v3.25.2
Segment and Geographical Area Information
 6 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]  
Segment and Geographical Area Information 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.

Beginning with the first quarter of 2025 reporting, the company changed the name of the Morningstar Data and Analytics reportable segment to Morningstar Direct Platform.

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 a broad collection of data and research covering the private capital markets, including venture capital, private equity, private credit and bank loans, and merger and acquisition (M&A) activities. Investors can also access Morningstar's data and research on public equities.

Morningstar Credit provides investors with credit ratings, research, data, and credit analytics solutions that contribute to the transparency of international and domestic credit markets. Morningstar Credit includes the Morningstar DBRS product area and the Morningstar Credit data and credit analytics product areas.

Morningstar Wealth provides investment products, platform capabilities, and individual investor tools powered by Morningstar’s independent research and data. We serve financial advisors through model portfolios, separately managed accounts, and technology platforms, and individuals through Morningstar Investor, which offers direct access to Morningstar’s research and insights.
Morningstar Retirement offers products designed to help individuals reach their retirement goals. Its offerings include managed retirement accounts, fiduciary services, Morningstar Lifetime Allocation funds, and custom models.

FASB ASC 280 Segment Reporting (FASB ASC 280) establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (CODM), in deciding how to allocate resources and assess performance. The company's chief executive officer, who is considered to be its CODM, reviews segment revenue and Segment Adjusted Operating Income presented on an operating segment basis for purposes of making operating decisions and assessing financial performance. For each segment, the CODM uses segment revenue and Segment Adjusted Operating Income in the annual budget and forecasting process. The CODM considers budget-to-actual variance when making decisions about allocating capital and personnel.

We define Segment Adjusted Operating Income as operating income (loss) excluding intangible amortization expense, the impact of merger, acquisition, and divestiture-related activity which, when applicable, may include certain non-recurring expenses such as pre-deal due diligence, transaction costs, contingent consideration, severance, and post-close integration costs (M&A-related expenses), and certain other one-time, non-recurring items which management does not consider when evaluating ongoing performance (other non-recurring items).

Although these adjustments are excluded from Segment Adjusted Operating Income, they are included in reported consolidated operating income and are included in the reconciliation to consolidated results. The CODM does not consider these adjustments for the purposes of making decisions to allocate resources among segments or to assess segment performance.

Expenses presented as part of the company's segments include allocations of shared costs. Shared costs include technology, investment research, sales, facilities, and marketing. These allocations are based on expected utilization of shared resources. Adjusted Operating Income is the reported measure that the company believes is most consistent with those used in measuring the corresponding amount in the consolidated financial statements.

The CODM does not review any information regarding total assets on a segment basis. Operating segments do not record intersegment revenues; therefore, there is none to be reported.

The following tables present information about the company’s reportable segments for the three and six months ended June 30, 2025 and 2024, along with the items necessary to reconcile the segment information to the totals reported in the accompanying consolidated financial statements. Prior period segment information is presented on a comparable basis to the basis on which current period segment information is presented and reviewed by the CODM.
Three months ended June 30, 2025
(in millions)Morningstar Direct PlatformPitchBookMorningstar CreditMorningstar WealthMorningstar RetirementTotal Reportable Segments
Revenue by type:
License-based$207.7 $164.7 $5.0 $19.7 $0.4 $397.5 
Asset-based— — — 35.2 32.0 67.2 
Transaction-based1.5 1.8 80.0 9.4 — 92.7 
Total segment revenue209.2 166.5 85.0 64.3 32.4 557.4 
Less:
Compensation expense(1)
58.2 76.3 41.1 28.7 11.3 
Other segment items(2)
54.7 37.4 13.4 32.6 5.7 
Adjusted operating income (loss)$96.3 $52.8 $30.5 $3.0 $15.4 $198.0 
Six months ended June 30, 2025
(in millions)Morningstar Direct PlatformPitchBookMorningstar CreditMorningstar WealthMorningstar RetirementTotal Reportable Segments
Revenue by type:
License-based$406.9 $326.5 $9.6 $38.8 $0.9 $782.7 
Asset-based— — — 71.3 64.4 135.7 
Transaction-based1.5 3.7 148.4 15.5 — 169.1 
Total segment revenue408.4 330.2 158.0 125.6 65.3 1,087.5 
Less:
Compensation expense(1)
115.9 152.4 79.6 58.9 22.9 
Other segment items(2)
109.1 72.7 26.5 64.5 12.4 
Adjusted operating income (loss)$183.4 $105.1 $51.9 $2.2 $30.0 $372.6 
Three months ended June 30, 2024
(in millions)Morningstar Direct PlatformPitchBookMorningstar CreditMorningstar WealthMorningstar RetirementTotal Reportable Segments
Revenue by type:
License-based$195.7 $150.1 $3.7 $19.9 $0.5 $369.9 
Asset-based— — — 35.8 32.8 68.6 
Transaction-based1.2 1.6 73.9 6.9 — 83.6 
Total segment revenue196.9 151.7 77.6 62.6 33.3 522.1 
Less:
Compensation expense(1)
54.0 70.2 37.7 31.2 10.8 
Other segment items(2)
55.6 34.2 12.0 33.6 5.2 
Adjusted operating income (loss)$87.3 $47.3 $27.9 $(2.2)$17.3 $177.6 

Six months ended June 30, 2024
(in millions)Morningstar Direct PlatformPitchBookMorningstar CreditMorningstar WealthMorningstar RetirementTotal Reportable Segments
Revenue by type:
License-based$392.4 $295.7 $7.9 $40.4 $1.0 $737.4 
Asset-based— — — 69.4 60.7 130.1 
Transaction-based1.2 3.6 130.0 11.8 — 146.6 
Total segment revenue393.6 299.3 137.9 121.6 61.7 1,014.1 
Less:
Compensation expense(1)
107.6 146.3 73.1 63.6 21.3 
Other segment items(2)
107.5 65.7 24.6 65.8 8.9 
Adjusted operating income (loss)$178.5 $87.3 $40.2 $(7.8)$31.5 $329.7 
________________________________________________________________________________________
(1) Compensation expense includes salaries, bonus, commissions, severance, employee benefits, payroll taxes, and stock-based compensation incurred for employees directly associated with each reportable segment. Allocated compensation expense related to corporate and centralized functions is reported within Other segment items.

(2) Other segment items for each reportable segment includes:
Morningstar Direct Platform - allocated expenses, infrastructure costs, and other overhead costs.
PitchBook - allocated expenses, infrastructure costs, professional fees, and other overhead costs.
Morningstar Credit - allocated expenses, infrastructure costs, professional fees, and other overhead costs.
Morningstar Wealth - allocated expenses, infrastructure costs, and other overhead costs.
Morningstar Retirement - allocated expenses, infrastructure costs, and other overhead costs.

Three months ended June 30,Six months ended June 30,
(in millions)2025202420252024
Reconciliation of reportable segment revenue to consolidated revenue:
Total reportable segment revenue$557.4 $522.1 $1,087.5 $1,014.1 
Corporate and All Other (3)
47.7 49.8 99.5 100.6 
Total consolidated revenue$605.1 $571.9 $1,187.0 $1,114.7 
Reconciliation of reportable segment adjusted operating income to income before income taxes:
Total reportable segment adjusted operating income$198.0 $177.6 $372.6 $329.7 
Corporate and All Other (4)
(54.6)(46.6)(93.8)(87.9)
Intangible amortization expense (15.3)(17.5)(29.7)(35.2)
M&A-related expenses(3.8)(5.0)(10.7)(5.5)
Other non-recurring items0.8 — 0.8 — 
Operating Income125.1 108.5 239.2 201.1 
Non-operating expense, net(8.6)(19.0)(14.2)(24.6)
Equity in investments of unconsolidated entities(1.2)(1.2)(3.8)(2.7)
Income before income taxes$115.3 $88.3 $221.2 $173.8 
___________________________________________________________________________________________
(3) Corporate and All Other provides a reconciliation between revenue from our Total Reportable Segments and consolidated revenue amounts. Corporate and All Other includes Morningstar Sustainalytics and Morningstar Indexes as sources of revenues. Revenue from Morningstar Sustainalytics was $27.3 million and $29.2 million for the three months ended June 30, 2025 and 2024, respectively, and $56.1 million and $60.0 million for the six months ended June 30, 2025 and 2024, respectively. Revenue from Morningstar Indexes was $20.4 million and $20.6 million for the three months ended June 30, 2025 and 2024, respectively, and $43.4 million and $40.6 million for the six months ended June 30, 2025 and 2024, respectively.

(4) Corporate and All Other includes unallocated corporate expenses as well as adjusted operating income (loss) from Morningstar Sustainalytics and Morningstar Indexes. For the second quarters of 2025 and 2024, unallocated corporate expenses were $50.1 million and $46.1 million, respectively. For the first six months of 2025 and 2024, unallocated corporate expenses were $91.9 million and $87.0 million, respectively. Unallocated corporate expenses include finance, human resources, legal, and other management-related costs that are not considered when segment performance is evaluated.

The following table presents depreciation expense by reportable segment:
Three months ended June 30,Six months ended June 30,
(in millions)2025202420252024
Morningstar Direct Platform$11.2 $9.5 $22.0 $17.7 
PitchBook8.1 8.3 15.9 15.7 
Morningstar Credit2.0 1.7 4.0 3.6 
Morningstar Wealth4.4 5.0 8.9 9.7 
Morningstar Retirement2.7 2.6 5.3 5.4 
Total Reportable Segments28.4 27.1 56.1 52.1 
Corporate and All Other (5)
4.8 4.4 9.9 8.6 
Total$33.2 $31.5 $66.0 $60.7 
___________________________________________________________________________________________
(5) Corporate and All Other provides a reconciliation between depreciation expense from our Total Reportable Segments and consolidated depreciation expense. Corporate and All Other includes unallocated corporate expenses of depreciation expense related to finance, human resources, legal, and other management-related costs that are not considered when segment performance is evaluated as well as depreciation expense from Morningstar Sustainalytics and Morningstar Indexes.
Geographical Area Information

The tables below summarize our revenue, long-lived assets, which includes property, equipment, and capitalized software, net, and operating lease assets by geographical area. Revenue is attributed to geographical area based on country in which the sale was contracted.
Revenue by geographical areaThree months ended June 30,Six months ended June 30,
(in millions)2025202420252024
United States$431.6 $410.3 $856.1 $801.2 
Asia12.2 13.0 24.1 25.7 
Australia16.2 15.7 31.3 30.7 
Canada38.6 37.8 71.7 70.4 
Continental Europe55.0 50.1 105.6 99.8 
United Kingdom48.2 42.0 91.9 80.9 
Other3.3 3.0 6.3 6.0 
Total International173.5 161.6 330.9 313.5 
Consolidated revenue$605.1 $571.9 $1,187.0 $1,114.7 
Property, equipment, and capitalized software, net by geographical area
(in millions)As of June 30, 2025As of December 31, 2024
United States$184.3 $189.5 
Asia9.8 9.6 
Australia1.5 1.6 
Canada17.6 6.6 
Continental Europe6.5 5.3 
United Kingdom5.7 6.1 
Other0.2 0.2 
Total International41.3 29.4 
Consolidated property, equipment, and capitalized software, net$225.6 $218.9 

Operating lease assets by geographical area
(in millions)As of June 30, 2025As of December 31, 2024
United States$84.9 $92.9 
Asia41.7 44.2 
Australia2.0 2.4 
Canada6.8 7.7 
Continental Europe17.1 19.1 
United Kingdom11.9 14.7 
Other0.1 0.2 
Total International79.6 88.3 
Consolidated operating lease assets$164.5 $181.2