FactSet (FDS) Surpasses Q2 Earnings And Revenue Estimates
Zacks Investment Research | Mar 27, 2018 09:00PM ET
FactSet Research Systems Inc. (NYSE:FDS) reported impressive results for second-quarter fiscal 2018, wherein the company topped the Zacks Consensus Estimate on both counts.
The company reported adjusted earnings per share of $2.12, which surpassed the Zacks Consensus Estimate of $2.05. The figure increased 17.1% on a year-over-year basis.
Quarter Details
FactSet’s revenues of $335.2 million increased 13.9% from the year-ago quarter and exceeded the Zacks Consensus Estimate of $334 million.
Notably, organic revenues increased 5.7% year over year to $310.4 million during the quarter. The increase was primarily driven by accelerated sales of content and technology solutions (CTS) as well as analytics products.
In the reported quarter, FactSet’s revenues from the United States increased to $208.9 million while international revenues grew to $126.3 million. Excluding the impact of foreign currency, acquisitions and disposition, U.S. revenues and international revenues rose 4.8% and 7.3%, respectively, on a year-over-year basis.
The company’s Annual Subscription Value (ASV) increased to $1.35 billion as of Feb 28, 2018, up around 13.4% from the year-ago quarter figure of $1.19 billion. Of this, nearly 83.3% was generated by buy-side clients while the rest came from sell-side firms, performing functions like mergers & acquisition, advisory work and equity research. Organically, it increased $25.5 million during the quarter.
FactSet added 86 clients in the reported quarter, taking the tally to 4,895. The company retained 89% of its clients. The percentage of client retention was more than 95% of ASV.
Coming to operational metrics, FactSet reported an 18.3% rise in total operating expenses. As a percentage of revenues, operating expenses increased approximately 300 basis points (bps) to 72%.
FactSet’s adjusted operating income increased 8.8% from the year-ago quarter to $106 million. However, adjusted operating margin decreased 170 bps year over year to 31.4%, owing to increased operating expenses as a percentage of revenues.
Adjusted net income during the quarter was $84.3 million compared with $71.8 million in the year-ago quarter.
FactSet exited the quarter with $233.6 million in cash and cash equivalents, compared with $221.9 million in the previous quarter. Long-term debt at the end of the quarter amounted to $574.7 million.
Cash flow from operations during the quarter was $153.7 million. The company generated free cash flow of $86.1 million.
FactSet repurchased $81.9 million worth of its common stock under its existing share repurchase authorization during the second quarter. With the recent approval of an addition of $300 million to the company’s in-progress share repurchase program, the company still has $431 million remaining under the share repurchase authorization.
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