The following is a summary of the FactSet Research Systems Inc. (FDS) Q2 2024 Earnings Call Transcript:
Financial Performance:
- FactSet recorded Q2 organic ASV plus professional services growth of 5.4% year-over-year, with an adjusted operating margin of 38.3% and adjusted diluted EPS of $4.22.
- GAAP revenue for the quarter rose by 6% to $546 million, while the GAAP operating expenses increased by 5%.
- An improvement of 130 basis points was noted in the adjusted operating margin to 38.3% and adjusted diluted EPS rose by 11% to $4.22.
- Q2 closed with more than 8,000 clients, and user count was 206,478.
- However, free cash flow decreased by 17% to $122 million compared to the same quarter in the prior year.
Business Progress:
- FactSet’s client retention remained strong at 90%, with ASV retention higher than 95%, despite purchasing decisions being delayed due to client caution.
- Positive momentum is being seen with corporates within investor relations, accompanied by a rising growth in the managed services business.
- GenAI-enhanced tools and copilots are being developed and significant developments in the GenAI solutions have lead to positive feedback.
- Organizational changes have been implemented to position the company for potential growth.
- FactSet has successfully doubled the number of seats on its platform over the past five years and has a healthy H2 pipeline.
- Riding on the demand for data solutions and platform use, FactSet is focusing on innovation for long-term client efficiency, and capitalizing on opportunities in banking, private equity, corporates and hedge funds.
- Cost cuts were implemented and personal growth is expected to be flat in FY ’25, maintaining an offshore balance of approximately 68%.