FACTSET RESEARCH SYSTEMS, INC. Tuesday December 19, 2023
FactSet Earnings Call
First Quarter Fiscal 2024
Copyright © 2023 FactSet Research Systems Inc. All rights reserved. FactSet Business Use Only
Forward-Looking Statements and Non-GAAP Measures
This presentation, and other statements that FactSet may make in connection with this presentation, contains forward-looking statements based on management's current expectations, assumptions, estimates, forecasts and projections about future events and circumstances. All statements that address expectations, guidance, outlook or projections about the future, including statements about our strategy, future financial results, anticipated growth, expected expenditure, product development, market position and trends, 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 numerous risks, uncertainties, and assumptions.
Many factors, including those discussed more fully in FactSet's filings with the Securities and Exchange Commission, particularly our latest annual report on Form 10-K and quarterly reports on Form 10-Q, could cause results to differ materially from those stated. These documents are available on our website at http://investor.factset.comand on the SEC's website at http://www.sec.gov. FactSet believes our expectations and assumptions are reasonable, but there can be no assurance that the expectations reflected herein will be achieved. Unless legally required, we undertake no obligation to update any forward-looking statements made in this presentation whether because of new information, future events or otherwise.
In addition, this presentation and oral statements made in connection with this presentation reference non-GAAP financial measures, such as ASV, organic revenues, adjusted operating income, adjusted operating margin, adjusted EBITDA, adjusted net income, adjusted diluted EPS and free cash flow. Forward-lookingnon-GAAP financial measures reflect management's current expectations and beliefs, and we are not able to reconcile such non- GAAP measures to reported measures without unreasonable efforts because it is not possible to predict with a reasonable degree of certainty the actual impact or exact timing of items that may impact comparability. Non-GAAP measures should be considered in addition to, not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, as more fully discussed in FactSet's financial statements and filings with the SEC. The use of these non-GAAP measures are limited as they include and/or do not include certain items not included and/or included in the most directly comparable GAAP measure. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is provided in the appendix to this presentation and in FactSet's earnings release issued on December 19, 2023, which are posted on www.factset.comunder the Investor Relations section.
Copyright © 2023 FactSet Research Systems Inc. All rights reserved. FactSet Business Use Only | 2 |
Agenda
- Welcome
- Business Update
- Financial Overview
- Questions and Answers
- Appendix
Copyright © 2023 FactSet Research Systems Inc. All rights reserved. FactSet Business Use Only | 3 |
Key Metrics - First Quarter 2024
7.1% 1 | 37.6% 2 | $4.12 2 | ||||||||
ORGANIC ASV + | ADJUSTED | ADJUSTED | ||||||||
PROFESSIONAL SERVICES | + | OPERATING | + | DILUTED | ||||||
GROWTH | MARGIN | EPS | ||||||||
Driven by higher Wealth | Decreased by ~70 bps YoY due | Increased by 3.3% YoY due | ||||||||
sales and increased sales | to higher technology expenses, | to revenue growth partially | ||||||||
of data. | which were partially offset by | offset by margin | ||||||||
lower facilities | compression and a higher | |||||||||
expenses, professional fees | tax rate. | |||||||||
and T&E expenses. |
1 LTM organic growth rate based on November 30, 2023. Annual Subscription Value (ASV) at any given point in time represents the forward-looking revenues for the next twelve months from all subscription services currently supplied to clients. Professional services are revenues derived from project-based consulting and implementation. Organic ASV excludes the effects of acquisitions and dispositions completed within the last twelve months and foreign currency movements.
2 Please see Appendix for a reconciliation of these non-GAAP metrics to GAAP metrics.
4
Copyright © 2023 FactSet Research Systems Inc. All rights reserved. FactSet Business Use Only
Key Operational Metrics
>95%
ASV RETENTION
ASV retained from clients over the last twelve
months.
No change versus 2023 | Q1
90%
CLIENT RETENTION
Percentage of clients retained over the last twelve months.
Down ~150bps versus 2023 | Q1
207,083
USER COUNT
Number of individuals accessing FactSet's
solutions.
14% change since 2023 | Q1
7,945
CLIENT COUNT
Companies subscribing to FactSet services with an
ASV greater than $10,000.
4% change since 2023 | Q1
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ASV + Professional Services Growth Rates* - By Global Segments
$2,185 Million
Organic ASV + Professional Services
+7.1%
$453M
EMEA
$22M +7% Pro Svcs
(4)%
$1,048M
AMERICAS
+9%
$552M $216M
EMEA ASIAPAC
+5%+8%
$1,395M
AMERICAS
+8%
$596M$600M
$813M ANALYTICSANALYTICS
RESEARCH+6%
+6%
$218M $181M
CTS WEALTH
CTS
+16% +6%
+16%+12%
* LTM Organic ASV Growth Rate based on last twelve months as of November 30, 2023 | |
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We continued to deliver on our strategy: To build the leading open content and analytics platform that delivers differentiated advantage for our clients' success
S c a l e U p
O u r C o n t e n t
R e f i n e r y
Deep Sector is driving wins and renewals within banking, positioning us to increase market share
N e x t
G e n e r a t i o n
W o r k f l o w
S o l u t i o n s
Industry leading analytics and middle office solutions drove a key performance win as asset managers and asset owners rely on our portfolio lifecycle
Growing demand for cloud- native solutions contribute to real time deployments
C l i e n t
O b s e s s i o n
Generative AI is fueling innovation and development, allowing us to reimagine the client experience across workflows
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Financial Overview
8
First Quarter 2024 Financial Results*
(in thousands, except per share data)
7.4% | 7.2% |
Revenues | Organic Revenues |
11/30/23 $542,216 | 11/30/23 $541,393 |
11/30/22 $504,815 | 11/30/22 $504,815 |
10.0% | 5.5% | |
Operating Income | Adjusted Operating | |
11/30/23 | $189,040 | Income |
11/30/22 | $171,895 | 11/30/23 $203,965 |
11/30/22 $193,402 |
80bps | (70bps) |
Operating Margin | Adjusted Operating |
11/30/23 34.9% | Margin |
11/30/22 34.1% | 11/30/23 37.6% |
11/30/22 38.3% |
8.6% | 2.5% |
Net Income | Adjusted Net |
11/30/23 $148,555 | Income |
11/30/22 $136,798 | 11/30/23 $159,127 |
11/30/22 $155,171 |
9.1% | 3.3% |
Diluted EPS | Adjusted Diluted EPS |
11/30/23 $3.84 | 11/30/23 $4.12 |
11/30/22 $3.52 | 11/30/22 $3.99 |
9.3%
EBITDA
11/30/23 $219,002 11/30/22 $200,419
56.4%
Free Cash Flow
11/30/23 $138,678 11/30/22 $88,676
* Please see Appendix for a reconciliation of non-GAAP metrics to GAAP metrics.
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9
We remain focused on returning capital to shareholders
FactSet continued share repurchases in the first fiscal quarter of 2024
Figures in millions accept share price
$410.64 | $440.67 | |||||||||
$403.44 | ||||||||||
$330.26 | ||||||||||
$270.10 | ||||||||||
$197.06 | $241.08 | |||||||||
$162.62 | ||||||||||
$177 | ||||||||||
$304 | $220 | $201 | $265 | $19 | ||||||
$261 | 136K | |||||||||
$81 | $89 | $100 | $110 | $118 | $126 | $139 | $59 | |||
$37 | ||||||||||
'17* | '18 | '19 | '20 | '21 | '22 | '23 | 'Q1 FY24 | |||
Cash Dividends | Share Repurchases | Average Share Price | ||||||||
* Includes shares repurchased from employee stock options for 2017 | Copyright © 2023 FactSet Research Systems Inc. All rights reserved. FactSet Business Use Only | 10 |
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Disclaimer
FactSet Research Systems Inc. published this content on 18 December 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 December 2023 15:53:07 UTC.
