Financial Analysis

Contingencies We record accrued liabilities for litigation, regulatory, and other business matters when those matters represent loss contingencies that are both probable and estimable. In these cases, there may be an exposure to loss in excess of any amounts accrued. Unless a loss contingency is both probable and estimable, we do not establish an accrued liability. As litigation, regulatory, or other business matters develop, we evaluate on an ongoing basis whether such matters present a loss contingency that is probable and estimable. Data Audits and Reviews In our global data business, we include in our products, or directly redistribute to our customers, data and information licensed from third-party vendors. Our compliance with the terms of these licenses is reviewed internally and is also subject to audit by the third-party vendors. At any given time, we may be undergoing several such internal reviews and third-party vendor audits, and the results and findings may indicate that we may be required to make a payment for prior data usage. Due to a lack of available information and data, as well as potential variations of any audit or internal review findings, we generally are not able to reasonably estimate a possible loss, or range of losses, for these matters. In situations where more information or specific areas subject to audit are available, we may be able to estimate a potential range of losses. While we cannot predict the outcome of these processes, we do not antici …

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Credit Arrangements Debt The following table summarizes our debt as of June 30, 2026 and December 31, 2025: (in millions) As of June 30, 2026 As of December 31, 2025 2025 Term Facility, net of unamortized debt issuance costs of $1.2 million and $1.5 million, respectively $ 744.1 $ 373.5 2025 Revolving Credit Facility 620.0 350.0 2.32% Senior Notes due October 26, 2030, net of unamortized debt issuance costs of $0.8 million and $0.9 million, respectively 349.2 349.1 Total debt $ 1,713.3 $ 1,072.6 Credit Agreement On October 31, 2025, the company entered into a senior credit agreement (the 2025 Credit Agreement).The 2025 Credit Agreement provides the company with a multi-currency credit facility with a borrowing capacity of up to $1.5 billion, including a five-year $750.0 million revolving credit facility (the 2025 Revolving Credit Facility), a five-year delayed draw term facility of up to $375.0 million (the 2025 A-1 Facility), and a three-year term facility of up to $375.0 million (the 2025 A-2 Facility and, together with the 2025 A-1 Facility, the 2025 Term Facility; and, together with the 2025 Revolving Credit Facility, the 2025 Facility). The 2025 Credit Agreement also provides for the issuance of up to $50.0 million of letters of credit and a $100.0 million sublimit for a swingline facility under the 2025 Revolving Credit Facility. As of June 30, 2026, the total outstanding debt under the 2025 Credit Agreement was $1.4 billion, net of debt issuance costs, including $370.3 …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Three months ended June 30, Six months ended June 30, (in millions) 2026 2025 2026 2025 License-based $ 455.1 $ 428.4 $ 900.0 $ 846.4 Asset-based 96.8 82.4 191.9 168.1 Transaction-based 111.3 94.3 216.1 172.5 Consolidated revenue $ 663.2 $ 605.1 $ 1,308.0 $ 1,187.0

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Stock-Based Compensation Stock-Based Compensation Plans Our employees and our non-employee directors are eligible for awards under the Morningstar Amended and Restated 2011 Stock Incentive Plan, which provides for a variety of equity-based awards, including stock options, RSUs, MSUs, PSUs, and restricted stock. The following table summarizes the stock-based compensation expense included in each of our operating expense categories: Three months ended June 30, Six months ended June 30, (in millions) 2026 2025 2026 2025 Cost of revenue $ 8.6 $ 8.2 $ 12.9 $ 11.7 Sales and marketing 2.9 3.1 4.2 5.0 General and administrative 15.8 7.1 21.0 10.8 Total stock-based compensation expense $ 27.3 $ 18.4 $ 38.1 $ 27.5 As of June 30, 2026, the total unrecognized stock-based compensation cost related to outstanding RSUs, MSUs, and PSUs expected to vest was $101.5 million, which we expect to recognize over a weighted average period of 29 months.

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Fair Value Measurements The tables below present information about items that are measured at fair value: Fair Value as of Level within the Fair Value Hierarchy as of June 30, 2026 (in millions) June 30, 2026 Level 1 Level 2 Level 3 Cash equivalents $ 37.1 $ 37.1 $ $ Investments: Marketable equity investments, exchange-traded funds, and mutual funds 30.0 30.0 Marketable debt securities 1.5 1.5 Total $ 68.6 $ 68.6 $ $ Fair Value as of Level within the Fair Value Hierarchy as of December 31, 2025 (in millions) December 31, 2025 Level 1 Level 2 Level 3 Cash equivalents $ 40.1 $ 40.1 $ $ Investments: Marketable equity investments, exchange-traded funds, and mutual funds 50.0 50.0 Marketable debt securities 1.5 1.5 Total $ 91.6 $ 91.6 $ $ …

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Acquisitions, Goodwill, and Other Intangible Assets 2026 Acquisitions Acquisition of CRSP On February 2, 2026, we acquired 100% of the equity interests in CRSP, a provider of historical stock market data and indexes, from the University of Chicago. The closing consideration of $363.0 million was paid in cash and reflects adjustments for estimated available cash, indebtedness, and working capital. We began consolidating the financial results of CRSP in our consolidated financial statements as of February 2, 2026. CRSP is included in the Morningstar Indexes operating segment. The acquisition was accounted for as a business combination under the acquisition method of accounting pursuant to FASB ASC 805, Business Combinations (FASB ASC 805), which requires that assets acquired and liabilities assumed be recognized at fair value as of the acquisition date. As of March 31, 2026, we completed our initial determination of the fair values of the acquired identifiable assets and liabilities based on the financial data available. Based on the timing of the closing of this transaction, certain valuation calculations are considered preliminary due to information that may subsequently become available, and values assigned to various assets and liabilities could change. The acquisition date fair value of certain assets and liabilities, including intangible assets acquired and related weighted average expected life calculations, are provisional and subject to revision within one year of the …

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Income Taxes The following table shows our effective tax rate for the three and six months ended June 30, 2026 and June 30, 2025: Three months ended June 30, Six months ended June 30, (in millions) 2026 2025 2026 2025 Income before income taxes and equity in investments of unconsolidated entities $ 147.0 $ 116.5 $ 288.8 $ 225.0 Equity in investments of unconsolidated entities (0.9) (1.2) (1.0) (3.8) Income before income taxes $ 146.1 $ 115.3 $ 287.8 $ 221.2 Income tax expense $ 38.3 $ 26.3 $ 72.9 $ 53.7 Effective tax rate 26.2 % 22.8 % 25.3 % 24.3 % Our effective tax rate in the second quarter and first six months of 2026 was 26.2% and 25.3%, respectively, reflecting an increase of 3.4 and 1.0 percentage points, respectively, compared with the same prior year periods. Our effective tax rate increased in 2026 due to deferred taxes recorded in the second quarter of 2026 with respect to unremitted foreign earnings from some of our non-US subsidiaries as well as from a negative tax impact due to the vesting of employee stock-based compensation compared with the excess tax benefits that were recognized in 2025. When stock-based compensation vests at a lower share price than the original grant price, a negative tax impact results. This reduces our tax deduction for stock-based compensation and resulted in an increase to our effective tax rate in the second quarter of 2026. The Organization for Economic Co-operation and Development (OECD) has proposed a global minimum tax of 15% of …

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Leases We lease office space and certain equipment under various operating leases, with most of our lease portfolio consisting of operating leases for office space. Our leases have remaining lease terms of approximately 1 year to 10 years, which may include the option to extend the lease when it is reasonably certain we will exercise that option. We do not have lease agreements with residual value guarantees, sale leaseback terms, or material restrictive covenants. The following table presents the components of lease cost: Three months ended June 30, Six months ended June 30, (in millions) 2026 2025 2026 2025 Operating lease cost $ 13.0 $ 11.2 $ 25.1 $ 22.2 Variable lease cost $ 4.9 $ 5.0 $ 8.8 $ 7.8 The following table presents other information related to operating leases: Three months ended June 30, Six months ended June 30, (in millions) 2026 2025 2026 2025 Cash paid for amounts included in the measurement for operating lease liabilities $ 12.7 $ 11.4 $ 25.0 $ 20.8 Right of use assets obtained in exchange for operating lease liability $ 8.3 $ 0.8 $ 26.9 $ 0.8 The following table shows our minimum future lease commitments due in the remainder of 2026, each of the next four subsequent years, and thereafter, for operating leases: (in millions) As of June 30, 2026 Remainder of 2026 (July 1 through December 31) $ 25.5 2027 45.8 2028 38.9 2029 27.7 2030 21.2 Thereafter 63.6 Total minimum lease commitments 222.7 Adjustment for discount to present value 31.2 Present value of leas …

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Income Statement : In November 2024, the FASB issued ASU No. 2024-03: Disaggregation of Income Statement Expenses (DISE) (ASU No. 2024-03), which requires additional disclosure of the nature of expenses included in the income statement. The standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. This standard is effective for our fiscal year beginning on January 1, 2027 and interim periods beginning on January 1, 2028. Early adoption is permitted. Entities should apply the guidance prospectively although retrospective application is permitted. We are evaluating the effect that ASU No. 2024-03 will have on our disclosures. Capitalized Software : In September 2025, the FASB issued ASU No. 2025-06: Targeted Improvements to the Accounting for Internal-Use Software (ASU No. 2025-06) to clarify and modernize the recognition and disclosure framework for internal-use software costs. This standard removes all references to software development project stages and requires capitalization to begin once (1) management commits funding and (2) completion and intended use are probable, considering whether significant development uncertainties have been resolved. This standard is effective for our fiscal year beginning on January 1, 2028 and interim reporting periods within that fiscal year. Early adoption is permitted. Entities may apply the guidance using a pr …

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Revenue Disaggregation of Revenue The following table presents our revenue disaggregated by revenue type: Three months ended June 30, Six months ended June 30, (in millions) 2026 2025 2026 2025 License-based $ 455.1 $ 428.4 $ 900.0 $ 846.4 Asset-based 96.8 82.4 191.9 168.1 Transaction-based 111.3 94.3 216.1 172.5 Consolidated revenue $ 663.2 $ 605.1 $ 1,308.0 $ 1,187.0 Contract Liabilities Our contract liabilities represent deferred revenue. We record deferred revenue when a contract requires a customer to be billed in advance. The following table summarizes our contract liabilities balance: (in millions) As of June 30, 2026 As of December 31, 2025 Deferred revenue (current) $ 628.4 $ 586.1 Deferred revenue (non-current) 19.1 21.0 Total contract liabilities $ 647.5 $ 607.1 The following table presents revenue recognized that was included in the deferred revenue balance at the beginning of the period: Six months ended June 30, (in millions) 2026 2025 Revenue recognized that was included in opening deferred revenue $ 440.2 $ 395.5 Remaining Performance Obligations Remaining performance obligations include both amounts recorded as deferred revenue in our Consolidated Balance Sheets as of June 30, 2026 as well as amounts not yet invoiced to customers as of June 30, 2026, largely reflecting future revenue related to signed multi-year arrangements. As of June 30, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $1. …

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Segment and Geographical Area Information Segment Information Our segments are generally organized around the company's products offerings. The company has concluded that it has seven operating segments, which are presented as the following five reportable segments: Morningstar Direct Platform PitchBook Morningstar Credit Morningstar Wealth Morningstar Retirement The operating segments of Morningstar Sustainalytics and Morningstar Indexes do not individually meet the quantitative segment reporting thresholds and have been combined and presented as part of Corporate and All Other, which is not a reportable segment. Corporate and All Other provides a reconciliation between revenue from our total reportable segments and consolidated revenue amounts. Morningstar Direct Platform provides investors comprehensive data, research and insights, and investment analysis to empower investment decision-making. Morningstar Direct Platform includes product areas such as Morningstar Data, Morningstar Direct, and Morningstar Advisor Workstation. PitchBook provides investors with access to data, proprietary research, analytics, and AI-enabled software across private capital markets, including venture capital, private equity, private credit, bank loans, and M&A. The platform offers access to Morningstars public-equity data and research. Morningstar Credit provides investors with credit ratings, research, data, and credit analytics solutions. Morningstar Credit includes the Morningstar DBRS p …

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Summary of Significant Accounting Policies Our significant accounting policies are included in Note 2 of the Notes to our Audited Consolidated Financial Statements included in our Annual Report. Recently Issued Accounting Pronouncements Not Yet Adopted Income Statement : In November 2024, the FASB issued ASU No. 2024-03: Disaggregation of Income Statement Expenses (DISE) (ASU No. 2024-03), which requires additional disclosure of the nature of expenses included in the income statement. The standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. This standard is effective for our fiscal year beginning on January 1, 2027 and interim periods beginning on January 1, 2028. Early adoption is permitted. Entities should apply the guidance prospectively although retrospective application is permitted. We are evaluating the effect that ASU No. 2024-03 will have on our disclosures. Capitalized Software : In September 2025, the FASB issued ASU No. 2025-06: Targeted Improvements to the Accounting for Internal-Use Software (ASU No. 2025-06) to clarify and modernize the recognition and disclosure framework for internal-use software costs. This standard removes all references to software development project stages and requires capitalization to begin once (1) management commits funding and (2) completion and intended use are probable, considering whether signifi …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing