Factset Research Systems Inc. · NYSE:FDS
Factset Research Systems — FY2022 Earnings Presentation
37 slides from Factset Research Systems's earnings presentation, Sep 22, 2022
Slide 1: FactSet Overview September 22, 2022
FactSet Overview September 22, 2022
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 3 We are a growth company We drive sustainable growth through continued investment and executional excellence. Our subscri
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 ) 39O F F I C E S 11K+E M P L O Y E E S 179K+U S E R S 4 C L I E N T S 7K+ 1 Figures as of FactSet end of fiscal 2022 year, August 31, 2022 2 LTM Organic ASV + Professional Services based on last twelve months as of August 31,
Slide 5: The market continues to respond favorably to our performance and digital strategy
The market continues to respond favorably to our performance and digital strategy 5 Notes: Market prices for the past 5 years through to September 16, 2022 FactSet began trading on the New York Stock Exchange on June 28, 1996 FDS (+176%) S&P 500 (+55%) Sep 20222017 2018 2019 2020 2021 Market Cap: $1
Slide 6: Five key trends inform our strategic investments to drive growth
Efficiency of Operations Technology Disruption, Generational Shift Alpha Driven by Depth of Data Value Investing and Regulation Multi-Asset Class Content and Analytics Five key trends inform our strategic investments to drive growth 6Copyright © 2022 FactSet Research Systems Inc. All rights reserved
Slide 7: Our strategy: Build the leading open content and analytics platform
Client Obsession: Deliver open, flexible, adaptive, solutions as part of our open ecosystem with hyper-personalized digital products to provide the “next best action” across the investment lifecycle Content Refinery: Provide the most comprehensive and connected inventory of client, proprietary, and
Slide 8: Our digital platform is critical to the success of the investment community
8 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 Simplific
Slide 9: Our content refinery
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 content portfolio • Core Content: Speed • Core Content: Depth • Unique Data: Broad co
Slide 10: Workflow solutions across the investment lifecycle
10 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
Slide 11: Transforming the way our users discover, decide, and act on opportunities
11 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
Slide 12: We see significant opportunity to capture more of the addressable market
We see significant opportunity to capture more of the addressable market Total Addressable Market Opportunity A S V CAGR Buy Side Banking Wealth PE/VC Corporates FactSet ASV and Opportunity Size (ASV vs. CAGR) Total Addressable Market (TAM) Serviceable Addressable Market (SAM) $32B Total Addressable
Slide 13: We have accelerated top-line growth and maintained high retention
179K+ $66 $79 $72 $78 $112 $157 FY17 FY18 FY19 FY20 FY21 FY22* G L O B A L U S E R S 12% change since Q4/2021 7.5K+ G L O B A L C L I E N T S 17% change since Q4/2021 1 LTM Organic ASV + Professional Services Growth Rate is based on last twelve months as of August 31, 2022 * FY22 Actual as of August
Slide 14: Executing our strategy through three workflow solutions
83% 62% 48% 17% 26% 35% 10% 17%APAC EMEA Americas Content Technology Solutions Analytics & Trading Research & Advisory Sell-Side Buy-Side 14 ASV Split by Client, Geography and Business 1 Percentage of Organic ASV + Professional Services as of August 31, 2022 2 Professional Services of $24M not alloc
Slide 15: ASV growth rates by geography have largely doubled since FY19
ASV growth rates1 by geography have largely doubled since 2019, except for AsiaPac 15 Americas $1,135M 2 EMEA $486M 2 AsiaPac $192M 2 • Deep sector and private market investments drive banking growth • Large wealth deals contributing • Significantly higher retention due to product investments • High
Slide 16: Our client-centric solutions drive value in established and growing markets
16 E s ta b lis h e d G ro w th Our client-centric solutions drive value in established and growing markets % ASV by Solution Client Need FactSet Value Insights, ESG, Consolidation Performance, Risk, Truvalue Alternative Investments, ESG Cabot, Signals, Private Market Banker Efficiency, Deal Velocit
Slide 17: Recent acquisitions
Headquarters San Francisco, CA Boston, MA Lakewood, CO Boston, MA New York, NY Founded 2013 2004 2014 2011 1968 Sponsoring SBU CTS Analytics & Trading Research & Advisory Research & Advisory CTS Strategic Alignment ESG Portfolio Lifecycle Deep Sector Private Markets Data Management Solutions Deal Ra
Slide 18: CUSIP Global Services
CUSIP Global Services CY 2021 FY 2022 FY 2025 Pre-Acquisition Annual Subscription Value (ASV) ~ $157M As of Dec 31, 2021 $165M As of Aug 31, 2022 Mid-to-High Single Digit Growth Annual Revenues ~ $180M Calendar Year 2021 ~$185M Pro Forma Full Year Mid-to-High Single Digit Growth % Non-Subscription ~
Slide 19: 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 20: Committed to Sustainable Growth in the Communities in Which We Live and Work
20Copyright © 2022 FactSet Research Systems Inc. All rights reserved. Business Use Only Committed to Sustainable Growth in the Communities in Which We Live and Work Board consists of eight directors: 7/8 independent, 3/8 women, 3/8 less than 5 years on Board, 6/8 less than 10 years on Board Comprehe
Slide 21: 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 Wealth Briefing European Award B E S T O V E R A L L T E C
Slide 22: Financial Review | Fiscal 2022
Financial Review | Fiscal 2022 22
Slide 23: Key Highlights
Key Highlights 23Copyright © 2022 FactSet Research Systems Inc. All rights reserved. Business Use Only Robust financial model with 95% subscription-based revenues supported by pricing discipline, demonstrated EBITDA flow-through and strong free cash flow conversion Strategic investments drive best-i
Slide 24: Attractive financial model with strong free cash flow conversion
Attractive financial model with demonstrated strong free cash flow conversion Revenues Adjusted EBITDA and EBITDA Margin1 Capital Expenditures as % of Revenues Free Cash Flow2 Note: Figures as of FactSet fiscal year end August 31 1 See appendix for a reconciliation of EBITDA to GAAP net income. EBIT
Slide 25: Returning capital to shareholders
31% 33% 28% 30% 30% 32% FY17 FY18 FY19 FY20 FY21 FY22 81 89 100 110 118 126 FY17 FY18 FY19 FY20 FY21 FY22 $261 $304 $220 $200 $265 $19 FY17 FY18 FY19 FY20 FY21 FY22 Returning capital to shareholders $0.6B over the last six years $1.27B over the last six years $M $M 284 352 368 428 494 487 FY17 FY18
Slide 26: Strategic investments have accelerated top-line growth
Strategic investments have accelerated top-line growth FY19 FY20 FY21 FY22 Base growth Acceleration from Investments 1 Cumulative three-year investments (FY20 - FY22) based internal attribution estimates 2 Organic LTM growth reported for respective FY Digital Platform Private Markets Other Deep Sect
Slide 27: Disciplined capital allocation framework drives value creation
27 Disciplined capital allocation framework drives value creation Last 5 Years (FY17 - FY21) 50% Return Reinvest Dividend Share Repurchase M&A CapEx R&D 1 FactSet’s expectations as of September 22, 2022. Actual results may differ materially from expectations above. Investments (R&D / CapEx) Share Re
Slide 28: Optimizing capital structure to ensure flexibility
Optimizing capital structure to ensure flexibility 1.0x 3.9x 3.1x 2.0x - 2.5x Feb 28, 2022 March 1, 2022 August 31, 2022 Target Copyright © 2022 FactSet Research Systems Inc. All rights reserved. Business Use Only • Investment grade ratings from Moody’s (Baa3) and Fitch (BBB) • New credit agreement
Slide 29: During fiscal year 2022, we delivered 9.3% ASV growth and expanded margin
$1.4 $1.4 $1.5 $1.6 $1.8 FY18 FY19 FY20 FY21 FY22 $79 $72 $78 $112 $157 FY18 FY19 FY20 FY21 FY22 $8.53 $10.00 $10.87 $11.20 $13.43 FY18 FY19 FY20 FY21 FY22 During fiscal year 2022, we delivered 9.3% ASV1 growth and expanded margin …building on momentum of the last several years $1.84B Revenue2 Adj O
Slide 30: Disciplined expense management drives our margin expansion plan
Disciplined expense management drives our margin expansion plan • Actively manage key expense drivers: people, real estate, technology and third-party data • Reduce real estate footprint to reduce costs • Focus on sustainable margin expansion to fund investment, coupled with careful expense manageme
Slide 31: Fiscal 2023 guidance is in line with our medium-term outlook
Fiscal 2023 guidance is in line with our medium-term outlook shared on Investor Day FactSet Organic ASV Growth 2, 3 FactSet Adjusted Operating Margin 4, 5 FactSet Adjusted Diluted EPS Growth 3, 5 8 - 9% 35 - 36% 11 - 13% Medium Term Outlook1 Research + Advisory Analytics + Trading Content + Technolo
Slide 32: Appendix
APPENDIX 32
Slide 33: Fiscal 2023 Guidance
Fiscal 2023 Guidance FISCAL 2023 OUTLOOK As of September 22, 2022 Organic ASV + Professional Services Growth1 $150 - $180 million Revenues $2,100 - $2,115 million Operating Margin 30% - 31% Adjusted Operating Margin 34% - 35% Effective Tax Rate 12.5% - 13.5% Diluted EPS $12.70 - $13.10 Adjusted Dilu
Slide 34: FactSet EBITDA and Adjusted EBITDA reconciliation
FactSet EBITDA and Adjusted EBITDA reconciliation FY2017 1 FY2018 1 FY2019 1 FY2020 1 FY2021 1 FY2022 1 Net Income $258.3 $267.1 $352.8 $372.9 $399.6 $396.9 Interest Expense3 8.8 16.3 20.1 13.1 8.2 35.7 Income Taxes 86.1 84.8 69.2 54.2 68.0 46.7 Depreciation and Amortization Expense 48.3 57.3 60.5 5
Slide 35: FactSet free cash flow reconciliation
($ in thousands) 35 Note: Columns may not foot due to rounding 1 Fiscal year ending August 31 2 Includes property, equipment, leasehold improvements and capitalized internal-use software ($ millions) FY2017 1 FY2018 1 FY2019 1 FY2020 1 FY2021 1 FY20221 Net cash provided by operating activities $320.
Slide 36: Non-GAAP Reconciliations Business Outlook
Non-GAAP Reconciliations Business Outlook Operating Margin, Net Income Fiscal 2023 (Forward Looking) Low End of Range High End of Range Revenues $2,100 $2,115 Operating Income $ 600 $656 Operating Margin 30.0% 31.0% Intangible Asset Amortization 73 73 Integration Costs 11 11 Adjusted Operating Incom
Slide 37: Non-GAAP Reconciliations Adjusted Diluted EPS Outlook
($ in thousands) Note: Columns may not foot due to rounding ($ millions) Low-end of range High-end of range 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
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