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FDS
Earnings call · Aug 2026 (Q4 FY26)

FACTSET RESEARCH SYSTEMS Q4 FY26 earnings call FDS

Sep 30, 2026 Source

Executive summary

FactSet Q4 FY26 — Record Organic ASV Growth Driven by AI Adoption and Strategic Investments

FactSet concluded a strong Q4 FY26 with record organic ASV growth, driven by successful AI product launches and strategic investments across banking, buy-side, and wealth management. The company is accelerating its business model shift towards flexible enterprise agreements and scaling productivity initiatives, leading to headcount reductions and improved operating leverage. While margins compressed in FY26 due to investments, management anticipates improvement in FY27, underpinned by a robust pipeline and differentiated AI strategy.

Highlights

5

  • Organic ASV grew 7% or $168 million to $2.56 billion for FY26, exceeding the high end of guidance.

  • Q4 organic ASV was $86 million, the largest quarter ever, with 7% year-over-year growth.

  • AI-related solutions made up a double-digit share (over 10%) of new ASV this quarter, exceeding FY25 total AI contribution.

  • Free cash flow for FY26 increased over 14% to $707 million.

  • Repurchased $644 million of shares in FY26, reducing shares outstanding by almost 7%.

Concerns

2

  • Adjusted operating margin for FY26 was 34.5%, approximately 180 basis points below FY25, due to structural investments and upfront compensation expenses for accelerating ASV.

  • FY27 EPS growth faces an approximate 2% headwind (between $0.30 and $0.40 per share) from a higher assumed tax rate and incremental interest expense from maturing notes.

Guidance & targets

CategoryTargetConfidence
Organic ASV growth
5% to 6.5%
high materiality
High
Revenue growth (reported)
5% to 6%
high materiality
High
Revenue growth (like-for-like)
approximately 100 basis points higher
medium materiality
High
Operating margin improvement
between 25 and 75 basis points
high materiality
High
EPS growth
high single digits
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Institutional buy-side
Showed acceleration in Q4.
Acceleration: approximately 100 basis points from Q4 2025
—5%——
Dealmakers
Significant growth in Q4 across both buy side and sell side.
Growth rate: approximately doubling its growth rate from a year ago
—9%——
Wealth
Strong organic ASV growth.
—9%——
Market infrastructure
Solid organic ASV growth.
—8%——
Americas
Grew faster in Q4 than a year ago.
—7%——
EMEA
Grew faster in Q4 than a year ago.
—5%——
Asia Pacific
Fastest-growing region, grew faster in Q4 than a year ago.
—over 10%——

FDS operating KPIs by quarter

FDS operating KPIs stated on its earnings calls, by fiscal quarter
KPI Feb 2026 Q2 FY26 May 2026 Q3 FY26This call Aug 2026 Q4 FY26Change vs prior quarter
ASV retention rate
95%+ Our overall ASV retention continued at over 95% in Q2. Source transcript
95%+ ASV retention rates above 95% reflect the strength of our client relationships, those relationships fuel our ASV bookings growth that provides a line of sight into future revenue. Source transcript
95%+ The impact of our commercial excellence initiative is clear with strong new business growth, continued ASV retention of over 95% and strong expansion. Source transcript
—

Operating figures the company states on every call, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

ProductTypeDetails
FactSet AI for bankinglaunch
Analytics MCPlaunch

Deals & partnerships

BCC Group Acquisition of a Frankfurt-based data infrastructure company.

Augments FactSet's real-time data offering to allow for integrated entitlement management. FactSet has worked with BCC Group on multiple deployments.

Risks & headwinds

Margin compression from faster ASV growth Q4 FY26

Q4 adjusted operating margin was 33% compared to 33.8% last year.

Mitigation:Efficiency gains from headcount reductions and productivity improvements are expected to benefit operating leverage and free cash flow over time, with FY26 operating margins representing a floor.

Headwinds to EPS growth in FY27 FY27

approximately 2% headwind to EPS growth (between $0.30 and $0.40 per share based on FY26 EPS of $18.01)

Mitigation:Management is focused on growing free cash flow and anticipates free cash flow per share to compound over time.

Increased interest expense March 2027

$500 million of notes with a 2.9% interest rate mature in March 2027, expected to be refinanced at higher rates.

Mitigation:Amended credit facilities to increase revolver capacity from $1 billion to $1.5 billion, providing optionality. Committed to maintaining investment-grade rating.

Higher assumed tax rate FY27

Effective tax rate was approximately 19% for FY26, expected to be slightly higher in FY27.

Mitigation:Not explicitly stated, but part of the overall EPS headwind management is working to offset through operational efficiencies.

What to watch in Q1 FY27

Organic ASV growth

Next quarter (Q1 FY27)
Current 7% in FY26
Target Initial progress towards 5% to 6.5% range

Why it matters

Verifies the initial trajectory of the FY27 guidance and momentum from record Q4 performance.

We expect another strong year with organic ASV growth of 5% to 6.5% during the fiscal year ahead.

Q&A highlights

Is FactSet interested in acquiring a competitor's business, especially for proprietary data sets, given recent headlines and the current market cycle?

Management stated a focus on organic growth and existing opportunities but confirmed they constantly evaluate inorganic opportunities that complement their strategy and meet financial criteria, citing the BCC Group acquisition as an example. They emphasized their own investments in proprietary data capabilities.

“When we look at opportunities that are high return and can complement what we do organically, we certainly will consider, and we are constantly looking at the market for all opportunities.”

asked by Alex Kramm · answered by Sanoke Viswanathan

2 min read 5 chapters

Detailed narrative

AI Strategy and Adoption

FactSet's AI strategy leverages its connected data, embedded analytics, and software in client workflows, resonating strongly with clients. MCP adoption is accelerating, with over 650 clients actively engaged and API call volumes growing 7x quarter-over-quarter. The company launched its first analytics MCP, extending market-leading portfolio analytics into Agentic workflows for buy-side clients, expected to unlock tremendous value for clients in performance measurement, risk, and reporting.

Commercial Excellence

The company achieved strong new business growth, maintained ASV retention over 95%, and saw robust expansion. Data ASV, delivered via direct feeds, APIs, and MCP, grew double-digits. FactSet is accelerating its shift to flexible enterprise agreements, with the majority of renewed ASV in Q4 secured as enterprise agreements or contracts of 3+ years, increasing average contract length by approximately 30% while broadly preserving pricing.

Productivity Initiatives

FactSet streamlined operations and reduced complexity, resulting in a net headcount reduction in FY26 and additional reductions in early Q1 FY27. These efficiencies free up capital for client-facing innovation and are expected to enhance operating leverage. AI-enabled projects expanded by 40% in Q4, with token use for coding assistance growing over 80% while token spend grew at half that pace, indicating significant efficiency gains.

Strategic Investments

Key investments include reengineering a private markets data pipeline, cutting processing times by over 75%, and rolling out a client assist agent that resolves over 30% of user requests without human interaction. The acquisition of BCC Group significantly expands FactSet's addressable market in real-time data distribution and entitlement management, providing a full-stack solution for clients and lowering integration risk due to prior collaborations.

Client Wins and Competitive Displacement

FactSet secured significant mandates by displacing major competitors across banking, buy-side, and wealth management. Wins included a bulge bracket investment bank adopting the full Agentic banking stack, a large regional bank displacing an incumbent with MCP and deep sector content, and two major competitive displacements in wealth management, serving Canada's five largest wealth managers. These wins demonstrate the strength of FactSet's platform and its ability to attract new clients and expand existing relationships.

AI-generated summary of the company's earnings call. Not investment advice.