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Good base of recurring revenue

Morningstar also has excellent visibility, with a high base of recurring revenue. Recurring revenue type companies are best able to cope with the enormous strains of high growth because they can anticipate future problems well in advance and plan ahead. Because they are the easiest to keep under control and the least demanding to run, they are also the least likely to stumble and produce disappointing earnings. 89% of Morningstar’s revenue is recurring.23% of this revenue comes from Morningstar.com.The other 66% comes from other contractual renewals. Contracts for Morningstar.com and the company’s subscription based services are for the most part renewed annually. •Based on ttm revenue of $404 million, the company currently has about a $359M run rate. •Revenue is also well diversified with sales from 5 main sources: Investment Consulting, Advisor Workstation, Licensed Data, Morningstar.com, and Principia.

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