Factset Research Systems Inc Q3 2025 Earnings Call Transcript

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

Question: Shlomo Rosenbaum - Stifel Nicolaus and Company, Incorporated - Analyst : I wanted to ask if there's any change in the macro environment. You're seeing a little bit of a turn-up in the ASV growth, which is certainly positive after over a year of sequential declines. So I'm wondering, is it all better execution and products getting traction? Or are you seeing anything in the end markets that are giving you any tailwind whatsoever?

Question: Alex Kramm - UBS Equities - Analyst : I'm not sure if this is just a follow-on to the first question, but maybe a little bit more specific on the 4Q outlook. If I look at the guidance range, which is obviously unchanged, I think to get to the low end, you need to basically do what you did in the last three years in the fourth quarter, I

Question: Faiza Alwy - Deutsche Bank - Analyst : I know it's a bit early, but I wanted to ask if you have any thoughts around how we should think about fiscal '26 because I know you've talked about you typically do have visibility over the next six months. And really, if I can just ask a direct question, do you expect to see further acceleration a little beyond Q4?

Question: Ashish Sabadra - RBC Capital Markets - Analyst : Phil, congrats on your retirement. Just on -- in the prepared remarks, there was a comment around asset owner pertaining to optimized costs and streamlining the vendor relationship. I was just wondering if you could provide some color on the headwinds there, but also how do we think about inflecting the growth for that particular [vertical]?

Question: Owen Lau - Oppenheimer & Co., Inc. - Analyst : So the adjusted operating margin for the first three quarter is about 37.2% based on my math. It implies that the fiscal 4Q margin has to go down to around 34.6% to hit the midpoint of the full year guidance. So is there any expense or investment we should be aware of for your fourth quarter, or it will follow historical patterns and it will more likely to land at the high end of the full year margin guidance? Thanks a lot.

Question: Andrew Nicholas - William Blair & Company - Analyst : Appreciate all the commentary on the monetization of GenAI and some success on the top line. I just wanted to ask about progress from an internal efficiency perspective. Helen, I think you mentioned briefly some internal efficiency initiatives. Just curious, how much of that is GenAI-related? And if we're thinking about kind of the increased investment there, how much of that could potentially be offset and over what time frame from cost savings from the same technologies? Thank you.

Question: Surinder Thind - Jefferies - Analyst : A big-picture question here margins and kind of the trade-off of growth versus margins here. We think over the next one, two, three years, is the idea that kind of expenses, we should see more operating leverage, I guess, that we're near peak investment, I guess, near fiscal 4Q and then it kind of deals normally or below normal at that point in time?

Question: Craig Huber - Huber Research Partners - Analyst : On the cost side, Helen, it looked to us like your cost adjusted for some onetime items overall was up about 10% to 11% year over year. If you take out the acquisitions, was it up more like 300 basis points lower than that, so call it roughly 8% maybe? 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 23, 2025 / 1:00PM, FDS.N - Q3 2025 Factset Research Systems Inc Earnings Call And while you're answering that question, can you touch on, please, the investments you guys are making in your sales force? Is that up significantly all this year? Or is it more like flattish? How should we think about that?

Question: Craig Huber - Huber Research Partners - Analyst : Sorry. What about the sales force part of it?

Question: Toni Kaplan - Morgan Stanley - Analyst : And Phil, congrats on your retirement. I wanted to ask the offensive GenAI question. You mentioned 10 signed deals and 45 opportunities. On the signed deals, are these customers you already had that want to adopt Pitch Creator? Or are these new banks that want to have sort of a full FactSet product and are adopting -- and Pitch Creator was like the driver for that? And what else is out in the marketplace like it at this point? I know you were sort of first, but has anything -- any other products come up to this point? Thanks. Goran Skoko - Factset Research Systems Inc - Executive Vice President, Chief Revenue Officer, Managing Director - EMEA and Asia Pacific Toni, it's Goran. So it's a bit of a mix. I would say most of the current deals are with existing clients, where they have adopted Pitch Creator as part of the overall solutions. We do have deals in the pipeline. Don't forget that Pitch Creator has been out there less than about four or five months. So we do have some selling activity, which -- where Pitch Creator is significant contributor in the sentiment of those deals that are currently in the pipeline. So we expect it to contribute to winning new business in addition to cross-selling and upselling of the existing business. I hope that, that helps. 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 23, 2025 / 1:00PM, FDS.N - Q3 2025 Factset Research Systems Inc Earnings Call

Question: David Motemaden - EVERCORE ISI - Analyst : And Phil, congrats on your retirement. Just -- I just wanted to just level set for where we are in terms of the 30 to 50 basis points ASV contribution from GenAI this year. Are we tracking in line with that? And as -- in terms of the traction you're getting there, do you think that's something that we should see accelerate and add more to ASV from that 30 to 50 basis points in the next year or two?

Question: Scott Wurtzel - Wolfe Research - Analyst : Wondering if you can talk a little bit about the CUSIP collaboration with Omni that you announced and just the opportunity there and the overall demand for identifiers among VC and PE-backed companies. Thank you.

Question: Russell Quelch - Rothschild & Co Redburn - Analyst : Helen, I think in your opening remarks, Helen, you mentioned the new liquidity you have to support growth. Will that be deployed organic or inorganically? And what are the main areas that you think you might deploy that additional capital to drive improving returns from next year?

Question: George Tong - Goldman Sachs - Analyst : I'd also like to extend my congrats to Phil on your retirement.

Question: George Tong - Goldman Sachs - Analyst : Yes. So earlier, Helen, you talked about the EMEA and APAC pricing contributions decelerating a little bit because of lower CPI increases. Can you elaborate on the pricing environment more broadly in the international regions and if you're seeing any competitive changes that might also be affecting your pricing there?