FDS - Earnings call transcript Q1 2018 | FactSet Research Systems Inc.

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Operator

Good morning. My name is Jamie and I will be your conference operator today. At this time, I'd like to welcome everyone to the FactSet First Quarter Webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator President Relations, Vice your may conference. of Hyder, you Investor begin Rima

Rima Hyder

and Welcome morning, quarter you, good Thank Jamie everyone. conference XXXX call. to earnings first FactSet’s

call. we point Before be slides presentation this will replay factset.com. call our section accessed A on on on please from remarks, will that prepared in like of begin, website our The be during To investors. website to be the conclusion yourself conference live Investor Service available limit FactSet’s and broadcast we the course to posted I'd question one can to questions our of by slides today’s at These After the we follow-up. will via of our transcribed be reference fair the at being this out will plus of website. the at via Relations website phone FactSet.com. a being is open and call the everyone, real-time CallStreet to is call

our discuss all which the notice of results, encourage we use non-GAAP Before review financial forward-looking X, the risks of measures. on explains and listeners legal the Slide to statements I

please and a of actual XX-Q factors Form our discussion forward-looking cause refer materially results that for could from differ to risk to these Additionally, XX-K statements.

on Our certain non-GAAP slide will call discussions presentation financial and include this measures.

information non-GAAP or with this financial the This appendix considered in in For be presentation such morning. substitute measures, nature as prepared the should and GAAP. release in reconciliation and a for directly supplemental comparably to in the the issued not our to measures are be the isolation accordance related GAAP should most in considered earnings information

companies. entitled by may GAAP the not these same other as financial measures similarly be In measures reported addition,

Executive Joining the now me Officer. today like over I'd Phil Chief to Financial discussion to turn Chief Officer; and Phil. Nicolelli, Snow, Maurizio are

Phil Snow

and today's At Thanks, morning, rapidly market dynamics of change. good FactSet, Rima to the call. we're to and welcome everyone responding

partner head and solutions with well analytics the industry provide service, our clients position meet award-winning to to on. innovative workflow us and our to content, platform Our facing challenges

generally is you the really versus quarter a and the of ASV than last year. in this much guidance annual are feel better indicates us higher first looking quarter our remainder guidance the QX of And than first for lighter guidance change. is year. at we first ASV this note quick we annual for good this and seeing QX the A full on the made we you indicator midpoint same and a quarter. We time did for not about quarter the gave growth rest The in of the year half, out why

with at his our community business received provide metrics core key shareholder evolves, goals will we've investment the you the during look more information we focus detail believe to aligns and guidance company. taken of support we you our the annual As move The guidance our provide closely more Maurizio a and of comments. annual and the has

by focus the margin We acknowledge diluted organic this and of the from Let's on Against and expected. the a new XX% in from Analytics quarter strategy executing active on clients to organic CTS. reaccelerate. deceleration consolidation had bit The in by in total We we churn portfolio this We a ASV on our which are quarter. at we Adjusted of quick $X.XX being from expanding X% performer increase take was at the this was income. addition backdrop, rate sales range contribution strong quarter solid driven around first suite passive, results. saw a of X% Within of was quarter the EPS momentum strong reporting, Wealth data portfolio adjusted risk, cancellations. offset and standard of we also grew themes year-over-year. and growth ongoing a continued quarter feeds. saw prior the within increased and saw to quite with quarters, ASV focused to with at was operating Analytics, shift the CTS services and cost ASV our this fixed ownership add-on revenues continuation of look laser industry. increased in XX.X%,

assets at Within and now already positioning adding existing using portfolio, factors asset gain Clients competitive approach. factor to the and stickier factor and risk a suite. full linear integrate our Carlo our This the using alternatives, a to view transparent multi-asset offering, equity, increases model. linear model our Analytics distribution fixed product, us can of Carlo market Analytics class makes we risk enhanced Monte in a income, or risk private our the levels, a clients Monte currency with

Turning XX% to region. our by our International business. fueled grew ASV Asia-Pac represents growth over of ASV organically ASV. the now international by X%, International in total

ASV grew X%. Asia-Pac analytics asset to grew with sales almost XX% Europe and increased managers. workstation

East which and been impacted environment Middle purchasing and in Our events Europe regulatory has both the European includes the political delayed segment, resulting by decisions.

of as inducement and rules. Europe, clients to Quick substantial for is is In across and to which effect our schedule tremendous seeing change take of and one make ahead is a us, great sell-side meant research business II, where platforms these had progressing bundling terms as significantly. and of MiFID products January clients opportunity on our result continue to up seen significant for scheduled on has pipeline beyond. opportunities pricing have to our in integration see our all models of allows more all II today and our compliance. note expectations cross-selling resulting This efforts the cost and in in we have MiFID II. buy-side leverage MiFID and opportunities acquisitions. our with opened solutions, technology interest and up-selling integration integration, for both II BISAM in research adapt in practices is solutions of FactSet we for XXXX a MiFID product line We're part fiscal importantly, the have progress with but in the know area synergies. we is requirements Digital Solutions clients

is impact less research sell-side research total concerned, users sell-side are the XX% users as FactSet. far the of As on than

product expect from believe In pipeline, giving topline double-digit for So, we have quarter we've a as look delivering we we a achieve to and and conclusion, as the value our negative be and shareholders can higher we growth beyond, us the impact to a as consistently confidence second as years. healthy minimal. MiFID done both well to earnings rate growth we really II sales

outlook. our to me Let over about talk first and financial XXXX turn now Maurizio results to quarter annual it XXXX

Maurizio Nicolelli

everyone the call. morning to you, good Thank on Phil, and

the These I results, quarter-over-quarter point efforts initiated our leverage to the of business. our that are get part into of details of more by recent from the Before scale company. acquisitions and comparisons out impacted quarterly the to actions realize a by actions we were the restructuring want GAAP our synergies

will You the impact our actions results. see throughout of these

Additionally, account with positive standard that XXX, employee our impact starting ASC us way transactions. for share-based XXXX. which told would of the results We you payment include also for effective a our accounting this fiscal companies be adoption quarter changes update from the FASB’s last

to quarter results Let's the GAAP an through increased XXXX. X% organic XXX more in versus in million, million quarter now and first the detail. XX% on quarter basis first the go to XXX first of Revenues

International year of EMS we basis had grew A increased our data higher as the increase quarter, driven our the of to a since an on higher ASV X% quarter. increased products. wins U.S. clients, Organic X by our increased and increased offset first to in from primarily segment revenue, and organically our Portware billion first at region. due sales new to existing strong performance ago, year-over-year X.XX our the business. Asia end primarily of from analytics was and end partially feeds X% result cancellations. volumes from by X% pacific with approximately revenues revenues ASV Looking organic higher quarter. at This primarily trading fourth million ASV

Let’s actions. and totaled of driven now million, expenses Operating our year-over-year, an acquisitions, look XXX our expenses. XX% a recent the increase the take previously quarter by at primarily mentioned restructuring first for operating

as the percentage decrease and Higher year compensation exchange was were current recent hedges the restructuring expenses, as incremental changes by SG&A acquisitions, in offset of Philippines. down costs a XX to expressed of the of salary increased excellence to base cost costs, basis The costs. of depreciation partially actions. fiscal acquisition services, the expressed year of driven and compensation points were expense, XXX the India XXXX. result compared points first quarter and quarter prior First increase revenues, and due with centers foreign was primarily and compared revenues, costs, by a percentage the period. located data basis year-ago hires related of The amortization our by higher in

of Adjusted primarily to XX year’s points basis XX.X%, mentioned XXX of to than XX.X% XXXX was decreased Our last lower points. from due due charges. acquisitions GAAP operating basis improvement margin previously XX%, restructuring of margin quarter by to primarily the an fourth year-over-year but the operating the margin

We expect get operating margin XXXX. improve to as fiscal our through we adjusted

This rate tax an this to spending, to due prior reduced as $X.XX operations, the from up a update. was timing payments. versus adjusted rate from was year first of decrease accounting define for Free and $X.XX, we higher benefit, a have XX% capital XX% was a from quarter benefit due accounting XX.X%, $X.XX. the increase EPS million, effective income, effective a and to EPS quarter a XX XX% first The Adjusted includes the standard define, we benefit certain grew lower primarily aforementioned diluted increase Without year. of as Our been period last XX.X% approximately would of ago, expenditures flow, same cash cash year. update. standard or million generated capital net from tax XX our less

our XX to DSOs at XXth. days acquisitions, XX at Excluding days recent from August November decreased XXst

XX,XXX versus lower client user decreased We The in clients. primarily user Client was resulting ASV. count X,XXX to quarter. count driven the In increased over XX continued average users XXX users contrast a increase decrease in by to our by by which StreetAccount users. ASV workstation over count carry this count

during our for We've quarter Moving repurchase repurchase under to our the share on share program. $XX program. existing XXX,XXX first repurchased shares million

and XXXX, allocation approximately XX, program. November $XXX framework. under future capital to of the balanced shareholders remained share committed repurchase purchases million a maintaining for share remain returning to capital As We

provide you for on the to to annual let's We annual we we turn this Now, update with each guidance. issued guidance fiscal plan quarter, quarterly quarter and have you XXXX. will guidance our discontinue today. Starting guidance with

ASV also introducing guidance are XXXX. for fiscal We

to into GAAP the to the innovation from annual predicated account continuous effective low to rate $X.XX One, any margin solution, and expected Our of tax XX% three, range of accounting and is X.X% to integrate operating a does be for range a the expected corporate The range to high bill. to expected XX.X% and a are ASV factors. the of of of offerings. billion. compensation growth range and is million of U.S. $XX range end our conditions. be X.X%. to Two, million and XXXX number Enterprise operating offer does standard XX.X%. update the in is be potential acquisitions the $X.XX stock-based expected true XX.X%. impact revenues product fiscal increase guidance pending and The range strengthen margin and GAAP implying take of Organic XX% market guidance ability in XX%. the in billion in to is Adjusted $XX our of on the in the be clients but tax rate ASV expected tax our in reform over is account and not stable range

in Adjusted U.S. $X.XX diluted the that GAAP the rate. have compensation expect to The for an EPS over of in of to the XX% EPS a accounting lowering EPS represents range our EPS $X.XX is estimated standard impact be of fiscal the year. of range growth and corporate a $X.XX from diluted We adjusted the is impact be range and effective compared the midpoint XXXX stock-based annual will expected rate includes $X.XX. income update. $X.XX. prior on diluted Adjusted tax to tax the favorable expected

of allow and need we indicator said, to year will we for remain As We ready pipeline this your quarter that We're year questions. results. have product achieve our to is Thank participation year. full our you in first an on a sales for Phil to full sales our healthy today's performance integration grow execute now not call. innovation confident the strategy; plans and your in us

Operator

Fargo. Wells comes Your Instructions] Warmington question [Operator first from with Bill

Your line is open.

Bill Warmington

Good morning, everyone.

So, was ASV first to ask growth. I wanted question, the on

you what are given wanted gives acceleration the mentioned that going the that of you to drive to and bottom that year? expecting the for growth about you of from an first confidence at what's of You'd the were improvement quarter X.X%. a rest you've ask range the to And or X.X% I near and ASV

Phil Snow

Thanks its Bill Hey, for Phil the Snow. question.

track look into So, of we've last visibility much that booked and point ahead we of pretty QX at so have definitely good keep ASV same how time at year-over-year, year, the obviously QX in we actually that. this when we versus it's

We to last visibility get on increase, we our than year. have price a more which expect little good did annual and execute on we bit

integrate that all we've it to second from just things back exceptionally can market, coming So, then lot of lead you have tell see the the years. and that a in of of could I QX to We But exited confident year accelerate. to does possibly to kind those half new new I at develop to in fiscal we about terms But think our better a believe product position product. us our we're of in the to I time reacceleration stated, salesforce, we'll get that levels to we'll this and the feel of last much QX than as acquisitions well year take and Maurizio done, execute in previous

help see solutions going to lifecycle. going individual as are things to really out sell that we're able of some well sales portfolio the come be teams to as So our

those you being of our year the us for we So for add things thesis all that the up guidance fiscal confident us to and reaccelerating. in for gave

Bill Warmington

the if XXXX U.S. I to look go what guidance like? expected, corporate through reform at my follow-up the $X.XX $X.XX, ask tax And then would to does for wanted XX% as bill that on question EPS EPS

Maurizio Nicolelli

So we're still -- Bill, this is Maurizio.

still we're give to context. the let for be law. you little me bit waiting So, bill final put of into a But

Bill Warmington

I I able wait. know you you wouldn't be -- to know wouldn’t

Maurizio Nicolelli

of U.K. look you the overseas a that XX% overseas, or pre-tax at tax at so FactSet, income if around rate. predominantly approximately XX% taxed So, is for in

rate the tax law 'XX, benefit going The bit a XX%. this the effective that will And rate other the piece statutory is be XX% if have XXXX, will becomes of U.S. U.S. see four statutory months year income then for today year of the the we'll the for is U.S. first that on whereby other and January be and a of XX% the through, tax goes If pre-tax that of fiscal at and us, is XX, year, months in hybrid law will rate. at eight tax the new old fiscal we the full forward. as

get So, if you somewhat will FactSet benefit take forward. in those going percentages and that of mix, realize you to can that a

Bill Warmington

it. Thank Got much. very helpful. Very you

Maurizio Nicolelli

not Potentially. It's signed yet.

Bill Warmington

Thank you very much.

Maurizio Nicolelli

Yeah.

Operator

question comes Anj next Singh Credit from Suisse. with Your

open. is line Your

Anj Singh

Hi. morning. taking for Thanks questions. Good my

the really Or light this get you is fiscal you but on much is was Is to business? of of momentum referenced? delay material? how I a bit outlook? supposed this elaborate some off, this I of the your of in some little wondering not of decisions the sense that weighing a seeing the yours, First offset if of in is getting surprising you're 'XX in purchasing commentary your trying it's competitor a from could in just by

Phil Snow

I me waiting we're So, over to a decisions out wrong, I'm I and a think come of to correct delay sort Europe in think you're January. seeing they sort where -- clients for if of slowdown referring as there in from it purchasing but

business. solutions mentioned as our a But MiFID we product of market. part I important an great and is around lot lot a II to of Europe coming of exciting So we offer have can

material impact we to think that. of definitely So, -- rest it's we we're going think business. on overcome can the have not don't the a We

Anj Singh

they've And nice to on bottomed it's last follow-up to XQ spoken it. the at margins, you'd a for Okay. quarter. that as Maurizio, see Got

the are So same let’s it Or any lift just deals? buy from curious Is side? the where contribution more getting more is from? it and you on thanks. FDSG side there, the higher revenue Just say cost the these color of on

Maurizio Nicolelli

is starting buy-same FDSG the and that on and cost both. an starting we're operating bit of of bit see also a little Yeah, to our side it's see to margin uplift more in revenue-driven. very uplift that's a well on One, we're executing synergies, and

and a looking at to to increase, it's little quarter of -- little our both we steady a see we margin, little historical rates. by bit by get way we the So, of mix operating are projecting are the each back a

Anj Singh

Okay.

Okay. it. Got Thank you.

Operator

Your with next question from comes Tong George Goldman Sachs.

Your line is open.

George Tong

morning. thanks good Hi,

expanded selling Your ASV of was and progress per you per in your growth discuss client more customer given relatively this quarter initiatives flat. your workflows? Can offering solutions

Phil Snow

Yeah, absolutely.

George hi, is very So, client. this start our I'll Phil. with largest

sales some a on with within created accounts now focuses about had and actually offering, our client team largest good them which we've very So, group called conversations entire strategic our our specialized very about of they would terms product integration. like accounts lighthouse as roadmap, also of see as sort help in our to talking of a really to in them group us what guide using terms we've

with is So, resonating strategy our them.

lead Our to well combined content think salesforce’s these through and base. that flexibility team cascade higher can executive have feel rest and the our within larger these to conversations solutions of and as firms, at really our that a we the do solutions the platform of them, and accounts, in the client with we level down us build-out for our of and -- our beginning I strength higher is

George Tong

to know you do next and of hearing impact the you're Very a helpful. touched from earlier, spending but can on – follow-up, And specifically expected then, on as clients on you think how MiFID, expect four and I elaborate what around impact results of this to quarters? how reflected you you was in an trends that the from two and much impact do MiFID over headcount evolve quarter this

Phil Snow

terms I positive. stated, research in on The is of the in for offering, our purchase Europe we're think is our impact in just delayed us, decisions. seeing So, think as impact business I I

indicated, So, than users. research as our sell-side of users I less are XX%

users fact, share sell-side taking actually In over user-base market months. the We've XX research last that has adding there. healthy been and growing been in

and think, – now, that So few we clients soft I have dollars. pay us very in

view little The within the uncertainty us going approach. of they're this is to taking more in we a and a affect the them how positive. about now a think, negative right cautious net-net, it base, for So, I is, as particularly client bit Europe,

George Tong

Very you. Thank helpful.

Phil Snow

Sure.

Operator

comes question next with Your Morgan Stanley. Toni from Kaplan

is line open. Your

Toni Kaplan

for and you wrong, demand a wanted expense were Good me morning. Is you understand I Thank the is at that better. that correct if feeds specifically? you. of I mentioned workstations? comment data Phil, additional solutions. think that seeing What and I'm that to unbundled little just bit

Phil Snow

Sure.

is you latest out as developed off a we've to know, tied can there a transitioning and them us good that platform we the the wave really closely being is FactSet's lot have core content very that other, clients So, to of have which that driven a and consume one of feeds standardizing of business so a each very by company strengths. them

within that So, partners a something a clients our that having are be, engines, we're we and wanted be that around if you on Workstation releasing example do a Analytics to strategy in an more one needed they've and we're executing allow are the pretty thinking constructing. clients, FactSet API wanted are conversations would that would about our a to different of with to do or environment something to they that with so client into flexible good traditionally close

view as this at cannibalistic. We accretive. as all it we view actually don't So,

big us We the many of of in a us clients a be they of FactSet of or Workstation, Enterprise is our everybody live competitive and us being advantage terminal for approach we to and flexibility of but some providing in components other still some an world this think terms are versus get to open competitors. use needs Our don't will solution. want our telling now bigger sort in a where front them us

by within we the you is different Views, if and so Another environment a great actually something call example deploy you itself. Workstation any component of wanted can FactSet that to, take FactSet

another of So example that's unbundling.

our and the as So, just of dimensions we're of we industry see evolve. API, lot a just are thinking now this in two mentioned views I different about

Toni Kaplan

expecting it. And year. know you then, pricing normal you're to I get mentioned Got this that

past; about believe would year? in price be expecting sort That to be at that Thanks. typically think helpful. Is I the I increases where the this gross are X%. of you're

Maurizio Nicolelli

it's eligible Hey, it's And X% the clients those U.S. to on increase are within year. Yes, Toni, their Maurizio. get the that that's for exactly, price contracts the

Toni Kaplan

Thanks a Yep. Thanks. lot.

Maurizio Nicolelli

Yes.

Operator

Hamzah comes Capital. Macquarie Your next from question with Mazari

is Your line open.

Hamzah Mazari

morning. Thank Good you.

this in like just, could Is feels the The but cancellation of of had if you is an cancellations just the markets. stabilization end the first seeing terms any end just were just churn there Just you're in just market, question normal characterize up or in consolidation of is We market? business? broadly Maybe talked bit. a the the impact color. any sense buy-side client end about it client what

Phil Snow

more Yeah. little more each QX I'd on the that We this on, we say out of and business saw more a and offset firms bit last other. but we go so did churn products we QX. sold clients, added smaller than side, saw more we flip so

we've been in terms that total about now years ownership with they're to So, for couple passive, of active and cost of still us. on, so a of the trend talking

smaller executing smaller hedge asset underperforming this we're or well typically lot really think managers is funds a versus up and you are accounts. passive in that of the churn It's environment see I in strategies.

Hamzah Mazari

of follow-up, that there we pricing longer-term thoughts to Got of terms pretty should an Maybe that to in be anything there? would And in enterprise-wide terms referenced helpful. seat-based. be a big potential expect any and a had color you you. Any picture change then from your a Is sort timing seamless in model system just of disruption process? of going

Phil Snow

bit models clients. pricing simplify the couple and scale and FactSet little we careful a the So, had few very to a salesforce business, need flexible of last we're model, taking our we over to been it’s pricing pricing. decades a our but at think a We've for at that different very more look our

to to model well build the in over expect enterprise two. atomic that So, impact will the pricing have down be not as add-ons we're us getting over really period. of next we would an in as expect on up level turn some would time packages see the I the and out workstation longer time. quarter I a to But or of this to

with are be of probably clients more have to big Now, little we we structured some larger pricing FactSet this our about are scalable a going already that with enterprise custom bit those talking build for up more model. deployments as

Hamzah Mazari

you. Thank Great.

Phil Snow

Sure.

Operator

next Your comes Patnaik Barclays. question with Manav from

Your line is open.

Manav Patnaik

hi. Good morning. Yeah,

deferred, question first even it bit assumptions The out a sell-side you're just sounds bit wanted the like assumptions in to market little is on conditions I I stable with your of more clarify it MiFID narrowly, hash maybe the impact impact are right? your reductions deal guidance a And think the does on seeing and more just more to just P&L from MiFID any it guess, you’re because seems to signing assuming I buy-side I something, to pressure any opposed like add want I maybe the guess, not headcount that. stuff as them,

Phil Snow

Yeah.

in is go to I II back feedback the previous think it decisions much relates we're getting some our too is but delayed, are Europe going which wouldn't focus The statements. causing to of FactSet. as team impact, the that just I that to from I'm So, on MiFID getting

few balance last we've we create something done think we really see thing new II company in more good focused solutions the experts think marketplace opportunity solutions how regulatory I our really out of on for outside quite so from terms very as to is to we that. we've right a a of in compliance filled quarters navigate for. the that over our can opportunity and as that regulations we'll now, is team, One of through exposure as come out this so we've and our about terms think got a broader MiFID It's legal, we're a two hired Greenfield our us clients, for there. risk, creating

of to good I in-house, that's mean, research. taking the on feel feel if to really is consume strongest capitalize I of decide buy-side We're want our more in We're have, that that more the research got penetration sell-side. segments that sell-side of to buy-side mentioned, as bring from we they So, share, less set if we've of one market do and we clients they research. it

Manav Patnaik

just or there then on was on you like that follow-up us, it. take Got no, to just I are but tax And reduced Maurizio that helpful the mean, I'm the other R&D I Okay. that you tax Are it number guess that. around. just color I'm lost sure of credits of use will math gave some you us sort be credit. those to? simply any gave sure you

Maurizio Nicolelli

minor that from the So, read, a have significant a go which to few number be a benefit we what are of There for FactSet, still will is us. R&D other items will we against us for but in what seen clean but it so again, fairly through, most have this to new go plan, it's the part, that's but seems have far. that we thoroughly

minor a so items potentially. we So, is the that us hurt that little get largest There's some included will will still is benefit. one the R&D, that we believe bit

Manav Patnaik

a Got Okay. guys. lot, Thanks it.

Operator

comes Stifel. Shlomo Your with next Rosenbaum from question

Your is line open.

Shlomo Rosenbaum

on for release heightened Hi, the increased Hey, bit churn my Is more have in about the a good one on StreetAccount morning, the cancellations and thank or going taking is versus little base press churn in increased or that other Phil, products there thing more questions. that's you'd the you that's it exactly across you quarter what StreetAccount particularly talked it is you're some subscriptions. of having? StreetAccount, with the

Phil Snow

question, Shlomo. that's a good So

products don't that web FactSet when the the you excellent have few standalone we one that kind of an StreetAccount of kept. those know they history, and web of product that's For acquired

StreetAccount to push a of piece workstation did in within it's client massive big our base. also a We our integrate

higher base workstation. within actually traditional So, FactSet even to low-priced though last usage the way our continue of individual These product. relative client the year, licenses are it of adoption is the is down we very product, it for in are was high. very typically to the invest the StreetAccount web-only as seats The than

StreetAccount In from at a price positive point fact, that so users and we really back in that. read a some price too at web, lost so wouldn't point, ASV it's much higher I likely QX, we saw added into users a lower

was have of into to a there, dedicated the material used That us impact had in in that may web broader selling and ASV, terms somewhat salesforce. integrated team we products either an that way. now StreetAccount terms thing FactSet other The not been also it's have affecting it's but how of has of salesforce

Shlomo Rosenbaum

maybe changing And the you bit Okay. seems in the this seeing ASV in or sales little lighter Thank a a sense, the acceleration more to markets last just Is the quarter-to-quarter? It us you give anomaly? clearly could you ground. deceleration quarter an Is what had the in quarter there Is just trying in last something general the it verses trends then that this We're little just could is quarter. delve anomaly? just gauge a deceleration? you're it's quarter, to you. moving is quarter end that

Phil Snow

it's good. Sure,

So the for if us good quarter. look not back, indicator lightest is of our yeah, a full-year. It's traditionally you QX

In and QX. the at for year, terms that QX, our fact, year fully of bigger last half our than rate rather hats quarters is salesforce and about is a we every I earlier year, we in growth the which so to as QX really than more much better we spoke accelerate than feel we on versus time feel gold for us in about did much last good quarter to same expect

Shlomo Rosenbaum

All right. Thank you.

Operator

question comes from UBS. with Alex next Your Kramm

open. Your is line

Alex Kramm

everyone. morning, good Hi,

and to have. wanted year the to you this guidance Just ASV come that back for visibility the

beyond a you'll often that year displace so in But if quarter. think you a lot answered of about you and bit do quarter obviously the for the away good you visibility that. for feel visibility get when think that term competitor of when I think I you a have back, little you you should signings new have I even second second free earlier a

have already the of full-year any of us, can that a for number much how share you anything do the So, you of sort baked the in or quarter? ASV beyond with is kind second

Phil Snow

part some range Yeah, that year. I'm to our yeah, we happen and a a not is later, and good the very we days. get in that at lot new maybe you be visibility hoping year-over-year. of I that We that and where expectation so Kramm free Maurizio up-tick with, think we're Okay, of harder we're fair margins salesforce a sort terminal can given I got midpoint your the for away a the side, products about or way Alex or on was that the enough, not good Thank feel the the very and then maybe it synergies we're sure you lot a you. but for employee about to coming it give above we in just what the year. integrations. count XX acquisitions, that the good have count throughout with could out little about range the I predict confident marketplace, the out charge if could with of typically It just for these so full-year, you good here jumped the know employee the a from and strategy considering year is think for cost for bit gave talk of

Maurizio Nicolelli

is so you, Maurizio. if Yeah, this

it’s X% similar. X% the during and the growth very the months, in XX next over plus headcount than lower lower have in if probably growth the our with We'll if end X.X% but you be the growth last months if look headcount somewhere growth you -- last we line the significant peel at look growth, see So, very at have that we similar so ASV growth, we months. somewhere period ASV in terms to range, but gauging XX ASV of XX if headcount will headcount something grew acquisitions, fairly you out really been at the

Alex Kramm

shouldn't expect you have count employee So, we right considering probably actually now? that drop overcapacity to

Maurizio Nicolelli

have we say wouldn't I overcapacity.

think be it. below or growth what And historically. have done ASV slightly it we in then line I with will

Alex Kramm

you. enough. Fair right. Thank All

Operator

Foresi question comes Fitzgerald. Cantor Joseph from Your with next

open. is line Your

Mike Reid

Reid this you where you I Can Mike appreciate is and us associated benefits? question. guys when the our detail maybe more could taking the Joe. for give see restructuring on we charges taken and Hi, some on

Maurizio Nicolelli

Yeah, so it's Maurizio.

the sizable in seeing to going the acquisitions company us restructuring related it base becoming of reviewing to trying both efficient So, reviewing we and opportunity efforts two QX streamline there's in to it's and and really and forward. more our where had also then overall and things. QX, remove cost One, costs

you've a couple bit the over last of think quite I seen quarters.

quarter. see previous rate – at still at than forward a quarter of lower a much that some but going and seen you'll the think lower this you've what I

Mike Reid

will then any this spread benefit think be Thanks. to year, Okay. be to that tell year, the And over will you that from of the do seasonality on be remaining not the seen evenly probably there the accounting change remainder you can or this at point?

Maurizio Nicolelli

tell driven employees It's when really exercise. difficult it's because to off

last in went the for we've and reason we there at benefit will I believe out annual have because helps guidance, year. and year, have annual or the very be think determine give. estimate If But difficult less we we it's similar another more gone to reason that the the can annual year to the the that quarter guidance we best us better very why which also what included it's projections why that our you and right to we number with it have it's it in the because look for believe will around that's gauge give is we

Mike Reid

makes Okay. sense. Yeah. guys. That Thanks

Operator

Bank question with comes of America. David from Your Chu next

open. Your line is

David Chu

Hi. Thank you.

So, the just update seeing can revenue quarters? trend to in you the you're and collectively see growing on how us they're Just recent if wanted performed to an any quarter? versus if double-digits non-terminal still changes give

Phil Snow

Phil. David hi, So, it's

exceptionally yeah, be growing the to CTS definitely QX referring and had you're to in double-digits looks good an a If business, having and QX. strong it's

David Chu

growing like mean everything that so kind I Yeah, that's collectively Analytics, speaking is broadly double-digits? Portware, non-terminal, more of RMS, to CTS,

Phil Snow

if institutional build and would growing big know we don't a this around take it full transactional we're revenue of you product. of the lot to at big not I math contributor given was We to new couple the I done a the quarter X%. say sign a Analytics that time clients. quarter. Portware clients The that but on suite sold does Analytics when up the clients, closed for Portware but we've

that quarter. those. first really continue we we're to in And close also clients closed we FactSet more of our the So, EMS encouraged

So It's that we're good reduced Portware, a over custom go that Enterprise not impact meaning version implementation something it's or configurable for anticipating of exciting sell. a Portware sorry, that's to larger will is FactSet from salesforce sort so that's and an is can there general of we've have the and that scalable, configurable product a created for time time support out the a less us. more solution easier EMS – severely is fully customized What definitely the solution.

David Chu

weaken Okay. continues Thanks. deal-related And in terms the of a to follow-up, for so despite activity. strong sell-side ASV

you just what So, describe seeing more you're can broadly?

Phil Snow

sell-side? the On

David Chu

on sell-side. Yeah, the

Phil Snow

the there that terms their than and lot in total face cost seen of of penetration terms one the of and our of in product of to So, on more seeing out clients, continuing essentially one We've would see going competitors terminal do good of together forcing competitive just pressure to I clients FactSet think pressure we're some buy-side typically take solutions of ownership. they we're bundling our want. essentially and a we

David Chu

Okay. you very much. Thank

Phil Snow

Sure.

Operator

question from next Appert comes with Your Jaffray. Peter Piper

is line Your open.

Kevin Barker

This Maurizio. and are Phil Peter you for doing? Hi, How Kevin guys talking Appert. is

Phil Snow

Good.

Maurizio Nicolelli

Great. it. Go for

Kevin Barker

call implement or model, moving to models So, from into if and a choose from products are this competitors lot if product? wish pricing to moving on inherit quarter do of your your model your an you Any earnings them progress one. updates might your that Enterprise platforms paper paperwork station towards password you pricing last

Phil Snow

this in of think I so detail on already that I some Yeah, amount call. answered

for largest management Enterprise So, going from pricing to very solutions when think our trading portfolio about analytics. we've research, through we and clients, got

we roll Enterprise we all do pricing are once can of So, that up into have an to easy those that. model, into components

bit of take some So, we've think true step we meantime We go acquisitions done, that we in a do pricing. though it's as going research for the for and time. enterprise for analytics, little create in can new towards that packages for of PMT, to the

Kevin Barker

Thank you. Okay.

Phil Snow

Sure.

Kevin Barker

seeing there three some pressure Are And any your in my add in topline second question the that to quarter, the is marketplace quarters? marketplace. regarding dynamics next might you're competitive changes that

Phil Snow

Not really.

flexibility it's competitors different for FactSet. I and the We're in for We and all you of winner. expect were strategy. would our with by in terms same with segments opportunity we our out business, platform large of us different as within working it compete the our firms we think that long-term and and the confident our there view salesforce our clients of believe make our we that us and approach very in confident

Kevin Barker

you. Thank

Operator

Your next Deutsche Ato question comes from Bank. Garrett with

Your line is open.

Ato Garrett

relating question guidance another have ASV. I to full-year morning. Good on

where that things that said pretty this Then you as pressure feel or it the there's with a like push where at for weren't previously are above ASV XQ. end really I'm ASV. X% with you pipeline markets you get new to growth is associated the the it? to we about you happy and sense about of, what that mid-single-digits in normal think for trying look You and really the a growth said the at is about and business looking do business think strongly just ways

Phil Snow

there's think definitely push ways I Yeah, above to it.

what and our So, we control the produce end can't clients. partner but we the can control that markets, is we product how with we

combined to of the to getting single-digits new market really back I last creating think eventually need and the with all high over So, that us in we gives come product growth. really thesis terms couple the to double-digit work that's and them of acquisition, the integrated, of get now, we've done beginning our years to platform open hopefully

Ato Garrett

seem with Okay. on I'm doesn't the if But for the certainly this term…? long horizon but given something that year, – like guidance understanding, that

Phil Snow

it's based reaccelerate. quarters we a plan – We're Not No. think to for We three us on to guidance, hoping do no. good out tell to exactly. that hard again the have but

Ato Garrett

an you Okay. at, mentioned execution. as you forward see Great. admit as multi-asset then class, best a MiFID you And you going partnership had announced recently, that you to and really opportunity look

to a more just you feel clients it for to you So MiFID, robust portfolio you partnerships do or to be so pretty MiFID are can that's as complete looking offer solution relates thinking your make product about to compliance? going existing

Phil Snow

I think, at beginnings of the really, We're Yeah. it.

research, unbundling. So, a terms we have research solution in of good for

product. our own Some that's of

in it's partnership and ONEaccess. of Some with Liquidnet

capabilities, have best also be that Trading to that's For market stuff MiFID Management be bringing we compliant will MiFID our the we'll product and for compliant. new Portfolio and execution

Ato Garrett

Great. Thank you.

Phil Snow

Sure.

Operator

D.A. from Davidson. Your comes Heckmann next Peter with question

line Your open. is

Peter Heckmann

idea to a of just I'm Is Wanted some trying it Good morning, entering allowing a so or the on to pricing? that you data, providers, there? business. better there gain of better streams to What's delivery, data get everyone. what's to the were follow-up competitive the number you Prior from cleaner advantage better scale and share incumbents? content market

Phil Snow

to with business has of data. data advantage So, main the I have we would the do with say our concordance feed

that So, and unstructured structured of that. for and and one clients feeds so what all all content entity of is do workstation and we've of it to the does to our been that data together exceptionally link will is our expose to link things underlying kinds take map FactSet take well able

get could focused FactSet's started of competitive our delivering of feeds always you It's course, all in we're value-adds of the marketplace. data. of of different how So has we on that's and company what really people, integration from one advantages terms and the been these feeds but to

always as plan that the apply of to that of area. intelligence, which a in connections accelerate on us focused you're this have, spell know if gain well that's that the type the want doing we and as we in datasets any real So, quant we're between for user, we alpha our to on-boarding what we're community look feed and to or the of to same on, advantage alternative a business so as for FactSet and methodology you datasets, users

Peter Heckmann

That's rolling proprietary And success given to then, more ones? expect should potentially helpful. we there, out FactSet your evaluated pricing-type see solutions, Okay. some

Phil Snow

We're not currently focused on that.

moment. don't we focused data for on underlying of of ingredients own that other the so Some ourselves, types at the we're

Peter Heckmann

Thank you.

Phil Snow

Sure.

Operator

comes Company. William question Blair Tim from next Your with McHugh &

open. is line Your

Tim McHugh

Hi. Yes, thanks.

I just than then rate was hoped to did you a same but said and last thought you about you're earlier there later comment you even thought to more the pricing you I First, increase. thought said year, I pushing capture

I the So, previously? is were you pushing any on, elaborate or of, could than different kind you clarify guess, just, pricing

Maurizio Nicolelli

last clients very it's get on to by X% a No, price similar to are forward. year, eligible year. to It's It's way. so that last going the Maurizio, similar increase very

that in XX than has a seeing being we're the grown, months It's year client given really look business of we when in our increase so, just base the ASV price ago. function of that bigger growth And overall at total bit QX. increase a price for this

Tim McHugh

Okay.

no percentage So, different? wise

Maurizio Nicolelli

Correct.

Tim McHugh

right. the And That's comment. right. All margins, on clarifying other fair. All maybe

was to the if which and kind I as downsize of about I at but right to range implies up in talked of for of here, QX. at at the hoping think middle your sequentially guide kind year, you you improve you are fiscal look QX the the gave margins where from

can square sequential Why I improvement/ guess, if lower two you things? those the end the you, of there expect guide So,

Phil Snow

high The guide end. Right? low and It's range. end going is a a a to have

We progress our the that year. to range goal are through range the end the of modeling gradually as quarter projecting the rest of increase and company at of fiscal top upper that is and to and XX.X% quarter-by- on a we basis get end is to the

Tim McHugh

imagine than you make there include obviously particular revenue you I of other growth rates, would the or think factors of trends? sequential any Are make but kind about risk lower

Phil Snow

Right? our guides and million is guidance, like both so in guidance, our XX risk million. our to There's ASV on ends right? always ASV Just margin risk, risk XX in at it's again, expenses in for some unforeseen be increase reason slowed some had revenue sides we for to guidance. affected the The reason. would our we on if XX% or of both There

Operator

from Glenn from comes question Greene next Your Oppenheimer.

open. is line Your

Glenn Greene

you. Thank

Just a Phil the I to first, couple of topic. MiFID follow-ups. on wanted

there's impact perhaps you? around seats. concern a thinking of a be XX% just and sort wouldn't sell-sides, think your sort as I wouldn't bit your why of perhaps their there to that more for of little a in a limited be why get it because You're buy-side budgets you shrinking the framing a as said I to color want be impact going

Phil Snow

they're FactSet would our pressure us that to in on execute their one those firms it obviously If just so and will competitors, their that they're us research put lowering other shrinking means with like have to be on factor be budgets, if and firms to would they spend less penetrate it budgets sure. up to So money ways.

us, Management I solutions. net-net think portfolio of Analytics. our a for we've is a and distributed So, it’s of very one piece Research Portfolio business is a huge Trading, area but got

our wealth off-platform our have now business business. We

that chances navigating overall is as MiFID it I on focused we're think on our II is through we're and and bullish everyone something a company.

Glenn Greene

quarters, quarters. sort then sort Is and been comparable of Obviously, worse, it. it has of than maybe it frame you to did I but the sell-side? which contrast if sort it’s few was ongoing of it what buy get last churn wondering somewhat comments Okay. the about issue was your an over wanted on that? StreetAccounts, various broader talked been And heard to just

Phil Snow

it the there we was with was say just saw stickier small year, So think that as offset our we'll sticking clients add-on than value-added last stuff but that we our a we base more year last move pronounced analytics that of little than in business, is really traditional things a so quarter, more were would the be again, our -- but and a I is bit within QX client workstation. of cancellations I than few it with so QX forward FactSet that's more QX

Operator

Your Northcoast Housum Research. last with question from Keith comes

Your line is open.

Keith Housum

tax also have of appreciate in some of going year? those earnings morning, your on an on impact and the Good just going of reform flow the gentlemen. a And one-time forward impact Is Maurizio, deemed rest a cash that back the could either to for question terms I the impact. you color or be on bringing there annual actual?

Maurizio Nicolelli

that years and pay over if to all have pay years have to So, we over what it pole cash would read eight on from this there's we a is we've earnings and and that eight we That payable read. overseas. investments choose again, tax is

final I back overseas has becomes if a Keep effect that have cash think in don't the our us. that to available bit cash flow. law, We that U.S. there's to the FactSet that that haven't enacted seen of can then so get on quite mind material will does come a more

Keith Housum

guess over foreign then guys seen quite we've FX the year. I past obviously, What in that moving EPS And on bit far, there year? Great. baked for the a are you so in impact Okay. been exchange change is, this

Maurizio Nicolelli

So, It us quarter in FX a because had very hedges benefit we was favorable some actually to slight impact. minimal first the during place. have

have see gone a Going bit against our impact even just as overall forward, rates three base very overall but there's so we last us a months. the slight six over structure, don't detriment cost to to cost our material still a manageable, within

Keith Housum

you. Thank Great.

Operator

I at will back There this over further are time. remarks. questions to Phil turn closing Snow no call the for

Phil Snow

So, thanks, call. us our everyone for on joining

in Rima we April forward mentioned will didn't quarter. in details press New it, XXth release have additional have of our there be we Day York an see we on early and please to and that next calendar of the plan If released Thanks. this Hyder event Investor you and questions, to hope again you we you so you if XXXX, look see seeing call to many in

Operator

This concludes today's conference call.

may now You disconnect.

FactSet Research Systems (FDS) 19 Dec 172018 Q1 Earnings call transcript