FACTSET RESEARCH SYSTEMS INC
For the period ended May 31, 2024. Filed Jul 3, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
May 31, 2024 · Filed Jul 3, 2024
FDS$327.89-3.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-02-29; filed 2024-04-03.
0001013237-24-000049
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-05-31; filed 2024-07-03.
0001013237-24-000084
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 212 previous paragraphs and 203 current paragraphs.
113 unchanged; 60 reworded; 29 added; 39 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
Fiscal 2024 Third Quarter in Review
Current report
Americas revenues increased 5.6% to $356.5 million during the three months ended May 31, 2024, compared with $337.7 million from the same period a year ago. This growth in revenues was primarily reflective of organic revenues growth of 5.5%. The increase in revenues was driven by higher demand and price increases primarily from workstations and CGS subscriptions.
Current report
EMEA revenues increased 2.4% to $141.2 million during the three months ended May 31, 2024, compared with $138.0 million from the same period a year ago. This growth in revenues was reflective of organic revenues growth of a 2.4%. The increase in revenues was driven by higher demand and price increases primarily from data solutions and middle office solutions.
Current report
Asia Pacific revenues increased 1.5% to $55.0 million during the three months ended May 31, 2024, compared with $54.1 million from the same period a year ago. This growth in revenues of 1.5% was reflective of a 3.0% increase in organic revenues, partially offset by a 1.5% decrease from foreign currency exchange rate fluctuations. The increase in revenues was driven by higher demand and price increases primarily from data solutions, workstations and middle office solutions.
Current report
Revenues from EMEA increased 4.7% to $420.0 million during the nine months ended May 31, 2024, compared with $401.2 million from the same period a year ago. This growth in revenues of 4.7% was reflective of a 4.4% increase in organic revenues and a 0.3% benefit from foreign currency exchange rate fluctuations. The increase in revenues was driven by higher demand and price increases primarily from data solutions and middle office solutions.
Current report
•Employee compensation costs decreased by 250 basis points primarily driven by a one-time payroll tax adjustment and a decrease in salaries. The decrease in salaries was primarily driven by higher capitalization of costs related to development of internal-use software.
Current report
•Amortization of intangible assets increased 80 basis points mainly due to higher amortization from capitalized costs related to the development of our internal-use software.
Current report
•Computer-related expenses increased 60 basis points primarily due to higher spending related to cloud-based hosting services and licensed software arrangements.
Current report
Cost of services, when expressed as a percentage of revenues, was 45.9% for the nine months ended May 31, 2024, an increase of 20 basis points compared with the same period a year ago. This increase was primarily driven by higher amortization of intangible assets and increases in the other expenses included in Costs of services outpacing the increase in revenues, partially offset by a decrease in employee compensation costs when expressed as a percentage of revenues.
Current report
•Amortization of intangible assets increased 40 basis points mainly due to higher amortization from capitalized costs related to the development of our internal-use software.
Current report
SG&A decreased 10.9% to $103.1 million for the three months ended May 31, 2024, compared with $115.7 million from the same period a year ago, primarily driven by lower employee compensation costs.
Current report
SG&A, when expressed as a percentage of revenues, was 18.7% for the three months ended May 31, 2024, a decrease of 320 basis points compared with the same period a year ago. This decrease was primarily driven by lower employee compensation costs, bad debt expense and occupancy costs, partially offset by an increase in marketing expense.
Current report
•Employee compensation costs decreased by 290 basis points primarily due to a decrease in variable compensation and payroll taxes.
Current report
•Bad debt expense decreased by 60 basis points as the prior year included a higher expense from our estimated collectibility of outstanding receivables.
Current report
•Occupancy costs decreased 50 basis points primarily due to exiting certain leased spaces in the prior year.
Current report
•Marketing expense increased by 60 basis points primarily related to costs associated with a client symposium.
Current report
Americas operating income increased 11.0% to $87.7 million during the three months ended May 31, 2024, compared with $79.0 million in the same period a year ago. This increase was primarily due to growth in revenues of 5.6% and a decrease in employee compensation costs, partially offset by higher amortization of intangible assets and computer-related expenses.
Current report
•Employee compensation costs decreased primarily due to a one-time payroll tax adjustment and a decrease in salaries. The decrease in salaries was mainly driven by a net headcount reduction of 200 employees and higher capitalization of compensation costs related to the development of our internal-use software, partially offset by annual merit increases.
Current report
•Amortization of intangible assets increased mainly due to higher amortization from capitalized costs related to the development of our internal-use software.
Current report
•Computer-related expenses increased primarily due to higher spending related to cloud-based hosting services and licensed software arrangements.
Current report
EMEA operating income increased 28.8% to $75.5 million during the three months ended May 31, 2024, compared with $58.6 million in the same period a year ago. This increase was primarily due to growth in revenues of 2.4% and lower employee compensation costs. Employee compensation costs decreased mainly due to lower variable compensation and a decrease in restructuring charges due to the release of certain accruals during the three months ended May 31, 2024.
Current report
Americas operating income increased 20.5% to $250.3 million during the nine months ended May 31, 2024, compared with $207.7 million in the same period a year ago. This increase was primarily due to growth in revenues of 6.6% and lower employee compensation costs, partially offset by higher amortization of intangible assets and computer-related expenses.
Current report
•Employee compensation costs decreased primarily due to lower variable compensation and, to a lesser extent, a decrease due to lower salaries and a one-time payroll tax adjustment, partially offset by an increase in restructuring charges. The decrease in salaries was primarily driven by higher capitalization of compensation costs related to the development of our internal-use software.
Current report
•Amortization of intangible assets increased mainly due to higher amortization from capitalized costs related to the development of our internal-use software.
Current report
•Computer-related expenses increased primarily due to higher spending related to cloud-based hosting services and licensed software arrangements.
Current report
EMEA operating income increased 6.3% to $207.1 million during the nine months ended May 31, 2024, compared with $194.9 million in the same period a year ago. This increase was primarily due to growth in revenues of 4.7%, partially offset by higher employee compensation costs. Employee compensation costs increased primarily due to higher annual base salaries driven by annual merit increases, partially offset by a net headcount decrease of 48 employees.
Current report
Asia Pacific operating income increased 5.0% to $116.0 million during the nine months ended May 31, 2024, compared with $110.5 million in the same period a year ago. This increase was mainly due to growth in revenues of 4.5% and reduction of certain operating expenses, partially offset by higher employee compensation costs. Employee compensation costs increased primarily due to higher annual base salaries driven by annual merit increases and a net headcount increase of 438 employees.
Current report
Our effective tax rate of 17.0% for the three months ended May 31, 2024 was relatively flat compared with 16.9% for the three months ended May 31, 2023. This was primarily due to higher pretax income, which reduced the effective tax rate impact of certain tax benefits, offset by increased utilization of foreign tax credits and excess tax benefits from stock-based compensation.
Current report
(1)Related to certain business acquisition costs for the three and nine months ended May 31, 2024 and integration costs from the CGS acquisition for the nine months ended May 31, 2023.
Removed paragraphs (39)
Previous report
Fiscal 2024 Second Quarter in Review
Previous report
Prior year ASV has been revised to include certain CGS revenues not previously reflected as ASV to better align with our legacy business.
Previous report
EMEA revenues increased 5.0% to $139.2 million during the three months ended February 29, 2024, compared with $132.5 million from the same period a year ago. This growth in revenues of 5.0% was reflective of a 4.8% increase in organic revenues and a 0.2% benefit due to the effects of foreign currency exchange rate fluctuations. The increase in revenues was primarily driven by an increase in sales of our data solutions and middle office solutions.
Previous report
Asia Pacific revenues increased 5.2% to $54.1 million during the three months ended February 29, 2024, compared with $51.5 million from the same period a year ago. This growth in revenues of 5.2% was reflective of a 6.4% increase in organic revenues, partially offset by a decrease of 1.2% due to the effects of foreign currency exchange rate fluctuations. The increase in revenues was primarily driven by higher demand for our data solutions and workstations.
Previous report
Revenues from the Americas increased 7.1% to $701.0 million during the six months ended February 29, 2024, compared with $654.5 million from the same period a year ago. This growth in revenues was reflective of organic revenues growth of 7.1%. The increase in revenues was driven by higher demand for our workstations and, to a lesser extent, sales of our middle office solutions, data solutions and CGS subscriptions, as well as our annual price increase.
Previous report
Revenues from EMEA increased 5.9% to $278.7 million during the six months ended February 29, 2024, compared with $263.2 million from the same period a year ago. This growth in revenues of 5.9% was reflective of a 5.4% increase in organic revenues and a 0.5% benefit due to the effects of foreign currency exchange rate fluctuations. The increase in revenues was primarily driven by higher demand for our data solutions and middle office solutions.
Previous report
Cost of services, when expressed as a percentage of revenues, was 46.7% for the three months ended February 29, 2024, relatively consistent with 46.8% for the three months ended February 28, 2023. This change was primarily due to revenues outpacing the increase in Cost of services and, when expressed as a percentage of revenues, lower computer-related expenses, partially offset by an increase in amortization of intangible assets and higher employee compensation costs.
Previous report
•Computer-related expenses decreased 80 basis points primarily due to lower spending related to cloud-based hosting services and a reduction in third-party vendor costs as projects are leveraging internal resources, partially offset by an increase in costs related to licensed software arrangements.
Previous report
•Amortization of intangible assets increased 70 basis points mainly from higher capitalized costs related to the development of our internal-use software.
Previous report
•Employee compensation costs increased 40 basis points primarily due to higher annual base salaries, net of capitalization of compensation costs related to the development of our internal-use software, a restructuring charge and an increase in payroll taxes. The increase in annual base salaries was primarily driven by annual merit increases and a net headcount increase in Cost of services of 459, primarily located in our COEs.
Previous report
•Royalty fees increased 30 basis points due to an increase in both CGS sales and the applicable royalty rate.
Previous report
•Contractor fees decreased 30 basis points primarily due to a reduction in data and technology consulting services.
Previous report
SG&A increased 4.0% to $108.8 million for the three months ended February 29, 2024, compared with $104.6 million from the same period a year ago, primarily driven by higher bad debt expense and employee compensation costs.
Previous report
SG&A, when expressed as a percentage of revenues, was 19.9% for the three months ended February 29, 2024, a decrease of 40 basis points compared with the same period a year ago. This decrease was primarily driven by revenues outpacing the increase in SG&A and, when expressed as a percentage of revenues, lower employee compensation costs, partially offset by higher bad debt expense.
Previous report
•Employee compensation costs decreased by 30 basis points primarily due to growth of our revenues outpacing the increase in employee compensation costs and lower variable compensation. This decrease was partially offset by higher payroll taxes, a restructuring charge and an increase in benefit-related expenses.
Previous report
•Bad debt expense increased by 50 basis points primarily due to the aging of accounts receivable.
Previous report
•Employee compensation costs decreased by 50 basis points, primarily due to growth of our revenues outpacing the increase in employee compensation costs, partially offset by higher annual base salaries and stock-based compensation expense. The increase in annual base salaries was primarily driven by annual merit increases, partially offset by a net headcount decrease in SG&A of 76 employees.
Previous report
•The net settlement of foreign currency forward contracts decreased SG&A by 50 basis points.
Previous report
•Professional fees decreased by 30 basis points primarily due to transition costs related to the CGS acquisition incurred during the prior year period.
Previous report
•Bad debt expense increased by 40 basis points primarily due to the aging of accounts receivable.
Previous report
Americas operating income increased 33.6% to $81.7 million during the three months ended February 29, 2024, compared with $61.2 million in the same period a year ago. This increase was primarily due to growth in revenues of 6.5%, partially offset by higher amortization of intangible assets and, to a lesser extent, an increase in bad debt expense.
Previous report
•Amortization of intangible assets increased mainly from higher capitalized costs related to the development of our internal-use software.
Previous report
•Bad debt expense increased primarily due to the aging of accounts receivable.
Previous report
EMEA operating income decreased 8.9% to $62.8 million during the three months ended February 29, 2024, compared with $68.9 million in the same period a year ago. This decrease was primarily due to higher employee compensation costs, partially offset by growth in revenues of 5.0%. Employee compensation costs increased mainly due to an increase in payroll taxes, a restructuring charge, higher annual base salaries and increased variable compensation. The increase in annual base salaries was mainly driven by annual merit increases, partially offset by a net headcount decrease of 67 employees.
Previous report
Americas operating income increased 26.3% to $162.6 million during the six months ended February 29, 2024, compared with $128.7 million in the same period a year ago. This increase was primarily due to growth in revenues of 7.1%, partially offset by higher amortization of intangible assets, computer-related expenses, bad debt expense, royalty fees and employee compensation costs.
Previous report
•Amortization of intangible assets increased mainly from higher capitalized costs related to the development of our internal-use software.
Previous report
•Computer-related expenses increased primarily due to higher spending related to licensed software arrangements and our cloud-based hosting services.
Previous report
•Bad debt expense increased primarily due to the aging of accounts receivable.
Previous report
•Royalty fees increased primarily due to an increase in both CGS sales and the applicable royalty rate.
Previous report
•Employee compensation costs increased primarily due to a restructuring charge and an increase in stock-based compensation, partially offset by a decrease in variable compensation.
Previous report
EMEA operating income decreased 3.3% to $131.7 million during the six months ended February 29, 2024, compared with $136.3 million in the same period a year ago. This decrease was primarily due to higher employee compensation costs and, to a lesser extent, an increase in data costs, partially offset by growth in revenues of 5.9%.
Previous report
•Employee compensation costs increased primarily due to higher annual base salaries and payroll taxes. The increase in annual base salaries was mainly driven by annual merit increases, partially offset by a net headcount decrease of 67 employees.
Previous report
•Data costs increased as the prior year period included the release of certain accruals related to the successful resolution of exchange audits.
Previous report
Asia Pacific operating income increased 0.7% to $76.7 million during the six months ended February 29, 2024, compared with $76.2 million in the same period a year ago. This increase was mainly due to growth in revenues of 6.1%, partially offset by higher employee compensation costs. Employee compensation costs increased primarily due to higher annual base salaries, driven mainly by annual merit increases and a net headcount increase of 628 employees, and, to a lesser extent, an increase in benefit expense, variable compensation and post-employment benefits.
Previous report
Our effective tax rate for the three and six months ended February 29, 2024 was lower than the applicable U.S. corporate income tax rate mainly due to a net tax benefit from the employee exercise of stock options, research and development ("R&D") tax credits and utilization of foreign tax credits, partially offset by our state taxes. For the three and six months ended February 28, 2023, our effective tax rate was lower than the applicable U.S. corporate income tax rate mainly due to R&D tax credits, a foreign derived intangible income ("FDII") deduction and a net tax benefit from the employee exercise of stock options.
Previous report
Our effective tax rate for the three months ended February 29, 2024 was higher than for the three months ended February 28, 2023, mainly driven by higher pretax income at applicable statutory tax rates and a higher overall foreign tax rate, partially offset by an increase in the exercise of stock options and increased utilization of foreign tax credits.
Previous report
(1)Related to integration costs of the CGS acquisition.
Previous report
Capital Expenditures
Previous report
For the six months ended February 29, 2024, capital expenditures increased by 8.4% to $38.4 million, compared with $35.4 million during the same period a year ago. This increase was primarily driven by higher capitalized costs related to the development of our internal-use software.
Reworded paragraphs (60)
Previous wording
Our platform delivers expansive data, sophisticated analytics, and flexible technology used by global financial professionals to power their critical investment workflows. As of February 29, 2024, we had more than 8,000 clients comprised of over 206,000 investment professionals, including institutional asset managers, bankers, wealth managers, asset owners, partners, hedge funds, corporate users, and private equity and venture capital professionals. Our revenues are primarily derived from subscriptions to our multi-asset class data and solutions powered by our connected content, referred to as our "content refinery." Our products and services include workstations, portfolio analytics and enterprise solutions.
Current wording
Our platform delivers expansive data, sophisticated analytics, and flexible technology used by global financial professionals to power their critical investment workflows. As of May 31, 2024, we had more than 8,000 clients comprised of over 208,000 investment professionals, including institutional asset managers, bankers, wealth managers, asset owners, partners, hedge funds, corporate users, and private equity and venture capital professionals. Our revenues are primarily derived from subscriptions to our multi-asset class data and solutions powered by our connected content, referred to as our "content refinery." Our products and services include workstations, portfolio analytics and enterprise solutions.
Previous wording
We drive our business based on our detailed understanding of our clients' workflows, which helps us to solve their most complex challenges. We provide financial data and market intelligence on securities, companies, industries and people to enable our clients to research investment ideas, as well as to analyze, monitor and manage their portfolios. Our on- and off-platform solutions span the investment life cycle of investment research, portfolio construction and analysis, trade execution, performance measurement, risk management and reporting. We provide open and flexible technology offerings, including a configurable desktop and mobile platform, comprehensive data feeds, cloud-based digital solutions and application programming interfaces ("APIs"). Our CUSIP Global Services ("CGS") business supports security master files relied on by the investment industry for critical front, middle and back-office functions. Our platform and solutions are supported by our dedicated client service team.
Current wording
We drive our business based on our detailed understanding of our clients' workflows, which helps us to solve their most complex challenges. We provide financial data and market intelligence on securities, companies, industries and people to enable our clients to research investment ideas, as well as to analyze, monitor and manage their portfolios. Our on- and off-platform solutions span the investment life cycle of investment research, portfolio construction and analysis, trade execution, performance measurement, risk management and reporting. We provide open and flexible technology offerings, including a configurable desktop and mobile platform, comprehensive data feeds, cloud-based digital solutions and application programming interfaces ("APIs"). The CUSIP Global Services ("CGS") business supports security master files relied on by the investment industry for critical front, middle and back-office functions. These platforms and solutions are supported by our dedicated client service team.
Previous wording
Revenues in the second quarter of fiscal 2024 were $545.9 million, an increase of 6.0% from the comparable prior year period, reflective of organic revenues growth of 6.0%. Revenues increased in all our segments, primarily in the Americas and, to a lesser extent, EMEA and Asia Pacific. Revenues increased due to higher demand for our workstations, data solutions, CGS subscriptions and middle office solutions. Refer to Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Non-GAAP Financial Measures, of this Quarterly Report on Form 10-Q for a definition of organic revenues and a reconciliation between revenues and organic revenues.
Current wording
Revenues in the third quarter of fiscal 2024 were $552.7 million, an increase of 4.3% from the comparable prior year period. The growth in revenues was reflective of organic revenues growth of 4.5% for the third quarter of fiscal 2024 compared with the prior year period. Revenues increased in all our segments, primarily in the Americas and, to a lesser extent, EMEA and Asia Pacific. Revenues increased due to higher demand and price increases primarily from workstations, data solutions and middle office solutions. Refer to Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Non-GAAP Financial Measures, of this Quarterly Report on Form 10-Q for a definition of organic revenues and a reconciliation between revenues and organic revenues.
Previous wording
As of February 29, 2024, organic annual subscription value ("Organic ASV") plus Professional Services totaled $2,209.5 million, an increase of 5.4% over the prior year. Organic ASV increased in all our segments, with the majority of the increase in the Americas and, to a lesser extent, EMEA and Asia Pacific. The Organic ASV increase was primarily driven by higher demand for our workstations, data solutions and middle office solutions. Refer to Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Annual Subscription Value, of this Quarterly Report on Form 10-Q for the definitions of Organic ASV and Organic ASV plus Professional Services.
Current wording
As of May 31, 2024, organic annual subscription value ("Organic ASV") plus Professional Services totaled $2,220.4 million, an increase of 5.0% over the prior year. Organic ASV increased in all our segments, with the majority of the increase in the Americas and, to a lesser extent, EMEA and Asia Pacific. The Organic ASV increase was driven by higher demand and price increases primarily from workstations, data solutions, middle office solutions and CGS subscriptions. Refer to Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Annual Subscription Value, of this Quarterly Report on Form 10-Q for the definitions of Organic ASV and Organic ASV plus Professional Services.
Previous wording
Operating margin increased to 33.3% during the three months ended February 29, 2024, compared with 32.9% in the prior year period. This increase was mainly due to growth in revenues and, when expressed as a percentage of revenues, a decrease in computer-related expenses, partially offset by an increase in amortization of intangible assets and bad debt expense. Diluted earnings per common share ("Diluted EPS") for the three months ended February 29, 2024 was $3.65, an increase of 8.0% compared with the prior year period.
Current wording
Operating margin increased to 36.6% during the three months ended May 31, 2024, compared with 32.5% in the prior year period. This increase was mainly due to growth in revenues and, when expressed as a percentage of revenues, a decrease in compensation costs and bad debt expense, partially offset by an increase in amortization of intangible assets, marketing costs and computer-related expenses. Diluted earnings per common share ("Diluted EPS") for the three months ended May 31, 2024 was $4.09, an increase of 18.2% compared with the prior year period.
Previous wording
–"Professional Services" are revenues derived from project-based consulting and implementation, annualized over the past 12 months.
Current wording
–"Professional Services" are revenues derived from project-based consulting and implementation services, annualized over the past 12 months.
Previous wording
(1)Includes $20.3 million in Professional Services as of February 29, 2024.
Current wording
(1)Includes $17.2 million in Professional Services as of May 31, 2024.
Previous wording
As of February 29, 2024, Organic ASV plus Professional Services was $2,209.5 million, an increase of 5.4% compared with February 28, 2023. Organic ASV increased in all our segments, with the majority of the increase related to the Americas, and, to a lesser extent, EMEA and Asia Pacific. This increase in Organic ASV was primarily driven by higher sales to existing clients and, to a lesser extent, price increases to existing clients and sales to new clients, partially offset by existing client cancellations. These higher sales mainly related to increased demand for our workstations, data solutions and middle office solutions.
Current wording
As of May 31, 2024, Organic ASV plus Professional Services was $2,220.4 million, an increase of 5.0% compared with May 31, 2023. Organic ASV increased in all our segments, with the majority of the increase related to the Americas, and, to a lesser extent, EMEA and Asia Pacific. This increase in Organic ASV was primarily driven by higher sales to existing clients and, to a lesser extent, price increases to existing clients and sales to new clients, partially offset by existing client cancellations. These higher sales and price increases were primarily attributable to workstations, data solutions, middle office solutions and CGS subscriptions.
Previous wording
As of February 29, 2024, ASV from the Americas represented 65% of total ASV and was $1,415.4 million, an increase from $1,336.6 million as of February 28, 2023. Americas Organic ASV was $1,415.4 million as of February 29, 2024, a 5.9% increase from the prior year period. The Organic ASV increase in the Americas was primarily driven by higher demand for our workstations and, to a lesser extent, CGS subscriptions.
Current wording
As of May 31, 2024, ASV from the Americas represented 64% of total ASV and was $1,417.1 million, an increase from $1,344.7 million as of May 31, 2023. Americas Organic ASV was $1,417.1 million as of May 31, 2024, a 5.7% increase from the prior year period. The Organic ASV increase in the Americas was driven by higher demand and price increases primarily from workstations and CGS subscriptions.
Previous wording
As of February 29, 2024, ASV from EMEA represented 25% of total ASV and was $557.2 million, an increase from $529.3 million as of February 28, 2023. EMEA Organic ASV was $557.5 million as of February 29, 2024, a 5.0% increase from the prior year period. The EMEA Organic ASV increase was primarily driven by higher demand for our data solutions, middle office solutions and workstations.
Current wording
As of May 31, 2024, ASV from EMEA represented 26% of total ASV and was $565.7 million, an increase from $541.3 million as of May 31, 2023. EMEA Organic ASV was $565.5 million as of May 31, 2024, a 4.4% increase from the prior year period. The EMEA Organic ASV increase was driven by higher demand and price increases mainly from data solutions and middle office solutions.
Previous wording
As of February 29, 2024, ASV from Asia Pacific represented 10% of total ASV and was $215.9 million, an increase from $207.1 million as of February 28, 2023. Asia Pacific Organic ASV was $216.3 million as of February 29, 2024, a 5.6% increase from the prior year period. The Asia Pacific Organic ASV increase was primarily driven by higher demand for our data solutions, middle office solutions and workstations.
Current wording
As of May 31, 2024, ASV from Asia Pacific represented 10% of total ASV and was $219.2 million, an increase from $209.8 million as of May 31, 2023. Asia Pacific Organic ASV was $220.6 million as of May 31, 2024, a 6.1% increase from the prior year period. The Asia Pacific Organic ASV increase was driven by higher demand and price increases primarily from middle office solutions and data solutions.
Previous wording
The buy-side and sell-side Organic ASV annual growth rates as of February 29, 2024 were 5.6% and 5.5%, respectively. Buy-side clients account for approximately 82% of our Organic ASV, compared to 83% in the prior year, and primarily include institutional asset managers, wealth managers, asset owners, partners, hedge funds and corporate firms. The remainder of our Organic ASV is derived from sell-side firms and primarily include broker-dealers, banking and advisory, and private equity and venture capital firms.
Current wording
The buy-side and sell-side Organic ASV annual growth rates as of May 31, 2024 were 5.3% and 3.7%, respectively. Buy-side clients account for approximately 82% of our Organic ASV, consistent with the prior year period, and primarily include institutional asset managers, wealth managers, asset owners, partners, hedge funds and corporate clients. The remainder of our Organic ASV is derived from sell-side firms and primarily include broker-dealers, banking and advisory, and private equity and venture capital firms.
Previous wording
Our total client count was 8,020 as of February 29, 2024, a net increase of 3.8% or 290 clients in the last 12 months, mainly due to an increase in corporate clients and, to a lesser extent, wealth management clients and partners.
Current wording
Our total client count was 8,029 as of May 31, 2024, a net increase of 3.3% or 259 clients in the last 12 months, mainly due to an increase in corporate clients and, to a lesser extent, wealth management clients.
Previous wording
As of February 29, 2024, there were 206,478 professionals using FactSet, representing a net increase of 10.7% or 20,015 users in the last 12 months, primarily driven by an increase in wealth users and, to a lesser extent, banking clients.
Current wording
As of May 31, 2024, there were 208,140 professionals using FactSet, representing a net increase of 10.8% or 20,295 users in the last 12 months, primarily driven by an increase in wealth users.
Previous wording
As of February 29, 2024, our employee headcount increased by 3.2% to 12,279, compared with 11,896 employees as of February 28, 2023. This headcount growth was primarily due to our continued investment in our centers of excellence ("COEs"), particularly through expanding our talent pool in our India and Philippines locations. Our COEs account for approximately 68% of our employees.
Current wording
As of May 31, 2024, our net employee headcount increased by 1.6% to 12,262, compared with 12,072 employees as of May 31, 2023. This net headcount growth was primarily due to our continued investment in our centers of excellence ("COEs"), particularly through expanding our talent pool in our India and Philippines locations. Our COEs account for approximately 68% of our employees.
Previous wording
As of February 29, 2024 compared to February 28, 2023, our net headcount growth in Asia Pacific was 8.0%, while the Americas and EMEA experienced a net headcount decrease of 7.0% and 4.6%, respectively. As of February 29, 2024, we had 8,519 employees located in Asia Pacific, 2,362 in the Americas and 1,398 in EMEA.
Current wording
As of May 31, 2024 compared to May 31, 2023, our net headcount growth in Asia Pacific was 5.4%, while the Americas and EMEA experienced a net headcount decrease of 7.9% and 3.3%, respectively. As of May 31, 2024, we had 8,521 employees located in Asia Pacific, 2,343 in the Americas and 1,398 in EMEA.
Previous wording
For an understanding of the significant factors that influenced our performance for the three and six months ended February 29, 2024 and February 28, 2023, the following discussion should be read in conjunction with the Consolidated Financial Statements and related Notes presented in Part I, Item 1. in this Quarterly Report on Form 10-Q.
Current wording
For an understanding of the significant factors that influenced our performance for the three and nine months ended May 31, 2024 and May 31, 2023, the following discussion should be read in conjunction with the Consolidated Financial Statements and related Notes presented in Part I, Item 1. in this Quarterly Report on Form 10-Q.
Previous wording
Revenues for the six months ended February 29, 2024 were $1,088.2 million, an increase of 6.7%. This growth in revenues of 6.7% was reflective of a 6.6% increase in organic revenues and a 0.1% benefit due to the effects of foreign currency exchange rate fluctuations. Organic revenues increased to $1,087.5 million for the six months ended February 29, 2024. Revenues increased in all our geographic segments, primarily in the Americas and, to a lesser extent, EMEA and Asia Pacific.
Current wording
Revenues for the three months ended May 31, 2024 were $552.7 million, an increase of 4.3%. This growth in revenues of 4.3% was reflective of a 4.5% increase in organic revenues, partially offset by a 0.2% decrease from foreign currency exchange rate fluctuations. Organic revenues increased to $553.4 million for the three months ended May 31, 2024. Revenues increased in all our segments, primarily in the Americas and, to a lesser extent, EMEA and Asia Pacific.
Previous wording
The increase in revenues was driven by increased sales to existing clients and, to a lesser extent, price increases to existing clients and sales to new clients, partially offset by existing client cancellations. Revenues increased due to higher demand for our workstations, data solutions, CGS subscriptions and middle office solutions.
Current wording
The increase in revenues was driven by increased sales to existing clients and, to a lesser extent, price increases to existing clients and sales to new clients, partially offset by existing client cancellations. Revenues increased due to higher demand and price increases primarily from workstations, data solutions and middle office solutions.
Previous wording
Revenues for the three months ended February 29, 2024 were $545.9 million, an increase of 6.0%. This growth in revenues was reflective of organic revenues growth of 6.0%, with organic revenues increasing to $546.1 million for the three months ended February 29, 2024. Revenues increased in all our segments, primarily in the Americas and, to a lesser extent, EMEA and Asia Pacific.
Current wording
Revenues for the nine months ended May 31, 2024 were $1,640.9 million, an increase of 5.9%. This growth in revenues was reflective of organic revenues growth of 5.9%, with organic revenues increasing to $1,641.0 for the nine months ended May 31, 2024. Revenues increased in all our geographic segments, primarily in the Americas and, to a lesser extent, EMEA and Asia Pacific.
Previous wording
The increase in revenues was mainly due to increased sales to existing clients and, to a lesser extent, price increases to existing clients and new client sales, partially offset by existing client cancellations. Revenues increased due to higher demand for our workstations, data solutions, middle office solutions and CGS subscriptions.
Current wording
The increase in revenues was mainly due to increased sales to existing clients and, to a lesser extent, price increases to existing clients and sales to new clients, partially offset by existing client cancellations. Revenues increased due to higher demand and price increases primarily from workstations, data solutions and middle office solutions.
Previous wording
Americas revenues increased 6.5% to $352.6 million during the three months ended February 29, 2024, compared with $331.1 million from the same period a year ago. This growth in revenues was reflective of organic revenues growth of 6.5%. The increase in revenues was primarily driven by higher demand for our workstations and, to a lesser extent, sales of our CGS subscriptions, data solutions and middle office solutions, as well as our annual price increase.
Current wording
Revenues from the Americas increased 6.6% to $1,057.5 million during the nine months ended May 31, 2024, compared with $992.2 million from the same period a year ago. This growth in revenues was primarily driven by organic revenues growth of 6.5%. The increase in revenues was driven by higher demand and price increases primarily from workstations and, to a lesser extent, CGS subscriptions, data solutions and middle office solutions.
Previous wording
Revenues from Asia Pacific increased 6.1% to $108.4 million during the six months ended February 29, 2024, compared with $102.2 million from the same period a year ago. This growth in revenues of 6.1% was reflective of a 7.0% increase in organic revenues, partially offset by a 0.9% decrease due to the effects of foreign currency exchange rate fluctuations. The increase in revenues was driven by higher demand for our workstations and data solutions.
Current wording
Revenues from Asia Pacific increased 4.5% to $163.4 million during the nine months ended May 31, 2024, compared with $156.3 million from the same period a year ago. This growth in revenues of 4.5% was reflective of a 5.6% increase in organic revenues, partially offset by a 1.1% decrease from foreign currency exchange rate fluctuations. The increase in revenues was driven by higher demand and price increases primarily from workstations and data solutions.
Previous wording
Cost of services increased 6.0% to $255.1 million for the three months ended February 29, 2024, compared with $240.8 million for the same period a year ago, primarily due to an increase in employee compensation costs and, to a lesser extent, amortization of intangible assets, partially offset by a decrease in computer-related expenses.
Current wording
Cost of services increased 2.2% to $247.0 million for the three months ended May 31, 2024, compared with $241.7 million for the same period a year ago, primarily due to an increase in amortization of intangible assets and computer-related expenses, partially offset by a decrease in employee compensation costs.
Previous wording
Cost of services, when expressed as a percentage of revenues, was 46.6% for the six months ended February 29, 2024, an increase of 70 basis points compared with the same period a year ago. This increase was primarily due to higher employee compensation costs and royalty fees, partially offset by lower contractor fees.
Current wording
Cost of services, when expressed as a percentage of revenues, was 44.7% for the three months ended May 31, 2024, a decrease of 90 basis points compared with the same period a year ago. This decrease was primarily due to lower employee compensation costs, partially offset by an increase in amortization of intangible assets and computer-related expenses.
Previous wording
Cost of services increased 8.3% to $506.8 million for the six months ended February 29, 2024, compared with $467.8 million in the same period a year ago, primarily due to an increase in employee compensation costs and, to a lesser extent, amortization of intangible assets, computer-related expenses and royalty fees.
Current wording
Cost of services increased 6.2% to $753.7 million for the nine months ended May 31, 2024, compared with $709.5 million in the same period a year ago, primarily due to an increase in employee compensation costs, amortization of intangible assets and computer-related expenses.
Previous wording
•Employee compensation costs increased by 30 basis points primarily due to a restructuring charge and higher annual base salaries, net of capitalization of compensation costs related to the development of our internal-use software, partially offset by a decrease in variable compensation costs. The increase in annual base salaries was primarily driven by annual merit increases and a net headcount increase in Cost of services of 459 employees, primarily located in our COEs.
Current wording
•Employee compensation costs decreased 60 basis points primarily due to revenues outpacing the increase in employee compensation costs and a decrease in variable compensation costs, partially offset by higher annual base salaries, net of capitalization of compensation costs related to the development of our internal-use software, and an increase in restructuring charges. The increase in annual base salaries was primarily driven by annual merit increases and a net headcount increase in Cost of services of 257, primarily located in our COEs.
Previous wording
SG&A expenses decreased 0.3% to $209.5 million for the six months ended February 29, 2024, compared with $210.2 million for the same period a year ago, primarily driven by a benefit from the net settlement of our foreign currency forward contracts, partially offset by higher bad debt expense and employee compensation costs.
Current wording
SG&A expenses decreased 4.1% to $312.6 million for the nine months ended May 31, 2024, compared with $325.9 million for the same period a year ago, primarily driven by lower employee compensation costs.
Previous wording
SG&A expenses, when expressed as a percentage of revenues, were 19.3% for the six months ended February 29, 2024, a decrease of 140 basis points compared with the same period a year ago. This decrease was primarily due to lower employee compensation costs, a benefit from the net settlement of our foreign currency forward contracts and a decrease in professional fees, partially offset by an increase in bad debt expense.
Current wording
SG&A expenses, when expressed as a percentage of revenues, were 19.1% for the nine months ended May 31, 2024, a decrease of 200 basis points compared with the same period a year ago. This decrease was primarily due to lower employee compensation costs mainly driven by a reduction in variable compensation expense.
Previous wording
Operating income increased 7.5% to $181.9 million for the three months ended February 29, 2024, compared with $169.3 million in the prior year period. This increase was primarily driven by growth in revenues and a decrease in computer-related expenses, partially offset by higher employee compensation costs, amortization of intangible assets and bad debt expense. Foreign currency exchange rate fluctuations, net of hedge activity, decreased operating income by $2.3 million for the three months ended February 29, 2024 compared with the three months ended February 28, 2023.
Current wording
Operating income increased 17.7% to $202.5 million for the three months ended May 31, 2024, compared with $172.0 million in the prior year period. This increase was primarily driven by growth in revenues and a decrease in employee compensation costs, partially offset by an increase in amortization of intangible assets and computer-related expenses. Foreign currency exchange rate fluctuations, net of hedge activity, decreased operating income by $1.1 million for the three months ended May 31, 2024 compared with the three months ended May 31, 2023.
Previous wording
Operating margin increased to 33.3% during the three months ended February 29, 2024, compared with 32.9% in the prior year period. This increase was mainly due to growth in revenues and, when expressed as a percentage of revenues, a decrease in computer-related expenses, partially offset by an increase in amortization of intangible assets and bad debt expense.
Current wording
Operating margin increased to 36.6% during the three months ended May 31, 2024, compared with 32.5% in the prior year period. This increase was mainly due to growth in revenues and, when expressed as a percentage of revenues, a decrease in employee compensation costs and bad debt expense, partially offset by higher amortization of intangible assets, marketing costs and computer-related expenses.
Previous wording
Operating income increased 8.7% to $371.0 million for the six months ended February 29, 2024, compared with $341.1 million in the prior year period. This increase was primarily due to growth in revenues, partially offset by higher employee compensation costs and amortization of intangible assets. Foreign currency exchange rate fluctuations, net of hedge activity, decreased operating income by $0.4 million for the six months ended February 29, 2024 compared with the six months ended February 28, 2023.
Current wording
Operating income increased 11.8% to $573.4 million for the nine months ended May 31, 2024, compared with $513.1 million in the prior year period. This increase was primarily due to growth in revenues, partially offset by higher amortization of intangible assets, computer-related expenses and employee compensation costs. Foreign currency exchange rate fluctuations, net of hedge activity, decreased operating income by $1.5 million for the nine months ended May 31, 2024 compared with the nine months ended May 31, 2023.
Previous wording
Operating margin increased to 34.1% for the six months ended February 29, 2024, compared with 33.4% in the prior year period. This increase was primarily due to growth in revenues and, when expressed as a percentage of revenue, a benefit from the net settlement of our foreign currency forward contracts, a decrease in contractor related fees and professional fees, partially offset by higher bad debt expense and royalty fees.
Current wording
Operating margin increased to 34.9% for the nine months ended May 31, 2024, compared with 33.1% in the prior year period. This increase was primarily due to growth in revenues and, when expressed as a percentage of revenue, a decrease in employee compensation costs, partially offset by higher amortization of intangible assets.
Previous wording
Asia Pacific operating income decreased 4.4% to $37.4 million during the three months ended February 29, 2024, compared with $39.1 million in the same period a year ago. This decrease was mainly due to higher employee compensation costs, partially offset by growth in revenues of 5.2%. Employee compensation costs increased primarily due to higher annual base salaries. The increase in annual base salaries was mainly driven by annual merit increases and a net headcount increase of 628 employees.
Current wording
Asia Pacific operating income increased 14.4% to $39.3 million during the three months ended May 31, 2024, compared with $34.3 million in the same period a year ago. This increase was mainly due to growth in revenues of 1.5% and the reduction of certain operating expenses, partially offset by higher employee compensation costs. Employee compensation costs increased primarily due to higher annual base salaries driven by annual merit increases and a net headcount increase of 438 employees.
Previous wording
Our effective tax rate for the six months ended February 29, 2024 was higher than for the six months ended February 28, 2023, mainly driven by higher pretax income at applicable statutory tax rates and a higher overall foreign tax rate, partially offset by increased utilization of foreign tax credits.
Current wording
Our effective tax rate for the nine months ended May 31, 2024 was 16.2%, compared with 15.4% for the nine months ended May 31, 2023. This increase was primarily due to higher pretax income, which reduced the effective tax rate impact of certain tax benefits, partially offset by increased utilization of foreign tax credits.
Previous wording
The increase in Net income and Diluted EPS for the three and six months ended February 29, 2024, compared to the respective prior year period, was primarily driven by higher operating income, partially offset by an increase in the provision for income taxes.
Current wording
The increase in Net income and Diluted EPS for the three and nine months ended May 31, 2024, compared to the respective prior year period, was primarily driven by higher operating income, partially offset by an increase in the provision for income taxes.
Previous wording
Organic revenues excludes the current year impact of revenues from acquisitions and dispositions completed within the past 12 months ("Acquisition revenues" and "Disposition revenues", respectively) and the current year impact from changes in foreign currency. For year to date comparisons, organic revenues excludes current year revenues that were incurred prior to the first anniversary date of an acquisition. The table below provides an unaudited reconciliation of revenues to organic revenues:
Current wording
Organic revenues exclude the current year impact of revenues from acquisitions and dispositions completed within the past 12 months ("Acquisition revenues" and "Disposition revenues", respectively) and the current year impact from changes in foreign currency. For year to date comparisons, organic revenues exclude current year revenues that were incurred prior to the first anniversary date of an acquisition. The table below provides an unaudited reconciliation of revenues to organic revenues:
Previous wording
(3)For purposes of calculating adjusted net income and adjusted Diluted EPS, the three months ended February 29, 2024 and February 28, 2023 were taxed at an adjusted tax rate of 24.6% and 16.9%, respectively, and the six months ended February 29, 2024 and February 28, 2023 were taxed at an adjusted tax rate of 26.0% and 15.0%, respectively.
Current wording
(3)For purposes of calculating adjusted net income and adjusted Diluted EPS, the three months ended May 31, 2024 and May 31, 2023 were taxed at an adjusted tax rate of 31.2% and 18.4%, respectively. The nine months ended May 31, 2024 and May 31, 2023 were taxed at an adjusted tax rate of 27.4% and 16.2%, respectively.
Previous wording
(4)Related to the accelerated vesting of stock awards for certain employees.
Current wording
(4)Related to the accelerated vesting of stock awards for certain employees during the nine months ended May 31, 2024.
Previous wording
As of February 29, 2024, Cash and cash equivalents were $381.7 million, compared with $425.4 million as of August 31, 2023. Our cash and cash equivalents are held in numerous locations throughout the world, with $164.1 million in EMEA (predominantly in the UK and Germany), $133.1 million in the Americas and the remaining $84.5 million in Asia Pacific (predominantly in the Philippines and India) as of February 29, 2024. We permanently reinvest all foreign unremitted earnings, except in jurisdictions where earnings can be repatriated substantially free of tax.
Current wording
As of May 31, 2024, Cash and cash equivalents were $453.1 million, compared with $425.4 million as of August 31, 2023. Our cash and cash equivalents are held in numerous locations throughout the world, with $188.5 million in EMEA (predominantly in the UK and Germany), $173.9 million in the Americas and the remaining $90.7 million in Asia Pacific (predominantly in the
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Current report — wording carried from elsewhere
Philippines and India) as of May 31, 2024. We permanently reinvest all foreign unremitted earnings, except in jurisdictions where earnings can be repatriated substantially free of tax.