Morningstar NASDAQ: MORN shareholders approved all proposals presented at the company’s 2026 annual meeting, including the election of 10 directors, an advisory “say on pay” vote, and the ratification of KPMG as independent auditor for 2026, Executive Chairman Joe Mansueto said. The company said it will file an 8-K with more detailed voting results by May 13.
Board updates and meeting agenda
Mansueto introduced directors in attendance and highlighted two board changes. Gail Landis, who joined the board in 2013, is stepping down after 13 years. Mansueto praised her “investor-first mindset” and asset management expertise. The company also welcomed new director Anne Bramman, whom Mansueto said brings “deep financial expertise and a strong track record of value creation.”
In management presentations that followed the formal vote, Morningstar leaders leaned into a theme that ran through the day: how artificial intelligence is affecting key parts of the business, including PitchBook, manager research, and credit ratings.
Mansueto: stock decline amid AI uncertainty, but buybacks signal conviction
Mansueto described the past year as “unusual.” He said Morningstar delivered “mid to upper single digits” organic revenue growth and “low double-digit” adjusted operating profit growth, but the stock price “declined pretty significantly” as investor uncertainty around AI’s implications for data and software companies increased.
Despite the stock move, Mansueto said Morningstar believes it is positioned “not just to navigate in an AI world, but to thrive in it,” pointing to large proprietary databases, analytics, independent research and ratings, accepted methodologies, and brand trust embedded in investor workflows.
He also emphasized capital returns. Mansueto noted Morningstar announced a $1 billion share repurchase authorization last fall and said the company has repurchased “a little more than 10%” of shares outstanding over the past 12 months, arguing the market price has diverged from intrinsic value.
Kapoor: “essential” to investor workflows and focused on AI and public-private convergence
CEO Kunal Kapoor said Morningstar is “embracing” AI and intends to use it to create value, while stressing that “trust, independence, and judgment” still matter when decisions are high-stakes. Kapoor said Morningstar is “plugged right into what [AI provider] Anthropic” is rolling out, and positioned the company as a “truth layer” that AI systems can anchor to through structured data, ratings, and methodologies.
Kapoor outlined areas of secular growth he said Morningstar is participating in, including model portfolios, private credit, private equity benchmarking, and private markets reporting. He also reiterated the importance of being “absolutely essential to the investor workflow,” and said the company’s internal focus for 2026 centers on two themes: AI and “owning the language of markets,” particularly around public-private convergence.
On business units, Kapoor said Morningstar Direct’s relevance extends beyond mutual funds as investment strategies increasingly appear in ETFs, separate accounts, managed portfolios, and other vehicles. He said PitchBook remains “a fantastic, valuable business,” though he acknowledged organic growth has slowed and said the company is experimenting rapidly on AI and business model changes. For Morningstar Credit, Kapoor said the business will have “ups and downs” across credit cycles but framed it as a long-term compounding opportunity. He also said Morningstar Wealth has become “far more capital light” after exiting more capital-intensive areas, and noted Morningstar Retirement serves more than 2.3 million investors.
CFO Holt: AOI as “North Star,” margin expansion, and capital deployment
CFO Mike Holt said Morningstar operationalizes long-term value creation by focusing on adjusted operating income (AOI), calling it the company’s “North Star metric.” He said growing AOI supports free cash flow growth and, in turn, intrinsic value growth. Holt said revenue has grown over the last decade from $800 million to more than $2.5 billion, while AOI increased from $182 million to over $600 million.
For 2025, Holt reported:
- 8% organic revenue growth
- 18% growth in adjusted operating income
- Free cash flow that was “relatively flat,” which he described as noisy quarter-to-quarter but correlated with AOI over time
Holt said adjusted operating income rose by $89 million in 2025, from $494 million to $583 million, driven by $170 million in incremental revenue with more than half flowing to profit. He highlighted margin expansion over the past three years and said the first quarter of 2026 showed a 27.7% adjusted operating margin. He also said the firm has delivered higher operating results “without adding headcount,” emphasizing productivity and scale.
On first-quarter 2026 results, Holt cited 7.6% organic revenue growth and 32% AOI growth, while noting free cash flow was “a little bit negative” due to quarterly timing effects.
Discussing segment performance, Holt said every segment contributed to AOI growth in 2025. He called Direct Platform the largest and most profitable segment, with “mid-40s” margins and a 6% growth rate. He said PitchBook’s AOI has quadrupled over five years but acknowledged recent deceleration. He described Morningstar Credit as showing volatility but benefiting from “meaningful tailwind” as it expands by geography and asset class. Holt said Morningstar Wealth has refocused on three core areas—investment management, the international wealth platform, and the individual investor segment—and that profitability has improved. For Morningstar Retirement, he cited “50% margins” and 8% growth rates.
Holt said capital deployment priorities are reinvestment, acquisitions, and then returning capital to shareholders. Over the last five years, he cited $1.1 billion in M&A, $346 million in dividends, and $1.3 billion in share repurchases. He also noted total debt increased from $1.1 billion at the end of 2025 to $1.7 billion at the end of the first quarter of 2026, citing items including the CRSP acquisition and $300 million of repurchases, while calling roughly 2x debt-to-EBITDA “very comfortable.”
AI deep dives: PitchBook workflows, manager research, and credit ratings
Nizar Tarhuni, EVP of Research at PitchBook, said private markets lack standardized reporting and a common taxonomy, making data sourcing, validation, enrichment, and orchestration a core competency. He said PitchBook is working to transition from a reference platform to an end-to-end workflow solution, while also embedding its data in external AI ecosystems in ways that “protect the economics” of its IP.
Tarhuni said PitchBook has built a client network generating “over 500,000 data points,” and highlighted credit coverage across syndicated loans, bonds, BDCs, CLOs, and private credit. He said PitchBook’s private credit coverage has grown “over 21 times” over the last four years, tracking nearly 100,000 private credit transactions. He also acknowledged softness in PitchBook’s corporate and venture segments, and described investments in non-backed company coverage, aiming to reach 20 million companies by year-end.
Tarhuni said PitchBook’s “Navigator” conversational AI search tool is a core software investment, with an ambition to build “agentic workstations” aligned to specific jobs such as sourcing, diligence, and portfolio monitoring. He also cited the 2025 acquisition of Lumonic, describing it as an AI-native portfolio monitoring company that expands PitchBook into middle-office workflows.
Laura Lutton, Morningstar’s global head of manager research, said AI will have a “greater long-term impact on investment research than any prior technology cycle,” and argued that “trust, transparency, and accountability become the new scarcity.” She emphasized Morningstar’s structured data standards—such as its fund category framework and star ratings—saying AI increases demand for “structured, auditable” data anchored in transparent methodologies. Lutton said Morningstar aggregates data across 10,000 sources and that the licensed data business is accelerating as it can be less costly than replicating collection in-house. She also pointed to an AI assistant launched inside Morningstar Direct in March that summarizes methodologies and streamlines investment list creation, saying several large clients have onboarded it within weeks.
On Morningstar Credit, Managing Director Sean O’Connor said AI-driven capital expenditures—particularly in digital infrastructure and energy transition—are creating demand for financing structures that “require credit opinions,” including for assets such as data centers, LNG terminals, battery storage, and cell towers. O’Connor said private markets create a “level playing field” where Morningstar can compete with larger rivals, and stated that 25% of Morningstar Credit ratings revenue comes from private markets.
Q&A: PitchBook pricing evolution, CRSP strategy, and sales cycles
In the Q&A session, PitchBook President and COO Rod Diefendorf said PitchBook has historically had “one product with a very rigid pricing structure,” but is evolving toward more segmented offerings and more firm-wide licensing. He said only about 10% of customers are currently not seat-based, but those customers represent about 40% of the user base, and he expects firm-wide licensing to increase. Diefendorf said PitchBook is also exploring an “MCP-only product” that would allow some customers to access PitchBook data through large language model partners without the full platform.
Diefendorf also discussed a newly announced relationship with StepStone, describing it as a reseller arrangement where PitchBook subscribers can access StepStone’s platform for an additional fee, and said early lead interest has been strong.
On usage-based pricing and “agentic AI,” Chief Revenue Officer Julie Willoughby said Morningstar has long offered enterprise structures and consumption-based tier models, and that MCP connectors increase traceability of what is accessed and the volume. However, she said clients often want pricing certainty and “have not yet been ready” to move wholesale to consumption models, in part due to compliance and traceability requirements.
On CRSP, Kapoor said Morningstar sees more pricing opportunity in the data side, but for indexes plans to prioritize growth and broader distribution rather than price increases. He said partner alignment with Vanguard centers on growing index usage, and argued that incumbents may be charging too much for beta indexes.
On sales cycles, Willoughby said the company has seen longer sales cycles as clients launch AI projects, with friction often tied to legal and compliance review, but said Morningstar has “solved a lot of that in the last two quarters.”
Kapoor closed the meeting by thanking shareholders and reiterating Morningstar’s focus on execution, with product demos offered after the session for PitchBook, Morningstar Credit, and Morningstar Direct.
About Morningstar NASDAQ: MORN
Morningstar, Inc is a leading provider of independent investment research, data, and analytics, serving both individual investors and financial professionals. The company offers comprehensive coverage of financial products, including mutual funds, exchange-traded funds (ETFs), stocks, bonds and market indexes. Morningstar's proprietary rating systems and research methodologies help clients assess the risk and return profiles of investment opportunities and make informed decisions.
Its core products include Morningstar Direct, an institutional investment analysis platform; Morningstar Office Cloud, a portfolio management solution for advisors; and Morningstar Data, which delivers extensive datasets through APIs and data feeds.
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