FactSet(FDS) - 2022 Q4 - Annual Report

Client Base and Revenue Growth - As of August 31, 2022, FactSet had over 7,500 clients, including approximately 180,000 investment professionals, with revenues primarily derived from subscriptions to multi-asset class data and solutions[15] - The buy-side organic annual subscription value (Organic ASV) growth rate for fiscal 2022 was 8.5%, with buy-side clients accounting for 83% of total ASV[30] - The sell-side organic ASV growth rate for fiscal 2022 was 13.8%, with sell-side clients representing 17% of total ASV[32] - Total client count increased by 16.8% to 7,538, with a net addition of 1,085 clients in the last 12 months[33] - The number of professionals using FactSet rose to 179,982, reflecting an 11.8% increase driven by wealth advisory and banking clients[34] - Annual ASV retention was greater than 95%, with client retention increasing to approximately 92% as of August 31, 2022[35] - Organic ASV plus Professional Services totaled $1.8 billion, up 9.3% compared to the previous year, with growth driven by Research & Advisory and Analytics & Trading solutions[36] - Fiscal 2022 revenues reached $1.8 billion, a 15.9% increase from the prior year, with organic revenues contributing 9.8% to this growth[195] Workforce and Diversity Initiatives - As of August 31, 2022, FactSet employed 11,203 individuals, with a 2.9% increase in workforce over the last twelve months[42] - In fiscal 2022, the company completed a global pay equity review, finding that women are paid 99% on average of what men are paid globally, and minority employees in the U.S. are paid 100% on average of what non-minority employees are paid[52] - The company launched a Supplier Diversity function and is currently auditing minority-owned spend and suppliers to set future goals[56] - The company achieved a 100% score on the Human Rights Campaign Equality Index for seven consecutive years, reflecting its commitment to inclusivity[55] - The company has maintained a MESH externship program for underrepresented college students in financial technology, expanding it to the U.K. in fiscal 2022[51] - The company has a comprehensive strategy for Diversity, Equity, and Inclusion (DE&I), focusing on workforce, marketplace, and societal impact areas[49] Technology and Digital Transformation - The company aims to enhance its digital platform and cloud-based solutions to support clients' evolving needs for personalized and connected data[20] - The company operates two fully redundant data centers in the U.S. and utilizes multiple cloud service providers to enhance service delivery and reliability[69] - The company has a hybrid cloud strategy that includes using premier cloud providers for services benefiting from cloud elasticity and resiliency[69] - The company is committed to digital transformation strategies to enhance operational efficiency and service delivery[92] - The company plans to grow its digital platform by scaling up its content refinery and offering cloud-based solutions[190] Financial Management and Risks - The company has a total outstanding principal amount of debt of $2.0 billion as of August 31, 2022[147] - The company has $250.0 million of unused commitments under the 2022 Revolving Facility and an option to increase the facility size by an additional $750.0 million[149] - The company is subject to ongoing tax audits and potential assessments, which could have a material impact on financial results if unfavorable outcomes occur[137][138] - The company utilizes derivative instruments to manage currency exchange rate fluctuations, but there is a risk that hedging may not be successful, impacting results and cash flows[140] - The company has incurred significant non-recurring costs associated with the CGS Transaction, including financial advisory and legal fees[146] - The company may face challenges in integrating the CGS Business, which could result in unforeseen expenses and affect cash flow[145] Market Presence and Competition - Approximately 40% of the company's revenues in fiscal 2022 were generated from operations outside the U.S., with 79% of employees located in non-U.S. offices[120] - The company is expanding its market presence in EMEA and Asia Pacific, focusing on client needs in these regions[88] - Intense competition may lead to price reductions and loss of market share, particularly if clients seek lower-cost alternatives[107] - A continued shift from active to passive investing could negatively impact user count growth and revenues, as passive investing requires less data and services[108] - Economic downturns and uncertainty may lead to reduced demand for the company's services, particularly from investment management clients[111] Cybersecurity and Data Privacy - The company is actively managing risks related to data privacy and cybersecurity, adhering to regulations such as the EU General Data Protection Regulation[95] - The company has dedicated resources for cybersecurity but acknowledges the increasing frequency and sophistication of cyberattacks, which may impact its ability to prevent or detect all such attacks[99] - A significant cyberattack could lead to unauthorized access to client data, resulting in increased expenses, potential lawsuits, and damage to the company's brand and reputation[100] - The company emphasizes the importance of continuous investment in internal processes and controls to safeguard client data[95] Operational Challenges - The company relies on its ability to process substantial volumes of data and transactions, and any significant growth in customer base may strain its systems[101] - The transition to new technologies and processes is complex and may involve substantial expenditures, with risks of operational disruptions during implementation[105] - The company faces operational risks in non-U.S. markets, including difficulties in product development and compliance with diverse regulatory requirements[120] - The ongoing COVID-19 pandemic has not yet materially impacted the company's financial condition, but future uncertainties could adversely affect operations and financial performance[127] - The company continues to monitor the impact of the Ukraine/Russia conflict on its operations and has taken steps to ensure compliance with regulatory restrictions[211] Stock Performance - The high and low sales prices per share of the company's common stock in Q1 2022 were $469.43 and $369.12, respectively[169] - The high and low sales prices per share of the company's common stock in Q2 2022 were $488.85 and $392.82, respectively[169] - The high and low sales prices per share of the company's common stock in Q3 2022 were $444.57 and $356.10, respectively[169] - The high and low sales prices per share of the company's common stock in Q4 2022 were $454.23 and $348.71, respectively[169] - As of October 10, 2022, the closing price of the company's common stock was $412.78 per share[169] Awards and Recognition - The company received over thirty industry awards in 2022, recognizing its performance across multiple workflows[201]