NORWALK, Conn., Sept. 22, 2022 (GLOBE NEWSWIRE) --  FactSet ("FactSet" or the “Company”) (NYSE:FDS) (NASDAQ:FDS), a global provider of integrated financial information, analytical applications, and industry-leading service, today announced results for its fourth quarter and full fiscal year 2022 ended August 31, 2022.

Fourth Quarter Fiscal 2022 Highlights

"Once again, we delivered a record year, achieving $2 billion in ASV plus professional services. We continue to build the leading open content and analytics platform, accelerating our organic ASV plus professional services growth to 9.3% in fiscal 2022,” said Phil Snow, CEO, FactSet. “Investments in our product portfolio and digital capabilities are driving growth in differentiated data and workflow solutions."

Key Financial Measures*

(Condensed and Unaudited)Three Months Ended  Twelve Months Ended Latest
 August 31,  August 31, FY 2022
(In thousands, except per share data) 2022  2021 Change  2022  2021 ChangeGuidance
Revenues$499,297 $411,894 21.2% $1,843,892 $1,591,445 15.9%$1.80 - $1.83B
Organic revenues$452,482 $412,011 9.8% $1,748,092 $1,591,984 9.8% 
Operating income$132,219 $119,176 10.9% $475,482 $474,041 0.3% 
Adjusted operating income$157,480 $130,384 20.8% $624,395 $517,694 20.6% 
Operating margin 26.5% 28.9%   25.8% 29.8% 25.5% - 26.5%
Adjusted operating margin 31.5% 31.6%   33.9% 32.5% 33% - 34%
Net income$104,422 $101,062 3.3% $396,917 $399,590 (0.7)%  
Adjusted net income$121,512 $110,874 9.6% $520,279 $432,049 20.4% 
Adjusted EBITDA$158,514 $136,783 15.9% $628,179 $540,293 16.3% 
Diluted EPS$2.69 $2.63 2.3% $10.25 $10.36 (1.1)% $9.75 - $10.15
Adjusted diluted EPS$3.13 $2.88 8.7% $13.43 $11.20 19.9%$12.75 - $13.15

        

* See reconciliation of U.S. GAAP to adjusted key financial measures in the back of this press release.

“Our strong execution in fiscal 2022 drove significant new business wins,” said Linda Huber, CFO, FactSet. “As we start our fiscal 2023, we will continue to invest in our people and products to drive both top-line growth and further margin expansion.”

Annual Subscription Value (ASV) + Professional Services

ASV at any given point in time represents the forward-looking revenues for the next twelve months from all subscription services currently supplied to clients. Professional services is revenue derived from project-based consulting and implementation.

ASV plus professional services was $2,002 million at August 31, 2022 compared with $1,688 million at August 31, 2021. Organic ASV plus professional services was $1,837 million at August 31, 2022, up $158.5 million from the prior year at a growth rate of 9.3%. Organic ASV, which excludes the effects of acquisitions and dispositions completed within the last 12 months and foreign currency movements, plus professional services, increased $64.3 million over the last three months.

Buy-side and sell-side organic ASV growth rates for the fourth quarter of fiscal 2022 were 8.5% and 13.8%, respectively. Buy-side clients, including asset managers, wealth managers, asset owners, hedge funds, channel partners and corporates, accounted for approximately 83% of organic ASV, while the remaining organic ASV came from sell-side firms including broker-dealers, banking and advisory, private equity and venture capital firms. Supplementary tables covering organic buy-side and sell-side ASV growth rates may be found on the last page of this press release.

Segment Revenues and ASV
ASV from the Americas region was $1,262.4 million compared with ASV in the prior year period of $1,039.4 million. Organic ASV increased 9.3% to $1,135.3 million. Americas revenues for the quarter increased to $323.6 million compared with $261.9 million in the fourth quarter last year. Excluding the effects of acquisitions and dispositions completed in the last 12 months, the Americas region organic revenues growth rate was 9.1%.

ASV from the EMEA region was $515.3 million compared with ASV in the prior year period of $450.0 million. Organic ASV increased 8.4% to $486.0 million. EMEA revenues were $126.4 million compared with $109.6 million in the fourth quarter of fiscal 2021. Excluding the effects of acquisitions and dispositions completed in the last 12 months and foreign currency impacts, the EMEA region organic revenues growth rate was 8.5%.

ASV from the Asia Pacific region was $200.4 million compared with ASV in the prior year period of $174.7 million. Organic ASV increased 12.0% to $191.7 million. Asia Pacific revenues were $49.3 million compared with $40.4 million in the fourth quarter of fiscal 2021. Excluding the effects of acquisitions and dispositions completed in the last 12 months and foreign currency impacts, the Asia Pacific region organic revenues growth rate was 17.8%.

Segment ASV does not include professional services, which totaled $24.0 million at August 31, 2022.

Organic ASV plus professional services from FactSet’s workflow solutions at August 31, 2022 was as follows:

Operational Highlights – Fourth Quarter Fiscal 2022

Full Year 2022 Highlights

Share Repurchase Program

FactSet did not repurchase any of its common stock during the fourth quarter under the Company's existing share repurchase program and has suspended share repurchases under the program, except for potential minor repurchases to offset dilution from grants of stock options, until at least the second half of fiscal 2023 to prioritize the repayment of debt. As of August 31, 2022, $181.3 million is available for share repurchases under the Company's existing share repurchase program.

Annual Business Outlook

FactSet is providing its outlook for fiscal 2023. The following forward-looking statements reflect FactSet's expectations as of today's date. Given the risk factors, uncertainties, and assumptions discussed below, actual results may differ materially. FactSet does not intend to update its forward-looking statements prior to its next quarterly results announcement.

Fiscal 2023 Expectations

Both GAAP operating margin and GAAP diluted EPS guidance do not include certain effects of any non-recurring benefits or charges that may arise in fiscal 2023. Please see the back of this press release for a reconciliation of GAAP to adjusted metrics.

Conference Call

Fourth Quarter 2022 Conference Call Details

Date:Thursday, September 22, 2022
Time:11:00 a.m. Eastern Time
Participant Registration:FactSet Q4 2022 Earnings Call Registration

Please register for the conference call using the above link in advance of the call start time. The conference call platform will register your name and organization and provide dial-in numbers and a unique access pin. The conference call will have a live Q&A session.

A replay will be available on the Company’s investor relations website after 1:00 p.m. Eastern Time on September 22, 2022 through September 22, 2023. The earnings call transcript will be available via FactSet CallStreet.

Forward-looking Statements

This news release contains forward-looking statements based on management's current expectations, estimates, forecasts and projections about industries in which FactSet operates and the beliefs and assumptions of management. All statements that address expectations, guidance, outlook or projections about the future, including statements about the Company's strategy for growth, product development, revenues, future financial results, anticipated growth, market position, subscriptions, expected expenditures, trends in FactSet’s business and financial results, are forward-looking statements. Forward-looking statements may be identified by words like "expects," "believes," "anticipates," "plans," "intends," "estimates," "projects," "should," "indicates," "continues," "may" and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in FactSet's filings with the Securities and Exchange Commission, particularly its latest annual report on Form 10-K and quarterly reports on Form 10-Q, as well as others, could cause results to differ materially from those stated. Forward-looking statements speak only as of the date they are made, and FactSet assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

About Non-GAAP Financial Measures

Financial measures in accordance with U.S. GAAP including revenues, operating income and margin, net income, diluted earnings per share and cash provided by operating activities have been adjusted.

FactSet uses these adjusted financial measures both in presenting its results to stockholders and the investment community and in its internal evaluation and management of the business. The Company believes that these adjusted financial measures and the information they provide are useful to investors because they permit investors to view the Company’s performance using the same tools that management uses to gauge progress in achieving its goals. Investors may benefit from referring to these adjusted financial measures in assessing the Company’s performance and when planning, forecasting and analyzing future periods and may also facilitate comparisons to its historical performance. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

Adjusted revenues exclude the impact of the fair value of deferred revenues acquired in a business combination. Organic revenues further excludes the effects of acquisitions and dispositions completed in the last 12 months and foreign currency movements in all periods presented. Adjusted operating income and margin, adjusted net income, and adjusted diluted earnings per share exclude intangible asset amortization, the impact of the fair valuing of deferred revenues acquired in a business combination and non-recurring items. EBITDA excludes interest expense, net, provision for income taxes and depreciation and amortization expense, while Adjusted EBITDA further excludes non-recurring non-cash expenses. The Company believes that these adjusted financial measures better reflect the underlying economic performance of FactSet.

Cash flows provided by operating activities has been reduced by capital expenditures to report non-GAAP free cash flow. FactSet uses this financial measure both in presenting its results to stockholders and the investment community and in the Company’s internal evaluation and management of the business. Management believes that this financial measure is useful to investors because it permits investors to view the Company’s performance using the same metric that management uses to gauge progress in achieving its goals and is an indication of cash flow that may be available to fund further investments in future growth initiatives.

About FactSet

FactSet (NYSE:FDS | NASDAQ:FDS) delivers superior content, analytics, and flexible technology to help approximately 180,000 users see and seize opportunities sooner. We give investment professionals the edge to outperform with informed insights, workflow solutions across the portfolio lifecycle, and industry-leading support from dedicated specialists. We're proud to have been recognized with multiple awards for our analytical and data-driven solutions, with the distinction of having been recently added to the S&P 500, and repeatedly scored 100 by the Human Rights Campaign® Corporate Equality Index for our LGBTQ+ inclusive policies and practices. Subscribe to our thought leadership blog to get fresh insight delivered daily at insight.factset.com. Learn more at www.factset.com and follow us on Twitter: www.twitter.com/factset.

FactSet
Investor Relations Contact:                         
Kendra Brown                                        
+1.203.810.2684                                
kbrown@factset.com

Media Contact
Bénédicte Godet
+33 (0)6 01 02 57 82
benedicte.godet@factset.com

                                



Consolidated Statements of Income(Unaudited)

     
 Three Months Ended Twelve Months Ended
 August 31, August 31,
(In thousands, except per share data) 2022   2021   2022   2021 
Revenues$499,297  $411,894  $1,843,892  $1,591,445 
Operating expenses       
Cost of services 241,944   197,532   871,106   786,400 
Selling, general and administrative 123,847   95,186   433,032   331,004 
Long-lived asset impairments 1,287   —   64,272   — 
Total operating expenses 367,078   292,718   1,368,410   1,117,404 
        
Operating income 132,219   119,176   475,482   474,041 
        
Other income (expense), net       
Interest expense, net (14,304)  (1,712)  (29,522)  (6,394)
Other income (expense), net (1,487)  979   (2,366)  (30)
Income before income taxes 116,428   118,443   443,594   467,617 
        
Provision for income taxes 12,006   17,381   46,677   68,027 
Net income$104,422  $101,062  $396,917  $399,590 
        
Diluted earnings per common share$2.69  $2.63  $10.25  $10.36 
Diluted weighted average common shares 38,820   38,476   38,736   38,570 




Consolidated Balance Sheets(Unaudited)		 
   
   
(In thousands)August 31, 2022August 31, 2021
ASSETS  
Cash and cash equivalents$503,273$681,865
Investments 33,219 35,984
Accounts receivable, net of reserves of $2,776 at August 31, 2022 and $6,431 at August 31, 2021 204,102 151,187
Prepaid taxes 38,539 13,917
Prepaid expenses and other current assets 91,214 50,625
Total current assets 870,347 933,578
   
Property, equipment and leasehold improvements, net 80,843 131,377
Goodwill 965,848 754,205
Intangible assets, net 1,895,909 134,986
Deferred taxes 3,153 2,250
Lease right-of-use assets, net 159,458 239,064
Other assets 38,747 29,480
TOTAL ASSETS$4,014,305$2,224,940
   
LIABILITIES  
Accounts payable and accrued expenses$108,395$85,777
Current portion of long-term debt — —
Current lease liabilities 29,185 31,576
Accrued compensation 114,808 104,403
Deferred revenues 152,039 63,104
Dividends payable 33,860 30,845
Total current liabilities 438,287 315,705
   
Long-term debt 1,982,424 574,535
Deferred taxes 8,800 14,752
Deferred revenues, non-current 7,212 8,394
Taxes payable 34,211 30,279
Long-term lease liabilities 208,622 259,980
Other liabilities 3,341 4,942
TOTAL LIABILITIES$2,682,897$1,208,587
   
STOCKHOLDERS’ EQUITY  
TOTAL STOCKHOLDERS’ EQUITY$1,331,408$1,016,353
   
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$4,014,305$2,224,940


Statement of Cash Flow



Consolidated Statements of Cash Flows(Unaudited)		  
 Twelve Months Ended
 August 31,
(In thousands) 2022  2021 
CASH FLOWS FROM OPERATING ACTIVITIES  
Net income$396,917 $399,590 
Adjustments to reconcile net income to net cash provided by operating activities  
Depreciation and amortization 86,683  64,476 
Amortization of lease right-of-use assets 43,032  42,846 
Stock-based compensation expense 56,003  45,065 
Deferred income taxes (8,715) (4,602)
Impairment charge 64,272  — 
Accounts receivable, net of reserves (32,980) 3,646 
Accounts payable and accrued expenses 12,815  2,068 
Accrued compensation 14,524  21,815 
Deferred fees (6,100) 5,078 
Taxes payable, net of prepaid taxes (19,275) 26,298 
Lease liabilities, net (48,628) (42,750)
Other, net (20,271) (8,304)
Net cash provided by operating activities 538,277  555,226 
   
CASH FLOWS FROM INVESTING ACTIVITIES  
Purchases of property, equipment, leasehold improvements and internal-use software (51,156) (61,325)
Acquisition of businesses, net of cash and cash equivalents acquired (1,981,641) (58,056)
Purchases of investments (878) (18,787)
Proceeds from maturity or sale of investments —  2,176 
Net cash used in investing activities (2,033,675) (135,992)
   
CASH FLOWS FROM FINANCING ACTIVITIES  
Proceeds from debt 2,238,355  — 
Repayments of debt (825,000) — 
Payments of debt issuance costs (9,736) — 
Dividend payments (125,934) (117,927)
Proceeds from employee stock plans 86,047  64,177 
Repurchases of common stock (18,639) (264,702)
Other financing activities (5,859) (4,259)
Net cash provided by/(used in) financing activities 1,339,234  (322,711)
   
Effect of exchange rate changes on cash and cash equivalents (22,428) (263)
Net (decrease) increase in cash and cash equivalents (178,592) 96,260 
Cash and cash equivalents at beginning of period 681,865  585,605 
Cash and cash equivalents at end of period$503,273 $681,865 

Reconciliation of U.S. GAAP Results to Adjusted Financial Measures

Financial measures in accordance with U.S. GAAP, including revenues, operating income and margin, net income, diluted EPS and cash provided by operating activities, have been adjusted below. FactSet uses these adjusted financial measures both in presenting its results to stockholders and the investment community and in its internal evaluation and management of the business. The Company believes that these adjusted financial measures and the information they provide are useful to investors because they permit investors to view the Company’s performance using the same tools that management uses to gauge progress in achieving its goals. Adjusted measures may also facilitate comparisons to FactSet’s historical performance.

Revenues

The table below provides a reconciliation of revenues to adjusted revenues and organic revenues.

(Unaudited)Three Months Ended  Twelve Months Ended 
 August 31,  August 31, 
(In thousands) 2022  2021Change  2022  2021Change
Revenues$499,297 $411,89421.2% $1,843,892 $1,591,44515.9%
Deferred revenues fair value adjustment (a) —  117   25  539 
Adjusted revenues 499,297  412,01121.2%  1,843,917  1,591,98415.8%
Acquired revenues (b) (50,189) —   (103,723) — 
Currency impact (c) 3,374  —   7,898  — 
Organic revenues$452,482 $412,0119.8% $1,748,092 $1,591,9849.8%

(a)   The amortization effect of purchase accounting adjustment on the fair value of acquired deferred revenue.

(b)   Revenues from acquisitions completed within the last 12 months.

(c)   The impact from foreign currency movements over the past 12 months.

Operating Income, Operating Margin, Net Income, and Diluted EPS

The table below provides a reconciliation of operating income, operating margin, net income and diluted EPS to adjusted operating income, adjusted operating margin, adjusted net income, EBITDA and adjusted diluted EPS.

(Unaudited)Three Months Ended 
 August 31, 
(In thousands, except per share data) 2022  2021 Change
Operating income$132,219 $119,176 10.9%
Deferred revenues fair value adjustment —  117  
Intangible asset amortization 18,210  5,902  
Business acquisition costs 3,152  —  
Contingent Liability 3,610  —  
Transformation costs (a) 621  2,136  
Restructuring / severance (332) 3,053  
Adjusted operating income$157,480 $130,384 20.8%
Operating margin 26.5% 28.9% 
Adjusted operating margin (b) 31.5% 31.6% 
    
Net income$104,422 $101,062 3.3%
Deferred revenues fair value adjustment —  100  
Intangible asset amortization 15,617  5,048  
Business acquisition costs 2,703  —  
Contingent Liability 3,096   
Transformation costs (a) 533  1,826  
Restructuring / severance (285) 2,611  
Income tax items (4,574) 227  
Adjusted net income (c)$121,512 $110,874 9.6%
    
Net income$104,422 $101,062  
Interest expense 15,580  2,049  
Income taxes 12,005  17,381  
Depreciation and amortization expense 26,507  16,291  
EBITDA 158,514  136,783  
Adjusted EBITDA$158,514 $136,783 15.9%
    
Diluted earnings per common share$2.69 $2.63 2.3%
Deferred revenues fair value adjustment 0.00  0.00  
Intangible asset amortization 0.41  0.13  
Business acquisition costs 0.07  0.00  
Transformation costs (a) 0.01  0.04  
Restructuring / severance (0.01) 0.07  
Contingent Liability 0.08  0.00  
Income tax items (0.12) 0.01  
Adjusted diluted earnings per common share (c)$3.13 $2.88 8.7%
Weighted average common shares (Diluted) 38,820  38,476  

(a)   Costs primarily related to professional fees associated with the ongoing multi-year investment plan.

(b)   Adjusted operating margin is calculated as adjusted operating income divided by adjusted revenues as shown in the revenues table above.

(c)   For purposes of calculating adjusted net income and adjusted diluted earnings per share, intangible asset amortization, deferred revenues fair value adjustments and other items were taxed at the quarterly effective tax rates of 12.3% for fiscal 2022 and 17.8% for fiscal 2021.

Operating Income, Margin, Net Income and Diluted EPS

The table below provides a reconciliation of operating income, operating margin, net income and diluted EPS to adjusted operating income, adjusted operating margin, adjusted net income and adjusted diluted EPS.

(Unaudited)Twelve Months Ended 
 August 31, 
(In thousands, except per share data) 2022  2021 Change
Operating income$475,482 $474,041 0.3%
Deferred revenues fair value adjustment 25  539  
Intangible asset amortization 49,122  23,257  
Business acquisition costs 20,608  —  
Contingent Liability 3,610  —  
Transformation costs 3,368  14,113  
Restructuring / severance 9,975  5,028  
Real estate charges 62,205  716  
Adjusted operating income 624,395  517,694 20.6%
Operating margin 25.8% 29.8% 
Adjusted operating margin (b) 33.9% 32.5% 
    
Net income$396,917 $399,590 (0.7)% 
Deferred revenue fair value adjustment 22 $456  
Intangible asset amortization 43,266  19,672  
Business acquisition costs 18,151  —  
Contingent Liability 3,180   
Transformation costs (a) 2,967  11,938  
Restructuring / severance 8,786  4,253  
Real estate charges 54,789  606  
Income tax items (c) (7,799) (4,466) 
Adjusted net income (d)$520,279 $432,049 20.4%
    
Net income$396,917 $399,590  
Interest expense 35,697  8,200  
Income taxes 46,677  68,027  
Depreciation and amortization expense 86,683  64,476  
EBITDA 565,974  540,293  
Real estate charges 62,205  —  
Adjusted EBITDA$628,179 $540,293 16.3%
    
Diluted earnings per common share$10.25 $10.36 (1.1)% 
Deferred revenues fair value adjustment —  0.01  
Intangible asset amortization 1.11  0.51  
Transformation costs 0.08  0.31  
Restructuring / severance 0.23  0.11  
Real estate charges 1.41  0.02  
Business acquisition costs 0.47   
Contingent Liability 0.08  —  
Income tax items (0.20) (0.12) 
Adjusted diluted earnings per common share (d)$13.43 $11.20 19.9%
Weighted average common shares (Diluted) 38,736  38,570  

(a)   Costs primarily related to professional fees associated with the ongoing multi-year investment plan.

(b)   Adjusted operating margin is calculated as adjusted operating income divided by adjusted revenues as shown in the organic revenues table above.

(c)   Income tax items for the year ended August 31, 2022 reflects tax expenses primarily related to a reduction in the estimated foreign pre-tax book income as well as an increase in estimated U.S. pre-tax book income. This was partially offset by a benefit from the finalization of the prior year tax return. Income tax items for the year ended August 31, 2021 includes income tax expenses primarily due to finalization of the prior year tax return.

(d)   For purposes of calculating adjusted net income and adjusted diluted earnings per share, intangible asset amortization, deferred revenue fair value adjustments and other items were taxed at the quarterly effective tax rates of 12.3% for fiscal 2022 and 17.8% for fiscal 2021.

Business Outlook Operating Margin, Net Income and Diluted EPS

(Unaudited)  
 Annual Fiscal 2023 Guidance
(In millions, except per share data)Low end of rangeHigh end of range
Revenues$2,100 $2,115 
Operating income$630 $656 
Operating margin 30.0% 31.0%
Intangible asset amortization (a) 73  73 
Integration Costs 11  11 
Adjusted operating income$714 $740 
Adjusted operating margin(b) 34.0% 35.0%
   
Net income$492 $508 
Intangible asset amortization (a) 64  63 
Integration Costs 9  9 
Discrete tax items (4) (3)
Adjusted net income$561 $577 
   
Diluted earnings per common share$12.70 $13.10 
Intangible asset amortization 1.64  1.62 
Integration Costs 0.23  0.24 
Discrete tax items (0.07) (0.06)
Adjusted diluted earnings per common share$14.50 $14.90 

(a)   The income tax effect related to intangible asset amortization is $9.5 million for the period presented above.

(b)   Adjusted operating margin is calculated as adjusted operating income divided by adjusted revenues as shown in the organic revenues table above.

Free Cash Flow

(Unaudited)Three Months Ended  Twelve Months Ended 
 August 31,  August 31, 
(In thousands) 2022  2021 Change  2022  2021 Change
Net Cash Provided for Operating Activities$151,352 $184,978   $538,277 $555,226  
Capital Expenditures (15,206) (13,821)   (51,156) (61,325) 
Free Cash Flow$136,146 $171,157 (20.5)% $487,121 $493,901 (1.4)%

Supplementary Schedules of Historical ASV by Client Type

The following table presents the percentages and growth rates of organic ASV by client type, excluding the impact of currency movements, and may be useful to facilitate historical comparisons. Organic ASV excludes acquisitions and dispositions completed within the last 12 months and the effects of foreign currency movements. The numbers below do not include professional services.

 Q4'22Q3'22Q2'22Q1'22Q4'21Q3'21Q2'21Q1'21
% of ASV from buy-side clients82.9%83.7%83.6%83.1%83.2%83.8%84.0%84.0%
% of ASV from sell-side clients17.1%16.3%16.4%16.9%16.8%16.2%16.0%16.0%
         
ASV Growth rate from buy-side clients8.5%9.6%8.9%8.5%6.5%5.6%5.5%5.1%
ASV Growth rate from sell-side clients13.8%12.9%12.4%13.2%12.0%8.0%6.3%4.4%

The following table presents the calculation of organic ASV plus professional services.
(Details may not sum to total due to rounding)

(In millions)Q4'22
As reported ASV plus Professional Services (a)$2,002.1 
Currency impact (b) 5.1 
Acquisition ASV (c) (170.2)
Organic ASV plus Professional Services$1,837.0 
Organic ASV plus Professional Services growth rate 9.3%

(a)   Includes $24.0 million in professional services as of August 31, 2022.

(b)   The impact of foreign currency movements.

(c)   Acquired ASV from acquisitions completed within the last 12 months.