Morningstar Reports Strong Second-Quarter 2026 Results with Revenue Growth, Higher Profitability, and Expanding AI-Driven Investment Solutions
Morningstar, Inc. (Nasdaq: MORN), a global provider of independent investment research, financial data, and investment insights, reported strong financial results for the second quarter of 2026, delivering solid growth in revenue, operating income, earnings per share, and cash flow. The company also continued investing in artificial intelligence, private market research, and technology partnerships while returning significant capital to shareholders through share repurchases and dividends.
The quarter reflected Morningstar’s continued execution of its long-term strategy to expand its data and analytics platform, strengthen its leadership in both public and private markets, and develop AI-powered tools that provide investors with faster access to research and actionable insights.
Revenue Continues to Grow
Morningstar generated second-quarter revenue of $663.2 million, representing a 9.6% increase compared with the same period in 2025.
On an organic basis, which excludes acquisitions, divestitures, and certain other items, revenue increased 6.8% year over year.
Management noted that if the impact of recently discontinued products had been excluded, organic revenue growth would have reached 8.2%, demonstrating continued healthy demand across the company’s core businesses.
Several business segments contributed meaningfully to the revenue increase, particularly:
- Morningstar Credit
- Morningstar Direct Platform
- PitchBook
These businesses benefited from increased client demand for investment research, credit ratings, market intelligence, and financial data solutions.
Strong First-Half Financial Performance
For the first six months of 2026, Morningstar reported revenue of approximately $1.3 billion, an increase of 10.2% compared with the first half of 2025.
Organic revenue increased 7.2%, while adjusted organic growth excluding discontinued products reached 8.5%.
The first-half performance illustrates continued momentum across Morningstar’s diversified business portfolio despite changing market conditions and evolving investor needs.
CEO Highlights AI Strategy and Private Markets Expansion
Chief Executive Officer Kunal Kapoor emphasized that Morningstar continues delivering profitable growth while accelerating investments in technology and innovation.
According to Kapoor, the company is rapidly expanding the use of agentic artificial intelligence workflows built upon Morningstar’s extensive proprietary databases, investment research, and intellectual property.
These AI-powered capabilities are designed to provide investors and financial professionals with faster access to actionable insights while improving productivity and investment decision-making.
Morningstar is also expanding partnerships with leading artificial intelligence model developers and enterprise technology providers, allowing broader access to its research content and proprietary data.
Beyond AI, Kapoor highlighted the firm’s continued focus on helping investors navigate the growing convergence between public and private capital markets.
Several recent initiatives support this strategy, including:
- Continued growth within Morningstar Credit, driven partly by private credit ratings activity.
- New collaborations within Morningstar Wealth to develop integrated public and private investment models alongside leading asset managers.
- Expanded private market research, including the latest State of Semiliquid Funds report.
Management believes these initiatives position Morningstar to capture growing demand for comprehensive investment intelligence across increasingly interconnected capital markets.
Operating Income Climbs Sharply
Morningstar’s profitability improved significantly during the quarter.
Reported operating income increased 28.4% to $160.6 million.
Adjusted operating income, which excludes selected non-recurring items, increased 22.7%.
The improvement reflected healthy revenue growth combined with disciplined expense management and favorable operating leverage.
Operating margin also expanded considerably.
Second-quarter operating margin reached 24.2%, compared with 20.7% during the same quarter last year.
Adjusted operating margin increased from 23.7% to 26.5%.
Management noted that the acquisition of the Center for Research in Security Prices (CRSP) completed earlier in 2026 contributed positively to adjusted operating margins during the quarter.
Earnings Per Share Show Strong Improvement
Morningstar reported net income of $107.8 million during the second quarter.
Diluted earnings per share increased to $2.83, representing a 35.4% increase compared with $2.09 per diluted share reported one year earlier.
Adjusted diluted earnings per share rose 29.2% to $3.10, compared with $2.40 during the second quarter of 2025.
The increase reflects stronger operating performance, revenue growth, and improved profitability across several business segments.
Cash Flow Nearly Doubles
Cash generation remained one of Morningstar’s strongest financial highlights.
Cash provided by operating activities increased 57.3% to $155.7 million.
Free cash flow rose an impressive 96.3%, reaching $122.5 million during the quarter.
Management attributed the increase primarily to:
- Higher operating earnings.
- Reduced capital expenditures compared with the prior year.
For the first six months of 2026:
- Operating cash flow increased 30.1% to $247.2 million.
- Free cash flow increased 45.3% to $176.1 million.
Strong cash generation provides Morningstar with significant financial flexibility to fund acquisitions, invest in technology, expand operations, and return capital to shareholders.
Share Repurchases Continue
Morningstar remained active in returning capital to shareholders.
During the second quarter, the company repurchased 567,844 shares for approximately $100 million.
Year to date, Morningstar has repurchased approximately 2.29 million shares totaling $400 million.
The company also paid $19 million in dividends during the quarter.
Management continues balancing investments in future growth with shareholder returns through disciplined capital allocation.
Morningstar Direct Platform Delivers Solid Growth
Morningstar Direct Platform remained the company’s largest business segment.
The division generated $222.1 million in revenue, increasing 6.2% year over year on a reported basis and 4.8% organically.
Growth was primarily driven by:
- Morningstar Data
- Morningstar Direct
Morningstar Data benefited from expanding relationships with existing clients, particularly within managed investment data products and Morningstar Essentials.
Morningstar Direct also experienced growth through increased revenue per software license and wider adoption of reporting solutions.
Although total software licenses remained relatively unchanged compared with last year, higher client engagement and expanded service usage supported revenue growth.
Adjusted operating income for the segment increased 4.2% to $100.3 million.
However, adjusted operating margin declined slightly to 45.2%, reflecting increased compensation expenses and higher technology investments supporting future growth initiatives.
PitchBook Continues Expanding
PitchBook remained another major contributor to Morningstar’s performance.
Revenue increased 4.9% to $174.7 million.
Growth was primarily supported by:
- Continued expansion of the PitchBook platform.
- Growth within the direct data business.
Demand remained particularly healthy among institutional investors and financial advisors.
Some softness persisted within venture capital clients and selected corporate customers, although overall client activity remained positive.
Licensed user counts remained relatively stable year over year.
Adjusted operating income increased modestly to $53 million.
Operating margin declined slightly due to increased hiring and continued investment in AI-powered technology initiatives.
Morningstar Credit Delivers Outstanding Growth
Morningstar Credit produced one of the strongest performances across the company’s operating segments.
Revenue increased 23.4% to $104.9 million, representing the highest growth rate among Morningstar’s major business lines.
Growth was supported by:
- Robust debt issuance activity.
- Expansion across multiple global markets.
- Strong performance in structured finance ratings.
- Increased corporate credit ratings in both the United States and Canada.
Adjusted operating income increased 26.2% to $38.5 million.
Adjusted operating margin improved to 36.7%, reflecting strong revenue growth that more than offset higher staffing expenses associated with supporting expanding business activity.
Morningstar Wealth Experiences Mixed Results
Morningstar Wealth reported revenue of $60.3 million, representing a 6.2% decline compared with the previous year.
However, after excluding discontinued products and certain other adjustments, the underlying business showed healthier trends.
Without the impact of discontinuing Morningstar Office, organic revenue would have increased 5.3%.
Investment Management remained a key driver of underlying growth.
Assets under management and advisement totaled $63.8 billion, down modestly from last year primarily because of the loss of one Asset Allocation Services client.
Excluding that client, overall managed assets would have increased year over year.
Combined Morningstar Model Portfolio and International Wealth Platform assets increased 16.2%, benefiting from both market appreciation and positive client inflows outside the United States.
Adjusted operating income improved dramatically, increasing more than 163% while adjusted operating margin expanded to 13.1%.
Morningstar Retirement Continues Strong Momentum
Morningstar Retirement also delivered an excellent quarter.
Revenue increased 17% to $37.9 million.
Assets under management increased 9% to $311 billion, supported by favorable equity markets and continued positive net client inflows.
Adjusted operating income increased 26%, while operating margin expanded to 51.2%, highlighting the segment’s strong profitability.
Corporate and Other Businesses
Corporate and All Other operations generated $63.3 million in revenue.
Reported revenue increased 32.7%, while organic growth measured 1.2%.
Much of the reported growth reflected Morningstar’s acquisition of CRSP.
Morningstar Indexes continued generating healthy growth.
Meanwhile, Morningstar Sustainalytics experienced lower revenue following the planned retirement of its second-party opinions product.
The Corporate segment’s operating loss narrowed significantly during the quarter, contributing positively to consolidated profitability.
Operating Expenses Increase with Strategic Investments
Operating expenses increased 5.9% to $509.4 million.
Management attributed the increase primarily to several strategic investments.
The largest contributors included:
- Higher compensation costs driven by stock-based compensation and employee bonuses.
- Increased cloud computing expenses associated with migration away from traditional data centers.
- Greater spending on artificial intelligence technology.
- Additional software and technology investments.
- Increased amortization expenses resulting from the acquisition of CRSP.
Despite these higher investments, revenue growth significantly outpaced expense growth, leading to meaningful expansion in operating margins.
Tax Rate Increases
Morningstar’s effective tax rate increased to 26.2% compared with 22.8% during the prior year.
Management explained that the increase resulted primarily from:
- Less favorable tax treatment associated with employee stock-based compensation.
- Deferred taxes related to foreign earnings retained overseas.
These factors partially offset the benefits generated by stronger operating performance.
Strong Balance Sheet
Morningstar continued maintaining a healthy financial position.
As of June 30, 2026, the company reported:
- $523.8 million in cash, cash equivalents, and investments.
- $1.7 billion in total debt.
Compared with year-end 2025, cash balances remained relatively stable while debt increased primarily to support strategic acquisitions, including CRSP.
Management believes the balance sheet remains sufficiently strong to support continued investments, acquisitions, technology development, and shareholder returns.
Morningstar enters the second half of 2026 with solid business momentum, supported by expanding demand for investment intelligence, private market analytics, and AI-enabled research solutions.
Management expects continued growth across Morningstar Credit, PitchBook, Morningstar Direct, Retirement, and Wealth Management while further integrating the CRSP acquisition and expanding partnerships with leading artificial intelligence providers.
The company’s strategy remains focused on combining proprietary investment research, financial data, and advanced AI technologies to deliver faster, more intelligent investment insights for institutional investors, financial advisors, asset managers, and individual investors worldwide.
With double-digit revenue growth, expanding operating margins, significantly higher earnings, strong cash generation, and continued investment in innovation, Morningstar appears well positioned to sustain profitable growth while strengthening its leadership in independent investment research and financial analytics.
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