FactSet Research Systems Inc.

What they do

FactSet sells subscriptions to multi-asset class data, analytics and AI-powered workflow tools used across the investment lifecycle, from research and portfolio construction to trade execution, performance, risk and reporting. Revenue comes from workstations, portfolio analytics, enterprise data solutions, managed services and the CUSIP Global Services security master business. Operations run through three reportable segments: Americas (65% of fiscal 2025 revenue), EMEA (25%) and Asia Pacific (10%), with offerings organized by firm type: Institutional Buyside, Dealmakers, Wealth, and Partnerships and CGS.

Revenue drivers

• Americas — Largest segment at 65% of fiscal 2025 revenue, selling to North, Central and South American clients from nine U.S. states plus Brazil and Canada, including the Norwalk, Connecticut headquarters.
• EMEA — Second segment at 25% of fiscal 2025 revenue, serving Europe, the Middle East and Africa through offices in ten countries including England, Germany, France and the UAE.
• Asia Pacific — Smallest segment at 10% of fiscal 2025 revenue, covering Asia and Australasia from offices in Australia, China, Hong Kong SAR, India, Japan, the Philippines and Singapore.
• Firm-type offerings — Within each region, revenue is generated by firm type, with Institutional Buyside front- and middle-office workflows, Dealmakers, Wealth, and Partnerships and CGS, which includes the CUSIP security master business.

Recent performance

For the third quarter of fiscal 2026 ended May 31, 2026, GAAP revenue rose 6.4% year over year to $622.9 million and organic revenue grew 7.0% to $622.9 million. Organic ASV reached $2,485.6 million, up 7.1% or $165.0 million year over year, with growth driven by institutional buy-side and wealth management clients. GAAP operating margin fell to 26.7% from 33.2% on higher employee compensation, including one-time charges and CEO compensation not incurred in the prior year, while adjusted operating margin was 34.0% versus 36.8%. GAAP diluted EPS was $3.50 versus $3.87, and adjusted diluted EPS rose 6.1% to $4.53 on revenue growth and a 6% lower share count. Net cash provided by operating activities was $284.5 million, up 12.1%, and free cash flow was $254.0 million, up 11.1%.

Strategy

FactSet frames its direction around AI-powered workflow solutions, noting that more than 90% of its Top 50 clients now use four or more AI products. The company cited new partnerships with Google Cloud, Finster AI and TIFIN.AI, plus its MCP server, as ways to broaden adoption of AI-ready solutions. Management highlighted commercial execution, with Q3 renewals extending in length by 30% on average and annual ASV retention above 95%. It also emphasized capital returns, returning more than $243 million to shareholders in Q3 and marking a twenty-seventh consecutive year of dividend increases, with fiscal year-to-date capital returned of $629 million.

Risks

• Cybersecurity and data protection — FactSet handles client portfolio and strategy data, and its size and role in financial markets increase exposure to nation-state, terrorist, generative-AI and ransomware cyber-attacks and to breaches at third-party service providers.
• Business continuity and system outages — Clients depend on time-sensitive, accurate data delivery, and FactSet's computer networks and database facilities could be disrupted by fire, natural disaster, pandemics, extreme weather, power loss or telecommunications failure.
• Foreign currency exposure — A hypothetical 10% devaluation of the U.S. dollar would have decreased operating income, excluding forward contracts, by an estimated $37 million for the nine months ended May 31, 2026, and increased the fair value of outstanding forward contracts by about $18 million.
• Floating-rate debt — As of May 31, 2026, FactSet had $395.0 million outstanding under its 2025 Credit Facilities bearing interest at one-month Term SOFR plus a 0.975% spread, leaving it exposed to interest rate movements.

Outlook

Management said third-quarter results reflect solid execution against strategic priorities and continued demand for its content, analytics and workflow solutions, citing a robust pipeline and accelerating enterprise contracts. The company stated that clients across regions and firm types are expanding relationships and adopting AI solutions, reinforcing confidence in sustained growth and long-term value. No specific numerical guidance was provided in the excerpted release.