FDS - Earnings call transcript Q2 2018 | FactSet Research Systems Inc.

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Operator

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

Rima Hyder

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

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

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

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

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

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

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

Chief and Snow, Officer. Financial Officer; Nicolelli, me Executive Phil Maurizio Chief are today Joining

to to I'd over like discussion the Now, Phil. turn

Phil Snow

our market product morning, pleased results, the We past cost difficult while And 'XX the within for on we and of on end face. on we’re fiscal Good and range. aware continue call thanks executing our clients to guidance growth pressures for ASV with everyone, expect quarter, Rima. focused year the to the executed you, This and today. well be our strategy. Thank on our and year plans the joining us we remain

second to our Asia. wins we and the boosted portfolio tax We Europe and increased results, $X.XX to Turning U.S. grew organic EPS revenues organic quarter X% saw at across new by U.S., ASV Adjusted the product diluted XX% reform. year-over-year. in

rate beyond. for items, tax quarter our additional evaluate program 'XX our overall, of While continue to $XXX of cash to to cash we our additional plans taking repurchase repatriate one-time year plan from in In the advantage $XXX the and we expect the our reform and due million to fiscal we to share tax press this our year morning, we announced the increase in this savings plans release million increased the utilize by that overseas. rest fiscal cash

will both and margin. of of the operating our have a our we We product to also adjusted cash will year sales the impact plan This efforts. middle on savings guidance margin an for invest and into believe adjusted portion end year full operating range closer to our we

will by more detail. This which last year quarter, our was it Maurizio quarter our as adjusted costs lower go and higher operating FX into first into, XX.X%, impacted slightly margin than was

digits services. fixed offering The contribution class and and of and portfolio first globally allowed in positioning increase to Now to of increase FactSet feeds by management another analytics, competitive in wins. strong of quarter let’s get The trading. quantitative primarily The ASV. more data this us into for ASV increase with portfolio the double portfolio global driven from continues than renewed XX% research asset analytics secure continuing The CTS income risk, CTS the in quarter. be a half rise risk the our Within to of grow in and had contributed FY ASV strong this enhancements client the major XXXX demand we product saw and market analytics, by added Analytics managers was feeds year-over-year. hedge quarter across of drivers net in across important our our funds. sales driven more in multi-asset data business base.

our this on upcoming world the on feeds around weeks capitalize from allowing extending more next the Day in business to coming Investor and We investment shift and there’s this have professionals connect smarter new more data, data initiative plans month. our to come to by with at

by This quarter, or with consolidation last of on these firm wins services ASV to we and firm prior lesser from in year. we of were offsetting to the saw degree but par cancellations than cancels year. were due to cancellations closures client driven new business Most With saw closures the either this, an redundancies. a uptick leading

recurring the less We also decreased will saw second existing believe this in remain base year-over-year. the through of they while half And theme a we client quarter, year. cancellations churn the

our international Americas and to Turning businesses.

X% total ASV rate sales growth in X% Pacific asset as Asia a region. now represents was organic fueled institutional growth ASV. to ASV of managers. International our grew by of primarily ASV CTS, organically the result XX% U.S. analytics Our and International by of

our Pac In in Europe in particular products. grew and Pac, risk to with grew managers an our business X%. new Asia we saw analytics over XX products, asset increase Asia

first following and in European which in a includes same Middle both East, Europe weak results the Our XXXX solid XXXX. of delivered of second period quarter segment, the quarter the XXXX versus

we wins our major Europe displaced fixed competitors. in where were from products income main the of Some

of from products. successes risk analytics we Additionally, recurring a saw theme

the and integrating make These to and acquisitions. continue up-selling across cross-selling all We have tremendous good products to our up open progress of platforms begun efforts opportunities.

at our deepen Portware, our to our portfolio strengthens execution our functionality. front second In conclusion, our good management analytics link we clients. Canada’s a largest relationships engine system lifecycle building we made the management institutional second we Investment of milestone CYMBA, in investment In against of within important another with powerful combination from buy-side portfolio the engine the BISAM year, offering returns Cognity’s win performance growth official by to middle with between our linking Alberta managers existing the for broader progress into one And integrating into higher system to is progress risk going the this which of important strategy key the push OEMS of This and BISAM quarter, quarter. make our generated acquisition example, order risk an class users office part For of and Management, half multi-asset continue suite. drove clients. B-One our continue and

investment with excited of an of and suits provide We’re solutions our community. increasing breadth number content the product to the and to the workflow ability

focused program. on our committed we laser to are remain we by returning our strategy, value buyback to our shareholders growth While increase in the demonstrated

last returned year-to-date 'XX, with we’ve fiscal including and billion repurchases share the years and our and to Over $X shareholders five dividends.

Let me talk to annual quarter now the revised outlook. and over turn our results Maurizio about XXXX call to financial the second

Maurizio Nicolelli

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

As tax tax of as this you guidance press we U.S. reform. and our changed EPS morning, saw the a result release in our

back program by XXX to more go in in XXX few million also plan a detail increased repurchase as through will our We bring I from million these overseas. minutes. share in cash we

on million, revenues second Let’s quarter of organic and now the quarter go XXX XXX million basis to through XX% second in to XXXX. GAAP X% an the the increased results. second quarter versus

X.XX our growth revenues increase our our primarily feeds Organic higher primarily Pac data from revenue, sales ASV new first partially over quarter. offset analytics the as at This Asia at Looking on second international basis was the by grew with to driven increased X% end our comes and by revenues of the and organically billion performance sales cancellations. X% of This an year-over-year region. segment U.S. ASV end and at result increased organic million higher a cross of products. XX and X% strong quarter. business, increased from

we this our about Additionally, our increase million quarter Americas This price was to XX ASV. annual higher implemented year. slightly which increase last than price also added

totaled and in for third of operating increase million, primarily by which the take second of purchased Operating quarter fiscal FDSG year-over-year, a Let’s our the XX% look driven now quarter acquisitions the an at XXXX. BISAM expenses were XXX expenses. of

margin points previously basis impact been margin impact to mentioned of XX.X% was of year-over-year acquisition than negative of primarily margin XX.X% XX.X%. negative Adjusted to and operating Our the costs due GAAP lower XX.X%. XXX quarter, year’s FX adjusted a have higher decreased would margin last from operating operating foreign the this Without currency.

as to XXX and percentage of the of merit were constant. down and driven last the expressed a holding increased Higher costs, as XXXX. increased year-ago exchange by was of SG&A revenues percentage primarily a intangible second The of gains acquisitions. by costs due with foreign employee points fiscal the BISAM expressed XXX were compared hedging of SG&A revenues increase of the was revenues services period. compared months, foreign of amortization driven data cost currency. expenses and the while The FDSG decrease employee XX by impact basis quarter result and with basis higher the increases primarily hiring cost points higher in assets, expenses quarter Second

impacts which The federal tax rate. was tax lowered tax The favorably had reform corporate XX% our from tax to this on impacted on effective Moving XX% tax various U.S. to the quarter. rate rate rate. our

fiscal quarterly blended that charges in XXXX. Keep elevated tax were federal the overall mind offset in a result our tax fiscal rate August rate to certain one-time for year tax end and federal corporate is there the However, benefit so XXst, this statutory change year that rate. our

year to items revaluation. due the tax tax tax to reform. pay tax rate unremitted These related on foreign a tax tax quarter XX we earnings the were a second million and totaled related effective XX.X%, deferred expense with Our primarily asset our items an from one-time the toll associated ago primarily U.S. that increase XX.X% one-time was to to have expense

EPS our Excluding The tax of the was rate items, versus I compensation second primarily accounting tax decreased current quarter in standard one-time annual update, is stock these mentioned. GAAP attributable effective $X.XX one-time $X.XX the but just quarter XX.X%. XXXX. this to decrease charges expense to including the

lower effective one-time quarter million approximately tax adjusted payments. cash XX% due Excluding period an spending, from cash net XX the charges we as was tax year. capital timing operations, other less capital rate, income, expenditures higher Free last grew XX a of our increase certain define XX% items, which EPS of generated The reduced for million, was increase and to to same these second or flow, $X.XX. and from

program, million we on Moving repurchase quarter share program. second under existing shares repurchase our for XX share repurchased to XXX,XXX the our during

expanded spend approximately annual earnings. returning the and million share repurchases. XXX months approximately to for capital XXX also allocation repurchase This expansion, repurchases. We program share XX share committed a due remain XXX our of increase XXX repurchases share over spend and million. million on Including planned repartition this future million maintaining next between to remains is We shareholders the our by to We another framework. intend foreign on of million XXX to balanced to the capital

guidance Now to let's for XXXX. turn fiscal

ASV, We organic in operating are confirming the first gave revenue we for that and quarter adjusted guidance you the margin.

EPS XXXX. the effective tax annual due our Our also are reform margin we updating and guidance tax to is fiscal GAAP and operating updated rate for

is the to to margin now range of operating XX%. GAAP Our XX.X% in be expected

year-to-date full for by higher expected was year nonrecurring Our impacted expenses. outlook XXXX than

tax rate growth from is As prior tax EPS U.S. impact and mentioned $X.XX. of FactSet’s the of The excludes expected XX% range now diluted the rate, EPS the The This the that rate now impact a change. the the accounting Adjusted the diluted one-time tax $X.XX. lowering expected and XX.X%. U.S. GAAP the effective the annual the reform. be of tax $X.XX in compensation the includes includes of corporate midpoint tax but the range and of I be represents previously updated EPS result of stock-based year. to is XX% items reform range guidance in range the is expected to $X.XX to adjusted be in and of federal over

shareholders of call. now that and provide clients. today's ready your continue second we We're for take the questions. Thank are and the you to market we participation in confident share our your will for value we to As half year, enter

Operator

[Operator Instructions].

Bill Your go first Fargo. question Wells Warmington comes ahead. with from Please

Bill Warmington

Good morning, everyone.

Phil Snow

Good morning.

Bill Warmington

actually that number a if in I about bit saw the to the wanted acceleration being little could is buy-side the buy-side you how a about QX new and that else? wins product churn talk know So your lower ASV driven much on you of and by is and opening by how or remarks something versus specifically talked you much of being driven sales

Phil Snow

Yes. combination Phil Hi, It’s Bill. It’s a of Snow. both.

product value-added us for really exciting of suite. adoption thing continued most is the think the I our

as wins. incremental over is suite of whole models. fact that win Canada in and well that I by the risk first specific analytics contributed to other mentioned of of I in in lot So quarter, mentioned my ASV A opening three quarter’s half the product that suite remarks, a the added we this host fueled and the that released a

So And that existing were along we cancellations and last year when a is there that at put analytics. lot client base, definitely work from products the within with other than of less a lot into within all that them look the are great we there were year. of last helping

helped of you year a same quarter that this increase saw definitely sort QX million So versus $XX with that ago. in the

Bill Warmington

Capital enterprise Kensho S&P’s trying having throwing one Reuters, lines they’re I and in sense have were then terms to this and I the a the any the Blackstone's the up, And ask if number IQ follow been over seeing of were IQ strategy? of business if a acquisition in Capital for pricing And see impact to including of SNL's from past use landscape. competitive SNL? you that – there A.I. kind to the in investment months There developments Thomson the across you wanted want accelerate few in about of

Phil Snow

Yes.

is yet. and the market say really operate sure competitive I our previous of And how success our quarters market of and So that’s on going think all the acquisition sort haven’t would that recent. I changed from the really we to TR affect for from landscape taking share completed Blackstone's in transaction’s even not of don’t I’m us competitors. much

Bill Warmington

final terms of A.I. one of right. the the increased then the that whether on purchase All something And Kensho in use and -- is

Phil Snow

what are theme sure marketplace. that’s their an not Obviously important plans the I’m there. So in

then CTO and look data that and he just spent We sort lot at really we those our well workflows learning own who as our and well have joined of is JPMorgan of this Gene use very is machine versed have product Fernandez ago, our our there clients continue as four improve time internally. essentially to own suite. focused to area from to of months strategy on a techniques as plans the We A.I. some science us of an

Operator

next Peter comes from with ahead. Your question go Please Heckmann Davidson.

Peter Heckmann

morning, it purely from Good than your from that basis the guidance the for the would on I wanted the net offset question. Thanks we to lower tax just rate, the in less everyone. what taking to calculated point XXX appears confirm the increase have is reduction tax rate.

margins as And offset? pressuring like for offset to Is that operating non-GAAP so is guidance margin if so it the year, the sounds that increased investments middle XX. to XX.X more the your the down of more end of are primary the range

Maurizio Nicolelli

Maurizio. it’s Peter,

Let walk you that me exactly calculation. through

annualized we’re by the range quarter for rate see So $X.XX that lower And you uptick sides basis tax benefit the three to EPS. drops an is in $X.XX. benefit guidance on FactSet the of the to to both Because from $X.XX. adjusted on getting is a year, an the what approximately really

proportionally, option product $X.XX down that really weighted grants weighted categories. we’ve pound dilutive now it’s price incremental the prior has One that three to share average making three is difference sales then more and calculation. dollar alluded versus that higher overall because equally that made P&L. fairly average So count in and the risen the to euro right Two, Phil in earlier. significantly we’re is to our that And the much our stock experiencing investment a is stronger the shares broken

Peter Heckmann

repurchases then as of your stated to are And XXX share quarters? guidance, follow next up, the over the within two XXX That’s a including helpful. you

Maurizio Nicolelli

XX for the next is So months. on spend our share repurchase that

our of forward is going a amount. but full in So not guidance the piece that

Peter Heckmann

I’ll back helpful. that’s in Okay, the get queue.

Operator

question comes Your next Tong from Please Sachs. go ahead. George with Goldman

George Tong

you growth in next Good quarters? over elaborate the morning. ASV Can cross and on activity, two relative growth business expectations Thanks. Hi. accelerate expect to organically performed and whether new the selling X.X% organic to accelerated ASV you to quarter. in how cancellations

Phil Snow

very what QX. in did we’re pleased with So we

to of the we’re annual think $XX laid in which was of our already said million remarks ASV I what we we drove the million guidance And year. entire expecting have what sort for $XX opening for come that. for in out to range

George Tong

Got quarters you quarter, And of the it. you several from throughout a to the pace the similar XQ fiscal trajectory to acceleration acceleration do at of path looked as next see over XQ? the going saw you fiscal

Phil Snow

predict. gave It we So there. is the you hard to range

out still tough mentioned it’s in remarks, market I As a my opening there.

our – is what to tell growth But we did the we’ve accelerating but on wins us with ever are is So challenging can a require key getting been, we QX. you a basis pipeline well, I is its going executing in market. dealing like biggest some

George Tong

queue. jump Got I’ll the in Thank it. back you.

Phil Snow

Thanks.

Operator

question Cantor next go ahead. Your Fitzgerald. Please with Foresi from comes Joseph

Joseph Foresi

about of was long should wondering factor swing term. margins the Hi. for the there? trajectory I we and of the how rest think the And biggest year what’s

Phil Snow

Phil it’s Snow. Joe,

we’re to year the range XX.X%. for the XX% which we middle between guided in of So was come what expecting in, the to

decided a We happened in given to reform. invest have the what tax bit product more little just with back

longest so out about gave to that bit, And pushed term at talk we’re our that going a that Investor get would guidance we more month. next expect Day little but to I

Joseph Foresi

on comments try little dig into okay. new demand to cross-selling just more is demand that versus of clients your earlier Thanks. wanted Maybe it, And for around I that sort of the analytics, weigh that because more could is or that you Got and bit a then cross-sell? backdrop. a the mix just to

Phil Snow

we’ve there. were done, analytics A the lot the is have growth from a cross-selling. base existing helped the come lot does space lot that a up-selling of in it which our of really of acquisitions So and client

direct of result did that AIMCo particular own the a we in new Canada multi-asset combined client. with class Cognity getting that was deal of with acquisition product. But the our was sale a up So

the that base. a was that versus we within selling cross client significant win existing see So the

a nice of combination both. it’s So

Joseph Foresi

Thank you.

Phil Snow

Sure.

Operator

Your next question go ahead. Stifel. Please comes from Shlomo Rosenbaum with

Shlomo Rosenbaum

morning. client adding And you you after wondering bit and comment it’s users quarter but you user Good know you little could Thank question big another dynamics more was it an can not Phil, taking your a just interesting count market – I of for your have if there? count questions. than had in terms about where I was then that. I the my a dynamic increase

Phil Snow

Sure.

So majority to clients. clients the the smaller of counts client are going be the –

both now the little StreetAccount count that well a just includes of Workstation I FactSet more user as Our a And there quarter in or StreetAccount. think as versus couple losses some hundred users. decomposing adds were this Workstation FactSet bit,

So is go least that been what for I workflow. year about to to I’ll what talking sort – that’s out. at shift a how is But now Workstation back which of broke what guess we’ve from the

and is least one market providing seeing clear clients, much on it’s So we’re I We solutions standpoint added of analysis not one a think to this that million we’re an from there results. there. the number I ASV and KPI $XX think you’re out from as at when should quarter’s but small but just in focused workstations that’s Workstation historically be in

growth. the accelerating clients we’re So workflows solutions that it’s selling to our the our and that are

Shlomo Rosenbaum

a kind of on Got Workstation it. about talk of That’s more you the how that? much to of Analyst related, no sense the us Day longer is business fair. give Are going

Phil Snow

But show about there are we more have the of going up think to pieces you and to providing you’ll guidance groups. more be definitely different of a find how in So to business give out. transparency know terms to on the be there. bit different little you’ll our I

Shlomo Rosenbaum

you. Thank

is right now Can the particularly? after my basis on squeezing in opportunity more you in the give and like necessarily an not what product talked a be the in in get you looks as to And back that, it bit mind investing timely little queue. that? you don’t us a to be you margin going products. are I’ll in, about but You just high detail If see just investing

Phil Snow

Yes, sure.

data is big analytics just feeds growing which on more gas example investment out faster, we’re and of so generation that we’re that. the a building things and are one making So CTS pouring business, next is the our

Shlomo Rosenbaum

you. Thank

Phil Snow

Sure.

Operator

next Your question go Please from Oppenheimer. comes Glenn with ahead. Greene

Glenn Greene

Good Thanks. morning.

in as wondering, Obviously, your doesn’t what of impact couple you it update could just was have on questions. to the of seem seen color you’ve on Just give I Phil, won’t if an a MiFID? but a huge relates It on business it what a us affect market? to seeing maybe little just bit anyone. you’re

Phil Snow

quarter. showing group with this we’re did comments positive my 'XX, other we’re haven’t out business momentum MiFID last and continuing solutions. our to FY of it QX and European really from so in there So QX better solutions did regulatory address than changed to build regulatory more The

Glenn Greene

decelerated – the a And Okay. the the in bit then on just Maurizio, for quarter. margins

invest throughout talked I think last just some late the year. Maybe back the quarter wrong the you quarter way? of them you maybe why went about took increasing the sequentially had but in sort the on to margins opportunity commentary

Maurizio Nicolelli

reduction range So to That to, middle at that for basis that But the was if the And generated. look you alluded that’s really in we our dipped in point it’s we QX. drove adjusted FX to than somewhere of Phil guidance. saw is as that XX the effect less in will QX It out what margin really XX.X. was gave margin QX. XX.X% the projection what our And within come XX.X%. margin

Glenn Greene

the Okay, at to didn’t in this you FX you so the invest than – unusual nothing quarter incrementally do the point? late and other opportunity didn’t take

Maurizio Nicolelli

No. and up talking really The – QX. coming Phil about majority QX of is is what is in

Glenn Greene

Okay. you. Thank

Operator

question next ahead. Kaplan Stanley. with from go Your Please comes Morgan Toni

Toni Kaplan

that …be soon. block complementary Would on --? and of portfolio type asset to the be your

Phil Snow

didn’t your beginning we the Toni, of hear question.

off. cut were You

Toni Kaplan

be might the Tradeweb that block mention soon. on reports news Recently Sure.

of are to most portfolio? acquisitions be your type now? one to complementary And right And you type that putting what that attractive aside, so would asset of

Phil Snow

acquisitions for going our call, specific not talk to strategy we’re this but about So M&A hasn’t on changed.

balance on acquisitions. presents and something if sheet right bigger have I And We itself. the as continue to both capacity interesting we our asset tuck-in to and evaluate the have content said, workflow do Maurizio

Toni Kaplan

the low-cost and of step Okay, ASV It was organic then in about up digits. basically acquisitions also or but just we and a sort employee top it think of you’re count mid-single hiring when your should your great. is And of we growth the Thanks. should that is additions pressuring I like locations, employee – X% growing it if think rate how employee is back, that in further take the about line? we count is quarter the out, is a margins from sustainable count versus in sort sort

Maurizio Nicolelli

Hi, Toni. It’s Maurizio.

So the employee count both grew X% on a from year-over-year basis FDSG. acquisitions the but and that includes of employees BISAM

If cost count out, and the are that of our you large are employee in grew a just part and of that Philippines X% at that a strip lower India employees are inherently. which north in

that’s So on headcount pressure number. a higher from today a us not significant

Operator

Your with Please go ahead. next Patnaik from Barclays. Manav question comes

Manav Patnaik

Maybe on good you question versus is you you the client but just you. another KPIs, comment retention workstations pretty maybe Thank market just help to like around can guys. workflow your sound dropping keeps why explain

there? disconnect the what’s So

Phil Snow

really the So that the we’re is clients ASV and think retention we’ve for into long a that had – bundled I existing larger cross-selling. client of time majority the our the and clients

think it’s on the net basis of on tail. So smaller I function just really losing us clients much a a

Manav Patnaik

Okay.

Phil Snow

It’s not heavily ASV, – what’s clients. – sort of look of you look But quarters by at influenced of about existing by clients. lost it vast a sorry, of the again the shifting our always really so at typically when majority essentially is you when you and each the function think

Manav Patnaik

with contract wondering just client how so on still color you’ve guess, to now is that that I just collected selling enterprise just I the services bit do then basically structured maybe and was years? enterprise-wide added like when efforts, on little you your – a or an is more you this your agreement And over Okay. the go

Phil Snow

with We’ve a agreements long had long-term our very clients for time.

with office, – a different longer-term be on negotiating we’re or a three of a range small with in now If could year. every whole to year length one our clients But which five a come agreements renews a smaller that family you’re could hedge a you might fund lot of for larger client them you’re include that years services. contract

Manav Patnaik

Thanks, it. Got guys.

Phil Snow

Sure.

Operator

Instructions]. [Operator

go Your with next Mazari Hamzah question from ahead. Macquarie. comes Please

Kayvon Rahbar

a Rahbar filling is on Hamzah. This it us productivity, how is your Hi. there for give any Is Kayvon you sense improvement? in sales trending? Can force room for

Phil Snow

track not sort in force of of cost So call. could a of the We’ve wide force we has set that’s has on something the sales of capabilities. talented a of talk terms fairly percentage And that metric got large, we the remained our as revenues about historically this sales that very constant. a

Kayvon Rahbar

Okay. you. Thank

Phil Snow

Yes.

Operator

from Your go Peter with ahead. Jaffray. Piper next Please question comes Appert

Peter Appert

Thank you.

accurate? in make Maurizio, business terms terms profitable there structural bigger could I’m workstation between and So Is sales efficiencies needle terms any in profitability there’s the Phil or selling the margin. difference feeds maybe is in some that the in of a of that dynamic? that that thinking the if of feeds more business I move

Phil Snow

the of feeds at ourselves team content been more of byproduct job the that standardizing feeds have. the selling it we lot and great a is of lot business because more business. we’re that it’s success a and tremendous our a feeds. becoming CTS collect A efficient so a Yes, done has has The we

think it’s partly that a become seeing feeds that is standardized. such adoption great why So I business you’re of is our

marketing it think force is and driver We’re business a effectively more sales point it’s you it to continue going there. general. is more margin be in raise and revenue our just a high us. in that one a It’s for becoming to expert we good But selling

Peter Appert

clients? and the what’s users feeds workstation clients overlap – between Are feeds the

Phil Snow

the depends but on low It’s shop. it

– lot of they to large may with be both sell a a So feeds quants. servicing may a be shop We a we feeds workstation. and

our So users into another feeds systems. to content will And do quant who excellent take same of cases, put using of investors a those to their using process. of they’ll their But suite quantitative really quant also lot the might some own products be FactSet’s be or it goes other. in internal FactSet’s business and piece quant one just

Peter Appert

higher margin expectation a of as But if or not is business expectation? that be of is there revenue, and as a it. the grows realistic that can percent driver Got feeds an a

Phil Snow

a not margin. thesis. think XX% could bigger a But its help it’s became gets today’s as it think FactSet, definitely growing of that our If and it I larger I nicely. piece bad it

Operator

next Kevin Your McVeigh Bank. go from comes question ahead. with Please Deutsche

Kevin McVeigh

Great. it Thank buyback a incremental boost the sounds there us to way give like tax that should a you. how could the or from benefit to any about result Is or that, will if structural we longer and is wonder the be what deployed I associated you flow the of cash think the in repatriation. term? think buyback incremental about with that reform acquisitions sense,

Maurizio Nicolelli

has capital So changed. allocation process not our really

We’re still we’re on shareholders M&A we dividend. front. been The to M&A, reinvesting to terms don’t the very in basis, of opportunistic a any but the on doing not dividend repurchase. change to growing dividend growth we’re see that has year-over-year very If significant the stock nicely in and back then

it’s the So cash of at doing now flow, buy back most go it’s we’re to really M&A. accretive large Right majority not free us for our stock.

on why And very that cash low from interest bring we’re basis that’s so a back returning. overseas able million earning incremental you’re at to seeing being that from point XXX

Kevin McVeigh

boost third margin organic thoughts Any about way outlined? the And on just the up, you – the follow it a terms as to incrementally a then is Great. growth. could like is it for in reinvestment mean that that any designed what of to think sounds there of growth reinvestment organic

Maurizio Nicolelli

this our to or growth guidance. we’re growth and and we’re So guidance It’s really really our think ASV within within is really for now trying forward within pushing grow push that that ASV number. right about guidance – growth really our year our when additional we maintain investment,

Kevin McVeigh

Thank you.

Operator

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

David Chu

you. Thank Great.

to-date So been an update current on just similar can the that has to in quarter? booked you ASV last quarter, provide

Phil Snow

the you Can repeat question?

David Chu

ASV to in to-date booked wanted if an on has current see get been we Just update that can the quarter.

Phil Snow

No. don’t disclose We that.

David Chu

no. Oh, Okay.

Just you just quarter, level to provided color that last of if so can get see that. we I wanted

margins Maurizio, range. at we XX% think maybe XX% – do back so, to the so get on this point, you So levels legacy to when can

Maurizio Nicolelli

what said Yes, I I guess earlier. to would back go Phil

few thought. And we we’re more at longer what it, I think Investor it on to focused a in bit. little initially out has bit little the than still been timeframe has And a Day going a pushed a give guidance little weeks. we’re but bit out pushed had

David Chu

just lastly rupee it. at got this to unhedged Okay, point? all you’re And the wanted to but confirm, then currencies

Maurizio Nicolelli

all currencies peso. and are Philippines to unhedged We ex-rupee

David Chu

All right.

Thank you. Okay.

Operator

go Your Blair. next with question Tim ahead. comes William from Please McHugh

Tim McHugh

Thanks.

on say the less of on then impact you margins, to I to prior Just is impact XQ? and trying point trends, third that for expectations, and now? FX XQ guess you relative just type at full this versus into year the what going quarter impact the did given currency the expect understand And

Maurizio Nicolelli

Yes.

a had at QX come So margin look down rates about in points. somewhat. basis that versus if negative QX, we affected it our you QX; look When QX, by we our exposure current XX has – at and in

QX effect an of less in QX. versus it’s So

just at it you effect If a overall be the for full negative full look on fiscal will a basis, it year year.

Tim McHugh

Okay.

$X.XX. the right And third number? one that’s so to that ballpark given the like points basis the number of seems kind to it’s full of you guess reinvestment – it that the XX like if I Is year the numbers for in gave,

Maurizio Nicolelli

Approximately. basis Correct. and points. XX Between XX

Tim McHugh

Okay. And then question. last

incremental seeing? been Can analytics half significantly Just does numbers I true quarters? that ASV. the one. the compare? since that close of or of than the know couple – Has business, been driving you different of don’t that another we you’ve how true to last business Is size The guess that roughly

Phil Snow

the always very quarter. first small a quarter’s Well,

more to time. we’ll do right the thing think I show to that and up at Day at color be providing Investor is some

Tim McHugh

Okay. Thanks.

Phil Snow

Yes.

Operator

ahead. Please go question Research. Keith comes next from Your with Northcoast Housum

Keith Housum

Good morning, guys.

regards over business, think it to segment, back had or your a it just about analytics And that a As talk sounds at the past in quarter. environment an the current that? just this in feeling like you pipeline sounds obviously year about the you good and is here segment, the there we area momentum so. Is the for thinking done better you’re that’s how about like

Phil Snow

driver analytics honestly. product. business beginning last been equity has for business portfolio the So analysis growth FactSet’s the of two It’s decades, a with

we’ve sort to as seven Vermilion, done. of them, business but lines So of eight as all is so Not now that on. all this or it’s – acquisitions have within well it of the really BISAM, and evolved

very it. products our with brings it’s great a it our stickiest and And often, of sales So products. It’s other lot business. drives of a one

trend. not a new So this is

a way We’re just more about have a beginning to granular historically. than of it little bit talk in we

Keith Housum

regarding levels about All right. rising Thank your remind your a process rate you. you And debt in thought then Maurizio, interest environment? can us

Maurizio Nicolelli

Yes, so million currently in debt. we have XXX

basis of capital it’s Our level, cost flow buy around for accretive At is XXX us to that right free stock. cash points. just still back invest very continue to our to

very reevaluate still us accretive lower Fed now, our count. it��s back it. interest go as share buy the right continue and stock But As increases for to still to of we rates,

Keith Housum

interest it’s And where do protect no? or have guys rates the derivatives Great. then any now at to you

Maurizio Nicolelli

we No. interest on Currently, the rate. have don’t hedges

Keith Housum

Great. Thank you.

Operator

Your comes from UBS. with last Kramm ahead. question Please Alex go

Alex Kramm

morning. Yes. Hi. Good

cleanups of Just a couple here.

there’s we’ve the think the all, in And related. Portware, some I you’ve is volume year-to-date, that of of seen historically, parts that First about volume. business talked fact trading, clearly on spike

that’s component in how how impact does strong how in just very then variable curious ends? that quarter? So much Maurizio, the it in use do February because when So And number? there that ASV, particular and added also, you your was ASV your quarter

Phil Snow

is the we the Portware. this historically part is part first out of I’ll Phil. not of the broken which So question, transaction revenue have answer

Maurizio Nicolelli

Maurizio. – And Alex so it’s

that’s So in XX last our ASV at the transaction months we in look we what ASV. and revenues include over calculation,

activity for the for we’ll So at our number and revenue months the that’s look transactional for last client XX ASV ASV.

Alex Kramm

All right.

anything way. one up a big So really doesn’t month drive in

rate minute. in secondly, just a tax the Okay, to good. back And coming just then

kind next now. here. I the think year, lot I but I of correctly, you I stock tax we think be got levels XX.X%. Did going a rate the if that quarters a assume away, numbers it of fiscal XX%, couple go-forward I If same around that’s hear a base it your should know about different gave forward, on like still But basis? of sounds like like comp

Maurizio Nicolelli

Yes.

look an forward decline So basis get for the 'XX, approximately in XXX But in incremental full only year eight XX is out see existing blended would of XXXX. points this you months year months of benefit fiscal we if the at – a year you the going benefit. because really tax rate

Alex Kramm

still to Excellent. hearing are as this an we’re talk one, Yes. of since as companies the spend review clients opportunity spend? last Europe, over at since I’m or that When their as should well. think holistically. very MiFID there, out their more looking taking budgets look up something their brought Are total increasingly, that and any somebody we quickly to for people just And already that seeing be maybe II you we of kind about of

Phil Snow

there. think check our with leaders any Yes, as I so we yet. seen been. impact the far, trends in for have same over business not the Europe so we’ve And in Obviously, us they remain

and stronger as So in have Europe we’re QX. QX we the we’ll hopefully QX did anticipating in that second in half a

Alex Kramm

Thank Excellent. very you much.

Phil Snow

you. Thank

So on the thanks for us joining everyone today. call

that hosting We today’s site. our to to City. release this Day have to in at of call. As in you if April to look forward hope we register quarter. we questions, on earnings York our event release, And you see Operator, noted the XXth Web New please talking you Hyder. Rima on ends are many on in press Investor for our and event. are an how We additional call Details next

Operator

concludes conference today’s This call. you. Thank

You may now disconnect.

FactSet Research Systems (FDS) 27 Mar 182018 Q2 Earnings call transcript