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FactSet (FDS) Q1 Earnings and Revenues Beat Estimates, Rise Y/Y
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FactSet Research Systems, Inc.(FDS - Free Report) reported impressive first-quarter fiscal 2024 (ended Nov 30) results, wherein earnings and revenues beat the Zacks Consensus Estimate.
Non-GAAP earnings per share (excluding 26 cents from non-recurring items) of $4.12 beat the consensus mark by a slight margin and increased 3.3% from the year-ago quarter’s reported figure. Revenues of $542.2 million surpassed the Zacks Consensus Estimate by a slight margin and increased 7.4% from the year-ago quarter’s reported figure. The increase was primarily due to higher sales of Analytics & Trading and Content & Technology solutions.
Revenues in Detail
Organic revenues increased 7.4% year over year to $541.4 million. Region-wise, organic revenue growth from the Americas, EMEA and the Asia Pacific was 7.7%, 6.1% and 7.5%, respectively.
FactSet Research Systems Inc. Price, Consensus and EPS Surprise
Revenues generated from the Americas segment were $348.3 milliom, up 7.7% from the year-ago reported figure but missing our estimated $349.7 million. Revenues from EMEA were $139.6, reflecting an increase of 6.8%. The figure surpassed our estimate by 4.3%. Revenues from Asia Pacific were $54.3 million, indicating growth of 7.1% from the year-ago figure and beating our expected $54.2 million.
ASV Plus Professional Services
FactSet’s Annual Subscription Value (ASV) plus professional services was $2.18 billion. Organic ASV plus professional services was $2.18 billion, up 7.1% from the year-ago quarter. Buy-side and sell-side organic ASV growth rates were 7.2% and 7.6%, 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 $1.4 billion, up 7.9% from the year-ago quarter. Organic ASV from EMEA and the Asia Pacific was $552.2 million and $215.5 million, up 5.4% and 8% year over year, respectively.
FactSet added 24 clients in the reported quarter, driven by an increase in corporate and wealth clients, thus taking the total to 7,945. The annual client retention rate was 95%. At the end of the reported quarter, the total employee count was 12,515, up 7.6% 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 $204 million, which increased 5.5% from the year-ago quarter’s reported figure and missed our estimate by 5.1%. The adjusted operating margin decreased to 37.6% from 38.3% in the year-ago quarter compared with our estimate of 39.5%. Adjusted EBITDA was $219 million, up 9.3% from the year-ago figure and beating our estimate by 3%.
Balance Sheet and Cash Flow
FactSet exited the quarter with a cash and cash equivalent balance of $411.86 million compared with $425.44 million in the previous quarter. Long-term debt was $1.55 billion compared with the year-ago quarter’s figure of $1.61 billion. In the reported quarter, FDS generated $155.1 million in cash from operating activities while capital expenditure was $16.5 million. Free cash flow was $138.7 million.
Guidance for Fiscal ’24
The company trimmed the guidance for GAAP revenues, which are now expected to be in the range of $2.2 billion to $2.21 billion, down from $2.21 billion to $2.23 billion guided earlier. The Zacks Consensus Estimate of $2.22 billion is higher than the guided range. FactSet's annual effective tax rate is expected to be 16.5-17.5%.
FactSet expects adjusted earnings per share to be in the range of $15.60 to $16, down from $15.65 - $16.15 guided earlier. The consensus estimate for earnings is pegged higher at $16.02 per share. The adjusted operating margin is expected to be in the range of 36.3% to 36.7%.
Here are a few stocks from the broader Business Services sector, which have performed well in their recent earnings releases:
ABM Industries Inc. (ABM - Free Report) reported impressive fourth-quarter fiscal 2023 results, wherein earnings and revenues beat the Zacks Consensus Estimate.
Adjusted earnings (considering 5 cents from non-recurring items) were $1.01 per share, which beat the consensus estimate by 8.6% and increased 13.5% from the last fiscal year’s quarterly figure.
Total revenues of $2.09 billion beat the consensus mark by 2.8% and improved 4.1% from the last fiscal year’s quarterly figure. The upside was backed by solid segmental performance, strength from new accounts that came online late last year and the acquisition of RavenVolt. Quarterly revenue growth included 3.8% organic growth and a 0.3% upside from acquisitions.
S&P Global Inc. (SPGI - Free Report) reported impressive third-quarter results, wherein earnings and revenues beat the Zacks Consensus Estimate.
SPGI’s adjusted earnings per share (excluding 88 cents from non-recurring items) of $3.21 rose 9.6% year over year and beat the consensus estimate by 5.3%. Revenues of $3.08 billion surpassed the consensus estimate by 2% and improved 8% year over year, backed by strong performance in each of its divisions.
Verisk Analytics Inc. (VRSK - Free Report) reported impressive third-quarter 2023 results, wherein earnings and revenues beat the Zacks Consensus Estimates.
VRSK’s adjusted earnings (excluding 23 cents from non-recurring items) were $1.52 per share, beating the consensus estimate and increasing 4.1% from the year-ago reported figure. Such a beat was supported by strong growth in Underwriting Data Solutions, Life Insurance and Extreme Events Solutions.
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FactSet (FDS) Q1 Earnings and Revenues Beat Estimates, Rise Y/Y
FactSet Research Systems, Inc.(FDS - Free Report) reported impressive first-quarter fiscal 2024 (ended Nov 30) results, wherein earnings and revenues beat the Zacks Consensus Estimate.
Non-GAAP earnings per share (excluding 26 cents from non-recurring items) of $4.12 beat the consensus mark by a slight margin and increased 3.3% from the year-ago quarter’s reported figure. Revenues of $542.2 million surpassed the Zacks Consensus Estimate by a slight margin and increased 7.4% from the year-ago quarter’s reported figure. The increase was primarily due to higher sales of Analytics & Trading and Content & Technology solutions.
Revenues in Detail
Organic revenues increased 7.4% year over year to $541.4 million. Region-wise, organic revenue growth from the Americas, EMEA and the Asia Pacific was 7.7%, 6.1% and 7.5%, respectively.
FactSet Research Systems Inc. Price, Consensus and EPS Surprise
FactSet Research Systems Inc. price-consensus-eps-surprise-chart | FactSet Research Systems Inc. Quote
Revenues generated from the Americas segment were $348.3 milliom, up 7.7% from the year-ago reported figure but missing our estimated $349.7 million. Revenues from EMEA were $139.6, reflecting an increase of 6.8%. The figure surpassed our estimate by 4.3%. Revenues from Asia Pacific were $54.3 million, indicating growth of 7.1% from the year-ago figure and beating our expected $54.2 million.
ASV Plus Professional Services
FactSet’s Annual Subscription Value (ASV) plus professional services was $2.18 billion. Organic ASV plus professional services was $2.18 billion, up 7.1% from the year-ago quarter. Buy-side and sell-side organic ASV growth rates were 7.2% and 7.6%, 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 $1.4 billion, up 7.9% from the year-ago quarter. Organic ASV from EMEA and the Asia Pacific was $552.2 million and $215.5 million, up 5.4% and 8% year over year, respectively.
FactSet added 24 clients in the reported quarter, driven by an increase in corporate and wealth clients, thus taking the total to 7,945. The annual client retention rate was 95%. At the end of the reported quarter, the total employee count was 12,515, up 7.6% 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 $204 million, which increased 5.5% from the year-ago quarter’s reported figure and missed our estimate by 5.1%. The adjusted operating margin decreased to 37.6% from 38.3% in the year-ago quarter compared with our estimate of 39.5%. Adjusted EBITDA was $219 million, up 9.3% from the year-ago figure and beating our estimate by 3%.
Balance Sheet and Cash Flow
FactSet exited the quarter with a cash and cash equivalent balance of $411.86 million compared with $425.44 million in the previous quarter. Long-term debt was $1.55 billion compared with the year-ago quarter’s figure of $1.61 billion. In the reported quarter, FDS generated $155.1 million in cash from operating activities while capital expenditure was $16.5 million. Free cash flow was $138.7 million.
Guidance for Fiscal ’24
The company trimmed the guidance for GAAP revenues, which are now expected to be in the range of $2.2 billion to $2.21 billion, down from $2.21 billion to $2.23 billion guided earlier. The Zacks Consensus Estimate of $2.22 billion is higher than the guided range. FactSet's annual effective tax rate is expected to be 16.5-17.5%.
FactSet expects adjusted earnings per share to be in the range of $15.60 to $16, down from $15.65 - $16.15 guided earlier. The consensus estimate for earnings is pegged higher at $16.02 per share. The adjusted operating margin is expected to be in the range of 36.3% to 36.7%.
FactSet currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Stocks to Consider
Here are a few stocks from the broader Business Services sector, which have performed well in their recent earnings releases:
ABM Industries Inc. (ABM - Free Report) reported impressive fourth-quarter fiscal 2023 results, wherein earnings and revenues beat the Zacks Consensus Estimate.
Adjusted earnings (considering 5 cents from non-recurring items) were $1.01 per share, which beat the consensus estimate by 8.6% and increased 13.5% from the last fiscal year’s quarterly figure.
Total revenues of $2.09 billion beat the consensus mark by 2.8% and improved 4.1% from the last fiscal year’s quarterly figure. The upside was backed by solid segmental performance, strength from new accounts that came online late last year and the acquisition of RavenVolt. Quarterly revenue growth included 3.8% organic growth and a 0.3% upside from acquisitions.
S&P Global Inc. (SPGI - Free Report) reported impressive third-quarter results, wherein earnings and revenues beat the Zacks Consensus Estimate.
SPGI’s adjusted earnings per share (excluding 88 cents from non-recurring items) of $3.21 rose 9.6% year over year and beat the consensus estimate by 5.3%. Revenues of $3.08 billion surpassed the consensus estimate by 2% and improved 8% year over year, backed by strong performance in each of its divisions.
Verisk Analytics Inc. (VRSK - Free Report) reported impressive third-quarter 2023 results, wherein earnings and revenues beat the Zacks Consensus Estimates.
VRSK’s adjusted earnings (excluding 23 cents from non-recurring items) were $1.52 per share, beating the consensus estimate and increasing 4.1% from the year-ago reported figure. Such a beat was supported by strong growth in Underwriting Data Solutions, Life Insurance and Extreme Events Solutions.