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FactSet (FDS) Beats on Q3 Earnings & Revenues, Raises Guidance
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FactSet Research Systems, Inc.(FDS - Free Report) reported impressive third-quarter fiscal 2023 (ended May 31) results, wherein both earnings and revenues beat the respective Zacks Consensus Estimate.
Non-GAAP earnings per share (excluding 33 cents from non-recurring items) of $3.79 beat the consensus mark by 4.7% and grew slightly from the year-ago quarter’s reported figure. Revenues of $529.8 million surpassed the consensus estimate by a slight margin but increased 8.4% from the year-ago quarter’s reported figure. The increase can be correlated to improved performance from Analytics & Trading and Content & Technology solutions.
Revenues in Detail
Organic revenues increased 8.5% year over year to $530.3 million. Region-wise, organic revenue growth from the Americas, EMEA and the Asia Pacific was 9%, 7.5% and 7.9%, respectively.
FactSet Research Systems Inc. Price, Consensus and EPS Surprise
FactSet’s Annual Subscription Value (ASV) plus professional services was $2.1 billion, up 8% from the prior-year quarter. Buy-side and sell-side organic ASV growth rates were 7.3% and 12.3%, respectively. Nearly 82% of organic ASV was generated by the buy-side and the rest by sell-side firms.
Organic ASV generated from the United States was $1.34 billion, up 8% from the prior-year quarter. Organic ASV from EMEA and the Asia Pacific were $540.7 million and $210.5 million, up 7.4% and 10.5% year over year, respectively.
FactSet added 40 clients in the reported quarter, driven by an increase in corporate and wealth clients, taking the total client count to 7,770. The annual client retention rate was 92%. At the end of the said quarter, the total employee count was 12,072, up 12.9% from the figure registered in the last 12 months, driven primarily by an increase in content, product and technology organizations.
Operating Results
Adjusted operating income was $190.9 million, up 6.6% from the year-ago quarter’s reported figure. The adjusted operating margin increased to 36% from 35.4% in the year-ago quarter.
Balance Sheet and Cash Flow
FactSet exited the quarter with a cash and cash equivalent balance of $486.63 million, compared with $445.33 million in the previous quarter. Long-term debt was $1.67 billion, compared with the prior quarter’s figure of $1.74 billion. In the reported quarter, FDS generated $218.6 million in cash from operating activities while capital expenditure was $26 million. Free cash flow was $192.6 million.
Updated FY23 Outlook
FactSet increased its adjusted earnings per share (EPS) and operating margin guidance for fiscal 2023. Adjusted EPS is now expected to be $14.75-$15.15 (previously $14.5-$14.9). The midpoint of the guided range ($14.95) is above the Zacks Consensus Estimate of $14.86. The adjusted operating margin is expected to be 35-36% (previously 29.5-30.5%).
The company reiterated its GAAP revenues guidance in the range of $2.08-$2.1 billion. The midpoint of the guided range ($2.09 billion) is in line with the consensus estimate. FactSet's annual effective tax rate is expected to be 14-15%.
Equifax (EFX - Free Report) reported better-than-expected first-quarter 2023 results. Adjusted earnings (excluding 52 cents from non-recurring items) came in at $1.43 per share, beating the Zacks Consensus Estimate by 4.4% but declining 35.6% from the year-ago figure. Total revenues of $1.3 billion surpassed the consensus estimate by 1.5% but decreased 4.5% on a reported basis from the year-ago figure. The top line was down 3% on a local currency basis.
Omnicom(OMC - Free Report) reported better-than-expected first-quarter 2023 results. OMC’s earnings of $1.56 per share beat the Zacks Consensus Estimate by 13%. EPS increased 12.2% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 2.3%. The top line increased 1% year over year.
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FactSet (FDS) Beats on Q3 Earnings & Revenues, Raises Guidance
FactSet Research Systems, Inc.(FDS - Free Report) reported impressive third-quarter fiscal 2023 (ended May 31) results, wherein both earnings and revenues beat the respective Zacks Consensus Estimate.
Non-GAAP earnings per share (excluding 33 cents from non-recurring items) of $3.79 beat the consensus mark by 4.7% and grew slightly from the year-ago quarter’s reported figure. Revenues of $529.8 million surpassed the consensus estimate by a slight margin but increased 8.4% from the year-ago quarter’s reported figure. The increase can be correlated to improved performance from Analytics & Trading and Content & Technology solutions.
Revenues in Detail
Organic revenues increased 8.5% year over year to $530.3 million. Region-wise, organic revenue growth from the Americas, EMEA and the Asia Pacific was 9%, 7.5% and 7.9%, respectively.
FactSet Research Systems Inc. Price, Consensus and EPS Surprise
FactSet Research Systems Inc. price-consensus-eps-surprise-chart | FactSet Research Systems Inc. Quote
ASV Plus Professional Services
FactSet’s Annual Subscription Value (ASV) plus professional services was $2.1 billion, up 8% from the prior-year quarter. Buy-side and sell-side organic ASV growth rates were 7.3% and 12.3%, respectively. Nearly 82% of organic ASV was generated by the buy-side and the rest by sell-side firms.
Organic ASV generated from the United States was $1.34 billion, up 8% from the prior-year quarter. Organic ASV from EMEA and the Asia Pacific were $540.7 million and $210.5 million, up 7.4% and 10.5% year over year, respectively.
FactSet added 40 clients in the reported quarter, driven by an increase in corporate and wealth clients, taking the total client count to 7,770. The annual client retention rate was 92%. At the end of the said quarter, the total employee count was 12,072, up 12.9% from the figure registered in the last 12 months, driven primarily by an increase in content, product and technology organizations.
Operating Results
Adjusted operating income was $190.9 million, up 6.6% from the year-ago quarter’s reported figure. The adjusted operating margin increased to 36% from 35.4% in the year-ago quarter.
Balance Sheet and Cash Flow
FactSet exited the quarter with a cash and cash equivalent balance of $486.63 million, compared with $445.33 million in the previous quarter. Long-term debt was $1.67 billion, compared with the prior quarter’s figure of $1.74 billion. In the reported quarter, FDS generated $218.6 million in cash from operating activities while capital expenditure was $26 million. Free cash flow was $192.6 million.
Updated FY23 Outlook
FactSet increased its adjusted earnings per share (EPS) and operating margin guidance for fiscal 2023. Adjusted EPS is now expected to be $14.75-$15.15 (previously $14.5-$14.9). The midpoint of the guided range ($14.95) is above the Zacks Consensus Estimate of $14.86. The adjusted operating margin is expected to be 35-36% (previously 29.5-30.5%).
The company reiterated its GAAP revenues guidance in the range of $2.08-$2.1 billion. The midpoint of the guided range ($2.09 billion) is in line with the consensus estimate. FactSet's annual effective tax rate is expected to be 14-15%.
FactSet currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
Equifax (EFX - Free Report) reported better-than-expected first-quarter 2023 results. Adjusted earnings (excluding 52 cents from non-recurring items) came in at $1.43 per share, beating the Zacks Consensus Estimate by 4.4% but declining 35.6% from the year-ago figure. Total revenues of $1.3 billion surpassed the consensus estimate by 1.5% but decreased 4.5% on a reported basis from the year-ago figure. The top line was down 3% on a local currency basis.
Omnicom(OMC - Free Report) reported better-than-expected first-quarter 2023 results. OMC’s earnings of $1.56 per share beat the Zacks Consensus Estimate by 13%. EPS increased 12.2% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 2.3%. The top line increased 1% year over year.