## FactSet's Q3 Fiscal 2024 Earnings Report Highlights
FactSet (NYSE: FDS) has shared its third-quarter fiscal 2024 earnings report, showing good performance despite market challenges. The company’s **subscription value and professional services** grew by 5%, and **earnings per share** (EPS) increased to $4.37. Despite facing difficulties such as tighter client budgets and longer sales cycles, FactSet achieved a 39.4% **operating margin** and introduced new products to foster future growth. The company is also managing costs well while investing in strategic areas like market data and **artificial intelligence (AI)**.
### Key Takeaways
- FactSet’s **subscription value** increased by 5%, and **adjusted EPS** rose by 15% to $4.37.
- The **operating margin** improved to 39.4%, with revenue up by 4% to $553 million.
- FactSet’s client base grew to 8,029, adding nine new clients.
- The company expects **annual growth** in subscription value and professional services between 4% and 5.5%.
- There are strategic investments in market data, client workflow improvements, and AI.
- FactSet paid off $62.5 million of its debt, reducing gross leverage to 1.7 times.
- A quarterly dividend of $1.04 per share was paid, marking a 6% increase.
### What’s Ahead?
- FactSet expects additional annual growth in subscription value and professional services between $85 million and $120 million for the fiscal year.
- Revenue is predicted to be between $2.18 billion and $2.19 billion.
- GAAP **operating margin** is anticipated to be between 33.7% and 34%, with an adjusted operating margin of 37% to 37.5%.
- Adjusted EPS is expected to be between $16 and $16.40.
- There is no change in the company’s **effective tax rate**.
### Challenges Faced
- Clients tightening their budgets and cost rationalization have led to extended decision-making and longer sales cycles.
- Slower growth because of market challenges and losing a contract due to a merger.
### Positive Points
- FactSet introduced new products at its client symposium, showing a focus on innovation.
- The company has a growing client base and is investing in areas such as artificial intelligence and data platforms.
- Increased mergers and acquisitions and hiring within the sell-side sector could drive faster growth.
### Areas to Improve
- The company revised down its forecast for additional growth in subscription value and professional services.
### Additional Insights
- CEO **Philip Snow** talked about the company’s strong position in the buy-side and wealth sectors, emphasizing a $28 billion total addressable market.
- Discussed international pricing strategies, which saw a slight decrease compared to last year.
- Addressed the impact of AI on technology costs and pricing integration.
- Highlighted the importance of the banking sector and an active pipeline in the wealth segment.
### Conclusion
FactSet’s third-quarter fiscal 2024 earnings call showed a company navigating market challenges while continuing to grow and invest in strategic initiatives. With a focus on innovation and a strong client base, FactSet is well-positioned to leverage industry trends and market conditions to maintain its growth trajectory.
