FactSet Research

AI Features

FactSet has strategically invested in generative AI to bolster its platform and drive efficiency for clients. The company has introduced several AI-powered solutions, including the Transcript Assistant, which accelerates research and analysis of earnings call transcripts, and Portfolio Commentary, which uses large language models to generate detailed investment performance summaries in under a minute1. The integration of AI extends to the new Portfolio Manager Hub, featuring a chatbot called Portfolio Assistant, designed to provide precise, traceable answers without leaving the platform2.

These AI advancements are expected to deliver significant productivity gains for clients, helping them save substantial time and reduce costs. The company’s robust and comprehensive data ecosystem forms a solid foundation for these AI tools, ensuring reliability and accuracy3. The strategic importance of AI to FactSet's future growth was underscored by the prediction that these initiatives will begin delivering incremental annual subscription value (ASV) from fiscal 2025 onwards4.

FactSet's recent $12.5 million investment in Aidentified, an AI-powered prospecting and relationship intelligence platform, further strengthens its position in the AI space, enabling wealth advisors to enhance client acquisition and relationship management5. Overall, FactSet's focus on AI is seen as a crucial factor for maintaining its competitive edge and achieving growth in an evolving technological landscape.
1: Client count as of May 31, 2024 was 8,029, a net increase of 9 clients in the past three months, with increases driven by wealth, corporates, and partners. The count includes clients with ASV of $10,000 and more.User count increased by 1,662 to 208,140 in the past three months across all firm types except banking, mainly driven by wealth.Annual ASV retention was greater than 95%. When expressed as a percentage of clients, annual retention was 90%.Employee count was 12,262 as of May 31, 2024, up 1.6% over the last twelve months, with the increase primarily in the content group. FactSet's Centers of Excellence account for approximately 68% of the Company's employees.Net cash provided by operating activities increased to $238.2 million for the third quarter of fiscal 2024 compared with $218.6 million for the third quarter of fiscal 2023, primarily due to an increase in revenues and improved collection rates, as well as lower payments of our accounts payable and accrued expenses, due to timing. Quarterly free cash flow increased to $216.9 million compared with $192.6 million a year ago, an increase of 12.6%, primarily driven by an increase in net cash provided by operating activities.A quarterly dividend of $39.6 million, or $1.04 per share, was paid on June 20, 2024, to holders of record of FactSet’s common stock at the close of business on May 31, 2024. This represented a 6% increase in the regular quarterly dividend from the $0.98 per share paid in the previous quarter and marks the 25th consecutive year the Company has increased dividends on a stock split-adjusted basis.FactSet announced the release of its Transcript Assistant, a GenAI-powered, conversational chatbot that accelerates in-depth research and analysis of earnings call transcripts.FactSet announced the release of its Portfolio Commentary solution. Powered by large language models (LLMs), Portfolio Commentary significantly reduces the challenging, time-consuming, and nuanced process of writing attribution summaries manually. Instead, with the click of a button, users can generate baseline and source-linked portfolio commentary for any attribution report in approximately 30-60 seconds.In addition, in June 2024, FactSet made a $12.5 million investment in Aidentified, Inc., a leading AI-powered prospecting and relationship intelligence platform for financial services professionals. Aidentified provides financial advisors, marketing teams, and other sales professionals with tools to identify, qualify, and convert new client relationships. View Source2: Thank you, Ali, and good morning, everyone. Thanks for joining us today. Before I speak about this quarter's results, I just want to point out that we scheduled today's call on a Friday to allow for observant of the Juneteenth holiday earlier this week. We finished our third quarter with organic ASV and professional services growth of 5%. Adjusted diluted EPS rose to $4.37 for the quarter, and our adjusted operating margin was 39.4%. This quarter, we continued to see the impact of clients, tightening budgets, and cost rationalization. Trends w e highlighted last quarter that were echoed by others in the industry. These pressures extend decision-making and lengthened sales cycles. Also, as you may recall, the third quarter is seasonally our weakest of the year. Against this backdrop, we continue to build on FactSet's history of 44 consecutive years of revenue growth and 28 consecutive years of adjusted EPS growth. And in these 44 years, we have successfully navigated through even more difficult market conditions than we face right now. Despite challenged end markets, t his is an exciting time in our industry, particularly for technology companies with valuable data assets. We are harnessing the power of gen AI to build cutting-edge solutions and capture market share. For example, we held our 11th client symposium in Miami in April, showcasing new products and the value they bring to clients. These new products are driving requests for hundreds of product demonstrations, creating new leads for our sales team. Returning now to our third quarter, we concluded with 8,029 clients and nine net new logos. Our user count exceeded 208,000. Overall ASP retention remained higher than 95% and c lient retention was 90%. Currently, w e expect to finish the fiscal year with annual organic ASV plus professional services growth between 4% and 5.5%. Linda will provide further updates to guidance in a few minutes. Turning now to our performance by region. We saw slower growth in the third quarter due to continued market headwinds and the effect of the cancellation from the Credit Suisse-UBS merger, which impacted all of our regions. Overall, as cancellation accounted for approximately 30 basis points or two-thirds of our ASV deceleration quarter over quarter. In the Americas, gains from asset owners and wealth managers were offset by continued client cost rationalization and the Americas regions' o rganic ASV growth rate was 5.7%. In the EMEA region, growth was driven by a price increase, sales to asset owners, and higher ASV from the analytics products suite. The EMEA region's organic ASV growth rate was 4.4%. And in the Asia-Pacific region, we saw acceleration from buy-side firms driven by front office solutions and growing transactional revenues. The Asia Pacific regions organic ASV growth rate was 6.1%. Looking now at trends by firm types, on the institutional buy side, we had a notable win this quarter, displacing a competitor at a large asset manager in the US. This win was driven by our advanced fixed income analytics. We took an enterprise sales approach and the client chose our portfolio performance solutions and analytics capabilities. We had another significant win with a global asset manager. It moved to a multiyear agreement, including middle office portfolio services. This contract aligns with the client strategy to consolidate vendors and to reduce total cost of ownership. These victories demonstrate our ability to provide tailored high-value solutions to our clients. These clients also recognize that our ongoing management of their complex portfolio holdings positioned us well to do more for them. In banking, we saw a decline from the Credit Suisse cancellation. This segment is still impacted by cautious hiring and a wait-and-see attitude toward the overall capital market conditions. In wealth management, a lthough growth was modest this quarter, the sector remains a tremendous opportunity for FactSet, g iven our active pipeline. We're committed to enhancing our offerings to capture future growth and deliver compelling value to wealth advisors and their clients. A great example of this is our recent investments in Aidentified, which was announced last week. By incorporating Aidentified's relationship management data into FactSet's intelligent prospecting solution, we're able to accelerate new client acquisitions for wealth advisors. This brings us to the fast-evolving technology landscape where FactSet is well positioned to lead. We have more than 40 years of meticulously curated and connected data. We are trusted by institutional asset managers and retail wealth advisors with 16 million portfolios on our system, representing more than $30 trillion in assets. And on the sell side, FactSet is well established as the platform of choice for fundamental research workflows. For users on both the buy-side and sell-side, FactSet has a unique breadth of data curated for their specific-use cases. Our rich data ecosystem is a singularly robust and safe foundation for harnessing the power of generative AI, specifically our clients benefit from the combination of our data, our knowledge of clients' workflows, and our new generative AI tools. Together, they are producing unique insights and efficiencies for our clients. At FactSet, we are energized to help our clients find new ways to surface insights to set them apart from their peers. We're doing this with live demonstrations of our new products that are available right now. As a result, FactSet is the trusted partner of choice, g iven that accuracy requires both seasoned judgments and traceable data sources. At FactSet, we have both. A prime example is our portfolio commentary product released last month, which generates complete detailed investment performance summaries in about a minute. Portfolio commentary combines our comprehensive data and deep domain expertise to provide tailored and highly efficient outputs. We also launched the new portfolio manager hub, an end-to-end solution that integrates all elements of our portfolio managers workflow from news and research to analysis and trade simulation. PM Hub adds a gen AI-backed chatbot called Portfolio Assistant to tap into our data to provide precise, traceable answers, all without leaving the platform. Enthusiastic client response at the Portfolio Commentary and PM Hub give us confidence that we can extend our buy-side middle office presence to front office users. And on the sell side, FactSet Mercury optimizes the company research workflow for junior bankers. Using a single trusted conversational interface, we are working towards producing pitch books and charts on-demand. We expect users to save another 10 hours per week using this tool in addition to the 5 to 10 hours per week that they said they saved with FactSet b efore we released Mercury. If banking conditions improve, we are confident that bankers will seek out FactSet Mercury to give them better speed, accuracy and efficiency. Looking ahead, we have a multi-year strategic investment plan built on three key pillars. First, we are expanding our market data for deep sector, private markets, alternatives, and real-time applications. With real-time market data, f or example, we aim to compete for market share by transitioning to cloud-based solutions. By enhancing our [pick up] plans' cloud capabilities and expanding content coverage, w e can offer more scalable, reliable, and cost-efficient data services. We're well positioned to capture market share when clients demand modern cloud-based infrastructure. Secondly, client workflow. Beyond our middle office business, we are heavily invest testing in our process capabilities covering both fundamental and quantitative research. Our offerings for the sell side, particularly in banking automation and gaining traction with top global banks and boutique firms. Our wealth franchise also continues to grow with significant new opportunities in the pipeline. Thirdly, generative AI. This foundational and strategic initiative we believe will begin delivering incremental ASV in fiscal 2025. As we mentioned on new Portfolio Commentary and FactSet Mercury are already driving demand. And last week, we announced our off-platform AI solutions for technologists. These include a new generative AI data package, a conversational API powered by FactSet Mercury and a new AI partner program to bring fintechs and AI start-ups onto FactSet's platform. Together, we expect to see ASV growth from tech savvy financial firms and hedge funds. In summary, I am extremely excited about our competitive opportunity. The demand for traceable quality data grows, particularly for financial decision-making, we're adding critical AI tools to deliver real advantages for our clients. Our partnership-focused approach has made FactSet a preferred provider and positions us well for even greater success when market conditions improve. I will now hand it over to Linda to discuss our second-quarter performance in more detail. View Source3: Thank you, Ali, and good morning, everyone. Thanks for joining us today. Before I speak about this quarter's results, I just want to point out that we scheduled today's call on a Friday to allow for observant of the Juneteenth holiday earlier this week. We finished our third quarter with organic ASV and professional services growth of 5%. Adjusted diluted EPS rose to $4.37 for the quarter, and our adjusted operating margin was 39.4%. This quarter, we continued to see the impact of clients, tightening budgets, and cost rationalization. Trends w e highlighted last quarter that were echoed by others in the industry. These pressures extend decision-making and lengthened sales cycles. Also, as you may recall, the third quarter is seasonally our weakest of the year. Against this backdrop, we continue to build on FactSet's history of 44 consecutive years of revenue growth and 28 consecutive years of adjusted EPS growth. And in these 44 years, we have successfully navigated through even more difficult market conditions than we face right now. Despite challenged end markets, t his is an exciting time in our industry, particularly for technology companies with valuable data assets. We are harnessing the power of gen AI to build cutting-edge solutions and capture market share. For example, we held our 11th client symposium in Miami in April, showcasing new products and the value they bring to clients. These new products are driving requests for hundreds of product demonstrations, creating new leads for our sales team. Returning now to our third quarter, we concluded with 8,029 clients and nine net new logos. Our user count exceeded 208,000. Overall ASP retention remained higher than 95% and c lient retention was 90%. Currently, w e expect to finish the fiscal year with annual organic ASV plus professional services growth between 4% and 5.5%. Linda will provide further updates to guidance in a few minutes. Turning now to our performance by region. We saw slower growth in the third quarter due to continued market headwinds and the effect of the cancellation from the Credit Suisse-UBS merger, which impacted all of our regions. Overall, as cancellation accounted for approximately 30 basis points or two-thirds of our ASV deceleration quarter over quarter. In the Americas, gains from asset owners and wealth managers were offset by continued client cost rationalization and the Americas regions' o rganic ASV growth rate was 5.7%. In the EMEA region, growth was driven by a price increase, sales to asset owners, and higher ASV from the analytics products suite. The EMEA region's organic ASV growth rate was 4.4%. And in the Asia-Pacific region, we saw acceleration from buy-side firms driven by front office solutions and growing transactional revenues. The Asia Pacific regions organic ASV growth rate was 6.1%. Looking now at trends by firm types, on the institutional buy side, we had a notable win this quarter, displacing a competitor at a large asset manager in the US. This win was driven by our advanced fixed income analytics. We took an enterprise sales approach and the client chose our portfolio performance solutions and analytics capabilities. We had another significant win with a global asset manager. It moved to a multiyear agreement, including middle office portfolio services. This contract aligns with the client strategy to consolidate vendors and to reduce total cost of ownership. These victories demonstrate our ability to provide tailored high-value solutions to our clients. These clients also recognize that our ongoing management of their complex portfolio holdings positioned us well to do more for them. In banking, we saw a decline from the Credit Suisse cancellation. This segment is still impacted by cautious hiring and a wait-and-see attitude toward the overall capital market conditions. In wealth management, a lthough growth was modest this quarter, the sector remains a tremendous opportunity for FactSet, g iven our active pipeline. We're committed to enhancing our offerings to capture future growth and deliver compelling value to wealth advisors and their clients. A great example of this is our recent investments in Aidentified, which was announced last week. By incorporating Aidentified's relationship management data into FactSet's intelligent prospecting solution, we're able to accelerate new client acquisitions for wealth advisors. This brings us to the fast-evolving technology landscape where FactSet is well positioned to lead. We have more than 40 years of meticulously curated and connected data. We are trusted by institutional asset managers and retail wealth advisors with 16 million portfolios on our system, representing more than $30 trillion in assets. And on the sell side, FactSet is well established as the platform of choice for fundamental research workflows. For users on both the buy-side and sell-side, FactSet has a unique breadth of data curated for their specific-use cases. Our rich data ecosystem is a singularly robust and safe foundation for harnessing the power of generative AI, specifically our clients benefit from the combination of our data, our knowledge of clients' workflows, and our new generative AI tools. Together, they are producing unique insights and efficiencies for our clients. At FactSet, we are energized to help our clients find new ways to surface insights to set them apart from their peers. We're doing this with live demonstrations of our new products that are available right now. As a result, FactSet is the trusted partner of choice, g iven that accuracy requires both seasoned judgments and traceable data sources. At FactSet, we have both. A prime example is our portfolio commentary product released last month, which generates complete detailed investment performance summaries in about a minute. Portfolio commentary combines our comprehensive data and deep domain expertise to provide tailored and highly efficient outputs. We also launched the new portfolio manager hub, an end-to-end solution that integrates all elements of our portfolio managers workflow from news and research to analysis and trade simulation. PM Hub adds a gen AI-backed chatbot called Portfolio Assistant to tap into our data to provide precise, traceable answers, all without leaving the platform. Enthusiastic client response at the Portfolio Commentary and PM Hub give us confidence that we can extend our buy-side middle office presence to front office users. And on the sell side, FactSet Mercury optimizes the company research workflow for junior bankers. Using a single trusted conversational interface, we are working towards producing pitch books and charts on-demand. We expect users to save another 10 hours per week using this tool in addition to the 5 to 10 hours per week that they said they saved with FactSet b efore we released Mercury. If banking conditions improve, we are confident that bankers will seek out FactSet Mercury to give them better speed, accuracy and efficiency. Looking ahead, we have a multi-year strategic investment plan built on three key pillars. First, we are expanding our market data for deep sector, private markets, alternatives, and real-time applications. With real-time market data, f or example, we aim to compete for market share by transitioning to cloud-based solutions. By enhancing our [pick up] plans' cloud capabilities and expanding content coverage, w e can offer more scalable, reliable, and cost-efficient data services. We're well positioned to capture market share when clients demand modern cloud-based infrastructure. Secondly, client workflow. Beyond our middle office business, we are heavily invest testing in our process capabilities covering both fundamental and quantitative research. Our offerings for the sell side, particularly in banking automation and gaining traction with top global banks and boutique firms. Our wealth franchise also continues to grow with significant new opportunities in the pipeline. Thirdly, generative AI. This foundational and strategic initiative we believe will begin delivering incremental ASV in fiscal 2025. As we mentioned on new Portfolio Commentary and FactSet Mercury are already driving demand. And last week, we announced our off-platform AI solutions for technologists. These include a new generative AI data package, a conversational API powered by FactSet Mercury and a new AI partner program to bring fintechs and AI start-ups onto FactSet's platform. Together, we expect to see ASV growth from tech savvy financial firms and hedge funds. In summary, I am extremely excited about our competitive opportunity. The demand for traceable quality data grows, particularly for financial decision-making, we're adding critical AI tools to deliver real advantages for our clients. Our partnership-focused approach has made FactSet a preferred provider and positions us well for even greater success when market conditions improve. I will now hand it over to Linda to discuss our second-quarter performance in more detail. View Source4: Thank you, Ali, and good morning, everyone. Thanks for joining us today. Before I speak about this quarter's results, I just want to point out that we scheduled today's call on a Friday to allow for observant of the Juneteenth holiday earlier this week. We finished our third quarter with organic ASV and professional services growth of 5%. Adjusted diluted EPS rose to $4.37 for the quarter, and our adjusted operating margin was 39.4%. This quarter, we continued to see the impact of clients, tightening budgets, and cost rationalization. Trends w e highlighted last quarter that were echoed by others in the industry. These pressures extend decision-making and lengthened sales cycles. Also, as you may recall, the third quarter is seasonally our weakest of the year. Against this backdrop, we continue to build on FactSet's history of 44 consecutive years of revenue growth and 28 consecutive years of adjusted EPS growth. And in these 44 years, we have successfully navigated through even more difficult market conditions than we face right now. Despite challenged end markets, t his is an exciting time in our industry, particularly for technology companies with valuable data assets. We are harnessing the power of gen AI to build cutting-edge solutions and capture market share. For example, we held our 11th client symposium in Miami in April, showcasing new products and the value they bring to clients. These new products are driving requests for hundreds of product demonstrations, creating new leads for our sales team. Returning now to our third quarter, we concluded with 8,029 clients and nine net new logos. Our user count exceeded 208,000. Overall ASP retention remained higher than 95% and c lient retention was 90%. Currently, w e expect to finish the fiscal year with annual organic ASV plus professional services growth between 4% and 5.5%. Linda will provide further updates to guidance in a few minutes. Turning now to our performance by region. We saw slower growth in the third quarter due to continued market headwinds and the effect of the cancellation from the Credit Suisse-UBS merger, which impacted all of our regions. Overall, as cancellation accounted for approximately 30 basis points or two-thirds of our ASV deceleration quarter over quarter. In the Americas, gains from asset owners and wealth managers were offset by continued client cost rationalization and the Americas regions' o rganic ASV growth rate was 5.7%. In the EMEA region, growth was driven by a price increase, sales to asset owners, and higher ASV from the analytics products suite. The EMEA region's organic ASV growth rate was 4.4%. And in the Asia-Pacific region, we saw acceleration from buy-side firms driven by front office solutions and growing transactional revenues. The Asia Pacific regions organic ASV growth rate was 6.1%. Looking now at trends by firm types, on the institutional buy side, we had a notable win this quarter, displacing a competitor at a large asset manager in the US. This win was driven by our advanced fixed income analytics. We took an enterprise sales approach and the client chose our portfolio performance solutions and analytics capabilities. We had another significant win with a global asset manager. It moved to a multiyear agreement, including middle office portfolio services. This contract aligns with the client strategy to consolidate vendors and to reduce total cost of ownership. These victories demonstrate our ability to provide tailored high-value solutions to our clients. These clients also recognize that our ongoing management of their complex portfolio holdings positioned us well to do more for them. In banking, we saw a decline from the Credit Suisse cancellation. This segment is still impacted by cautious hiring and a wait-and-see attitude toward the overall capital market conditions. In wealth management, a lthough growth was modest this quarter, the sector remains a tremendous opportunity for FactSet, g iven our active pipeline. We're committed to enhancing our offerings to capture future growth and deliver compelling value to wealth advisors and their clients. A great example of this is our recent investments in Aidentified, which was announced last week. By incorporating Aidentified's relationship management data into FactSet's intelligent prospecting solution, we're able to accelerate new client acquisitions for wealth advisors. This brings us to the fast-evolving technology landscape where FactSet is well positioned to lead. We have more than 40 years of meticulously curated and connected data. We are trusted by institutional asset managers and retail wealth advisors with 16 million portfolios on our system, representing more than $30 trillion in assets. And on the sell side, FactSet is well established as the platform of choice for fundamental research workflows. For users on both the buy-side and sell-side, FactSet has a unique breadth of data curated for their specific-use cases. Our rich data ecosystem is a singularly robust and safe foundation for harnessing the power of generative AI, specifically our clients benefit from the combination of our data, our knowledge of clients' workflows, and our new generative AI tools. Together, they are producing unique insights and efficiencies for our clients. At FactSet, we are energized to help our clients find new ways to surface insights to set them apart from their peers. We're doing this with live demonstrations of our new products that are available right now. As a result, FactSet is the trusted partner of choice, g iven that accuracy requires both seasoned judgments and traceable data sources. At FactSet, we have both. A prime example is our portfolio commentary product released last month, which generates complete detailed investment performance summaries in about a minute. Portfolio commentary combines our comprehensive data and deep domain expertise to provide tailored and highly efficient outputs. We also launched the new portfolio manager hub, an end-to-end solution that integrates all elements of our portfolio managers workflow from news and research to analysis and trade simulation. PM Hub adds a gen AI-backed chatbot called Portfolio Assistant to tap into our data to provide precise, traceable answers, all without leaving the platform. Enthusiastic client response at the Portfolio Commentary and PM Hub give us confidence that we can extend our buy-side middle office presence to front office users. And on the sell side, FactSet Mercury optimizes the company research workflow for junior bankers. Using a single trusted conversational interface, we are working towards producing pitch books and charts on-demand. We expect users to save another 10 hours per week using this tool in addition to the 5 to 10 hours per week that they said they saved with FactSet b efore we released Mercury. If banking conditions improve, we are confident that bankers will seek out FactSet Mercury to give them better speed, accuracy and efficiency. Looking ahead, we have a multi-year strategic investment plan built on three key pillars. First, we are expanding our market data for deep sector, private markets, alternatives, and real-time applications. With real-time market data, f or example, we aim to compete for market share by transitioning to cloud-based solutions. By enhancing our [pick up] plans' cloud capabilities and expanding content coverage, w e can offer more scalable, reliable, and cost-efficient data services. We're well positioned to capture market share when clients demand modern cloud-based infrastructure. Secondly, client workflow. Beyond our middle office business, we are heavily invest testing in our process capabilities covering both fundamental and quantitative research. Our offerings for the sell side, particularly in banking automation and gaining traction with top global banks and boutique firms. Our wealth franchise also continues to grow with significant new opportunities in the pipeline. Thirdly, generative AI. This foundational and strategic initiative we believe will begin delivering incremental ASV in fiscal 2025. As we mentioned on new Portfolio Commentary and FactSet Mercury are already driving demand. And last week, we announced our off-platform AI solutions for technologists. These include a new generative AI data package, a conversational API powered by FactSet Mercury and a new AI partner program to bring fintechs and AI start-ups onto FactSet's platform. Together, we expect to see ASV growth from tech savvy financial firms and hedge funds. In summary, I am extremely excited about our competitive opportunity. The demand for traceable quality data grows, particularly for financial decision-making, we're adding critical AI tools to deliver real advantages for our clients. Our partnership-focused approach has made FactSet a preferred provider and positions us well for even greater success when market conditions improve. I will now hand it over to Linda to discuss our second-quarter performance in more detail. View Source5: Client count as of May 31, 2024 was 8,029, a net increase of 9 clients in the past three months, with increases driven by wealth, corporates, and partners. The count includes clients with ASV of $10,000 and more.User count increased by 1,662 to 208,140 in the past three months across all firm types except banking, mainly driven by wealth.Annual ASV retention was greater than 95%. When expressed as a percentage of clients, annual retention was 90%.Employee count was 12,262 as of May 31, 2024, up 1.6% over the last twelve months, with the increase primarily in the content group. FactSet's Centers of Excellence account for approximately 68% of the Company's employees.Net cash provided by operating activities increased to $238.2 million for the third quarter of fiscal 2024 compared with $218.6 million for the third quarter of fiscal 2023, primarily due to an increase in revenues and improved collection rates, as well as lower payments of our accounts payable and accrued expenses, due to timing. Quarterly free cash flow increased to $216.9 million compared with $192.6 million a year ago, an increase of 12.6%, primarily driven by an increase in net cash provided by operating activities.A quarterly dividend of $39.6 million, or $1.04 per share, was paid on June 20, 2024, to holders of record of FactSet’s common stock at the close of business on May 31, 2024. This represented a 6% increase in the regular quarterly dividend from the $0.98 per share paid in the previous quarter and marks the 25th consecutive year the Company has increased dividends on a stock split-adjusted basis.FactSet announced the release of its Transcript Assistant, a GenAI-powered, conversational chatbot that accelerates in-depth research and analysis of earnings call transcripts.FactSet announced the release of its Portfolio Commentary solution. Powered by large language models (LLMs), Portfolio Commentary significantly reduces the challenging, time-consuming, and nuanced process of writing attribution summaries manually. Instead, with the click of a button, users can generate baseline and source-linked portfolio commentary for any attribution report in approximately 30-60 seconds.In addition, in June 2024, FactSet made a $12.5 million investment in Aidentified, Inc., a leading AI-powered prospecting and relationship intelligence platform for financial services professionals. Aidentified provides financial advisors, marketing teams, and other sales professionals with tools to identify, qualify, and convert new client relationships. View Source
Evidence of AI driving revenue?
As of now, there is no concrete evidence of generative AI directly driving real revenue growth for FactSet. While FactSet's AI initiatives, such as the Portfolio Commentary and Transcript Assistant, are poised to deliver productivity gains and save substantial time for clients, the actual impact on revenue is expected to materialize from fiscal 2025 onwards. The company anticipates that these generative AI tools will start generating incremental annual subscription value (ASV) in the coming fiscal year6.
6: Thank you, Ali, and good morning, everyone. Thanks for joining us today. Before I speak about this quarter's results, I just want to point out that we scheduled today's call on a Friday to allow for observant of the Juneteenth holiday earlier this week. We finished our third quarter with organic ASV and professional services growth of 5%. Adjusted diluted EPS rose to $4.37 for the quarter, and our adjusted operating margin was 39.4%. This quarter, we continued to see the impact of clients, tightening budgets, and cost rationalization. Trends w e highlighted last quarter that were echoed by others in the industry. These pressures extend decision-making and lengthened sales cycles. Also, as you may recall, the third quarter is seasonally our weakest of the year. Against this backdrop, we continue to build on FactSet's history of 44 consecutive years of revenue growth and 28 consecutive years of adjusted EPS growth. And in these 44 years, we have successfully navigated through even more difficult market conditions than we face right now. Despite challenged end markets, t his is an exciting time in our industry, particularly for technology companies with valuable data assets. We are harnessing the power of gen AI to build cutting-edge solutions and capture market share. For example, we held our 11th client symposium in Miami in April, showcasing new products and the value they bring to clients. These new products are driving requests for hundreds of product demonstrations, creating new leads for our sales team. Returning now to our third quarter, we concluded with 8,029 clients and nine net new logos. Our user count exceeded 208,000. Overall ASP retention remained higher than 95% and c lient retention was 90%. Currently, w e expect to finish the fiscal year with annual organic ASV plus professional services growth between 4% and 5.5%. Linda will provide further updates to guidance in a few minutes. Turning now to our performance by region. We saw slower growth in the third quarter due to continued market headwinds and the effect of the cancellation from the Credit Suisse-UBS merger, which impacted all of our regions. Overall, as cancellation accounted for approximately 30 basis points or two-thirds of our ASV deceleration quarter over quarter. In the Americas, gains from asset owners and wealth managers were offset by continued client cost rationalization and the Americas regions' o rganic ASV growth rate was 5.7%. In the EMEA region, growth was driven by a price increase, sales to asset owners, and higher ASV from the analytics products suite. The EMEA region's organic ASV growth rate was 4.4%. And in the Asia-Pacific region, we saw acceleration from buy-side firms driven by front office solutions and growing transactional revenues. The Asia Pacific regions organic ASV growth rate was 6.1%. Looking now at trends by firm types, on the institutional buy side, we had a notable win this quarter, displacing a competitor at a large asset manager in the US. This win was driven by our advanced fixed income analytics. We took an enterprise sales approach and the client chose our portfolio performance solutions and analytics capabilities. We had another significant win with a global asset manager. It moved to a multiyear agreement, including middle office portfolio services. This contract aligns with the client strategy to consolidate vendors and to reduce total cost of ownership. These victories demonstrate our ability to provide tailored high-value solutions to our clients. These clients also recognize that our ongoing management of their complex portfolio holdings positioned us well to do more for them. In banking, we saw a decline from the Credit Suisse cancellation. This segment is still impacted by cautious hiring and a wait-and-see attitude toward the overall capital market conditions. In wealth management, a lthough growth was modest this quarter, the sector remains a tremendous opportunity for FactSet, g iven our active pipeline. We're committed to enhancing our offerings to capture future growth and deliver compelling value to wealth advisors and their clients. A great example of this is our recent investments in Aidentified, which was announced last week. By incorporating Aidentified's relationship management data into FactSet's intelligent prospecting solution, we're able to accelerate new client acquisitions for wealth advisors. This brings us to the fast-evolving technology landscape where FactSet is well positioned to lead. We have more than 40 years of meticulously curated and connected data. We are trusted by institutional asset managers and retail wealth advisors with 16 million portfolios on our system, representing more than $30 trillion in assets. And on the sell side, FactSet is well established as the platform of choice for fundamental research workflows. For users on both the buy-side and sell-side, FactSet has a unique breadth of data curated for their specific-use cases. Our rich data ecosystem is a singularly robust and safe foundation for harnessing the power of generative AI, specifically our clients benefit from the combination of our data, our knowledge of clients' workflows, and our new generative AI tools. Together, they are producing unique insights and efficiencies for our clients. At FactSet, we are energized to help our clients find new ways to surface insights to set them apart from their peers. We're doing this with live demonstrations of our new products that are available right now. As a result, FactSet is the trusted partner of choice, g iven that accuracy requires both seasoned judgments and traceable data sources. At FactSet, we have both. A prime example is our portfolio commentary product released last month, which generates complete detailed investment performance summaries in about a minute. Portfolio commentary combines our comprehensive data and deep domain expertise to provide tailored and highly efficient outputs. We also launched the new portfolio manager hub, an end-to-end solution that integrates all elements of our portfolio managers workflow from news and research to analysis and trade simulation. PM Hub adds a gen AI-backed chatbot called Portfolio Assistant to tap into our data to provide precise, traceable answers, all without leaving the platform. Enthusiastic client response at the Portfolio Commentary and PM Hub give us confidence that we can extend our buy-side middle office presence to front office users. And on the sell side, FactSet Mercury optimizes the company research workflow for junior bankers. Using a single trusted conversational interface, we are working towards producing pitch books and charts on-demand. We expect users to save another 10 hours per week using this tool in addition to the 5 to 10 hours per week that they said they saved with FactSet b efore we released Mercury. If banking conditions improve, we are confident that bankers will seek out FactSet Mercury to give them better speed, accuracy and efficiency. Looking ahead, we have a multi-year strategic investment plan built on three key pillars. First, we are expanding our market data for deep sector, private markets, alternatives, and real-time applications. With real-time market data, f or example, we aim to compete for market share by transitioning to cloud-based solutions. By enhancing our [pick up] plans' cloud capabilities and expanding content coverage, w e can offer more scalable, reliable, and cost-efficient data services. We're well positioned to capture market share when clients demand modern cloud-based infrastructure. Secondly, client workflow. Beyond our middle office business, we are heavily invest testing in our process capabilities covering both fundamental and quantitative research. Our offerings for the sell side, particularly in banking automation and gaining traction with top global banks and boutique firms. Our wealth franchise also continues to grow with significant new opportunities in the pipeline. Thirdly, generative AI. This foundational and strategic initiative we believe will begin delivering incremental ASV in fiscal 2025. As we mentioned on new Portfolio Commentary and FactSet Mercury are already driving demand. And last week, we announced our off-platform AI solutions for technologists. These include a new generative AI data package, a conversational API powered by FactSet Mercury and a new AI partner program to bring fintechs and AI start-ups onto FactSet's platform. Together, we expect to see ASV growth from tech savvy financial firms and hedge funds. In summary, I am extremely excited about our competitive opportunity. The demand for traceable quality data grows, particularly for financial decision-making, we're adding critical AI tools to deliver real advantages for our clients. Our partnership-focused approach has made FactSet a preferred provider and positions us well for even greater success when market conditions improve. I will now hand it over to Linda to discuss our second-quarter performance in more detail. View Source

Bull Case

  • Solid Earnings Performance: FactSet reported adjusted diluted EPS of $4.37 for Q3 2024, exceeding market expectations, indicating strong operational efficiency and profitability7,8,9.

  • Client and User Growth: The company's client count increased to 8,029 with over 208,000 users, reflecting its growing market presence and adoption of its solutions10,11.

  • High ASV Retention Rates: FactSet maintains annual subscription value retention rates greater than 95%, demonstrating reliable revenue streams from existing clients12,13.

  • AI-Powered Product Enhancements: Recent product launches, such as the Transcript Assistant and Portfolio Commentary, leverage generative AI to significantly enhance research and analysis efficiency14. These innovations position FactSet at the forefront of technological advancements in financial services.

  • Strategic Investments: The $12.5 million investment in Aidentified underscores FactSet's focus on AI-driven tools, which are expected to bolster their product offerings and client acquisition strategies15.

  • Positive Financial Metrics: FactSet's free cash flow increased by 12.6% year-over-year and net cash provided by operating activities rose to $238.2 million for Q3 2024, indicating robust financial health and liquidity16.

  • Analyst Confidence: Despite some cautious ratings, Barclays has set a price target of $460.0017, and UBS maintains a Hold rating with a $455.00 price target18, illustrating a degree of confidence in FactSet's potential for stock price appreciation.

Considering these factors, FactSet's continued innovation, market penetration, and strong financial performance could potentially drive its stock price higher over the next 12+ months, enhancing its appeal to investors seeking sustainable growth.
7: Results: FactSet Research Systems Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts View Source8: Q3 2024 Factset Research Systems Inc Earnings Call View Source9: Compared to Estimates, FactSet (FDS) Q3 Earnings: A Look at Key Metrics View Source10: Client count as of May 31, 2024 was 8,029, a net increase of 9 clients in the past three months, with increases driven by wealth, corporates, and partners. The count includes clients with ASV of $10,000 and more.User count increased by 1,662 to 208,140 in the past three months across all firm types except banking, mainly driven by wealth.Annual ASV retention was greater than 95%. When expressed as a percentage of clients, annual retention was 90%.Employee count was 12,262 as of May 31, 2024, up 1.6% over the last twelve months, with the increase primarily in the content group. FactSet's Centers of Excellence account for approximately 68% of the Company's employees.Net cash provided by operating activities increased to $238.2 million for the third quarter of fiscal 2024 compared with $218.6 million for the third quarter of fiscal 2023, primarily due to an increase in revenues and improved collection rates, as well as lower payments of our accounts payable and accrued expenses, due to timing. Quarterly free cash flow increased to $216.9 million compared with $192.6 million a year ago, an increase of 12.6%, primarily driven by an increase in net cash provided by operating activities.A quarterly dividend of $39.6 million, or $1.04 per share, was paid on June 20, 2024, to holders of record of FactSet’s common stock at the close of business on May 31, 2024. This represented a 6% increase in the regular quarterly dividend from the $0.98 per share paid in the previous quarter and marks the 25th consecutive year the Company has increased dividends on a stock split-adjusted basis.FactSet announced the release of its Transcript Assistant, a GenAI-powered, conversational chatbot that accelerates in-depth research and analysis of earnings call transcripts.FactSet announced the release of its Portfolio Commentary solution. Powered by large language models (LLMs), Portfolio Commentary significantly reduces the challenging, time-consuming, and nuanced process of writing attribution summaries manually. Instead, with the click of a button, users can generate baseline and source-linked portfolio commentary for any attribution report in approximately 30-60 seconds.In addition, in June 2024, FactSet made a $12.5 million investment in Aidentified, Inc., a leading AI-powered prospecting and relationship intelligence platform for financial services professionals. Aidentified provides financial advisors, marketing teams, and other sales professionals with tools to identify, qualify, and convert new client relationships. View Source11: Client count as of May 31, 2024 was 8,029, a net increase of 9 clients in the past three months, with increases driven by wealth, corporates, and partners. The count includes clients with ASV of $10,000 and more.User count increased by 1,662 to 208,140 in the past three months across all firm types except banking, mainly driven by wealth.Annual ASV retention was greater than 95%. When expressed as a percentage of clients, annual retention was 90%.Employee count was 12,262 as of May 31, 2024, up 1.6% over the last twelve months, with the increase primarily in the content group. FactSet's Centers of Excellence account for approximately 68% of the Company's employees.Net cash provided by operating activities increased to $238.2 million for the third quarter of fiscal 2024 compared with $218.6 million for the third quarter of fiscal 2023, primarily due to an increase in revenues and improved collection rates, as well as lower payments of our accounts payable and accrued expenses, due to timing. Quarterly free cash flow increased to $216.9 million compared with $192.6 million a year ago, an increase of 12.6%, primarily driven by an increase in net cash provided by operating activities.A quarterly dividend of $39.6 million, or $1.04 per share, was paid on June 20, 2024, to holders of record of FactSet’s common stock at the close of business on May 31, 2024. This represented a 6% increase in the regular quarterly dividend from the $0.98 per share paid in the previous quarter and marks the 25th consecutive year the Company has increased dividends on a stock split-adjusted basis.FactSet announced the release of its Transcript Assistant, a GenAI-powered, conversational chatbot that accelerates in-depth research and analysis of earnings call transcripts.FactSet announced the release of its Portfolio Commentary solution. Powered by large language models (LLMs), Portfolio Commentary significantly reduces the challenging, time-consuming, and nuanced process of writing attribution summaries manually. Instead, with the click of a button, users can generate baseline and source-linked portfolio commentary for any attribution report in approximately 30-60 seconds.In addition, in June 2024, FactSet made a $12.5 million investment in Aidentified, Inc., a leading AI-powered prospecting and relationship intelligence platform for financial services professionals. Aidentified provides financial advisors, marketing teams, and other sales professionals with tools to identify, qualify, and convert new client relationships. View Source12: Client count as of May 31, 2024 was 8,029, a net increase of 9 clients in the past three months, with increases driven by wealth, corporates, and partners. The count includes clients with ASV of $10,000 and more.User count increased by 1,662 to 208,140 in the past three months across all firm types except banking, mainly driven by wealth.Annual ASV retention was greater than 95%. When expressed as a percentage of clients, annual retention was 90%.Employee count was 12,262 as of May 31, 2024, up 1.6% over the last twelve months, with the increase primarily in the content group. FactSet's Centers of Excellence account for approximately 68% of the Company's employees.Net cash provided by operating activities increased to $238.2 million for the third quarter of fiscal 2024 compared with $218.6 million for the third quarter of fiscal 2023, primarily due to an increase in revenues and improved collection rates, as well as lower payments of our accounts payable and accrued expenses, due to timing. Quarterly free cash flow increased to $216.9 million compared with $192.6 million a year ago, an increase of 12.6%, primarily driven by an increase in net cash provided by operating activities.A quarterly dividend of $39.6 million, or $1.04 per share, was paid on June 20, 2024, to holders of record of FactSet’s common stock at the close of business on May 31, 2024. This represented a 6% increase in the regular quarterly dividend from the $0.98 per share paid in the previous quarter and marks the 25th consecutive year the Company has increased dividends on a stock split-adjusted basis.FactSet announced the release of its Transcript Assistant, a GenAI-powered, conversational chatbot that accelerates in-depth research and analysis of earnings call transcripts.FactSet announced the release of its Portfolio Commentary solution. Powered by large language models (LLMs), Portfolio Commentary significantly reduces the challenging, time-consuming, and nuanced process of writing attribution summaries manually. Instead, with the click of a button, users can generate baseline and source-linked portfolio commentary for any attribution report in approximately 30-60 seconds.In addition, in June 2024, FactSet made a $12.5 million investment in Aidentified, Inc., a leading AI-powered prospecting and relationship intelligence platform for financial services professionals. Aidentified provides financial advisors, marketing teams, and other sales professionals with tools to identify, qualify, and convert new client relationships. View Source13: Client count as of May 31, 2024 was 8,029, a net increase of 9 clients in the past three months, with increases driven by wealth, corporates, and partners. The count includes clients with ASV of $10,000 and more.User count increased by 1,662 to 208,140 in the past three months across all firm types except banking, mainly driven by wealth.Annual ASV retention was greater than 95%. When expressed as a percentage of clients, annual retention was 90%.Employee count was 12,262 as of May 31, 2024, up 1.6% over the last twelve months, with the increase primarily in the content group. FactSet's Centers of Excellence account for approximately 68% of the Company's employees.Net cash provided by operating activities increased to $238.2 million for the third quarter of fiscal 2024 compared with $218.6 million for the third quarter of fiscal 2023, primarily due to an increase in revenues and improved collection rates, as well as lower payments of our accounts payable and accrued expenses, due to timing. Quarterly free cash flow increased to $216.9 million compared with $192.6 million a year ago, an increase of 12.6%, primarily driven by an increase in net cash provided by operating activities.A quarterly dividend of $39.6 million, or $1.04 per share, was paid on June 20, 2024, to holders of record of FactSet’s common stock at the close of business on May 31, 2024. This represented a 6% increase in the regular quarterly dividend from the $0.98 per share paid in the previous quarter and marks the 25th consecutive year the Company has increased dividends on a stock split-adjusted basis.FactSet announced the release of its Transcript Assistant, a GenAI-powered, conversational chatbot that accelerates in-depth research and analysis of earnings call transcripts.FactSet announced the release of its Portfolio Commentary solution. Powered by large language models (LLMs), Portfolio Commentary significantly reduces the challenging, time-consuming, and nuanced process of writing attribution summaries manually. Instead, with the click of a button, users can generate baseline and source-linked portfolio commentary for any attribution report in approximately 30-60 seconds.In addition, in June 2024, FactSet made a $12.5 million investment in Aidentified, Inc., a leading AI-powered prospecting and relationship intelligence platform for financial services professionals. Aidentified provides financial advisors, marketing teams, and other sales professionals with tools to identify, qualify, and convert new client relationships. View Source14: Client count as of May 31, 2024 was 8,029, a net increase of 9 clients in the past three months, with increases driven by wealth, corporates, and partners. The count includes clients with ASV of $10,000 and more.User count increased by 1,662 to 208,140 in the past three months across all firm types except banking, mainly driven by wealth.Annual ASV retention was greater than 95%. When expressed as a percentage of clients, annual retention was 90%.Employee count was 12,262 as of May 31, 2024, up 1.6% over the last twelve months, with the increase primarily in the content group. FactSet's Centers of Excellence account for approximately 68% of the Company's employees.Net cash provided by operating activities increased to $238.2 million for the third quarter of fiscal 2024 compared with $218.6 million for the third quarter of fiscal 2023, primarily due to an increase in revenues and improved collection rates, as well as lower payments of our accounts payable and accrued expenses, due to timing. Quarterly free cash flow increased to $216.9 million compared with $192.6 million a year ago, an increase of 12.6%, primarily driven by an increase in net cash provided by operating activities.A quarterly dividend of $39.6 million, or $1.04 per share, was paid on June 20, 2024, to holders of record of FactSet’s common stock at the close of business on May 31, 2024. This represented a 6% increase in the regular quarterly dividend from the $0.98 per share paid in the previous quarter and marks the 25th consecutive year the Company has increased dividends on a stock split-adjusted basis.FactSet announced the release of its Transcript Assistant, a GenAI-powered, conversational chatbot that accelerates in-depth research and analysis of earnings call transcripts.FactSet announced the release of its Portfolio Commentary solution. Powered by large language models (LLMs), Portfolio Commentary significantly reduces the challenging, time-consuming, and nuanced process of writing attribution summaries manually. Instead, with the click of a button, users can generate baseline and source-linked portfolio commentary for any attribution report in approximately 30-60 seconds.In addition, in June 2024, FactSet made a $12.5 million investment in Aidentified, Inc., a leading AI-powered prospecting and relationship intelligence platform for financial services professionals. Aidentified provides financial advisors, marketing teams, and other sales professionals with tools to identify, qualify, and convert new client relationships. View Source15: Aidentified Announces $12.5 Million Series B Funding from FactSet View Source16: Client count as of May 31, 2024 was 8,029, a net increase of 9 clients in the past three months, with increases driven by wealth, corporates, and partners. The count includes clients with ASV of $10,000 and more.User count increased by 1,662 to 208,140 in the past three months across all firm types except banking, mainly driven by wealth.Annual ASV retention was greater than 95%. When expressed as a percentage of clients, annual retention was 90%.Employee count was 12,262 as of May 31, 2024, up 1.6% over the last twelve months, with the increase primarily in the content group. FactSet's Centers of Excellence account for approximately 68% of the Company's employees.Net cash provided by operating activities increased to $238.2 million for the third quarter of fiscal 2024 compared with $218.6 million for the third quarter of fiscal 2023, primarily due to an increase in revenues and improved collection rates, as well as lower payments of our accounts payable and accrued expenses, due to timing. Quarterly free cash flow increased to $216.9 million compared with $192.6 million a year ago, an increase of 12.6%, primarily driven by an increase in net cash provided by operating activities.A quarterly dividend of $39.6 million, or $1.04 per share, was paid on June 20, 2024, to holders of record of FactSet’s common stock at the close of business on May 31, 2024. This represented a 6% increase in the regular quarterly dividend from the $0.98 per share paid in the previous quarter and marks the 25th consecutive year the Company has increased dividends on a stock split-adjusted basis.FactSet announced the release of its Transcript Assistant, a GenAI-powered, conversational chatbot that accelerates in-depth research and analysis of earnings call transcripts.FactSet announced the release of its Portfolio Commentary solution. Powered by large language models (LLMs), Portfolio Commentary significantly reduces the challenging, time-consuming, and nuanced process of writing attribution summaries manually. Instead, with the click of a button, users can generate baseline and source-linked portfolio commentary for any attribution report in approximately 30-60 seconds.In addition, in June 2024, FactSet made a $12.5 million investment in Aidentified, Inc., a leading AI-powered prospecting and relationship intelligence platform for financial services professionals. Aidentified provides financial advisors, marketing teams, and other sales professionals with tools to identify, qualify, and convert new client relationships. View Source17: Barclays analyst Manav Patnaik maintained a Hold rating on Factset Research today and set a price target of $460.00. The company’s shares closed last Monday at $406.73. View Source18: Currently, the analyst consensus on Factset Research is a Moderate Sell with an average price target of $429.00, which is a 7.3% upside from current levels. In a report issued on June 11, UBS also maintained a Hold rating on the stock with a $455.00 price target. View Source

Bear Case

  • Sustained Sales Challenges: FactSet has faced persistent difficulties in its sales growth, leading to a revised and lower annual subscription value (ASV) growth forecast19. Analyst consensus shows a Moderate Sell rating with a significant decrease in target prices from analysts like Jefferies and Morgan Stanley, now at $378 and $350 respectively20.

  • Market Headwinds: The company has been subjected to challenging market conditions, particularly impacting its annual ASV and weakening sales performance. These factors have led to cautious hiring and extended sales cycles, further complicating revenue generation21.

  • Diminished ASV Growth: Despite operational efficiency, the ASV growth has decelerated, primarily due to the cancellation of contracts like the Credit Suisse-UBS merger, which significantly impacted ASV growth in all regions22. The current market environment shows no immediate signs of improvement, making it difficult for FactSet to achieve even the midpoint of their updated ASV guidance23.

  • Analyst Downgrades: FactSet has been subject to several downgrades and maintained Sell ratings from analysts like Goldman Sachs, citing concerns over future growth prospects and market saturation24. The downward adjustments in price targets indicate a conservative outlook on FactSet's stock appreciation potential.

  • Competitive Pressures: Intense competition within the financial data and analytics sector may challenge FactSet's ability to maintain its market share and pricing power. The competitive landscape is increasingly populated with innovative and potentially disruptive technologies, adding pressure on FactSet's growth strategies25.

Considering these points, FactSet's stock price could face downward pressure due to persistent sales challenges, market headwinds, and competitive pressures. These factors might limit its potential for significant stock appreciation over the next 12+ months.
19: Toni Kaplan has given his Sell rating due to a combination of factors impacting Factset Research’s financial performance and market outlook. In the recent quarter, Factset faced challenging market conditions that hindered the growth of their Annual Subscription Value (ASV), causing a downward revision of their ASV growth forecast for the year. This revision reflects a substantial drop from their previous projections, signaling a potential concern for future revenue growth. Additionally, the consensus expectations for net new ASV growth were not met, indicating a weaker performance than the market anticipated. Despite this, the actual margin results were better than expected, suggesting some operational efficiency. However, even with this margin improvement, about half of the year-over-year enhancement was attributed to non-recurring factors, which may not be sustainable in the long term. Kaplan remains cautious, pointing out that the current market environment shows no signs of immediate improvement, which could further complicate Factset’s path to achieving even the midpoint of their updated ASV guidance. Moreover, Kaplan’s analysis leads to a slight adjustment in the price target, but maintains the Sell rating, reflecting a conservative stance on Factset’s ability to navigate through these difficult market conditions and achieve substantial organic ASV growth. View Source20: Factset Research (FDS – Research Report), the Financial sector company, was revisited by a Wall Street analyst yesterday. Analyst Toni Kaplan from Morgan Stanley maintained a Sell rating on the stock and has a $355.00 price target. View Source21: Thank you, Ali, and good morning, everyone. Thanks for joining us today. Before I speak about this quarter's results, I just want to point out that we scheduled today's call on a Friday to allow for observant of the Juneteenth holiday earlier this week. We finished our third quarter with organic ASV and professional services growth of 5%. Adjusted diluted EPS rose to $4.37 for the quarter, and our adjusted operating margin was 39.4%. This quarter, we continued to see the impact of clients, tightening budgets, and cost rationalization. Trends w e highlighted last quarter that were echoed by others in the industry. These pressures extend decision-making and lengthened sales cycles. Also, as you may recall, the third quarter is seasonally our weakest of the year. Against this backdrop, we continue to build on FactSet's history of 44 consecutive years of revenue growth and 28 consecutive years of adjusted EPS growth. And in these 44 years, we have successfully navigated through even more difficult market conditions than we face right now. Despite challenged end markets, t his is an exciting time in our industry, particularly for technology companies with valuable data assets. We are harnessing the power of gen AI to build cutting-edge solutions and capture market share. For example, we held our 11th client symposium in Miami in April, showcasing new products and the value they bring to clients. These new products are driving requests for hundreds of product demonstrations, creating new leads for our sales team. Returning now to our third quarter, we concluded with 8,029 clients and nine net new logos. Our user count exceeded 208,000. Overall ASP retention remained higher than 95% and c lient retention was 90%. Currently, w e expect to finish the fiscal year with annual organic ASV plus professional services growth between 4% and 5.5%. Linda will provide further updates to guidance in a few minutes. Turning now to our performance by region. We saw slower growth in the third quarter due to continued market headwinds and the effect of the cancellation from the Credit Suisse-UBS merger, which impacted all of our regions. Overall, as cancellation accounted for approximately 30 basis points or two-thirds of our ASV deceleration quarter over quarter. In the Americas, gains from asset owners and wealth managers were offset by continued client cost rationalization and the Americas regions' o rganic ASV growth rate was 5.7%. In the EMEA region, growth was driven by a price increase, sales to asset owners, and higher ASV from the analytics products suite. The EMEA region's organic ASV growth rate was 4.4%. And in the Asia-Pacific region, we saw acceleration from buy-side firms driven by front office solutions and growing transactional revenues. The Asia Pacific regions organic ASV growth rate was 6.1%. Looking now at trends by firm types, on the institutional buy side, we had a notable win this quarter, displacing a competitor at a large asset manager in the US. This win was driven by our advanced fixed income analytics. We took an enterprise sales approach and the client chose our portfolio performance solutions and analytics capabilities. We had another significant win with a global asset manager. It moved to a multiyear agreement, including middle office portfolio services. This contract aligns with the client strategy to consolidate vendors and to reduce total cost of ownership. These victories demonstrate our ability to provide tailored high-value solutions to our clients. These clients also recognize that our ongoing management of their complex portfolio holdings positioned us well to do more for them. In banking, we saw a decline from the Credit Suisse cancellation. This segment is still impacted by cautious hiring and a wait-and-see attitude toward the overall capital market conditions. In wealth management, a lthough growth was modest this quarter, the sector remains a tremendous opportunity for FactSet, g iven our active pipeline. We're committed to enhancing our offerings to capture future growth and deliver compelling value to wealth advisors and their clients. A great example of this is our recent investments in Aidentified, which was announced last week. By incorporating Aidentified's relationship management data into FactSet's intelligent prospecting solution, we're able to accelerate new client acquisitions for wealth advisors. This brings us to the fast-evolving technology landscape where FactSet is well positioned to lead. We have more than 40 years of meticulously curated and connected data. We are trusted by institutional asset managers and retail wealth advisors with 16 million portfolios on our system, representing more than $30 trillion in assets. And on the sell side, FactSet is well established as the platform of choice for fundamental research workflows. For users on both the buy-side and sell-side, FactSet has a unique breadth of data curated for their specific-use cases. Our rich data ecosystem is a singularly robust and safe foundation for harnessing the power of generative AI, specifically our clients benefit from the combination of our data, our knowledge of clients' workflows, and our new generative AI tools. Together, they are producing unique insights and efficiencies for our clients. At FactSet, we are energized to help our clients find new ways to surface insights to set them apart from their peers. We're doing this with live demonstrations of our new products that are available right now. As a result, FactSet is the trusted partner of choice, g iven that accuracy requires both seasoned judgments and traceable data sources. At FactSet, we have both. A prime example is our portfolio commentary product released last month, which generates complete detailed investment performance summaries in about a minute. Portfolio commentary combines our comprehensive data and deep domain expertise to provide tailored and highly efficient outputs. We also launched the new portfolio manager hub, an end-to-end solution that integrates all elements of our portfolio managers workflow from news and research to analysis and trade simulation. PM Hub adds a gen AI-backed chatbot called Portfolio Assistant to tap into our data to provide precise, traceable answers, all without leaving the platform. Enthusiastic client response at the Portfolio Commentary and PM Hub give us confidence that we can extend our buy-side middle office presence to front office users. And on the sell side, FactSet Mercury optimizes the company research workflow for junior bankers. Using a single trusted conversational interface, we are working towards producing pitch books and charts on-demand. We expect users to save another 10 hours per week using this tool in addition to the 5 to 10 hours per week that they said they saved with FactSet b efore we released Mercury. If banking conditions improve, we are confident that bankers will seek out FactSet Mercury to give them better speed, accuracy and efficiency. Looking ahead, we have a multi-year strategic investment plan built on three key pillars. First, we are expanding our market data for deep sector, private markets, alternatives, and real-time applications. With real-time market data, f or example, we aim to compete for market share by transitioning to cloud-based solutions. By enhancing our [pick up] plans' cloud capabilities and expanding content coverage, w e can offer more scalable, reliable, and cost-efficient data services. We're well positioned to capture market share when clients demand modern cloud-based infrastructure. Secondly, client workflow. Beyond our middle office business, we are heavily invest testing in our process capabilities covering both fundamental and quantitative research. Our offerings for the sell side, particularly in banking automation and gaining traction with top global banks and boutique firms. Our wealth franchise also continues to grow with significant new opportunities in the pipeline. Thirdly, generative AI. This foundational and strategic initiative we believe will begin delivering incremental ASV in fiscal 2025. As we mentioned on new Portfolio Commentary and FactSet Mercury are already driving demand. And last week, we announced our off-platform AI solutions for technologists. These include a new generative AI data package, a conversational API powered by FactSet Mercury and a new AI partner program to bring fintechs and AI start-ups onto FactSet's platform. Together, we expect to see ASV growth from tech savvy financial firms and hedge funds. In summary, I am extremely excited about our competitive opportunity. The demand for traceable quality data grows, particularly for financial decision-making, we're adding critical AI tools to deliver real advantages for our clients. Our partnership-focused approach has made FactSet a preferred provider and positions us well for even greater success when market conditions improve. I will now hand it over to Linda to discuss our second-quarter performance in more detail. View Source22: Q3 2024 Factset Research Systems Inc Earnings Call View Source23: Toni Kaplan has given his Sell rating due to a combination of factors impacting Factset Research’s financial performance and market outlook. In the recent quarter, Factset faced challenging market conditions that hindered the growth of their Annual Subscription Value (ASV), causing a downward revision of their ASV growth forecast for the year. This revision reflects a substantial drop from their previous projections, signaling a potential concern for future revenue growth. Additionally, the consensus expectations for net new ASV growth were not met, indicating a weaker performance than the market anticipated. Despite this, the actual margin results were better than expected, suggesting some operational efficiency. However, even with this margin improvement, about half of the year-over-year enhancement was attributed to non-recurring factors, which may not be sustainable in the long term. Kaplan remains cautious, pointing out that the current market environment shows no signs of immediate improvement, which could further complicate Factset’s path to achieving even the midpoint of their updated ASV guidance. Moreover, Kaplan’s analysis leads to a slight adjustment in the price target, but maintains the Sell rating, reflecting a conservative stance on Factset’s ability to navigate through these difficult market conditions and achieve substantial organic ASV growth. View Source24: Toni Kaplan has given his Sell rating due to a combination of factors impacting Factset Research’s financial performance and market outlook. In the recent quarter, Factset faced challenging market conditions that hindered the growth of their Annual Subscription Value (ASV), causing a downward revision of their ASV growth forecast for the year. This revision reflects a substantial drop from their previous projections, signaling a potential concern for future revenue growth. Additionally, the consensus expectations for net new ASV growth were not met, indicating a weaker performance than the market anticipated. Despite this, the actual margin results were better than expected, suggesting some operational efficiency. However, even with this margin improvement, about half of the year-over-year enhancement was attributed to non-recurring factors, which may not be sustainable in the long term. Kaplan remains cautious, pointing out that the current market environment shows no signs of immediate improvement, which could further complicate Factset’s path to achieving even the midpoint of their updated ASV guidance. Moreover, Kaplan’s analysis leads to a slight adjustment in the price target, but maintains the Sell rating, reflecting a conservative stance on Factset’s ability to navigate through these difficult market conditions and achieve substantial organic ASV growth. View Source25: Factset Research (FDS – Research Report), the Financial sector company, was revisited by a Wall Street analyst yesterday. Analyst Toni Kaplan from Morgan Stanley maintained a Sell rating on the stock and has a $355.00 price target. View Source