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FactSet's (FDS) Q3 Earnings and Revenues Beat Estimates

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FactSet Research Systems Inc. (FDS - Free Report) reported better-than-expected third-quarter fiscal 2022 results.

Adjusted earnings per share (excluding $1.83 from non-recurring items) of $3.76 surpassed the Zacks Consensus Estimate by 18.2% and increased 38.2% year over year. The bottom line was driven by higher revenues and margin expansion.

FactSet’s revenues of $488.8 million in the quarter surpassed the Zacks Consensus Estimate by 2.7% and increased 22.3% year over year. The uptick was driven by higher sales of analytics, and research and advisory solutions as well as the acquisition of CUSIP Global Services (CGS) in March 2022.

Shares of FDS have gained 16.7% over the past year against an 18.2% decline of the industry it belongs to.

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Revenues in Detail

Organic revenues increased 10.5% year over year to $441.7 million. Region-wise, organic revenue growth from the Americas, EMEA and the Asia Pacific was 7.4%, 13.2% and 23.6%, respectively.

ASV Plus Professional Services

FactSet’s Annual Subscription Value (ASV) plus professional services were $1.94 billion, up 19.8% year over year. Buy-side and sell-side ASV growth rates were 9.6% and 12.9%, respectively. Organic ASV plus professional services were $1.78 billion, up 10.1% from the prior-year quarter’s level. Nearly 84% of organic ASV was generated by buy-side and the rest by sell-side firms.

Organic ASV generated from the United States was $1.1 billion, up 10.1% from the prior-year quarter’s level. Organic ASV from EMEA and the Asia Pacific regions was $471 million and 186.1 million each, up 8.3% and 14.3% year over year, respectively.

FactSet added 147 clients in the reported fiscal quarter, driven by an increase in corporate and wealth clients, taking the total to 7,319. The annual client retention rate was 92%. At the end of the said fiscal quarter, the total employee count was 10,691, down 0.2% from the last twelve months’ level, primarily in the technology organization.

Operating Results

Adjusted operating income came in at $179.1 million, up 41.6% from the year-ago quarter’s reported figure. Adjusted operating margin increased to 36.6% from 31.6% in the year-ago quarter. Selling, general and administrative expenses increased 56.4% to $119.8 million. Total operating expenses rose 39% to $391.5 million.

Balance Sheet and Cash Flow

FactSet exited the fiscal third quarter with a cash and cash equivalents balance of $527 million compared with $773 million in the previous fiscal quarter. Long-term debt was $2,062.2 million compared with the prior fiscal quarter’s figure of $574.6 million. In the reported fiscal quarter, FDS generated $192 million of cash from operating activities, while capital expenditures were $15.5 million. Free cash flow was $176.6 million.

FactSet currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Business Services Companies

ABM Industries Inc. (ABM - Free Report) reported mixed second-quarter fiscal 2022 results, with earnings beating the Zacks Consensus Estimate while revenues lagging the same. Adjusted earnings from continuing operations came in at 89 cents per share, beating the consensus mark by 6% and increasing 8.5% year over year. Total revenues of $1.89 billion missed the consensus estimate by 1% but improved 26.7% from the year-ago fiscal quarter’s level.

Accenture plc (ACN - Free Report) reported mixed third-quarter fiscal 2022 results, wherein its earnings missed the Zacks Consensus Estimate but revenues surpassed the same. Earnings of $2.79 per share missed the consensus estimate by 1.8% but improved 16.3% year over year. Revenues of $16.16 billion beat the consensus mark by 0.7% and increased 22% year over year on a reported basis and 27% in terms of local currency.
 


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