FactSet (FDS) FY 2025 Conference May 29, 2025 08:00 AM ET Speaker0 Hi. Good morning, everyone. Thanks for joining us today. My name is Kelsey Chew. I'm the financial information services analyst at Autonomous. And with me on stage today, we have mister Phil Snow, who is the CEO of FactSet. Thanks for joining us today, Phil. Speaker1 Thanks for having us. Yeah. Speaker0 So, Phil, I believe you started your career at FactSet in 1996 as a consultant and was officially named CEO in 2015. So just wondering if yo ...

NORWALK, Conn., May 29, 2025 (GLOBE NEWSWIRE) -- FactSet (NYSE: FDS | NASDAQ: FDS), a global financial digital platform and enterprise solutions provider, today announced it will release its financial and operating results for the third quarter fiscal 2025, ending May 31, 2025, on Monday, June 23, 2025. FactSet will also host a conference call to discuss these results at 9:00 a.m. Eastern Time on Monday, June 23, 2025. The following information is provided for investors who would like to participate in the ...

NORWALK, Conn., May 22, 2025 (GLOBE NEWSWIRE) -- FactSet (NYSE: FDS | NASDAQ: FDS), a global financial digital platform and enterprise solutions provider, today announced that Chief Executive Officer Phil Snow will participate in a fireside chat at the Bernstein 41st Annual Strategic Decisions Conference in New York on Thursday, May 29, 2025, at 8:00 a.m. Eastern Time. To access the live webcast, please visit the event page. By the end of the day, an audio replay of the webcast will be available for 90 days ...

NORWALK, Conn., May 01, 2025 (GLOBE NEWSWIRE) -- FactSet (NYSE: FDS | NASDAQ: FDS), a global financial digital platform and enterprise solutions provider, today announced that its Board of Directors approved a 6% increase in the regular quarterly cash dividend of $1.04 per share to $1.10 per share. The $0.06 per share increase marks the twenty-sixth consecutive year the Company has increased dividends on a stock split-adjusted basis, demonstrating its ongoing commitment to providing value to shareholders. T ...

Acquisitions - The acquisition of LiquidityBook was completed on February 7, 2025, for a purchase price of $243.8 million, including contingent consideration of $11.9 million[81]. - LiquidityBook provides cloud-native trading solutions and enhances the company's ability to serve integrated workflow needs across the portfolio life cycle[82]. - The acquisition resulted in the recognition of goodwill totaling $162.4 million, reflecting the excess of the purchase price over the fair value of net assets acquired[83]. - The acquisition of Irwin was completed on November 5, 2024, for a purchase price of $120.2 million, including contingent consideration of $9.6 million[86]. - Irwin is a leading investor relations platform, expanding the company's capabilities in addressing the workflow needs of investor relations professionals[87]. - The acquisition of Irwin resulted in the recognition of goodwill totaling $90.3 million, representing the excess of the purchase price over the fair value of net assets acquired[89]. Financial Performance - For the three months ended February 28, 2025, total revenues reached $570,660,000, an increase from $545,945,000 for the same period in 2024, representing a growth of 4.5%[165]. - Operating income for the three months ended February 28, 2025, was $185,492,000, compared to $181,942,000 in the prior year, reflecting a year-over-year increase of 2.0%[165]. - For the six months ended February 28, 2025, total revenues were $1,139,327,000, compared to $1,088,161,000 for the same period in 2024, marking a growth of 4.7%[165]. - Operating income for the six months ended February 28, 2025, was $376,827,000, up from $370,982,000 in the previous year, reflecting a growth of 1.6%[165]. Goodwill and Intangible Assets - Goodwill increased from $1,011,129 thousand as of August 31, 2024, to $1,245,315 thousand as of February 28, 2025, reflecting acquisitions of $252,713 thousand and foreign currency translations of $(18,527) thousand[91]. - The total carrying amount of identifiable intangible assets as of February 28, 2025, was $2,408,330 thousand, with a net carrying amount of $1,935,488 thousand after accumulated amortization of $472,842 thousand[93]. - Amortization expense for intangible assets for the six months ended February 28, 2025, was $62,461 thousand, compared to $48,853 thousand for the same period in 2024, representing a year-over-year increase of 28%[94]. - The company did not identify any material impairment of intangible assets during the six months ended February 28, 2025[93]. - The company tested goodwill for impairment and concluded there was no impairment as of February 28, 2025[92]. Debt and Financing - Total debt as of February 28, 2025, was $1,472,162 thousand, an increase from $1,365,973 thousand as of August 31, 2024[108]. - The company entered into a credit agreement on March 1, 2022, borrowing a total of $1.25 billion, consisting of $1.0 billion under the senior unsecured term loan and $250 million under the senior unsecured revolving credit facility[109]. - As of February 28, 2025, the company fully repaid the 2022 Term Facility, amounting to $62.5 million and $125 million repaid during the three and six months ended February 28, 2025, respectively[111]. - The outstanding borrowings under the 2022 Revolving Facility were $480 million as of February 28, 2025, with net borrowings of $230 million during the six months ended February 28, 2025[112]. - The company issued $1 billion in Senior Notes, with $500 million at a 2.900% interest rate due March 1, 2027, and another $500 million at a 3.450% interest rate due March 1, 2032[120]. - Interest expense on outstanding debt for the three months ended February 28, 2025, was $13.9 million, down from $16.6 million for the same period in 2024[124]. Shareholder Returns - The company authorized up to $300 million for share repurchases during fiscal 2025, with $186.9 million remaining as of February 28, 2025[138]. - The company repurchased 136,714 shares of common stock at a total cost of $64.4 million during the three months ended February 28, 2025[137]. - The Board of Directors approved a dividend of $1.04 per share for the first and second quarters of fiscal 2025, totaling approximately $39,572,000 and $39,511,000 respectively[141]. Tax and Other Comprehensive Income - The effective tax rate for the six months ended February 28, 2025, was 16.2%, an increase from 15.8% for the same period in 2024, primarily due to lower excess tax benefits related to stock-based compensation[98]. - Total accumulated other comprehensive loss (AOCL) as of February 28, 2025, was $(112,753,000), compared to $(79,613,000) as of August 31, 2024[142]. Capital Expenditures - Capital expenditures for the three months ended February 28, 2025, totaled $23,736,000, up from $21,917,000 in the same period of 2024, indicating an increase of 8.3%[165]. - Capital expenditures for the six months ended February 28, 2025, were $49,610,000, compared to $38,383,000 in the same period of 2024, indicating a significant increase of 29.1%[165]. Segment Performance - Americas segment revenues for the three months ended February 28, 2025, were $369,661,000, an increase from $352,618,000 in the same period of 2024, representing a growth of 4.1%[165]. - EMEA segment revenues for the three months ended February 28, 2025, were $143,387,000, compared to $139,176,000 in the prior year, reflecting a growth of 3.1%[165]. - Asia Pacific segment revenues for the three months ended February 28, 2025, were $57,612,000, an increase from $54,151,000 in the same period of 2024, indicating a growth of 6.8%[165].

Core Insights - FactSet (FDS) shares have increased by 4.9%, underperforming the industry rally of 14.3% and the S&P 500's rise of 8.1% [1] - Revenue growth is projected at 5% for 2025 and 6% for 2026, with earnings expected to rise by 4% in 2025 and 7.7% in 2026 [1] Group 1: Financial Performance - In fiscal 2024, organic revenues grew by 5.7% year over year, reaching $2.2 billion, with a forecasted increase of 4.9% for fiscal 2025 [2] - The Annual Subscription Value (ASV) reached $2.3 billion, marking a 4.8% year-over-year increase, with U.S. revenues at $1.5 billion, up 6.1% [3] - Share repurchases totaled $235.2 million in fiscal 2024, with dividends paid amounting to $150.7 million, reflecting the company's commitment to shareholder value [4] Group 2: Strategic Partnerships and Innovations - FactSet partnered with Irwin to integrate investor relations CRM with its Workstation, enhancing solutions for IR professionals [5] - Collaboration with LightPoint provides hedge funds with an integrated solution to improve trade workflows [5] - Partnership with Coin Metrics allows financial professionals to monitor digital assets and evaluate portfolios [5] Group 3: Liquidity and Financial Health - The current ratio for FactSet in Q2 fiscal 2025 was 1.47, significantly higher than the industry average of 0.8, indicating strong liquidity [6]

Core Viewpoint - FactSet (FDS) reported second-quarter fiscal 2025 results with earnings exceeding estimates while revenues met expectations [1][2] Financial Performance - Earnings per share (EPS) of $4.28 beat the consensus estimate by 2.2% and increased 1.4% year-over-year [2] - Revenues totaled $570.7 million, meeting the Zacks Consensus Estimate and reflecting a 4.5% year-over-year growth [2] - Adjusted operating income was $212.7 million, up 1.6% from the previous year, surpassing estimates [8] Revenue Breakdown - Organic revenues increased 4% year-over-year to $568 million, with regional growth rates of 4% in the Americas, 3.1% in EMEA, and 6.8% in Asia Pacific [4] - Revenues from the Americas segment were $369.7 million, up 4.8% year-over-year [5] - EMEA revenues were $143.4 million, a 3% increase, while Asia Pacific revenues reached $57.6 million, marking a 6.5% growth [5] Subscription Value and Client Metrics - Annual Subscription Value (ASV) plus professional services reached $2.3 billion, up 4.1% year-over-year [6] - The company added 396 clients in the second quarter, bringing the total to 8,645, with a client retention rate of 91% [7] Balance Sheet and Cash Flow - Cash and cash equivalents at the end of the quarter were $278.5 million, down from $289.2 million in the previous quarter [9] - Long-term debt increased to $1.5 billion from $1.3 billion [9] - Generated $174 million in cash from operating activities, with capital expenditures of $23.7 million [10] Guidance for Fiscal 2025 - Updated revenue guidance for fiscal 2025 is set at $2.305-$2.325 billion, slightly above the previous range [11] - EPS guidance is between $16.8 and $17.4, with the midpoint aligning with consensus estimates [11] - Projected adjusted operating margin is between 36% and 37% [11]

Group 1 - The article discusses a positive outlook on FactSet Research Systems (NYSE: FDS), highlighting expectations for strong EPS growth in the coming years [1] - The author emphasizes a fundamentals-based approach to value investing, arguing against the misconception that low multiple stocks are inherently cheap [1] - The focus is on identifying companies with long-term durability, steady growth, and strong balance sheets, while acknowledging the risks associated with overpaying for successful companies [1] Group 2 - The article does not contain any disclosures related to stock positions or business relationships with the companies mentioned [2] - It clarifies that past performance is not indicative of future results and that no specific investment advice is provided [3]

Company Overview - FactSet (NYSE: FDS) is recognized for its solid business model based on recurring revenues, which contributes to its stability and reliability in the financial services sector [1]. Business Model - The company operates a digital financial platform utilized by thousands of professionals, indicating a strong user base and demand for its services [1]. Investment Perspective - The focus on fundamental analysis rather than technical trading suggests a long-term investment strategy, which aligns with the company's recurring revenue model [1].

Financial Data and Key Metrics Changes - In Q2 2025, organic ASV grew by 4.1% year-over-year, with an adjusted operating margin of 37.3% and adjusted diluted EPS of $4.28 [9][10][43] - GAAP revenues increased by 4.5% year-over-year to $571 million, while organic revenues grew by 4% to $568 million [35][36] - Free cash flow was $150 million in Q2, up 23% over the same period last year [44] Business Line Data and Key Metrics Changes - Wealth management saw double-digit growth, with significant wins including a contract with UBS [15][16] - The banking segment faced challenges, but renewal activity increased, with over a dozen large banking renewals signed [18][20] - PEVC experienced accelerated double-digit growth, while asset management faced headwinds due to cost rationalization [21][22] Market Data and Key Metrics Changes - In the Americas, organic ASV grew by 4%, while EMEA saw 3% growth and Asia-Pacific maintained 7% growth [12][13][14] - The wealth segment is gaining market share, particularly in the Americas, with expansion opportunities in Europe and Asia [16][17][118] Company Strategy and Development Direction - The company is focused on driving top-line growth, with a strong sales pipeline and product-led innovation [25][26] - Recent acquisitions, including LiquidityBook, are expected to enhance service offerings and cross-sell opportunities [23][27][111] - The strategy includes expanding into new regions and adding services to existing clients, particularly in wealth management [119] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging market environment but expresses confidence in the sales pipeline and product innovation [10][11] - There is optimism about growth acceleration in the second half of the fiscal year, with reaffirmed guidance for organic ASV growth [47][50] - The company is well-positioned to capitalize on Gen AI products and improve client engagement [31][50] Other Important Information - The company repurchased nearly 137,000 shares for approximately $64 million during the quarter [45] - The effective tax rate for Q2 was 15.9%, a decrease from the previous year [42] - The company is committed to returning capital to shareholders while maintaining investment-grade ratings [46][47] Q&A Session Summary Question: Can you provide more details on the traction with Gen AI products? - Management reported strong momentum with PitchCreator and other Gen AI products, with positive client reception and active trials [56][62] Question: Is the environment improving or is the company performing better in a challenging market? - Management believes they have de-risked major challenges and are seeing strength across all markets, with a positive outlook for the second half [68][71] Question: How does banking factor into the guidance range? - Management indicated that they are not relying on banking for their numbers, with conservative estimates baked into the guidance [76][80] Question: Is the UBS Vault deal included in ASV this quarter? - Yes, the UBS deal was signed in the quarter, but the ASV impact will be realized in the following quarters [84][87] Question: What is the pricing outlook given the lower CPI? - Management expects international pricing to align with the lower CPI, impacting annual price increases [90][92] Question: How are technology costs impacting margins? - Management is actively managing technology and people costs, with expectations of a ramp-up in expenses for strategic investments in the second half [96][100]