Morningstar, Inc. Posts Steady Revenue Growth and Strategic Progress in Third Quarter 2025
Morningstar, Inc. (Nasdaq: MORN), a global leader in independent investment research, reported solid financial performance for the third quarter of 2025, highlighted by continued revenue growth and improvements in both operating income and margins. The quarter showcased particular strength within the Morningstar Credit business, as favorable market conditions and broad demand across geographies helped drive results. Additionally, Morningstar’s key software and data platforms, including Morningstar Direct and PitchBook, contributed meaningfully to overall year-over-year growth.
Chief Executive Officer Kunal Kapoor emphasized that the quarter reflected not only execution on current strategy but continued investment in long-term positioning. “Morningstar Credit delivered a standout quarter driven by strong performance across asset classes and regions, while Morningstar Direct Platform and PitchBook also contributed meaningfully to consolidated growth,” Kapoor stated. He added that recent strategic moves—including the planned acquisition of the Center for Research in Security Prices (CRSP)—are intended to reinforce Morningstar’s leadership in indexing and data analytics. Once completed, the CRSP acquisition is expected to place Morningstar among the largest index providers serving U.S. equity index funds, significantly deepening the scale and reach of Morningstar Indexes.
The company also highlighted several innovation milestones during the quarter. These included the introduction of Morningstar’s first medalist ratings for semi-liquid investment funds, the creation of the Morningstar PitchBook US Modern Market 100 Index, and new collaborations aimed at integrating Morningstar’s proprietary data into leading generative AI platforms. These initiatives reflect Morningstar’s broader strategy of expanding distribution channels and diversifying the product suite to serve evolving investor needs.
Share Repurchase Activity and Capital Allocation
Morningstar continued returning capital to shareholders, completing its previously authorized $500 million share repurchase program in October. Through October 28, the company repurchased 1,873,729 shares for a total cost of approximately $487 million, representing around 4% of its shares outstanding at the end of 2024. Reflecting confidence in its long-term performance and balance sheet flexibility, the Board of Directors approved an additional three-year share repurchase program authorizing up to $1 billion in repurchases, effective October 31.
Third-Quarter Financial Performance
For the third quarter of 2025, total revenue rose 8.4% to $617.4 million compared with the prior-year period. On an organic basis, which excludes foreign currency effects and acquisitions or divestitures, revenue grew 9.0%. Increased demand for credit ratings, expanded data subscriptions, and continued adoption of the PitchBook platform contributed to this growth.
Operating income increased 10.6% year over year to $127.8 million, while adjusted operating income, which removes certain non-recurring or acquisition-related expenses, rose 15.6% to $150.6 million. Operating margin improved to 20.7% from 20.3% a year earlier, and adjusted operating margin reached 24.4%, showing stronger operating leverage as revenue expanded.
Net income for the quarter was $91.6 million, equating to $2.17 per diluted share, compared to $2.77 per share in the prior-year period. The decrease was mainly due to a one-time gain that benefited earnings a year ago relating to the sale of Morningstar’s Commodity and Energy Data business. Adjusting for this and other non-recurring factors, adjusted diluted net income per share increased 27.5% to $2.55, underscoring the underlying strength of recurring business performance.
Cash flow also remained healthy. Cash provided by operating activities increased slightly to $195.7 million, while free cash flow rose 2.8% to $160.1 million. The company repurchased 686,512 shares during the quarter for $170.1 million.
Performance by Business Segment
Morningstar Direct Platform
Revenue from the Morningstar Direct Platform increased 6.3% year over year to $211.1 million, driven primarily by higher revenue from Morningstar Data products and broader use of investment data across global client groups. Although license counts were flat, customer spending per user strengthened, reflecting the platform’s importance in institutional research workflows. Adjusted operating income rose to $93.7 million, although margins declined slightly due to higher compensation and technology investment costs.
PitchBook
PitchBook revenue increased 7.9% to $169.0 million. The platform continues to grow among core private market users, including private equity and investment advisory firms, though demand among corporate clients has remained softer amid slower global deal activity. User counts were stable, as new client wins offset churn and normalization in large enterprise renewals. Adjusted operating income rose to $52.9 million but margins modestly declined due to increased staffing and higher healthcare and compensation costs.
Morningstar Credit
The strongest segment performer for the quarter was Morningstar Credit, where revenue surged 28.5% to $91.1 million. Growth was broad-based, led by commercial mortgage-backed securities, asset-backed securities, and corporate credit ratings across North America and Europe. Adjusted operating income increased sharply by nearly 85% to $28.1 million, while margins expanded by more than nine percentage points to 30.8%. Increased headcount helped support rising demand, but revenue growth significantly outpaced cost increases.
Morningstar Wealth
Morningstar Wealth posted revenue of $62.1 million, up slightly from the prior year, but organic revenue growth was more substantial at 9.8% when excluding divested U.S. TAMP assets. The business continues to benefit from growth in managed portfolios and strong advisor platform adoption. Assets under management and advisement climbed to $70.8 billion, supported by favorable market performance and net inflows. The segment returned to profitability with adjusted operating income of $3.1 million.
Morningstar Retirement
Morningstar Retirement reported revenue of $34.2 million, representing 7.5% growth. Assets under management and advisement increased to $297.8 billion, driven largely by broader adoption of managed account solutions. Adjusted operating income remained steady, though margins compressed due to higher compensation and marketing investments.
Balance Sheet and Liquidity
As of September 30, 2025, Morningstar held $514.5 million in cash and investments and $848.9 million in total debt. Cash flow from operations increased year over year, though income tax payments were higher due to timing and repatriation-related taxes.
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