FactSet Research Q4: Marginal Revenue Beat, Misses On Bottomline, Dull FY24 Outlook & More

FactSet Research Systems Inc. FDS reported fourth-quarter FY23 sales growth of 7.3% year-on-year to $535.797 million, marginally beating the consensus of $535.280 million. 

Adjusted EPS of $2.930 missed the consensus of $3.50.

The sales increase was primarily due to higher sales of Analytics & Trading and Content & Technology solutions.

As of August 31, 2023, the client count was 7,921, a net increase of 151 clients in the past three months, primarily driven by the rise in corporate and wealth management clients and channel partners.

Adjusted operating margin improved to 33.6% (+210 bps Y/Y), driven by a lower bonus accrual, partially offset by higher salary expenses. 

Adjusted EBITDA increased to $172.2 million, up 8.6% Y/Y, due to higher income tax add-backs and impairment charges.

The company exited the quarter with $425.44 million in cash and equivalents. 

"During a transformative period where technology is reshaping our industry, FactSet's open platform strategy is resonating with clients seeking new sources of growth as well as increased efficiency," said Phil Snow, FactSet CEO. "Our unwavering commitment to innovation is putting the full power of our vast repository of connected data and analytical capabilities at our clients' fingertips."

Share Repurchase: FactSet repurchased 264,400 shares of its common stock for $109.6 million at an average price of $414.63 during the fourth quarter.

Additionally, on June 20, 2023, the Board approved a new share repurchase authorization of up to $300 million, which became available on September 1, 2023.

Outlook: FactSet is providing its outlook for fiscal 2024. The company sees FY24 Adjusted EPS of 15.65-$16.15. The Street view stands at $16.65.

Adjusted operating margin is expected to be in the range of 36.3%-36.7%.

Meanwhile, the company sees FY24 GAAP revenues in the range of $2.210 billion-$2.230 billion. The Street View stands at $2.23 billion.

Price Action: FDS shares traded lower by 0.89% premarket at $420.00 on the last check Thursday.