Financials

The following is a summary of the FactSet Research Systems Inc. (FDS) Q3 2024 Earnings Call Transcript: Financial Performance: FactSet reported organic ASV and professional services growth of 5% for the quarter. Adjusted diluted EPS rose to $4.37. Adjusted operating margin improved to 39.4%. GAAP revenue increased 4% to $553 million. Free cash flow for the quarter was $217 million, an increase of 13% over last year. Business Progress: FactSet continues to make strategic investments in generative AI and cloud-based solutions to strengthen its competitive position and capture new market opportunities. The company saw notable wins in displacing competitors and securing multi-year agreements with major asset managers, showcasing the effectiveness of their tailored solutions. Enhanced offerings in wealth management through partnerships, such as the incorporation of Aidentified’s relationship management data into FactSet’s solutions. Opportunities: FactSet’s commitment to expanding into deep sector and private market data as well as real-time market […]

FactSet Research Systems Inc. (NYSE:FDS) Q3 2024 Earnings Conference Call June 21, 2024 11:00 AM ET Company Participants Ali van Nes – Head of Investor Relations Philip Snow – Chief Executive Officer Linda Huber – Chief Financial Officer Helen Shan – Chief Revenue Officer Conference Call Participants Toni Kaplan – Morgan Stanley Alex Kramm – UBS Kelsey Zhu – Autonomous Manav Patnaik – Barclays Faiza Alwy – Deutsche Bank Surinder Thind – Jefferies Ashish Sabadra – RBC George Tong – Goldman Sachs Andrew Nicholas – William Blair Shlomo Rosenbaum – Stifel Craig Huber – Huber Research Partners Russell Quelch – Redburn Heather Balsky – Bank of America Scott Wurtzel – Wolfe Research Operator Good day and thank you for standing by. Welcome to the Third Quarter FactSet Earnings Call. At this time all participants are in listen-only mode. After the speaker’s presentation there will be a question-and-answer session. [Operator Instructions]

Fiscal 2024 Expectations (with reference to most recent previous guidance): Organic ASV plus professional services is expected to grow in the range of $85 million to $120 million during fiscal 2024 (reduced from $110 million to $150 million). This represents ASV growth of 4.8% at the midpoint. GAAP revenues are expected to be in the range of $2,180 million to $2,190 million (down from $2,200 million to $2,210 million). GAAP operating margin is expected to be in the range of 33.7% to 34.0% (up from 32.5% to 33.0%). Adjusted operating margin is expected to be in the range of 37.0% to 37.5% (up from 36.3% to 36.7%). FactSet’s annual effective tax rate is expected to be in the range of 16.5% to 17.5% (unchanged). GAAP diluted EPS is expected to be in the range of $14.55 to $14.95 (up from $13.95 to $14.35). Adjusted diluted EPS is expected to be

We lower our 12-month target price by $15 to $520, 29.2x our FY 25 (Aug.) EPS estimate, higher than the company’s 10-year historical average of 26.8x, given strong growth prospects. We increase our FY 24 adjusted EPS by $0.28 to $16.59 and raise FY 25’s by $0.08 to $17.79. FDS reported May-Q adjusted EPS of $4.37 vs. $3.79 a year ago, $0.47 above consensus on revenue that came in at consensus. Revenue growth (+4% vs. 6% in prior quarter) continued to decelerate as results were once again impacted by consolidation cancellations following UBS’s acquisition of Credit Suisse. Still, despite revenue growth disappointing in recent quarters, we have been encouraged by FDS’s willingness to adapt quickly. FDS has responded with a 10% Y/Y reduction in employee costs and a 14% reduction in real estate. As a result, FDS’s adjusted operating margin expanded a hefty 340 bps to 39.4%. Additionally, encouraging signs

FactSet Research Systems (FDS) reported fiscal Q3 adjusted earnings Friday of $4.37 per diluted share, up from $3.79 a year earlier. Analysts polled by FactSet expected $3.91. Revenue for the quarter ended May 31 was $552.7 million, compared with $529.8 million a year earlier. Analysts surveyed by FactSet expected $552.7 million. The company raised its fiscal-year 2024 adjusted earnings guidance to $16.00 to $16.40 per diluted share, from $15.60 to $16.00. Analysts polled by FactSet expect $16.00. The company reduced its revenue outlook for the year to $2.18 billion to $2.19 billion, from $2.20 billion to $2.21 billion. Analysts surveyed by FactSet expect $2.20 billion.

FactSet Research Systems (FDS) is likely to miss estimates by analysts for annual subscription value in fiscal Q3. potentially leading to lower ASV growth guidance in the full year, Morgan Stanley said Monday in a report. The company “continues to face challenging end market conditions with tight budgets, clients delaying sales and cost pressures leading to decelerating client headcount,” Morgan Stanley said. ASV growth decelerated in the past six quarters and headwinds to fiscal Q3 include the potential impact of the merger of UBS (UBS) and Credit Suisse (CS), the report said. For the full year, Morgan Stanley said its new ASV growth expectation for the company is 13% below consensus and 9% below FactSet’s guidance. FactSet is set to release its fiscal Q3 results on June 21. Morgan Stanley cut its price target on FactSet stock to $350 from $372 and reiterated its underweight rating. FactSet shares fell 2%

FactSet Research Systems (FDS) is facing downside risks as its sales are under pressure amid an ongoing malaise in the financial services sector, BofA Securities said Thursday in a note to clients. The company’s annual subscription value and revenue will likely stay stuck in a rut amid an uncertain environment and lackluster capital markets activity, the investment firm said, adding those factors may lead to delays in decisions by clients and slower closing of major deals. FactSet’s organic annual subscription value growth has decreased from high-single digits in fiscal years 2021 through 2023 ending Aug. 31 to mid-single digits, BofA said. The investment firm said that it’s worrying that “softer volumes are leading to more intense competition” and it sees risks to organic annual subscription value exiting fiscal Q4 in the guided range, which is the low end of 5% to 7% growth. The investment firm downgraded FactSet to underperform

FactSet Research Systems (FDS) is expected to report roughly “in-line” fiscal Q3 results but the focus is on fiscal Q4 annual subscription value, RBC Capital Markets said in a note. RBC, said in a Tuesday note, it expects FactSet to report fiscal Q3 adjusted earnings of $3.90 per diluted share and revenue of $552.7 million. The brokerage said the key focus areas for fiscal Q3 are the impact of the UBS Group (UBS) and Credit Suisse merger, and the risk of a lower fiscal 2024 annual subscription value outlook. For fiscal 2024, RBC anticipates the annual subscription value at $2.27 billion, representing a $98 million year-over-year growth which is below the company’s guidance of $110 million to 150 million due to an extended sales cycle and soft hiring trends. The brokerage said they expect FactSet Research to reaffirm its fiscal 2024 annual subscription value outlook due to a strong sales