FactSet (“FactSet” or the “Company”) (NYSE:FDS) (NASDAQ:FDS), a
global financial digital platform and enterprise solutions
provider, today announced results for its fourth quarter fiscal
2024 ended August 31, 2024.
Fourth Quarter Fiscal 2024 Highlights
-
GAAP revenues increased 4.9%, or $26.4 million, to
$562.2 million for the fourth quarter of fiscal 2024 compared with
$535.8 million in the prior year period. Organic(1) revenues grew
5.0% year over year to $562.8 million during the fourth quarter of
fiscal 2024. Growth in GAAP and Organic revenues this quarter was
driven by wealth, banking, institutional asset managers and asset
owners.
- Annual
Subscription Value ("ASV") plus professional services was
$2,276.0 million at August 31, 2024, compared with $2,174.6
million at August 31, 2023. Organic ASV plus professional
services was $2,272.8 million at August 31, 2024, up 4.8% or
$104.4 million year over year.
- Organic
ASV plus professional services increased $53.5 million
over the last three months. Please see the “ASV + Professional
Services” section of this press release for details.
- GAAP
operating margin increased to 22.7% compared with 21.7%
for the prior year period, mainly due to a decrease in employee
compensation costs, growth in revenues and lapping of the prior
year's facilities impairment, partially offset by charges related
to the Massachusetts sales tax dispute. Adjusted operating margin
improved to 35.8% compared with 33.4% in the prior year period due
to lower bonus accrual and salary costs due to lower headcount,
partially offset by higher technology expenses from amortization of
internal use software.
- During the
fourth quarter, FactSet took a charge of approximately $54 million
related to our previously disclosed Massachusetts sales tax
dispute. In addition to reserves taken in prior fiscal years, this
brings our total charge with respect to this matter to
approximately $64 million. FactSet does not anticipate taking
additional material charges with respect to this matter.
-
GAAP diluted earnings per
share ("EPS") increased 38.1% to $2.32 compared with $1.68
for the same period in fiscal 2023, due to a decrease in employee
compensation costs and an increase in revenues, partially offset by
charges related to the Massachusetts sales tax dispute. Adjusted
diluted EPS increased 23.8% to $3.74 compared with $3.02 in the
prior year period, driven by growth in revenues, margin expansion,
and a lower tax rate.
- Net
cash provided by operating activities was $163.2 million
for the fourth quarter of fiscal 2024, driven by net income and
timing of payments to vendors. Free cash
flow decreased to $137.2 million for the fourth quarter of
fiscal 2024, compared with $156.3 million for the same period in
fiscal 2023, a decrease of 12.2%, primarily due to lower net cash
provided by operating activities and an increase in capital
expenditures.
- GAAP
effective tax rate for the fourth quarter of fiscal 2024
decreased to 23.6% compared with 39.3% for the three months ended
August 31, 2023. The primary driver of the lower GAAP rate in
the fourth quarter of fiscal 2024 is the inclusion of a prior year
tax adjustment in the fourth quarter of fiscal 2023.
(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.
"During a time of technological change and an
external environment marked by both uncertainty and opportunity,
FactSet's open platform strategy is resonating with clients seeking
growth and efficiency," said Phil Snow, CEO of FactSet. "Our
commitment to innovation ensures our comprehensive data and
analytical tools are fully available to our clients, empowering
them to achieve their goals."
Key Financial Measures*
(Condensed and Unaudited) |
Three Months Ended |
|
|
Twelve Months Ended |
|
Latest |
|
August 31, |
August 31, |
|
|
August 31, |
August 31, |
|
FY2024 |
(In
thousands, except per share data) |
|
2024 |
|
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
|
2023 |
|
|
Change |
Guidance |
Revenues |
$ |
562,187 |
|
|
$ |
535,797 |
|
|
4.9 |
% |
|
$ |
2,203,056 |
|
|
$ |
2,085,508 |
|
|
5.6 |
% |
$2,180 - $2,190 |
Organic revenues |
$ |
562,781 |
|
|
$ |
535,797 |
|
|
5.0 |
% |
|
$ |
2,203,736 |
|
|
$ |
2,085,508 |
|
|
5.7 |
% |
|
Operating income |
$ |
127,858 |
|
|
$ |
116,103 |
|
|
10.1 |
% |
|
$ |
701,299 |
|
|
$ |
629,207 |
|
|
11.5 |
% |
|
Adjusted operating income |
$ |
201,402 |
|
|
$ |
179,134 |
|
|
12.4 |
% |
|
$ |
832,653 |
|
|
$ |
754,188 |
|
|
10.4 |
% |
|
Operating margin |
|
22.7 |
% |
|
|
21.7 |
% |
|
|
|
|
31.8 |
% |
|
|
30.2 |
% |
|
|
33.7% - 34.0% |
Adjusted operating margin |
|
35.8 |
% |
|
|
33.4 |
% |
|
|
|
|
37.8 |
% |
|
|
36.2 |
% |
|
|
37.0% - 37.5% |
Net income |
$ |
89,496 |
|
|
$ |
65,119 |
|
|
37.4 |
% |
|
$ |
537,126 |
|
|
$ |
468,173 |
|
|
14.7 |
% |
|
Adjusted net income |
$ |
144,089 |
|
|
$ |
117,225 |
|
|
22.9 |
% |
|
$ |
635,073 |
|
|
$ |
569,722 |
|
|
11.5 |
% |
|
Adjusted EBITDA |
$ |
170,494 |
|
|
$ |
171,207 |
|
|
(0.4 |
)% |
|
$ |
847,538 |
|
|
$ |
776,620 |
|
|
9.1 |
% |
|
Diluted EPS |
$ |
2.32 |
|
|
$ |
1.68 |
|
|
38.1 |
% |
|
$ |
13.91 |
|
|
$ |
12.04 |
|
|
15.5 |
% |
$14.55 - $14.95 |
Adjusted diluted EPS |
$ |
3.74 |
|
|
$ |
3.02 |
|
|
23.8 |
% |
|
$ |
16.45 |
|
|
$ |
14.65 |
|
|
12.3 |
% |
$16.00 - $16.40 |
* See reconciliation of U.S. GAAP to
adjusted key financial measures in the back of this press
release.
"We are pleased with our results this quarter, which reflect our
strong execution and operating discipline," said Helen Shan,
FactSet's CFO. "By protecting our operating margin through aligning
variable expenses with revenues, we achieved solid earnings growth
and wrapped up the year effectively, positioning us well for fiscal
2025."
Full Year Fiscal 2024
Highlights
- GAAP revenues
increased 5.6% to $2.20 billion, up 5.7% on an organic basis, based
primarily on growth in organic revenues driven by wealth, CUSIP
Global Services ("CGS") subscriptions, and higher transactional
revenue. This marked the 44th consecutive year of increased
revenues for the Company.
- GAAP
operating margin increased to 31.8%
compared with 30.2% for the prior year, primarily due to growth in
revenues, a decrease in employee compensation costs and lapping of
the prior year's facilities impairment, partially offset by charges
related to the Massachusetts sales tax dispute. Adjusted operating
margin improved to 37.8% compared with 36.2% in the prior year
driven by lower bonus accrual and salary due to headcount
reductions, partially offset by increased technology expenses from
amortization and software licenses.
- GAAP
diluted EPS increased 15.5% to $13.91, mainly driven by
growth in revenues, partially offset by charges related to the
Massachusetts sales tax dispute. Adjusted diluted EPS increased
12.3% to $16.45, primarily driven by growth in revenues, margin
expansion and a lower tax rate. Fiscal 2024 marks the 28th
consecutive year that FactSet has increased its adjusted diluted
EPS.
- Net
cash provided by operating activities was $700.3 million
for fiscal 2024, driven by net income and timing of payments to
vendors. Free cash flow increased to $614.7
million for fiscal 2024 compared with $584.8 million for fiscal
2023, an increase of 5.1%, primarily due to higher net cash
provided by operating activities, partially offset by an increase
in capital expenditures.
-
Adjusted EBITDA increased to $847.5 million, up
9.1%, for fiscal 2024, compared with $776.6 million for fiscal
2023, due to an increase in operating income primarily driven by
higher revenues, partially offset by charges related to the
Massachusetts sales tax dispute.
- GAAP
effective tax rate for fiscal 2024 decreased to 17.6%
compared with 19.8% for the twelve months ended August 31,
2023. The primary driver of the lower GAAP rate in fiscal 2024 is
the inclusion of a prior year tax adjustment in the fourth quarter
of fiscal 2023.
- Client count
increased by 3.7% or 296 during the fiscal year, while users grew
by 13.9% or 26,409 from the prior year.
- In May 2024,
FactSet increased its quarterly cash dividend by 6% to $1.04 per
share. The $0.06 per share increase marks the 25th consecutive year
the Company has increased dividends, highlighting FactSet's
continued commitment to return value to its shareholders.
- The Company
returned $385.9 million to shareholders in the form of share
repurchases and dividends during fiscal 2024, for a return of 55%
as a percentage of free cash flow and proceeds from employee stock
plans.
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 $2,276.0
million at August 31, 2024, compared with $2,174.6 million at
August 31, 2023. Organic ASV plus professional services was
$2,272.8 million at August 31, 2024, up $104.4 million from
the prior year, for a growth rate of 4.8%. Organic ASV plus
professional services increased $53.5 million over the last three
months.
The buy-side and sell-side organic ASV annual
growth rates as of August 31, 2024 were 4.9% and 3.8%,
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 $1,456.8
million compared with ASV in the prior year period of $1,376.9
million. Organic ASV increased 6.1% to $1,456.8 million. Americas
revenues for the quarter increased to $362.5 million compared with
$343.3 million in the fourth quarter of last year. The Americas
region's quarterly organic revenues growth rate was 5.6% over the
prior year period.
ASV from the EMEA region was $570.3 million
compared with ASV in the prior year period of $559.6 million.
Organic ASV increased 1.8% to $569.3 million. EMEA revenues were
$143.1 million compared with $138.6 million in the fourth quarter
of fiscal 2023. The EMEA region's quarterly organic revenues growth
rate was 3.3% over the prior year period.
ASV from the Asia Pacific region was $230.6
million compared with ASV in the prior year period of $215.4
million. Organic ASV increased 7.1% to $228.4 million. Asia Pacific
revenues were $56.6 million compared with $53.9 million in the
fourth quarter of fiscal 2023. The Asia Pacific region's quarterly
organic revenues growth rate was 6.1% over the prior year
period.
Segment ASV does not include professional
services, which totaled $18.3 million at August 31, 2024.
Operational Highlights – Fourth Quarter
Fiscal 2024
- Client count as
of August 31, 2024 was 8,217, a net increase of 188 clients in
the past three months, with increases driven by wealth, corporates,
hedge funds and partners. The count includes clients with ASV of
$10,000 and more.
- User count
increased by 8,241 to 216,381 in the past three months driven
primarily by wealth and seasonal bank hiring.
- Annual ASV
retention was greater than 95%. When expressed as a percentage of
clients, annual retention was 90%.
- Employee count
was 12,398 as of August 31, 2024, up 1.3% over the last twelve
months, with the increase primarily in the content group. FactSet's
Centers of Excellence account for approximately 69% of the
Company's employees.
- The Company
announced that its Board of Directors approved a regular quarterly
cash dividend of $1.04 per share. The cash dividend will be paid on
September 19, 2024, to holders of record of FactSet’s common stock
at the close of business on August 30, 2024.
- FactSet
announced that it will host an Investor Day on Thursday, November
14, 2024, from 8:00 a.m. to 2:00 p.m. EST. The event will be dually
hosted in New York City and via live stream.
- FactSet
announced its suite of solutions designed to enable technologists
and developers to build proprietary workflows and accelerate their
AI-powered innovations.
- Kristina
Karnovsky has been appointed Executive Vice President and Head of
the Dealmakers and Wealth group, effective September 1, 2024. Ms.
Karnovsky is a veteran FactSet executive who previously served as
FactSet's Executive Vice President and Chief Product Officer. Ms.
Karnovsky succeeds Goran Skoko, who became the Company's Chief
Revenue Officer effective September 1, 2024.
Share Repurchase Program
FactSet repurchased 153,650 shares of its common
stock for $63.3 million at an average price of $412.09 during the
fourth quarter of fiscal 2024 under the Company’s share repurchase
program. As of August 31, 2024, the remaining $64.8 million
under this program was no longer available for share repurchases.
On September 17, 2024, the Board of Directors of FactSet approved a
new share repurchase authorization of up to $300 million in the
aggregate, which will be available during fiscal 2025.
Annual Business Outlook
FactSet is providing its outlook for fiscal
2025. 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 2025 Expectations
Beginning in fiscal 2025, FactSet will report
Organic ASV, rather than Organic ASV plus Professional Services, to
more accurately reflect the recurring nature of its revenues. This
underscores the shift of FactSet's offerings toward providing more
managed services and less project-based services.
- Organic ASV is
expected to grow in the range of $90 million to $140 million during
fiscal 2025.
- GAAP revenues
are expected to be in the range of $2,285 million to $2,305
million.
- GAAP operating
margin is expected to be in the range of 32.5% to 33.5%.
- Adjusted
operating margin is expected to be in the range of 36.0% to
37.0%.
- FactSet's annual
effective tax rate is expected to be in the range of 17% to
18%.
- GAAP diluted EPS
is expected to be in the range of $15.10 to $15.70.
- Adjusted diluted
EPS is expected to be in the range of $16.80 to $17.40.
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 2025. Please see the
back of this press release for a reconciliation of GAAP to adjusted
metrics.
Conference Call
Fourth Quarter
2024 Conference Call Details |
|
|
Date: |
Thursday, September 19,
2024 |
Time: |
11:00 a.m. Eastern Time |
Participant Registration: |
FactSet Q4 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 September 19, 2024,
through September 19, 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 8,200 global clients,
including over 216,000 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.comavannes@factset.comMedia
ContactMegan Kovach+1.512.736.2795megan.kovach@factset.com
Consolidated Statements of Income (Unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
August 31, |
|
August 31, |
|
August 31, |
|
August 31, |
(In thousands, except per share data) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues |
$ |
562,187 |
|
|
$ |
535,797 |
|
|
$ |
2,203,056 |
|
|
$ |
2,085,508 |
|
Operating expenses |
|
|
|
|
|
|
|
Cost of services |
|
258,196 |
|
|
|
263,688 |
|
|
|
1,011,945 |
|
|
|
973,225 |
|
Selling, general and administrative |
|
172,519 |
|
|
|
131,227 |
|
|
|
485,135 |
|
|
|
457,130 |
|
Asset impairments |
|
3,614 |
|
|
|
24,779 |
|
|
|
4,677 |
|
|
|
25,946 |
|
Total
operating expenses |
|
434,329 |
|
|
|
419,694 |
|
|
|
1,501,757 |
|
|
|
1,456,301 |
|
|
|
|
|
|
|
|
|
Operating income |
|
127,858 |
|
|
|
116,103 |
|
|
|
701,299 |
|
|
|
629,207 |
|
|
|
|
|
|
|
|
|
Other
income (expense), net |
|
|
|
|
|
|
|
Interest income |
|
4,020 |
|
|
|
4,618 |
|
|
|
14,447 |
|
|
|
12,809 |
|
Interest expense |
|
(15,547 |
) |
|
|
(16,691 |
) |
|
|
(65,778 |
) |
|
|
(66,319 |
) |
Other income (expense), net |
|
799 |
|
|
|
3,279 |
|
|
|
1,535 |
|
|
|
8,257 |
|
Total other income (expense),
net |
|
(10,728 |
) |
|
|
(8,794 |
) |
|
|
(49,796 |
) |
|
|
(45,253 |
) |
|
|
|
|
|
|
|
|
Income before income
taxes |
|
117,130 |
|
|
|
107,309 |
|
|
|
651,503 |
|
|
|
583,954 |
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
27,634 |
|
|
|
42,190 |
|
|
|
114,377 |
|
|
|
115,781 |
|
Net
income |
$ |
89,496 |
|
|
$ |
65,119 |
|
|
$ |
537,126 |
|
|
$ |
468,173 |
|
|
|
|
|
|
|
|
|
Basic
earnings per common share |
$ |
2.35 |
|
|
$ |
1.71 |
|
|
$ |
14.11 |
|
|
$ |
12.26 |
|
Diluted
earnings per common share |
$ |
2.32 |
|
|
$ |
1.68 |
|
|
$ |
13.91 |
|
|
$ |
12.04 |
|
|
|
|
|
|
|
|
|
Basic
weighted average common shares |
|
38,007 |
|
|
|
38,092 |
|
|
|
38,059 |
|
|
|
38,194 |
|
Diluted
weighted average common shares |
|
38,517 |
|
|
|
38,784 |
|
|
|
38,618 |
|
|
|
38,898 |
|
Consolidated Balance Sheets (Unaudited) |
|
|
|
|
(In thousands) |
August 31, 2024 |
August 31, 2023 |
ASSETS |
|
|
Cash and cash equivalents |
$ |
422,979 |
|
|
$ |
425,444 |
|
Investments |
|
69,619 |
|
|
|
32,210 |
|
Accounts receivable, net of reserves of $14,581 at August 31, 2024
and $7,769 at August 31, 2023 |
|
228,054 |
|
|
|
237,665 |
|
Prepaid taxes |
|
56,994 |
|
|
|
24,206 |
|
Prepaid expenses and other current assets |
|
60,092 |
|
|
|
50,610 |
|
Total current assets |
|
837,738 |
|
|
|
770,135 |
|
|
|
|
Property, equipment and leasehold improvements, net |
|
82,513 |
|
|
|
86,107 |
|
Goodwill |
|
1,011,129 |
|
|
|
1,004,736 |
|
Intangible assets, net |
|
1,844,141 |
|
|
|
1,859,202 |
|
Deferred taxes |
|
61,337 |
|
|
|
27,229 |
|
Lease right-of-use assets, net |
|
130,494 |
|
|
|
141,837 |
|
Other assets |
|
89,578 |
|
|
|
73,676 |
|
TOTAL ASSETS |
$ |
4,056,930 |
|
|
$ |
3,962,922 |
|
|
|
|
LIABILITIES |
|
|
Accounts payable and accrued expenses |
$ |
178,250 |
|
|
$ |
121,816 |
|
Current debt |
|
124,842 |
|
|
|
— |
|
Current lease liabilities |
|
31,073 |
|
|
|
28,839 |
|
Accrued compensation |
|
93,279 |
|
|
|
112,892 |
|
Deferred revenues |
|
159,761 |
|
|
|
152,430 |
|
Current taxes payable |
|
42,281 |
|
|
|
31,009 |
|
Dividends payable |
|
39,470 |
|
|
|
37,265 |
|
Total current liabilities |
|
668,956 |
|
|
|
484,251 |
|
|
|
|
Long-term debt |
|
1,241,131 |
|
|
|
1,612,700 |
|
Deferred taxes |
|
8,452 |
|
|
|
6,737 |
|
Deferred revenues, non-current |
|
1,344 |
|
|
|
3,734 |
|
Taxes payable |
|
40,452 |
|
|
|
30,344 |
|
Long-term lease liabilities |
|
177,521 |
|
|
|
198,382 |
|
Other liabilities |
|
6,614 |
|
|
|
6,844 |
|
TOTAL LIABILITIES |
$ |
2,144,470 |
|
|
$ |
2,342,992 |
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
TOTAL STOCKHOLDERS’ EQUITY |
$ |
1,912,460 |
|
|
$ |
1,619,930 |
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
4,056,930 |
|
|
$ |
3,962,922 |
|
Consolidated Statements of Cash Flows
(Unaudited) |
|
|
Twelve Months Ended |
|
August 31, |
August 31, |
(In thousands) |
|
2024 |
|
|
|
2023 |
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
Net
income |
$ |
537,126 |
|
|
$ |
468,173 |
|
Adjustments to reconcile net income to net cash provided by
operating activities |
|
|
Depreciation and amortization |
|
125,187 |
|
|
|
105,384 |
|
Amortization of lease right-of-use assets |
|
30,407 |
|
|
|
32,344 |
|
Stock-based compensation expense |
|
63,501 |
|
|
|
62,038 |
|
Deferred income taxes |
|
(32,020 |
) |
|
|
(31,119 |
) |
Asset impairments |
|
4,677 |
|
|
|
25,946 |
|
Changes
in assets and liabilities, net of effects of acquisitions |
|
|
Accounts receivable, net of reserves |
|
2,195 |
|
|
|
(40,103 |
) |
Accounts payable and accrued expenses |
|
55,347 |
|
|
|
8,393 |
|
Accrued compensation |
|
(20,213 |
) |
|
|
(3,431 |
) |
Deferred revenues |
|
4,939 |
|
|
|
(3,387 |
) |
Taxes payable, net of prepaid taxes |
|
(11,448 |
) |
|
|
41,396 |
|
Lease liabilities, net |
|
(39,320 |
) |
|
|
(39,704 |
) |
Other,
net |
|
(20,040 |
) |
|
|
19,643 |
|
Net cash provided by operating activities |
|
700,338 |
|
|
|
645,573 |
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
Purchases of property, equipment, leasehold improvements and
capitalized internal-use software |
|
(85,681 |
) |
|
|
(60,786 |
) |
Acquisition of businesses, net of cash and cash equivalents
acquired |
|
— |
|
|
|
(23,593 |
) |
Purchases of investments |
|
(58,636 |
) |
|
|
(11,014 |
) |
Net cash provided by (used in) investing
activities |
|
(144,317 |
) |
|
|
(95,393 |
) |
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
Repayments of debt |
|
(250,000 |
) |
|
|
(375,000 |
) |
Dividend
payments |
|
(150,667 |
) |
|
|
(138,601 |
) |
Proceeds
from employee stock plans |
|
91,711 |
|
|
|
72,006 |
|
Repurchases of common stock |
|
(235,235 |
) |
|
|
(176,720 |
) |
Other
financing activities |
|
(16,659 |
) |
|
|
(13,709 |
) |
Net cash provided by (used in) financing
activities |
|
(560,850 |
) |
|
|
(632,024 |
) |
|
|
|
Effect
of exchange rate changes on cash and cash equivalents |
|
2,364 |
|
|
|
4,015 |
|
Net
increase (decrease) in cash and cash equivalents |
|
(2,465 |
) |
|
|
(77,829 |
) |
Cash and
cash equivalents at beginning of period |
|
425,444 |
|
|
|
503,273 |
|
Cash and cash equivalents at end of period |
$ |
422,979 |
|
|
$ |
425,444 |
|
|
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 |
|
|
Twelve Months Ended |
|
|
August 31, |
August 31, |
|
|
August 31, |
|
(In
thousands) |
|
2024 |
|
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
Revenues |
$ |
562,187 |
|
|
$ |
535,797 |
|
|
4.9 |
% |
|
$ |
2,203,056 |
|
$ |
2,085,508 |
|
|
5.6 |
% |
Acquisition revenues |
|
16 |
|
|
|
— |
|
|
|
|
|
(414 |
) |
|
— |
|
|
|
Currency impact |
|
578 |
|
|
|
— |
|
|
|
|
|
1,094 |
|
|
— |
|
|
|
Organic revenues |
$ |
562,781 |
|
|
$ |
535,797 |
|
|
5.0 |
% |
|
$ |
2,203,736 |
|
$ |
2,085,508 |
|
|
5.7 |
% |
|
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 |
|
Twelve Months Ended |
|
|
August 31, |
August 31, |
|
August 31, |
August 31, |
|
(in
thousands, except per share data) |
|
2024 |
|
|
|
2023 |
|
|
% Change |
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
Operating income |
$ |
127,858 |
|
|
$ |
116,103 |
|
|
10.1 |
% |
|
$ |
701,299 |
|
|
$ |
629,207 |
|
|
11.5 |
% |
Intangible asset
amortization |
|
16,691 |
|
|
|
18,131 |
|
|
|
|
|
67,383 |
|
|
|
71,503 |
|
|
|
Massachusetts sales tax
dispute |
|
54,048 |
|
|
|
6,239 |
|
|
|
|
|
54,048 |
|
|
|
6,239 |
|
|
|
Restructuring / severance |
|
(1,099 |
) |
|
|
18,128 |
|
|
|
|
|
5,596 |
|
|
|
19,879 |
|
|
|
Asset impairment(1) |
|
3,443 |
|
|
|
20,327 |
|
|
|
|
|
3,443 |
|
|
|
20,327 |
|
|
|
Business acquisition /
integration costs(2) |
|
461 |
|
|
|
206 |
|
|
|
|
|
884 |
|
|
|
7,033 |
|
|
|
Adjusted operating income |
$ |
201,402 |
|
|
$ |
179,134 |
|
|
12.4 |
% |
|
$ |
832,653 |
|
|
$ |
754,188 |
|
|
10.4 |
% |
Operating margin |
|
22.7 |
% |
|
|
21.7 |
% |
|
|
|
|
31.8 |
% |
|
|
30.2 |
% |
|
|
Adjusted operating margin(3) |
|
35.8 |
% |
|
|
33.4 |
% |
|
|
|
|
37.8 |
% |
|
|
36.2 |
% |
|
|
Net income |
$ |
89,496 |
|
|
$ |
65,119 |
|
|
37.4 |
% |
|
$ |
537,126 |
|
|
$ |
468,173 |
|
|
14.7 |
% |
Intangible asset
amortization |
|
12,390 |
|
|
|
14,496 |
|
|
|
|
|
49,529 |
|
|
|
59,422 |
|
|
|
Massachusetts sales tax
dispute |
|
40,121 |
|
|
|
4,988 |
|
|
|
|
|
39,727 |
|
|
|
5,185 |
|
|
|
Restructuring / severance |
|
(816 |
) |
|
|
14,493 |
|
|
|
|
|
4,113 |
|
|
|
16,520 |
|
|
|
Asset impairment(1) |
|
2,556 |
|
|
|
16,251 |
|
|
|
|
|
2,531 |
|
|
|
16,893 |
|
|
|
Business acquisition /
integration costs(2) |
|
342 |
|
|
|
165 |
|
|
|
|
|
650 |
|
|
|
5,845 |
|
|
|
Income tax items |
|
— |
|
|
|
1,713 |
|
|
|
|
|
1,397 |
|
|
|
(2,316 |
) |
|
|
Adjusted net income(4) |
$ |
144,089 |
|
|
$ |
117,225 |
|
|
22.9 |
% |
|
$ |
635,073 |
|
|
$ |
569,722 |
|
|
11.5 |
% |
Net income |
|
89,496 |
|
|
|
65,119 |
|
|
37.4 |
% |
|
|
537,126 |
|
|
|
468,173 |
|
|
14.7 |
% |
Interest expense |
|
15,547 |
|
|
|
16,691 |
|
|
|
|
|
65,778 |
|
|
|
66,319 |
|
|
|
Income taxes |
|
27,634 |
|
|
|
42,190 |
|
|
|
|
|
114,377 |
|
|
|
115,781 |
|
|
|
Depreciation and amortization
expense |
|
34,032 |
|
|
|
26,703 |
|
|
|
|
|
125,187 |
|
|
|
105,384 |
|
|
|
EBITDA |
$ |
166,709 |
|
|
$ |
150,703 |
|
|
10.6 |
% |
|
$ |
842,468 |
|
|
$ |
755,657 |
|
|
11.5 |
% |
Non-recurring non-cash
expenses(5) |
|
3,785 |
|
|
|
20,504 |
|
|
|
|
$ |
5,070 |
|
|
$ |
20,963 |
|
|
|
Adjusted EBITDA |
$ |
170,494 |
|
|
$ |
171,207 |
|
|
(0.4 |
)% |
|
$ |
847,538 |
|
|
$ |
776,620 |
|
|
9.1 |
% |
Diluted EPS |
$ |
2.32 |
|
|
$ |
1.68 |
|
|
38.1 |
% |
|
$ |
13.91 |
|
|
$ |
12.04 |
|
|
15.5 |
% |
Intangible asset
amortization |
|
0.32 |
|
|
|
0.38 |
|
|
|
|
|
1.27 |
|
|
|
1.53 |
|
|
|
Massachusetts sales tax
dispute |
|
1.04 |
|
|
|
0.13 |
|
|
|
|
|
1.03 |
|
|
|
0.13 |
|
|
|
Restructuring / severance |
|
(0.02 |
) |
|
|
0.37 |
|
|
|
|
|
0.11 |
|
|
|
0.43 |
|
|
|
Asset impairment(1) |
|
0.07 |
|
|
|
0.42 |
|
|
|
|
|
0.07 |
|
|
|
0.43 |
|
|
|
Business acquisition /
integration costs(2) |
|
0.01 |
|
|
|
0.00 |
|
|
|
|
|
0.02 |
|
|
|
0.15 |
|
|
|
Income tax items |
|
— |
|
|
|
0.04 |
|
|
|
|
|
0.04 |
|
|
|
(0.06 |
) |
|
|
Adjusted Diluted EPS(4) |
$ |
3.74 |
|
|
$ |
3.02 |
|
|
23.8 |
% |
|
$ |
16.45 |
|
|
$ |
14.65 |
|
|
12.3 |
% |
Weighted average common shares (Diluted) |
|
38,517 |
|
|
|
38,784 |
|
|
|
|
|
38,618 |
|
|
|
38,898 |
|
|
|
(1) The asset impairment primarily relates to
impairment charges of lease right-of-use assets and property,
equipment and leasehold improvements associated with vacating
certain leased office space.(2) Fiscal 2024 related to certain
business acquisition costs and fiscal 2023 related to integration
costs from the CGS acquisition.(3) Adjusted operating margin is
calculated as Adjusted operating income divided by Revenues.(4) For
purposes of calculating Adjusted net income and Adjusted diluted
EPS, all adjustments for the three months ended August 31,
2024 and August 31, 2023 were taxed at an adjusted tax rate of
25.8% and 20.1%, respectively. For the twelve months ended
August 31, 2024 and August 31, 2023, all adjustments were
taxed at an adjusted tax rate of 26.5% and 16.9%, respectively.(5)
Primarily related to asset impairments.
Business Outlook Operating Margin, Net
Income and Diluted EPS
(Unaudited) |
|
|
Figures may not foot due to rounding |
Annual Fiscal 2025 Guidance |
(In millions, except per share data) |
Low end of range |
High end of range |
Revenues |
$ |
2,285 |
|
|
$ |
2,305 |
|
Operating income |
$ |
765 |
|
|
$ |
749 |
|
Operating margin |
|
33.5 |
% |
|
|
32.5 |
% |
Intangible asset amortization |
|
80 |
|
|
|
81 |
|
Adjusted operating income |
$ |
845 |
|
|
$ |
830 |
|
Adjusted operating margin (a) |
|
37.0 |
% |
|
|
36.0 |
% |
|
|
|
Net
income |
$ |
598 |
|
|
$ |
577 |
|
Intangible asset amortization |
|
66 |
|
|
|
66 |
|
Discrete tax items |
|
(4 |
) |
|
|
(3 |
) |
Adjusted net income |
$ |
660 |
|
|
$ |
640 |
|
|
|
|
Diluted earnings per common share |
$ |
15.70 |
|
|
$ |
15.10 |
|
Intangible asset amortization |
|
1.73 |
|
|
|
1.73 |
|
Discrete tax items |
|
(0.03 |
) |
|
|
(0.03 |
) |
Adjusted diluted earnings per common share |
$ |
17.40 |
|
|
$ |
16.80 |
|
(a) Adjusted operating margin is calculated as
Adjusted operating income divided by Revenues.
Free Cash Flow
(Unaudited) |
Three Months Ended |
|
|
|
Twelve Months Ended |
|
|
August 31, |
|
|
|
August 31, |
|
(In
thousands) |
|
2024 |
|
|
|
2023 |
|
|
Change |
|
|
|
2024 |
|
|
|
2023 |
|
|
Change |
Net Cash Provided for Operating Activities |
$ |
163,161 |
|
|
$ |
175,911 |
|
|
|
|
|
$ |
700,338 |
|
|
$ |
645,573 |
|
|
|
Less: purchases of property,
equipment, leasehold improvements and capitalized internal-use
software |
|
(25,959 |
) |
|
|
(19,606 |
) |
|
|
|
|
|
(85,681 |
) |
|
|
(60,786 |
) |
|
|
Free Cash Flow |
$ |
137,202 |
|
|
$ |
156,305 |
|
|
(12.2 |
)% |
|
$ |
614,657 |
|
|
$ |
584,787 |
|
|
5.1 |
% |
|
|
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.
|
Q4'24 |
Q3'24 |
Q2'24 |
Q1'24 |
Q4'23 |
Q3'23 |
Q2'23 |
Q1'23 |
% of ASV from buy-side clients |
82.0% |
82.3% |
82.0% |
82.0% |
81.8% |
82.1% |
82.8% |
82.8% |
% of ASV from sell-side
clients |
18.0% |
17.7% |
18.0% |
18.0% |
18.2% |
17.9% |
17.2% |
17.2% |
|
|
|
|
|
|
|
|
|
ASV Growth rate from buy-side
clients |
4.9% |
5.3% |
5.6% |
7.2% |
6.9% |
7.3% |
8.1% |
8.0% |
ASV Growth rate from sell-side
clients |
3.8% |
3.7% |
5.5% |
7.6% |
9.3% |
12.3% |
15.8% |
14.4% |
|
The following table presents the calculation of organic ASV plus
professional services.
(Details may not sum to total due to
rounding)
(In
millions) |
As of August 31, 2024 |
As reported ASV plus Professional Services (a) |
$ |
2,276.0 |
|
Currency impact (b) |
|
(3.2 |
) |
Organic
ASV plus Professional Services |
$ |
2,272.8 |
|
Organic ASV plus Professional Services growth rate |
|
4.8 |
% |
(a) Includes $18.3 million in professional
services as of August 31, 2024.(b) The impact of foreign
currency movements.
FactSet Research Systems (NYSE:FDS)
Historical Stock Chart
From Aug 2024 to Sep 2024
FactSet Research Systems (NYSE:FDS)
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From Sep 2023 to Sep 2024