FactSet (“FactSet” or the “Company”) (NYSE:FDS) (NASDAQ:FDS), a
global financial digital platform and enterprise solutions
provider, today announced results for its third quarter fiscal 2024
ended May 31, 2024.
Third Quarter Fiscal 2024 Highlights
-
GAAP revenues increased 4.3%, or $22.9 million, to
$552.7 million for the third quarter of fiscal 2024 compared with
$529.8 million in the prior year period. Organic(1) revenues grew
4.5% year over year to $553.4 million during the third quarter of
fiscal 2024. Growth in GAAP and Organic revenues this quarter was
driven by institutional asset managers, asset owners, partners and
corporates.
- Annual
Subscription Value ("ASV") plus professional services was
$2,219.2 million at May 31, 2024, compared with $2,120.1
million at May 31, 2023. Organic ASV plus professional
services was $2,220.4 million at May 31, 2024, up 5.0% or
$105.6 million year over year.
- Organic
ASV plus professional services increased $11.7 million
over the last three months. Please see the “ASV + Professional
Services” section of this press release for details.
- GAAP
operating margin increased to 36.6% compared with 32.5%
for the prior year, mainly due to a reduction in bonus accruals, a
one-time payroll tax adjustment, and a higher capitalization
benefit. Adjusted operating margin improved to 39.4% compared with
36.0% in the prior year due to similar drivers.
- GAAP
diluted earnings per share ("EPS") increased 18.2% to
$4.09 compared with $3.46 for the same period in fiscal 2023, due
to higher revenues, margin expansion, and reduced share count,
partially offset by a higher provision for income taxes. Adjusted
diluted EPS increased 15.3% to $4.37 compared with $3.79 for the
prior year period, driven by growth in revenues, margin expansion,
and reduced share count.
-
Adjusted EBITDA increased to $239.9 million, up
16.9% for the third quarter of fiscal 2024, compared with $205.3
million for the same period in fiscal 2023, due to higher operating
income.
- The Company’s
effective tax rate for the third quarter of fiscal
2024 slightly increased to 17.0% compared with 16.9% for the three
months ended May 31, 2023, primarily due to higher pretax
income, partially offset by increased utilization of foreign tax
credits and excess tax benefits from stock-based compensation.
"FactSet has a long history of providing
exceptional value to our clients,” said Phil Snow, CEO of FactSet.
"We maintain an optimistic outlook as we further invest in our
platform and harness the power of generative AI to accelerate our
clients' efficiency and decrease their total cost of
ownership."
(1) References to "organic" figures in this
press release exclude the current year impact of acquisitions and
dispositions completed within the past twelve months and the
current year impact from changes in foreign currency.
Key Financial Measures*
|
(Condensed and Unaudited) |
Three Months Ended |
|
| |
May 31, |
|
May 31, |
|
|
|
| (In
thousands, except per share data) |
|
2024 |
|
|
|
2023 |
|
|
Change |
|
Revenues |
$ |
552,708 |
|
|
$ |
529,811 |
|
|
4.3 |
% |
| Organic revenues |
$ |
553,432 |
|
|
$ |
529,811 |
|
|
4.5 |
% |
| Operating income |
$ |
202,459 |
|
|
$ |
171,959 |
|
|
17.7 |
% |
| Adjusted operating income |
$ |
217,960 |
|
|
$ |
190,932 |
|
|
14.2 |
% |
| Operating margin |
|
36.6 |
% |
|
|
32.5 |
% |
|
|
| Adjusted operating margin |
|
39.4 |
% |
|
|
36.0 |
% |
|
|
| Net income |
$ |
158,135 |
|
|
$ |
134,663 |
|
|
17.4 |
% |
| Adjusted net income |
$ |
168,796 |
|
|
$ |
147,667 |
|
|
14.3 |
% |
| Adjusted EBITDA |
$ |
239,930 |
|
|
$ |
205,284 |
|
|
16.9 |
% |
| Diluted EPS |
$ |
4.09 |
|
|
$ |
3.46 |
|
|
18.2 |
% |
|
Adjusted diluted EPS |
$ |
4.37 |
|
|
$ |
3.79 |
|
|
15.3 |
% |
* See reconciliation of U.S. GAAP to adjusted key financial
measures in the back of this press release.
"We continue to deliver value for our
shareholders through increased EPS and adjusted operating margin,
offsetting softness on the top line," said Linda Huber, FactSet’s
CFO. "We are updating our organic ASV plus professional services
guidance for fiscal 2024 and now expect growth will be in the range
of $85 million to $120 million, which represents annual growth of
4.8% at the midpoint, reduced from our previous guidance of $110
million to $150 million."
Annual Subscription Value (ASV) +
Professional Services
ASV at any given point in time represents the
forward-looking revenues for the next 12 months from all
subscription services currently supplied to clients. Professional
services are revenues derived from project-based consulting and
implementation services.
ASV plus professional services was $2,219.2
million at May 31, 2024, compared with $2,120.1 million at
May 31, 2023. Organic ASV plus professional services was
$2,220.4 million at May 31, 2024, up $105.6 million from the
prior year, for a growth rate of 5.0%. Organic ASV plus
professional services increased $11.7 million over the last three
months.
Buy-side and sell-side organic ASV growth rates
for the third quarter of fiscal 2024 were 5.3% and 3.7%,
respectively. Buy-side clients, including institutional asset
managers, wealth managers, asset owners, hedge funds, partners, and
corporate clients, accounted for 82% of organic ASV. The remaining
organic ASV came from sell-side firms, including broker-dealers,
banking and advisory, and private equity and venture capital firms.
Supplementary tables covering organic buy-side and sell-side ASV
growth rates may be found on the last page of this press
release.
Segment Revenues and ASV
ASV from the Americas region was $1,417.1
million compared with ASV in the prior year period of $1,344.7
million. Organic ASV increased 5.7% to $1,417.1 million. Americas
revenues for the quarter increased to $356.5 million compared with
$337.7 million in the third quarter of last year. The Americas
region's organic revenues growth rate was 5.5%.
ASV from the EMEA region was $565.7 million
compared with ASV in the prior year period of $541.3 million.
Organic ASV increased 4.4% to $565.5 million. EMEA revenues were
$141.2 million compared with $138.0 million in the third quarter of
fiscal 2023. The EMEA region's organic revenues growth rate was
2.4%.
ASV from the Asia Pacific region was $219.2
million compared with ASV in the prior year period of $209.8
million. Organic ASV increased 6.1% to $220.6 million. Asia Pacific
revenues were $55.0 million compared with $54.1 million in the
third quarter of fiscal 2023. The Asia Pacific region's organic
revenues growth rate was 3.0%.
Segment ASV does not include professional
services, which totaled $17.2 million at May 31, 2024.
Operational Highlights – Third Quarter
Fiscal 2024
- Client count as
of May 31, 2024 was 8,029, a net increase of 9 clients in the
past three months, with increases driven by wealth, corporates, and
partners. The count includes clients with ASV of $10,000 and
more.
- User count
increased by 1,662 to 208,140 in the past three months across all
firm types except banking, mainly driven by wealth.
- Annual ASV
retention was greater than 95%. When expressed as a percentage of
clients, annual retention was 90%.
- Employee count
was 12,262 as of May 31, 2024, up 1.6% over the last twelve
months, with the increase primarily in the content group. FactSet's
Centers of Excellence account for approximately 68% of the
Company's employees.
- Net cash
provided by operating activities increased to $238.2 million for
the third quarter of fiscal 2024 compared with $218.6 million for
the third quarter of fiscal 2023, primarily due to an increase in
revenues and improved collection rates, as well as lower payments
of our accounts payable and accrued expenses, due to timing.
Quarterly free cash flow increased to $216.9 million compared with
$192.6 million a year ago, an increase of 12.6%, primarily driven
by an increase in net cash provided by operating activities.
- A quarterly
dividend of $39.6 million, or $1.04 per share, was paid on
June 20, 2024, to holders of record of FactSet’s common stock
at the close of business on May 31, 2024. This represented a
6% increase in the regular quarterly dividend from the $0.98 per
share paid in the previous quarter and marks the 25th consecutive
year the Company has increased dividends on a stock split-adjusted
basis.
- FactSet
announced the release of its Transcript Assistant, a GenAI-powered,
conversational chatbot that accelerates in-depth research and
analysis of earnings call transcripts.
- FactSet
announced the release of its Portfolio Commentary solution. Powered
by large language models (LLMs), Portfolio Commentary significantly
reduces the challenging, time-consuming, and nuanced process of
writing attribution summaries manually. Instead, with the click of
a button, users can generate baseline and source-linked portfolio
commentary for any attribution report in approximately 30-60
seconds.
- In addition, in
June 2024, FactSet made a $12.5 million investment in Aidentified,
Inc., a leading AI-powered prospecting and relationship
intelligence platform for financial services professionals.
Aidentified provides financial advisors, marketing teams, and other
sales professionals with tools to identify, qualify, and convert
new client relationships.
Share Repurchase Program
FactSet repurchased 135,150 shares of its common
stock for $59.8 million at an average price of $442.12 during the
third quarter of fiscal 2024 under the Company’s share repurchase
program. As of May 31, 2024, $128.1 million remained available
for share repurchases under this program.
Annual Business Outlook
FactSet is updating its outlook for fiscal 2024.
The following forward-looking statements reflect FactSet's
expectations as of today's date. Given the risk factors,
uncertainties, and assumptions discussed below, actual results may
differ materially. FactSet does not intend to update its
forward-looking statements prior to its next quarterly results
announcement.
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 in the range of $16.00 to $16.40 (up
from $15.60 to $16.00).
Adjusted operating margin and adjusted diluted
EPS guidance do not include certain effects of any non-recurring
benefits or charges that may arise in fiscal 2024. Please see the
back of this press release for a reconciliation of GAAP to adjusted
metrics.
Conference Call
Third Quarter 2024 Conference Call Details
| Date: |
Friday, June 21, 2024 |
| Time: |
11:00 a.m. Eastern Time |
| Participant Registration: |
FactSet Q3 2024 Earnings Call Registration |
| |
|
Please register for the conference call using the above link
before the call start time. The conference call platform will
register your name and organization and provide dial-in numbers and
a unique access pin. The conference call will have a live Q&A
session.
A replay will be available on the Company’s investor relations
website after 1:00 p.m. Eastern Time on June 21, 2024 through
June 21, 2025. The earnings call transcript will be available via
FactSet CallStreet.
Forward-looking Statements
This news release contains forward-looking
statements based on management's current expectations, estimates,
forecasts and projections about industries in which FactSet
operates and the beliefs and assumptions of management. All
statements that address expectations, guidance, outlook or
projections about the future, including statements about the
Company's strategy for growth, product development, revenues,
future financial results, anticipated growth, market position,
subscriptions, expected expenditures, trends in FactSet’s business
and financial results, are forward-looking statements.
Forward-looking statements may be identified by words like
"expects," "believes," "anticipates," "plans," "intends,"
"estimates," "projects," "should," "indicates," "continues," "may"
and similar expressions. These statements are not guarantees of
future performance and involve a number of risks, uncertainties and
assumptions. Many factors, including those discussed more fully
elsewhere in this release and in FactSet's filings with the
Securities and Exchange Commission, particularly its latest annual
report on Form 10-K and quarterly reports on Form 10-Q, as well as
others, could cause results to differ materially from those stated.
Forward-looking statements speak only as of the date they are made,
and FactSet assumes no duty to and does not undertake to update
forward-looking statements. Actual results could differ materially
from those anticipated in forward-looking statements and future
results could differ materially from historical performance.
About Non-GAAP Financial
Measures
Financial measures in accordance with U.S. GAAP
including revenues, operating income and margin, net income,
diluted earnings per share and cash provided by operating
activities have been adjusted.
FactSet uses these adjusted financial measures
both in presenting its results to stockholders and the investment
community and in its internal evaluation and management of the
business. The Company believes that these adjusted financial
measures and the information they provide are useful to investors
because they permit investors to view the Company’s performance
using the same tools that management uses to gauge progress in
achieving its goals. Investors may benefit from referring to these
adjusted financial measures in assessing the Company’s performance
and when planning, forecasting and analyzing future periods and may
also facilitate comparisons to its historical performance. The
presentation of this financial information is not intended to be
considered in isolation or as a substitute for the financial
information prepared and presented in accordance with GAAP.
Organic revenues excludes from revenues the
current year impact of revenues from acquisitions and dispositions
completed within the past twelve months and the current year impact
from changes in foreign currency. Adjusted operating income and
margin, adjusted net income, and adjusted diluted earnings per
share exclude acquisition-related intangible asset amortization and
non-recurring items. EBITDA and adjusted EBITDA represent earnings
before interest expense, provision for income taxes and
depreciation and amortization expense, while Adjusted EBITDA
further excludes non-recurring non-cash expenses. The Company
believes that these adjusted financial measures help to fully
reflect the underlying economic performance of FactSet.
Cash flows provided by operating activities has
been reduced by purchases of property, equipment, leasehold
improvements and capitalized internal-use software to report
non-GAAP free cash flow. FactSet uses this financial measure both
in presenting its results to stockholders and the investment
community and in the Company’s internal evaluation and management
of the business. Management believes that this financial measure is
useful to investors because it permits investors to view the
Company’s performance using the same metric that management uses to
gauge progress in achieving its goals and is an indication of cash
flow that may be available to fund further investments in future
growth initiatives.
About FactSet
FactSet (NYSE:FDS | NASDAQ:FDS) helps the
financial community to see more, think bigger, and work better. Our
digital platform and enterprise solutions deliver financial data,
analytics, and open technology to more than 8,000 global clients,
including over 208,000 individual users. Clients across the
buy-side and sell-side as well as wealth managers, private equity
firms, and corporations achieve more every day with our
comprehensive and connected content, flexible next-generation
workflow solutions, and client-centric specialized support. As a
member of the S&P 500, we are committed to sustainable growth
and have been recognized amongst the Best Places to Work in 2023 by
Glassdoor as a Glassdoor Employees’ Choice Award winner. Learn more
at www.factset.com and follow us on X and LinkedIn.
FactSet Investor Relations Contact:
Ali
van Nes
+1.203.810.2273investor_relations@factset.com
avannes@factset.com
Media ContactMegan
Kovach+1.512.736.2795megan.kovach@factset.com
|
Consolidated Statements of Income (Unaudited) |
|
|
|
|
|
|
| |
Three Months Ended |
|
Nine Months Ended |
| |
May 31, |
|
May 31, |
|
May 31, |
|
May 31, |
|
(In thousands, except per share data) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Revenues |
$ |
552,708 |
|
|
$ |
529,811 |
|
|
$ |
1,640,869 |
|
|
$ |
1,549,711 |
|
| Operating expenses |
|
|
|
|
|
|
|
|
Cost of services |
|
246,986 |
|
|
|
241,689 |
|
|
|
753,749 |
|
|
|
709,537 |
|
|
Selling, general and administrative |
|
103,098 |
|
|
|
115,725 |
|
|
|
312,616 |
|
|
|
325,903 |
|
|
Asset impairments |
|
165 |
|
|
|
438 |
|
|
|
1,063 |
|
|
|
1,167 |
|
| Total operating expenses |
|
350,249 |
|
|
|
357,852 |
|
|
|
1,067,428 |
|
|
|
1,036,607 |
|
| |
|
|
|
|
|
|
|
| Operating income |
|
202,459 |
|
|
|
171,959 |
|
|
|
573,441 |
|
|
|
513,104 |
|
| |
|
|
|
|
|
|
|
| Other income (expense),
net |
|
|
|
|
|
|
|
|
Interest income |
|
4,568 |
|
|
|
3,083 |
|
|
|
10,427 |
|
|
|
8,191 |
|
|
Interest expense |
|
(16,894 |
) |
|
|
(16,354 |
) |
|
|
(50,231 |
) |
|
|
(49,628 |
) |
|
Other income (expense), net |
|
399 |
|
|
|
3,310 |
|
|
|
736 |
|
|
|
4,978 |
|
| Total other income (expense),
net |
|
(11,927 |
) |
|
|
(9,961 |
) |
|
|
(39,068 |
) |
|
|
(36,459 |
) |
| |
|
|
|
|
|
|
|
| Income before income
taxes |
|
190,532 |
|
|
|
161,998 |
|
|
|
534,373 |
|
|
|
476,645 |
|
| |
|
|
|
|
|
|
|
| Provision for income
taxes |
|
32,397 |
|
|
|
27,335 |
|
|
|
86,743 |
|
|
|
73,591 |
|
| Net income |
$ |
158,135 |
|
|
$ |
134,663 |
|
|
$ |
447,630 |
|
|
$ |
403,054 |
|
| |
|
|
|
|
|
|
|
| Basic earnings per common
share |
$ |
4.15 |
|
|
$ |
3.52 |
|
|
$ |
11.76 |
|
|
$ |
10.54 |
|
| Diluted earnings per common
share |
$ |
4.09 |
|
|
$ |
3.46 |
|
|
$ |
11.58 |
|
|
$ |
10.35 |
|
| |
|
|
|
|
|
|
|
| Basic weighted average common
shares |
|
38,089 |
|
|
|
38,278 |
|
|
|
38,069 |
|
|
|
38,227 |
|
| Diluted weighted average
common shares |
|
38,640 |
|
|
|
38,912 |
|
|
|
38,644 |
|
|
|
38,936 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheets (Unaudited) |
|
| |
|
|
| |
|
|
| (In
thousands) |
May 31, 2024 |
|
August 31, 2023 |
|
ASSETS |
|
|
|
Cash and cash equivalents |
$ |
453,144 |
|
$ |
425,444 |
|
Investments |
|
68,890 |
|
|
32,210 |
|
Accounts receivable, net of reserves of $10,484 at May 31, 2024 and
$7,769 at August 31, 2023 |
|
240,096 |
|
|
237,665 |
|
Prepaid taxes |
|
44,416 |
|
|
24,206 |
|
Prepaid expenses and other current assets |
|
51,729 |
|
|
50,610 |
|
Total current assets |
|
858,275 |
|
|
770,135 |
| |
|
|
|
Property, equipment and leasehold improvements, net |
|
80,843 |
|
|
86,107 |
|
Goodwill |
|
1,004,749 |
|
|
1,004,736 |
|
Intangible assets, net |
|
1,851,395 |
|
|
1,859,202 |
|
Deferred taxes |
|
36,739 |
|
|
27,229 |
|
Lease right-of-use assets, net |
|
137,229 |
|
|
141,837 |
|
Other assets |
|
70,471 |
|
|
73,676 |
|
TOTAL ASSETS |
$ |
4,039,701 |
|
$ |
3,962,922 |
| |
|
|
|
LIABILITIES |
|
|
|
Accounts payable and accrued expenses |
$ |
138,381 |
|
$ |
121,816 |
|
Current portion of long-term debt |
|
187,144 |
|
|
— |
|
Current lease liabilities |
|
30,130 |
|
|
28,839 |
|
Accrued compensation |
|
79,383 |
|
|
112,892 |
|
Deferred revenues |
|
168,053 |
|
|
152,430 |
|
Current taxes payable |
|
28,825 |
|
|
31,009 |
|
Dividends payable |
|
39,589 |
|
|
37,265 |
|
Total current liabilities |
|
671,505 |
|
|
484,251 |
| |
|
|
|
Long-term debt |
|
1,240,626 |
|
|
1,612,700 |
|
Deferred taxes |
|
7,944 |
|
|
6,737 |
|
Deferred revenues, non-current |
|
1,928 |
|
|
3,734 |
|
Taxes payable |
|
36,748 |
|
|
30,344 |
|
Long-term lease liabilities |
|
183,642 |
|
|
198,382 |
|
Other liabilities |
|
6,904 |
|
|
6,844 |
|
TOTAL LIABILITIES |
$ |
2,149,297 |
|
$ |
2,342,992 |
| |
|
|
| STOCKHOLDERS’
EQUITY |
|
|
|
TOTAL STOCKHOLDERS’ EQUITY |
$ |
1,890,404 |
|
$ |
1,619,930 |
| |
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
4,039,701 |
|
$ |
3,962,922 |
|
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows
(Unaudited) |
|
| |
Nine months ended |
| |
May 31, |
|
May 31, |
|
(In thousands) |
|
2024 |
|
|
|
2023 |
|
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
| Net income |
$ |
447,630 |
|
|
$ |
403,054 |
|
| Adjustments to reconcile net
income to net cash provided by operating activities |
|
|
|
Depreciation and amortization |
|
91,154 |
|
|
|
78,681 |
|
|
Amortization of lease right-of-use assets |
|
22,846 |
|
|
|
29,245 |
|
|
Stock-based compensation expense |
|
46,707 |
|
|
|
44,365 |
|
|
Deferred income taxes |
|
(6,979 |
) |
|
|
(12,716 |
) |
|
Asset impairments |
|
1,063 |
|
|
|
1,167 |
|
| Changes in assets and
liabilities, net of effects of acquisitions |
|
|
|
Accounts receivable, net of reserves |
|
(7,176 |
) |
|
|
(37,879 |
) |
|
Accounts payable and accrued expenses |
|
17,296 |
|
|
|
5,870 |
|
|
Accrued compensation |
|
(33,329 |
) |
|
|
(39,935 |
) |
|
Deferred revenues |
|
13,817 |
|
|
|
(3,861 |
) |
|
Taxes payable, net of prepaid taxes |
|
(15,992 |
) |
|
|
19,112 |
|
|
Lease liabilities, net |
|
(31,687 |
) |
|
|
(34,041 |
) |
| Other, net |
|
(8,173 |
) |
|
|
36,841 |
|
|
Net cash provided by operating activities |
|
537,177 |
|
|
|
489,903 |
|
| |
|
|
| CASH FLOWS FROM
INVESTING ACTIVITIES |
|
|
| Purchases of property,
equipment, leasehold improvements and capitalized internal-use
software |
|
(59,722 |
) |
|
|
(61,421 |
) |
| Purchases of investments |
|
(44,936 |
) |
|
|
(10,889 |
) |
|
Net cash provided by (used in) investing
activities |
|
(104,658 |
) |
|
|
(72,310 |
) |
| |
|
|
| CASH FLOWS FROM
FINANCING ACTIVITIES |
|
|
| Repayments of debt |
|
(187,500 |
) |
|
|
(312,500 |
) |
| Dividend payments |
|
(111,297 |
) |
|
|
(101,377 |
) |
| Proceeds from employee stock
plans |
|
83,497 |
|
|
|
55,885 |
|
| Repurchases of common
stock |
|
(171,918 |
) |
|
|
(67,092 |
) |
| Other financing
activities |
|
(15,690 |
) |
|
|
(12,273 |
) |
|
Net cash provided by (used in) financing
activities |
|
(402,908 |
) |
|
|
(437,357 |
) |
| |
|
|
| Effect of exchange rate
changes on cash and cash equivalents |
|
(1,911 |
) |
|
|
3,118 |
|
| Net increase (decrease) in
cash and cash equivalents |
|
27,700 |
|
|
|
(16,646 |
) |
| Cash and cash equivalents at
beginning of period |
|
425,444 |
|
|
|
503,273 |
|
|
Cash and cash equivalents at end of period |
$ |
453,144 |
|
|
$ |
486,627 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of U.S. GAAP Results to Adjusted
Financial Measures
Financial measures in accordance with U.S. GAAP,
including revenues, operating income and margin, net income,
diluted EPS and cash provided by operating activities, have been
adjusted below. FactSet uses these adjusted financial measures both
in presenting its results to stockholders and the investment
community and in its internal evaluation and management of the
business. The Company believes that these adjusted financial
measures and the information they provide are useful to investors
because they permit investors to view the Company’s performance
using the same tools that management uses to gauge progress in
achieving its goals. Adjusted measures may also facilitate
comparisons to FactSet’s historical performance.
Revenues
Organic revenues exclude the current year impact
of revenues from acquisitions and dispositions completed within the
past twelve months and the current year impact from changes in
foreign currency. The table below provides a reconciliation of
revenues to organic revenues:
| (Unaudited) |
Three Months Ended |
|
| |
May 31, |
|
May 31, |
|
| (In
thousands) |
|
2024 |
|
|
2023 |
Change |
|
Revenues |
$ |
552,708 |
|
|
$ |
529,811 |
|
4.3 |
% |
| Acquisition revenues |
|
(119 |
) |
|
|
— |
|
| Currency impact |
|
843 |
|
|
|
— |
|
| Organic revenues |
$ |
553,432 |
|
|
$ |
529,811 |
|
4.5 |
% |
| |
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
The table below provides a reconciliation of operating income,
operating margin, net income and diluted EPS to adjusted operating
income, adjusted operating margin, adjusted net income, EBITDA,
adjusted EBITDA and adjusted diluted EPS.
| |
Three Months Ended |
|
| |
May 31, |
|
May 31, |
|
| (dollar
amounts in thousands, except per share data) |
|
2024 |
|
|
|
2023 |
|
% Change |
|
Operating income |
$ |
202,459 |
|
|
$ |
171,959 |
|
|
17.7 |
% |
| Intangible asset
amortization |
|
16,674 |
|
|
|
17,655 |
|
|
| Business acquisition /
integration costs(1) |
|
423 |
|
|
|
— |
|
|
| Restructuring / severance |
|
(1,596 |
) |
|
|
1,318 |
|
|
|
Adjusted operating income |
$ |
217,960 |
|
|
$ |
190,932 |
|
|
14.2 |
% |
|
Operating margin |
|
36.6 |
% |
|
|
32.5 |
% |
|
|
Adjusted operating margin(2) |
|
39.4 |
% |
|
|
36.0 |
% |
|
|
Net income |
$ |
158,135 |
|
|
$ |
134,663 |
|
|
17.4 |
% |
| Intangible asset
amortization |
|
11,466 |
|
|
|
14,406 |
|
|
| Business acquisition /
integration costs(1) |
|
291 |
|
|
|
— |
|
|
| Restructuring / severance |
|
(1,096 |
) |
|
|
1,075 |
|
|
| Income tax items |
|
— |
|
|
|
(2,477 |
) |
|
|
Adjusted net income(3) |
$ |
168,796 |
|
|
$ |
147,667 |
|
|
14.3 |
% |
|
Net income |
|
158,135 |
|
|
|
134,663 |
|
|
17.4 |
% |
| Interest expense |
|
16,894 |
|
|
|
16,354 |
|
|
| Income taxes |
|
32,397 |
|
|
|
27,335 |
|
|
| Depreciation and amortization
expense |
|
32,504 |
|
|
|
26,473 |
|
|
| EBITDA |
$ |
239,930 |
|
|
$ |
204,825 |
|
|
17.1 |
% |
| Non-recurring non-cash
expenses |
|
— |
|
|
|
459 |
|
|
| Adjusted EBITDA |
$ |
239,930 |
|
|
$ |
205,284 |
|
|
16.9 |
% |
|
Diluted EPS |
$ |
4.09 |
|
|
$ |
3.46 |
|
|
18.2 |
% |
| Intangible asset
amortization |
|
0.30 |
|
|
|
0.36 |
|
|
| Business acquisition /
integration costs(1) |
|
0.01 |
|
|
|
— |
|
|
| Restructuring / severance |
|
(0.03 |
) |
|
|
0.03 |
|
|
| Income tax items |
|
— |
|
|
|
(0.06 |
) |
|
|
Adjusted Diluted EPS(3) |
$ |
4.37 |
|
|
$ |
3.79 |
|
|
15.3 |
% |
|
Weighted average common shares (Diluted) |
|
38,640 |
|
|
|
38,912 |
|
|
|
(1) |
Related to business acquisition costs. |
| (2) |
Adjusted operating margin is
calculated as Adjusted operating income divided by Revenues. |
| (3) |
For purposes of calculating
Adjusted net income and Adjusted diluted earnings per share, all
adjustments for the three months ended May 31, 2024 and
May 31, 2023 were taxed at an adjusted tax rate of 31.2% and
18.4%, respectively. |
| |
|
Business Outlook Operating Margin, Net
Income and Diluted EPS
| (Unaudited) |
|
|
| Figures
may not foot due to rounding |
Annual Fiscal 2024 Guidance |
|
(In millions, except per share data) |
Low end of range |
|
High end of range |
|
Revenues |
$ |
2,180 |
|
|
$ |
2,190 |
|
| Operating income |
$ |
735 |
|
|
$ |
745 |
|
| Operating margin |
|
33.7 |
% |
|
|
34.0 |
% |
| Intangible asset
amortization |
|
66 |
|
|
|
70 |
|
| Restructuring / severance |
|
6 |
|
|
|
6 |
|
| Adjusted operating income |
$ |
807 |
|
|
$ |
821 |
|
|
Adjusted operating margin(a) |
|
37.0 |
% |
|
|
37.5 |
% |
|
|
|
|
| Net income |
$ |
563 |
|
|
$ |
578 |
|
| Intangible asset
amortization |
|
55 |
|
|
|
57 |
|
| Restructuring / severance |
|
5 |
|
|
|
5 |
|
| Discrete tax items |
|
(5 |
) |
|
|
(7 |
) |
|
Adjusted net income |
$ |
618 |
|
|
$ |
633 |
|
|
|
|
|
| Diluted earnings per common
share |
$ |
14.55 |
|
|
$ |
14.95 |
|
| Intangible asset
amortization |
|
1.42 |
|
|
|
1.49 |
|
| Restructuring / severance |
|
0.13 |
|
|
|
0.13 |
|
|
Discrete tax items |
|
(0.10 |
) |
|
|
(0.17 |
) |
|
Adjusted diluted earnings per common share |
$ |
16.00 |
|
|
$ |
16.40 |
|
| |
|
|
|
|
|
|
|
(a) Adjusted operating margin is calculated as
Adjusted operating income divided by Revenues.
Free Cash Flow
| (Unaudited) |
Three Months Ended |
|
| |
May 31, |
|
|
May 31, |
|
|
| (In
thousands) |
|
2024 |
|
|
|
2023 |
|
Change |
|
Net Cash Provided for Operating Activities |
$ |
238,235 |
|
|
$ |
218,589 |
|
|
| Less: purchases of property,
equipment, leasehold improvements and capitalized internal-use
software |
|
(21,339 |
) |
|
|
(26,005 |
) |
|
|
Free Cash Flow |
$ |
216,896 |
|
|
$ |
192,584 |
|
|
12.6 |
% |
| |
|
|
|
|
|
|
|
|
|
|
Supplementary Schedules of Historical ASV by Client
Type
The following table presents the percentages and
growth rates of organic ASV by client type, excluding the impact of
currency movements, and may be useful to facilitate historical
comparisons. Organic ASV excludes acquisitions and dispositions
completed within the last twelve months and the effects of foreign
currency movements.
The numbers below do not include professional
services or issuer fees.
|
|
Q3'24 |
Q2'24 |
Q1'24 |
Q4'23 |
Q3'23 |
Q2'23 |
Q1'23 |
Q4'22 |
| %
of ASV from buy-side clients |
82.3% |
82.0% |
82.0% |
81.8% |
82.1% |
82.8% |
82.8% |
82.9% |
| % of ASV from sell-side
clients |
17.7% |
18.0% |
18.0% |
18.2% |
17.9% |
17.2% |
17.2% |
17.1% |
| |
|
|
|
|
|
|
|
|
| ASV Growth rate from buy-side
clients |
5.3% |
5.6% |
7.2% |
6.9% |
7.3% |
8.1% |
8.0% |
8.5% |
| ASV Growth rate from sell-side
clients |
3.7% |
5.5% |
7.6% |
9.3% |
12.3% |
15.8% |
14.4% |
13.8% |
| |
|
|
|
|
|
|
|
|
The following table presents the calculation of organic ASV plus
professional services.
(Details may not sum to total due to
rounding)
| (In
millions) |
Q3'24 |
|
As reported ASV plus Professional Services (a) |
$ |
2,219.2 |
|
|
Currency impact (b) |
|
1.2 |
|
| Organic ASV plus Professional
Services |
$ |
2,220.4 |
|
| Organic ASV plus Professional
Services growth rate |
|
5.0 |
% |
(a) Includes $17.2 million in professional
services as of May 31, 2024.
(b) The impact of foreign currency
movements.
FactSet Research Systems (NYSE:FDS)
Historical Stock Chart
From May 2024 to Jun 2024
FactSet Research Systems (NYSE:FDS)
Historical Stock Chart
From Jun 2023 to Jun 2024
