Factset Research Systems Inc. · NYSE:FDS

Factset Research Systems — Investor Presentation (July 2024)

42 slides from Factset Research Systems's investor presentation, Jul 3, 2024

Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures This presentation, and other statements that FactSet may make in connection with this presentation, contains forward-looking statements based on management's current expectations, assumptions, estimates, forecasts and projections as of the date such s
Slide 3: Overview
Overview01
Slide 4: FactSet at a Glance
FactSet at a Glance1 20G L O B A L F O O T P R I N T ( C O U N T R I E S ) 37O F F I C E S 12K+E M P L O Y E E S 208K+U S E R S C L I E N T S 8K+ $2.2B 2 A S V 39.4% 3 44 $4.373 5.0% 3 F Y 2 4 A S V O R G A N I C G R O W T H R A T E F Y 2 4 A D J U S T E D O P E R A T I N G M A R G I N C O N S E C U
Slide 5: Consistent Revenue Growth, Resilient Through All Market Cycles
$14 $36 $134 $313 $641 $1,007 $1,494 $2,086 1990 1995 2000 2005 2010 2015 2020 2023 $104 $134 $177 1999 2000 2001 Dot-Com Burst +29% +32% $476 $576 $622 2007 2008 2009 Global Financial Crisis +21% +8% $920 $1,007 $1,127 2014 2015 2016 Oil Crash, Greek Default, Brexit +9% +12% $1,435 $1,494 $1,591 20
Slide 6: As we grow, our ASV remains sticky and strong
1 Please see Appendix for a reconciliation of these non-GAAP metrics to GAAP metrics. 2 Includes CUSIP Global Services (CGS), 3 Incremental ASV Growth, 4 FY18-FY23 actual, 5 Total Organic ASV Growth ASV Retention >95% Client Retention >90% As we grow, our ASV remains sticky and strong NOTE: Figures
Slide 7: Historical LTM Organic ASV Growth
Average 6.5% Note: Chart above includes CGS starting FY23 Q3 $60 $71 $71 $79 $88 $82 $77 $72 $58 $62 $72 $78 $74 $83 $89 $112 $142 $150 $163 $157 $150 $159 $157 $145 $145 $114 $106 5.1% 5.9% 5.5% 5.9% 6.6% 6.0% 5.6% 5.1% 4.1% 4.3% 5.0% 5.3% 5.0% 5.5% 5.8% 7.2% 8.9% 9.4% 10.1% 9.3% 8.8% 9.1% 8.0% 7.1
Slide 8: Our Origin Story
Our Origin Story02
Slide 9: FactSet was founded at the dawn of the technological revolution
FactSet was founded 45 years ago, at the dawn of the technological revolution. Bike messengers delivered our reports: the “fact set” for a company was a four- page company analysis report. This is where we came from. Copyright © 2024 FactSet Research Systems Inc. All rights reserved. FactSet Busines
Slide 10: Our first client terminal connected subscribers to our mainframe
Our first client terminal connected subscribers to our mainframe computers so that they could download large amounts of data quickly. Copyright © 2024 FactSet Research Systems Inc. All rights reserved. FactSet Business Use Only 10
Slide 11: Next, we brought our data to clients on their PCs
Next, we brought our data to our clients on their PCs. Copyright © 2024 FactSet Research Systems Inc. All rights reserved. FactSet Business Use Only 11
Slide 12: FactSet Today
FactSet Today03
Slide 13: A global company with a diversified ASV footprint
Americas Europe, Middle East & Africa Asia Pacific 64% 26% 10% 13 We are a global company with a diversified ASV footprint NOTE: Percentages represent ASV from each region as of May 31, 2024. Copyright © 2024 FactSet Research Systems Inc. All rights reserved. FactSet Business Use Only 13
Slide 14: Our clients are at the center of what we do
Our clients are at the center of what we do INSTITUTIONAL BUY SIDE: Institutional Asset Management Asset Owners Hedge Funds 51% DEALMAKERS: Banking Corporates PE/VC 19% WEALTH 13% PARTNERS & CGS 17% NOTE: Percentages represent ASV from each firm type as of May 31, 2024. Copyright © 2024 FactSet Rese
Slide 15: Our Seamlessly Integrated Suite of Best-in-Class Applications
Our Seamlessly Integrated Suite of Best-in-Class Applications Our flexible technology architecture and unique, high-quality data, coupled with professional services and a consultative approach provides solutions across core workflows R E S E A R C H P O R T F O L I O C O N S T R U C T I O N T R A D
Slide 16: Comprehensive and connected inventory of client, proprietary and third-party data
Core Proprietary Data Sets 35 Third Party Data Vendors 1,000+ Client Portfolios (Institutional + Wealth) 15M+ Comprehensive and connected inventory of client, proprietary and third-party data CORE • Fundamentals • Estimates • Equity/Debt Capital Structure • Terms & Conditions • People • Global Excha
Slide 17: Investment banker survey: hours saved using FactSet
Save 5+ hours per week 55% Save 3+ hours per week 72% Respondents indicated that they spend the greatest number of hours per day building pitches and creating models. Almost all said they spend 2 or more hours per day on pitches and another 2 or more per day on creating financial models. We recently
Slide 18: Our support desk is legendary in the investment banking community
Our support desk is legendary in the investment banking community and helps junior bankers early in their careers increase their skills and efficiency Copyright © 2024 FactSet Research Systems Inc. All rights reserved. FactSet Business Use Only 18
Slide 19: Seamless integration with Microsoft Office products
We integrate seamlessly with Microsoft Office products and drive efficiency for our clients who work in these environments Copyright © 2024 FactSet Research Systems Inc. All rights reserved. FactSet Business Use Only 19
Slide 20: Build/partner/buy strategy to capture more of the addressable market
Note: Total addressable market (TAM) is the total market demand for a product or service. Serviceable addressable market (SAM) is the segment of the TAM targeted by FactSet’s products and services within our geographic segments. Serviceable Addressable Market Total Addressable Market We employ a bui
Slide 21: Recent deals completed
Headquarters Boston, MA Lakewood, CO Boston, MA New York, NY New York, NY Founded 2004 2014 2011 1968 2014 Sponsoring SBU Analytics & Trading Research & Advisory Research & Advisory CTS CTS Strategic Alignment Portfolio Lifecycle Deep Sector Private Markets Data Management Solutions Data Management
Slide 23: Universal Screening: only one company passes this screen, FactSet
FG_CONSTITUENTS(SP50,0,CLOSE) FactSet’s Universal Screening tool can help us find companies that… …are currently in the S&P 500, AND …have grown revenue every year for the last 20 years, AND …have increased their annual dividend every year for the last 20 years, AND SUM20(FF_SALES(ANN_R,0) > FF_SALE
Slide 24: The Future
The Future04
Slide 25: We are investing in the future
DATA EXCELLENCE Open, flexible, modular End-to-end enterprise solutions and services provider Leader in artificial intelligence We are investing in the future. Copyright © 2024 FactSet Research Systems Inc. All rights reserved. FactSet Business Use Only 25
Slide 26: Elevating our AI capabilities to power clients' key workflows
We are elevating our AI capabilities to power our clients’ key workflows and deliver unparalleled levels of personalization, discoverability, and productivity. Mile-Wide Discoverability Mile-High Innovation EnablementMile-Deep Workflow Automation Copyright © 2024 FactSet Research Systems Inc. All
Slide 28: With FactSet…
With FactSet… …an Investment Banker can update a pitchbook with the click of a button. …a Portfolio Manager can query their portfolio’s performance in natural language. …a Wealth Advisor can automatically create an investment proposal for a prospect. Copyright © 2024 FactSet Research Systems Inc. Al
Slide 29: Financials | Q3 Fiscal 2024
Financials | Q3 Fiscal 202405
Slide 30: Long-term strategy drives growth through changing market cycles
Our long-term strategy to build the leading open content and analytics platform drives growth through changing market cycles Americas $1,417M 1,2 EMEA $565M 1,2 AsiaPac $221M 1,2 • We saw gains from asset owners and wealth managers this quarter • These gains were offset by continued client cost rati
Slide 31: Attractive financial model with strong free cash flow conversion
368 428 494 487 585 477 73.7% 83.8% 91.7% 77.5% 75.2% 70.5% 40.0% 60.0% 80.0% 100.0% - 100 200 300 400 500 600 FY19 FY20 FY21 FY22 FY23 FY24 YTD Free Cash Flow % FCF Conversion 503 514 540 628 778 677 35.0% 34.4% 33.9% 34.1% 37.3% 28.0% 30.0% 32.0% 34.0% 36.0% 38.0% 40.0% FY19 FY20 FY21 FY22 FY23 FY
Slide 32: Returning capital to shareholders
33% 28% 30% 30% 32% 30% FY18 FY19 FY20 FY21 FY22 FY23 89 100 110 118 126 139 FY18 FY19 FY20 FY21 FY22 FY23 $304 $220 $201 $265 $19 $177 FY18 FY19 FY20 FY21 FY22 FY23 Returning capital to shareholders $0.6B over the last six years $1.1B over the last six years $M $M 352 368 428 494 487 585 FY18 FY19
Slide 33: ASV Split by Client, Geography, and Firm Type
82% 64% 51% 18% 26% 19% 10% 13% 17% APAC EMEA Americas Sell-Side Buy-Side ASV Split by Client, Geography, and Firm Type 1 Percentage of Organic ASV + Professional Services as of May 31, 2024 2 Professional Services of $17.2M not allocated by client type and geography Institutional Buyside Previously
Slide 34: Disciplined capital allocation framework and medium-term goals
Sustain value creation through disciplined capital allocation Current focus on cash-flow- neutral tuck-in acquisitions and partnerships Normalized share repurchase program with expanded share repurchase authorization amount Target quarterly dividend ~25%- 30% of net income Target annual organic inve
Slide 35: Optimizing capital structure to ensure flexibility
Optimizing capital structure to ensure flexibility Debt incurred for CGS on March 1, 2022, included $1.0B of new senior notes, $1.0B of new term loan, $250M drawn new revolver, net of repayment of $575M previous revolver 1 Based on $575M of drawn revolver as of February 28, 2022, and $561M of FY22 Q
Slide 36: FY2024 expected ASV growth and adjusted operating margin
$72 $78 $112 $157 $145 FY19 FY20 FY21 FY22 FY23 FY24* $85-$120 $1.4 $1.5 $1.6 $1.8 $2.1 FY19 FY20 FY21 FY22 FY23 FY24* $2.18- $2.19 $10.00 $10.87 $11.20 $13.43 $14.55 $16.00 - $16.40 FY19 FY20 FY21 FY22 FY23 FY24* In FY2024 we expect to deliver 4.0-5.5% higher ASV Growth and Adjusted Operating Margi
Slide 37: Balancing sustainable margin expansion with investing in innovation
Committed to balancing sustainable margin expansion with investing in innovation to drive top-line growth People ~8.6% cost reduction YoY1 Real Estate ~14% cost reductions YoY1 Technology ~26% expense increase YoY1 Third-Party Data Costs ~9% expense increase YoY1 • Reduction driven by lower compensa
Slide 38: We are revising our guidance for FY2024
We are revising our guidance for FY2024 FISCAL 2024 OUTLOOK As of March 21, 2024 FISCAL 2024 OUTLOOK As of June 21, 2024 Organic ASV + Professional Services Growth1 $110 - $150 million (~5% to ~7%) $85 - $120 million (~4.0% to ~5.5%) Revenues $2,200- $2,210 million $2,180 - $2,190 million Operating
Slide 39: EBITDA and Adjusted EBITDA reconciliation
FactSet EBITDA and Adjusted EBITDA reconciliation FY2019 1 FY2020 1 FY2021 1 FY2022 1 FY2023 1 LTM Q3FY2024 2 YTD Q3 FY2024 3 Net Income $352.8 $372.9 $399.6 $396.9 $468.1 $512.7 $447.6 Interest Expense 4 20.1 13.1 8.2 35.7 66.3 66.9 50.2 Income Taxes 69.2 54.2 68.0 46.7 116.8 129.0 86.7 Depreciatio
Slide 40: Free cash flow reconciliation
($ in thousands) Note: Columns may not foot due to rounding 1 Fiscal year ending August 31 2 Fiscal year to date, three months ending May 31, 2024 3 Includes property, equipment, leasehold improvements and capitalized internal-use software ($ millions) FY2019 1 FY2020 1 FY2021 1 FY20221 FY20231 YTD
Slide 41: Non-GAAP Reconciliations: Business Outlook Operating Margin, Net Income
Copyright © 2022 FactSet Research Systems Inc. All rights reserved. Confidential: Do not forward. Non-GAAP Reconciliations Business Outlook Operating Margin, Net Income (in millions, except per share data) Fiscal 2024 (Forward Looking) Low End of Range High End of Range Revenues $2,180 $2,190 Operat
Slide 42: Non-GAAP Reconciliations: Business Outlook Diluted EPS
Copyright © 2022 FactSet Research Systems Inc. All rights reserved. Confidential: Do not forward. Non-GAAP Reconciliations Business Outlook Diluted EPS (in millions, except per share data) Low End of Range High End of Range Diluted Earnings per Common Share $14.55 $14.95 Intangible Asset Amortizatio

Factset Research Systems — Investor Presentation (July 2024) on 6ix

Factset Research Systems — Investor Presentation (July 2024)

Slide 1: FactSet Overview

Slide 2: Forward-Looking Statements and Non-GAAP Measures

Slide 3: Overview

Slide 4: FactSet at a Glance

Slide 5: Consistent Revenue Growth, Resilient Through All Market Cycles

Slide 6: As we grow, our ASV remains sticky and strong

Slide 7: Historical LTM Organic ASV Growth

Slide 8: Our Origin Story

Slide 9: FactSet was founded at the dawn of the technological revolution

Slide 10: Our first client terminal connected subscribers to our mainframe

Slide 11: Next, we brought our data to clients on their PCs

Slide 12: FactSet Today

Slide 13: A global company with a diversified ASV footprint

Slide 14: Our clients are at the center of what we do

Slide 15: Our Seamlessly Integrated Suite of Best-in-Class Applications

Slide 16: Comprehensive and connected inventory of client, proprietary and third-party data

Slide 17: Investment banker survey: hours saved using FactSet

Slide 18: Our support desk is legendary in the investment banking community

Slide 19: Seamless integration with Microsoft Office products

Slide 20: Build/partner/buy strategy to capture more of the addressable market

Slide 21: Recent deals completed

Slide 22: Copyright © Use Only

Slide 23: Universal Screening: only one company passes this screen, FactSet

Slide 24: The Future

Slide 25: We are investing in the future

Slide 26: Elevating our AI capabilities to power clients' key workflows

Slide 27: Copyright © Use Only

Slide 28: With FactSet…

Slide 29: Financials | Q3 Fiscal 2024

Slide 30: Long-term strategy drives growth through changing market cycles

Slide 31: Attractive financial model with strong free cash flow conversion

Slide 32: Returning capital to shareholders

Slide 33: ASV Split by Client, Geography, and Firm Type

Slide 34: Disciplined capital allocation framework and medium-term goals

Slide 35: Optimizing capital structure to ensure flexibility

Slide 36: FY2024 expected ASV growth and adjusted operating margin

Slide 37: Balancing sustainable margin expansion with investing in innovation

Slide 38: We are revising our guidance for FY2024

Slide 39: EBITDA and Adjusted EBITDA reconciliation

Slide 40: Free cash flow reconciliation

Slide 41: Non-GAAP Reconciliations: Business Outlook Operating Margin, Net Income

Slide 42: Non-GAAP Reconciliations: Business Outlook Diluted EPS