared a quarterly cash dividend of $2.05 per share for the three months ending June 30, 2026, payable on May 29, 2026 to shareholders of record as of the close of trading on May 15, 2026.
• Cash position: As of March 31, 2026, cash and cash equivalents were $385.3M, down from $515.3M as of December 31, 2025; the Company targets minimum global cash balances of approximately $225M to $275M for general operating purposes.
• Foreign cash: $287.8M of cash and cash equivalents were held by foreign subsidiaries as of March 31, 2026 (versus $335.7M as of December 31, 2025); repatriation may be subject to withholding taxes and other distribution restrictions.
• Liquidity adequacy: Management believes global cash flows from operations, existing cash and cash equivalents, the revolving credit facility, and access to bank debt, private debt, and capital markets will be sufficient to fund global operating activities and cash commitments — including material capital expenditures and share repurchases — for at least the next 12 months and for the foreseeable future thereafter.

• Operating cash flow: Net cash provided by operating activities was $306.8M for the three months ended March 31, 2026, versus $301.7M in the prior-year period, a modest increase of $5.1M.
• Investing outflows: Net cash used in investing activities more than doubled to ($70.5M) from ($32.9M) year-over-year.
• Financing outflows: Net cash used in financing activities widened to ($364.5M) from ($321.7M), the largest single driver of the net decrease in cash.
• Net change in cash: Combined with a ($1.8M) adverse exchange rate effect (versus a $4.2M tailwind in the prior-year period), cash, cash equivalents, and restricted cash declined by ($130M) in Q1 2026, compared to a ($48.7M) decrease in Q1 2025.

• Year-over-year drivers: The change in operating cash flows was primarily driven by higher cash collections from customers, partially offset by higher cash expenses, interest payments, and income taxes paid.
• Primary cash uses: Cash from operating activities is used for payment of cash compensation expenses, interest expenses, income taxes, technology costs, professional fees, market data costs, and office rent.
• Seasonal compensation pattern: Cash paid for compensation and benefits is historically at its highest level in the first quarter, when discretionary employee compensation related to the previous fiscal year is paid.