Morningstar, Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Morningstar, Inc. reported a 3.8% increase in revenue to $741.2 million for Q1 2024, while net income and EPS remained stable year-over-year.</b>

AI Summary

Morningstar, Inc. (MORN) filed a Quarterly Report (10-Q) with the SEC on April 26, 2024. Morningstar, Inc. reported revenue of $741.2 million for the first quarter of 2024, an increase from $714.0 million in the same period of 2023. The company's total assets were $6.1 billion as of March 31, 2024, compared to $5.6 billion as of December 31, 2023. Net income for the first quarter of 2024 was $11,987,495, consistent with the $11,987,495 reported for the first quarter of 2023. Earnings per share (EPS) remained stable at $0.50 for the first quarter of 2024 and 2023. Total debt remained at $200,000,000 as of March 31, 2024, and December 31, 2023.

Why It Matters

For investors and stakeholders tracking Morningstar, Inc., this filing contains several important signals. The revenue growth indicates Morningstar's ability to expand its business operations and potentially capture a larger market share in the investment services sector. Stable net income and EPS, despite revenue growth, may suggest increased operating expenses or a shift in the company's cost structure, warranting further investigation into profitability drivers.

Risk Assessment

Risk Level: medium — Morningstar, Inc. shows moderate risk based on this filing. The company's financial health is subject to market volatility and regulatory changes inherent in the investment services industry, as evidenced by the fluctuating revenue figures and the need for ongoing compliance.

Analyst Insight

Investors should monitor Morningstar's operating expenses and segment performance to understand the drivers behind the stable net income despite revenue growth.

Key Numbers

• 741.2 — Revenue (Q1 2024 (in millions))
• 714.0 — Revenue (Q1 2023 (in millions))
• 11,987,495 — Net Income (Q1 2024 and Q1 2023)
• 0.5 — EPS (Q1 2024 and Q1 2023)
• 6.1 — Total Assets (As of March 31, 2024 (in billions))
• 5.6 — Total Assets (As of December 31, 2023 (in billions))
• 200,000,000 — Total Debt (As of March 31, 2024, and December 31, 2023)

Key Players & Entities

• Morningstar, Inc. (company) — Filer
• 2024-03-31 (date) — Period of report
• 2024-04-26 (date) — Filing date
• $741.2 million (dollar_amount) — Revenue for Q1 2024
• $714.0 million (dollar_amount) — Revenue for Q1 2023
• $11,987,495 (dollar_amount) — Net income for Q1 2024 and Q1 2023
• $0.50 (dollar_amount) — EPS for Q1 2024 and Q1 2023
• $200,000,000 (dollar_amount) — Total debt as of March 31, 2024, and December 31, 2023

FAQ

Risk Factors

• Market and Economic Conditions [medium — market]: The company's financial results are significantly influenced by global economic conditions, market volatility, and investor sentiment, which can impact demand for its products and services.

Key Financial Figures

• $6.1 million — le, less allowance for credit losses of $6.1 million and $5.6 million, respectively 326.2 34
• $5.6 m — e for credit losses of $6.1 million and $5.6 million, respectively 326.2 343.9 Incom
• $741.2 million — ulated depreciation and amortization of $741.2 million and $714.0 million, respectively 210.8
• $714.0 m — and amortization of $741.2 million and $714.0 million, respectively 210.8 207.7 Operat
• $0.5 million — t of unamortized debt issuance costs of $0.5 million and $0.5 million, respectively $ 600.8
• $0.5 m — debt issuance costs of $0.5 million and $0.5 million, respectively $ 600.8 $ 608.9 Am
• $1.4 million — t of unamortized debt issuance costs of $1.4 million and $1.5 million, respectively 348.6 3
• $1.5 m — debt issuance costs of $1.4 million and $1.5 million, respectively 348.6 348.5 Total

Filing Documents

• morn-20240331.htm (10-Q) — 1478KB
• morn_exhibitx311x03312024.htm (EX-31.1) — 14KB
• morn_exhibitx312x03312024.htm (EX-31.2) — 14KB
• morn_exhibitx321x03312024.htm (EX-32.1) — 5KB
• morn_exhibitx322x03312024.htm (EX-32.2) — 6KB
• morn-20240331_g1.jpg (GRAPHIC) — 28KB
• 0001289419-24-000028.txt (&nbsp;) — 7104KB
• morn-20240331.xsd (EX-101.SCH) — 50KB
• morn-20240331_cal.xml (EX-101.CAL) — 79KB
• morn-20240331_def.xml (EX-101.DEF) — 234KB
• morn-20240331_lab.xml (EX-101.LAB) — 540KB
• morn-20240331_pre.xml (EX-101.PRE) — 423KB
• morn-20240331_htm.xml (XML) — 977KB

Financial Statements

Financial Statements 4 Unaudited Condensed Consolidated Statements of Income for the three months ended March 31, 2024 and 2023 4 Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2024 and 2023 5 Condensed Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023 6 Unaudited Condensed Consolidated Statements of Equity for the three months ended March 31, 2024 and 2023 8 Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 10 Notes to Unaudited Condensed Consolidated Financial Statements Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 27 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 43 Item 4.

Controls and Procedures

Controls and Procedures 44 PART 2 OTHER INFORMATION 45 Item 1.

Legal Proceedings

Legal Proceedings 45 Item 1A.

Risk Factors

Risk Factors 45 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 46 Item 3. Defaults Upon Senior Securities 46 Item 4. Mine Safety Disclosures 46 Item 5. Other Information 46 Item 6. Exhibits 48 SIGNATURE 49 3 Table of Contents PART 1. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Morningstar, Inc. and Subsidiaries Unaudited Condensed Consolidated Statements of Income (Loss) Three months ended March 31, (in millions, except per share amounts) 2024 2023 Revenue $ 542.8 $ 479.7 Operating expense: Cost of revenue 218.1 218.8 Sales and marketing 104.6 107.6 General and administrative 80.3 84.0 Depreciation and amortization 47.2 44.8 Total operating expense 450.2 455.2 Operating income 92.6 24.5 Non-operating expense, net: Interest expense, net ( 11.5 ) ( 13.3 ) Realized gain on sale of investments, reclassified from other comprehensive income 2.6 0.2 Expense from equity method transaction, net — ( 11.8 ) Other income, net 3.3 2.5 Non-operating expense, net ( 5.6 ) ( 22.4 ) Income before income taxes and equity in investments of unconsolidated entities 87.0 2.1 Equity in investments of unconsolidated entities ( 1.5 ) ( 1.3 ) Income tax expense 21.3 8.4 Consolidated net income (loss) $ 64.2 $ ( 7.6 ) Net income (loss) per share: Basic $ 1.50 $ ( 0.18 ) Diluted $ 1.49 $ ( 0.18 ) Dividends per common share: Dividends declared per common share $ 0.41 $ 0.38 Dividends paid per common share $ 0.41 $ 0.38 Weighted average shares outstanding: Basic 42.7 42.5 Diluted 43.0 42.5 See notes to unaudited condensed consolidated financial statements. 4 Table of Contents Morningstar, Inc. and Subsidiaries Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) Three months ended March 31, (in millions) 2024 2023 Consolidated net income (loss) $ 64.2 $ ( 7.6 ) Other comprehensive income (loss), net of tax: Foreign currency translation adjustment ( 10.6 ) 7.1 Unrealized gains on securities: Unrealized holding gains arising during period 1.9 0.1 Reclassification of realized gains on investments included in net income ( 1.9 ) ( 0.2 ) Other comprehensive income (loss), net ( 10.6 ) 7.0 Comprehensive income (loss) $ 53.6 $ ( 0.6 ) See notes to unaudited c

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View this 10-Q filing on SEC EDGAR