FactSet Earnings Miss Estimates in Q3, Revenues Increase Y/Y

Core Insights - FactSet (FDS) reported third-quarter fiscal 2025 results with earnings per share of $4.27, missing the Zacks Consensus Estimate, while revenues of $585.5 million exceeded expectations [1][9] - The company experienced a 2.3% year-over-year decline in earnings, but revenues increased by 5.9% compared to the previous year [1][9] Revenue Performance - Organic revenues rose 4.4% year-over-year to $577.2 million, with regional growth of 5% in the Americas, 2.3% in EMEA, and 6.4% in Asia Pacific [3] - Revenues from the Americas segment were $380.5 million, up 6.7% year-over-year, while EMEA revenues were $145.7 million, a 3.1% increase, and Asia Pacific revenues reached $59.3 million, marking 7.8% growth [4] Annual Subscription Value (ASV) and Client Metrics - FactSet's Annual Subscription Value plus professional services totaled $2.3 billion, reflecting a 4.5% year-over-year increase, with 82% generated by buy-side firms [5] - The company added 166 clients in the third quarter, bringing the total to 8,811, with a client retention rate of 91% [6] Operating Results - Adjusted operating income was $194.2 million, a decrease of 4.1% year-over-year, but exceeded estimates [7] - The adjusted operating margin was 36.8%, down 260 basis points from the previous year [7] Balance Sheet and Cash Flow - FactSet ended the quarter with cash and cash equivalents of $356.4 million, up from $278.5 million in the previous quarter, and long-term debt decreased to $1.4 billion [8] - The company generated $253.8 million in cash from operating activities, with capital expenditures of $25.2 million, resulting in a free cash flow utilization of $228.6 million [8] Fiscal Year 2025 Guidance - For fiscal 2025, FactSet anticipates revenues between $2.305 billion and $2.325 billion, with the midpoint slightly above the Zacks Consensus Estimate [10] - Earnings per share guidance is set at $16.8 to $17.4, with the midpoint aligning with consensus estimates, and an adjusted operating margin projected at 36-37% [10]