Factset Research Systems Inc. · NYSE:FDS
Factset Research Systems — Investor Presentation (April 2024)
32 slides from Factset Research Systems's investor presentation, Apr 3, 2024
Slide 1: FactSet Overview
FactSet Overview April 3, 2024 Copyright © 2024 FactSet Research Systems Inc. All rights reserved. FactSet Business Use Only
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: Our purpose is to drive the investment community to see more, think bigger
Our purpose is to drive the investment community to see more, think bigger, and do its best work We are transforming the way our users discover, decide, and act on opportunities We are a growth company We drive sustainable growth through continued investment and executional excellence. Our subscript
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 ) 35O F F I C E S 12K+E M P L O Y E E S 206K+U S E R S C L I E N T S ~8K 1 Figures as of FactSet Q2 FY2024, February 29, 2024 2 LTM Organic ASV + Professional Services based on the last twelve months as of February 29, 2024 3 Q
Slide 5: The market has responded favorably to our digital strategy
Over the long term, the market has responded favorably to our digital strategy Notes: Market prices for the past 5 years through March 22, 2024 FDS (+92%) S&P 500 (+87%) Market Cap: $17B$9B $9B $12B $16B $15B 5Copyright © 2024 FactSet Research Systems Inc. All rights reserved. FactSet Business Use O
Slide 6: Build the leading Innovation Platform powering financial information
6 Build the leading Innovation Platform powering financial information that delivers differentiated advantage for our clients’ success C L I E N T O B S E S S I O N Drive next-gen workflow solutions with: ‣ Open, AI/ML-enhanced technology ‣ Modern data model DIGITAL PLATFORM Our Purpose: Drive the i
Slide 7: Our digital platform is critical to the success of the investment community
Centralize Content Expanded content access | Data decision support | Enabling data science Our digital platform is critical to the success of the investment community Digital Platform Operational Efficiencies Cohesive investment process | Frictionless user experience Cost Rationalization Simplificat
Slide 8: Data Connectivity and FactSet Marketplace
20% • Listings • Securities • Entities • People • Transactions • Relationships – Associations (e.g., Revenue, Frequency, History) Data Connectivity Expansive coverage, depth, and speed of FactSet’s core proprietary data portfolio • Core Data: Speed • Core Data: Depth • Unique Data: Broad coverage Fa
Slide 9: Workflow solutions across the investment lifecycle
S Y M B O L O G Y C O N C O R D A N C E B E S T I N C L A S S T E C H N O L O G Y B E S T I N B R E E D D A T A 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 I N G P E R F O R M A N C E + A T T R I B U T I O N R E P O R T I N G • Generate ideas and discover opportunities with uni
Slide 10: Transforming the way users discover, decide, and act on opportunities
Transforming the way our users discover, decide, and act on opportunities using our digital platform Hyper-Personalized Products Open Ecosystem & Self-ServiceTrusted Partner ❖ Remove friction from the client experience with solutions that are open, flexible, and easy to use ❖ Advance the Digital Tra
Slide 11: Historical LTM Organic ASV Growth
Historical LTM Organic ASV Growth Copyright © 2024 FactSet Research Systems Inc. All rights reserved. FactSet Business Use Only Average 6.6% 11 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 $14
Slide 12: Top-line growth and continued high retention
$72 $78 $112 $157 $145 $110-$150* FY19 FY20 FY21 FY22 FY23 FY24* 206K+ G L O B A L U S E R S 11% change since Q2/2023 8.0K+ G L O B A L C L I E N T S 4% change since Q2/2023 1 LTM Organic ASV + Professional Services Growth Rate is based on the last twelve months as of February 29, 2024 2 CGS include
Slide 13: ASV Split by Client, Geography, and Firm Type
82% 65% 51% 18% 25% 19% 10% 13% 16% APAC EMEA Americas Sell-Side Buy-Side ASV Split by Client, Geography, and Firm Type 1 Percentage of Organic ASV + Professional Services as of February 29, 2024 2 Professional Services of $20.3M not allocated by client type and geography Institutional Buyside Previ
Slide 14: 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 $1,415M 1,2 EMEA $558M 1,2 AsiaPac $216M 1,2 • Our annual price increase contributed to growth • Macro headwinds reduced expansion and retention • Slower growth due t
Slide 15: 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 16: Our people and culture power our growth agenda
Our people and culture power our growth agenda • Our client focus drives the creation of industry-leading products and services • Our culture of innovation and collaboration makes FactSet an attractive firm for top talent, including technologists • Our focused investment in learning and development
Slide 17: Sustainability Report – Key Highlights
Sustainability Report – Key Highlights Copyright © 2024 FactSet Research Systems Inc. All rights reserved. FactSet Business Use Only. Scan QR code to read FactSet’s 2022 Sustainability Report
Slide 18: Our Awards
Our Awards B E S T D A T A A N A L Y T I C S P R O V I D E R Inside Market Data & Inside Reference Data Award Buy-Side Technology Award Fund Technology & WSL Awards B E S T R E P O R T I N G S Y S T E M P R O V I D E R Waters Ranking Awards B E S T O V E R A L L T E C H N O L O G Y P R O V I D E R B
Slide 19: Financial Review | Q2 Fiscal 2024
Financial Review | Q2 Fiscal 2024
Slide 20: Key Highlights
Key Highlights Robust financial model with 97.9% subscription-based revenues supported by pricing discipline, demonstrated EBITDA flow-through and strong free cash flow conversion Strategic investments drive best-in-class solutions and scale up the content refinery, accelerating top-line growth Disc
Slide 21: Attractive financial model with strong free cash flow conversion
368 428 494 487 585 261 73.7% 83.8% 91.7% 77.5% 75.2% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 110.0% - 100 200 300 400 500 600 FY19 FY20 FY21 FY22 FY23 FY24 YTD Free Cash Flow % FCF Conversion 503 514 540 628 778 437 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 FY2
Slide 22: 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 23: Sustain value creation through disciplined capital allocation
23 Sustain value creation through disciplined capital allocation Copyright © 2024 FactSet Research Systems Inc. All rights reserved. FactSet Business Use Only
Slide 24: Optimizing capital structure to ensure flexibility
FACTSET Optimizing capital structure to ensure flexibility Gross Leverage (Debt / LTM EBITDA) Capital Structure Optimization + Investment grade ratings from Moody's (Baa3) and Fitch (BBB) * Credit agreement with $500 million revolver ($250 million drawn) and additional $750 million accordion feature
Slide 25: In fiscal 2024 we expect to deliver 5-7% higher ASV growth
$72 $78 $112 $157 $145 FY19 FY20 FY21 FY22 FY23 FY24* $110-$150 $1.4 $1.5 $1.6 $1.8 $2.1 FY19 FY20 FY21 FY22 FY23 FY24* $2.20- $2.21 $10.00 $10.87 $11.20 $13.43 $14.55 $15.60 - $16.00 FY19 FY20 FY21 FY22 FY23 FY24* In fiscal year 2024 we expect to deliver 5-7% higher ASV Growth and Adjusted Operatin
Slide 26: Balancing sustainable margin expansion with investing in innovation
Committed to balancing sustainable margin expansion with investing in innovation to drive top-line growth • In Q2 FY24, we took an $11 million personnel-related charge. • Overall cost optimization efforts are anticipated to result in $25 - $30 million of annualized cost savings going forward. People
Slide 27: Appendix
APPENDIX
Slide 28: Fiscal 2024 Outlook
As of Q2, we expect to finish the year at the lower end of the guidance range for ASV and revenue growth. 1 Organic ASV + Professional Services growth as compared to fiscal 2023 The Fiscal 2024 Outlook shown here is a forward-looking statement. Given the risks, uncertainties and assumptions related
Slide 29: EBITDA and Adjusted EBITDA reconciliation
FactSet EBITDA and Adjusted EBITDA reconciliation FY2019 1 FY2020 1 FY2021 1 FY2022 1 FY2023 1 LTM Q2FY2024 2 YTD Q2 FY2024 3 Net Income $352.8 $372.9 $399.6 $396.9 $468.1 $489.2 $289.5 Interest Expense 4 20.1 13.1 8.2 35.7 66.3 66.4 33.3 Income Taxes 69.2 54.2 68.0 46.7 116.8 124.9 54.3 Depreciatio
Slide 30: FactSet free cash flow reconciliation
($ in thousands) Note: Columns may not foot due to rounding 1 Fiscal year ending August 31 2 Fiscal year to date, three months ending February 29, 2024 3 Includes property, equipment, leasehold improvements and capitalized internal-use software ($ millions) FY2019 1 FY2020 1 FY2021 1 FY20221 FY20231
Slide 31: Non-GAAP Reconciliations: Business Outlook
Non-GAAP Reconciliations Business Outlook Operating Margin, Net Income Fiscal 2024 (Forward Looking) Low End of Range High End of Range Revenues $2,200 $2,210 Operating Income $715 $729 Operating Margin 32.5% 33.0% Intangible Asset Amortization 84 82 Adjusted Operating Income $799 $811 Adjusted Oper
Slide 32: Non-GAAP Reconciliations: Adjusted Diluted EPS
($ in thousands) (In Millions Except Per Share Data) Low-end of range High-end of range Diluted earnings per common share $13.95 $14.35 Intangible asset amortization 1.81 1.75 Discrete tax items (0.16) (0.13) Adjusted diluted earnings per common share $15.60 $16.00 The Fiscal 2024 Outlook shown here
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