- Earnings call transcript Q1 2023

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Operator

Good day. Thank you for standing by. Welcome to FactSet First Fiscal Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. advised conference be being Please Instructions] that is today's recorded. [Operator conference like Vice your to would over President, hand Relations. Senior I Brown, the to Kendra host Investor today, ahead. go Please

Kendra Brown

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

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

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

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

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

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

Phil discussion to and Chief Financial Huber, over Executive Officer. Linda today now me Officer; Snow, will turn Phil Joining the Chief are I Snow.

Philip Snow

continued capital demonstrate on XXXX of a fiscal foundation and coming by achieving us year diluted margin of I our quarter seasonally lowest executing from EPS of clients, organic first was $X.XX and this you, out came result banking, ASV Professional an contributors and ASV grew XX.X%. asset momentum Kendra, types biggest morning what full venture double revenue share exhibited Last which us our to for a X.X% medium and and strong These to solid quarter. growth drove adjusted Thank a Small quarter's record for quarter's targets. across lay is ASV performance am results. QX pleased quarter. is results for of usually digit all The year-over-year our deals operating client for good Thanks growth Services sized growth owners today. and everyone. year's and private growth this We this our equity joining plus rates. adjusted

solutions uncertainty Our content investments technology It's continue support in markets, markets. including retention and sector important client in analytics global APIs deep continued the and acknowledge private rates expansion. and to to

supportive, environment budgets, client signs firm in new see are been we change and signs more elongated material indicating for in prolonged and cycles, conditions. sales to a have starting a clients reduction a layoffs, challenging could include we These conditions closely While for creation. are our watching reduced

stability history choppy However, and FactSet strategy will in growth our a and cycle. that we in volatile position of proven ability execute well has even markets confident us and a economic remain to

for clients, scaling further content our analytics partner our us our grow content of strategy our as As building allowing we we the remain is addressable leading refinery. on commitment look and an the focused share platform, foundation market. the to to our reinforcing position At open of anchor ahead,

content. We invest grow continue critical and to in

investments our plants key that history. and critical in investment powers clients with business. BMLL tick enhanced of puts example, essential efficiency Asia, traction as to with the For for within and their launch and and more are real-time the are our and our hands solutions These market connectivity of recently gaining our and us in all nature FactSet content Europe tools an to hyper-personalized professionals, clients partner to conditions. relationship competitive. increase in in information technology our be confidence are digital data resilient transformations the solutions them enabling across drive announced advance performance, analytical solutions ticker generate our of further prioritizing giving business, they alpha technology cloud-based The of data is transformations and for

seventh we performance driven our all The growth ASV equity workstation LTM to higher the portfolio recent client see contributor owners and and X.X% in biggest to remains monitoring and to was clients Organic across for asset leading among banking. wins. of higher banking. continue diverse history Turning growth the retention growth EMEA strongest capital with drove strength ASV solution, Performance by in retention across marking increasing the was with and growth. venture accelerated also Private QX quarter, ASV X.X% securing Cobalt, Americas managers, by quarter regions. region's firm our plus in organic of the growth in the our types, driven growth primarily asset

driving we managers and portfolio, a with Asset Dashboard saw expansion healthy also continued the key demand higher solutions wins. also product Advisor for see our wealth across to

of we growth driven among Finally, with asset ASV business and XX.X%, expansion Pacific, Asia by organic in owners. managers delivered wins new primarily asset

from among environment I'm we including any closely experienced In signs resulted policies, and market monitoring with our We pleased in first recognize for clients. which headwinds in regional the summary, the slower COVID of factors However, the the are macro also in quarter weakness. region uncertainty macro results. decision making

to client downturn proactively clearer of expense picture later Linda a view maintains get a will start half our in calendar a continue XXXX, and actions finalized. are focused share we as the growth. we've long-term the call are of into and our playbook strategy the on we disciplined head taken. FactSet as guide, investing management expect sustain second will Using to we budgets As of we our

of more healthy to guidance. it our Linda quarter such now a discuss We performance are as I'll reaffirming and turn over first pipeline detail. opportunities we have our to in

Linda Huber

the Thanks, call. Phil and on hello everyone to

exclude our with associated date. more in I'll ASV ASV, Services organic quarter following on CUSIP from seen revenues and growth diluted definition revenue when press months any share Consistent details for the Global metrics double organic digit you've first release year-over-year with related revenue performance. the single of now reported reporting we morning, we in high adjusted As in growth our and digit our this ASV organic acquisition EPS. XX

We specifics anniversary so part the will, as results its component our provide some X, first be CGS, March to of continue business. XXXX, understand on the our FactSet. as acquisition, it of performance organic you CGS however, of in can Beginning included will a CGS

of adjusted by grew a comparable Kendra Professional release. of included X.X%. our figures GAAP We to As noted, end organic press the ASV at Services reconciliation plus is our metrics

quarter. year to As Phil stated fiscal earlier, as to lower our our is strong start typically a compared revenue this first

million. GAAP content continued solutions, higher for continued and our for wins performance the retention and banking, support Analytics in XX.X%. All increased in workstation from Enterprise exchange first XX% to saw & by and operating pricing. solutions. for quarter the Analytics Americas grew at client strength expansion. $XXX & XX.X% Research our our geographic saw and X.X% by All regions We & our $XXX Trading demand Our expenses the and in and to basis X.X%. & to ASV Asia from at and an Advisory GAAP came Organic with was Trading growth increases at grew regions reflects revenue, solutions. Advisory subscription-based value-based benefited impact segments $XXX for X.X% driven million first the EMEA and notable increased any primarily solutions acquisitions, revenue organic in increased key to which was CGS our foreign revenue Growth Research on quarter. Pacific primarily excludes million. growth. From

and expenses people, based our Let salary primary cost grew buckets. stock X% higher Starting expense. expenses me now existing with compensation our due employees increased to for based on review year-over-year, primarily our expenses

was and balance investment productivity. As a of on lower our talent basis percentage our XXX focus year-over-year, revenue points continued a in achieving this sustainable of demonstrating

estate by right-sizing the in XX% by real performed decreased Next, costs we exercise fiscal driven XXXX. year-over-year,

points percentage this a XXX basis was revenue year-over-year. As lower of

by XX%, expenses by Third, driven spending. technology quarter increased increased cloud this

growth revenue our basis and more points lower XX focus driven financial party direct on continued by governance. of percentage year-over-year. a finally third decreased by content And data XX% year-over-year, As costs discipline than was

was lower percentage a XXX points basis of revenue year-over-year. As growth

outlook quarter, result year, rate good our While XXX revenue, by operating lower to basis and higher XXXX increased driven by GAAP this increased we to Investor estate costs margin of points personnel costs. operating X% offset integration expenses at annual expect previous the adjusted basis April Day. costs the first XX.X% grow our XXX compared to related gave our revenue X% by the the and with Improvement for was points and margin we Compared were is CGS. These to by XX.X%. to and as in to the real line a to higher technology expenses content at lower

quarters. subsequent first to than want our to Regarding be tend seasonally quarter quarter margins remind our higher in first I that margin, everyone

first GAAP committed had shareholders. in adjusted basis, remain we've balancing to on to and While operating value both performance a margin business our strong a investment we with returning quarter

such, we margins lower we basis As between likely XXXX. operating fiscal and XX XX%. XX the expect year XXXX anticipate Further, our fiscal to means will to full of This points anticipate of fiscal margin margin in to be XXXX. expansion continue quarters XX adjusted we that for the be subsequent

the from block revenue income operating adjusted an find appendix today's You'll earnings in to expense presentation. of

year-over-year adjusted an SG&A of XXX a basis cost was basis was basis. on basis. lower GAAP a a percentage on points lower points and basis of XXX basis a year than lower XXX last and as basis, revenues GAAP points an As adjusted our on sales revenue, XX points percentage basis lower of On

for rate Moving the quarter to on, compared XX.X% year's tax of last our XX.X%. rate was

Both statutory partially tax EPS expense from to foreseeable XX% EPS year. the revenue pre-tax primarily and increased UK which and driven rates a GAAP by and to grew $X.XX this rate. income to quarter $X.XX were for in offset versus $X.XX. Adjusted higher increase higher margin higher figures expansion in continue were rate due prior XX.X% XX.X% to higher by tax increased future. diluted EPS and Our the interest XX%, an the will

release, the $XX less for internal flow, of year. related from the net capitalization adjusted free in quarter, which an we higher due As defined noted to offset million by $XXX increased EBITDA And last our operations cash costs XX.X% cash press software. XXXX. over from in to to increase was use up generated same about finally, income, period million, was same fiscal period This XX.X% spending, as the partially capital increased

with to financial provide want to additional on, Before help housekeeping I items modeling. moving

First CGS in well, million quarter. to incremental continued $X the ASV perform for adding

in single expect digits. it We grow to mid-to-high the

is we CGS next it CGS. our reminder, to will we a on no of include will quarter report separately. As guidance Once included as longer part update results, organic

Next, million. for the expense interest was quarter $XX

$XX expense full to XXXX million. the expect of about interest fiscal end year, For with we

the we following a acquisition. debt As repayment CGS to reminder, prioritize paused share repurchases

been such, XXXX. of shares purchased additional quarter As no first the have since

was count share of million As diluted XX November, of weighted the XXXX, our shares. end average

accrual, bonus Moving on expect pool bonus fiscal far, million. XXXX for to the we performance to $XXX the so given about our be

hedge. versus benefited operating the the we U.S. strength Our income major dollar from of currencies

year, However, the exchange volatile to so will be fluctuate. we rates throughout expect the impact

As revenue a our dollars. expenses our denominated reminder, and most U.S. XX% in of of are

fiscal we up million expenditures. with technology $XX in about by prior quarter was well from million as Next, period. capital ended expenditures driven as This of the increases the year capitalization $X

March growth as in on XX quarterly to estate discussed increase our this of million capitalization our delivering the strategy, an And cloud finally, dividend Paris we as last of on we our real continue about in As at increased program we $XX value XXXX be to of paid XX. expect year strategy. offices on a focus consolidate dividend move midpoint $X.XX our fiscal December earnings we shareholders. to to consecutive we expect and and call, CapEx years part Fiscal hybrid our

number corporate ASV total XX%. by capital clients. for We Our to remained grew prior the wealth the and equity than XX% greater and of driven retention by the private compared first year, quarter venture clients

Content the our Our client Digital platform. and year-over-year at reflecting remains retention XX% stickiness of

initial bringing planned now we acquisition. our down of of CGS we down In continue million, sheet, when leverage times the term acquisition X.X made to to balance the to gross XXX X.X our the financed the to prepayment Turning first we level from another CGS. loan times ratio the quarter, related pay fiscal

X.X prepayment allowed target. to planned the strength in to next faster adjusted than income this X $XXX of reach The EBITDA our expected target net expect times. ratio to be and Following has within our to second move fiscal quarter, million us of our we leverage of

during while this reminder, minor repurchases of do until share may not our a fiscal share the grants stock impact to offset repurchase at dilutive the we program As least resume to quarter. option we make time, third intend

Next, discuss I'd downturn like to playbook. our

X% periods markets fared million $XX gives by to reduce operating and supported our well we mentioned, X% volatility. of end or $XX [ph] during still FactSet levers playbook Phil As our expenses has downturn are Should historically change, to experiencing us to anything million.

and we downturn of on Actions taken have our essential engagements investment. uncertainty, client travel and revisiting third include market proactively to parts needs, focusing and our of content costs. margins Given playbook date prioritize protect party to real footprint the implemented limiting to continued reduction estate business

In are roles monitoring are also to business. addition, positions that we ensure open our to on focus our essential

than In our fiscal which ability to our of will hybrid million restructured as we year. change on-premise run part core next strategy, conditions. changing navigate confident over million including cloud budget we've cloud computing the years, $XX will Finally, use our both the platforms. to in cloud this save more are and our five market This closing, $X

look have we we ahead our for now guidance ready in year, fiscal Operator? the XXXX. in With as reaffirming pipeline are for questions. as our early still it's that, before, we're your and we stated While confidence

Operator

you. Thank Barclays. line first comes Instructions] Manav question Patnaik And of [Operator our the from with

Your ahead. Please open. line is go

Manav Patnaik

Good in you the Linda, you. that is is cadence of Thank throughout on mind? there ASV perhaps you gave based what keep or the I seasonality was year morning. I what to guess should forward, wondering, see from in any looking expect just to there, the, was margins. we kind for pricing any there pipeline us

Linda Huber

Sure, Manav.

talk me I'll if a margin bit and let and okay. on that's go Phil back about ASV expectations and Let then pricing, little our

on, the first XXX March past me, points points that basis and looking have we well. on forward, has look margin of year, so couple great, So won't performing rest lapsed a note as from compared expansion basis the additive is which margin and of margin the of of expansion quarter, get CUSIP. will to about cost Xst that set things is organic increase we came XXX excuse the If last margin to from margin here. had business half CUSIP. have that we Manav, The at from our stage of it for as we CUSIP, In we buckets we come increase

data third and down. very nicely party in have costs Our moved are fact doing

costs Our well. have as moved real down estate

had will good re-planning this costs which but our tech are of a up, $X Our in we've year. savings of result cloud million strategy,

here So big our watch to the bucket is people expenses.

eye So on headcount on and keep we've to close got a compensation.

But for to said guidance the expect within adjusted we we for staying in year, lower might XX% operating the this to first than forward look will quarter. we So that our margins script, margin next of of be they've XX% year. the the as been for three quarters

that So I hope the margin question. answers

go but ASV can and to Phil Sorry price. now a handle bit backward,

Philip Snow

at and year. Manav, so the were Hey the positive at for least of looking today, thanks than what we're QX the and Yes, looking QX still for for Great. question. year QX rest last time more we're this we

Some of that price. is definitely supported by

and X% to the call last are said going about on price more believe As own Clearly I what's a happening at increase figure than well with were through their clients. and indicated they're we, introspection out going go are and finalized conversations getting trying all out the I now. markets in to budgets as we we going

So we'll visibility, with our has last to hard over amount have few it's argue, the investment of the years. put but more into frankly, platform FactSet

on on executing are there's great successful the now. clients. I'm Conversations do in lot optimistic. that got relationships believe a we'll right the we've in be So And increase. going cautiously well. with We markets price going

what the one information, Our terms the January looks strategy year rest as head particularly is in we'll get a good and of we into more of like.

QX bit on information big more is We play you visibility how and in out. of quarter to a such going that's as a us. know, better QX need terms have for We QX and

Manav Patnaik

And secure Phil, more really contracts I enterprise it. follow was the guys hoping, the mean, layoffs but doing I Obviously could Got if focused. I side, the sorry, we you and help narrative us there. up, sell would be quickly was and on you seems there of filter little bit maybe anticipate I are just guys a just more SICOM to noise you on a how side. been the changing, through kind are your sell well could have versus just that lot just helping,

Philip Snow

Sure, yes.

sell really there. accelerate. continues some may the of but So side to you, surprise we're That healthy

amounts pick as like again, our most a not the to laying staff next know, to to will And And that companies. investment massive feel banks banking. as off so, I'm, So out, soft conversations in But of Maybe particularly activity side. we're of it be banking. And exposed having, landing capital in and users, other doesn't some pointed that solutions part hoping been sell you as in the in you like six hang markets in I'm there are for months the investment we've our of diversify they're up. are the able banks. for as within or begun M&A here optimistic we'll I've the

it this good six So have side. CTS took sell looks a like look the very I for the next months, on at we and a just pipeline

of data that's want data to particularly beginning we're we're So benefit and theme their to systems, and that going and it the the able on this value clients being is see, for would want create we out and that they're back middle that into side. through interfaces I types say to terms And our the the to sell using, see the whatever in that client offices. client is systems going they most right, across consistency, from take workstations a and now in integrate the

Manav Patnaik

Got Thank you. it.

Philip Snow

Yes.

Operator

Toni of Kaplan and comes one the with next our Morgan question. our for moment And you line Stanley. Thank from question next

Please Your go line open. ahead. is

Toni Kaplan

out ask quarter really know and you particularly is so see over solutions just to but wanted last able upsell, of historically to out strong more anything I if really, much. just that and any they're normal? wanted in side to had demanding that I things that demand. different CTS were I sell you one upsell just called versus sort than last sell pipeline, that side or you're were to so know called the also six the there Thanks now quarters, I on

Philip Snow

Toni. Most seats it of

is you're made and we've the So sector what there I that seeing markets. in private think investment deep

users of expanded new different and or content are get for So FactSet historically bank, good a us that the getting more give allowing advantage. those competitive us parts might into we are newer have to just sets maybe out than

that's and us So users helping with renewals really the banks. new helping it's gain of

Toni Kaplan

Yep.

And, and to the what great. clients. Okay, to hiring that I starting pull there? cycle? environment see Is challenging slower it trigger that's this environment guess like Phil, is mentioned your uncertain comments slower couple going times the you the sort of driving a or it for on really sales are there are the this and more things

Philip Snow

both. of a Yes, bit

to larger to futures through the providing they're own through, confident I think going management, go are some ones. hiring they imagine may asset less right we're see to We're say, but of so we're them as their imagine it's institutional and pause the it they're them. these But to these I we're have be deals. we're that this to buy within go figure not lot negotiable larger that we're with I don't seeing these pausing of not, going transformations clients So on They solutions some be of on transformations trying out of are could yet, the that the I going should transformations, a be through. also deciding side. for some may

Toni Kaplan

you. thank helpful, Very

Operator

with from question one for our and next question. Andrew you line Nicholas moment our Blair. next And Thank William the comes of

Your please open, line is ahead. go

Andrew Nicholas

my on taking terms a you're for Toni's anything end I if was by up questions. Thanks or uniform call There are of health obviously follow your on question to out ask in curious difference pretty just basis. to different the region between morning. disparate good a growth regional seeing of kind and basis? first any just wanted market if some Hi, on region across if but regions, just geographies there's comments

Philip Snow

I have exceptionally six look did different pretty they're months, quarter, out puts the quarter by there an and region. there Andrew. Europe this strong into uniform think but I next takes as are

different a Americas wouldn't looks months six the stronger than Asia that's than say one EMEA, the little I and bit maybe next dramatically region any that there's others. but frankly, for

Europe other more In terms of from a see don't But effects see harder yet. might impact recession, lot would generally we than get just of from haven't, where we might that hit regions. that I we imagine

Andrew Nicholas

follow Got with year ask are the up, ago, strategy, know it. Thank you from Stepp wondering to I any the CTO, you about a the there I you. And hired Kate if then if, digital involvement new half strategy. know my wanted major takeaways her for

under hood restructuring you're and in going color the the savings. like result great. Thank would that cloud that's to you. what's Any Sounds cost be budget there more some on happening

Philip Snow

spending been with of time lot Kate. Linda's a

Linda Huber

Yes.

budget with of of we needs she's Kate Andrew, be cloud that the was number What First everything all, been cloud. so looked but the and years, hire. she has the company we concluded did for on to sat has not down quite at we new not we a and a changed position,

have new are I kicked balance better But capability to on-premises to things buy company the is a CapEx, We've in for few centers. cloud well capability. and think some computing back that. move servers, long-term as said like looking as with we our we items into up housekeeping data we So the as some core had the

want save million. just rebalanced do $X of what budget. that again, helpful. to which million we've And over we're the save next very it's five a Kate we've on-premise the this doing So technology thought the versus we'll computing. through what very that is years With change, with helpful $XX has with been as we year, cloud we'll But rebalancing

helps that hope you. So

Andrew Nicholas

you much. thank very Yes,

Operator

one next question Sabadra And our Capital with Markets. comes line and of from Ashish you, question. question next and for moment Thank RBC next the our our

open. Please is line Your ahead. go

Unidentified Analyst

seems Trading last really Sales, question. seeing around quickly potential as & Thanks, bucket my well is Hi, maybe focusing cost, could for the X% months, hiring Analytics, this just is like it you're over just XX just up you people Thanks the John talk filling any Maybe about people as count on taking benefits Ashish. technology head on talent Content as the & whole? a for

Philip Snow

Yes, Linda I'll comments. will have sure I'm start some and

is talent, months last to hire frankly attrition the wanted been come few market hiring a this we've great for over So and successful we very has and at down. who

Linda here So it to day upgrade that watching want and do am but I and to this We opportunity careful not we're continue hot be but lean to continue have in invest. to running here, an -- day. we our talent and to

right, able don't it talent go kind hopeful, the if a the you're and we're have from you helps that much definitely on too to pain in as not to hard brakes we've side, keep the we too But people through investing previous of slam run. cycles, So on in here long standpoint. done

Linda Huber

said Phil we're run It's by not watching hot. day. get headcount as very Yes, John, we day right important and too that that

down attrition come our said, nicely. very Phil has As

the we little result people a the market the in performers employer friendly sure some high last our to our moves bit year and our being is that make we're rewarding of more that of made and of Some appropriately. compensation

So we got that right.

sales increased have support we've headcount trading. on headcount quarter-over-quarter About is to about locations. cost effort excellence, been with first lower with we sector that that very and centers to our of largely of so assist quarter. in talked bringing analytics for and about which we've careful the our effort, And deep right, You're to headcount help before, XX% the

make and at are hiring down are sized but which we than nice over really so did sure far much time has so But the healthier last a to trends don't a So, accordingly picture attrition thing. seeing retention is year we good, we this get out skis. be our to

bit you that a more So clarity. hope gives

Unidentified Analyst

Yes, around color, conversations thank if you in sales could that's great well any as talk change maybe wealth quickly, as the pipeline client just and And cycle? there's you. tone been about maybe the

Philip Snow

pipeline be healthy. continues to Yes, the wealth

just opportunity where deals now of run have continue the good one we a to just in of we the such more terms of We that's markets, tailwinds. long a markets in feel work. mix like we've great larger that got and And

Unidentified Analyst

Okay, thanks.

Operator

Thank UBS. moment line one question. with from you, comes next And question for our Alex the next and Kramm our of

open. is ahead. line Please Your go

Alex Kramm

Hello hey. Yes, everyone.

Just your pricing One you're in segments them currency coming back different is seeing of Europe can the with asking comments pretty last side, to on terms, changes we've is regional, client getting? the Any the harder. sort also so expand uniform? in more in you for year-over-year or year of all pushback what it the has FX things that increasingly is example, when much devalued heard, dollar for the over you're

curious pricing on or Thanks. there's call on, by anything set would just So region? you if customer

Philip Snow

Yes, nothing I'd yet, call out Alex.

And So the similar conversations good to going. has I've value reached conversations a FactSet said last product. with year, not put of very as into is the a for my which have the desk, argue are terms how lot it's of in that sign hard clients to

market other sure. is this. at be a opportunity it more everywhere terms what as We've opportunities capture great share. gotten inflation is certainly result clients some to us may providers, understanding of Everyone we're coming in, clients very for inbound and that in are a a moderate to place believe, sense that gives relative my which from So seeing I seeing of

Alex Kramm

release thank you. think maybe the weeds, helpful, which the that's And on up press Oh, one and too Model be in your the called in then just launch, but much beginning you at wealth November. Center was follow out this side, of may I

like a like an something investment for this Sounds much like I you're like example. describing does to what is at shelf, that here, look when has very something -- me

really talk that at envision into segment services of to that Again, maybe then want of is obviously versus doing to but you early of order sign market? expanding repurposing getting not it's about is -- So days, a, just or wealth my that you some revenue workflows then today. can other very you things question the obviously the wealth, in end you talk deeper about model doing but this a terminal really facts the the the And scope offer yourself business? you're

Philip Snow

consistent and across Yes, that we're the it that is absolutely a other sign servicing. Alex types firm of

too we push But adjacencies We've client that relatively So so gone platform is the for the lot follow-up continuing sure for where wealth we're can some much as and get clients? other this That's just detail you open Model. other and more expand to with on wealth good and established. have very beyond of us the into for about we There's can be for there. there's they’d types way what FactSet detail call to being we to a lot type with newer want type up more, firm follow-up well they’re room talk more is think, a a I to us, company. do I’m little team, partners, workstation work giving Kendra a already. terms probably if you each of in within with what to Wealth, than a happy we're a a our firm to beyond thought what probably later doing

Alex Kramm

All right, very much. sounds good. Thank you

Operator

Thank you. One next moment question. for our

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

ahead. Please open. go is line Your

George Tong

morning. Hi, Good thanks.

involved in? or coming large clients deals. this you’re are pausing up renewal for You any deals any noticed competitive Are larger there on that large RFPs fiscal that year

Philip Snow

deals for There question. I mean, the are every year. are, George, hey There like thanks that

we seen previous this think are year if and less So get we in this But there I later need Linda can than year into might years. can this renewals or to. Kendra I large have believe

some for interesting very are QX QX couple. working and couple definitely QX that So in related, deals. of sell-side year, deals a are and some that there we’re are this partner on larger there a And

George Tong

hiring. seeing it. that the Got Can a bit direction sales budgets, those client overall in? about you enterprise seeing cycles, secondly, a are longer moving little bit talk you’re mentioned you’re slower what with And you

Philip Snow

Yes.

So watching for. things I out are these that said we’re

managers technology done a asset that a to was a seeing -- of there managers hands a having you the really into them we’re think one, was asset are the that to yet, article, all a it that are to So if terms few all that haven’t. into about, some partners but right? that in speaks happening. ago, idle work not done of it the space, may we’ve the the been I it lot which FactSet’s Times which which PLC, We’re be some well with an of pull article And And be doing investment and platform, platforms weeks that was make good Financial the the don’t we’ve lot -- work of came competitive. out a all money on of we’ve work indications this the to again, lot plays we in open know saw public I we’re really of

to just to are of So pace optimistic a to in very which go. these overall, the clients and these are the our question these. going Then cancel ability stop. at for about But deals not execute. transformations our It’s they not going completely marketplace position I’m

George Tong

very helpful. you. Thank Great,

Operator

line one moment you the Thank comes of question Huber Craig with from next and for Huber next our And our question. Research.

Your line Please open. go is ahead.

Craig Huber

good Yes, morning.

building maybe can there question, First there. traditional the the start potential out on Just sales specifically pressure that with of talk the for traditional on little that what’s be you part buy-side Just there? I’ll your comment might just cycles? business? marketplace, points going longer about legacy the a more some more

Philip Snow

Yes.

Craig. pretty overall, healthy, it’s So

our there’s components we don’t believe So it. in significantly. see that but than buy-side to number less year, there -- last a hiring lot has of you The was it’s press down release I

So at. are we’re sort revenue through most maybe we’re types The it’s everyone go than corporates. what less where firm two helpful looking seeing now and so to that headwinds the last of year understands

it good firm had less the year. partners. up a prior quarter, corporates we but of creation year. lumpy quarter a really the a make of it’s part And a new lot did this than was the we with So add in number They for

on owners plus little bit last or environment. with seeing And par management, on that I the doing -- number institutional say asset in in are that in seeing. Above would funds of kind buy-side what that’s of wealth year some of we’re you’re that, what the less the than are what’s asset year terms well. that’s hedge So last a all exceptionally and side,

on typically a solutions the on very from work terms crushing in fixed year. So partners. the PLC asset side. working signs seeing encouraging owners positive And asset with it That’s asset of owners adoption and longer we’re great owners, multi-asset last have of we’re that versus doing the view, and the class we’re much and seeing in we’re there income

that you. the hopefully, but -- we So terms number that’s helpful thinking give buy-side overall of about in

Craig Huber

I the my little scratching things, Okay. And Linda, side then, bit if I’m ask on a cost could here. of head

meaningfully quarter fourth higher were the or quarter. costs costs fiscal Your than third the quarter

about, You time cost, good specific on incentive the spoke the of $X the number out from this stuff. out you but in May last maybe about compensation first versus and here back and we year I know versus cost think way just at say quarter, in Thank of the so out guys down onetime just we November that, August the then stuff model an last a total million you should just items fell the called about finished costs here and extra The levels the stuff. quarter here this by a maybe May more roughly talk was year could take lower you. or in the $XX million you’ve the if lumpiness for in various to little rest how the quarter? quarter

Linda Huber

for Thanks compensation fourth ensure And quarter, correct. right. hard observations that your really Yes. we had to are the In we that, Craig. worked

couple a of things. So you saw

inflationary was in a You of saw to pool, adjustments with countries merit stronger a U.S. than the which number and usual deal

which XXXX. worked a well we You on you harder as moved we FY also saw in FY up saw very and also then bonuses, were compensation that strong fulsome equity-based quite equity, XXXX. had And because

off while strong, there our were was for had make coming employees compensation sure great resignation. correct the we goal running picture the to So a we

we and one watching situation year, talked well move are three Craig, buckets to The forward going costs are entire shifted, around into of we’re this conservatism controlled. our very about that So has costs. I as our carefully. nicely

I here which compensation headcount very think includes people costs. bucket, the we place both is where our and watch closely

said. a QX So we’re quarter. that very the first year, revenue year, we Last This on that. we’re A side half as had notice things at to those of of about very, Phil the for couple about carefully, $XX in million. watching record was running ASV level

later in through in So matters the change how to comes of year. the timing revenue us the terms

we’re makes sure for job make to the that that managing that correctly exciting margin. just much my So more

So we’re doing that.

very The to at retracing about look has take the had strength. one-third that been strong. other Recently, a of Craig, thing, been the is dollar dollar

have through to we bouncy we we has the quarters. what’s conversion of timing last revenue. have as happening the careful been then to careful and with to ASV, also unusually which be So on couple have impacts of the later moved the on FX, be And on

to XX.X% So eye hope pretty and move buckets quarter. but we will happy rest year. the helps, the of in those and that eagle in through margin that we’ve did cost an as nicely help first got bank, I’m them have the on managing we us the the

helps. the is name the prudence So of here. game Hope that

Craig Huber

Yes that's guys. Thanks good.

Operator

our one Thank Alwy question for question. you. from with comes moment line And the of next And Faiza next Deutsche Bank. our

is open. Please… line Your

Faiza Alwy

Yes, hi. Good morning.

I to the competitive about ask So wanted environment.

that like But and several Over there’s years, been investing. you’ve you’ve of competitors my some now, products as been the looks that they’re have new deals, last it share perception out. your is integrating busy rolling gained

competitive characterize various we head environment, you across your your So more potentially challenging into a how products? I’m curious positioning as would

Philip Snow

I’d question. strong. the for thanks as characterize it being exceptionally Faiza, Hi

the searchability, clients in as as If we’ve applications of well in FactSet alerting investments of you lot with the that ease the just terms we’ve of are upgraded workstation, there use made of a use, all really in start clients. content our

our over reflected, significantly So years. number types, across last that’s of frankly, a and you see the numbers grown in five workstation that firm

in continue terms for of partner to middle to front, do work anchor our space or great offices. what in to and the with the we asset portfolio go other they the partners want servicers really back, On from of front the be life with the in things analytics cycle to achieve and and -- core clients

that So is front, those lot product And for technology accretive FactSet the are for terms The lot suite. market to on that companies all looking a that, in we’ve there’s solutions. -- checks for that and of done runway They’re expand looking of a frankly. and boxes. CTS ahead innovation,

there real-time real share a CTS small today, One out That’s we’re there’s of the pretty space. the time. of market excited of about things but is very billions on dollars of piece

BMLL, time. might have history recent you tick which is need that very complement do to which You we need to seen -- a you good investment made a in product, real

this an great opportunities. of So is area

in of FactSet in mention time. us good the just that And not can help sort more clients. trusted there’s the are help. type of in our last over ways our where and to really there relationships stead. And remiss us the future. clients. partners. is I’d the we’ve made them with there we them be And continue three have And more be we clients invest and and they So Many we’ll long with for years the to investment been been a frankly, our need They’ve for of past, for this environment, the we’ve put

in as feel my entire FactSet. competitive at I almost XX-year about frankly, is our good, position I So as have

Faiza Alwy

and that. then the capital you about Great, ask to interest And just a thanks Linda. follow-up, expense wanted allocation for I provided, as guide that

raised so I been sort also I understand you’ve think but you interest behind rates I down guide, are debt and pay you that assumptions paying bit debt, sort confirm, clarify further assuming of Just are Because of no down? that feel higher, the want like to I to wanted any little guide? expense just a

Linda Huber

the a Yes. Faiza, I in think this script. we've bit mentioned

So leverage go let’s and and about our about back that. talk levels think

We’ve leverage we purchased of $XXX X.X to when of a pay basically our level So downs per million CUSIP, up gross number quarter. went times. made

Now X.X our gross leverage times. ratio is

times X times. of would to grade We’re within considered for looking our rating, is X.X level which be to investment back get what typical

can inside we note we’re going Board you the as authorization, we’re resume about what authorization what done had speak then spend. to exact we’re to pace and that we this doesn’t at do so that. So here, And do we clear the have I make, to more is about that. That term is be want with going million. clear have to point, that’s what with That think want means our to The authorization want to anticipated mean get to what before. continue one think going is, buybacks after we to conversations. leverage we of pay prepayment not be At may to $XXX remaining loan to And is that same share we that’s the agencies, those which crystal what level. on we’ll that payment down rating

had whole. average share all repurchase that So back-end as market, FY XXXX. FY all count to it that presumes mentioned. a into if going the much be we It And into I do the those for as loaded and the share move expense won’t note be will that’s back we XXXX move get things interest helpful please

need, So all that detail you Faiza. you hope gives that, that the

Faiza Alwy

thank Linda. Yes, you

Operator

next And comes And moment next the our McVeigh with our question. Kevin from line Credit of Suisse. for question one you. Thank

Please ahead. open. line Your go is

Kevin McVeigh

to Great, thanks back. so circle much. I just want

the it million, downturn tell the were And is On to this you can playbook make million you very you year how heard you’ve want right. Of are I sure implemented? want is Like obviously $X million one-third? to us clear, Is -- $XX right? I incremental just then that, the Linda. that to think sure I $XX helpful. make comment the I just much

Linda Huber

Yes.

amount. sort be think And midpoint say I implemented about it’d it’d think Kevin, fair the about to I to be one-third. good, of probably that think we’ve of

that taking close to right. we get what is look at the and to T&E a with here, do obviously, want got because, top We’re line paramount we’ve

people. So other do that things we to we’re looking around some need at of mostly the

extremely end with too lay and out. at what we’ll how will We’re It’s the bonus the the we see had cautious on difficult as quarter to happens being new hard of line. first too that hires, said -- tell

had said be clear, housekeeping I the bonus are expecting, as about to $XXX million. we Just section, the line, in

a the as XX the booked move year. number first for about have ramped bit through Generally, up that we quarter. is We

out things to XX go play maybe previous that from if years. in question mark. have in XX So quarter way fourth the a That’s they you the

right million, cut. we targets in do center the we well all don’t So we’ll that. early as But guidance down expect by way bonus and about that happens our think as comes what now. there’s one-third. of too line to another matches about which our bonus what come are, point perhaps it’s our with -- would about clear $XX very talk light, it’s If save we If

we right we’ve of terms got pace of solution towards And the probably XXXX. our quarter. the hiring, on another saves get estate in estate footprint, change see going we’re focus we’ll that budget. we the will to fourth keep though, FY So through to something expense be take real Any technology make it sure is make that in footprint, as pass real the the in

going I eagle to For be fiscal eye year not us come bucket. in to But later on all these in it growing part, support we’ve said and the the in most got top XXXX, before, help will too as so of much to that line. buckets,

year, Our look quarter even pipelines second as and better last third Phil than said. had

want Just to reemphasize that.

So mainly, a we’ve of had timing shift. a bit

sure with costs that the we’re matching we’re and So making accordingly. dealing

Kevin. helpful, that’s hope I So

Kevin McVeigh

there follow-up. Is over you about current to is any Very, very where the quick you can think employee a talked of about way footprint and today get of centers that to think excellence. the kind just the And know helpful. then time? how I

Philip Snow

it’s Phil. Kevin, Hi

So are if talking is you talent the located? about where

Kevin McVeigh

Yes.

Philip Snow

Yes.

a of right, having Linda talking very hybrid to expense. have We’ve a We’ve years few is last been about a environment, learned which approach the So standpoint. interesting, work is you lot. estate talent taken the from real why

options we So have do more globally.

make to -- the We move Philippines. sure excellence and continue talent have of in can crank. there. we’re Those have we’re opportunities we exploring forward, very that we our of globally centers the want as to India all good But and best very we we that

hire us that we actually So a employees needed that’s we’ve it the and for work made of to of in make right middle to some we’re if locations in more piece to now. moves possible

Kevin McVeigh

Very helpful. Thank you.

Philip Snow

welcome. you’re Yep,

Operator

one our next Moore next question. you. comes for of line Thank Stephanie the Jefferies. moment And question our from with And

Your ahead. line Please open. is go

Hans Hoffman

Hoffman Hans on is this Hi, for Stephanie.

just client question, a first given sort you’re seeing us you you terms my cancellation noted So for of of environment, what more of in challenging sort on trends? could update guys

Philip Snow

go the we’re just are and into far okay finalizing and their been so year, Well, being as clients we budgets. cautious it’s

we’re net funds. positive on in we’re can the positive press that You release see on net users, and

year numbers, that the seeing, last not our but we’re So absolute client and very The are to from we’re a in of grow in there we’re out we’re continuing like lot of business. down base, numbers seeing terms panic competitive.

I we’re So we’re emphasize for. that looking signs -- these want are to

well, that about history environment business good – our our feel ability and we matter has really well managing execute no to We’re know. as but strong is the you FactSet market what we’re a of

Hans Hoffman

of a where And bit you in of follow-up, of about the stage just Got and could just in see helpful. the my technology you biggest next it, sort investment that’s then content? opportunity for sort talk

Philip Snow

we’ve that platform. given opened opportunity great the up a There’s

look the all firms management, press So we doing the the well FactSet buy-side have, components institutional we partner our at big largest of but opportunity. premier for is really and of about partnerships we’ve done very asset being call a some very in the taking and in releases you we’re what book. anchor When going

but doing our last basis So our relative premier sell-side, actually close And book the a on base also extends very top it’s to to client to XXX clients. is year. well that

some positive percentage of or business. seeing are within of big out there. might the and a a do clients of very we signs I see markets, the overall, have to our has larger But we’re our we smaller in more weakness where So getting of ASV big potentially small and that much percentage that opportunity, think created the firms going less some firms with middle firms

Linda Huber

we in me us we’re It’s CUSIP. and questioner to about some technology the had asked I CUSIP as has the just business. see CUSIP the interesting sure one opportunity clear out point not on call, coming No also last point But the asked. that this exactly to business that want points from let make

with we’re the happy very So acquisition.

with weeks and We We’re very just to great. with ago. very down them with the a our see Bankers the few team were American going Association, relationship we’re which is happy happy

of grow growth municipal in grown deposits, also little which think you certificates of and for business, that logos, from that. individuals. rest from a interest of of The with have coming good growth, growth and $XX continue issuance we’re million done well that -- the CUSIP’s bit which and about dramatically those retention subscriptions in very $XX grew as o revenue very in don’t of on contributed issuances really opportunities about million that two-thirds and still investments that. rates the from Overall, is but very So about types QX, pleased bond growth more CUSIP. to see one-third growth like growth. the about of about million, about $X X.X% things with new contributed slower, We

in before, markets; and very we Now there. the CUSIP expanding the see said to private we example, as we growth opportunities second CUSIP leveraged a couple traded, good packages for areas: we’ve credits potentially different see one ESG, are third, of would to – carbon as of expanding is be the markets;

So job good us. CUSIP has a done for really

going up we blip outstanding. We our to will those We the with it, And lapping of days lap come only March. is sales services the as That are off has tighten move into Xst agreement. as there on a X, March days bit. sales CUSIP we on The technical the extended we outstanding. said,

helpful performance. everyone, hope its biggest to So with and that’s to we’re pleased date our acquisition

We details we is we the where subsumed have it CTS quarter one as give After business, that you said. more will in the CUSIP. on

we have maybe So Shlomo’s of with questions, but some move front-run that, may I can on.

Operator

our And from our One with moment for next question. Stifel. Rosenbaum question next is Shlomo

line Please ahead. go open. is Your

Shlomo Rosenbaum

sell-side more go or a to I on positive absolutely Thank that you way some a just up again. in see the wouldn’t we there banks end than you. for – to in coming the the buy-side. that shift opposed that not way? to composition growth people now the bit. drag Yes, to you of about that ask lot combination the the there downturns Is in or start you we more be front-run right has the would Linda, any going growth? question. the to as would Is case to in think been decide But I just believe a sell-side back some on start want the there of Historically, being to be not little same the a if up hang that the did same AR to would the was difference volatile you of DSO to lead what’s

Philip Snow

If layoffs but than there are investment just workstations the business, sell would banks. large the right, beginning in that – earlier, as banking, mentioned more affect to us, Shlomo, we’re I CTS the to certainly

a other go in there’s other them can made us the that potentially deep sell up sign and workflows much positive open into. users we private very us. stronger a in markets terms can we’ve that’s departments things put And that and and position content So just new again, in for of for we investment sector

haven’t I spoken our private type. about the The is firm that in number that’s other equity sell-side capital and thing venture

time, So that’s is not massive, over I to meaningful but growing quickly. a it expect very be contributor. And it

next is and definitely sell being of quarter. out called into look the months, equity, strongest. side to that on. We something of one eye private the an it’s So as And capital venture as owners that I asset quarter this firms, the the it keep look out six the drivers

couple be in occur PEVC the banking. a if – of things So just big the piece, those that if are and particular, will think investment layoffs I hedged in do CTS

Linda Huber

still a note. Shlomo, things couple pipeline to strong. The just is M&A very of

now, the some that be pandemic. more would to trimming some headcounts fulsome be might you’re engaged investment seeing have at trimming pretty normal of the what stay the Also, those making there firms sure interest in So through not banks.

versus you’re they again, of and of years it’s couple And happen. headcount some that that, of them. did the there’s since for So been compensation a seeing question

to see analyst on the important. look junior pandemic is and size. more next. lesson trained. be those we’ll what are through employees classes be have brought the The that happens So about They same But learned to

more few a might help there just that So you. points

Shlomo Rosenbaum

what sales to you’ve you that’s And made I just, Because versus which the at looking with with downturn on? about with to going that the of sounds trying at you your narrative sales tone, of your least I’m seeing understand Is like and sure comments strategy, pipelines. it is then cycles, you’re you. actions going the took happening thank the make what more seem the just conservative the seems to some some implement strong be that world cost like. actually well, pipeline the around what’s sounds Okay, pretty that the

Philip Snow

Well, sustainable we’re margin view one just to taking long-term here is a expansion.

and in I really put Linda us. think, come So a good framework for in has

is we sort effort people took And the Some of basis. biggest a a year. to expense make actions great that has expense. margin all we down is on just expand reasonable that of Attrition because our the sure of our come through multiyear way of

we’re on the so there – pace. much thing And sure that’s think an and right expense at that I news our is the eye cutting. So making right and out keeping headcount moving layoffs closest recession just possible now there’s about is yes, the cost ahead

of enough clients we as look get great our don’t will budgets when printing are into conservative going budgets. to we’re like. We’re model relative we we’re their lot and investment, January being clients have positioned what still want in to terms to just be our that our of companies We business just but just – of visibility on the a well make other sure

think can more lot numbers the I So terms us that will that’s a give of the that thing we in project. confidence

Shlomo Rosenbaum

very Okay, much. thank you

Philip Snow

Yes.

Operator

next Thank you. Housum one Keith question for our line question. from the comes Research. with moment And of our Northcoast And next

line Your open Please go is ahead.

Keith Housum

Linda, morning, it. appreciate and Thank you. Phil I Good

If In risk terms to VC guys noted of greatest firms. very like I likely in doing for close, that most think you to hit understand, now. customers we forward, PE is do would guess trying I and just of I the more healthy of downturn, closing? and going we if where are FactSet a would terms

customers the losing where as So into risks go this we do downturn? year of see business you do

Philip Snow

one example. funds firms, that smaller being of closure. there’s not be Well, are yes, I the firms firm could competitive, think Hedge risk

of That’s of okay. unusual a in completely next large six standpoint. I So another asset sort for that a middle type FactSet that’s firm where And doing it’s for hedge from funds, -- The seem doing there. us the here well manager or we’re out pack a terms to bank in CTS put loses I’d hedge medium of funds months. the the be them

We have some footprint.

win taking just those within focused firms. market -- to we’re and us for is really, share So on what

of but me of on accounts amount much. -- has our control More be for More moving firm have worry forward. So us the our opportunity it’s doesn’t of closure frankly. hard so largest to that largest to that, focus the

Keith Housum

remind Great. but reoccurring, recurring it I of And versus, part? of being appreciate I that. did that And me do is then in nonrecurring? what terms is stream, your quarter I portion most your – of revenue guess, know the revenue how obviously, in

Philip Snow

to It’s something than it’s a our less out, we’re taking look something I It’s consider And a closer mean that’s break forward. helpful going at. to would probably think X%. moving certainly that of very be I percentage if small revenue. we’re more

little a trends going Typically, very the with been have much to ASV, down. it’d right? -- think it’s I business. and analytics with trend So

out the So services comes implementations. analytics of most the professional of

Keith Housum

luck. Great, thank you. Good

Philip Snow

Thanks.

Operator

question. moment of And comes line And Lau from for next question the you. one with Oppenheimer. Owen last Thank our our

Your line is Please open. go ahead.

Owen Lau

impact taking you we about year? expense please Could your your and an for to ESG you. ESG initiatives? should think this fiscal my give of you Thank questions. us update How Thank revenue initiatives on the your

Philip Snow

Owen. Hey,

probably selection for overall, agnostic ESG many different And ESG have So an in be globally. the region the integrate And ESG just best strategy region There’s so our focuses is market. is providers. the to of clients. other so ecosystem overarching fragmented. we in agent we our FactSet’s by

adds of don’t that own the concording In all ESG go their that through so managing are data. its data pain creating in that firms fact, the of have that value to composites terms

building top a to that to of we’re not provide own applications clients today. focused create It’s on ASV tools their contributor So to meaningful view, what own that's primarily their on.

probably a some of it of into think the put lot directly I its up ASV product, we’ve doesn’t as as value own but there’s workstation. that show

subscribing whatever workstation products a I subscribe market. the to they’re access that So users believe in to can ESG most

now. So really that’s our where primary right focus is

Owen Lau

for my it holidays. it. me. taking Thank from That’s Got you happy questions and

Philip Snow

You, Yes. too.

So thank today. joining us you all for

good fiscal a start We’re XXXX. off to in

performer in respond economic clients to FactSet successfully to talking confident well While uncertainty navigating of really is our I’m volatility. with drive prepared any growth, proven persists, constantly continued to market are consistent and are and a ability history a environment. we to sustainable our

with are offerings end the differentiated competitive in deliver and clients. our And our content business enhance we invest as diverse we we only to markets. continue innovative resilient a further value have products mix, to to product an We strengthening position and our

is all Before globally want high firm wrapping know of up, having continued fun. their and everyone thank hopefully, the engagement execution and really at to level I am. I for I FactSetters

invested, great most are. have we think I We’ve FactSetters culture. and a

forward additional this quarter. good holiday this Kendra next meantime, be look the a to any with now. ends place Brown call. season. contact be questions. feel it’s to to well with free So today’s again Operator, We And Please you right speaking in

Operator

call. Thank you conference for participating. today’s concludes This

great disconnect. now may Everyone, You have a day.

FactSet Research Systems (FDS) 20 Dec 222023 Q1 Earnings call transcript