Second-quarter 2026
Filed Jul 29, 2026Morningstar, Inc. Reports Second-Quarter 2026 Financial Results
Revenue, operating income, diluted EPS, operating cash flow, and free cash flow all increased, while operating and adjusted operating margins expanded. Morningstar Credit and Morningstar Retirement delivered particularly strong growth, though Morningstar Wealth revenue declined and Direct Platform and PitchBook adjusted operating margins contracted.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $663.2 million | – | increased 9.6% |
| Organic revenuenon-GAAP | 6.8% | – | increased 6.8% |
| Organic revenue excluding the impact from the sunsetting of certain productsnon-GAAP | 8.2% | – | would have increased 8.2% |
| Operating expenseGAAP | $509.4 million | – | increased 5.9% |
| Operating incomeGAAP | $160.6 million | – | increased 28.4% |
| Adjusted operating incomenon-GAAP | $175.9 million | – | increased 22.7% |
| Operating marginGAAP | 24.2% | – | – |
| Adjusted operating marginnon-GAAP | 26.5% | – | – |
| Net incomeGAAP | $107.8 million | – | – |
| Diluted net income per shareGAAP | $2.83 per diluted share | – | increased 35.4% |
| Adjusted diluted net income per sharenon-GAAP | $3.10 | – | increased 29.2% |
| Effective tax rateGAAP | 26.2% | – | – |
| Cash provided by operating activitiesGAAP | $155.7 million | – | increased 57.3% |
| Free cash flownon-GAAP | $122.5 million | – | increased 96.3% |
| Year-to-date revenueGAAP | $1.3 billion | – | increased 10.2% |
| Year-to-date organic revenuenon-GAAP | 7.2% | – | increased 7.2% |
| Year-to-date organic revenue excluding the impact from the sunsetting of certain productsnon-GAAP | 8.5% | – | would have increased 8.5% |
| Year-to-date operating incomeGAAP | $316.5 million | – | increased 32.3% |
| Year-to-date adjusted operating incomenon-GAAP | increased 27.2% | – | increased 27.2% |
| Year-to-date diluted net income per shareGAAP | $5.55 | – | increased 41.9% |
| Year-to-date adjusted diluted net income per sharenon-GAAP | $6.27 | – | increased 35.4% |
| Year-to-date cash provided by operating activitiesGAAP | $247.2 million | – | increased 30.1% |
| Year-to-date free cash flownon-GAAP | $176.1 million | – | increased 45.3% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Morningstar Direct PlatformHigher revenue was primarily driven by Morningstar Data and Morningstar Direct. Morningstar Data growth reflected expansion with existing clients and continued strength in managed investment data and Morningstar Essentials, partly offset by softness in exchange market data. | $222.1 million | – | increased 6.2% compared to the prior-year period, or 4.8% on an organic basis |
| PitchBookGrowth was driven by the PitchBook platform and strength in the direct data business, with contributions from most core investor and advisor client segments, partially offset by softness in venture capital and elevated churn in the corporate client segment. | $174.7 million | – | increased 4.9% on a reported and organic basis compared to the prior-year period |
| Morningstar CreditRobust issuance supported growth across geographies and most asset classes, particularly US structured finance ratings and Canadian and US corporates. | $104.9 million | – | increased 23.4% compared to the prior-year period, or 23.3% on an organic basis |
| Morningstar WealthOrganic revenue excluded interim service fees from AssetMark and foreign currency impact. Excluding the sunsetting of Morningstar Office, organic revenue would have increased 5.3%, supported by Investment Management. | $60.3 million | – | decreased 6.2% compared to the prior-year period, or 4.6% on an organic basis |
| Morningstar RetirementAUMA increased primarily due to market gains and was supported by positive net flows to traditional and Advisor Managed Accounts. | $37.9 million | – | increased 17.0% on a reported and organic basis |
| Corporate and All OtherReported growth was driven primarily by the CRSP acquisition. Morningstar Indexes revenue increased on a reported and organic basis, while Morningstar Sustainalytics revenue declined due to the retirement of the second-party opinions product. | $63.3 million | – | increased 32.7%, or 1.2% on an organic basis |
Capital returns
- Share repurchases totaled 567,844 shares for $100.0 million.
- During the quarter, the Company repurchased $100.0 million of its shares.
- During the quarter, the Company paid $19.0 million in dividends.
- Year-to-date share repurchases totaled 2,291,256 shares for $400.0 million.
What drove it
- Morningstar Credit, Morningstar Direct Platform, and PitchBook were the largest contributors to organic revenue growth.
- The February 2026 acquisition of the Center for Research in Security Prices (CRSP) contributed to intangible amortization expense and was accretive to adjusted operating margin in the quarter.
- Operating expense growth reflected a $7.4 million increase in compensation costs, a $6.7 million increase in certain technology infrastructure costs, and a $5.6 million increase in intangible amortization expenses.
- Morningstar Credit benefited from robust issuance, including strength in US structured finance ratings and Canadian and US corporates.
- Morningstar Retirement growth was supported by market gains and positive net flows.
- Corporate and All Other reported growth was driven primarily by the CRSP acquisition.
Concerns
- Morningstar Wealth revenue decreased 6.2% on a reported basis and 4.6% on an organic basis.
- Morningstar Direct Platform adjusted operating margin decreased 0.8 percentage points to 45.2%.
- PitchBook adjusted operating margin decreased 1.4 percentage points to 30.3%.
- PitchBook faced softness in venture capital and elevated churn in the corporate client segment.
- Morningstar Data experienced softness in exchange market data.
- Morningstar Sustainalytics revenue declined due to the retirement of the second-party opinions product.
- The effective tax rate increased to 26.2% from 22.8%, primarily reflecting stock-based compensation vesting effects and deferred taxes on unremitted foreign earnings.
What to watch
- Organic revenue growth excluding the sunsetting of Morningstar Office and the second-party opinions product.
- Morningstar Credit issuance activity across structured finance and corporate ratings.
- PitchBook corporate churn, venture capital demand, and licensed user counts.
- Morningstar Direct Platform license growth and the effect of added research and sales resources on margin.
- Cloud migration, AI initiative spending, and related technology infrastructure costs.
- The impact of the CRSP acquisition on Morningstar Indexes growth, amortization expense, and adjusted operating margin.
Balance sheet and cash flow
- As of June 30, 2026, cash, cash equivalents, and investments totaled $523.8 million.
- As of June 30, 2026, debt was $1.7 billion.
- As of Dec. 31, 2025, cash, cash equivalents, and investments totaled $528.7 million.
- As of Dec. 31, 2025, debt was $1.1 billion.
- During the quarter, the Company increased its debt by $0.3 million, net.
- Cash provided by operating activities increased 57.3% to $155.7 million.
- Free cash flow increased 96.3% to $122.5 million, mainly reflecting higher cash earnings and a decrease in capital expenditures compared to the prior-year period.
- Reported assets under management and advisement decreased 4.5% to $63.8 billion in Morningstar Wealth.
- Combined Morningstar Model Portfolio and International Wealth Platform AUMA increased 16.2% to $55.3 million.
- Morningstar Retirement AUMA increased 9.0% to $311.0 billion.
Analysis
Morningstar reported broad second-quarter growth, with revenue increasing 9.6% to $663.2 million and organic revenue increasing 6.8%. Organic growth would have been 8.2% excluding the sunsetting of certain products. Morningstar Credit, Morningstar Direct Platform, and PitchBook were the largest contributors to organic growth, while the CRSP acquisition was a material contributor to reported growth in Corporate and All Other.
Profitability expanded faster than revenue. Operating income increased 28.4% to $160.6 million and adjusted operating income increased 22.7% to $175.9 million. Operating margin increased to 24.2% from 20.7%, while adjusted operating margin increased to 26.5% from 23.7%. Operating expense increased 5.9% to $509.4 million, led by higher compensation, cloud and AI-related technology costs, and CRSP-related intangible amortization. CRSP was accretive to adjusted operating margin in the quarter.
Segment performance was uneven. Morningstar Credit produced the strongest revenue growth, increasing 23.4% reported and 23.3% organically, supported by robust issuance. Morningstar Retirement revenue increased 17.0%, with AUMA supported by market gains and positive net flows. Direct Platform and PitchBook grew revenue but saw adjusted operating-margin pressure from compensation and technology costs. Morningstar Wealth revenue declined 6.2%, although excluding the sunsetting of Morningstar Office, organic revenue would have increased 5.3%.
Cash conversion strengthened materially. Cash provided by operating activities increased 57.3% to $155.7 million, and free cash flow increased 96.3% to $122.5 million, reflecting higher cash earnings and lower capital expenditures. The company repurchased $100.0 million of shares and paid $19.0 million in dividends during the quarter. At June 30, 2026, cash, cash equivalents, and investments totaled $523.8 million and debt was $1.7 billion. The supplied filing text contains no forward guidance.
Management, verbatim
We are continuing to deliver profitable growth with meaningful increases in operating and free cash flows,
Kunal Kapoor, Morningstar's CEO
Morningstar is accelerating an ambitious strategy, unlocking speed to insights by building agentic workflows and tools atop our data, research, and intellectual property.
Kunal Kapoor, Morningstar's CEO
We are also doubling down on helping investors navigate the convergence of public and private markets.
Kunal Kapoor, Morningstar's CEO
Not in the filing
stated, not guessed- Forward revenue guidance
- Forward gross-margin guidance
- Forward operating-expense guidance
- Forward tax-rate guidance
- Prior guidance for comparison
- Gross profit
- Gross margin
- Prior-year operating expense amount
- Prior-year adjusted operating income amount
- Prior-year cash provided by operating activities amount
- Prior-year free cash flow amount
- Prior-quarter comparisons for reported metrics
- Year-to-date adjusted operating income amount
- Year-to-date prior-year amounts for reported financial metrics
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.