Last week FactSet Research Systems Inc. (NYSE:FDS), a Norwalk, Connecticut-based global financial digital platform and enterprise solutions provider, reported a solid financial performance for the first quarter fiscal 2025 (ended November 30, 2024) as GAAP diluted earnings per share rose 1.3% to $3.89 compared to $3.84 for the same period in fiscal 2024.
1st Qtr Fiscal 2025 Financial Results
FactSet announced that 1st Qtr Fiscal 2025 GAAP revenue increased 4.9% to $568.7 mln compared to the $542.2 mln reported during the same period in the prior year. Organic revenue during this period rose 4.7%. FactSet’s Annual Subscription Value (ASV) grew 4.9% to $2,265.9 mln as of November 30, 2024 fro, $2,159.4 mln on November 30, 2023.
The buy-side and sell-side organic ASV annual growth rates as of November 30, 2024 were 4.3% and 3.5%, respectively. Buy-side clients, including institutional asset managers, wealth managers, asset owners, partners, hedge funds and corporate clients, accounted for 82% of organic ASV. The remaining organic ASV came from sell-side firms, including broker-dealers, banking and advisory firms, and private equity and venture capital firms.
First-quarter operating income increased 1.2% to $191.34 million. Adjusted operating income was $213.75 million, an increase of 4.8% during the 1st Qtr 2025. First-quarter operating margin was 33.6%, compared with 34.9% in the prior-year period. Adjusted operating margin was 37.6% in the first quarter of 2025, versus 37.6% in the prior-year period.
Net income in the 1Q25 was $150.02 million, or $3.89 per diluted share, compared with net income of $148.56 million, or $3.84 per diluted share in the first quarter of 2025, an increase of 1.3% on a per share basis. Adjusted diluted earnings per share increased 6.1% to $4.37 per share in the first quarter of 2025, compared with $4.12 per share in the prior-year period.
Cash provided by operating activities was $86.4 million for the first quarter 2025, while free cash flow decreased to $60.5 mln for the first quarter of fiscal 2025.
Our Take
FactSet’s 1st Qtr Fiscal 2025 performance demonstrates solid revenue growth, particularly in the wealth and asset management sectors. However, the decline in the firm’s operating margin and free cash flow indicates rising costs and capital expenditures, which could impact future profitability. The company’s strategic initiatives, such as the Intelligent Platform and acquisitions, suggest a focus on long-term growth and innovation.
The number of FactSet clients as of November 30, 2024 was 8,249, a net increase of 32 clients in the past three months, driven by an increase in partners, private equity and venture capital and wealth. However, the number of FactSet users increased by 1,886 to 218,267 in the past three months, primarily driven by an increase in wealth management users.
FactSet CFO Helen Shan commented on the 1st Quarter Fiscal 2025 performance saying, “We are off to a good start in fiscal 2025 and achieved solid operating performance through sustained cost discipline and execution against our growth initiatives and capital strategy.”
FactSet’s solid financial performance in Q1 Fiscal 2025 reflects its strong market position in the financial services industry. The growth in client and user counts highlights the company’s ability to attract and retain customers. The introduction of new solutions, partnerships, and acquisitions positions FactSet to capitalize on emerging trends in data management and analytics.