LONDON, UK / ACCESSWIRE / July 13, 2018 / If you want access to our free earnings report on FactSet Research Systems Inc. (FDS) ("FactSet"), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=FDS. The Company reported its third quarter fiscal 2018 operating and financial results on June 26, 2018. The financial data firm outperformed earnings expectations. Register today and get access to over 1,000 Free Research Reports by joining our site below:
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Earnings Highlights and Summary
For the third quarter ended May 31, 2018, FactSet's revenues increased 8.9% to $339.9 million compared to $312.1 million in Q3 FY17, and were in-line with analysts' estimates. The Company's organic revenues grew 5.7% to $332.5 million on a y-o-y basis, primarily driven by higher sales of analytics products, content and technology solutions (CTS), and wealth management solutions.
For Q3 FY18, FactSet's operating margin decreased to 27.4% compared to 28.1% in Q3 FY17. The decrease in operating margin was primarily related to restructuring actions and certain one-time administrative expenses. The Company's adjusted operating margin decreased to 31.0% compared to 31.9% in the prior year's same period.
FactSet reported a net income of $74.75 million, or $1.91 per diluted share, in Q3 FY18 compared to $65.41 million, or $1.66 per diluted share, in Q3 FY17. The Company's adjusted diluted earnings per share (EPS) rose 17.8% to $2.18 in the reported quarter versus $1.85 in the prior year's comparable period, boosted primarily by the US Tax Cuts and Jobs Act 2017 (TCJA), and beating Wall Street's estimates of $2.14.
ASV and Segment Revenue
FactSet's annual subscription value (ASV) was $1.36 billion at May 31, 2018, up $67.6 million organically compared to $1.28 billion in Q3 FY17. The organic ASV growth rate, excluding the effects of acquisitions, dispositions, and foreign currency, was 5.3%.
The Company's ASV excluded professional services fees billed in the last 12 months, which were not subscription-based. The Company's organic ASV increased by $9.0 million over the last three months.
During Q3 FY18, FactSet's buy-side and sell-side ASV growth rates were 5.3% and 5.0%, respectively. Buy-side clients accounted for 84.4% of ASV, while the remainder was derived from sell-side firms that perform mergers and acquisitions advisory work, capital markets services, and equity research.
FactSet's ASV from US operations was $843.6 million, increasing 4.4% to $807.8 million on a y-o-y basis and 4.4% organically. The Company's US revenues were $210.3 million in the reported quarter compared to $197.8 million in the prior year’s corresponding quarter.
During Q3 FY18, FactSet's ASV from international operations was $512.6 million, increasing 8.1% compared to $474.3 million in Q3 FY17. The Company's International ASV represented 37.8% of total ASV in the reported quarter, up 37.0% in the prior year's same quarter. The Company's International revenues were $129.6 million compared to $114.3 million in Q3 FY17.
As of May 31, 2018, FactSet's client count was 4,975, reflecting a net increase of 80 clients in the past three months, primarily driven by the Company's wealth management business. The count includes clients with ASV of $10,000 and above.
FactSet's user count increased by 860 to 89,506 in the past three months, primarily driven by an increase in wealth workstation sales. FactSet defines users as workstation and StreetAccount users. The Company's annual client retention was greater than 95% of ASV.
During Q3 FY18, FactSet's net cash provided by operating activities was $125.7 million compared to $92.3 million in Q3 FY17. The Company's free cash flow was $119.7 million in the reported quarter versus $84.3 million in the year ago comparable period, reflecting an increase of 41.9%, primarily due to improved cash collections.
FactSet repurchased 620,000 shares for $122 million in Q3 FY18, under the Company's existing share repurchase program. Over the last 12 months, FactSet has returned $369 million to stockholders in the form of share repurchases and dividends, funded by cash generated from operations.
For the full fiscal year 2018, FactSet is forecasting organic ASV to increase in the range of $65 million and $85 million, implying a growth rate in the band of 4.9% to 6.5% compared to FY17. The Company's GAAP revenues are estimated to be in the band of $1.34 billion and $1.36 billion for FY18. FactSet is expecting GAAP EPS to be in the range of $6.92 and $7.17, and adjusted EPS to be in the band of $8.37 and $8.62 for FY18.
Stock Performance Snapshot
July 12, 2018 - At Thursday's closing bell, FactSet Research Systems' stock marginally dropped 0.28%, ending the trading session at $205.36.
Volume traded for the day: 260.98 thousand shares.
Stock performance in the last three-month - up 3.50%; previous six-month period - up 5.13%; past twelve-month period - up 25.27%; and year-to-date - up 6.54%
After yesterday's close, FactSet Research Systems' market cap was at $7.89 billion.
Price to Earnings (P/E) ratio was at 28.65.
The stock has a dividend yield of 1.25%.
The stock is part of the Technology sector, categorized under the Information & Delivery Services industry. This sector was up 1.7% at the end of the session
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