FactSet Reports Strong Second Quarter Results for Fiscal 2025

FactSet reported GAAP revenues of $570.7 million, marking a 4.5% increase from $545.9 million in the same quarter of the previous year. The organic revenues grew by 4.0% year-over-year, reaching $568.0 million. This growth was primarily fueled by strong demand from wealth management and institutional clients.

The Annual Subscription Value (ASV) stood at $2,306.1 million as of February 28, 2025, up from $2,185.6 million a year earlier. Organic ASV grew 4.1%, amounting to $2,276.2 million, reflecting an increase of $90.7 million year-over-year. Notably, the organic ASV increased by $19.6 million over the past three months.

Despite the revenue growth, FactSet experienced a slight decline in its operating margins. The GAAP operating margin decreased to 32.5% from 33.3% in the prior year. The adjusted operating margin also declined to 37.3% from 38.3%. These reductions were attributed to increased acquisition-related expenses and technology-related costs, although they were somewhat mitigated by revenue growth and lower employee compensation costs.

FactSet's GAAP diluted earnings per share (EPS) increased by 3.0% to $3.76, compared with $3.65 for the same period last fiscal year. The adjusted diluted EPS grew by 1.4% to $4.28, up from $4.22, reflecting the effects of revenue growth tempered by higher operational costs.

The company reported net cash provided by operating activities of $174.0 million for the quarter, with free cash flow increasing 23.3% to $150.2 million compared to $121.9 million in the previous year.

FactSet's client base grew to 8,645, adding 396 new clients in the last three months, largely due to the integration of clients from the recent Irwin acquisition. The user count also saw a positive uptick, reaching 219,141, an increase of 874 users, mainly driven by growth in wealth management.

During the quarter, FactSet made significant strides in its strategic initiatives:

FactSet has been active in returning value to its shareholders, repurchasing 136,714 shares for $64.4 million at an average price of $470.70 during the quarter. Moreover, the company declared a quarterly dividend of $39.5 million, or $1.04 per share, scheduled for payment on March 20, 2025.

Looking ahead, FactSet has reaffirmed its organic ASV growth guidance at a midpoint of 5%, narrowing its revenue expectations for fiscal 2025 to a range of $2,305 million to $2,325 million. This reflects continued confidence in its growth trajectory despite the modest dilution from acquisitions.

CEO Phil Snow stated, "With increased visibility into the remainder of the fiscal year, we are reaffirming our 5% midpoint of our organic ASV growth guidance and narrowing the range of anticipated top-line outcomes. The strength of our full-year pipeline and constructive dialogue with our clients position our business positively for growth acceleration in the second half of the year."

FactSet's second quarter results for fiscal 2025 demonstrate a robust performance amidst a challenging economic landscape. With strategic acquisitions, a growing client base, and a commitment to innovation, FactSet is well-positioned to sustain its growth momentum as it navigates the remainder of the fiscal year. The upcoming conference call will provide further insights into the company’s strategic direction and financial outlook.