FactSet(US:FDS)2025-07-02 21:49Financial Performance - Revenues for the third quarter of fiscal 2025 were $585.5 million, a 5.9% increase from the prior year, driven by a 4.4% increase in organic revenues [185]. - Revenues for the three months ended May 31, 2025 were $585.5 million, an increase of 5.9% compared to $552.7 million in the same period of 2024 [207]. - For the nine months ended May 31, 2025, revenues were $1,724.8 million, an increase of 5.1% compared to $1,640.9 million in the same period of 2024 [208]. - Organic revenues increased by 4.4% to $577.2 million for the three months ended May 31, 2025, with acquisition-related revenues contributing an additional 1.4% [207]. - Net income for the three months ended May 31, 2025 was $148.5 million, a decrease of 6.1% from $158.1 million in the same period of 2024 [206]. - Diluted earnings per share (EPS) for the third quarter were $3.87, a decrease of 5.4% from the prior year, primarily due to lower operating income [188]. Client Metrics - The client count increased by 9.7% to 8,811 as of May 31, 2025, with a net addition of 782 clients, mainly due to the acquisition of Platform Group Limited [201]. - Annual ASV retention was greater than 95% as of May 31, 2025, with client retention at 91%, up from 90% the previous year [202]. - The Americas accounted for 65% of total ASV, amounting to $1,513.1 million, with a 5.0% increase in Organic ASV from the prior year [195]. Operating Performance - Operating margin decreased to 33.2% from 36.6% in the prior year, attributed to higher employee compensation costs and amortization of intangible assets [188]. - Operating income decreased by 4.1% to $194.2 million for the three months ended May 31, 2025, compared to $202.5 million in the prior year [229]. - Total operating income decreased 4.1% to $194.2 million for the three months ended May 31, 2025, compared to $202.5 million in the same period a year ago [235]. Expenses and Costs - Cost of services rose by 13.7% to $280.7 million for the three months ended May 31, 2025, primarily due to increased employee compensation costs [221]. - SG&A expenses increased by 7.1% to $110.6 million for the three months ended May 31, 2025, driven by higher employee compensation costs [226]. - Cost of services as a percentage of revenues was 47.9% for the three months ended May 31, 2025, an increase of 330 basis points year-over-year [222]. Acquisitions - The acquisition of LiquidityBook was completed for a purchase price of $243.2 million, including contingent consideration of $11.9 million [280]. - The acquisition of Irwin was completed for a purchase price of $120.2 million, including contingent consideration of $9.6 million [282]. - The acquisition date fair value of goodwill from LiquidityBook is $161.995 million, representing the excess of the purchase price over the fair value of net assets acquired [88]. - The acquisition date fair value of goodwill from Irwin is $91.376 million, reflecting future economic benefits expected from the acquisition [93]. Cash Flow and Capital Management - Net cash provided by operating activities for the nine months ended May 31, 2025, was $514.2 million, a decrease of $23.0 million from $537.2 million in the same period last year [288]. - Free cash flow for the nine months ended May 31, 2025, was $439.3 million, a decrease of $38.1 million compared to $477.5 million in the prior year [295]. - The company returned $312.2 million to stockholders in the form of share repurchases and dividends during the nine months ended May 31, 2025 [273]. - During the three months ended May 31, 2025, the company repurchased 184,050 shares for $80.7 million [275]. Debt and Financing - The total debt as of May 31, 2025, was $1,430,197 thousand, an increase from $1,365,973 thousand as of August 31, 2024 [112]. - The company entered into a new credit agreement on April 8, 2025, borrowing $500,000 thousand under a senior unsecured term loan credit facility [115]. - Interest expense on outstanding debt for the three months ended May 31, 2025, was $15.1 million, down from $16.6 million in the same period of 2024 [131]. Tax and Compliance - The provision for income taxes for the three months ended May 31, 2025, was $31,406 thousand, with an effective tax rate of 17.5%, up from 17.0% in the same period of 2024 [101]. - The company was in compliance with all covenants and requirements of the 2025 Credit Agreement as of May 31, 2025 [123].