## 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.
Mark Eisenberg is a financial analyst and writer with over 15 years of experience in the finance industry. A graduate of the Wharton School of the University of Pennsylvania, Mark specializes in investment strategies, market analysis, and personal finance. His work has been featured in prominent publications like The Wall Street Journal, Bloomberg, and Forbes. Mark’s articles are known for their in-depth research, clear presentation, and actionable insights, making them highly valuable to readers seeking reliable financial advice. He stays updated on the latest trends and developments in the financial sector, regularly attending industry conferences and seminars. With a reputation for expertise, authoritativeness, and trustworthiness, Mark Eisenberg continues to contribute high-quality content that helps individuals and businesses make informed financial decisions.⬤
