FactSet Reports Results for First Quarter 2024
-- Q1 GAAP revenue of $542.2 million, up 7.4% from Q1 2023.
-- Organic Q1 ASV plus professional services of $2,185.0 million, up 7.1%
year over year.
-- Q1 GAAP operating margin of 34.9%, up approximately 80 bps year over year,
and adjusted operating margin of 37.6%, down approximately 70 bps from
the prior year.
-- Q1 GAAP diluted EPS of $3.84, up 9.1% from the prior year, and adjusted
diluted EPS of $4.12, up 3.3% year over year.
-- Fiscal 2024 guidance update: expected ASV plus professional services
growth of 5-7%, GAAP revenue growth of 5.5-6%, adjusted operating margin
increase of 10-50 bps, and adjusted diluted EPS growth of 6-9%.
-- FactSet has published an AI Blueprint describing plans to responsibly
deploy AI solutions to its clients. FactSet Mercury, launched last week,
features a new large language model-based workflow tool for junior
bankers.
NORWALK, Conn., Dec. 19, 2023 (GLOBE NEWSWIRE) — FactSet (“FactSet” or the “Company”) (NYSE:FDS) (NASDAQ:FDS), a global financial digital platform and enterprise solutions provider, today announced results for its first fiscal 2024 quarter ended November 30, 2023.
First Quarter Fiscal 2024 Highlights
-- GAAP revenue increased 7.4%, or $37.4 million, to $542.2 million for the
first quarter of fiscal 2024 compared with $504.8 million in the prior
year period. Organic(1) revenue grew 7.2% year over year to $541.4
million during the first quarter of fiscal 2024. The increase was
primarily due to higher Wealth sales and increased sales of data.
-- Annual Subscription Value (ASV) plus professional services was $2,184.6
million at November 30, 2023, compared with $2,039.0 million at
November 30, 2022. Organic ASV plus professional services was $2,185.0
million at November 30, 2023, up 7.1% or $145.3 million year over year.
-- Organic ASV plus professional services increased $14.3 million over the
last three months. Please see the "ASV + Professional Services" section
of this press release for details.
-- GAAP operating margin increased to 34.9% compared with 34.1% for the
prior year, primarily due to a decrease in professional fees, personnel
and facilities costs partially offset by higher technology related
expenses. Adjusted operating margin decreased to 37.6% compared with
38.3% in the prior year period driven by higher technology expenses
partially offset by lower facilities expenses, professional services and
travel and entertainment expenses.
-- GAAP diluted earnings per share (EPS) increased 9.1% to $3.84 compared
with $3.52 for the same period in fiscal 2023, due to higher revenue and
margin expansion partially offset by a higher tax rate. Adjusted diluted
EPS increased 3.3% to $4.12 compared with $3.99 for the prior year period,
driven by revenue growth partially offset by margin compression and a
higher tax rate.
-- EBITDA increased to $219.0 million, up 9.3% for the first quarter of
fiscal 2024 compared with $200.4 million for the same period in fiscal
2023.
-- The Company's effective tax rate for the first quarter of fiscal 2024
increased to 15.2% compared with 13.4% for the three months ended
November 30, 2022, primarily due to a lower tax benefit from stock option
exercises and restricted stock vesting. The reminder of the increase was
due to higher pre-tax income and a higher foreign tax rate, partially
offset by foreign tax credits.
“In an environment of continued macroeconomic uncertainty, I remain confident in the health of our business and our strategy, and I am optimistic about our ability to grow our business,” said Phil Snow, FactSet CEO. “We are harnessing the power of generative AI to transform our products while expanding the breadth of data and analytics on our open platform.”
(1) References to “organic” figures in this press release exclude the current year impact of acquisitions and dispositions completed within the past twelve months and the current year impact from changes in foreign currency. For year to date comparisons, organic revenues excludes current year revenues that were incurred prior to the the first anniversary date of an acquisition.
Key Financial Measures*
(Condensed and Unaudited) Three Months Ended
November 30,
(In thousands, except per share
data) 2023 2022 Change
--------------------------------- ------- ------- -----------
Revenues $542,216 $504,815 7.4%
Organic revenues $541,393 $504,815 7.2%
Operating income $189,040 $171,895 10.0%
Adjusted operating income $203,965 $193,402 5.5%
Operating margin 34.9% 34.1% 81bps
Adjusted operating margin 37.6% 38.3% (69bps)
Net income $148,555 $136,798 8.6%
Adjusted net income $159,127 $155,171 2.5%
EBITDA $219,002 $200,419 9.3%
Diluted EPS $ 3.84 $ 3.52 9.1%
Adjusted diluted EPS $ 4.12 $ 3.99 3.3%
--------------------------------- ------- ------- -------
* See reconciliation of U.S. GAAP to adjusted key financial measures in the back of this press release.
“We remain vigilant about evolving market conditions as we direct investment toward our most competitive offerings, including AI,” said Linda Huber, FactSet CFO. “Also, we are updating our organic ASV guidance for fiscal 2024. We now expect that our organic ASV growth will be in the range of $110 million to $150 million for fiscal 2024, reduced from our previous guidance of $130 million to $175 million, representing ASV growth of 6% at the midpoint.”
Annual Subscription Value (ASV) + Professional Services
ASV at any given point in time represents the forward-looking revenues for the next twelve months from all subscription services currently supplied to clients. Professional services are revenues derived from project-based consulting and implementation.
ASV plus professional services was $2,184.6 million at November 30, 2023, compared with $2,039.0 million at November 30, 2022. Organic ASV plus professional services was $2,185.0 million at November 30, 2023, up $145.3 million from the prior year, for a growth rate of 7.1%. Organic ASV plus professional services increased $14.3 million over the last three months.
Buy-side and sell-side organic ASV growth rates for the first quarter of fiscal 2024 were 7.2% and 7.6%, respectively. Buy-side clients, including asset managers, wealth managers, asset owners, hedge funds, partners, and corporate clients, accounted for 82% of organic ASV. The remaining organic ASV came from sell-side firms, including broker-dealers, banking and advisory, private equity and venture capital firms. Supplementary tables covering organic buy-side and sell-side ASV growth rates may be found on the last page of this press release.
Segment Revenues and ASV
ASV from the Americas region was $1,395.0 million compared with ASV in the prior year period of $1,293.1 million. Organic ASV increased 7.9% to $1,395.1 million. Americas revenues for the quarter increased to $348.3 million compared with $323.4 million in the first quarter of last year. The Americas region’s organic revenues growth rate was 7.7%.
ASV from the EMEA region was $552.4 million compared with ASV in the prior year period of $522.0 million. Organic ASV increased 5.4% to $552.2 million. EMEA revenues were $139.6 million compared with $130.7 million in the first quarter of fiscal 2023. The EMEA region’s organic revenues growth rate was 6.1%.
ASV from the Asia Pacific region was $215.0 million compared with ASV in the prior year period of $201.0 million. Organic ASV increased 8.0% to $215.5 million. Asia Pacific revenues were $54.3 million compared with $50.7 million in the first quarter of fiscal 2023. The Asia Pacific region’s organic revenues growth rate was 7.5%.
Segment ASV does not include professional services, which totaled $22.2 million at November 30, 2023
Operational Highlights — First Quarter Fiscal 2024
-- Client count as of November 30, 2023 was 7,945, a net increase of 24
clients in the past three months, driven by an increase in private
equity/venture capital, corporates and wealth management clients. The
count includes clients with ASV of $10,000 and more.
-- User count increased by 17,111 to 207,083 in the past three months,
driven by an increase in wealth management users.
-- Annual ASV retention was greater than 95%. When expressed as a percentage
of clients, annual retention was 90%.
-- Employee count was 12,515 as of November 30, 2023, up 7.6% over the last
twelve months, with the increase primarily in FactSet's Centers of
Excellence. Growth was driven by an increase in the content, product, and
technology organizations. 68% of FactSet employees are located in the
Centers of Excellence.
-- Net cash provided by operating activities increased to $155.1 million
compared with $106.6 million for the first quarter of fiscal 2023,
primarily due to an increase in cash collections in the current year.
Quarterly free cash flow increased to $138.7 million compared with $88.7
million a year ago, an increase of 56.4%, driven by an increase in net
cash provided by operating activities.
-- A quarterly dividend of $37.3 million, or $0.98 per share, will be paid
on December 21, 2023, to holders of record of FactSet's common stock at