FactSet (FDS) Q3 2024 earnings summary

Executive summary

• Q3 FY24 revenues rose 4.3% year-over-year to $552.7 million, with organic revenue growth of 4.5%–5% and strong contributions from institutional asset managers, asset owners, partners, and corporates.

• Adjusted operating margin increased to 39.4% (up 340 bps), and GAAP operating margin improved to 36.6% (up 420 bps), driven by cost controls and lower compensation expenses.

• Adjusted diluted EPS grew 15.3% to $4.37, and GAAP diluted EPS rose 18.2% to $4.09, reflecting higher operating income and margin expansion.

• Organic ASV plus professional services reached $2,220.4 million, up 5% year-over-year, with ASV retention above 95% and client retention at 90%.

• Continued investment in GenAI and technology, launching new products such as Portfolio Commentary, Portfolio Manager Hub, and Transcript Assistant.

Financial highlights

• Q3 net income was $158.1 million, up 17.4% year-over-year; adjusted EBITDA reached $239.9 million, up 16.9%.

• Free cash flow for Q3 was $216.9 million, up 12.6% year-over-year; nine-month free cash flow totaled $477.5 million.

• Share repurchases totaled $59.8–$60 million for the quarter, with $128.1 million remaining authorized.

• Board approved a 6% increase in quarterly dividend to $1.04 per share, marking 25 consecutive years of dividend growth.

• Client count rose to 8,029, with user count up 11% to 208,140.

Outlook and guidance

• FY24 organic ASV plus professional services growth expected at 4%–5.5%, revised down from prior guidance.

• FY24 revenue guidance is $2.18–$2.19 billion, slightly reduced from previous guidance.

• Adjusted operating margin guidance raised to 37%–37.5%; adjusted EPS now $16–$16.40.

• Effective tax rate guidance remains at 16.5%–17.5%.

• GAAP diluted EPS guidance increased to $14.55–$14.95.