On September 19, 2024, FactSet Research Systems Inc (FDS, Financial) released its 8-K filing for the fourth quarter of fiscal 2024, showcasing robust financial performance. FactSet, a global financial digital platform and enterprise solutions provider, aggregates data from various sources to deliver essential portfolio analytics to the investment community.
Performance Highlights
FactSet Research Systems Inc (FDS, Financial) reported Q4 GAAP revenues of $562.2 million, a 4.9% increase from Q4 2023, surpassing the estimated revenue of $546.81 million. The company's GAAP diluted EPS rose to $2.32, a 38.1% increase year-over-year, while adjusted diluted EPS reached $3.74, up 23.8% from the prior year, significantly beating the estimated EPS of $3.32.
Key Financial Metrics
FactSet's Q4 GAAP operating margin improved to 22.7%, up from 21.7% in the previous year, driven by decreased employee compensation costs and revenue growth. The adjusted operating margin also saw an increase, reaching 35.8%, up from 33.4% in Q4 2023.
| Metric | Q4 2024 | Q4 2023 | Change |
|---|---|---|---|
| GAAP Revenues | $562.2 million | $535.8 million | 4.9% |
| GAAP Operating Margin | 22.7% | 21.7% | 1.0% |
| Adjusted Operating Margin | 35.8% | 33.4% | 2.4% |
| GAAP Diluted EPS | $2.32 | $1.68 | 38.1% |
| Adjusted Diluted EPS | $3.74 | $3.02 | 23.8% |
Income Statement and Cash Flow
FactSet's net income for Q4 2024 was $89.5 million, a 37.4% increase from $65.1 million in Q4 2023. The company reported net cash provided by operating activities of $163.2 million, while free cash flow decreased to $137.2 million, down 12.2% from the same period last year.
Annual Performance
For the full fiscal year 2024, FactSet's GAAP revenues increased by 5.6% to $2.20 billion, marking the 44th consecutive year of revenue growth. The GAAP operating margin rose to 31.8%, and the adjusted operating margin improved to 37.8%. GAAP diluted EPS for the year was $13.91, while adjusted diluted EPS reached $16.45.
Challenges and Future Outlook
Despite the strong performance, FactSet faced challenges, including a $54 million charge related to a Massachusetts sales tax dispute. However, the company does not anticipate additional material charges regarding this matter.
During a time of technological change and an external environment marked by both uncertainty and opportunity, FactSet's open platform strategy is resonating with clients seeking growth and efficiency," said Phil Snow, CEO of FactSet.
Looking ahead, FactSet provided fiscal 2025 guidance, expecting organic ASV growth of 4% - 6%, GAAP revenues between $2,285 million and $2,305 million, and adjusted diluted EPS in the range of $16.80 - $17.40.
FactSet's continued commitment to innovation and client-centric solutions positions it well for sustained growth in the competitive capital markets industry.
Explore the complete 8-K earnings release (here) from FactSet Research Systems Inc for further details.
