MSCI Inc. (MSCI) shares plummeted 5.15% in intraday trading on Tuesday, despite the company reporting better-than-expected second-quarter earnings. The sharp decline comes as investors focus on rising operating expenses, overshadowing the positive revenue and earnings figures.

For the second quarter of 2025, MSCI reported adjusted earnings per share of $4.17, surpassing the analyst consensus estimate of $4.14. The company's total revenue reached $772.7 million, an increase of 9.1% year-over-year and exceeding analyst expectations of $768.4 million. However, the market's negative reaction suggests concerns about the company's cost structure and future profitability.

While MSCI demonstrated strong performance across its segments, including a 9.5% increase in Index operating revenues and an 11.3% growth in Sustainability and Climate operating revenues, the focus on rising expenses appears to be weighing heavily on investor sentiment. The company's outlook for full-year capital expenditures of $115-125 million and free cash flow of $1.40-$1.46 billion remained unchanged, which may have contributed to the market's cautious stance. As MSCI navigates the balance between growth and cost management, investors will likely keep a close eye on the company's ability to maintain its margins and cash flow generation in the coming quarters.