Factset Research Systems Inc (FDS) — Q2 2026 Earnings Call Transcript

Thank you, and good morning, everyone. Welcome to FactSet Research Systems Inc.'s second quarter fiscal 2026 earnings call. Before we begin, the slides we reference during this presentation can be found through the webcast on the Investor Relations section of our website at factset.com. A replay of today's call will be available on our website. After our prepared remarks, we will open the call to questions. The call is scheduled to last one hour. To be fair to everyone, please limit yourself to one question. You may reenter the queue for additional follow-up questions which we will take if time permits. Before we discuss our results, I encourage all listeners to review the legal notice on slide two. Discussions on this call may contain forward-looking statements. Such statements are subject to risks and uncertainties that may cause actual results to differ materially from results anticipated in these forward-looking statements. Additional information concerning these risks and uncertainties can be found in our Forms 10-Ks and 10-Q. Our slide presentation and discussions on this call will include certain non-GAAP financial measures. For such measures, reconciliations to the most directly comparable GAAP measures are in the appendix to the presentation and in our earnings release issued earlier today, both of which can be found on our website at investors.factset.com. During this call, unless otherwise noted, relative performance metrics reflect changes as compared to the respective fiscal 2025 period. Joining me today are Sanoke Viswanathan, Chief Executive Officer, Helen Shan, Chief Financial Officer, and Goran Skoko, Chief Revenue Officer. I will now turn the discussion over to Sanoke Viswanathan.

Thank you, Kevin, and good morning, everyone. Thank you for joining us. ASV growth accelerated in Q2 for the fourth consecutive quarter, 6.7%, to $2.45 billion. It accelerated across all geographies and has grown year over year in each of retention, expansion, and new business. Adjusted operating margin was 35% and reflects the investments we are making this year. Adjusted diluted EPS was $4.46, up 4% year over year. These results confirm that FactSet Research Systems Inc.'s foundational strengths are increasingly valuable in an AI-intensive environment: our connected data, embedded workflows, best-in-class service, and broad distribution. Customer wins from this quarter illustrate the breadth and depth of our data and product capabilities. First, following the multi-year renewal of our relationship with a major global investment bank, we expanded into their international corporate bank. This was driven by the depth and differentiation of our sector content. Similarly, our private capital data assets were central to our new mandate with a leading Australian private equity fund. These wins show dealmakers continue to value our differentiated data. Second, one of our largest international wealth clients selected our proposal generation solution as an extension of their existing use of FactSet Research Systems Inc. for portfolio monitoring. A major Canadian wealth manager adopted our real-time exchange data feed product. These expansions showcase demand for our products that span the whole investment lifecycle, including portfolio construction, ongoing oversight, and end-client engagement. Third, Capital Group expanded their use of our Portware trading platform, which also achieved several new wins with other large asset managers. Our new order management solution, LiquidityBook, is gaining significant traction with hedge funds and other institutional buy-side clients. Based on our strong first half performance, we are raising our ASV, revenue, and EPS outlook ranges for fiscal 2026. This reflects sustained momentum across all client types and geographies. We are maintaining our guidance range for operating margin as we continue to balance investments and productivity improvements. Last quarter, I outlined three priorities: driving commercial excellence, delivering productivity improvements, and solidifying our long-term strategy for sustainable growth. We have made strong progress on all three. We are bolstering the health of our client franchise, making our core operations more efficient, and redeploying our resources to fund strategic investments to drive further growth and deliver better operating leverage in the medium term. First, on commercial excellence, we are rolling out new pricing and packaging, infusing AI throughout the sales lifecycle, and realigning sales and customer success incentives. With disciplined pricing and packaging, our revenue base is becoming more durable. Our direct seat-based exposure now represents less than 20% because of appropriate minimums and bundling into enterprise agreements. In Q2, the majority of our renewed ASV was in the form of enterprise agreements or contracts that are more than three years duration. On average, these renewals extended in length by more than 30%. Our focus on client health has led to a five-point Net Promoter Score improvement just this quarter amongst our investment banking users. This is helping drive ASV retention and expansion. Our overall ASV retention continued at over 95% in Q2. 86% of our top 200 clients use five or more of our solutions, up from 78% three years ago. In Q2, Data Solutions grew by double digits across all firm types, including the highest expansion we have seen since 2023. Today, 48 of our top 50 clients are using at least three of our AI solutions, with several more in trials. In Q2, new business growth accelerated. Our marketing leads increased 11% year over year. And with stronger lead scoring and more targeted outreach, win rates for these opportunities improved by 29% year over year. Corporates and private capital wins were particularly strong, with double-digit growth in both. First half productivity initiatives have already captured more than half of the 100 basis points of productivity improvement we targeted for the year. We have made real changes in technology, data operations, and client support, our three largest operating cost centers. We have consolidated all technology under our newly appointed CTO and are converging on standard tools and platforms to deliver efficiency. For example, our internal development platform that standardizes tooling and software deployment will allow engineers to spend more time on product development. AI coding assistance now authors nearly one-fifth of our successful code commits and frees up a quarter of our engineers' capacity in those teams. This includes over 90% reduction in efforts spent on business-as-usual activities like software upgrades and patching. Some teams have radically reduced time to market for new product development by fully automating the delivery lifecycle, collapsing a month-long cycle to one day. We see ample scope to scale this transformation. In data operations, we are seeing rapid transformation as we drive down unit cost and time to value and expand our content universe. Our Rubik's private company classification project to deepen coverage from four to six levels is a great example. We have quadrupled classification capacity year over year while keeping costs flat, capturing scale economies in our business. This quarter, we have deployed four distinct AI tools across different parts of our data operations, generating over a 25% reduction in manual curation on average. We are expanding this systematically across all our data while maintaining high quality standards. The text-to-formula agent that we launched in October 2025 has fundamentally changed how we handle client inquiries. Our help desk experiences double-digit monthly growth in formula support requests. However, the volumes handled by our client service representatives have now started to decline as the agent absorbs an increasingly large share of these inquiries each month. This allows our support colleagues to focus on higher-level activities, such as custom client implementations, advanced analytics support for fixed income and quant workflows, and outbound engagement to expand our reach. We are lowering the variable cost of serving each client while increasing our capacity to engage and retain our highest-value accounts. Beyond these three areas, we are systematically identifying further cost savings across the business. These include streamlining procurement and lead-to-cash processes, consolidating legacy software contracts, and optimizing our third-party data agreements. These productivity gains will make us a structurally more efficient company, flattening the cost curve as we scale and freeing up resources for high-return opportunities. We have made substantial progress on developing our medium- to long-term strategy, which I will share in detail along with the business plan at an investor event after the end of this fiscal year. Let me reiterate that we are well positioned to be a winner in an AI-intensive world and to deliver attractive ongoing financial returns. To give you some insights now, a key element of our strategy is to be a leading data and workflow infrastructure provider for AI-enabled institutional finance. What we are seeing so far is clear. As clients move AI into production, they are pulling us deeper into their operations, not replacing us. Our foundational strengths include connected data and embedded workflows, making us more valuable to clients as they implement AI in their environments. We are wired into our clients' operations, so the relationship deepens with every transaction. Five key factors make our data differentiated and trusted, and thereby integral to financial institution clients that have zero error tolerance. Data depth and coverage: We collect and refine data sourced directly from over 300 stock exchanges, millions of public and private company websites, thousands of data partners, and clients themselves, for example, broker research. We hold the commercial and legal rights to access these proprietary datasets and licensed content. Data cohesiveness: We seamlessly integrate data from one time period to another to provide holistic company time-series data from annual, quarterly, and preliminary reports going back over 40 years. Data comparability: We provide data that is comparable within and across industries, considering different accounting standards, market and company-specific presentations, reporting practices, and regulatory requirements. Data traceability: Clients can view the data source of each data point through document tracebacks, creating data transparency, credibility, and reliability. Data quality: We apply quality checks to data and apply in-tool checks at every step of our collection pipelines. We have automated logical validation rules augmented by audits conducted by humans. After all this, we conduct product checks by our experts to ensure our data products are fit for use in each of our end markets. Over the past three years, we have tripled our data assets while maintaining these high-quality standards. However, it is not just data alone. It is how deeply we integrate our data with client data and deliver value that supports the sophisticated decisions our clients make every day. Our Office add-ins are woven into clients' daily research and reporting, and the custom models they have built on our data have grown by 17% just this quarter. Our buy-side analyst clients store over two million research notes in our database, which has been growing at over 35% per year for the last three years. Investment committees use this research to make decisions, while compliance teams run regulatory checks against our outputs. The longitudinal analyses stored and reported from our analytics book of record are essential to communicating the definitive source of portfolio performance and the characteristics of millions of funds managing trillions in assets. The number of institutional portfolios integrated into our system grew by 20% in the last year, to almost eight million. Let me use a value-at-risk calculation for a multi-asset class portfolio to illustrate the mission-critical nature of our embedded workflows. When a portfolio manager looks at a value-at-risk number, they scrutinize the output of tens of thousands of simulations across hundreds of risk factors driven by millions of data points: position attributes, historical return series, yield curves, volatility surfaces, correlations, and much more. All of which must be correct, consistently sourced, and temporally aligned. If even a single data node is wrong, the entire risk calculation silently misstates the riskiness of a portfolio. This is not a theoretical concern; it is a daily operational reality for every institutional investor managing risk at scale. The data checks we conduct across our multi-asset class portfolio analytics suite alone have grown by 29% in just the last year, underscoring the importance of our robust infrastructure. AI accelerates aggregation and finds patterns in the data, but it cannot substitute our trusted, reconciled, data production and modeling infrastructure that underpins these risk, valuation, and compliance workflows. Our AI strategy will leverage these foundational strengths and build more integrated solutions at all levels of the emerging AI stack. Partnerships for growth are an important component of our strategy. For example, partnerships with Snowflake and Databricks enable clients to seamlessly combine our data with their own sources and operate AI-driven workflows in the secure cloud environments they already use. We are also actively partnering with Anthropic, OpenAI, and other leading frontier labs to ensure that our datasets are readily available in their marketplaces to facilitate rapid development of new AI solutions. We are infusing agentic capabilities across our workstation so that users can operate more effectively within our governed, trusted workflows. Our newly announced partnership with Finster will accelerate our agentic platform for banking, meeting the growing demands of our dealmaker clients. We have strong traction and are seeing rapid adoption and use of our solutions as AI workloads take root at our clients. One illustration: our MCP Server, which is built on a robust ecosystem of content APIs, was launched in December and already has over 120 clients actively engaged. API call volume is steadily growing as well, with March volumes three times the February level. We expect this success to be replicated across our AI solutions in all layers of the stack. As AI continues to reshape financial institutions, we are becoming more central to clients' mission-critical workflows. We are in the early innings of sector-level technological change and are building on our current foundational strengths to continue creating value for our clients in the future. Let me close by thanking every team member for their continued focus and commitment to delivering for our clients. We are winning competitive mandates and expanding relationships from a position of strength. Now I will hand over to Helen Shan to discuss our Q2 performance and updated guidance in more detail.

Thank you, Sanoke Viswanathan. Great to be here with everyone today. The second quarter, organic ASV accelerated to 6.7%, an increase of $38 million. Growth was balanced across all regions and fueled by three key drivers: strong client expansion, new business wins, and higher pricing capture from our annual price increase in The Americas. Let us walk through our performance by region. In The Americas, organic ASV grew 7%, up from 6% in Q1. Asset management continued to be a bright spot with growth driven by both trading and middle-office solutions. Dealmakers contributed with competitive displacements in banking and uplift from successful renewals in sell-side research. An increase in new business logos was powered by hedge funds and corporates. In EMEA, organic ASV grew 4%, in line with Q1. Higher demand for Data Solutions in wealth and a large banking renewal that included PitchCreator and our new MCP solution drove the positive results. These wins helped offset softness with asset owners, partly due to pension reform in The Netherlands. In Asia Pacific, organic ASV accelerated to 10%, up from 8% last quarter. Improved demand from asset managers and hedge funds for middle-office and trading solutions, coupled with stronger banking retention, drove the region's performance. Now turning to our results by firm type. On the institutional buy-side, we delivered 5% organic ASV growth, up from 4% last quarter. This reacceleration was driven in part by higher trading volumes fueled by additional Portware installations, increased data demand by hedge funds, and continued strength in managed services linked to our performance solutions. In wealth, organic ASV maintained a 10% growth rate, despite the challenging year-over-year comparison given our landmark UBS win a year ago. This performance was driven by higher demand for our wealth platform as we further integrate into clients' daily work with our proposal generation and adviser dashboard solutions. In dealmakers, organic ASV grew 8%, up from 6% in Q1. Competitive displacements and successful enterprise renewals added momentum in banking. Our investments in deep sector, aftermarket research, and banker productivity solutions position us as a trusted enterprise partner. Both corporates and private capital accelerated to double-digit growth this quarter, with new business and competitive wins fueled by demand for our data. The organic growth in market infrastructure accelerated to 8%, up from 7% in Q1, with robust sales in real-time data and higher retention. In addition, strong issuance activity supported the positive results for CUSIP. We continue to expand our client and user base. In Q2, we added 98 net new clients, bringing our total to 9,101, led by corporates and wealth. Our user base increased to over 241,000, with additions largely in wealth and dealmakers, reflecting a 10% annual growth rate. Lastly, we continue to have solid retention rates at 91% for clients and above 95% for ASV. These results reflect the mission-critical nature of our business as the world's leading financial institutions continue to trust us. Turning now to our financial results. Second quarter revenues grew 7.1% year over year to $611 million, or 6.8% organically, excluding impact from foreign exchange and M&A. Adjusted earnings per share was $4.46, up 4% year over year, driven by higher revenue and a lower share count, partially offset by a higher tax rate. Adjusted operating margin came in at 35% for the quarter, compared to 36.2% in Q1 and 37.3% a year ago. This reflects the timing of strategic investments, driven by three main factors: First, higher people expenses due to year-over-year compensation adjustments and full impact from merit increases. Second, accelerated technology spend on cloud infrastructure and AI tools, and third, higher professional fees from increased project work in the quarter. The midpoint of our full-year margin guidance reflects expected investment pacing through the second half in technology infrastructure, professional services, and product development. AI is playing a dual role, enhancing client value through new capabilities while driving productivity gains. We remain committed to long-term growth and maintaining our track record of capital discipline. As highlighted last quarter, we are investing to differentiate our data, deepen client workflows, and modernize our platforms. Approximately two-thirds will be directed towards growth initiatives and one-third on enhancing our internal infrastructure. Funding will come from productivity improvements and disciplined cost management. With the first half now complete, let me connect our investments to the early outcomes we are seeing. Our investments in data expansion are delivering. We now offer our core datasets through MCP Servers, giving clients the flexibility to access our data in their preferred environments. Workstation users are benefiting from optimized real-time data delivery, driving both efficiency and cost-effectiveness for clients. We are meeting client demand by integrating premier research firms like JPMorgan, Barclays, and Kepler directly into our platform. These are expanding our addressable market and enhancing the value we deliver to clients. Our workflow investments are receiving market validation, expanding our long-standing relationship with Schroders to provide a managed service to enable greater scale. As highlighted earlier, Capital Group selected us as their trading platform because of our hyperscalable platform and high-volume capabilities. And the year post-acquisition, demand for the LiquidityBook order management system and FactSet Research Systems etc., showcases our ability to scale from point solutions to enterprise-wide partnerships. On the structural side, we are executing across four priorities. First, modernizing our tech stack and cybersecurity to strengthen platform resiliency as we integrate agentic capabilities into the workstation. Second, deploying AI to scale our content operations as mentioned by Sanoke Viswanathan earlier. Third, strengthening our brand with our Fluent in Finance campaign that is generating strong top-of-funnel growth. Lastly, freeing up engineering capacity with AI, enabling us to accelerate new projects with existing talent. We expect these benefits to accelerate through next fiscal year and beyond. We are also on track to capture our intended in-year expense savings by automating manual processes through AI, optimizing cloud usage, and streamlining our portfolio through product lifecycle rationalization. For example, we have been able to reduce the cost of vectorizing client data by 80% while delivering faster and more accurate results. Of our planned 100 basis points in savings, we have already secured more than half and remain on track to deliver the full benefit in H2. This improving operational efficiency combined with consistent free cash flow generation gives us flexibility to deploy our capital. Our framework prioritizes organic investments followed by strategic M&A and returning excess capital to shareholders. Our balance sheet remains strong with gross debt leverage at 1.4x, providing capacity across all three priorities. At current valuation levels, we see our buyback program as a compelling use of capital. In Q2, we repurchased approximately 652,000 shares for $163 million and year-to-date deployed over $300 million to repurchase shares at attractive prices. To put this into context, in the past two quarters alone, our accelerated pace of buybacks has resulted in a 3% reduction in total shares outstanding. At quarter end, we had approximately $700 million remaining under our upsized $1 billion authorization. Based on our strong first-half performance and improved visibility, we are raising our fiscal 2026 guidance. ASV growth is now expected at $130 million to $160 million, representing approximately 5.4% to 6.7% growth, an increase of $20 million at the midpoint. We are targeting GAAP revenue at $2,150 million to $2,470 million, representing an increase of $25 million at the midpoint. We are maintaining our guidance ranges for GAAP operating margin and adjusted operating margin, accounting for the potential higher performance-based compensation given the strong commercial outlook. The effective tax rate remains unchanged. Our guidance range for GAAP EPS is now $14.85 to $15.35, an increase of $0.20 at the midpoint. For adjusted EPS, our range is now $17.25 to $17.75, representing an increase of $0.25 at the midpoint. This revised outlook reflects improved visibility in client demand, accelerating commercial momentum, and realized benefits from our productivity initiatives. Our priorities are clear: deliver innovation, deepen client relationships, and invest with discipline. With that, I will turn it back to the operator for questions.

Hi, good morning. Thanks for taking my question. If you transition all of your workstation ASV into Data Solutions ASV and apply usage-based pricing on top of that, what would that look like? Because I think end users are using FactSet Research Systems Inc. Workstation to get access to your data anyway, just curious how you think about the business model in the wholesale world. Especially as data consumption is expected to increase meaningfully. How important is it for you that you continue to own the user interface product, especially for research analysts? Thanks a lot.

Thank you, Kelsey. I appreciate the question, and it is an important question for not just us, but for the whole industry. We are currently seeing strong growth across all our channels. So we are seeing continued growth in our workstation, which Helen already talked about. We are also seeing tremendous growth in our Data Solutions both through data feeds, APIs, and increasingly through our newest channel, the MCP Server, which opens up new TAMs within our clients. We are witnessing a real compounding of this at the moment. Your question is speculative about the future, where all channels might disappear and we are just in the data business. The way we are working through that, at early stages in this evolution of the market, is by developing our strategy jointly with our customers to effectively look at our pricing and packaging closely, and we are striking enterprise contracts with them that give both them and us a lot of flexibility in how we continue to deliver value in the future. So what, and you have seen the results. We have had great success in this quarter alone in restructuring some of our contracts, resulting in a real extension of almost 30% in our enterprise contracts. Furthermore, a significant share of our contracts are now enterprise agreements or long-term agreements. This gives our clients and us flexibility to consume our data in various ways: through the workstation, data feeds, the MCP, and frankly, any new channels that open into the context. We are very optimistic about the future of this multichannel mix business, as the core of all this is our data, which remains highly valuable in whatever context our clients consume it. We have provided considerable evidence of how important it is for us to deliver strong, high-quality, concorded data. Goran, do you want to add anything to that?

Yeah. Kelsey, the concept of utilizing our content or components of FactSet Research Systems Inc. is not new to us. Over the past seven or eight years, we have been talking about an open approach and servicing clients where they are, meeting them where they need our solutions. In terms of owning that interface or enriching the interface so the clients can properly complete their workflow, that has been our approach for years. As Sanoke Viswanathan touched on, we are entering into more enterprise-level agreements, and we are layering consumption on top of that, which we think will more than compensate for any type of attrition on the workstation side going forward.

Thank you.

Hi, thanks for taking my question. Really strong momentum in the business. My question was focused on the sales pipeline, demand environment as well as sales cycle, particularly in the context of geopolitical concerns. Any color that you can provide on that front? Thanks.

Sure, Ashish. We are seeing broad-based demand and a really strong pipeline through the rest of the year. Improved retention, continued expansion, and also really strong new business growth characterize our performance across the board. What is driving our sales cycle is that we are seeing asset managers consuming a lot of our Data Solutions. As you know, we have been making investments in real-time data, pricing and reference data, and private capital data. All of this is resonating and driving significant interest in our buy side. Middle-office solutions are resonating very well with the managed services overlay, which is particularly exciting in an AI-intensive world where we can add agentic workflows. Our trading solutions are also growing strongly. Overall, I would say the sales cycle has not changed. The macro conditions are not affecting us. We see traction across all client groups. What I can say is when it comes to AI solutions, the sales cycle is considerably faster. Clients are eager and enthusiastic to try out new solutions. You might have seen we even announced a new partnership with Finster on our banking agentic platform, which illustrates our client-demand driven approach. We see tremendous demand and enthusiasm from clients to try these solutions. Our MCP solution, which we launched in December, was our fastest-growing solution in the market.

Thank you. Good morning. I just wanted to focus on your middle office and trading solutions, which you mentioned have been growing strongly. Therefore, I was hoping you could elaborate on how big those two solutions are and some of the key sub-solutions that are selling very well nowadays.

Thank you, Manav. Yes. These solutions are among the crown jewels in our business, particularly for large buy-side clients. They begin with essential portfolio analytics, which consists of performance analytics, attribution, and risk management. These are mission-critical processes for our clients. Millions of funds depend on the immutable data that is stored and distributed from our analytics book of record, providing high-grade analytics over decades. The parts of that which are particularly growing this quarter, and we see this trend continuing, involve clients shifting into multi-asset class portfolios, demanding a total portfolio view that includes both private and public positions, applying normalized risk across asset classes, and performing what-if scenarios across different risk analyses. Recent market conditions surrounding private credit and similar matters have increased the relevance of these risk analyses and strengthened our business ties with clients. We are also experiencing strong progress in our managed services, helping clients operate large platforms and transforming their data integration into our systems. The output of this integration is reported to multiple different sources such as compliance teams conducting regulatory checks and end clients demanding performance progress.

Thank you.

Hi. Thank you very much for taking my question. Sanoke Viswanathan, could you discuss what has changed significantly in the last couple of quarters? We were seeing the company's organic growth slowing down; however, with your arrival, we do not typically observe a real acceleration in such a short timeframe. I am curious to know about the critical factors that are contributing to this apparent reacceleration and what might be allowing for that moving forward.

Thank you. It is a very important question, and something that we spend a lot of time on. We believe that we are just at the start of this inflection point. A number of factors are landing well for us. I would start by saying that prior to my joining, the company had initiated targeted and focused investments in the right areas where we see enormous headroom for growth. I will start with data. Data is the company's foundational strength. Despite years of success in building our datasets and developing a client franchise, we still have substantial market share growth potential among our competitors. A prime example is real-time data. We now possess capabilities competitive with our larger competitors—an investment made over several years that has allowed us to win significant clients. Another example of something that is clicking is our AI investments, where we do well across various layers of the AI stack, including AI-ready data, the MCP Server, our agentic platforms, and AI solutions that are infused into our workstation. Notably, 48 of our top 50 clients use at least three of our AI solutions, and I expect that number to increase significantly in the coming quarters. Thirdly, the investments we are making in content—beyond real-time data, highly relevant for dealmakers and wealth managers—like pricing and reference data, as well as private company-related data, have been paying off. As we increase data solution dissemination beyond workstations, we observe huge opportunities to enhance cross-selling within our existing client base. Certainly, the commercial excellence efforts that we have initiated in the last few quarters are yielding positive results. We see significant energy in our sales and customer success teams driving retention and expansion. However, it is the combination of these targeted investments from the past few quarters that contributes to our current momentum, and I see a lot of growth potential ahead of us. Helen, would you like to add anything?

Sure. You are right, Shlomo; it takes time for these changes to gain traction. As Sanoke Viswanathan mentioned, we are fortunate our open platform is perfectly positioned for this new AI environment, which is why AI serves as a tailwind for us. Additionally, we are experiencing double-digit growth across data in various firm types, including banking, wealth, and buy-side segments. This correlation demonstrates that our investments have contributed positively to both client retention and the growth of new business.

Thank you.

Hey, good morning and thanks for taking my question. I wanted to focus on the expense side of things. I'm curious if there has been any change in how you are thinking about expenses through the year. I think previously you had mentioned that investment plans were more second-half weighted. So I was curious if that remains the case. More broadly, while I appreciate that you are making investments in the business that clearly reflect in better ASV growth, are you planning to moderate some of the pace of investments or the expense growth so that you can start leveraging expenses next fiscal year?

Thanks, Jason. As you can tell, we are very pleased with the execution we've had in the first half of the year. The guidance range for our operating margin reflects the opportunities we see for high-ROI investments, both for growth and for improving the company's success going forward. You are correct. We expect a heavier investment in the second half. At the same time, we are being very disciplined and will moderate spending based on ROI and the opportunities available to invest. Our goal is to grow earnings in the coming year and beyond; hence, our investments will be focused on high-ROI opportunities. We think we can achieve both of those objectives because we are seeing promising productivity improvement opportunities ahead. We have provided a flavor for those earlier in our presentation, but we are still just at the very early stages of capturing productivity gains. As they accelerate, they will serve as a nice offset to these investments, enabling us to deliver operational leverage as well.

Hi, good morning. I appreciate you taking my question. I appreciate the insights again this quarter on your strategic priorities and foundational strengths. I found slide eight particularly helpful regarding the uniqueness and value of the data. However, as you consider FactSet Research Systems Inc.'s position within the ecosystem relative to newer competitors and model providers, can you address any disadvantages stemming from your status as a legacy provider? Furthermore, to what extent are those disadvantages addressable through organic investment, partnerships, or M&A?

Sure. We have many advantages to our position. We believe these advantages are exciting, and we see plenty of opportunities for growth with them. Notably, one thing you will see is that we are one of the players most forward-leaning in partnerships across the ecosystem. This focus begins with data. We have multiple, strong, multi-year commercial and technical partnerships with several other content providers. They increasingly seek us out, given our technology prowess, to aggregate more of their data and deliver it through new channels we can open for them. As for newer capabilities from AI natives and hyperscalers, we have established strong partnerships with Anthropic, making our datasets readily available in their marketplaces to expedite new AI solutions' development. Notably, we are one of the prominent financial services connects on the cloud marketplace, representing our fastest-growing marketing channel. We view this partnership as fundamentally synergistic, where we both benefit. I do not regard these challenges as disadvantages but rather as opening market opportunities that our business model is uniquely positioned to capitalize on.

Broadly, many AI-native firms excel in point solutions. However, clients who seek integrated solutions to eliminate the hassle of managing multiple tools find us better positioned to deliver that.

Hey, thanks. Good morning. Sanoke Viswanathan, you had mentioned several areas for further cost savings across the business. I think you mentioned streamlining procurement, legacy software, and optimizing third-party data agreements. Could you provide insight into the runway for those initiatives? How significant could those create margin opportunities for fiscal 2027? Thanks.

Sure. We have already captured over 50% of the 100 basis points of productivity improvements we targeted for this year. While we provided examples of early impacts from applying AI in engineering, data operations, and customer success, I believe these are just the early stages, and we see great potential for AI-based opportunities. The value captured to date aligns with what you mentioned—procurement, legacy software consolidation, and optimizing data contracts. We are carefully ensuring efficiency across third-party services while running the company in a more effective manner. There is ample room to expand these AI programs. Our focus will prioritize improving earnings through fiscal 2027 and beyond while integrating high-ROI investments for future growth.

Hi, thanks. Good morning. You talked about introducing new pricing and product packaging initiatives. Can you elaborate on this? What year-over-year price performance has been in the U.S.?

Sure. I will start with our overall approach to pricing and packaging. Helen will elaborate on the specifics of price improvements we’ve seen. I’d like to start by saying we have a solid portfolio of excellent products that clients love. We receive great feedback and our NPS scores are high. However, we continue to invest in building our NPS across different segments to bolster our pricing power. Hence, we have been reassessing how we are packaging and bundling our products, making appropriate changes where needed. We are restructuring enterprise agreements with various client types to provide flexibility for both them and us as we evolve into a new world consisting of a combination of seats, data delivery, and consumption. With that, I will hand it to Helen to provide details on how these pricing power initiatives translated into this quarter’s results.

As we do every year, the annual price increase in the Americas contributed more this year than last, reflecting that our pricing strategy is grounded in the value we deliver. Clients perceive value in our product, supported by the price realization we are observing, and clients are accepting increases due to the value and workflow integration we provide. This increase is driven in part by our larger ASV base and improved retention rates. Also, the shift to enterprise agreements contains some contractual escalators. We are very pleased with our ability to continue capitalizing on pricing trends this year.

Thank you.

In noting some of the statistics you released on client count and user count, it appears that users per client are escalating at a greater rate. Is there something driving that? Is there a mix shift towards wealth, or something else occurring?

I would advise caution regarding client count interpretation. We exceed 9,000 clients, accompanied by a long tail of clients in our business. We experienced a very favorable quarter, adding a notable number of new clients. Concurrently, we expanded our presence significantly in our top clients—those that form substantial portions of our business. I would not read too much into the client count alone. It is crucial to note that corporates, wealth managers, and private equity sectors drive new client expansion. We maintain substantial penetration within the largest global banks, asset managers, and wealth managers, which does contribute to the overall client count. On the user front, the number of wealth managers makes a significant impact, as acquiring major wealth managers inherently brings in many advisers and contributes to the user count.

Good morning, and thank you for taking my question. Could you discuss the pace or degree of AI product adoption in the wealth channel? Given that wealth is still in this digitization journey, do you foresee this as a longer-tail opportunity?

Yes, you are right; wealth is a more heterogeneous environment for us. We have large firms, mid-sized firms, and RIAs, so there is a broad spectrum. We are noticing a gradual increase in AI adoption within the wealth sector. While it is currently lagging behind the sell side and buy side, we expect it to be a critical growth driver in future quarters. Goran, would you like to add anything?

Some of the AI solutions we see increased adoption involve client prospecting—our largest clients are adopting our intelligent prospecting and monitoring solution, which drives new business for them. We are currently rolling out AI solutions with two of our largest clients. Adoption is indeed increasing, but I agree with Sanoke Viswanathan that it is trailing behind investment banking and other business areas.

Thank you. I want to touch on the evolving AI landscape. There are growing concerns that advancements in AI might reduce the need for white-collar positions. In a scenario where we see a 10% or 15% reduction in white-collar workforce across buy-side and sell-side firms, how would that impact your pricing and revenue prospects should this play out? You have discussed strategies to trend towards more enterprise pricing over the years; how vulnerable do you feel in such an environment?

Thanks, Craig. To envision a scenario with such headcount reduction, one would need to consider the assumption that agentic workflows have become sufficiently robust to effectively substitute human roles. If that were the case, we believe that our agents will require high-quality inputs to execute their jobs adequately. I provided an illustration earlier regarding the value-at-risk calculation, which emphasizes the critical importance of our connected data and embedded workflows. It will become exponentially more valuable as agents transition into primary data consumers. We are well-positioned to capture that upside, especially as pricing shifts to data consumption as opposed to solely human seat pricing in the future. We are actively collaborating with our clients, and there is significant enthusiasm among them to partner with us in revising contracts to enhance flexibility for both parties. This approach should allow us to maintain our pricing power and capitalize on this transition when it materializes.

Thank you, operator. Thank you, everyone, for joining the call today. We continue to execute with discipline. Accelerating ASV growth, strengthening commercial performance, and measurable productivity gains position us well for 2026 and beyond. In May, we will welcome clients to FactSet Research Systems Inc. Focus, where they will experience firsthand the innovation we are delivering across our platform. Operator, this concludes today's call.