Factset Research Systems Inc Q3 2024 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Toni Kaplan - Morgan Stanley & Co. LLC - Analyst : Terrific. Thank you so much. I wanted to ask regarding ASV. The guidance seems pretty wide in terms of the range. Are there sort of a wide range of -- array of outcomes that could happen? I think the midpoint sort of assumes that things maybe stays -- are flat sequentially. And so, therefore, that would maybe be a little bit better than the last few quarters. So just wanted to get a sense of, you know, you talked about the challenging environment, like any green shoots there and how we should be thinking about that. Thanks.

Question: Alex Kramm - UBS Group AG - Analyst : Yes, hey, hello, everyone. Phil, you talked about adding three areas of investments here that you're excited about or that you're focused on rather. If I go back a few years ago, I think we found ourselves in the same kind of situation. Growth has come down maybe from the environment and you felt like you need to spend a little bit more to get the growth going again. So when you talk about these investments, if I think about the next couple of years, do you think the company needs another kind of boost of investments? Or do you think you can do orders in the current cost base that you have in front of you? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 21, 2024 / 3:00PM, FDS.N - Q3 2024 Factset Research Systems Inc Earnings Call

Question: Kelsey Zhu - Autonomous Research US LP - Analyst : Hi, good morning. Thanks for taking my question. So the industry data we track suggest that there are some early signs of capital markets activity recovery. So just curious, what are you hearing from your sell side customers? And when do you expect sell side ASV growth to reaccelerate?

Question: Manav Patnaik - Barclays Bank PLC - Analyst : Thank you. Good morning. I guess I just had a little bit of a run rate question and kind of a two part. One on the top line. Is the UBS-CS impact now fully in the run rate? Did you anticipate more impact? And then just specific to expenses as well, you know, all the REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 21, 2024 / 3:00PM, FDS.N - Q3 2024 Factset Research Systems Inc Earnings Call headcount efforts and stuff you've made thus far, is there more to flow through? Just trying to appreciate the dynamics in those two.

Question: Faiza Alwy - Deutsche Bank AG - Analyst : Yes, hi, thank you. Good morning. So I wanted to ask about the competitive environment, and I'm curious what you're seeing from competitors. It seems that over the last couple of years, you've seen competitors invest as well, relative to what had been the case previously. And I know you talked about price competition for new business. So just give us a sense of how you would assess the competitive dynamics at this point.

Question: Surinder Thind - Jefferies LLC - Analyst : Thank you. The question about gen AI and just the integration of the tools and the feature set, as clients begin to adopt more and use more, how does that impact the technology costs for you guys? Any color there would be helpful.

Question: Ashish Sabadra - RBC Capital Markets - Analyst : Thanks for taking my question. I just wanted to clarify on the CS-UBS headwind. Was that just the negative impact? Or how do we think about like any potential cross-sell opportunity? Was there any cross-sell opportunity which lowered that impact? And then maybe just a quick clarifying question on revenue versus ASV growth in the fourth quarter. If my math is right, I get at the midpoint of the revenue guidance, less than 2% revenue growth in the second -- in the fourth quarter, which is almost a three-point lower than the ASV growth at the midpoint. What's causing that delta? And how do we think about the exit revenue run rate and going into next year? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 21, 2024 / 3:00PM, FDS.N - Q3 2024 Factset Research Systems Inc Earnings Call

Question: Ashish Sabadra - RBC Capital Markets - Analyst : Sorry, I was wondering if you could comment on the fourth quarter as well. That was helpful color on the third quarter.

Question: George Tong - Goldman Sachs & Co. - Analyst : Hi, thanks. Good morning. I wanted to get some additional clarity around the assumptions behind the updated ASV guide. Are you basically assuming that the sales cycles are elongating, so it's basically a matter of timing of when the deals get closed? Or does it reflect increased client events where the business is essentially structurally lost? And then secondly, can you talk a little bit about international pricing. I believe fiscal 3Q is typically when you push through your pricing actions and how does that pricing compare to the prior year?

Question: Andrew Nicholas - William Blair & Company L.L.C. - Analyst : Hi, good morning. Thanks for taking my question. Phil, I think you mentioned that you believe AI will drive incremental ASV in 2025. I appreciate all the color there. But I'm just curious on kind of the other side of the coin, maybe in terms of internal cost savings. Is that something that you would also expect to materialize at least at some point in 2025? Or should we still be thinking about this primarily being kind of breakeven cost effort on the expense front. Thank you.

Question: Shlomo Rosenbaum - Stifel, Nicolaus & Company, Incorporated - Analyst : Hi. Thank you for taking my question here. I wanted to ask a little bit just to clarify first on the questions that were asked before in terms of like CS and UBS, the fourth quarter guidance implies a down quarter in revenue, which is notable. I don't think we've seen this in about five years on a sequential basis. And want to know if you were to exclude what's going on with the UBS-CS, license is going away, would you show growth sequentially in revenue if were to kind of normalize for that? I'm trying to understand if there's an environment thing or you're being overly burdened by that. And then just in general, there's been a slowdown in revenue growth, and Linda I've asked you this before, but you've pulled a lot of levers in terms of expenses, and we're continuing to see the environment kind of meander around. And what's left on the board for you in terms of if we don't see kind of a pickup. We're kind of hoping to see a little bit more, I think, from some green shoots that we noted last quarter. But if those don't materialize soon, what other levers would you pull? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 21, 2024 / 3:00PM, FDS.N - Q3 2024 Factset Research Systems Inc Earnings Call

Question: Craig Huber - Huber Research Partners, LLC - Analyst : Thank you. Back to just a broad question here. How would -- again, your thoughts here on the sell side and buy side customers that you have out there in the marketplace. Do you sort of feel like you're just sort of bouncing along at the bottom here that the worst is behind you? How you -- just broadly, again, how would you describe what you're going through right now? I mean, in other words, are you feeling like you're at the very bottom here, and it's just a matter of time before things start re-accelerating.

Question: Craig Huber - Huber Research Partners, LLC - Analyst : Linda, could you just quickly give us a housekeeping question I have for you here. Just your bonus accruals, what was it each of the first three quarters this year? I think it was $24 million to $25 million quarterly last year. What was it the first three quarters this year? Sorry for the housekeeping question. Thank you.

Question: Russell Quelch - Redburn Atlantic - Analyst : Yeah, hi Phil and Linda. Just wanted to drill down into the private market space a little bit. A lot of your competitors are also targeting this area for growth. So could you just a favor and just detail your product ambitions here, how you're going to win against the other guys who are targeting growth. And the other angle to this question is it was recently rumored that one of the big incumbents in the space is for sale. So is this something you might look at to accelerate your positioning growth in the area?

Question: Heather Balsky - BofA Securities, Inc. - Analyst : Hi. Thank you so much. I want to first ask with regards to ASV growth, if you could provide some color in terms of what you're seeing with regards to price versus volume right now and how that tracks versus, I guess, what you expected in the year. And then the other question, bigger picture, and I realized you just talked about kind of that potentially the malaise we're seeing persist until the end of the year. I know this has been a really tough environment to kind of get visibility, but when you think about the recovery here, based on what you've been seeing, how do you think things recover? Or do you think we can have a U- or V-shape recovery? Do you get the sense that your clients are going to move very gradually, just given all the uncertainty in pad? Just any insight you have would be helpful.

Question: Guru Sidaarth - Oppenheimer & Co. Inc. - Analyst : Hi. This is Guru on for Owen and thank you so much for taking my questions. I wanted to ask about the deep sector offering. I think the last major update was back in Q1 when it helped displace a competitor in banking. So any updates here? Because this really seems like it could be a solid driver give behind AI. So any updates or insights over here?

Question: Scott Wurtzel - Wolfe Research Securities - Analyst : Hey, good morning, guys, and thanks for squeezing me in here. Just wanted to go back to the wealth segment. I'm wondering if you can maybe sort of characterize the overall demand on the wealth side relative to what you're seeing on institutional buy side and sell side. I know you talked about modest growth this quarter, but I would love to just kind of hear characterization of the overall demand and compared to some of the other end markets you operate in.

Question: Scott Wurtzel - Wolfe Research Securities - Analyst : Great, thank you.