FactSet(US:FDS)2026-04-01 21:45Financial Performance - Revenues for the second quarter of fiscal 2026 were $611.0 million, a 7.1% increase from the prior year, driven by a 6.8% increase in organic revenues [170]. - Net income for the second quarter was $133.1 million, an 8.1% decrease from the prior year, with diluted earnings per share (EPS) at $3.59, down 4.5% [175]. - Revenues for the six months ended February 28, 2026, increased by 7.0% to $1,206.2 million, driven by a 6.4% increase in organic revenues [191]. - Net income for the three months ended February 28, 2026, was $133,056, a decrease of 8.1% compared to the prior year [232]. - The company reported a net income of $285.6 million for the six months ended February 28, 2026, compared to $294.9 million in 2025 [274][275]. Client Metrics - Client count increased by 5.3% to 9,101, while user count rose by 10.1% to 241,352, driven mainly by corporate and wealth management clients [185]. - Annual ASV retention was over 95% as of February 28, 2026, with client retention at 91% [186]. Revenue Segmentation - Organic Annual Subscription Value (Organic ASV) totaled $2,449.1 million, reflecting a 6.7% increase over the prior year, with significant growth in the Americas [171]. - ASV from the Americas represented 66% of total ASV at $1,605.9 million, a 7.0% increase from the prior year [181]. - ASV from EMEA was $595.2 million, a 4.3% increase, while Asia Pacific ASV reached $249.1 million, a 10.0% increase [182][183]. - Americas segment revenues grew by 8.0% to $795.9 million for the six months ended February 28, 2026, primarily from workstations and data solutions [192]. - EMEA segment revenues increased by 4.0% to $298.6 million, with organic revenue growth of 4.0% and a 1.0% increase from foreign currency exchange [194]. - Asia Pacific segment revenues rose by 7.7% to $124.1 million, driven by a 9.0% increase in organic revenues [198]. Operating Expenses and Margins - Operating margin decreased to 30.3% from 32.5% in the prior year, primarily due to higher employee compensation costs [172]. - Total operating expenses for the six months ended February 28, 2026, were $841.6 million, a 10.4% increase compared to the prior year [203]. - Operating income for the six months ended February 28, 2026, increased by 0.1% to $377.0 million, with an operating margin of 30.9% [214]. - Employee compensation costs increased by 160 basis points, primarily due to higher variable compensation and annual base salaries [216]. - Cost of services as a percentage of revenues was 48.0% for the six months ended February 28, 2026, an increase of 160 basis points year-over-year [207]. - SG&A expenses as a percentage of revenues were 21.1% for the six months ended February 28, 2026, an increase of 50 basis points compared to the previous year [211]. Shareholder Returns - The company returned $204.0 million to stockholders through share repurchases and dividends during the three months ended February 28, 2026 [176]. - The company returned $385.3 million to stockholders in the form of share repurchases and dividends during the six months ended February 28, 2026 [260]. - Dividends paid during the six months ended February 28, 2026, totaled $82.4 million, compared to $78.8 million for the same period last year [264]. Cash Flow and Capital Expenditures - For the six months ended February 28, 2026, net cash provided by operating activities was $333.0 million, an increase of $72.6 million compared to $260.3 million in the same period of 2025 [274][275]. - The net cash used in investing activities for the six months ended February 28, 2026, was $21.9 million, significantly lower than $338.1 million in 2025, primarily due to reduced acquisition-related expenditures [276][277]. - Net cash used in financing activities for the six months ended February 28, 2026, was $386.7 million, compared to $45.5 million in 2025, mainly driven by $302.9 million in share repurchases [278][279]. - Free cash flow for the six months ended February 28, 2026, was $276.1 million, an increase of $65.4 million from $210.7 million in 2025 [281]. - Capital expenditures increased by 14.6% to $56.8 million for the six months ended February 28, 2026, compared to $49.6 million for the same period a year ago [265]. Acquisitions - The acquisition of LiquidityBook was completed for a purchase price of $243.2 million, net of cash acquired, on February 7, 2025 [267]. - The acquisition of Irwin was completed for a purchase price of $120.2 million, net of cash acquired, on November 5, 2024 [269]. Debt and Financing - As of February 28, 2026, outstanding debt under the 2025 Term Facility was $375.0 million, with no borrowings under the 2025 Revolving Facility [249]. - The company has a total of $1.0 billion available under the 2025 Revolving Facility, which matures on April 8, 2030 [247]. - The company has total purchase obligations with suppliers and vendors of approximately $352 million as of August 31, 2025 [271]. Taxation - The provision for income taxes increased by 14.7% for the six months ended February 28, 2026, totaling $65,588 [226]. - The effective tax rate for the six months ended February 28, 2026, was 18.7%, up from 16.2% in the prior year [229]. Other Financial Metrics - Adjusted operating income for the six months ended February 28, 2026, was $434,163, an increase of 1.8% compared to the prior year [238]. - EBITDA for the six months ended February 28, 2026, was $465,509, a 2.4% increase compared to the prior year [238]. - Adjusted diluted EPS for the six months ended February 28, 2026, was $4.46, representing a 4.2% increase from $4.28 in the same period last year [5]. - Cash and cash equivalents as of February 28, 2026, were $268.3 million, down from $337.7 million as of August 31, 2025 [242]. - The company had no off-balance sheet financing other than letters of credit as of February 28, 2026 [282]. - The company maintained foreign currency forward contracts to hedge a portion of its projected operating expenses, with maturity periods ranging from Q3 fiscal 2026 to Q2 fiscal 2027 [284]. - Non-cash charges for the six months ended February 28, 2026, were $154.2 million, primarily due to depreciation and amortization [274]. - The change in working capital for the six months ended February 28, 2026, was influenced by client collections timing and annual variable compensation payments [274].