MSCI Inc. (MSCI) Earnings Call Transcript & Summary

All right. Good afternoon, everybody. Thank you for being here. For those of you who don't know me, my name is Manav Patnaik. I cover business and information services for Barclays. We're very pleased to kick off our participation in the financial conference this year with MSCI, and we have Andy Wiechmann, the CFO. So Andy, thank you for being here.

Thank you for having me. It's great to be here.

Appreciate it, as always. So Andy, maybe let's just start off with your 8-K update this morning on the interest expense guidance and beyond, obviously, just the technicalities of these numbers. Just help us with the framework on the debt raise that you did, why now and what the use of proceeds there are?

Sure, sure. So I know many slowed down a bit in August. I know many of you don't, and we definitely don't at MSCI. But we did a $1.25 billion new financing transaction in August. And so we wanted to, with the 8-K, just make sure everybody was aware of that and note changes to our interest expense guidance. So we clarified that we expect interest expense in the third quarter to be $54 million to $55 million. And then for the full year, updating to be $205 million to $209 million, again, interest expense for the full year. That's the technical reason for the 8-K. But as you are alluding to, we are continually looking to optimize our capital structure as an organization. And we saw an attractive window to raise debt. And so we took advantage as we are continually monitoring the market to look for those attractive financing windows. And of course, it usually coincides with when we have attractive opportunities to deploy that capital. And so I think many of you are aware of our approach to share repurchases where we look at available cash, we look at market volatility and volatility in our stock, and we look at value. And so we've seen attractive opportunities to use the capital for a whole host of purposes, but in large part for share repurchases. And so you might have seen, if you were following some of the releases around the financing transaction, we did use proceeds to pay down the revolver. And needless to say, you've all seen the activity in the stock price, and we've seen attractive opportunities to buy the stock. And we are long-term buyers, long-term believers in the stock, but we believe there are short-term opportunities to get it at attractive prices. And so you've seen this window for raising very attractive long-term debt as a mechanism for us to optimize our capital structure further and create long-term shareholder value for all of you.

Got it. That's pretty clear. Just to digress a little bit, this window of raising debt that you talked about, what is it about this environment that you decided now? Because the big question in mind is there could be rate cuts coming, maybe you get a better rate, maybe you don't. How do you, as a CFO, think about why you had to do that now?

Yes. We didn't have to. We're in a great position that we generate a lot of excess cash as an organization. But we also have the ability to put leverage on to our balance sheet. Our leverage was ticking down before we did the financing was ticking down well below our targeted leverage range. And so we have a targeted leverage range of 3 to 3.5x gross debt to trailing EBITDA. That is the leverage level that optimizes the overall cost of capital for the firm, allows us to be opportunistic and continue to create value, as I was alluding to in the prior question, but also leaves us in a position to always be on our forefoot and be aggressive as an organization. So never put us in a position where we can't be aggressive on investing in the company or pursuing M&A. And so that's how we arrive at that 3 to 3.5x. We have been trailing below that. So before the financing, we were around 2.5x gross debt to trailing EBITDA. So below that range. The reason why we are trailing below it is a combination of us not seeing what we think are really attractive long-term financing rates and combined with not having a significant need to raise additional debt through the cash generation of the business, some use of the revolver, we've been able to deploy capital towards those initiatives that we found attractive. And so we are now at a position where, one, we were running below that targeted range. So we had some additional capacity. Two, we saw a very attractive window to raise debt here. We saw not only a very attractive rate environment and spread environment, but demand for MSCI paper. This was our inaugural investment-grade offering, and so it was met with very strong receptivity out there. And then as I alluded to before, just an attractive use of proceeds, general corporate purposes, but also a meaningful amount of share repurchases as well, just given what we've seen with the stock price and what we've seen with the broader environment, we thought this was a good way to create value for us over the long term.

And just to close this loop, so you were 2.5x before the raise and now are you within the range? Or what is the leverage level?

Yes. So we're 2.5x. We raised $1.25 billion, just doing the pro forma math, that puts us towards the lower end. We're in the range, but towards the lower end of that range. And obviously, as EBITDA grows over time, we'll continue to progress down. And so we're still very comfortably within/at the lower end of the range even with that $1.25 billion financing transaction.

Got it. Let's just stick to capital allocation since we started with the debt raise. So most of the proceeds you mentioned towards buybacks, how about the M&A pipeline ambitions there? Can you just give us some color on what you're looking at and how that's looking?

Yes. We are in the advantageous position that we have very attractive organic growth prospects. Our primary focus is capitalizing on the long-term secular trends that we think we are uniquely positioned to capitalize on. And so those are trends like customization at scale. You hear us talk a lot about custom indexes. It is private asset investing, an area where we see tremendous evolution taking place, and we believe we're in a unique position to create those frameworks around risk and return and transparency and discipline around private markets, climate and the climate transition and then outcome-oriented, which brings all this together, outcome-oriented, more systematic personalized portfolios. And so we have a number of very attractive organic opportunities. And so that is our primary focus. M&A can be a nice accelerator for us. So you've seen us do M&A over the last 1.5 years. If you look at the areas where we've done those transactions, it's been around private assets, it's been around custom indexing, been around climate and the carbon markets, and it's been around wealth. And so that's the client segments you've heard us talk about. And we've acquired a platform that we've been building out. We now call it MSCI Wealth Manager that allows us to deliver a much broader value proposition to the wealth channel. And so you will see us continue to look at these types of opportunities. We call them bolt-on accelerators because they're accelerating those organic areas that we are focused on. We're not looking to dramatically diversify the business out a whole another segment. We think we've got very attractive prospects. And so M&A and partnerships. So we spend as much or more time talking about how we can work with other players in the space, other technology vendors, players that might have a unique footprint for distributing our content where we can unlock further value. But there are M&A opportunities from time to time where there's a very unique content set that we otherwise couldn't get or a data set that will dramatically enhance our position within a market. Think of the Burgiss acquisition. There's a capability that will dramatically enhance our value proposition. Think of the Foxberry acquisition we did that enhanced our custom index capability or a platform that will allow us to enhance our value proposition to a certain client segment. Think of the Fabric acquisition we did, which is now MSCI Wealth Manager, as I alluded to. And so those are the types of acquisitions that we will continue to look at. Going back to the capital allocation topic, we are very, very disciplined. And so we're continually evaluating the returns we can get on these opportunities with the other uses of that capital, namely share repurchases. We are huge believers in the company, and we're very interested in investing in the company, both organically, but also buying our shares back. And so we need to make sure these acquisitions meet rigorous return hurdles. We're very disciplined on ensuring that we see the path to monetization and value unlocking. And we think they can be great long-term value creators as well as short-term accelerators for us.

Got it. The MP&A strategy, specifically on the partnerships, like is that more a question of let's learn the asset and then think about it as -- like all these deals that you mentioned, were they partnerships before that eventually convert into M&A opportunities? How do we think about the partnerships?

Yes. I mean you're absolutely right, we are very strategically focused. We know where we have differentiation, competitive advantage and as a result, where we can bring value to a target. And so not only are we financially disciplined, but we're very strategically disciplined when we pursue acquisitions. As I said, they're not meant to be diversifying plays, they're meant to be accelerators. And so yes, the acquisitions I alluded to, Burgiss, I think most of you are aware, we had a sizable minority interest in the company before we did the acquisition. We had a series of partnerships in place with them going back to even before we made the minority investment. And so we were very familiar with the asset, very familiar with the benefits it brings to our client base, our ability to bring total portfolio views, the ability to unlock and harness the unique data footprint that they had. And so that was one which we were aware of and had conviction that we were in a position to create value. Similarly, the Fabric acquisition that we did, that was a business that -- the reason why it turned into an acquisition was we were discussing partnership with them. They are a platform that helps a wealth organization understand how a portfolio -- a client's portfolio compares to a model. And so they wanted to use a whole host of our content, so our risk models, index framework classification systems as a way to tell clients, here's the risk, here's how much you're deviating from the model and then here's the risk you're taking. And if you want to achieve these objectives, here's how you can optimize to do that. And so it was very clear to us that we bring enormous value to that platform. And so that led to acquisition discussions. And so, yes, in general, these acquisitions generally will be with organizations we know. Oftentimes, we've had partnership discussions with and platforms that we have conviction we can be additive to and not only add value to us and our shareholders, but to our clients and the investment community more broadly.

Maybe that's a good segue into private credit discussion. Firstly, I think Burgiss and private credit kind of get buried in that other line. So can you just help us how you size overall what your private credit revenue stream is and your strategy there?

Sure. So private credit is quite modest for us today. It's an area where we spend a significant amount of time talking about the opportunity, our capabilities there and our strategy more generally. And so to your point, most of what we do in the private credit space actually straddles two areas. To be honest, most of the revenue today probably sits within analytics. And it depends how you define private credit, but there are some of the big alternative managers that are using some of our analytics tools to understand risk within their organizations in a more way. We also do license some of our climate and sustainability tools to some of the big alternative managers as well. But the area that we've been spending an enormous amount of time is within, as you said, what was Burgiss, we now call Private Capital Solutions, which sits within our reporting segment of private assets. And so just to give you a little bit of color what we have there and what we are doing, Burgiss has three main offerings. One is helping investors in private capital, understand the performance of their investments. If they've invested in 100 different funds, we help them understand what are the returns, how much capital has been called, how can you expect distributions to come on that and then starting to get into the analysis, what is driving that performance, not only what managers, but kind of what sectors, what geographies, what types of strategies are driving that performance. We then have a transparency solution, which is what is in those funds that I've invested in. I've invested in 100 different private capital vehicles, how do I understand what is in them? So we give them the ability -- our clients the ability to double-click into all the funds that they've invested in, see the underlying assets, starting to see more and more firmographic information about the companies that might be invested in, the instruments, and that's where private credit comes in. If you're invested in a private credit portfolio, we can tell you, here's all the loans that are in that portfolio, information about the companies in the portfolio, and we're increasingly starting to build out the analytics around that to help understand here's how to understand things like risk in private credit. And hence, the partnership we announced with Moody's, which is starting to help our clients understand the credit exposure that they are taking and understand the relative trade-offs between risk and return within private credit portfolios. This is all very new territory for us. Burgiss was heavily focused in private equity, first and foremost. They've been building out coverage across all private capital vehicles. And so opportunistic real estate, infrastructure, natural resources and the area that we've built out the most has been across private credit portfolios. And we've seen not only the assets that we cover grow significantly over the last 2 years, but the number of funds and number of underlying companies and instruments. And so we are very rapidly going to investors in private credit funds, which, as you all know, is a growing universe, including within the wealth arena and helping them to understand what is in those private credit investments, understand the risk that they are taking in those private credit portfolios and then start to create standards around things like -- you all know us for benchmarks, but even classification, what are different types of private credit, how do I understand the different risk profiles of different parts of the capital structure that I'm taking, how do I know whether a manager is actually staying within the objectives that they set out to invest in. And then from that, things like -- and this is very early days, but talking about things like evaluated pricing within private credit portfolios. And so it's a fertile area where we are spending a lot of time. We are talking very heavily with many different industry participants to try to institutionalize, if you will, or help evolve and mature the private credit space very rapidly because there are a lot more assets going into it from a lot more investors, and I think there are a lot of risks that people don't fully understand around it.

So maybe let's just tie in the Moody's partnership to the private credit discussion. The first part of the partnership, which was ESG, I think it was fairly straightforward. But the second part, which I think you just launched your model. So can you just elaborate on what the second part of the partnership is and maybe just some help on how the economics work?

Yes, absolutely. So as I alluded to, we have a very unique data set. We are getting all the documents that the GPs are sending to the LPs where you can think of the managers, and it's increasingly a wider range of fund structures beyond just that closed-end partnership type structure, but that's the bulk of what we do. All the documents that the managers are sending to their investors, we get. Within those documents, we see within private credit portfolios, private credit funds, all of the loans that are in there as well as the marks and to varying degrees, terms and conditions. We usually have some terms and conditions. Some disclose a lot more detail than others. And we also have firmographic information. So increasingly, you're seeing managers talk about things like the EBITDA, the growth at the very least the leverage of these companies. And so we have this granular data. As I said, we do analysis on top of it, but we have partnered with Moody's to provide credit insights. And so we have established a partnership with Moody's, where we get access to their EDF-X credit scoring model. And so we can run each of those loans through the Moody's credit scoring model and be able to show our clients here's what the credit profile of the loans in this fund look like. And so that is the initial phase of it. As you alluded to, Manav, we just went to market, we just launched this very recently, and we are actively engaging with the investment community, and it's getting great traction. We haven't disclosed the economic model around it. I would highlight that we generally benefit by getting more clients to want to use our services. So namely, we want more clients to sign up for transparency to look into their private credit portfolios, in which case we can help them understand credit. And so it's something that helps drive our penetration of private credit investors. And Moody's does benefit by trying to create some standardization around credit risk and credit ratings within private credit portfolios. The EDF-X model just gives a credit score, which is different than a ratings, but hopefully is something that starts to drive some focus around Moody's being a leader in providing credit risk and credit ratings across private credit. And so this is something that will help drive their business more broadly and the need for additional services from them. And so we're both motivated to make this successful, and it would strongly ingrain both of our positions within the private credit universe over time.

Got it. And so in this case, obviously, it's the Moody's model using the Burgiss' data.

Correct.

I think when you first announced the partnership with Moody's, there's, I guess, a third leg potentially whenever that comes, which is using the Moody's data and your index capabilities, if I understood that broadly. But just talk about what the next partnership is and how that would help.

Yes. I mean there are a whole host of areas that we do brainstorm with Moody's about. We are very complementary organizations, not only from asset class coverage, they're big in credit. We are huge in equities, not only from a client segment standpoint, where we are very big within the, if you will, the investment community, they're very big within the lending community, credit community. Obviously, I'm oversimplifying here. And so -- and then also from a content sets and capabilities, big on market risk and market indexes and market pricing, and they're huge on the credit side and broader risk topics. And so yes, we brainstorm with them about how can we do more together on the real estate side, where we have complementary data sets and complementary client footprints. On the index side, are there ways we can enhance some of the indexes using some of that rich private credit data and private company data that they have, are there ways that we create deeper insights into private companies more generally? And so there are a number of areas that we do brainstorm with them about ways we can mutually create value. And we tend to do that with most of the companies within the info and analytics space, where just by nature, we're all quite complementary. We have strengths and weaknesses in certain areas, and that creates opportunities to partner on many fronts. And you've seen us do that with other organizations, and we've really started to unlock that with Moody's over the last year and change.

Got it. Just one more on private credit. Burgiss was an acquisition. If you include your real estate side, RCA was an acquisition. Moody's is a partnership. But like -- and there's been a lot of other private credit deals that have, I guess, changed hands with other info players and companies. So is in the next, let's just say, 5 years, like does this grow with -- like will it be more acquisition focused than your other segments, I guess, is the way to ask it?

So I will say this. We have, we believe, most of the key capabilities and content sets that we need to deliver on our aspirations. We've got the best data set today, and that's investment quality data that will serve as a foundation to create those framework standards that really don't exist in size to start to create some of those tools. And we've already started doing this tools and insights into the private markets that really have not existed to this point, and we are very actively harvesting those rich data sets that we have today. And it's an area where we have a feverish pace of innovation. We are active in partnerships. So we are very actively working with other content providers like Moody's to enhance the offerings that we have, but also a wide range of other partners that will help either distribute our content or allow us to derive some unique insight. And it probably is one of the areas we spend a disproportionate amount of time from an M&A standpoint. It's a very fertile area with a lot of opportunities. As I said, we have the bulk of what we need today. We have conviction in the long-term growth that we can deliver with what we have today. But there are some unique content sets out there, unique platforms that we could partner with, potentially acquire over time that would reinforce our position and build even a stronger moat. So when we look forward 10 years, we are really the leader in performance insight investment decision tools for the private markets. And so it is an area we spend time, but we will be very disciplined, very selective. And I think we've got most of what we need today.

Got it. Let's shift to the overall client macro environment, if you call it. So let's focus on your subscription businesses, so index and analytics maybe together. Just any update. Last year was obviously a tough year with a lot of cancellations, less new sales. This year seems to be dragging its feet a little bit. But how would you characterize the current environment and how you're feeling about that?

Yes. And it is worth highlighting that we are a very global business. And so we serve not only a lot of geographies, but we're serving many different client segments, solution sets, use cases across the capital markets. And so this is generalizing quite a bit. The dynamics do differ quite a bit across client segments, across geographies. But we are in a position where we're seeing consistent dynamics. I think that was the term you heard us use on our second quarter earnings call. We're seeing relatively consistent environment among active managers. And we are seeing some strengths and momentum in other areas. And so equity markets continue to hit new highs. You're seeing on the margin fund flows into international markets. Those are constructive things for many client segments for us, many parts of our business. And so we do see attractive opportunities across many parts of our client base where we've historically been smaller, but we are seeing outsized growth. And so areas like you heard us talking a lot about the "fast money" community. I'll call that the trading ecosystem. So that's trading firms, hedge funds, broker-dealers, those are areas where we are seeing very strong growth. And to this point, we've largely been monetizing tools and content that we created for the more traditional investment process, but we have recently been developing content sets and tools that are geared to those markets. And so we continue to believe there's a big opportunity there. Wealth management, I touched on earlier. Similarly, that's a client segment that you've seen assets grow enormously. The structural nuances of it do differ a bit in the U.S. versus Europe and where those assets are being raised, but it is an area where you're seeing asset growth, fee growth, new entrants, that creates big opportunities for us. And you're seeing the direction of travel to more model-driven personalized portfolios, and those are areas where we can help. And so in the past, we've been licensing content that we have, if you will, off the shelf to wealth organizations. We are increasingly developing solutions that will be fit for purpose and designed to help for those specific use cases. You're also seeing -- we're also seeing attractive opportunities within areas like insurance and asset owners, small for us today, but banks and alternative managers. And so I'd say the dynamics are generally pretty good in many of those areas. Within asset managers, which are 50% of our subscription run rate, that's where you've seen the run rate growth be 6%. We're seeing consistent dynamics. So for us to grow there, it means we need to continue to add value to those organizations that are going through structural change. We've seen them go through structural change. But many of the places they are evolving to investing in are areas where we can help. And so we do have an aggressive road map and runway, particularly within index and analytics to help them in the customization journey, help them serve wealth-driven investment process better, help them with active ETFs, and that's an area that is seeing healthy capital raising fund flows. And we think we have a unique value proposition there, expand across not only the equity part of their investment organization and the enterprise-wide multi-asset, but help them within the fixed income investment process. And so we continue to evolve our fixed income offering. And so we do have a rich road map to help active managers and asset managers generally grow with where the market is growing, but that's an area where we do see structural change taking place and the growth is going to come more from our efforts as opposed to expecting the industry to recover.

And all these, what I would call NPI, new product innovation efforts, like are you trying to -- because I guess what I'm getting to is the wallet of these asset managers is tight and probably reducing. So is this share gain that you're doing with these NPIs? Or how are you approaching the budget discussions with them?

Yes. So generally, we're in a good position where we can do a lot for these organizations. I think the power of one MSCI, as you heard us talk about in the past, is as great as it's ever been, where we can serve them more strategically. And so that's, to your point, we can help them be more efficient at displacing other vendors. So wallet share gain competitive wins. And so we do have those. We can help them raise more capital, we call it sales enablement. So we have use cases that can allow them to position themselves more strongly with their clients, launch a new strategy in an area where we know there's client demand or their client demand or investor demand more generally. And so that is helping them transform their business to raise additional assets. And then we can help them become more efficient. So it's displacing internal resources as well. And so yes, it's attacking all three of those pillars. And we do think there's real opportunity for us to continue to grow with this client base, granted it's not going to be at the growth rates that we're seeing in other areas. To your point, there are structural pressures there. There are some that are actually doing quite well, but there are many that are feeling pressure. And so we need to be more thoughtful, strategic, deliberate and continue to add value to these organizations to continue to grow with them over time.

And maybe just incorporate with these clients organizations that are pressured, like how is the pricing discussion environment with them? And as a follow-up, like how long before these NPIs can help you kind of reaccelerate the growth there to get overall subscription growth double digits?

Yes. I mean -- so a couple of points. I'll touch on pricing and then your second point, I think there's some important observations there. But we are -- you've heard us say this in the past, we're a mission-critical tool provider generally across much of what we do. We have pricing power, although we want to be measured. Most of our growth is going to come from doing more for these organizations. To your prior question, we recognize we need to create value for them to make them as effective as possible and successful as possible over time. And so those pricing conversations oftentimes come together with broader value discussions. Can we license you more content across more of your organization? Can we help you displace competitors? And we will generally try to be constructive on price and bring together the price and volume discussion with them. And I'd say, as we've mentioned before, the contribution of price to new sales has been relatively consistent. It's been relatively stable. There are some puts and takes there. We've seen probably a higher contribution of price to new sales within sustainability and climate in large part because you've had overall sales drop or volume drop. We've seen probably slightly higher contribution of price to new sales in analytics, but that is part of our strategy. Going to my point, we -- part of the way we monetize the continual innovations, enhancements we make to the services we're delivering our clients is through price increases. And so it's not a like-for-like price increase. But generally, across the organization, it's been pretty consistent, and we're confident if we can continue to and when we continue to deliver more and more value to these clients, price will be an important lever to us, but so will the new product channel. And some of that will monetize through price. Some of it will be upsells and cross-sells to our client. With -- to your second part of your question with asset managers more generally, I would highlight that part of the slowdown that we've seen or a large part of the slowdown we've seen in the growth rate with asset managers over the last couple of years has been within the sustainability, particularly, but even a little bit climate, sustainability and to a degree, our climate offering. And so if you look at the growth outside of sustainability and climate with asset managers, and especially if you look even within index, where we break out the non -- now today, it's the non-market cap weighted modules within the subscription base there, you've seen a slowdown in the growth rate there. A big part of that was the ESG index module that we would license. There is a point where that was growing 60%, close to 60% and now that's down to single digits. So that -- just the variability in the growth rate of that module has been a big part of the slowdown you've seen within index with asset managers, within the index subscription base more generally and then asset managers across the board when you look at the Sustainability and Climate segment. There are a number of areas where we are, to your point, innovating and can do more for these organizations. So you've seen us spend a lot of time talking about custom indexes. And that's a big growth area across not only asset managers, but all these other client segments I talked about where the trends in the market are creating opportunities for MSCI to really help organizations develop customized outcomes, personalized outcomes, more systematic strategies. And we've got a unique framework and capability to help our clients with that active ETFs. I talked about continuing to expand across asset classes. And so all of these areas give us tools and levers to do more with these active managers that will probably continue to feel pressure, but are going to play an important role in the investment community, and we can serve them in a greater capacity as well.

Got it. One of the things you alluded to earlier was just the non-U.S. flows are doing well for you guys, and that was one of the broader themes since Liberation Day, U.S. exceptionalism dies down kind of situation. And so maybe just help us appreciate how -- at what cadence does this -- if it does obviously keep happening, help you? Because I think there was an initial thought that this could be immediate and growth comes back, but it takes time. So maybe just help set the base on how flows and then other business works for you guys.

Sure, sure. So all else equal, international rotation or flows into international markets is helpful for us without a doubt. You see it most notably within asset-based fees. Just looking at ETF inflows over the last 11 months, we've seen something like $160 billion, $170 billion of flows, which is a very strong pace compared to history. There are very few periods, if any, over 11 months where we've kind of had that level of inflows. And so a large part of that is being driven by flows into developed markets outside the U.S., global strategies, to a lesser degree, emerging markets, but we are seeing some into emerging markets. And so we see most acutely or most directly the benefit in the ETF flows. A little bit slower, but we do see similar dynamics within the non-ETF space, where you'll start to see on the margin more institutions who might be allocating or launching an international mandate, and those are areas where we have a strong position, although that fund creation process takes a little bit more time and you see different dynamics depending on the geography among institutions, but that's something that's helpful to us. And then to the extent organizations are launching active strategies to get into international markets, that's where it's a little bit less direct, but it is helpful. Most investment organizations are already licensing from us EM Core and DM Core. Those are -- think of our large cap and mid-cap, market cap-weighted modules that gives you coverage of international markets. And so if an organization is looking to launch a new international strategy, they don't necessarily need to come to us to license something new. But to the extent they are building a new investment team, so they're hiring to invest more internationally, they want more professionals across more offices to be investing internationally or just generally investing in their content sets, their technology to support the growth of international investment teams. Those are all potential upsell opportunities for us. And at the very least, it's adding more value to our clients who might be using a broader range of the content sets that they're already licensing for us and so helpful from a price increase standpoint. So that piece moves the slowest, but it is, for sure, helpful for us.

Got it. Maybe I'll just sneak one last question in here in the less than a minute as we have. You mentioned the ESG index module declined from 60% to 1%. Broadly, your ESG growth has declined or decelerated as well. You've mentioned that you will revisit your long-term targets. It's been a year almost now, I think. So just curious on your thought process there and how we should track that.

So we continue to believe it's a big opportunity. There are changing dynamics in the space, as we've alluded to, depending on the market, the content area, the client segment, there's a wide range of dynamics at play. We expect those dynamics that we've been seeing recently to continue into the coming quarters. But we continue to have conviction around the market and our leadership in the market, and we continue to believe in the long-term growth. But we are continuing to evaluate those short-term dynamics, the trajectory in the short term and what it means for the long-term growth. And so at this point, we are not updating our long-term targets for the Sustainability and Climate segment.

Got it. Okay. All right. We're perfectly on time there. So thank you, Andy, for being here. Thanks, everyone as well.

Thank you. Appreciate it.