MORNINGSTAR,INC. (NASDAQ:MORN) Files An 8-K Regulation FD Disclosure
Item 7.01. Regulation FD Disclosure.
The following information is included in this Current Report on Form8-K as a result of Morningstar,Inc.’s policy regarding public disclosure of corporate information. Answers to additional inquiries, if any, that comply with this policy are scheduled to become available around April5, 2019.
Caution Concerning Forward-Looking Statements
This current report on Form8-K contains forward-looking statements as that term is used in the Private Securities Litigation Reform Act of 1995. These statements are based on our current expectations about future events or future financial performance. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, and often contain words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue.” These statements involve known and unknown risks and uncertainties that may cause the events we discuss not to occur or to differ significantly from what we expect. For us, these risks and uncertainties include, among others,
· Align to the three secular trends we are positioning the business around:
· Growing demand for differentiated data, research, and analytics
· Investors demanding more value from advice providers
· Convergence of public and private markets
· Build our investment databases, research capabilities, technical expertise, or customer groups faster or more cost effectively than we could if we built them ourselves; and
· Offer a good cultural fit with our entrepreneurial spirit and brand leadership
We are active in looking at potential M&A opportunities across the business, but we maintain a very high hurdle for completing transactions. As data has shown, acquisitions can easily destroy value, and we take our responsibility of being good capital stewards seriously. Thus, while you should expect us to be opportunistic, it is highly unlikely we will be among the most active firms on the acquisition front. Additionally, it is worth pointing out that the current environment has created eye-popping valuations across financial technology, and we would have a hard time earning meaningful returns given current valuation premiums. You might see us be more active in a downturn, when valuations return to more reasonable levels. In the meantime, we are excited about our organic growth opportunities.
Enterprise Contract Trends
6. It seems large information services/data providers (competitors) are transitioning to enterprise contracts (vs. monthly per user fees), at least for larger clients? Is this a trend that you see with your client base? How is management positioning the company as the market shifts towards enterprise contracts?
We have diverse lines of business across our portfolio, and we continuously explore different revenue and pricing models. It’s worth pointing out that we have always had a mix of enterprise and per-user contracts, and we largely use client preference as a means to govern between the two. That said, our data contracts are generally more of the enterprise kind, while our software contracts (including Morningstar Direct and PitchBook) tend to be based more on per-user fees. We also value simplicity and transparency a great deal in our pricing.Overall, we do not see a trend favoring one type of pricing model over another.
About MORNINGSTAR,INC. (NASDAQ:MORN)
Morningstar, Inc. is a provider of independent investment research in North America, Europe, Australia and Asia. The Company offers a line of data, software, research and investment management offerings for financial advisors, asset managers, retirement plan providers and sponsors, and individual investors. In addition to its United States-based products and services, the Company offers local versions of its products designed for investors in Asia, Australia, Canada, Europe, Latin America and South Africa. The Company serves approximately 250,000 financial advisors, over 1,300 asset management firms, approximately 30 retirement plan providers, over 300,000 retirement plan sponsors and approximately 10.1 million individual investors. The Company has operations in approximately 30 countries. The Company tracks market data on approximately 20 million exchange-traded equities, derivatives, commodities, currencies and other investments.