FactSet Reports Impressive Q3 Growth, CEO Highlights AI Investment for Boosting Client Efficiency

FactSet Research Systems Inc FDS reported third-quarter fiscal 2024 sales growth of 4.3% Y/Y to $552.708 million versus the analyst consensus estimate of $552.712 million. 

Organic revenue rose 4.5% Y/Y to $553.43 million, aided by institutional asset managers, asset owners, partners, and corporates.

Adjusted EPS of $4.37 beat the analyst consensus estimate of $3.90. The stock price gained after the print.

As of May-end, the client count was 8,029, a net increase of 9 clients in the past three months, primarily driven by wealth, corporates, and partners. The count includes clients with ASV of $10,000 and more.

Adjusted operating margin improved to 39.4% (+340 bps Y/Y). Adjusted EBITDA increased to $239.9 million, up 16.9% due to higher operating income.

The company held $522.03 million in cash and equivalents as of May 31, 2024. 

CEO Phil Snow said, “We maintain an optimistic outlook as we further invest in our platform and harness the power of generative AI to accelerate our clients’ efficiency and decrease their total cost of ownership.”

FY24 Outlook: FactSet revised the fiscal 2024 revenue outlook to $2.18 billion – $2.19 billion (prior $2.20 billion – $2.21 billion) vs. $2.20 billion estimate and adjusted EPS of $16.00 – $16.40 (prior $15.60 – $16.00) vs. consensus of $15.98.

The company revised adjusted operating margin guidance to 37.0% – 37.5% (prior 36.3% – 36.7%).

FDS stock lost close to 4% in the last 12 months. Investors can gain exposure to the stock via Vanguard Total Stock Market ETF VTI and Vanguard Mid-Cap ETF VO.

Price Action: FDS shares traded higher by 3.92% at $424.35 premarket at the last check Friday.