FDS - Earnings call transcript Q3 2019 | FactSet Research Systems Inc.

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Operator

Good morning. My name is Christine, and I will be your conference operator today. At this time, I would like to welcome everyone to the FactSet Q3 2019 Earnings Call. 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, you Vice conference. begin Investor Hyder, may Relations, your Rima

Rima Hyder

you, everyone. earnings quarter morning, and conference to Thank good fiscal Welcome Christine, FactSet’s third call. XXXX

slides to we call The this open this will on investors. of the of to everyone, slides at call. yourself one on Relations to be phone our of webcast posted today’s please out questions fair available Before section A and to would the be can reference conclusion question our prepared our replay like via will remarks, via the from the I that After the be begin, one website. plus presentation the be website limit factset.com. on we we accessed To course will call of will during follow-up. website point at Investor our

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

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

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

the the to earlier and reconciliation comparable measures, are directly in today. such For our earnings measures appendix GAAP presentation the issued to most in release

are Chief me Shan, Executive Snow, Officer. Phil Joining Chief today Officer and Financial Helen

the to Snow. Phil over turn discussion like to I'd now

Phil Snow

ASV are that with revenue, the including Rima, our I second Thanks, say year our our pleased record we of fiscal margin. all and growth key continuing everyone. of and good growth half morning long EPS to across steady metrics in am

This benefit solutions in wallet us and continue with smarter higher ever we drive are opportunity in more to and the pressures growing the financial Cost response their efficiencies clients analytics. take remain, data but connected that from to and share. what’s provides looking invest to technological sector to

our due achieved higher see Now and comparable At results, same moving did net rate new clients team and expected increments our cancellations sales quarter. users. pointed more and We quarter pressures. this half cost last expect expanded gross a the weighted we footprint quarter to of half we year in on towards than out be of globally third ongoing sales our in the our call, to second business our we to industry-wide at as think time, the fourth

wealth to were this the drivers increase along ASV. price quarter, annual and clients. Analytics with main Turning for our the international

of that impacted was with have line grown to quarter would quarter multi-year by this cancellation, of client fiscal corporate our an a this ASV year, in with this Our came agreement ASV outside a end XXXX. third

revenue sale one-time this as clients. Helen cancellation we from did of it detail, on cancellation the will otherwise business quarter. CTS CTS had our impacted discuss ASV, the resulted but a solid in This data side benefit in to more this same a

our Within Sales the for solutions and removes products CTS which of biggest drivers solutions equity to the the transactional of data ASV. friction contributor was the this biggest from core trial were data standard feeds and the trading process exploration and accelerated evaluation analytics, analytics our revenue portfolio from our growth. through some

trajectory The solutions launch API believe allow and us platform our portfolio risk and the services in recent continued progress portfolio on of growth to this management of business.

expectations. cancellations our short let of the us while growth, within to changes fall was and specialist to However, force sales analytics contributor largest unexpected

that of a challenges will taken these we and overestimated some we how to on benefit believe have we’ve steps monetize products Additionally, our address analytics can adjustments and necessary quickly positive the overall. new these

other year. plus $XX walk professional We’ve at told between as will now Day our our million $XX you such through Investor we those ASV, Helen key Taking million as you all few and we’ll in of finish this for a margin targets for and mid-single-digit year EPS minutes. metrics into account, that maintaining last believe services to growth increased we guidance the

it had as strong Wealth another take competitive expand, volumes. continued quarter to gain and share

strong to this finish year believe us. driver positioned wealth larger we continues team target With will growth the is to well of that clients sales for strong pipeline continue a dynamic to and be

better research, with within results than And the workstation and came RMS in wins expected sales.

continues Cancellations also were general all mainly firm continued a our the cancellations and regions, to across industry. However, from business on the in higher trend our this closures in quarter experienced pressure higher buy consolidation from be side.

We losses. to renegotiating value products of to are contracts full mitigate clients proactively the sales our processes, changes understand future help making FactSet the client and ensuring

quarter Another continuing significant we of to sales. this our the general to align specialists various into sales we products made lines all instead them have past change was move to business

change with will for the these organizational line products sight more allow more give sales client experience our of businesses heads and specialized and into This of even sales teams.

diverse terms to of clients taking offerings. global advantage presence the of configurable we and flexible our In growing breakdown, geographic open, with have continue a

Looking these Americas from Asia-Pac EMEA at and this quarter. increase both price businesses, delivered growth international X% the continued of and growth XX% solid annual and and driven and rate be X% regions. Americas grew CTS CTS analytics a our international regions the by Analytics drivers to respectively in and benefiting

cost future that amid FactSet example an given in challenges. we resulted with to rates. said last with In ability tightening sector-wide cutbacks clients to than increased and cautious quarter great of quarter which team’s quarter summary, usual this across even perform eye client higher saw pressures industry remained increasingly the the volatility, this belts is a the cancellation We

clients we across QX placed we in and help to changing a we long-term environments. confident believe demonstrated obstacles, margins navigate are Despite EPS these strategy our in well and remain and ASV, revenue, growth

solutions value. to technology drive will workflows. investment in are to for clients resonating continue markets, and their mission-critical serve which Our ways open flexible solutions search growing and seeing believe and as is for our create We clients efficiency dynamic as new the adoption

consecutive to pipeline and strong our on disciplines this cost a year growth are remain successfully and increased fourteenth focus accelerate higher taking EPS sales to the and steward to of continue also company with shareholders has our ASV quarter dividends. we returning capital We steps marking and

the Let quarter. me in this about call now detail more talk to over to Helen our turn performance

Helen Shan

Phil, results you, GAAP strong good you. morning, We expansion to the a in delivered XX% organic revenue GAAP a quarter to with the and operating margins. in operating of both in year. operating here of in fees It’s and X% all in growth resulting [indiscernible] great our over be income solid everyone. previous the with Thank over led versus This increased growth

by adjusted grew EPS we XX%. addition, diluted In

corporate by $X increased revenues million. one-time as a data The to earlier client sales by referred Phil GAAP

particular, Our income cash operating and positively were by this results, revenues, in sale. quarterly impacted

purposes, we comparability our adjusted For basis. an from results exclude this on transaction

organic GAAP third primarily CTS quarter. and wealth I will through as now was by the $XXX is in specifics million recognized quarter. prior and revenue as prior of more our to million X% increased walk us period fully analytics, Growth respectively ASV driven versus $XXX third and the year. the revenue

was and months, geographic revenue over For revenue by wealth, revenue from our twelve International X% in CTS. and international X%, the organically. over grew grew Americas analytics CTS. driven segments, last benefited analytics largely an Americas increase

pricing at $X.XX billion The reflects a third end $X.X price growth our and prior the approximately at quarter. positive was the ASV our second in of increase plus driven ASV segments. from to end million up services professional $X quarter to and X.X% primarily growth our since year-over-year The line our increased international rate year. of and impact was annual by in wealth analytics with million, of

flat last GAAP million, operating year. $XXX expenses nearly for the versus third quarter totaled

point XXX improvement basis quarter margin to GAAP increased a level operating five have points our XXXX, not the As from seen in result, third increased margin XX%. XXX Adjusted a of basis a to years. we XX%,

but and employee quarter disciplined by of foreign costs. Similar driven in also This a to extent. a lesser movements exchange management positive to rates improvement XXXX, lower second to expense continues this be driver were in part increasingly the quarter,

of currencies strengthened exposure dollar margins impact our basis Indian and providing which us pound, of including have the approximately to favorable points. several rupee to euro we the the greatest The XX the the against

cost adjusted XXX services points margins revenue, growth cost came revenue of was year a by the versus year-over-year. a services percentage basis On was improvement from were basis, last lower which XXX basis faster points our on of and basis. in GAAP expense positively of impacted an than improvement As largely the

include increase in factors an offset compensation employee expenses both computer-related in decreases contractor Contributing and we to by was partially fees. upgrade continue benefit stack. as This technology our

percentage basis. On and result SG&A of over on a is experienced adjusted well in expenses, basis expressed basis approximately as expense reductions improvement basis, the This compensation. driven GAAP XX XXX a of entertainment, as primarily was year as this improvement by travel prior marketing, points points. an employee revenue, period an

margins. operating results, and guidance solid range our our GAAP we Given both adjusted for increasing are

was adjustments. for rate impacted one-time period and tax Our the by quarter primarily XX.X%, tax added

would rate Excluding XX.X%. these tax discrete be items, our

exercises Our are lower tax option tax from this quarter guidance trended and discuss stock annual rate minutes. has would that that fiscal rate. of higher further XXXX the we lowering for few in I a our level

attributable XX% GAAP end margins, quarter the EPS third a diluted revenue, quarter A release. is this the disclosed of in and to versus of GAAP to reconciliation $X.XX increase rate. $X.XX. higher This EPS tax EPS adjustment increased Adjusted press to XX% our of $X.XX lower XXXX. grew is improved our to effective at

period for an by flow spending, free working partially to increased was offset which XX% increase income, have generated cash seen was The quarter, we cash and less as primarily the define capital is same strength due Free higher capital of of cash strongest year. last expenditures. including the the net This cash history FactSet. flow, over we improved operations, collections, capital higher million in from $XXX the

office technology. due our Our locations year of CapEx increased to for this and trended investments higher build space in some new out our has

Looking shares at million for price repurchased $XX we program XXX,XXX an the our of for share average repurchase second at $XXX. share quarter,

our of existing increase bringing available for Directors $XXX this repurchases. program, million Additionally, total to of million approved $XXX repurchase now share an a share week, of Board the

we repurchases. months, investors twelve last the million in share $XXX and dividends have of the Over to form returned our

between remain and shareholder back capital returns. a steady at to to our investment shares We and buying continued the balance pace committed allocations business

professional and to the be is like increasing are Moving for now our our ASV expected year million metrics, outlook the margin, to plus and guidance million. ASV, we narrowing most for services year, $XX for of annual professional $XX between plus range services. EPS, our

to and $X.XX range tightening billion revenue are $X.XX our billion. GAAP We

benefiting be Our GAAP this and and non-core now sell between quarter’s from XX.X%. XX% is margin transactions operating

adjusted guidance and XX.X% We to XX%. are also our increasing margin operating

taken cost in with have We are to these achieve that discipline to implement pleased be able results. we to measures the order

has items As tax exercises. and this lower a explained due stock our than from rate expected higher year trended option earlier, impact to I one-time

We our year. are between expect the it XX.X%. We and full now to rate lowering for be annual effective tax XX%

EPS diluted GAAP midpoint represents are and is a on $X. And increasing $X.XX range year range guidance between an basis. adjusted this over for prior ranges The the we earnings share. is our EPS $X.XX. XX% and finally, diluted $X.XX growth tightening and per Adjusted of

of our We operating are results this proud quarter.

Our margin note for the improvement to growth discipline track and year a to on dedication strong EPS. on are cost continues to process yield and we finish revenue, and

As industry we headwinds. And we business aligned our continue will shareholders. returning to continuing our record track that expect with despite to to we FactSet growth of drive investments value course, prudent forward to and remain strategy, look resilient our make proven of long-term sector

for your questions. we Christine? With ready now that, are

Operator

of Barclays. the [Operator from first Manav comes question line from Instructions] Patnaik Your

open. Your line is

Manav Patnaik

Hi, good morning.

you like around it you sounded you half, that. I renewals of question had to these and in a is, but was first had back guidance you all first at didn’t add the initiated The the guess and almost when conservative ASV bunch

was visibility So just of I was a kind it are changed to you what just of along change or real way that the referring curious in today, did of terms like, shift? materially something like, lack was that the

Phil Snow

it’s for Hey, Thanks question. Manav, Phil. the

one I is kind to year it’s out. three bit typically – have multiple see times, think easier yes, for us it stated So, look to us of for to a little we difficult months ahead, six

at guidance thought the in do the we each year, our beginning and was year. the terms based of market what So businesses what we on could the that of of over our saw

we are coming much pretty kind or I are analytics is CTS, would summarize, from seeing expected business. and as difference beginning of say, the where our wealth above a But the year. all area of the to research, in biggest

original that’s at of difference the we as projection. are you would grew last our seeing analytics at business say year where the XX% I So, end and the one biggest versus know

quickly Now driver. it the we going of as it the absolute It’s as out ASV growth anticipated would. we But it’s just believe still is most different lines any a growing this add, business year. of not to

Manav Patnaik

on follow-up anything that but just I it’s would guess, competition sounds why like there I point temporarily elaborate if of why maybe, It on that just is then, then, that is more, And slowing happening? Okay. down? or just can you because

Phil Snow

are there is, we not spoke with piece believe the the business into as it of that One that that things that last of year. so look Yes, it. specialist is when quickly organization has income about. some we did few Part do to growing as I fixed of

sales we completely away in specialized for gotten organization team. our for having few analytics So, were years a and the fixed specialists from income a

is, And it multi-asset the additional we’ve good over the to what was But few think of have it’s more specialization team. years class a I group. learned within last

work sales sales leaders to who that back of closely those business general of facing that businesses a it. certainly but sales wasn’t So, we’ve very do of more so with specialists into work the client of was third we shifted force population, It’s about still can the all it. the are that a now piece going our the with lines closely think

Another think overestimated much a newer one little products. bit is we how revenue the ASV some would from I get of we or

of to hard was predict. APIs that opened was part that So, up. It we our

have four out APIs market in the now We analytics. for five or

is them, the confident opening the we over getting very ASV and strategy we which much as We But are from of core up at time thought we the believe workstations. growth material that outside would suite we are and as not selling get analytics will in we beginning.

those to the would highlight if two. So, I things, was two be

Manav Patnaik

Thanks guys. right. All

Operator

from the of from Wells Bill comes Fargo. Warmington line question next Your

is Your open. line

Bill Warmington

morning, Good everyone.

Phil Snow

morning. Good

Bill Warmington

sustainable also I – to reduction? the for from trying it of for from could much numbers expense came you and ran then, sense wanted QX how to in speed of from just And a more integration, you terms get the is? So, some of from it on detail FX, expense number ask to if how core acquisition summarize a me

Helen Shan

execution question. plans. really it’s operational a thanks When continuation Sure, what on we about for think that of we QX, in accomplished our

that So, quarter, efficiencies for XXX as discretionary basis with classify what were operational into well less is and I expense management little really items, say, marketing. from would of from T&E, about the as would half points than - I

the by improvements mix high productivity that the between countries And cost driven of the balance terms is change reflect in and and of continues to percentage low employees.

bit give additional color that. on So you let little me a

in number low the saw in we in countries QX employees If the X%. high this countries versus our number year increase year, in and – you by look cost cost our of at employees of last an a reduction X% our in by

accounts this for was And mix [build] change. rest really on I’ll on long FX. so And that. And the then in that the that - address view [ph] term

XX favorable for where points about basis the FX So provides us.

quarter quarter it in the beat So that’s terms And improvement that last the the of that had aligns is we – around the we margins. the did quarter, except it XX%. in was how of over last

operational So quarter from more came of improvement this the efficiencies.

year units, and years business and established have of have have into broader that, getting question, let benefit, another we the centers to the deeper a the the sustainability, about we are now of me starting We ago if we really good where try lines drivers think now with and organization. business of the put that couple and is operate. way it we we relates accountability you As the cost budgets it this to address

to making decisions. folks their have that. be and are headcount the they we are who the So expenses doing team able in they and managing accountability, and more our manage spend are have informed their have leadership now They discretion to

has percentage and changed. other countries. high the cost low is again The mix mix The between

end about plus this look reductions now now the countries we of and – of year we frankly, year, businesses. our were employees quite that cost integrations of X% our rest which things have I higher low two expected, expense if it’s So if so, I those in think integrated were that to last at the the some with

in it’s those been and contracts, to well. in certain of and know do through we rationalize XXXX have come or But in content whether able technology we’ve as

that we to be do long-term we lot back continue we sustain. look to have accomplished, for of able in believe vest we while growth, to a So, should ways for what

Bill Warmington

pursue your want of mean ago to mid-term for and for – the the delivery and I wealth win follow-up couple you and And a my you does to the what enabled to years moved Okay. opportunities and of seat is FactSet that terminal the about move cloud targets? cost some like margin you business to ask do that higher your when count And underlying management. to And near cloud? infrastructure lower

Phil Snow

that doing. which cloud the other large of private use we mean, for The that’s we private the things, clarify, I public have others open more have product cloud. of part what we need did for heavy is still of the our cloud. analytics own in And the in we CTS we very few our some do cloud deployed duty So, just up public web FactSet to additional architecture now capacity when to is side in we wealth, sort is the calculation. particularly on What a

we to It’s part sales have that’s So, on allow migration lot a still learned to process. world and direction direction strategy, us give we it’s products we a all the the are going our what lot it’s is to go. I remove but I a you is the timeframe friction multi-year need we’re going the to the think public think and of going also exact We faster whole from develop an to cloud. as of that considering can’t

and of It now us trialing content takes time by the have products that and lowered So of sort it of in was and begin all up. it it make and trial a of having module for up data day getting to to magnitude. the cloud what a takes public orders the both CTS amount the CTS have up having setting the offering our saw taken might begin begin and up to clients previously which to decision the at versus looking with? we weeks set the all we go has discovery

the that’s pieces mentioned for So, of analytics that lot model. We of available a The lots it we were APIs question, great business. now. think on of I our business can those leverage previous

and our into interesting of our we clients. the go where friction another to example portal, in you so If exposing that’s ways removing are and new developer products

Operator

Your next Stifel. from Shlomo the Rosenbaum line question of comes from

Your line is open.

Shlomo Rosenbaum

of taking just trying the Phil, revenue for my but ASV to Hey dynamics right of I you the am I seeing growth growth now. am I going inch understand ASV seeing and revenue things questions. revenue down, other revenue like am and think Thank inch kind what doesn’t organic between up, follow ASV kind of that’s and am is Hi. kind should And usually the down. in direction are seeing to it you those like happen. tandem the that the seem inch move I if usually saying you

what’s It more bit give sounds that? like of a little you you kind hoping are background us I going was can on confident

Phil Snow

So, is I’ll QX bit transaction am your for or I that well. follow-up a to little I deal on as one-time the and what then I’ll think question mentioned do describe going how I

QX. $X.X script in cancellation one-time client. a mentioned have So, I million pretty did about think in corporate in I a to we my ASV It was large

of go in core where that So, and I the direction turn FactSet say all seen that’s content we content to very was year contents collected company internally, And decided us of been some over one this another over time, to going content. would a but other direction. you’ve ten ten sort distributing we’ve sets our for client and in – comparable into of FactSet contract a taken has the third-party a year

common buy when a So, to always content. comes build it there decision

for that I this a may little negatively So, our obviously impacted in quarter. have misspoke bit ASV script. my

our last year. I quarter meant to ASV absolute transaction, pretty basis, what last have of on would of the growth the consistent and absence was, think in with I say an $X.X that rate with pretty QX consistent been million

Helen that We booked which but did bit more was million the of that Helen in revenue, mentioned a little this get explain at as contract $X a detail. one-time of payment let I’ll end

Helen Shan

Sure.

that revenue, So, that’s X%. looking I number of GAAP there the think over for are you at number a

$X this from one-time so that benefit sale. And the includes million

more a at strip what a are you and ASV lot are that of if is terms So, in that you think out, between more and increase we to revenue. – aligned, get X.X% the at trying I that to

Shlomo Rosenbaum

terms you if mind, selling, before. Okay. you you you don’t just certain of as of as in terms in And things just follow-up, what then, a they you well what on selling are were not are mentioned pipeline, seeing are

it a little bit sounds just as that good more you tightening I belt of quite is guess, kind stuff Some as thought good not environment type of be. the or would

terms on the you pickup rates expect seems your think to what pretty of off still because, or you other hand, comment the words, here? other that is pipeline should said at X% more kind the we context? But in the if confident, think just to could would are a just was organic In you growth building the and of about Day see in the from tone you way that is wondering things bouncing of that, bottom saying Analyst I that still growth we’re last of X% kind

Phil Snow

Shlomo, hard future QX, far. very saw it’s that When the question the It’s to a what comparable again we pipeline at year. time to last into see look and this great is out I

what you next think we already and the thinking are And feel can businesses. So, looking adjusted about we about we fiscal good see we at of of on I obviously that sort based gave all today. our guidance busy year

than pipeline markets much we historically so coming that’s each in within business to We lines larger great products of had. our has FactSet felt deals and the have

are those don’t. you deal or a pretty either binary BAML get so of you and sort right, of like it Some

accelerate I from affect to obviously actually very opportunity that good So have that and have feel we a growth materially here. do but rate, continue the can we pace

Operator

from Morgan question next line The Kaplan Toni the Stanley. from of comes

Your line is open.

Toni Kaplan

of more sort sort a mentioned the cancellation. be of you they are client commonalities any types? – the us as is opposed Are you on, or any give size there Phil, sort of unexpected clients there way color clients? to bit across or group long-term helpful? would of them newer that you. thank just The Okay, Could clients

Phil Snow

question sets that So, about Toni, is your cancelled completely? client the

Toni Kaplan

Yes.

Phil Snow

Yes.

So, XX quarter. would clients corporate most were which positive I additions think consistent. the around is for showed I we the say, on that would and pretty of net side wealth we positive that the

new We are corporations. wealth adding lot a in of names in and

bit in a what I of saw think terms bit institutional was little the we a tick of hedge a down of funds. asset down and management in space tick a

this Hedge year. funds though QX what were a last positive,

So, do is I think market with I to are hedge the But management institutional right. both particular. think fees CTS well very think continue existing we unexpected, seeing, part it’s we I challenged the in asset The funds of in not space. our

managers I I very growth was is summarize we But good the seeing to if traditional institutional the it’s the cancellations. compared we seeing the asset but asset are industry. it, newer space in are which So, owner that to But relatively us, think asset the are pressure. are or seeing smaller for managers they the

Toni Kaplan

think, XXX I an update of about sustainability the on to of that. had few basis you target an have next year at last you points earlier And sort to trying over figure great. year, margin was – but you expansion there Okay, have the know, talked margin the I a Investor Day just question, originally outperformed and to this years out Helen,

has accelerated you. pace just of at a for well? as should you Thank sense given basis get have be as point XXX a trying big the been year And the next to just looking contributor or still that we so,

Helen Shan

operational about ability are and how FY plan XXXX. Sure. for Thanks we been question. commitment see to meet we’ve Listen, actually our our your executing for and our pleased

As a we and stated earnings. not on but really are revenues the manage margin grow last looking to call, we to

include people. and going such of going to is this and plans our infrastructure sustain invest and determine areas our right do for growth in now to this as including are so are technology in in how through technology, to content planning We strategic stack we long-term spending best and our we

not assuming but FX year did that necessarily are going We from – – get a and forward. are we benefit this for not necessarily we

we to forward. when But relates as will back going margins new we our come information it to got you

Toni Kaplan

you. Thank

Operator

of Your the Peter from next question comes line from Heckmann Davidson.

Your line is open.

Peter Heckmann

taking Hi, in may the product your thanks really are be guidance or a just there fourth to a that range question. my of potential of it’s a convey? just wide the This trying quarter growth rates of some uncertainties position but are for you follow-up, other

Helen Shan

narrowed sure make I I guidance the across question board? your because follow we our

Peter Heckmann

if we X% X% implying is three the quarter the quarters, first fourth take growth. so of But, out to kind revenue

Helen Shan

Because I are think you large, X.XX. because are talking to about so X.XX revenues the numbers

widest, trying was at – numbers. are because I It into back to that before You at miss. look necessarily look much if that was at wider wouldn’t trying you look the our original guidance

might little difference – that we look convey rate. material don’t – it’s I bit to to difference a think of in you growth trying a are should lot a number we confusing. the not see be necessarily here our I our that in

Peter Heckmann

and tax a with Okay, that EPS? that can occurred back okay. And then about was talk non-GAAP you added just the the follow-up, items just as

Helen Shan

do Yes, that. Happy to sure.

to So, adjustment the charge up. related tax credit, Reform, of these were yes, year. our toll things from number provision from to R&D including some true U.S. a last impact Tax

some So in this of number cases year. period again of and from things, out last it’s really a

than of and So would overall, mentioned tax have higher benefit but get was expected it that where we as also by employees as helps a of drive the higher exercise well. the that material reason options that’s we that, we delta,

Peter Heckmann

Got it. Thank you.

Helen Shan

You are welcome.

Operator

UBS. Alex Your next question of comes Kramm the from from line

open. is line Your

Alex Kramm

everyone. morning hey, Yes, good

steps were et maybe in in to prepared taken make flush out Phil, there, just Thank to when like, maybe environment some you. will little you you to bit lock the some have cancellations steps tough side the you your going clients. out remarks, sure Just, a you there? Can it to negative It cetera. addressing pricing your what’s on know on sounded about with clients were me talking taking decline,

Phil Snow

Sure.

to continuing elevate what So, we Alex, level with clients. we I particularly our think the have, are conversation of really there, is larger doing

face, do and good So, them, breadth everything the can offerings now, agreements where to a we into very look grow our and a we from and content challenges them given get about together. succeed sit down educate standpoint can there and clients our of with multi-year is to the and technology workflow opportunity

So think what a we little referring more bit are I of to. that’s

a and to come a contracts does But conversations in their things end are we competitive into win-win. is restructuring to contracts talk to it. come clients have I Of a about an way course, in which environment think with looking the price lengthening before

Alex Kramm

need Okay. And on that implied for XQ but quarter-over-quarter increase the the Thank guidance, if good sequential I the know in fourth a and here, ASV I asked step-up I midpoint, terms of helpful. still just at you. think decent is that before at somebody the a here in maybe the just, That’s then quarter I XQ is or what’s split usually pretty look guidance quarter you it’s the pipeline. and think

for usual I that wins describe, or couple am set have guess, Can pipeline year there is you couple here as this really there? to make get a wins business of are you it that trying this big big in happen to the or like, to you are should like, for. get looking is the I ones just to of need looking diverse that you you that just ask are to very

Phil Snow

usual. It’s question. business good It’s as a second. That’s the the

very close us. by massive there But a very geography is at in is a of diverse both pipeline. a took I portfolio opportunities business look lines. and by for strong the quarter QX So

negative massive side. no deals are either there on the or So, positive

in a fashion. And I believe will impact binary quarter the

level I But very the short will close a large sales a team question deals think what number just period they of of QX. a do we at in which do relatively high to every a executing it’s really of that’s time.

Alex Kramm

All right. Very helpful again. Thank you.

Phil Snow

Sure.

Operator

question of next Your Joseph from Fitzgerald. the comes Foresi from line Cantor

Your open. line is

Drew Kootman

is on moving of wanted see just year what Drew Joe. about Kootman how and this ask this wealth management I Hi, forward? impact the you for to

Phil Snow

rest What the deal we’ve of pipeline. that of captured really signed revenue this Yes, executed so, obviously last we had year doing been in that fiscal on and year and the we we the the the is first fantastic majority year building the just for half.

of in hitting next lot successful clients that So, year been year. majority that start running interest I we to this a not QX had expect impact We’ve and would visibility of of the we’ve from very of of some the deal. fiscal the given lot a got trials

Drew Kootman

And Americas, then, continues looking a it follow-up, as just like at the Great. it to be looks strong.

maybe there you from what and could on demand just there? So you seeing the touch are

Phil Snow

Yes.

market and well. mature it’s size So, our the team. profits team ways, very of just sales of a in have the the for most is of the Americas terms we that lot this business In performing

some think we’ve is benefit platform. of going really Americas releasing. new to the from portfolio example management great I highly been A our is products that

integrating now and I the about been Americas the have good us two up what will sales believe portfolio lifecycle. there we buy three really out team work geared office getting and last we side to quarter the at years educate quarter or hard of the calling we last been as And is portfolio we’ve go management think begin this we which offering. this So, impacts to clients the the that for did for acquisitions one, released front the is in our

Drew Kootman

you. Thank Great.

Operator

Your the Deutsche next Bank. Ashish comes of from line question Sabadra from

open. is line Your

Ashish Sabadra

Thanks for just question. follow-up. maybe taking quick my a Phil,

cancellations, some and changes competitive then of You being you're well. also clients pressure sales cost as the within having pressure which - your we’ve talked your about also is force increased on but seeing

fourth is So, the of quarter converting in given conversions? is question such there there strong potential with fourth the terms risk headwinds, any is, pipeline in and quarter all to these pipeline ASV a

Phil Snow

got in have trust FactSet. we and lot of They working our like great products sales with and I've a a clients us. force confidence

on very is this There execute few look next positioned time I to think the as felt we are months QX. I out any over So I me different nothing year. makes at than last well that feel

Ashish Sabadra

directly revenue Okay. That’s wasn’t it? quick a roughly it $X third to bottom-line in so we the of the which maybe, And the flowed really to million with associated question, fair is in it cost assume Helen, any saw helpful. one-time that there sense quarter,

Helen Shan

is. Yes. There

Ashish Sabadra

the was ahead. – sorry, what so, go And

Helen Shan

Yes.

are on you that. correct So,

seeing why more So, between quarter. adjusted that’s that difference significant between and you are difference to this GAAP GAAP

are straight you through. that right, flowed So just

Ashish Sabadra

Okay. Thanks.

Operator

of Chu from question of the America. next Bank line David from Your comes

open. is line Your

David Chu

acceleration? like moderated guys you guys. what ASV bit discuss side? looks Thanks you of after quite are seeing It sell from Can the quarters straight a five

Phil Snow

pipeline lumpy. in Yes, the very their hard the on increasing lot the that will for many by so, hardest had workstation. of We’ve when is people actually QX of a the That’s sell price FactSet and hire new us sell a good was predict things our do hires the banks that’s run pretty as can of of multiplied how a sometimes gauge. side banks terms one little QX be the hirings of a terms to footprint in the of side. to the lot and

within on visibility next for very get But quarter the on done sell that side we a are our close. be with work and pleased is on comes side as doing to we So, to fiscal we into year. as we side are going I we’ve the typically lot sell the content clients our the exciting the think products this a particularly more move

David Chu

just the And like in Okay. really is looks to expected it then, intangible fourth off quarter. fall Helen, based amortization asset on the guide,

Just wondering if I thinking about correctly? this am

Helen Shan

that you said? off you fall expected to Sorry,

David Chu

does Or I this there about based quarter it around is Yes, on and annual fall million bit? looks expected quite like $X million off because – outlook, over $X your mean, to it right? is it a

Helen Shan

Okay.

that would But question, that’s material there change want is to So, follow-up your we nothing do Rima. happening. all you see with

So that needs you. something to might clarify which with be

David Chu

Okay.

you. Thank good. Sounds

Helen Shan

Thanks. Okay.

Operator

Peter from Your next Jaffray. Piper the line Appert from question comes of

line is Your open.

Peter Appert

Hi, morning. good

impact in if So I'm big pace forward? process on that of terms I thought of any has outperformer and - am the buybacks just going your obviously, wondering stocks,

Helen Shan

bought Year-to-date, that. we opportunistic every XXX for we take you, the the that we’ve into how like Thanks million. market, one. price back is Sure. enter But around stock share are I’ll we watch day.

happy in though stock from are the over we chase trajectory weren’t performed of that. the we quarter. with our how the market to the But necessarily So, perspective pretty

to returning good dividend We increased our share be to continued shareholders. we very cash repurchase just increased about the We’ve this program. and past quarter

target for we are – now, we million XXX around right opportunistic. are continue So But, year. fiscal this for to looking how again, to

go. how we’ll things So, see

Peter Appert

I am seeing impact now separated Refinitiv competitive they dynamic you any wondering Phil on the Thomson you the related any any thoughts or from if in changes was behavior on that? in are to are then, Reuters. have having market change And Whether

Phil Snow

No, I mean, Peter. in a behavior. we’ve actually not of seen much change

say would that, change – we moving with forward. we are I Refinitiv. a But would to seen all. of side, much there have be beyond not do So, wealth that's going I at say on the primarily compete

Peter Appert

Thank Okay. you.

Phil Snow

Sure.

Operator

question next from the comes from Sachs. George Your line Tong of Goldman

open. Your line is

George Tong

Hi, morning. thanks. Good

You And Can due on another called direction. out corporate the this was canceled, it we large why cancellation or since quarter by talk elaborate trending? cancellation capabilities? the client rates to about how if you more client pricing go a product to decided then broadly in are

Phil Snow

But that or and organization it’s they’ve decision-making in think faces best yourselves as your FactSet put build of a other in and earlier, so probably thinking contents you’ve case, of I be building think, complicated someone was a within I can decided that who the to Yes, are something day that’s that partner partnering or mentioned the buy in having got you if difficult every mind that the terms process. client. for either solution about I platform, on the It’s your it or decision. else with

about little largest was that a outlier on an with for very place this business that had. When us probably corporate. of this But we the size, are on we we one FactSet, cancellations of bit talking a do good this have was the

expect not this a of year would like I contract. or I was size frequency ten So, said more this

It was long a very contract.

and and was products our about reason we’ve the successful nothing continued was is for to the on massively our there which improve So platform that cancellation.

George Tong

overestimated the modifications. contributed it’s Whether sales revenue more products Whether overestimation? from dynamics efficiency? you Can due you or Got ASV force it’s that discuss much get to it. new some of due what to competitive would caused guidance of if how And a function that and you you it’s indicated to evolving that recently? pricing

Phil Snow

factors. into you It’s goes lot a a the When plan. are of is these great releasing products there A I lot business question. think

what one terms I in we internally better is spending of here our get the can the about I am have we things So discipline and are of our increased money think we think, the time. I projections, excited better over on that

to confident functionality I this on. analytics and how things in a price to said, we would the Like I begun the so am want we’ve clients of just already learned the in of market monetize terms the few APIs. But direction. very want, in we

you all can So, give that’s Tong. really the I color

George Tong

Thank it. you. Got Helpful.

Phil Snow

Sure.

Operator

from comes from the question of Hamzah next Macquarie Capital. Your line Mazari

Your line is open.

Mario Cortellacci

what us Hamzah. Mario is this you environment. clients Could Cortellacci give for just from on update in current Hi you hearing filling the are an given

can compare and Europe, Just hearing are you what versus one maybe of kind in you for of U.S. the versus compare Asia, you those us?

Phil Snow

their consistent offer really so up very globally. on for to their Clients and looking work and on. activities themes organizations more are the can think so I So, look they free drive within that to Mario higher efficiencies value resources

of that is of lot is a them can how really So, efficiencies. conversation around their onto we Part those with FactSet. just help our them services consolidating

to and organizations explodes see-through the more it. to within data of all of they data the are look clients of have of their need as people trying sense make Lots the pace and

data. conversations with. they outsource help to around their So to clients Things them the that do to public How we how want we have lots in cloud of them organize with can stuff. help

that It is not complicated. really

I to of think they firms value. really some things like add focus where just want so FactSet efficiently the they with on clients can do more

Mario Cortellacci

it. give while or timeframe when Or just that quick help but, that planning about you can reach you mean, follow-up. guys equilibrium there working you use do a think an how for you pressures with longer you us where sense I Got do clients guess, future? I know you that a could Thanks. And catalyst have the term? or pricing regarding of, I could from we mean, cost, are

Phil Snow

the restate question? you Could

Mario Cortellacci

we you that ever think longer pricing an equilibrium regarding if with like term? or future for pricing is help maybe you timeframe while or yes. am cost catalyst use pressures there see about so mean, that the is if Sure, – if a could you I sorry, about planning there from Do there clients. you wanted thought know is that to I costs from you

Phil Snow

pricing are may an at. we’ve looking pricing evolved - is our modular very overcomplicated something we have things we terms as as it’s is in So, of organization. and FactSet

open with our as clients. we are that can considering enterprise get model. now our So, middle platform, ways we evaluating of agreements are into the up our in business we And new we

you that’s couple a piece So, would work that I And it might that’s of quarters. at a of least But wouldn’t us expect more on probably be from that. ongoing. for hear

Helen Shan

capture continue was is So, might what saying. for want to the Clients consider don’t for one add to prices is we to continue that more to ability client, the the that. the to the to putting to want pay we are That’s Phil way obviously way for pay guess, on. get equilibrium focused have to to use I but as thing word, you and continue they pressures, for value pricing what clients will value will

Mario Cortellacci

you. Thank

Operator

question Northcoast Research. next Our from comes the of line Housum Keith from

is open. line Your

Keith Housum

item I you that guys morning. to the in ASV. explore fees Good have professional was included hoping

revenue? of into the rest how fees that be would you the does those around but get different think the margin then, profile bucket? bit should a provide fees perhaps from could is must professional and of ASV you of long obviously and turn recognized increasing, And If color to take grow you

Helen Shan

Sure.

last Rima. But Let out look about me months quarter-by-quarter. with take the add have is and as professional are we look don’t at We and try ASV twelve project in. that professional and a fees any have, to you to an value, that the think try talk for way at then annual that over – definitely subscription fees that you from through follow-ups say, that we you’ll can

backwards really that already looking have captured. it's we from perspective, what So, on

then comes it quarter goes of in it perspective, through a from gets through terms the how that revenue realized. In

Keith Housum

business? of Got you. the that profile margin Helen,

Helen Shan

Well, gets it’s added a it a business. more our – honestly of on mix. But some people-intensive of to it’s

business. to added gets other So, some on of existing our it

necessarily its don’t at really look we own standalone So business.

Keith Housum

to sales you just guys terms real the of of Okay over how strategy Any the market? then, change in the in quick go in change in terms leadership sales quarter.

Phil Snow

So, think, last years. the I executed well was two over exceptionally sales

business change biggest we lines that sales the created. specialists into think moving I the is the

I is within think CGS. the and analytics biggest impact we there see will

specialists detail, these a know very about and that third implementation. sales good they force or are So, also in high our client products very do the at they pre-sales sales of facing

specialists we’re consultants That’s the make we we force by with change will one efficiency all up they to the and FactSet these groups. think the think also So, be at are to into facing sales the our more I get just moving regional going our how the looking focus great years continuing sales people staff of as the client on begun C-suite. the last out well as and a general to two expanding little that bit push focused, commercially not model over we’ve coupled

group strategic different the within had our successful expand very But or that top which the client to we ways clients. So, so is, that’s in at conversations thirty we regions. been looking elevating and are

summary. the that’s So,

between opportunity you the Franck soon to I some quarters. think some changes as an he to think you have pretty meet he’d And about the of bring to we planning to is with very excited will talk of meet I you organization. be to

Keith Housum

you. Thank

Phil Snow

Sure.

Operator

question James. Our the Raymond from last O'Shaughnessy line Patrick comes of from

now is Your line open.

Patrick O'Shaughnessy

morning. Hey, good

or your evidence of adoption Symphony another tool a as by point? you base capital any the signs any of So, in Symphony seeing million Communications this quarter. chat Are raised during $XXX client guys at

Phil Snow

lot cross of good, over within communication. we’ve I clients yet a So we have not phone within adoption We our with see partnered Symphony think do - time. clients. But seen the cross

So, the position of buy expert and by we myself between side Symphony. a the side as I am I any so. there. want sell – that on communication in I an think lot mean, not area to directly But don’t don’t see it’s But

Patrick O'Shaughnessy

enough. the last on one And then, quick tax Fair question maybe Okay. rate.

benefit So, of looking that this benefits. Any stock you moving kind lower Are we to implications point? this a forward? as due going year XXXX at tax fiscal isolated modeling rate of about this think kind to as

Helen Shan

Right.

change point the use such a That – word on is So, that. this I I’ll the wouldn’t necessarily, unpredictable. view at

be continues of positive we continued if price, it for a us. Given our to this the expect trajectory would share

say So, for our I within just now. would range probably

Patrick O'Shaughnessy

you. Thank

Operator

at this further over questions the turn There back I to call are you. Snow, no time. Mr. Phil

Phil Snow

call and that amid year this Well, working. today the strategy on thanks everyone the this and by a achieved proof headwinds encouraged joining our are growth is long-term point challenging we see for as us we

We expect share wallet EPS to shareholders. to finish capture revenue, and the to to deliver year continue value strong margin with and and

questions, speaking we call all If Rima next you have Hyder additional forward and you with look to please quarter.

Operator, that ends today’s call.

Operator

concludes This today's you. call. Thank conference

now may disconnect. You

FactSet Research Systems (FDS) 25 Jun 192019 Q3 Earnings call transcript