Cover
Cover - shares | 3 Months Ended | |
Nov. 30, 2020 | Dec. 31, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Nov. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-11869 | |
Entity Registrant Name | FACTSET RESEARCH SYSTEMS INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-3362547 | |
Entity Address, Address Line One | 45 Glover Avenue | |
Entity Address, City or Town | Norwalk | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06850 | |
City Area Code | 203 | |
Local Phone Number | 810-1000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 37,978,624 | |
Title of 12(b) Security | Common Stock, $0.01 Par Value | |
Trading Symbol | FDS | |
Entity Central Index Key | 0001013237 | |
Current Fiscal Year End Date | --08-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
New York Stock Exchange LLC | ||
Entity Information [Line Items] | ||
Security Exchange Name | NYSE | |
The Nasdaq Stock Market | ||
Entity Information [Line Items] | ||
Security Exchange Name | NASDAQ |
Consolidated Statements of Inco
Consolidated Statements of Income - Unaudited - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 388,206 | $ 366,658 |
Operating expenses | ||
Cost of services | 188,088 | 164,957 |
Selling, general and administrative | 79,087 | 88,515 |
Total operating expenses | 267,175 | 253,472 |
Operating income | 121,031 | 113,186 |
Other expenses | ||
Interest expense, net | (1,029) | (3,131) |
Other income (expense), net | 230 | (1,314) |
Income before income taxes | 120,232 | 108,741 |
Provision for income taxes | 19,026 | 14,784 |
Net income | $ 101,206 | $ 93,957 |
Basic earnings per common share (in USD per share) | $ 2.66 | $ 2.47 |
Diluted earnings per common share (in USD per share) | $ 2.62 | $ 2.43 |
Basic weighted average common shares (in shares) | 38,007 | 37,978 |
Diluted weighted average common shares (in shares) | 38,697 | 38,587 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - Unaudited - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | ||
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 101,206 | $ 93,957 | |
Other comprehensive income, net of tax: | |||
Net unrealized (loss) gain on cash flow hedges | [1] | (116) | 2,051 |
Foreign currency translation adjustments | 333 | 7,787 | |
Other comprehensive gain | 217 | 9,838 | |
Comprehensive income | $ 101,423 | $ 103,795 | |
[1] | For the three months ended November 30, 2020, the net unrealized loss on cash flow hedges were net of a tax benefit of $39 thousand. For the three months ended November 30, 2019, the net unrealized gain on cash flow hedges were net of a tax expense of $714 thousand. |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income - Unaudited (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net unrealized (loss) gain on cash flow hedges, tax expense (benefit) | $ (39) | $ 714 |
Consolidated Balance Sheets - U
Consolidated Balance Sheets - Unaudited - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 560,137 | $ 585,605 |
Investments | 18,166 | 19,572 |
Accounts receivable, net of reserves of $7,252 at November 30, 2020 and $7,987 at August 31, 2020 | 156,218 | 155,011 |
Prepaid taxes | 25,908 | 38,067 |
Prepaid expenses and other current assets | 43,660 | 43,675 |
Total current assets | 804,089 | 841,930 |
Property, equipment and leasehold improvements, net | 135,121 | 133,102 |
Goodwill | 738,575 | 709,703 |
Intangible assets, net | 134,896 | 121,095 |
Lease right-of-use assets, net | 257,591 | 248,929 |
Other assets | 29,154 | 28,629 |
TOTAL ASSETS | 2,099,426 | 2,083,388 |
LIABILITIES | ||
Accounts payable and accrued expenses | 84,738 | 82,094 |
Current lease liabilities | 30,954 | 29,056 |
Accrued compensation | 36,486 | 81,873 |
Deferred fees | 46,439 | 53,987 |
Dividends payable | 29,266 | 29,283 |
Total current liabilities | 227,883 | 276,293 |
Long-term debt | 575,511 | 574,354 |
Deferred taxes | 18,444 | 19,713 |
Deferred fees | 9,147 | 9,319 |
Taxes payable | 28,795 | 27,739 |
Long-term lease liabilities | 279,723 | 272,269 |
Other non-current liabilities | 7,350 | 7,326 |
TOTAL LIABILITIES | 1,146,853 | 1,187,013 |
Commitments and Contingencies | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued | 0 | 0 |
Common stock, $0.01 par value, 150,000,000 shares authorized, 40,884,113 and 40,767,708 shares issued, 38,008,129 and 38,030,252 shares outstanding at November 30, 2020 and August 31, 2020, respectively | 409 | 408 |
Additional paid-in capital | 968,375 | 939,067 |
Treasury stock, at cost: 2,875,984 and 2,737,456 shares at November 30, 2020 and August 31, 2020, respectively | (682,224) | (636,956) |
Retained earnings | 705,089 | 633,149 |
Accumulated other comprehensive loss | (39,076) | (39,293) |
TOTAL STOCKHOLDERS’ EQUITY | 952,573 | 896,375 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 2,099,426 | $ 2,083,388 |
Consolidated Balance Sheets -_2
Consolidated Balance Sheets - Unaudited (Parentheticals) - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable reserve | $ 7,252 | $ 7,987 |
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, issued (in shares) | 40,884,113 | 40,767,708 |
Common stock, outstanding (in shares) | 38,008,129 | 38,030,252 |
Treasury stock (in shares) | 2,875,984 | 2,737,456 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - Unaudited - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 101,206 | $ 93,957 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization | 15,290 | 14,390 |
Amortization of lease right-of-use assets | 10,697 | 10,700 |
Stock-based compensation expense | 11,317 | 9,814 |
Deferred income taxes | 437 | (6,624) |
Changes in assets and liabilities, net of effects of acquisitions | ||
Accounts receivable, net of reserves | (342) | 875 |
Accounts payable and accrued expenses | 2,240 | 13,165 |
Accrued compensation | (45,858) | (45,780) |
Deferred fees | (9,724) | (6,483) |
Taxes payable, net of prepaid taxes | 13,302 | 16,616 |
Lease liabilities, net | (10,007) | (3,761) |
Other, net | 718 | (1,078) |
Net cash provided by operating activities | 89,276 | 95,791 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Acquisition of business, net of cash and cash equivalents acquired | (41,916) | 0 |
Purchases of property, equipment, leasehold improvements and internal-use software | (18,333) | (26,780) |
Purchases of investments | (250) | (2,620) |
Proceeds from maturity or sale of investments | 2,177 | 2,257 |
Net cash used in investing activities | (58,322) | (27,143) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repurchases of common stock | (43,144) | (84,423) |
Dividend payments | (29,103) | (27,259) |
Proceeds from employee stock plans | 17,993 | 16,727 |
Other financing activities | (2,123) | 0 |
Net cash used by financing activities | (56,377) | (94,955) |
Effect of exchange rate changes on cash and cash equivalents | (45) | 2,725 |
Net decrease in cash and cash equivalents | (25,468) | (23,582) |
Cash and cash equivalents at beginning of period | 585,605 | 359,799 |
Cash and cash equivalents at end of period | $ 560,137 | $ 336,217 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - Unaudited - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Aug. 31, 2019 | 40,104,192 | 1,986,352 | ||||
Beginning balance at Aug. 31, 2019 | $ 672,256 | $ 401 | $ 806,973 | $ (433,799) | $ 373,225 | $ (74,544) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 93,957 | 93,957 | ||||
Other comprehensive income (loss) | 9,838 | 9,838 | ||||
Common stock issued for employee stock plans (in shares) | 119,740 | |||||
Common stock issued for employee stock plans | 19,182 | $ 1 | 19,181 | |||
Vesting of restricted stock (in shares) | 15,376 | 5,778 | ||||
Vesting of restricted stock | $ (1,456) | $ (1,456) | ||||
Repurchase of common stock (in shares) | 343,000 | 343,000 | ||||
Repurchases of common stock | $ (84,423) | $ (84,423) | ||||
Stock-based compensation expense | 9,814 | 9,814 | ||||
Dividends declared | (27,290) | (27,290) | ||||
Ending balance (in shares) at Nov. 30, 2019 | 40,239,308 | 2,335,130 | ||||
Ending balance at Nov. 30, 2019 | 691,878 | $ 402 | 835,968 | $ (519,678) | 439,892 | (64,706) |
Beginning balance (in shares) at Aug. 31, 2020 | 40,767,708 | 2,737,456 | ||||
Beginning balance at Aug. 31, 2020 | 896,375 | $ 408 | 939,067 | $ (636,956) | 633,149 | (39,293) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 101,206 | 101,206 | ||||
Other comprehensive income (loss) | 217 | 217 | ||||
Common stock issued for employee stock plans (in shares) | 98,459 | |||||
Common stock issued for employee stock plans | 17,992 | $ 1 | 17,991 | |||
Vesting of restricted stock (in shares) | 17,946 | 6,728 | ||||
Vesting of restricted stock | $ (2,124) | $ (2,124) | ||||
Repurchase of common stock (in shares) | 131,800 | 131,800 | ||||
Repurchases of common stock | $ (43,144) | $ (43,144) | ||||
Stock-based compensation expense | 11,317 | 11,317 | ||||
Dividends declared | (29,266) | (29,266) | ||||
Ending balance (in shares) at Nov. 30, 2020 | 40,884,113 | 2,875,984 | ||||
Ending balance at Nov. 30, 2020 | $ 952,573 | $ 409 | $ 968,375 | $ (682,224) | $ 705,089 | $ (39,076) |
Description of Business
Description of Business | 3 Months Ended |
Nov. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | DESCRIPTION OF BUSINESS FactSet Research Systems Inc. and its wholly-owned subsidiaries (collectively, the "Company" or "FactSet") is a global provider of integrated financial information, analytical applications and industry-leading services for the investment and corporate communities. For over 40 years, global financial professionals have utilized the Company's content and multi-asset class solutions across each stage of the investment process. FactSet's goal is to provide a seamless user experience spanning idea generation, research, portfolio construction and analysis, trade execution, performance measurement, risk management and reporting, in which the Company serves the front, middle, and back offices to drive productivity and improved performance. FactSet's flexible, open data and technology solutions can be implemented both across the investment portfolio lifecycle or as standalone components serving different workflows in an organization. FactSet is focused on growing the business through three segments: the Americas, EMEA (Europe and Africa), and Asia Pacific. Within each of the segments, the Company primarily delivers insight and information through the four workflow solutions of Research, Analytics and Trading, Content and Technology Solutions ("CTS") and Wealth. FactSet currently serves a wide range of financial professionals, including but not limited to portfolio managers, investment research professionals, investment bankers, risk and performance analysts, wealth advisors and corporate clients. FactSet provides both insights on global market trends and intelligence on companies and industries, as well as capabilities to monitor portfolio risk and performance and execute trades. The Company combines dedicated client service with open and flexible technology offerings, such as a configurable desktop and mobile platform, comprehensive data feeds, open marketplace and digital portals and application programming interface ("APIs"). The Company’s revenue is primarily derived from subscriptions to products and services such as workstations, portfolio analytics, enterprise data, and research management. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Nov. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATIONFactSet conducts business globally and is managed on a geographic basis. The accompanying unaudited Consolidated Financial Statements and Notes to the Company's Consolidated Financial Statements included in this Quarterly Report on Form 10-Q are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by GAAP for annual financial statements. The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany activity and balances have been eliminated. In the opinion of management, the accompanying unaudited Consolidated Financial Statements include all normal recurring adjustments, transactions or events discretely impacting the interim periods considered necessary to present fairly the Company’s results of operations, financial position, cash flows and equity. Certain notes and other information have been condensed or omitted in this Quarterly Report on Form 10-Q, therefore the information in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2020. The Company has evaluated subsequent events through the date the financial statements were issued. Reclassification The Company reclassified in the Consolidated Statement of Cash Flows certain prior year comparative figures from Other, net to Amortization of lease right-of-use assets and Lease liabilities, net within Net cash provided by operating activities to conform to the current year's presentation. COVID-19 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Nov. 30, 2020 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS As of November 30, 2020, the Company implemented all applicable new accounting standards and updates issued by the Financial Accounting Standards Board ("FASB") that were in effect. There were no new standards or updates adopted during the three months ended November 30, 2020 that had a material impact on the Consolidated Financial Statements. New Accounting Standards or Updates Recently Adopted Goodwill Impairment Test In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350); Simplifying the Test for Goodwill Impairment , which removes the requirement for companies to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The Company has adopted this standard effective September 1, 2020. The adoption of this accounting standard update had no impact on the Company's Consolidated Financial Statements. Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-03, Financial Instruments—Credit Losses (Topic 326); Measurement of Credit Losses on Financial Instruments , which significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard replaces the "incurred loss" approach with an "expected loss" model for instruments measured at amortized cost. Subsequent to the adoption, the allowance for doubtful accounts is made when the financial asset is first recorded to the balance sheet (and periodically thereafter) and is based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. The Company has adopted this standard effective September 1, 2020. The adoption of this accounting standard update did not have a material impact on the Company's Consolidated Financial Statements. Recent Accounting Standards or Updates Not Yet Effective Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848); Facilitation of the Effects of Reference Rate Reform on Financial Reportin g, to provide optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions affected by the anticipated transition from LIBOR. As a result of the reference rate reform initiative, certain widely used reference rates such as LIBOR are expected to be discontinued. The guidance is designed to simplify how entities account for contracts, such as receivables, debt, leases, derivative instruments and hedging, that are modified to replace LIBOR or other benchmark interest rates with new rates. The guidance is effective upon issuance and may be applied through December 31, 2022. The Company is currently evaluating the impact of this accounting standard, but it is not expected to have a material impact on the Company’s Consolidated Financial Statements. Income Tax Simplification In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740); Simplifying the Accounting for Income Taxes , to simplify various aspects related to accounting for income taxes, eliminating certain exceptions to the general principles in accounting for income taxes related to intraperiod tax allocation, simplifying when companies recognize deferred taxes in an interim period, and clarifying certain aspects of the current guidance to promote consistent application. The guidance will be effective for the Company in the first quarter of fiscal 2022, with early adoption permitted. Most amendments are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company is currently evaluating the potential impact of adopting the guidance on its Consolidated Financial Statements. No other new accounting pronouncements issued or effective as of November 30, 2020, have had or are expected to have a material impact on the Company’s Consolidated Financial Statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Nov. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION The Company derives most of its revenue by providing client access to its hosted proprietary data and analytics platform which can include various combinations of products and services available over the contractual term. The hosted platform is a subscription-based service that consists primarily of providing access to products and services including workstations, portfolio analytics, enterprise data, and research management. The Company determined that the subscription-based service represents a single performance obligation covering a series of distinct products and services that are substantially the same and that have the same pattern of transfer to the client. The Company also determined the nature of the promise to the client is to provide daily access to one overall data and analytics platform. This platform provides integrated financial information, analytical applications and industry-leading service for the investment community. Based on the nature of the services and products offered by FactSet, the Company applies an input time-based measure of progress as the client is simultaneously receiving and consuming the benefits of the platform. The Company records revenue for its contracts using the over-time revenue recognition model as a client is invoiced or performance is satisfied. FactSet does not consider payment terms as a performance obligation for clients with contractual terms that are one year or less and the Company has elected the practical expedient. Contracts with clients can include certain fulfillment costs, comprised of up-front costs to allow for the delivery of services and products, which are recoverable. In connection with the adoption of the revenue recognition standard, fulfillment costs are recognized as an asset, recorded in the Prepaid expenses and other current assets account for the current portion and Other assets for the non-current portion, based on the term of the license period, and amortized consistent with the associated revenue for providing the services. There are no significant judgments that would impact the timing of revenue recognition. The majority of client contracts have a duration of one year or less, or the amount FactSet is entitled to receive corresponds directly with the value of performance obligations completed to date, and therefore, the Company does not disclose the value of the remaining unsatisfied performance obligations. Disaggregated Revenue The Company disaggregates revenue from contracts with clients by geographic region, which includes the Americas, EMEA and Asia Pacific. FactSet believes these regions are reflective of how the Company manages the business and the markets in which it serves. These regions best depict the nature, amount, timing and uncertainty of revenue and cash flows related to contracts with clients. Refer to Note 16, Segment Information , for further information on revenue by geographic region. The following table presents this disaggregation of revenue by geography: Three Months Ended November 30, (in thousands) 2020 2019 Americas $ 244,337 $ 231,330 EMEA 105,777 100,830 Asia Pacific 38,092 34,498 Total Revenue $ 388,206 $ 366,658 |
Fair Value Measures
Fair Value Measures | 3 Months Ended |
Nov. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measures | FAIR VALUE MEASURES Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the use of various valuation methodologies, including market, income and cost approaches are permissible. The Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. Fair Value Hierarchy The accounting guidance for fair value measurements establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value based on the reliability of inputs. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect its placement within the fair value hierarchy levels. FactSet has categorized its cash equivalents, investments and derivatives within the fair value hierarchy as follows: Level 1 – applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. These Level 1 assets and liabilities include the Company’s corporate money market funds that are classified as cash equivalents. Level 2 – applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. The Company’s certificates of deposit, mutual funds and derivative instruments are classified as Level 2. Level 3 – applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. There were no Level 3 assets or liabilities held by the Company as of November 30, 2020 or August 31, 2020. (a) Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables show, by level within the fair value hierarchy, the Company’s assets and liabilities that are measured at fair value on a recurring basis at November 30, 2020 and August 31, 2020. The Company did not have any transfers between levels of fair value measurements during the periods presented. Fair Value Measurements at November 30, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets Corporate money market funds (1) $ 201,803 $ — $ — $ 201,803 Mutual funds (2) — 18,166 — 18,166 Certificates of deposit (3) — — — — Derivative instruments (4) — 3,027 — 3,027 Total assets measured at fair value $ 201,803 $ 21,193 $ — $ 222,996 Liabilities Derivative instruments (4) $ — $ 5,311 $ — $ 5,311 Total liabilities measured at fair value $ — $ 5,311 $ — $ 5,311 Fair Value Measurements at August 31, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets Corporate money market funds (1) $ 276,852 $ — $ — $ 276,852 Mutual funds (2) — 17,257 — 17,257 Certificates of deposit (3) — 2,315 — 2,315 Derivative instruments (4) — 3,644 — 3,644 Total assets measured at fair value $ 276,852 $ 23,216 $ — $ 300,068 Liabilities Derivative instruments (4) $ — $ 5,773 $ — $ 5,773 Total liabilities measured at fair value $ — $ 5,773 $ — $ 5,773 1. The Company’s corporate money market funds are readily convertible into cash and the net asset value of each fund on the last day of the quarter is used to determine its fair value. As such, the Company’s corporate money market funds are classified as Level 1 assets and included in Cash and cash equivalents within the Consolidated Balance Sheets. 2. The Company’s mutual funds have a fair value based on the fair value of the underlying investments held by the mutual funds, allocated to each share of the mutual fund using a net asset value approach. The fair value of the underlying investments is based on observable inputs. As such, the Company’s mutual funds are classified as Level 2 and are classified as Investments (short-term) on the Consolidated Balance Sheets. 3. The Company’s certificates of deposit held for investment are not debt securities and are classified as Level 2 assets. These certificates of deposit have original maturities greater than three months but less than one year and, as such, are classified as Investments (short-term) within the Consolidated Balance Sheets. 4. The Company utilizes the income approach to measure fair value for its foreign exchange forward contracts. The income approach uses pricing models that rely on market observable inputs such as spot, forward and interest rates, as well as credit default swap spreads, and are classified as Level 2 assets. To estimate fair value for the interest rate swap agreement, the Company utilizes a present value of future cash flows, leveraging a model-derived valuation that uses Level 2 observable inputs such as interest rate yield curves. Refer to Note 6 , Derivative Instruments, for more information on the Company's derivative instruments designed as cash flow hedges. (b) Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to our tangible fixed assets, operating lease assets, goodwill and intangible assets, and investments. The fair values of these non-financial assets and liabilities are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparable information, and discounted cash flow projections. The Company reviews goodwill and intangible assets for impairment annually, during the fourth quarter of each fiscal year, or as circumstances indicate the possibility for impairment. The Company monitors the carrying value of long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. During the three months ended November 30, 2020, no fair value adjustments or material fair value measurements were required for the Company’s non-financial assets or liabilities. (c) Assets and Liabilities Measured at Fair Value for Disclosure Purposes O nly As of November 30, 2020, and August 31, 2020, the fair value of the Company’s 2019 Revolving Credit Facility (as defined below in Note 11, Debt), included in Long-term debt within the Consolidated Balance Sheets, was $575.0 million, which approximated its carrying amount given the application of a floating interest rate equal to LIBOR plus a spread using a debt leverage pricing grid. As the interest rate is a variable rate, adjusted based on market conditions, it approximates the current market-rate for similar instruments available to companies with comparable credit quality and maturity, and therefore, the long-term debt is categorized as Level 2 in the fair value hierarchy. As part of the Truvalue Labs, Inc. ("TVL") acquisition, FactSet assumed an additional $1.1 million in debt included in Long-term debt within the Consolidated Balance Sheets. Refer to Note 7, Acquisition for further discussion on the TVL acquisition. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Nov. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS Cash Flow Hedges Foreign Currency Forward Contracts FactSet conducts business outside the U.S. in several currencies including the British Pound Sterling, Euro, Indian Rupee, and Philippine Peso. As such, the Company is exposed to movements in foreign currency exchange rates compared to the U.S. dollar. The Company utilizes derivative instruments (foreign currency forward contracts) to manage the exposures related to the effects of foreign exchange rate fluctuations and reduce the volatility of earnings and cash flows associated with changes in foreign currency. The Company does not enter into foreign currency forward contracts for trading or speculative purposes and limits counterparties to credit-worthy financial institutions. Refer to Note 12, Commitments and Contingencies – Concentrations of Credit Ris k, for further discussion on counterparty credit risk. In designing a specific hedging approach, FactSet considered several factors, including offsetting exposures, the significance of exposures, the forecasting of risk and the potential effectiveness of the hedge. The gains and losses on foreign currency forward contracts offset the variability in operating expenses associated with currency movements. The changes in fair value for these foreign currency forward contracts are initially reported as a component of Accumulated other comprehensive loss ("AOCL") and subsequently reclassified into Operating expenses when the hedge is settled. There was no discontinuance of cash flow hedges during the first three months of fiscal 2021 or 2020, and as such, no corresponding gains or losses related to changes in the value of the Company’s contracts were reclassified into earnings prior to settlement. As of November 30, 2020, FactSet maintained foreign currency forward contracts to hedge a portion of its British Pound Sterling, Euro, Indian Rupee and Philippine Peso exposures. FactSet entered into a series of forward contracts to mitigate its currency exposure ranging from 25% to 75% over their respective hedged periods. The current foreign currency forward contracts are set to mature at various points between the second quarter of fiscal 2021 through the first quarter of fiscal 2022. As of November 30, 2020, the gross notional value of foreign currency forward contracts to purchase Philippine Pesos and Indian Rupees with U.S. dollars was ₱1.3 billion and Rs2.4 billion, respectively. The gross notional value of foreign currency forward contracts to purchase U.S. dollars with Euros and British Pound Sterling was €36.3 million and £37.6 million, respectively. Interest Rate Swap Agreement On March 5, 2020, FactSet entered into an interest rate swap agreement with a notional amount of $287.5 million to hedge the variable interest rate obligation on a portion of its outstanding debt under its 2019 Revolving Credit Facility (as defined below in Note 11, Debt). As of November 30, 2020, FactSet has borrowed $575.0 million of the available $750.0 million under the 2019 Revolving Credit Facility, which bears interest on the outstanding principal amount at a rate equal to contractual one month LIBOR plus a spread using a debt leverage pricing grid, which was 0.875% as of November 30, 2020. Refer to Note 11, Debt, for further discussion on the 2019 Revolving Credit Facility. The variable interest rate on FactSet’s long-term debt can expose the Company to interest rate volatility arising from changes in LIBOR. Under the terms of the interest rate swap agreement, FactSet will pay interest at a fixed rate of 0.7995% and receive variable interest payments based on the same one-month LIBOR utilized to calculate the interest expense from the 2019 Revolving Credit Facility. The interest rate swap agreement matures on March 29, 2024. As the terms for the interest rate swap agreement align with the 2019 Revolving Credit Facility, the Company does not expect any hedge ineffectiveness. The Company has designated and accounted for this instrument as a cash flow hedge with the unrealized gains or losses on the interest rate swap agreement recorded in AOCL in the Consolidated Balance Sheets. Realized gains or losses are subsequently reclassified into Other expenses in the Consolidated Statement of Income when settled. The following is a summary of the gross notional values of the derivative instruments: (in thousands, in U.S. dollars) Gross Notional Value November 30, 2020 August 31, 2020 Foreign currency forward contracts $ 150,298 $ 129,649 Interest rate swap agreement 287,500 287,500 Total cash flow hedges $ 437,798 $ 417,149 Fair Value of Derivative Instruments The following is a summary of the fair values of the derivative instruments: Fair Value of Derivative Instruments Derivatives designated as hedging instruments Derivative Assets Derivative Liabilities Balance Sheet Classification November 30, 2020 August 31, 2020 Balance Sheet Classification November 30, 2020 August 31, 2020 Foreign currency forward contracts Prepaid expenses and other current assets $ 3,027 $ 3,644 Accounts payable and accrued expenses $ 45 $ 93 Interest rate swap agreement Prepaid expenses and other current assets — — Accounts payable and accrued expenses 1,447 1,861 Other Assets — — Other non-current liabilities 3,819 3,819 Total cash flow hedges $ 3,027 $ 3,644 $ 5,311 $ 5,773 All derivatives were designated as hedging instruments as of November 30, 2020 and August 31, 2020. Derivatives in Cash Flow Hedging Relationships The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for each of the three months ended November 30, 2020 and 2019, respectively: (in thousands) Gain (Loss) Recognized in AOCL on Derivatives Location of Gain (Loss) Reclassified from AOCL into Income Gain (Loss) Reclassified from AOCL into Income November 30, November 30, Derivatives in Cash Flow Hedging Relationships 2020 2019 2020 2019 Foreign currency forward contracts $ 248 $ 2,030 SG&A $ 817 $ (734) Interest rate swap agreement (56) — Interest expense, net (470) — Total cash flow hedges $ 192 $ 2,030 $ 347 $ (734) Foreign currency forward contract gains and losses are recorded in the Consolidated Statement of Income in Selling, general, and administrative ("SG&A"). The gain or loss from the interest rate swap agreement is recorded in the Consolidated Statement of Income in Interest expense, net. As of November 30, 2020, the Company estimates that net pre-tax derivative gains of $1.1 million included in AOCL will be reclassified into earnings within the next 12 months. As of November 30, 2020, FactSet's cash flow hedges were effective, with no amount of ineffectiveness recorded in the Consolidated Statements of Income for these designated cash flow hedges and all components of each derivative’s gain or loss were included in the assessment of hedge effectiveness. Offsetting of Derivative Instruments FactSet’s master netting and other similar arrangements with its respective counterparties allow for net settlement under certain conditions. As of November 30, 2020, and August 31, 2020, there were no material amounts recorded net on the Consolidated Balance Sheets. |
Acquisition
Acquisition | 3 Months Ended |
Nov. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisition | ACQUISITION Truvalue Labs, Inc. On November 2, 2020, FactSet acquired all of the outstanding shares of TVL for a purchase price of $41.9 million, subject to working capital and other adjustments . T VL is a leading provider of environmental, social, and governance ("ESG") information derived from artificial intelligence. The acquisition of TVL further enhances FactSet's commitment to providing industry leading access to ESG data across its platforms. The TVL purchase price was in excess of the fair value of net assets acquired, resulting in the recognition of goodwill. FactSet expects to finalize the allocation of the purchase price for TVL as soon as possible, but in any event, no later than one year from the acquisition date. The preliminary estimated acquisition date fair values of major classes of assets acquired and liabilities assumed are as follows: Estimated Acquisition Date Fair Value Estimated Acquisition Date Useful Life Amortization Method (in thousands) (in years) Current assets $ 811 Amortizable intangible assets Software technology 10,700 13 years Straight-line Client relationships 900 12 years Straight-line Trade names 2,800 15 years Straight-line Goodwill 29,342 Other non-current assets 5,299 Current liabilities (3,184) Other non-current liabilities (4,753) Total purchase price $ 41,915 |
Goodwill
Goodwill | 3 Months Ended |
Nov. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | GOODWILL Changes in the carrying amount of goodwill by segment for the three months ended November 30, 2020 are as follows: (in thousands) Americas EMEA Asia Pacific Total Balance at August 31, 2020 $ 386,195 $ 320,427 $ 3,081 $ 709,703 Acquisitions 29,342 — — 29,342 Foreign currency translations — (519) 49 (470) Balance at November 30, 2020 $ 415,537 $ 319,908 $ 3,130 $ 738,575 |
Income Taxes
Income Taxes | 3 Months Ended |
Nov. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income tax expense is based on taxable income determined in accordance with current enacted laws and tax rates. Deferred income taxes are recorded for the temporary differences between the financial statement and the tax bases of assets and liabilities using currently enacted tax rates. Provision for Income Taxes The provision for income taxes is as follows: Three Months Ended November 30, (in thousands) 2020 2019 Income before income taxes $ 120,232 $ 108,741 Provision for income taxes $ 19,026 $ 14,784 Effective tax rate 15.8 % 13.6 % FactSet’s effective tax rate is based on recurring factors and nonrecurring events, including the taxation of foreign income. The Company’s effective tax rate will vary based on, among other things, changes in levels of foreign income, as well as discrete and other nonrecurring events that may not be predictable. FactSet’s effective tax rate is lower than the applicable U.S. corporate income tax rate for the three months ended November 30, 2020 driven mainly by research and development ("R&D") tax credits and a foreign derived intangible income ("FDII") deduction. The effective tax rate for the three months ended November 30, 2020 is further reduced by windfall tax benefits from stock-based compensation. |
Leases
Leases | 3 Months Ended |
Nov. 30, 2020 | |
Leases [Abstract] | |
Leases | LEASES FactSet primarily leases real estate for office space under various operating lease agreements. FactSet reviews new arrangements at inception to evaluate whether the Company obtains substantially all the economic benefits of and has the right to control the use of an asset. If FactSet determines that an arrangement qualifies as a lease, a lease liability and a corresponding lease right-of-use ("ROU") asset are recognized on the lease commencement date. As of November 30, 2020 , the Company’s leases have remaining terms of less than one year to just over 15 years. In determining the amount of lease payments used in measuring each lease ROU asset and lease liability , FactSet elected the package of practical expedients permitted under the transition guidance, which permits the Company not to reassess under the new standard the prior conclusions about lease identification, lease classification, and initial direct costs. FactSet did not elect the use-of-hindsight practical expedient in determining the lease term and in assessing impairment. FactSet elected the practical expedient not to separate lease components from non-lease components but, rather, to combine them into one single lease component, which FactSet recognizes over the expected lease term on a straight-line expense basis in occupancy costs (a component of SG&A expense). The Company has also elected to apply the short-term lease exception to not recognize lease ROU assets and lease liabilities for leases with a term of 12 months or less. FactSet will recognize these lease payments on a straight-line basis over the lease term in O ccupancy costs (a component of SG&A expense) . The adoption of the lease standard primarily related to the Company’s real estate operating leases. As of November 30, 2020, the Company recognized $257.6 million of Lease right-of-use assets, net (initially measured as the lease liabilities , adjusted for deferred rent and lease incentives) and combined Current and Long-term lease liabilities of $310.7 million in the Consolidated Balance Sheet. The lease ROU assets and lease liabilities recognized did not include any renewal or termination options that were not yet reasonably certain to be exercised. Lease liabilities are measured as the present value of the future minimum lease payments, which includes fixed lease payments and certain qualifying index-based variable payments, over the lease term. The present value is calculated using FactSet’s incremental borrowing rate ("IBR") within the geography where the leased asset is located as there is no rate implicit in the Company’s operating lease arrangements. As FactSet does not have any outstanding public debt, the Company estimates the IBR based on FactSet’s estimated credit rating and available market information. The IBR is determined at lease commencement, or as of September 1, 2019 for operating leases in existence upon adoption of ASC 842. The IBR is subsequently reassessed upon any modification to the lease arrangement. The following table reconciles FactSet’s future undiscounted cash flows related to the Company’s operating leases and the reconciliation to the Current and Long-term lease liabilities as of November 30, 2020 : (in thousands) Minimum Lease Fiscal Years Ended August 31, 2021 (remaining nine months) $ 32,134 2022 41,942 2023 38,317 2024 36,510 2025 35,815 Thereafter 198,108 Total $ 382,826 Less: Imputed interest 72,149 Present value $ 310,677 The components of lease cost related to the operating leases were as follows: Three Months Ended November 30, (in millions) 2020 2019 Operating lease cost 1 $ 10.7 $ 10.6 Variable lease cost 2 $ 3.4 $ 5.0 1. Operating lease costs include fixed lease payments and qualifying index-based variable payments that qualified for lease accounting under ASC 842, Leases and complied with the practical expedients and exceptions elected by FactSet. 2. Variable lease costs were not included in the measurement of the lease liabilities and are primarily related to variable non-lease costs and leases that qualified for the short-term lease exception. These variable non-lease costs included costs that were not fixed at the lease commencement date and are not dependent on an index or rate. These cost relate to utilities, real estate taxes, insurance and maintenance. The following table summarizes the Company's lease term and discount rate assumptions related to the operating leases recorded on the Consolidated Balance Sheets: November 30, 2020 August 31, 2020 Weighted average remaining lease term (in years) 10.0 10.1 Weighted average discount rate (IBR) 4.3 % 4.2 % The following table summarizes supplemental cash flow information related to the Company's operating leases: Three Months Ended November 30, (in thousands) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities $ 9.7 $ 10.5 Lease ROU assets obtained in exchange for lease liabilities $ 1.1 $ 2.1 |
Debt
Debt | 3 Months Ended |
Nov. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | DEBT FactSet’s debt obligations at November 30, 2020 and August 31, 2020 consisted of the following: (in thousands) November 30, 2020 August 31, 2020 2019 Revolving Credit Facility $ 575,000 $ 575,000 2019 Revolving Credit Facility loan origination fees (600) (646) Other Long-term debt 1 1,111 — Long-term debt $ 575,511 $ 574,354 1 This debt was acquired as part of the TVL acquisition, refer to Note 7 , Acquisition, for more information on the acquisition. On March 29, 2019, the Company entered into a credit agreement between FactSet, as the borrower, and PNC Bank, National Association ("PNC"), as the administrative agent and lender (the "2019 Credit Agreement"). The 2019 Credit Agreement provides for a $750.0 million revolving credit facility (the "2019 Revolving Credit Facility"). FactSet may request borrowings under the 2019 Revolving Credit Facility until its maturity date of March 29, 2024. The 2019 Credit Agreement also allows FactSet, subject to certain requirements, to arrange for additional borrowings with PNC for an aggregate amount up to $500.0 million, provided that any such request for additional borrowings must be in a minimum amount of $25.0 million. FactSet borrowed $575.0 million of the available $750.0 million provided by the 2019 Revolving Credit Facility, resulting in $175.0 million available to be withdrawn. FactSet is required to pay a commitment fee using a pricing grid currently at 0.10% based on the daily amount by which the available balance in the 2019 Revolving Credit Facility exceeds the borrowed amount. All outstanding loan amounts are reported as Long-term debt within the Consolidated Balance Sheets at November 30, 2020. The principal balance is payable in full on the maturity date. The fair value of the Company's long-term debt under the 2019 Revolving Credit Facility was $575.0 million as of November 30, 2020, which the Company believes approximates the carrying amount as the terms and interest rates approximate market rates given its floating interest rate basis. Borrowings under the 2019 Revolving Credit Facility bear interest on the outstanding principal amount at a rate equal to the daily LIBOR plus a spread using a debt leverage pricing grid, currently at 0.875%. For the three months ended November 30, 2020 and 2019, FactSet recorded interest expense on its outstanding debt, including the amortization of debt issuance costs of $2.1 million and $4.2 million, respectively, net of the effects of the interest rate swap agreement. Including the effects of the interest rate swap agreement, the year-to-date weighted average interest rate on amounts outstanding under the Company's 2019 Revolving Credit Facility was 1.40% and 2.20% as of November 30, 2020 and August 31, 2020, respectively. Refer to Note 6 , Derivative Instruments for further discussion on the interest rate swap agreement. Interest on the loan outstanding under the 2019 Revolving Credit Facility is payable quarterly, in arrears, and on the maturity date. During fiscal 2019, FactSet incurred approximately $0.9 million in debt issuance costs related to the 2019 Credit Agreement. These costs were capitalized as loan origination fees and are amortized into interest expense ratably over the term of the 2019 Credit Agreement. The 2019 Credit Agreement contains covenants and requirements restricting certain FactSet activities, which are usual and customary for this type of loan. In addition, the 2019 Credit Agreement requires that FactSet maintain a consolidated net leverage ratio, as measured by total net funded debt/EBITDA below a specified level as of the end of each fiscal quarter. The Company was in compliance with all the covenants and requirements within the 2019 Credit Agreement as of November 30, 2020. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Nov. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Commitments represent obligations, such as those for future purchases of goods or services, that are not yet recorded on the balance sheet as liabilities. FactSet records liabilities for commitments when incurred ( i.e. , when the goods or services are received). Purchase Commitments with Suppliers and Vendors Purchase obligations represent payments due in future periods in respect of commitments to the Company’s various data vendors as well as commitments to purchase goods and services such as telecommunication and computer maintenance services. These purchase commitments are agreements that are enforceable and legally binding on FactSet, and they specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. As of August 31, 2020, the Company had total purchase commitments with suppliers of $226.0 million. During the three months ended November 30, 2020, FactSet entered into a software subscription agreement with total purchase commitments of approximately $10.0 million with a contract term of three years . There were no other material changes in the Company’s purchase commitments during the three months ended November 30, 2020. Letters of Credit From time to time, FactSet is required to obtain letters of credit in the ordinary course of business, with approximately $2.9 million of standby letters of credit outstanding as of November 30, 2020. These standby letters of credit utilize the same covenants included in the 2019 Credit Agreement. Refer to Note 11, Debt for more information on these covenants. Contingencies Income Taxes Uncertain income tax positions are accounted for in accordance with applicable accounting guidance, refer to Note 9, Income Taxes, for further details. FactSet is currently under audit by tax authorities and has reserved for potential adjustments to its provision for income taxes that may result from examinations by, or any negotiated settlements with, these tax authorities. The Company believes that the final outcome of these examinations or settlements will not have a material effect on its results of operations. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of tax benefits in the period FactSet determines the liabilities are no longer necessary. If the Company’s estimates of the federal, state, and foreign income tax liabilities are less than the ultimate assessment, a further charge to expense would result. Legal Matters FactSet accrues non-income tax liabilities for contingencies when management believes that a loss is probable, and the amounts can be reasonably estimated, while contingent gains are recognized only when realized. The Company is engaged in various legal proceedings, claims and litigation that have arisen in the ordinary course of business, including employment matters, commercial and intellectual property litigation. The outcome of all the matters against the Company is subject to future resolution, including the uncertainties of litigation. Based on information available at November 30, 2020, FactSet’s management believes that the ultimate outcome of these unresolved matters against the Company, individually or in the aggregate, will not have a material adverse effect on the Company's consolidated financial position, its results of operations or its cash flows. Sales Tax Matters In August 2019, FactSet received a Notice of Intent to Assess (the "Notice") additional sales taxes, interest and underpayment penalties from the Commonwealth of Massachusetts Department of Revenue (the "Commonwealth") relating to prior tax periods. The Notice follows FactSet's previously disclosed response to a letter from the Commonwealth requesting additional sales information. Based upon the Notice, it is the Commonwealth's intention to assess sales/use tax, interest and penalties on previously recorded sales transactions. The Company filed an appeal to the Notice and intends to contest any such assessment, if assessed, and continues to cooperate with the Commonwealth's inquiry. Due to the uncertainty surrounding the assessment process, the Company is unable to reasonably estimate the ultimate outcome of this matter and, as such, has not recorded a liability as of November 30, 2020. FactSet believes that it will ultimately prevail if the Company is presented with a formal assessment; however, if FactSet does not prevail, the amount could have a material impact on the Company’s consolidated financial position, cash flows and results of operations. Indemnifications As permitted or required under Delaware law and to the maximum extent allowable under that law, FactSet has certain obligations to indemnify its current and former officers and directors for certain events or occurrences while the officer or director is, or was, serving at FactSet’s request in such capacity. These indemnification obligations are valid as long as the director or officer acted in good faith and in a manner the person reasonably believed to be in, or not opposed to, the best interests of the Company, and with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The maximum potential amount of future payments FactSet could be required to make under these indemnification obligations is unlimited; however, FactSet has a director and officer insurance policy that it believes mitigates FactSet’s exposure and may enable FactSet to recover a portion of any future amounts paid. The Company believes the estimated fair value of these indemnification obligations is immaterial. Concentrations of Credit Risk Cash equivalents Financial instruments that potentially subject FactSet to concentrations of credit risk consist primarily of cash, cash equivalents and investment securities. The Company is exposed to credit risk for cash and cash equivalents held in financial institutions in the event of a default, to the extent that such amounts are in excess of applicable insurance limits. To mitigate associated concentration risk, FactSet utilizes credit-worthy financial institutions. The Company also seeks to mitigate its credit risks by spreading such risks across multiple counterparties and monitoring the risk profiles of these counterparties. Accounts Receivable Accounts receivable are unsecured and are derived from revenue earned from clients located around the globe. The Company does not require collateral from its clients but performs credit evaluations on an ongoing basis. The Company maintains reserves for potential write-offs and evaluates the adequacy of the reserves periodically. These losses have historically been within expectations. No single client represented more than 3% of FactSet’s total subscription revenue in any period presented. As of November 30, 2020, the receivable reserve was $7.3 million compared to $8.0 million as of August 31, 2020. Derivative Instruments FactSet's use of derivative instruments exposes the Company to credit risk to the extent that the counterparties may be unable to meet the terms of their agreements. To mitigate credit risk, the Company limits counterparties to credit-worthy financial institutions and distributes contracts among these institutions to reduce the concentration of credit risk. FactSet does not expect any losses as a result of default of its counterparties. Concentrations of Other Risk Data Content Providers FactSet relies on certain data sets where there are a limited number of suppliers. The Company makes every effort to assure that, where reasonable, alternative sources are available. FactSet is not dependent on any one third-party data supplier in order to meet the needs of its clients. FactSet combines the data from these commercial databases into its own dedicated single online service, which its clients access to perform their analysis. No single vendor or data supplier represented more than 10% of FactSet's total data costs for the three months ended November 30, 2020 or November 30, 2019. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Nov. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Shares of common stock outstanding were as follows: Three Months Ended November 30, (in thousands) 2020 2019 Balance, beginning of year at September 1, 2020 and 2019, respectively 38,030 38,118 Common stock issued for employee stock plans 117 135 Repurchase of common stock from employees (1) (7) (6) Repurchase of common stock under the share repurchase program (132) (343) Balance at November 30, 2020 and November 30, 2019, respectively 38,008 37,904 (1) For the three months ended November 30, 2020 and November 30, 2019, the Company repurchased 6,728 and 5,778 shares, or $2.1 million and $1.5 million, of common stock, respectively, in settlement of employee tax withholding obligations due upon the vesting of restricted stock and exercise of stock options. Share Repurchase Program Repurchases of shares of common stock are made from time to time in the open market and privately negotiated transactions, subject to market conditions. For the three months ended November 30, 2020 and 2019, the Company repurchased 131,800 shares for $43.1 million and 343,000 shares for $84.4 million, respectively. On March 24, 2020, the Board of Directors of FactSet approved a $220.0 million increase to the existing share repurchase program. As of November 30, 2020, $215.9 million remained authorized for future share repurchases. There is no defined number of shares to be repurchased over a specified timeframe through the life of the share repurchase program. It is expected that share repurchases will be paid using existing and future cash generated by operations. Restricted Stock Restricted stock awards entitle the holders to receive shares of common stock as the awards vest over time. For the three months ended November 30, 2020, 17,946 shares of previously granted restricted stock vested and were included in common stock outstanding as of November 30, 2020 (recorded net of 6,728 shares repurchased from employees at a cost of $2.1 million to cover their cost of taxes upon vesting of the restricted stock). During the three months ended November 30, 2019, 15,376 shares of previously granted restricted stock vested and were included in common stock outstanding as of November 30, 2019 (recorded net of 5,778 shares repurchased from employees at a cost of $1.5 million to cover their cost of taxes upon vesting of the restricted stock). Dividends The Company’s Board of Directors declared the following dividends for the first three months of fiscal 2021 and 2020 respectively: Year Ended Dividends per Record Date Total $ Amount Payment Date Fiscal 2021 First Quarter $ 0.77 November 30, 2020 $ 29,266 December 17, 2020 Fiscal 2020 First Quarter $ 0.72 November 29, 2019 $ 27,291 December 19, 2019 Future cash dividend payments will depend on the Company’s earnings, capital requirements, financial condition and other factors considered relevant by the Company and are subject to final determination by the Company’s Board of Directors. Accumulated Other Comprehensive Loss The components of AOCL are as follows: (in thousands) November 30, 2020 August 31, 2020 Accumulated unrealized losses on cash flow hedges $ (1,707) $ (1,591) Accumulated foreign currency translation adjustments (37,369) (37,702) Total AOCL $ (39,076) $ (39,293) |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Nov. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE A reconciliation of the weighted average shares outstanding used in the basic and diluted earnings per share ("EPS") computations is as follows: (in thousands, except per share data) Net Income Weighted Per Share For the three months ended November 30, 2020 Basic EPS Income available to common stockholders $ 101,206 38,007 $ 2.66 Diluted EPS Dilutive effect of stock options and restricted stock 690 Income available to common stockholders plus assumed conversions $ 101,206 38,697 $ 2.62 For the three months ended November 30, 2019 Basic EPS Income available to common stockholders $ 93,957 37,978 $ 2.47 Diluted EPS Dilutive effect of stock options and restricted stock 609 Income available to common stockholders plus assumed conversions $ 93,957 38,587 $ 2.43 Dilutive potential common shares consist of stock options and unvested performance-based awards. There were 1,750 stock options excluded from the calculation of diluted EPS for the three months ended November 30, 2020, because their inclusion would have been anti-dilutive. For the three months ended November 30, 2019, the number of stock options excluded from calculation of diluted EPS was 20,128. |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Nov. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | STOCK-BASED COMPENSATION Stock-based Compensation The Company recognized total stock-based compensation expense of $11.3 million and $9.8 million during the three months ended November 30, 2020 and 2019, respectively. As of November 30, 2020, $117.0 million of total unrecognized compensation expense related to non-vested equity awards is expected to be recognized over a weighted average period of 3.4 years. Stock-based compensation expense related to the FactSet Research Systems Inc. Employee Stock Purchase Plan, as Amended and Restated (the "ESPP") was $0.5 million for both the three months ended November 30, 2020 and 2019. As of November 30, 2020, FactSet had 5.1 million share-based awards available for grant under the FactSet Research Systems Inc. Stock Option and Award Plan, as Amended and Restated (the "LTIP") and 0.2 million share-based awards available for grant under the FactSet Research Systems Inc. Non-Employee Directors' Stock Option and Award Plan, as Amended and Restated (the "Director Plan"). Employee Stock Option Awards During the three months ended November 30, 2020, FactSet granted 408,093 stock options with a weighted average exercise price of $316.71 to existing employees of the Company, using the lattice-binomial option-pricing model. The majority of the stock options granted during the first three months of fiscal 2021 related to the annual employee grant on November 9, 2020 under the LTIP. These stock option awards vest 20% annually on the anniversary date of the grant and are fully vested after five years, expiring ten years from the date of grant. The estimated fair value of employee stock options granted on November 9, 2020 was determined with the following assumptions: November 9, 2020 Grant Details Risk-free interest rate 0.10% - 0.80% Expected life (years) 7.13 Expected volatility 27.5 % Dividend yield 0.91 % Estimated fair value $78.23 Exercise price $316.71 Fair value as a percentage of exercise price 24.7 % Non-Employee Director Stock Option Grant The Director Plan provides for the grant of share-based awards, including stock options, to non-employee directors of FactSet. As of November 30, 2020, shares available for future grant under the Director Plan were 249,886. The expiration date of the Director Plan is December 19, 2027. Restricted Stock Units During the first three months of fiscal 2021, FactSet granted 41,358 non-performance based restricted stock units ("RSUs") and 36,424 performance-based restricted stock units ("PRSUs"). RSUs and PRSUs granted during the period were related to the annual employee grant on November 9, 2020. The RSUs and PRSUs granted had a weighted average grant date fair value of $306.37 under the LTIP. The RSUs and PRSUs granted to employees entitle the holders to shares of common stock as the units vest over time or the performance period, but not to dividends declared on the underlying shares while the restricted stock is unvested. The grant date fair value of restricted stock units is measured by reducing the grant date price of FactSet's common stock by the present value of the dividends expected to be paid on the underlying stock during the requisite service period, discounted at the appropriate risk-free interest rate. The majority of the RSUs granted vest 20% annually on the anniversary date of grant and are fully vested after five years and the majority of the granted PRSUs cliff vest on the third anniversary of the grant date, subject to the achievement of certain performance metrics. The remaining RSUs and PRSUs were granted to TVL employees as part of their transition to FactSet and vest 50% on the second anniversary of grant and 25% percent on each of the third and fourth anniversaries of grant, subject to the achievement of certain performance metrics for the PRSUs. Employee Stock Purchase Plan Shares of FactSet common stock may be purchased by eligible employees under the ESPP in three -month intervals. The purchase price is equal to 85% of the lesser of the fair market value of the Company’s common stock on the first day or the last day of each three-month offering period. Employee purchases may not exceed 10% of their gross compensation and there is a $25,000 contribution limit per employee during an offering period. Dividends paid on shares held in the ESPP are used to purchase additional ESPP shares at the market price on the dividend payment date. During the three months ended November 30, 2020, employees purchased 9,269 shares at a weighted average price of $286.58 compared to 11,159 shares at a weighted average price of $220.70 for the three months ended November 30, 2019. At November 30, 2020, the ESPP had 168,535 shares reserved for future issuance. |
Segment Information
Segment Information | 3 Months Ended |
Nov. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION Operating segments are defined as components of an enterprise that have the following characteristics: (i) it engages in business activities from which it may earn revenue and incur expense, (ii) its operating results are regularly reviewed by the company's chief operating decision maker ("CODM") for resource allocation decisions and performance assessment, and (iii) its discrete financial information is available. The Company's Chief Executive Officer functions as FactSet's CODM. The Company’s operating segments are aligned with how the Company, including its CODM, manages the business and the geographic markets in which it serves, with a primary focus on providing integrated global financial and economic information. The Company’s internal financial reporting structure is based on three segments: the Americas, EMEA and Asia Pacific. Within each of the segments, the Company primarily delivers insight and information through four workflow solutions including Research, Analytics and Trading, CTS and Wealth. These workflow solutions provide global financial and economic information to investment managers, investment banks and other financial services professionals. The Americas segment serves our clients throughout North, Central, and South America. The EMEA segment serves our clients in countries in Europe and Africa. The Asia Pacific segment serves our clients in countries in Asia and Australia. Segment revenue reflects sales to clients based in these respective geographic locations. Each segment records compensation expense (including stock-based compensation), amortization of intangible assets, depreciation of furniture and fixtures, amortization of leasehold improvements, communication costs, professional fees, rent expense, travel, office and other direct expenses. Expenditures associated with the Company’s data centers, third-party data costs and corporate headquarters charges are recorded by the Americas segment and are not allocated to the other segments. The content collection centers, located in India, the Philippines, and Latvia, benefit all the Company’s operating segments, and thus the expenses incurred at these locations are allocated to each segment based on a percentage of revenue. The following tables reflect the results of operations of the Company's segments for the three months ended November 30, 2020 and November 30, 2019: (in thousands) Americas EMEA Asia Pacific Total For the three months ended November 30, 2020 Revenue $ 244,337 $ 105,777 $ 38,092 $ 388,206 Operating income $ 56,376 $ 40,634 $ 24,021 $ 121,031 Capital expenditures $ 9,560 $ 319 $ 8,454 $ 18,333 For the three months ended November 30, 2019 Revenue $ 231,330 $ 100,830 $ 34,498 $ 366,658 Operating income $ 49,623 $ 41,218 $ 22,345 $ 113,186 Capital expenditures $ 24,024 $ 1,168 $ 1,588 $ 26,780 The following table reflects the total assets for the Company's segments: Segment Assets (in thousands) November 30, 2020 August 31, 2020 Americas $ 1,071,502 $ 1,111,600 EMEA 807,156 757,524 Asia Pacific 220,768 214,264 Total assets $ 2,099,426 $ 2,083,388 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Nov. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited Consolidated Financial Statements and Notes to the Company's Consolidated Financial Statements included in this Quarterly Report on Form 10-Q are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by GAAP for annual financial statements. The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany activity and balances have been eliminated. In the opinion of management, the accompanying unaudited Consolidated Financial Statements include all normal recurring adjustments, transactions or events discretely impacting the interim periods considered necessary to present fairly the Company’s results of operations, financial position, cash flows and equity. Certain notes and other information have been condensed or omitted in this Quarterly Report on Form 10-Q, therefore the information in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2020. The Company has evaluated subsequent events through the date the financial statements were issued. |
Reclassification | Reclassification The Company reclassified in the Consolidated Statement of Cash Flows certain prior year comparative figures from Other, net to Amortization of lease right-of-use assets and Lease liabilities, net within Net cash provided by operating activities to conform to the current year's presentation. |
Recent Accounting Standards or Updates Not Yet Effective | Recent Accounting Standards or Updates Not Yet Effective Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848); Facilitation of the Effects of Reference Rate Reform on Financial Reportin g, to provide optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions affected by the anticipated transition from LIBOR. As a result of the reference rate reform initiative, certain widely used reference rates such as LIBOR are expected to be discontinued. The guidance is designed to simplify how entities account for contracts, such as receivables, debt, leases, derivative instruments and hedging, that are modified to replace LIBOR or other benchmark interest rates with new rates. The guidance is effective upon issuance and may be applied through December 31, 2022. The Company is currently evaluating the impact of this accounting standard, but it is not expected to have a material impact on the Company’s Consolidated Financial Statements. Income Tax Simplification In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740); Simplifying the Accounting for Income Taxes |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The following table presents this disaggregation of revenue by geography: Three Months Ended November 30, (in thousands) 2020 2019 Americas $ 244,337 $ 231,330 EMEA 105,777 100,830 Asia Pacific 38,092 34,498 Total Revenue $ 388,206 $ 366,658 |
Fair Value Measures (Tables)
Fair Value Measures (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following tables show, by level within the fair value hierarchy, the Company’s assets and liabilities that are measured at fair value on a recurring basis at November 30, 2020 and August 31, 2020. The Company did not have any transfers between levels of fair value measurements during the periods presented. Fair Value Measurements at November 30, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets Corporate money market funds (1) $ 201,803 $ — $ — $ 201,803 Mutual funds (2) — 18,166 — 18,166 Certificates of deposit (3) — — — — Derivative instruments (4) — 3,027 — 3,027 Total assets measured at fair value $ 201,803 $ 21,193 $ — $ 222,996 Liabilities Derivative instruments (4) $ — $ 5,311 $ — $ 5,311 Total liabilities measured at fair value $ — $ 5,311 $ — $ 5,311 Fair Value Measurements at August 31, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets Corporate money market funds (1) $ 276,852 $ — $ — $ 276,852 Mutual funds (2) — 17,257 — 17,257 Certificates of deposit (3) — 2,315 — 2,315 Derivative instruments (4) — 3,644 — 3,644 Total assets measured at fair value $ 276,852 $ 23,216 $ — $ 300,068 Liabilities Derivative instruments (4) $ — $ 5,773 $ — $ 5,773 Total liabilities measured at fair value $ — $ 5,773 $ — $ 5,773 1. The Company’s corporate money market funds are readily convertible into cash and the net asset value of each fund on the last day of the quarter is used to determine its fair value. As such, the Company’s corporate money market funds are classified as Level 1 assets and included in Cash and cash equivalents within the Consolidated Balance Sheets. 2. The Company’s mutual funds have a fair value based on the fair value of the underlying investments held by the mutual funds, allocated to each share of the mutual fund using a net asset value approach. The fair value of the underlying investments is based on observable inputs. As such, the Company’s mutual funds are classified as Level 2 and are classified as Investments (short-term) on the Consolidated Balance Sheets. 3. The Company’s certificates of deposit held for investment are not debt securities and are classified as Level 2 assets. These certificates of deposit have original maturities greater than three months but less than one year and, as such, are classified as Investments (short-term) within the Consolidated Balance Sheets. 4. The Company utilizes the income approach to measure fair value for its foreign exchange forward contracts. The income approach uses pricing models that rely on market observable inputs such as spot, forward and interest rates, as well as credit default swap spreads, and are classified as Level 2 assets. To estimate fair value for the interest rate swap agreement, the Company utilizes a present value of future cash flows, leveraging a model-derived valuation that uses Level 2 observable inputs such as interest rate yield curves. Refer to Note 6 , Derivative Instruments, for more information on the Company's derivative instruments designed as cash flow hedges. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of gross notional values of derivative instruments | The following is a summary of the gross notional values of the derivative instruments: (in thousands, in U.S. dollars) Gross Notional Value November 30, 2020 August 31, 2020 Foreign currency forward contracts $ 150,298 $ 129,649 Interest rate swap agreement 287,500 287,500 Total cash flow hedges $ 437,798 $ 417,149 |
Summary of the fair values of derivative instruments | The following is a summary of the fair values of the derivative instruments: Fair Value of Derivative Instruments Derivatives designated as hedging instruments Derivative Assets Derivative Liabilities Balance Sheet Classification November 30, 2020 August 31, 2020 Balance Sheet Classification November 30, 2020 August 31, 2020 Foreign currency forward contracts Prepaid expenses and other current assets $ 3,027 $ 3,644 Accounts payable and accrued expenses $ 45 $ 93 Interest rate swap agreement Prepaid expenses and other current assets — — Accounts payable and accrued expenses 1,447 1,861 Other Assets — — Other non-current liabilities 3,819 3,819 Total cash flow hedges $ 3,027 $ 3,644 $ 5,311 $ 5,773 |
Schedule of pre-tax effect of derivative instruments in cash flow hedging relationships | The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for each of the three months ended November 30, 2020 and 2019, respectively: (in thousands) Gain (Loss) Recognized in AOCL on Derivatives Location of Gain (Loss) Reclassified from AOCL into Income Gain (Loss) Reclassified from AOCL into Income November 30, November 30, Derivatives in Cash Flow Hedging Relationships 2020 2019 2020 2019 Foreign currency forward contracts $ 248 $ 2,030 SG&A $ 817 $ (734) Interest rate swap agreement (56) — Interest expense, net (470) — Total cash flow hedges $ 192 $ 2,030 $ 347 $ (734) |
Acquisition (Tables)
Acquisition (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Business Combinations [Abstract] | |
Purchase price allocation | The preliminary estimated acquisition date fair values of major classes of assets acquired and liabilities assumed are as follows: Estimated Acquisition Date Fair Value Estimated Acquisition Date Useful Life Amortization Method (in thousands) (in years) Current assets $ 811 Amortizable intangible assets Software technology 10,700 13 years Straight-line Client relationships 900 12 years Straight-line Trade names 2,800 15 years Straight-line Goodwill 29,342 Other non-current assets 5,299 Current liabilities (3,184) Other non-current liabilities (4,753) Total purchase price $ 41,915 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Changes in the carrying amount of goodwill by segment for the three months ended November 30, 2020 are as follows: (in thousands) Americas EMEA Asia Pacific Total Balance at August 31, 2020 $ 386,195 $ 320,427 $ 3,081 $ 709,703 Acquisitions 29,342 — — 29,342 Foreign currency translations — (519) 49 (470) Balance at November 30, 2020 $ 415,537 $ 319,908 $ 3,130 $ 738,575 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of income taxes | The provision for income taxes is as follows: Three Months Ended November 30, (in thousands) 2020 2019 Income before income taxes $ 120,232 $ 108,741 Provision for income taxes $ 19,026 $ 14,784 Effective tax rate 15.8 % 13.6 % |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Leases [Abstract] | |
Schedule of future minimum commitments | The following table reconciles FactSet’s future undiscounted cash flows related to the Company’s operating leases and the reconciliation to the Current and Long-term lease liabilities as of November 30, 2020 : (in thousands) Minimum Lease Fiscal Years Ended August 31, 2021 (remaining nine months) $ 32,134 2022 41,942 2023 38,317 2024 36,510 2025 35,815 Thereafter 198,108 Total $ 382,826 Less: Imputed interest 72,149 Present value $ 310,677 |
Schedule of other information related to operating leases | The components of lease cost related to the operating leases were as follows: Three Months Ended November 30, (in millions) 2020 2019 Operating lease cost 1 $ 10.7 $ 10.6 Variable lease cost 2 $ 3.4 $ 5.0 1. Operating lease costs include fixed lease payments and qualifying index-based variable payments that qualified for lease accounting under ASC 842, Leases and complied with the practical expedients and exceptions elected by FactSet. 2. Variable lease costs were not included in the measurement of the lease liabilities and are primarily related to variable non-lease costs and leases that qualified for the short-term lease exception. These variable non-lease costs included costs that were not fixed at the lease commencement date and are not dependent on an index or rate. These cost relate to utilities, real estate taxes, insurance and maintenance. The following table summarizes the Company's lease term and discount rate assumptions related to the operating leases recorded on the Consolidated Balance Sheets: November 30, 2020 August 31, 2020 Weighted average remaining lease term (in years) 10.0 10.1 Weighted average discount rate (IBR) 4.3 % 4.2 % The following table summarizes supplemental cash flow information related to the Company's operating leases: Three Months Ended November 30, (in thousands) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities $ 9.7 $ 10.5 Lease ROU assets obtained in exchange for lease liabilities $ 1.1 $ 2.1 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of debt obligations | FactSet’s debt obligations at November 30, 2020 and August 31, 2020 consisted of the following: (in thousands) November 30, 2020 August 31, 2020 2019 Revolving Credit Facility $ 575,000 $ 575,000 2019 Revolving Credit Facility loan origination fees (600) (646) Other Long-term debt 1 1,111 — Long-term debt $ 575,511 $ 574,354 1 This debt was acquired as part of the TVL acquisition, refer to Note 7 , Acquisition, for more information on the acquisition. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Equity [Abstract] | |
Shares of common stock outstanding | Shares of common stock outstanding were as follows: Three Months Ended November 30, (in thousands) 2020 2019 Balance, beginning of year at September 1, 2020 and 2019, respectively 38,030 38,118 Common stock issued for employee stock plans 117 135 Repurchase of common stock from employees (1) (7) (6) Repurchase of common stock under the share repurchase program (132) (343) Balance at November 30, 2020 and November 30, 2019, respectively 38,008 37,904 (1) For the three months ended November 30, 2020 and November 30, 2019, the Company repurchased 6,728 and 5,778 shares, or $2.1 million and $1.5 million, of common stock, respectively, in settlement of employee tax withholding obligations due upon the vesting of restricted stock and exercise of stock options. |
Schedule of dividends declared | The Company’s Board of Directors declared the following dividends for the first three months of fiscal 2021 and 2020 respectively: Year Ended Dividends per Record Date Total $ Amount Payment Date Fiscal 2021 First Quarter $ 0.77 November 30, 2020 $ 29,266 December 17, 2020 Fiscal 2020 First Quarter $ 0.72 November 29, 2019 $ 27,291 December 19, 2019 |
Components of AOCL | The components of AOCL are as follows: (in thousands) November 30, 2020 August 31, 2020 Accumulated unrealized losses on cash flow hedges $ (1,707) $ (1,591) Accumulated foreign currency translation adjustments (37,369) (37,702) Total AOCL $ (39,076) $ (39,293) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of weighted average number of shares | A reconciliation of the weighted average shares outstanding used in the basic and diluted earnings per share ("EPS") computations is as follows: (in thousands, except per share data) Net Income Weighted Per Share For the three months ended November 30, 2020 Basic EPS Income available to common stockholders $ 101,206 38,007 $ 2.66 Diluted EPS Dilutive effect of stock options and restricted stock 690 Income available to common stockholders plus assumed conversions $ 101,206 38,697 $ 2.62 For the three months ended November 30, 2019 Basic EPS Income available to common stockholders $ 93,957 37,978 $ 2.47 Diluted EPS Dilutive effect of stock options and restricted stock 609 Income available to common stockholders plus assumed conversions $ 93,957 38,587 $ 2.43 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of assumptions about stock options | The estimated fair value of employee stock options granted on November 9, 2020 was determined with the following assumptions: November 9, 2020 Grant Details Risk-free interest rate 0.10% - 0.80% Expected life (years) 7.13 Expected volatility 27.5 % Dividend yield 0.91 % Estimated fair value $78.23 Exercise price $316.71 Fair value as a percentage of exercise price 24.7 % |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | The following tables reflect the results of operations of the Company's segments for the three months ended November 30, 2020 and November 30, 2019: (in thousands) Americas EMEA Asia Pacific Total For the three months ended November 30, 2020 Revenue $ 244,337 $ 105,777 $ 38,092 $ 388,206 Operating income $ 56,376 $ 40,634 $ 24,021 $ 121,031 Capital expenditures $ 9,560 $ 319 $ 8,454 $ 18,333 For the three months ended November 30, 2019 Revenue $ 231,330 $ 100,830 $ 34,498 $ 366,658 Operating income $ 49,623 $ 41,218 $ 22,345 $ 113,186 Capital expenditures $ 24,024 $ 1,168 $ 1,588 $ 26,780 The following table reflects the total assets for the Company's segments: Segment Assets (in thousands) November 30, 2020 August 31, 2020 Americas $ 1,071,502 $ 1,111,600 EMEA 807,156 757,524 Asia Pacific 220,768 214,264 Total assets $ 2,099,426 $ 2,083,388 |
Description of Business (Detail
Description of Business (Details) | 3 Months Ended |
Nov. 30, 2020segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 3 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Revenue from External Customer [Line Items] | ||
Revenue | $ 388,206 | $ 366,658 |
Americas | ||
Revenue from External Customer [Line Items] | ||
Revenue | 244,337 | 231,330 |
EMEA | ||
Revenue from External Customer [Line Items] | ||
Revenue | 105,777 | 100,830 |
Asia Pacific | ||
Revenue from External Customer [Line Items] | ||
Revenue | $ 38,092 | $ 34,498 |
Fair Value Measures - Narrative
Fair Value Measures - Narrative (Details) - USD ($) | Nov. 30, 2020 | Nov. 02, 2020 | Aug. 31, 2020 |
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Long-term debt, fair value | $ 575,000,000 | $ 575,000,000 | |
Truvalue Labs, Inc. | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Debt assumed in acquisition | $ 1,100,000 | ||
Level 3 | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Assets, fair value | 0 | 0 | |
Liabilities, fair value | $ 0 | $ 0 |
Fair Value Measures - Schedule
Fair Value Measures - Schedule of Assets and Liabilities Measured at Fair Value (Details) - USD ($) | Nov. 30, 2020 | Aug. 31, 2020 |
Fair value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments | $ 3,027,000 | $ 3,644,000 |
Total assets measured at fair value | 222,996,000 | 300,068,000 |
Derivative instruments | 5,311,000 | 5,773,000 |
Total liabilities measured at fair value | 5,311,000 | 5,773,000 |
Fair value | Corporate money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 201,803,000 | 276,852,000 |
Fair value | Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mutual funds | 18,166,000 | 17,257,000 |
Fair value | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Certificates of deposit | 0 | 2,315,000 |
Level 1 | Fair value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments | 0 | 0 |
Total assets measured at fair value | 201,803,000 | 276,852,000 |
Derivative instruments | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Level 1 | Fair value | Corporate money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 201,803,000 | 276,852,000 |
Level 1 | Fair value | Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mutual funds | 0 | 0 |
Level 1 | Fair value | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Certificates of deposit | 0 | 0 |
Level 2 | Fair value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments | 3,027,000 | 3,644,000 |
Total assets measured at fair value | 21,193,000 | 23,216,000 |
Derivative instruments | 5,311,000 | 5,773,000 |
Total liabilities measured at fair value | 5,311,000 | 5,773,000 |
Level 2 | Fair value | Corporate money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Level 2 | Fair value | Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mutual funds | 18,166,000 | 17,257,000 |
Level 2 | Fair value | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Certificates of deposit | 0 | 2,315,000 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Level 3 | Fair value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Derivative instruments | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Level 3 | Fair value | Corporate money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Level 3 | Fair value | Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mutual funds | 0 | 0 |
Level 3 | Fair value | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Certificates of deposit | $ 0 | $ 0 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - USD ($) | May 31, 2020 | Nov. 30, 2020 | Nov. 30, 2019 | Aug. 31, 2020 | Mar. 05, 2020 | Mar. 29, 2019 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Discontinuance of cash flow hedges | $ 0 | $ 0 | ||||
Net derivative gains (losses) to be reclassified | $ 1,100,000 | |||||
Minimum | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Percent of foreign exchange contracts hedged (in percentage) | 25.00% | |||||
Maximum | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Percent of foreign exchange contracts hedged (in percentage) | 75.00% | |||||
2019 Revolving Credit Facility | PNC Bank, National Associations | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Long-term line of credit | $ 575,000,000 | |||||
Maximum borrowing capacity | $ 750,000,000 | |||||
2019 Revolving Credit Facility | PNC Bank, National Associations | London Interbank Offered Rate (LIBOR) | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Basis spread on variable rate | 0.875% | |||||
Cash flow hedging | Designated as hedging instrument | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Gross notional amount | $ 437,798,000 | $ 417,149,000 | ||||
Cash flow hedging | Designated as hedging instrument | Interest rate swap agreement | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Gross notional amount | $ 287,500,000 | $ 287,500,000 | ||||
Fixed rate | 0.7995% |
Derivative Instruments - Summar
Derivative Instruments - Summary of Gross Notional Values (Details) - Cash flow hedging - Designated as hedging instrument $ in Thousands, € in Millions, £ in Millions, ₱ in Billions, ₨ in Billions | Nov. 30, 2020PHP (₱) | Nov. 30, 2020INR (₨) | Nov. 30, 2020EUR (€) | Nov. 30, 2020GBP (£) | Nov. 30, 2020USD ($) | Aug. 31, 2020USD ($) |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Gross notional amount | $ 437,798 | $ 417,149 | ||||
Foreign currency forward contracts | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Gross notional amount | ₱ 1.3 | ₨ 2.4 | € 36.3 | £ 37.6 | 150,298 | 129,649 |
Interest rate swap agreement | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Gross notional amount | $ 287,500 | $ 287,500 |
Derivative Instruments - Summ_2
Derivative Instruments - Summary of Fair Values (Details) - Cash flow hedging - Designated as hedging instrument - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative Assets | $ 3,027 | $ 3,644 |
Derivative Liabilities | 5,311 | 5,773 |
Foreign currency forward contracts | Prepaid expenses and other current assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative Assets | 3,027 | 3,644 |
Foreign currency forward contracts | Accounts payable and accrued expenses | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative Liabilities | 45 | 93 |
Interest rate swap agreement | Prepaid expenses and other current assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative Assets | 0 | 0 |
Interest rate swap agreement | Other Assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative Assets | 0 | 0 |
Interest rate swap agreement | Accounts payable and accrued expenses | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative Liabilities | 1,447 | 1,861 |
Interest rate swap agreement | Other non-current liabilities | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative Liabilities | $ 3,819 | $ 3,819 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Pre-Tax Effect of Cash Flow Hedging Relationships (Details) - Cash flow hedging - Designated as hedging instrument - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
(Loss) Gain Recognized in AOCL on Derivatives | $ 192 | $ 2,030 |
Loss Reclassified from AOCL into Income | 347 | (734) |
Foreign exchange contract | SG&A | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
(Loss) Gain Recognized in AOCL on Derivatives | 248 | 2,030 |
Loss Reclassified from AOCL into Income | 817 | (734) |
Interest rate swap agreement | Interest expense, net | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
(Loss) Gain Recognized in AOCL on Derivatives | (56) | 0 |
Loss Reclassified from AOCL into Income | $ (470) | $ 0 |
Acquisition - Narrative (Detail
Acquisition - Narrative (Details) - USD ($) $ in Thousands | Nov. 02, 2020 | Nov. 30, 2020 | Nov. 30, 2019 | Aug. 31, 2020 |
Business Acquisition [Line Items] | ||||
Purchase price | $ 41,916 | $ 0 | ||
Goodwill | $ 738,575 | $ 709,703 | ||
Truvalue Labs, Inc. | ||||
Business Acquisition [Line Items] | ||||
Purchase price | $ 41,900 | |||
Goodwill | $ 29,342 |
Acquisition - Purchase price al
Acquisition - Purchase price allocation (Details) - USD ($) $ in Thousands | Nov. 02, 2020 | Nov. 30, 2020 | Aug. 31, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 738,575 | $ 709,703 | |
Truvalue Labs, Inc. | |||
Business Acquisition [Line Items] | |||
Current assets | $ 811 | ||
Goodwill | 29,342 | ||
Other non-current assets | 5,299 | ||
Current liabilities | (3,184) | ||
Other non-current liabilities | (4,753) | ||
Total purchase price | 41,915 | ||
Truvalue Labs, Inc. | Software technology | |||
Business Acquisition [Line Items] | |||
Amortizable intangible assets | $ 10,700 | ||
Estimated acquisition date useful life | 13 years | ||
Truvalue Labs, Inc. | Client relationships | |||
Business Acquisition [Line Items] | |||
Amortizable intangible assets | $ 900 | ||
Estimated acquisition date useful life | 12 years | ||
Truvalue Labs, Inc. | Trade names | |||
Business Acquisition [Line Items] | |||
Amortizable intangible assets | $ 2,800 | ||
Estimated acquisition date useful life | 15 years |
Goodwill - Changes in the Carry
Goodwill - Changes in the Carrying Amount of Goodwill by Segment (Details) $ in Thousands | 3 Months Ended |
Nov. 30, 2020USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 709,703 |
Acquisitions | 29,342 |
Foreign currency translations | (470) |
Ending Balance | 738,575 |
Americas | |
Goodwill [Roll Forward] | |
Beginning Balance | 386,195 |
Acquisitions | 29,342 |
Foreign currency translations | 0 |
Ending Balance | 415,537 |
EMEA | |
Goodwill [Roll Forward] | |
Beginning Balance | 320,427 |
Acquisitions | 0 |
Foreign currency translations | (519) |
Ending Balance | 319,908 |
Asia Pacific | |
Goodwill [Roll Forward] | |
Beginning Balance | 3,081 |
Acquisitions | 0 |
Foreign currency translations | 49 |
Ending Balance | $ 3,130 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) | 3 Months Ended |
Nov. 30, 2020reportingUnit | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Number of reporting units | 3 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income before income taxes | $ 120,232 | $ 108,741 |
Provision for income taxes | $ 19,026 | $ 14,784 |
Effective tax rate | 15.80% | 13.60% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 19,026 | $ 14,784 |
Higher windfall tax benefit from stock-based compensation | $ 3,000 | $ 5,900 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
Lessee, Lease, Description [Line Items] | ||
ROU assets | $ 257,591 | $ 248,929 |
Lease liabilities | $ 310,677 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease terms | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease terms | 15 years |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Commitments (Details) $ in Thousands | Nov. 30, 2020USD ($) |
Leases [Abstract] | |
2021 (remaining nine months) | $ 32,134 |
2022 | 41,942 |
2023 | 38,317 |
2024 | 36,510 |
2025 | 35,815 |
Thereafter | 198,108 |
Total | 382,826 |
Less: Imputed interest | 72,149 |
Present value | $ 310,677 |
Leases - Schedule of Other Info
Leases - Schedule of Other Information Related to Operating Lease (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | Aug. 31, 2020 | |
Leases [Abstract] | |||
Operating lease cost | $ 10,700 | $ 10,600 | |
Variable lease cost | $ 3,400 | 5,000 | |
Weighted average remaining lease term (in years) | 10 years | 10 years 1 month 6 days | |
Weighted average discount rate (incremental borrowing rate) | 4.30% | 4.20% | |
Cash paid for amounts included in the measurement of lease liabilities | $ 9,700 | 10,500 | |
Lease ROU assets obtained in exchange for lease liabilities | $ 1,100 | $ 2,100 |
Debt - Debt Obligations (Detail
Debt - Debt Obligations (Details) - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
Debt Instrument [Line Items] | ||
Other Long-term debt | $ 1,111 | $ 0 |
Long-term debt | 575,511 | 574,354 |
2019 Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt obligations | 575,000 | 575,000 |
2019 Revolving Credit Facility loan origination fees | (600) | (646) |
Long-term debt | $ 575,511 | $ 574,354 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Nov. 30, 2020 | Nov. 30, 2019 | Aug. 31, 2019 | Aug. 31, 2020 | Mar. 29, 2019 | |
Debt Instrument [Line Items] | |||||
Interest expense | $ 2,100,000 | $ 4,200,000 | |||
Weighted average interest rate | 1.40% | 2.20% | |||
2019 Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt obligations | $ 575,000,000 | $ 575,000,000 | |||
2019 Revolving Credit Facility | PNC Bank, National Associations | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 750,000,000 | ||||
Maximum amount of additional borrowings | 175,000,000 | 500,000,000 | |||
Minimum borrowing amount required for additional borrowings | $ 25,000,000 | ||||
Debt obligations | $ 575,000,000 | ||||
Commitment fee percentage | 0.10% | ||||
Debt fair value | $ 575,000,000 | ||||
Debt issuance costs | $ 900,000 | ||||
2019 Revolving Credit Facility | PNC Bank, National Associations | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.875% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Aug. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Purchase commitment, remaining minimum amount committed | $ 226,000 | |
Long-term purchase commitment amount | $ 10,000 | |
Long-term purchase commitment period | 3 years | |
Letters of credit outstanding | $ 2,900 | |
Concentration risk benchmark, percentage of total revenue | 3.00% | |
Accounts receivable reserve | $ 7,252 | $ 7,987 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) | 3 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | Mar. 24, 2020 | |
Class of Stock [Line Items] | |||
Repurchase of common stock (in shares) | 131,800 | 343,000 | |
Repurchases of common stock | $ 43,144,000 | $ 84,423,000 | |
Approved addition to authorized amount | $ 220,000,000 | ||
Remaining authorized repurchase amount | 215,900,000 | ||
Cost of shares repurchased from employees | $ 2,100,000 | $ 1,500,000 | |
Treasury Stock | |||
Class of Stock [Line Items] | |||
Repurchase of common stock (in shares) | 131,800 | 343,000 | |
Repurchases of common stock | $ 43,144,000 | $ 84,423,000 | |
Vesting of restricted stock (in shares) | 6,728 | 5,778 | |
Restricted stock units | |||
Class of Stock [Line Items] | |||
Restricted stock vested (in shares) | 17,946 | 15,376 |
Stockholders' Equity - Shares o
Stockholders' Equity - Shares of Common Stock Outstanding (Details) - USD ($) $ in Millions | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance (in shares) | 38,030,252 | 38,118,000 |
Common stock issued for employee stock plans (in shares) | 117,000 | 135,000 |
Repurchase of common stock (in shares) | (131,800) | (343,000) |
Ending Balance (in shares) | 38,008,129 | 37,904,000 |
Number of shares repurchased in settlement of employee tax withholding obligations (in shares) | 6,728 | 5,778 |
Value of shares repurchased in settlement of employee tax withholding obligations | $ 2.1 | $ 1.5 |
Repurchase of common stock from employees | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Repurchase of common stock (in shares) | (7,000) | (6,000) |
Share repurchase program | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Repurchase of common stock (in shares) | (132,000) | (343,000) |
Stockholders' Equity - Dividend
Stockholders' Equity - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Equity [Abstract] | ||
Dividends per Share of Common Stock (in USD per share) | $ 0.77 | $ 0.72 |
Total Amount | $ 29,266 | $ 27,291 |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 | Nov. 30, 2019 | Aug. 31, 2019 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Total AOCL | $ 952,573 | $ 896,375 | $ 691,878 | $ 672,256 |
Accumulated unrealized losses on cash flow hedges | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Total AOCL | (1,707) | (1,591) | ||
Accumulated foreign currency translation adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Total AOCL | (37,369) | (37,702) | ||
Accumulated Other Comprehensive Loss | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Total AOCL | $ (39,076) | $ (39,293) | $ (64,706) | $ (74,544) |
Earnings Per Share - Weighted A
Earnings Per Share - Weighted Average Shares Outstanding (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Earnings Per Share, Basic [Abstract] | ||
Income available to common stockholders | $ 101,206 | $ 93,957 |
Basic weighted average common shares (in shares) | 38,007 | 37,978 |
Basic earnings per common share (in USD per share) | $ 2.66 | $ 2.47 |
Earnings Per Share, Diluted [Abstract] | ||
Income available to common stockholders plus assumed conversions | $ 101,206 | $ 93,957 |
Dilutive effect of stock options and restricted stock (in shares) | 690 | 609 |
Diluted weighted average common shares (in shares) | 38,697 | 38,587 |
Diluted earnings per common share (in USD per share) | $ 2.62 | $ 2.43 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,750 | 20,128 |
Performance-based awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 72,090 | 36,501 |
Stock Based Compensation - Narr
Stock Based Compensation - Narrative (Details) - USD ($) | Nov. 09, 2020 | Nov. 30, 2020 | Nov. 30, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 11,300,000 | $ 9,800,000 | |
Unrecognized compensation expense related to non-vested equity | $ 117,000,000 | ||
Exercise price (in USD per share) | $ 316.71 | ||
Offering period | 3 months | ||
Purchase price percentage | 85.00% | ||
Maximum employee subscription rate | 10.00% | ||
Maximum contribution limit | $ 25,000 | ||
Number of share purchased by employees (in shares) | 9,269 | 11,159 | |
Stock issued during period employee stock purchase plans weighted average price per share (in USD per share) | $ 286.58 | $ 220.70 | |
Capital shares reserved for future issuance (in shares) | 168,535 | ||
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Non-option award grants (in shares) | 41,358 | ||
PRSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Non-option award grants (in shares) | 36,424 | ||
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 500,000 | $ 500,000 | |
Weighted average period for recognition | 3 years 4 months 24 days | ||
LTIP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available for grant (in shares) | 5,100,000 | ||
Stock options granted (in shares) | 408,093 | ||
Exercise price (in USD per share) | $ 316.71 | ||
LTIP | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting percentage | 20.00% | ||
Award vesting period | 5 years | ||
Expiration period | 10 years | ||
LTIP | Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 5 years | ||
Weighted average grant date fair value (in USD per share) | $ 306.37 | ||
LTIP | Restricted stock units | Share-based Payment Arrangement, Tranche One | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting percentage | 20.00% | ||
LTIP | Restricted stock units | Share-based Payment Arrangement, Tranche Two | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting percentage | 50.00% | ||
LTIP | Restricted stock units | Share-based Payment Arrangement, Tranche Three | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting percentage | 25.00% | ||
Director Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available for grant (in shares) | 249,886 |
Stock-based Compensation -Weigh
Stock-based Compensation -Weighted Average Assumptions (Details) | Nov. 09, 2020$ / shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected life | 7 years 1 month 17 days |
Dividend yield | 0.91% |
Estimated fair value (in USD per share) | $ 78.23 |
Exercise price (in USD per share) | $ 316.71 |
Fair value as a percentage of exercise price | 24.70% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 0.10% |
Expected volatility | 27.50% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 0.80% |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended |
Nov. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information - Results o
Segment Information - Results of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | Aug. 31, 2020 | |
Revenue | $ 388,206 | $ 366,658 | |
Operating income | 121,031 | 113,186 | |
Capital expenditures | 18,333 | 26,780 | |
Assets | 2,099,426 | $ 2,083,388 | |
Americas | |||
Revenue | 244,337 | 231,330 | |
Operating income | 56,376 | 49,623 | |
Capital expenditures | 9,560 | 24,024 | |
Assets | 1,071,502 | 1,111,600 | |
EMEA | |||
Revenue | 105,777 | 100,830 | |
Operating income | 40,634 | 41,218 | |
Capital expenditures | 319 | 1,168 | |
Assets | 807,156 | 757,524 | |
Asia Pacific | |||
Revenue | 38,092 | 34,498 | |
Operating income | 24,021 | 22,345 | |
Capital expenditures | 8,454 | $ 1,588 | |
Assets | $ 220,768 | $ 214,264 |