FACTSET RESEARCH SYSTEMS INC

FactSet Research Systems Inc. is a global financial digital platform and enterprise solutions provider that delivers financial intelligence to investment professionals worldwide through open and flexible technologies. The company operates in the financial information services industry, which is characterized by intense competition from both large, well-capitalized companies and smaller, niche firms. The industry is shaped by rapid technological change, including advances in artificial intelligence, cloud computing, and machine learning, as well as evolving client demands and a continued shift from active to passive investing. FactSet's platform delivers expansive data, sophisticated analytics, and flexible, AI-powered technologies used by global financial professionals to power their critical investment workflows.

FactSet operates in a highly competitive environment with its largest competitors being Bloomberg L.P., S&P's Market Intelligence division, and London Stock Exchange Group's Data & Analytics division (formerly known as Refinitiv). Other competitors include BlackRock Aladdin, MSCI Inc., and Morningstar Inc. The company believes its products are central to clients' investment analysis, decision-making, and operations, as it is entrusted with significant amounts of clients' own proprietary data, including portfolio holdings. FactSet's competitive advantages include the breadth and depth of its suite of products and applications, its open and flexible technology platform, and its deep integration into client workflows.

FactSet's revenues are primarily derived from subscriptions to its multi-asset class data and solutions powered by its connected data and technology platform. The majority of revenues come from client access to its multi-asset solutions available over the contractual term, which is a subscription-based service providing access to various combinations of products and services including workstations, portfolio analytics, and enterprise data solutions. The company also offers managed services that operate as an extension of clients' internal teams to support data, performance, risk, and reporting workflows. FactSet's primary customer segments include institutional asset managers, bankers, wealth managers, asset owners, partners, hedge funds, corporate users, and private equity and venture capital professionals, with buy-side clients accounting for approximately 82% of Organic ASV as of August 31, 2025 ¹.

FactSet's products and services include workstations, portfolio analytics, and enterprise data solutions. The company provides financial data and market intelligence on securities, companies, industries, and people to enable clients to research investment ideas and analyze, monitor, and manage their portfolios. Its solutions span the investment lifecycle of investment research, portfolio construction and analysis, trade execution, performance measurement, risk management, and reporting. The company offers open and flexible technology offerings, including a configurable desktop and mobile platform, comprehensive data feeds, cloud-based digital solutions, and application programming interfaces (APIs), with AI embedded across these offerings to enhance data discovery, automate routine workflows, and improve the speed and accuracy of client insights. The CUSIP Global Services (CGS) business supports security master files relied on by the investment industry for critical front, middle, and back-office functions.

FactSet operates through three reportable segments: the Americas, EMEA, and Asia Pacific. Within each segment, the company offers data, products, and analytical applications by firm type: Institutional Buyside, Dealmakers, Wealth, and Partnerships and CGS. The Institutional Buyside firm type focuses on multi-asset class solutions for global asset managers, asset owners, and hedge fund professionals. The Dealmakers firm type focuses on workflow solutions for investment bankers, sell-side research analysts, corporate users, investor relations officers, and private equity and venture capital professionals. The Wealth firm type focuses on comprehensive solutions for wealth management clients. The Partnerships and CGS firm type delivers solutions to firms in the financial services ecosystem, including curated datasets and turnkey APIs, while CGS is the exclusive issuer of CUSIP and CINS identifiers globally.

During fiscal 2025, FactSet completed several corporate transactions, including the acquisition of Platform Group Limited (Irwin) on November 5, 2024 for a purchase price of $120.2 million ², net of cash acquired, and the acquisition of Liquid Holdings, LLC (LiquidityBook) on February 7, 2025 for a purchase price of $243.2 million ³, net of cash acquired. The company also completed the acquisition of LogoIntern. On April 8, 2025, FactSet entered into a new credit agreement and borrowed $500.0 million ⁴ under a senior unsecured term loan credit facility, using the proceeds to repay the outstanding balance under the 2022 Revolving Facility. During fiscal 2025, FactSet repurchased 684,960 ⁵ shares of common stock for $300.5 million ⁶ and paid dividends of $160.0 million ⁷. In the third quarter of fiscal 2025, the Board of Directors approved a 6% ⁸ increase in the regular quarterly dividend from $1.04 ⁹ to $1.10 ¹⁰ per share. On June 17, 2025, the Board of Directors authorized up to $400 million ¹¹ for share repurchases on or after September 1, 2025 through September 30, 2026. The company also entered into an interest rate swap agreement on April 24, 2025 with a notional amount of $200.0 million ¹² to hedge a portion of its outstanding floating SOFR debt with a fixed interest rate of 4.086% ¹³.

Revenues for fiscal 2025 were $2,321.7 million ¹⁴, an increase of 5.4% ¹⁵ from the comparable prior year. Operating margin was 32.2% ¹⁶ for fiscal 2025, compared with 31.8% ¹⁷ for fiscal 2024. Net income for fiscal 2025 was $597.0 million ¹⁸, an increase of 11.2% ¹⁹ from the prior year. Diluted earnings per common share for fiscal 2025 was $15.55 ²⁰, an increase of 11.8% ²¹ compared with the prior year. The increase in net income and diluted EPS was primarily driven by higher operating income and a gain from the divestiture of a business. The company returned $460.4 million ²² to its stockholders in the form of share repurchases and dividends during fiscal 2025.

FactSet's growth strategy is focused on three core pillars: expanding data offerings and delivery capabilities, embedding deeper in client workflows, and innovating with AI. The company aims to scale up its data ecosystem to provide a comprehensive inventory of industry, proprietary, and third-party data, including granular data for key industry verticals, real-time market data, fund data, and sustainable finance. FactSet intends to expand its data delivery capabilities in the cloud and through other methods to advance its position as an enterprise data provider. The company is focused on expanding further into the buy-side front office by leveraging its expertise in portfolio performance, analytics, and risk management, and is building on its strong presence on advisor desktops by expanding into prospecting and digital reporting workflows. FactSet is also working to introduce next-generation automation in research, financial modeling, and pitch creation.

FactSet's AI roadmap, driven by its FactSet AI Blueprint, is resonating with clients, and the company's AI solutions are generating usage, demand, and commercial transactions. The company continues to advance a pragmatic, open, and flexible strategy for integrating AI and natural language processing into clients' workflows, aiming to boost productivity by surfacing actionable insights throughout the portfolio lifecycle and automating routine research and content processing tasks. FactSet is delivering AI embedded workflow solutions for various personas including research analysts, bankers, portfolio managers, wealth advisors, and engineering teams. The company believes these outcomes will accelerate decision making for clients and differentiate FactSet from its competitors and drive growth. A major focus in fiscal 2025 was enhancing AI capabilities aligned with innovation and AI monetization goals, with employees advancing skills in prompt engineering, coding, vector databases, and data querying.

FactSet's operating margin increased to 32.2% ²³ in fiscal 2025, compared with 31.8% ²⁴ in the prior year. This increase was primarily driven by growth in revenues and, when expressed as a percentage of revenues, charges associated with the Sales Tax Dispute recorded in the prior year, partially offset by higher amortization of intangible assets in the current year. Cost of services, when expressed as a percentage of revenues, was 47.3% ²⁵ for fiscal 2025, an increase of 130 basis points ²⁶ compared with fiscal 2024, primarily from higher amortization of intangible assets. SG&A expenses, when expressed as a percentage of revenues, were 20.5% ²⁷ for fiscal 2025, a decrease of 170 basis points ²⁸ compared with fiscal 2024, primarily due to charges associated with the Sales Tax Dispute recorded in the prior year.

FactSet's business is dependent on its ability to process substantial volumes of data and transactions rapidly and efficiently on its networks and systems. The company operates two fully redundant, physically separated data centers in the U.S. that provide client services, while also using market-leading cloud providers to run products and services. FactSet currently uses several cloud providers; however, one supplier provided the majority of its cloud computing support for fiscal 2025. The company is currently implementing a multi-year project to enhance its information technology disaster recovery processes with modernized tooling and automation to maximize resiliency and minimize recovery time in the event of a service disruption. As of August 31, 2025, FactSet had 12,800 ²⁹ employees, representing an increase of 3.2% ³⁰ compared with August 31, 2024.

Capital expenditures for fiscal 2025 increased by 27.0% ³¹ to $108.8 million ³², compared with $85.7 million ³³ in fiscal 2024, primarily due to higher capitalized costs related to the development of internal-use software. During fiscal 2025, FactSet repurchased 684,960 ³⁴ shares for $300.5 million ³⁵ and paid dividends of $160.0 million ³⁶. On June 17, 2025, the Board of Directors authorized up to $400 million ³⁷ for share repurchases on or after September 1, 2025 through September 30, 2026. In the third quarter of fiscal 2025, the Board of Directors approved a 6% ³⁸ increase in the regular quarterly dividend from $1.04 ³⁹ to $1.10 ⁴⁰ per share. Fiscal 2025 marked the 26th ⁴¹ consecutive fiscal year FactSet has increased dividends on a stock split-adjusted basis.

FactSet faces several structural headwinds and execution risks that management has explicitly flagged. The continued shift from active to passive investing could negatively impact user count growth and revenues, as passive investing requires little decision-making by investment managers and results in lower fees for the investor. A decline in equity and/or fixed income returns may impact the buying power of investment management clients, as the profitability and management fees of many of these clients are tied to assets under management. Uncertainty or downturns in the global economy and consolidation in the financial services industry may cause FactSet to lose clients and users. Mergers, consolidation, or contraction of clients in the financial services industry could directly impact the number of clients, prospective clients, and users of FactSet's products and services.

FactSet faces constraints from geographic, regulatory, and macro factors. The company's non-U.S. operations involve risks that differ from or are in addition to those faced by its U.S. operations, including difficulties in developing products and services tailored to the needs of non-U.S. clients, different employment laws and rules, rising labor costs in lower-wage countries, and different regulatory, legal, and compliance requirements. In fiscal 2025, approximately 39% ⁴² of FactSet's revenues related to operations located outside the U.S., and approximately 80% ⁴³ of its employees are located in offices outside the U.S., including India and the Philippines. The company is subject to numerous global laws and regulations governing the protection of personal and confidential information, including the EU's General Data Protection Regulation, various U.S. state laws, China's Personal Information Protection Law, and India's Digital Personal Data Protection Act.

FactSet faces material risks from cybersecurity threats, as its size, scale, and role in financial markets increase its risk for cyber-attacks, and improper access to confidential client data could damage its brand and reputation, result in litigation, and cause loss of client confidence. The company also faces significant competitive risk from large, well-capitalized competitors like Bloomberg L.P., S&P's Market Intelligence division, and LSEG's Data & Analytics division, as well as from smaller niche firms, and failure to keep pace with technological change, including advances in AI, could cause its products to become outdated. A continued shift from active to passive investing could reduce demand for the services of active investment managers and consequently for FactSet's products and services. The company is exposed to risks from its reliance on third-party content suppliers, with two data suppliers each representing more than 10% ⁴⁴ of total data costs for fiscal 2025, and failure to maintain these relationships could increase costs and reduce the type of content available to clients. Additionally, FactSet has identified a material weakness in its internal control over financial reporting related to the design and operation of IT general controls that support its revenues, accounts receivable, and deferred revenues processes, which could impair its ability to produce accurate financial statements.

Management's tone in the filing is forward-looking and focused on strategic execution, emphasizing the company's commitment to growing its global business through three strategically aligned geographic segments: the Americas, EMEA, and Asia Pacific. The key themes of management's message include the successful execution of the company's business strategy as reflected in Annual Subscription Value (ASV) growth, the importance of innovation with AI, and the focus on expanding data offerings and embedding deeper in client workflows. Management highlights that FactSet's AI solutions are generating usage, demand, and commercial transactions, and that the company's AI roadmap is resonating with clients. The strategic priorities emphasized for the period ahead are expanding data offerings and delivery capabilities, embedding deeper in client workflows, and innovating with AI. Management also notes the executive leadership transition, with Sanoke Viswanathan assuming the role of Chief Executive Officer on September 8, 2025, succeeding F. Philip Snow.