Why FactSet Research Systems Shares Sliding Today

FactSet Research Systems Inc. FDS reported third-quarter FY23 sales growth of 8.4% year-on-year to $529.81 million, beating the consensus of $527.33 million. The increase was primarily due to Analytics & Trading and Content & Technology solutions.

Adjusted EPS of $3.79 beat the consensus of $3.61.

Client count as of quarter end was 7,770, a net increase of 40 clients in the past three months, primarily driven by the rise in corporate and wealth management clients.

GAAP operating margin increased to 32.5% compared with 19.9% for the prior year.

Adjusted EBITDA increased to $205.3 million, up 15.6%, driven by higher operating income.

FactSet held $486.63 million in cash and equivalents as of May 31, 2023.

"Our continued cost management efforts are on track," said Linda Huber, FactSet CFO. "As a result, we have increased our fiscal 2023 adjusted operating margin guidance by 100 basis points to 35% -36%, with continued high single-digit ASV growth and double-digit EPS growth."

Share Repurchase: FactSet repurchased 165,950 shares of its common stock for $67.1 million during the third quarter. 

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

Outlook: The company sees FY23 Adjusted EPS of $14.75-$15.15, a $0.25 increase at the midpoint from the prior guidance of $14.50 - $14.90. The Street view stands at $14.88.

Meanwhile, the company sees FY23 GAAP revenues at the lower end of the prior range of $2.08 billion-$2.10 billion. The Street view stands at $2.09 billion.

Price Action: FDS shares traded lower by 6.83% at $394.44 on the last check Thursday.