March 13, 2020

Could you provide a “higher than corporate average” or “lower than corporate average” adjusted operating margin characterization for the different revenue lines (License-based, Asset-based, and Transaction-based) reported? Is DBRS Morningstar curren

We do not report in segments or fully manage the business by revenue type, but we can give some general indication of margin relative to each category. 

In aggregate, our licensed based products tend to have the highest margins in our portfolio given the inherent leverage in selling subscriptions for data, research and software. Our asset-based revenue would come next, with aggregate margins in this category generally below our licensed-based products. These products are generally basis point driven and see positive leverage as asset values appreciate and the reverse during periods of market decline. Our transaction-based revenue should be split between ad sales and DBRS Morningstar given their different characteristics. Ad sales are primarily driven off of the Morningstar.com platform and the revenue largely falls to the bottom line. Finally, we reported DBRS Morningstar financial information in 2019. DBRS Morningstar’s adjusted operating margin, excluding amortization and deal-related expenses was 16.8%. As we noted in our fourth quarter press release, this also includes costs associated with a pending regulatory settlement.

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