When you disclose the relative margins of each segment and products within those segments, what is your allocation to “corporate” overhead? How large is corporate overhead for Morningstar as a whole compared with your total revenue (what % of total revenues would be classified here)?

March 29, 2023

We do not have business segments as you describe. Rather, we have one reportable segment but disclose revenue by type, or product area, to provide useful information to shareholders. When we talk about relative margins, or margins by product area, we employ a variety of cost allocation methodologies to directly attribute certain expenses to these areas. These methodologies as well as our product areas do change from time to time and that is why we view our relative margins as directional.

For the year ended December 31, 2022, more than half of our costs were direct and these were primarily related to compensation. We do not define corporate overhead separately. We have certain large pools of operating expenses, such as those for data, research, information technology systems and infrastructure, sales, marketing, facilities, and other corporate functions, that are managed by centralized teams. These costs are included in the allocation assumptions used to derive our estimated margins by product area.


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