We’ve also had some traction with the partnerships that we’ve alluded to in the past, and we have gotten favorable feedback by enhancing user experiences. As we’ve talked about in the last couple of quarters, we had another strong quarter and a strong year across our factor models as well. So, we did see pretty good momentum on Equity Analytics, particularly with our factor model sales. And we have had – it’s early days, but we’ve had some traction with our risk insights offering as well, which is a new offering for us, where we’re providing clients with more easily accessible, more interactive and more user-friendly risk and performance stats on their portfolios. So, we’re encouraged. The growth we’re seeing is an area that we’ve been focused and investing and so we definitely are encouraged by the outlook.
But I would say, particularly given the backdrop and the fact that within Analytics, we do have a higher concentration of broker-dealers and hedge funds, we do expect to see some lumpiness in both sales and cancels moving forward here. But the long-term dynamics in those areas of traction we’ve been getting have been quite encouraging to us.
Operator: Our next question comes from the line of Alexander Hess with JPMorgan. Please go ahead.
Alexander Hess: Hi guys. Baer, you alluded to a desire to meaningfully scale the physical asset business. Just wanted – it sounds like you guys have fleshed out a bit more sort of a concrete near-term road map for the ESG and Climate business. But sort of can you maybe dimensionalize why you guys weren’t in that earlier? Is that something where you feel the competitors maybe have a head start? And then beyond that, is there – how would you monetize this? Is that going to be more of a consumption-based model? Or is that going to be on sort of a subscription program as well? Thank you guys.
Baer Pettit: Sure. So look, the Climate opportunity is an enormous one, which will affect all aspects of the economy and industries, right? So, I think it’s natural that there will be aspects of it which at the outset we were not present in and where we’re broadening and deepening our capabilities, right? So I think that’s a general observation which could be both from our actions organically and inorganic. So in this instance, we’re very excited with what we’ve done here, not merely because there’s clearly demand from this, but it’s also an area where we’re able to apply a lot of interesting work in data science and AI. So there’s client demand, it plays to our strengths in this growth category, and I think we’ve got a really good chance of continuing to innovate.
Just in terms of the business model, it’s the same as usual, right? So it’s a subscription business model. It’s integrated with the normal way that we sell and it’s just enriching our capabilities across the board.
Operator: Our next question comes from the line of Owen Lau with Oppenheimer. Please go ahead.
Owen Lau: Hey, good morning. Thank you for taking my question. So your non-recurring revenue was up quite a bit in both Index and Analytics. And I think you recognize some fees for unlicensed usage of the content, like in the past, in slower periods in the Index business. I think for Analytics you had some large number of implementation and some on-time [ph] deals. Could you please elaborate a little bit more on what they actually are and what that means for recurring revenue going forward? Thank you.
Andy Wiechmann: Yes, sure. Owen, thank you. So maybe I’ll start on Index and then I can touch on Analytics. But yes, I think it’s helpful to give a bit more color on exactly what these non-recurring sales and revenues are. So as we mentioned, during the quarter, we had a very large contract signed to address the unlicensed usage of our Indexes in past periods. And just to put a finer point on that, just to be very clear, we identified a client that had been using our Indexes to create Index Linked products without a license over a long time period. And so during the quarter, we signed an agreement that we would be paid for that passed on license usage. And as a result recorded a sale and revenue associated with that. It is worth noting that we continue to see contributions to non-recurring sales and revenue from the licensing of our Indexes to create things like structured products and over-the-counter derivatives.
We also have non-recurring sales of – and uses of our – some of our data packages, like our free float data package and our Index history sales. And so those unlicensed usage sales are by their nature going to be lumpy and we don’t have those very often, as you know. But these other trends in things like over-the-counter derivatives and structured products are areas where we do see some momentum and should continue to be a contributor for us, but no changes to our business model overall, other than to say we see growth opportunities across categories of non-recurring revenue and sales for us. As you alluded to on the Analytics side, we did have a number of implementation related services that were completed during the quarter and so those implementation related services are non-recurring in nature.
And so we recognize non-recurring revenue when we complete those. It is worth noting on the recurring side as well for certain products that involve implementations such as our enterprise risk solutions. We defer the revenue until the implementation is complete, at which point we recognize the revenue from the beginning of the contract period to that point. And so we will have what we call these catch ups when we have implementations coming online, and we had several of those during the quarter. I’d say within Analytics, the non-recurring revenue tends to be most closely tied to those implementations and so it generally will be tied to the business growth over time.
Operator: Our next question comes from the line of Seth Weber with Wells Fargo. Please go ahead.
Seth Weber: Hey guys. Good morning. Wanted to ask about traction with the Burgiss integration. I think I heard something about run rate in the high teens, which sounds pretty encouraging. And I think on prior calls we’ve talked about how the product line is pretty undersold globally and just wondering how the integration or how the combination is going with Burgiss salespeople, working with existing MSCI salespeople just to kind of start cross selling the product? Thank you.
Baer Pettit: Sure. So happy to take that question. We’re very pleased with how the integration is going. I think there was clearly a benefit that we were a minority shareholder of Burgiss for a number of years, so got to know the business very well. We had one of our senior executives, Jay McNamara, there working for a number of years and really helped to revitalize their client activity and go-to-market and all the commercial side. So he is now a Co-Head of the business with Charissa Smith. So I think both from an operational point of view, we’re very pleased with the integration and we’ve got a team of client coverage people there that were already, if you like, trained the MSCI way under Jay, and the – and now those teams can work seamlessly with the MSCI client coverage team.
