The Rise of FactSet Research Systems: A Look at Q3 Performance and Future Outlook

Key Takeaways

• FactSet Research Systems beat third-quarter profit forecasts and raised its full-year outlook as revenue and operating margin gained.
• The financial data provider said sales to institutional asset managers, asset owners, partners, and corporates increased.
• FactSet boosted its 2024 adjusted earnings per share (EPS) estimate, although it lowered its revenue guidance.

FactSet Research Systems (FDS) shares saw a significant uptick on Friday following the release of their third-quarter financial results. The company exceeded profit expectations and raised its full-year guidance, driven by increased revenues from institutional asset managers, asset owners, partners, and corporates.

In the fiscal 2024 third quarter, FactSet reported adjusted earnings per share (EPS) of $4.37, surpassing analysts’ consensus estimate of $3.90. Revenue also saw a healthy increase of 4.3% year-over-year, reaching $552.7 million, in line with forecasts. Organic revenue experienced a 4.5% growth during this period.

One of the standout metrics was the adjusted operating margin, which surged to 39.4% from 36.0% compared to the previous year. Additionally, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose to $239.9 million, marking a substantial 16.9% increase.

The company’s Annual Subscription Value (ASV) plus professional services reached $2.22 billion, reflecting a 4.7% uptick. The number of FactSet users also saw a positive trend, increasing by 1,662 to a total of 208,140. FactSet attributed these gains to all firm types except banking, with wealth clients being the primary drivers of growth.

CEO Phil Snow expressed optimism about FactSet’s future trajectory, emphasizing the company’s commitment to leveraging generative AI to enhance client efficiency and reduce total cost of ownership.

FactSet Raises FY Adjusted EPS, Lowers Revenue Guidance

FactSet revised its full-year adjusted EPS outlook to a range of $16.00 to $16.40, up from the previous forecast of $15.60 to $16.00. However, the company adjusted its revenue guidance downward to $2.18 billion to $2.19 billion, compared to the earlier projection of $2.20 billion to $2.21 billion.

Following the positive earnings report, FactSet Research Systems shares experienced a 5% increase to $428.49 shortly after the market opened on Friday. Despite this uptick, the stock is still down more than 10% year-to-date.

In conclusion, FactSet Research Systems’ strong performance in the third quarter and optimistic outlook for the full year indicate a promising future for the financial data provider. With a focus on innovation and client-centric solutions, FactSet is well-positioned to navigate the evolving landscape of the financial industry.

For more information on FactSet’s latest financial updates, you can read the original article on Investopedia [here](https://www.investopedia.com/factset-stock-rises-on-q3-profit-beat-raised-guidance-8667132).