NASDAQ$MORN

Morningstar Inc. · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Morningstar's Q3 2022 financial results reflected solid revenue growth driven by license-based areas, but were challenged by declines in asset- and transaction-based product areas due to global market conditions.

Morningstar's Q3 2022 revenue increased by 9.2% to $468.2 million. However, operating income declined by 67.6% to $22.0 million, and net income resulted in a loss of ($9.0) million, or ($0.21) per diluted share. The company is moderating hiring activity in response to the challenging environment.

  • Revenue grew 9.2% to $468.2 million, with organic revenue growth of 8.5%.
  • License-based revenue increased by 19.4%, driven by PitchBook, Morningstar Sustainalytics, Morningstar Data, and Morningstar Direct.
  • Operating income decreased by 67.6% to $22.0 million, and net income resulted in a loss of ($9.0) million.
  • The company began reducing its China operations, incurring costs of $30.1 million.

Headline financials

Total Revenue

$468M

Previous: $429M+9.2%
EPS (adj)

$0.77

Previous: $1.38-44.2%
Capital Expenditures

-$93.4M

Previous: -$71.6M-30.4%
Free Cash Flow

-$102M

Previous: -$22.6M-353.1%
Net Income

-$9M

Previous: $49M-118.4%
Operating Income

$22M

Previous: $67.8M-67.6%
Gross Profit

$273M

Previous: $246M+11.0%
Cash & Equivalents

$407M

Previous: $487M-16.5%
Total Assets

$3.42B

Previous: $2.74B+24.4%
Stock-Based Comp

$22.1M

Previous: $11.1M+99.1%

Revenue & EPS history

Morningstar · Revenue · Quarterly

$468M

Q3 2022+9.2%vs Q3 2021
Beat estimate in 4 of 6 quarters(67%)
ActualEstimate

Revenue by segment

Morningstar · $409M total across 4 segments · Q2 2023

  • Morningstar Data & Analytics
    $194M
  • PitchBook
    $134M
  • Morningstar Wealth
    $50M
  • Morningstar Retirement
    $31.4M

Forward guidance

The company expects that the reduction of China operations will be substantially complete by the end of the third quarter of 2023 and will result in lower ongoing run-rate costs from the overall net reduction in the related headcount and certain overhead.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2022

Historical avgQ3 2022

+0.5%

Avg return

Earnings day

+0.0%

Avg return

5 days after

+0.4%

Avg return

30 days after

53%

36 / 68 earnings

Positive

+12.6%

Q3 2018

Best reaction

-12.9%

Q1 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-10.0%-11.2%-3.0%
Q4 2025+2.3%+5.7%+19.0%
Q3 2025+2.8%+1.4%+2.9%
Q1 2025-0.5%+3.1%+8.3%
Q4 2024-2.8%-6.5%-7.5%
Q3 2024-3.5%-2.7%+0.8%
Q2 2024+4.5%+4.7%+1.6%
Q1 2024-4.3%-5.5%-0.9%
Q4 2023-0.2%+8.1%+9.8%
Q3 2023+11.1%+12.6%+23.7%
Q2 2023+6.5%+6.5%+2.7%
Q1 2023-12.9%-7.9%+1.7%
Q4 2022-11.1%-11.0%-19.6%
Q3 2022+2.1%+4.7%+11.2%
Q2 2022+3.5%-0.0%-5.8%
Q1 2022+1.4%-4.4%-0.6%
Q4 2021+6.4%+2.0%+1.3%
Q3 2021+4.8%+3.1%+1.4%
Q2 2021+3.0%+5.6%+7.0%
Q1 2021+3.7%+3.5%-7.7%
Q4 2020-1.2%-8.9%-5.6%
Q3 2020+6.9%+6.5%+8.8%
Q2 2020+4.9%+2.8%+0.1%
Q1 2020+9.0%+3.8%+7.1%
Q4 2019-2.5%-6.4%-35.4%
Q3 2019-7.2%-4.7%-1.1%
Q2 2019+0.6%-1.0%-0.8%
Q1 2019-0.9%+2.9%-2.7%
Q4 2018+0.3%+0.6%-3.9%
Q3 2018+12.6%+4.3%-0.8%
Q2 2018-2.7%-4.1%-0.9%
Q1 2018+6.2%+5.0%+13.8%
Q4 2017-1.1%-1.7%-1.3%
Q3 2017+1.9%-2.3%+6.3%
Q2 2017+2.9%+3.4%+1.6%
Q1 2017-4.1%-6.1%-6.8%
Q4 2016+1.8%+2.2%-2.0%
Q3 2016-6.4%-7.2%-4.8%
Q2 2016+1.0%+0.7%-1.8%
Q1 2016-4.2%
Q4 2015-0.5%
Q3 2015-1.9%
Q2 2015+3.2%
Q1 2015+3.5%
Q4 2014+10.7%
Q3 2014-0.3%
Q2 2014-2.4%
Q1 2014-4.6%
Q4 2013+4.3%
Q3 2013+4.9%
Q2 2013+0.7%
Q1 2013+0.5%
Q4 2012+1.9%
Q3 2012-1.3%
Q2 2012+2.4%
Q1 2012+1.7%
Q4 2011-0.1%
Q3 2011-0.4%
Q2 2011-2.5%
Q1 2010-1.7%
Q1 2011+1.5%
Q4 2010-2.2%
Q4 2008-2.2%
Q3 2009+0.1%
Q3 2010+0.1%
Q2 2010-1.1%
Q4 2009-1.1%
Q2 2009-1.1%

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