Factset Research Systems Inc. · NYSE:FDS
Factset Research Systems — Investor Presentation (July 2022)
38 slides from Factset Research Systems's investor presentation, Jul 19, 2022
Slide 1: FactSet Overview July 18, 2022
FactSet Overview July 18, 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 10K+E M P L O Y E E S 173K+U S E R S 4 C L I E N T S 7K+ 1 Figures as of FactSet fiscal Q3 quarter end, May 31, 2022 2 LTM Organic ASV + Professional Services based on last twelve months as of May 31, 2022 3 F
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 as of June 27, 2022 FactSet began trading on the New York Stock Exchange on June 28, 1996 FDS (+136%) S&P 500 (+61%) Apr 20222017 2018 2019 2020 2021 Market Cap: $15B$6B $8B $11B $12B $13B Copyri
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: Platform capabilities across the investment workflow
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 while maintaining high retention
173K+ $66 $79 $72 $78 $112 FY17 FY18 FY19 FY20 FY21 FY22* G L O B A L U S E R S 12% change since Q3/2021 7.3K+ G L O B A L C L I E N T S 19% change since Q3/2021 1 LTM Organic ASV + Professional Services Growth Rate is based on last twelve months as of May 31, 2022 * FY22 Outlook as of June 21, 2022
Slide 14: ASV Split by Client, Geography and Business
84% 62% 48% 16% 27% 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 May 31, 2022 2 Professional Services of $24M not allocate
Slide 15: ASV growth rates by geography have largely doubled since FY19
ASV growth rates1 by geography have largely doubled since 2019 15 Americas $1,093M 2 EMEA $471M 2 AsiaPac $186M 2 • Deep sector and private market investments drive banking growth • Large wealth deals contributing • Significantly higher retention due to product investments • Higher demand for feeds
Slide 16: We deliver value to clients tailored by market and firm type
We deliver value to clients that is tailored by market and firm type 16 Research + Advisory Solutions Content + Technology Solutions Analytics + Trading Solutions S A L E S C L I E N T S FY21 ASV APAC EMEA Americas by Market by Firm Type Buy Side Sell Side Wealth Copyright © 2022 FactSet Research Sy
Slide 17: Our client-centric solutions drive value in established and growing markets
17 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 18: 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 19: CUSIP Global Services acquisition is margin accretive and provides product diversity
CUSIP Global Services acquisition is margin accretive and provides product diversity CY 2021 FY 2022 FY 2025 Pre-Acquisition Annual Subscription Value ~ $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 Fu
Slide 20: 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 21: Committed to Sustainable Growth in the Communities in Which We Live and Work
21Copyright © 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 ten directors: 9/10 independent, 4/10 women, 5/10 less than 5 years on Board, 7/10 less than 10 years on Board Compre
Slide 22: 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 23: Financial Review | Fiscal 2022 Guidance
Financial Review | Fiscal 2022 Guidance 23
Slide 24: Key Highlights
Key Highlights 24Copyright © 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 25: Attractive financial model with demonstrated 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; YTD 9-month figure as of May 31 1 See appendix for a reconciliation o
Slide 26: Returning capital to shareholders
31% 34% 28% 30% 30% FY17 FY18 FY19 FY20 FY21 81 89 100 110 118 FY17 FY18 FY19 FY20 FY21 $261 $304 $220 $200 $265 FY17 FY18 FY19 FY20 FY21 Returning capital to shareholders $0.5B over the last five years $1.25B over the last five years $M $M 284 352 368 428 494 FY17 FY18 FY19 FY20 FY21 Avg 30.6% $M +
Slide 27: Strategic investments have accelerated top-line growth
Strategic investments have accelerated top-line growth FY19 FY20 FY21 FY22 Guidance Base growth Acceleration from Investments 1 Cumulative three-year investments (FY20 - FY22) based internal attribution estimates 2 Organic LTM growth reported for respective FY quarter ends 3 FactSet’s expectations a
Slide 28: Disciplined capital allocation framework drives value creation
28 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 April 5, 2022. Actual results may differ materially from expectations above. Investments (R&D / CapEx) Share Repurch
Slide 29: Optimizing capital structure to ensure flexibility
Optimizing capital structure to ensure flexibility 1.0x 3.9x 3.5x 2.0x - 2.5x Feb 28, 2022 March 1, 2022 May 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 wit
Slide 30: In fiscal year 2022, we expect to deliver 8%-9% higher ASV growth and expanded margin
$1.4 $1.4 $1.5 $1.6 $1.80-$1.83 FY18 FY19 FY20 FY21 FY22* $79 $72 $78 $112 $130-$150 FY18 FY19 FY20 FY21 FY22* $8.53 $10.00 $10.87 $11.20 $12.75- $13.15 FY18 FY19 FY20 FY21 FY22* In fiscal year 2022, we expect to deliver 8% - 9% Higher ASV1 Growth and Expanded Margin …building on momentum of the las
Slide 31: 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 32: We expect 8-9% ASV growth and 50-75 basis points of margin expansion per year
We expect 8-9% ASV growth and 50-75 basis points of margin expansion per year to deliver 35-36% adjusted operating margin by year-end 2025 Copyright © 2022 FactSet Research Systems Inc. All rights reserved. Business Use Only 32 FactSet Organic ASV Growth 2, 3 FactSet Adjusted Operating Margin 4, 5 F
Slide 33: Appendix
APPENDIX 33
Slide 34: We reaffirm fiscal 2022 guidance of 8%-9% ASV growth and expanded margin
We reaffirm fiscal 2022 guidance of 8% - 9% ASV1 growth and expanded margin FISCAL 2022 OUTLOOK As of June 21, 20222 Organic ASV + Professional Services Growth3 $130 - $150 million Revenues $1,800 - $1,830 million Operating Margin 25.5% - 26.5% Adjusted Operating Margin 33% - 34% Effective Tax Rate
Slide 35: FactSet EBITDA and Adjusted EBITDA reconciliation
FactSet EBITDA and Adjusted EBITDA reconciliation FY2017 1 FY2018 1 FY2019 1 FY2020 1 FY2021 1 LTM Q3FY2022 2 YTD Q3 FY2022 3 Net Income $258.3 $267.1 $352.8 $372.9 $399.6 $393.6 $292.5 Interest Expense, Net 6.6 14.4 16.6 9.8 6.4 16.9 15.2 Income Taxes 86.1 84.8 69.2 54.2 68.0 52.1 34.7 Depreciation
Slide 36: FactSet free cash flow reconciliation
($ in thousands) 36 Note: Columns may not foot due to rounding 1 Fiscal year ending August 31 2 Nine months ending May 31 3 Includes property, equipment, leasehold improvements and capitalized internal-use software ($ millions) FY2017 1 FY2018 1 FY2019 1 FY2020 1 FY2021 1 YTD Q3 FY20222 Net cash pro
Slide 37: FactSet adjusted operating margin reconciliation
($ in thousands) 37 1 Costs primarily related to professional fees associated with the ongoing multi-year investment plan. ($ millions) Low end of range High end of range Revenues $1,800 $1,830 Operating income $459 $485 Operating margin 25.5% 26.5% Intangible asset amortization 26 26 Real estate ch
Slide 38: FactSet adjusted diluted EPS reconciliation
($ in thousands) 38 Note: Columns may not foot due to rounding ($ millions) Low end of range High end of range Diluted earnings per common share $9.75 $10.15 Intangible asset amortization 0.58 0.58 Real estate charges 1.26 1.26 Business acquisition costs 0.91 0.91 Restructuring / severance 0.20 0.20
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