FDS · Q4 2024 Earnings

Cautious

FactSet

Reported September 18, 2025

30-second summary

FactSet closed FY2025 with organic ASV growth re-accelerating to 5.7% (vs 4.5% organic ASV growth at end of Q3) and adjusted EPS of $16.98 landing within the prior $16.80–$17.40 guide. FY adjusted operating margin of 36.3% also landed inside the 36.0–37.0% guided band. The story is in the FY2026 setup: against FY2025 actuals, GAAP operating margin is guided to 29.5–31.0% (vs 32.2% actual, -120 to -270bps), adjusted operating margin to 34.0–35.5% (vs 36.3% actual, -80 to -230bps), and GAAP EPS to $14.55–$15.25 (vs $15.55 actual, implying -2% to -6% YoY) — all framed by management as a "strategic inflection point" around AI. Organic ASV growth guidance was raised at the top end ($100–150M vs prior $100–130M), but the margin reset is the dominant signal.

Headline numbers

EPS

Q4 FY2024

$4.05

Revenue

Q4 FY2024

$0.60B

+6.2% YoY

Gross margin

Q4 FY2024

51.6%

Free cash flow

Q4 FY2024

$0.18B

Operating margin

Q4 FY2024

29.7%

Key financials

Q4 FY2024

Metric	Q4 FY2024	YoY	Q3 FY2025	QoQ
Revenue	$0.60B	+6.2%	$0.59B	+1.9%
EPS	$4.05	—	$4.27	-5.2%
Gross margin	51.6%	—	—	—
Operating margin	29.7%	—	33.2%	-350bps
Free cash flow	$0.18B	—	$0.23B	-22.1%

Guidance

FY2025 results largely in-line but margins compressed; FY2026 guidance issued with moderately lower operating margins and modestly higher organic ASV growth relative to prior-year ranges.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	FY2025	$2,305 million to $2,325 million	$2,321.7 million	in-line	Beat
Adjusted diluted EPS	FY2025	$16.80 to $17.40	$16.98	+$0.58 above high end	Beat

New guidance

Metric	Period	Guide	YoY
Adjusted diluted EPS	FY2026	$16.90 to $17.60	—
Effective tax rate	FY2026	18% to 19%	—
Revenue	FY2026	$2,423 million to $2,448 million	+4.3% to +5.4% YoY

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
GAAP diluted EPS	FY2025	$14.80 to $15.40	$14.55 to $15.25	-$0.25 at low end, -$0.15 at high end	Lowered
GAAP operating margin	FY2025	32.0% to 33.0%	29.5% to 31.0%	-250 to -200 bps	Lowered
Adjusted operating margin	FY2025	36.0% to 37.0%	34.0% to 35.5%	-200 to -150 bps	Lowered
Organic ASV growth	FY2025	$100 million to $130 million	$100 million to $150 million	+$20M at high end	Raised

Segment performance

Q4 FY2024

Segment	Q4 FY2024	YoY
Buy-side ASV	$1.944B	+5.5%
Sell-side ASV	$0.427B	+4.3%

Capital & returns

Q4 FY2024

Segment	Q4 FY2024
Capital Returned to Shareholders	$460.4M (FY2025)

Other KPIs

Q4 FY2024

Segment	Q4 FY2024	YoY
Americas	$0.389B	+7.2%
EMEA	$0.147B	+3.0%
Asia Pacific	$0.061B	+7.4%
Organic ASV	$2.371B	+5.7%
Organic ASV Growth	5.7%	—
Annual ASV Retention	>95%	—
Client Retention (by count)	91%	—
Client Count	8,996	—
User Count	237,324	—
Adjusted Operating Margin	33.8%	—
Free Cash Flow Margin	29.8%	—

Q&A highlights

Tony Kaplan · Morgan Stanley

Should fiscal 2025 margin guidance be viewed as representative of a normal year, or how should investors think about long-term margin trajectory given the significant expansion since 2021?

Management characterized FY2025 as a reset year after margin expansion that exceeded previous medium-term targets of 35-36%. About half the margin decline versus FY2024 is due to bonus pool reset, with the remainder covering technology investments. Management views current guidance as a normalized level, with all investments self-funded through efficiency gains.

Previous medium-term margin target: 35-36%FY2024 adjusted operating margin: 37.8%FY2025 guided adjusted operating margin: 36-37%Bonus pool reset accounts for approximately half of margin decline

Ashish Sabadra · RBC

Despite expected second-half improvement in FY2025, the 5% midpoint ASV growth guidance implies no improvement versus FY2024 despite potentially better macro conditions. What macro and pricing assumptions are baked into guidance?

Management expects continued near-term headwinds but anticipates client budget resets post-calendar year and market uncertainty abatement. Believes first-half conditions will persist while second-half will benefit from client budget resets, hiring improvements, and new GenAI product launches. Does not assume aggressive macro improvement in guidance.

FY2025 organic ASV growth guidance: 5% midpoint (4-6% range)FY2024 organic ASV plus professional services growth: 4.8%First-half guidance assumes current conditions; second-half assumes improvementManagement expects product pipeline to drive second-half acceleration

Alex Cram · UBS

Provide more background on the large asset management cancellation in the quarter, which is atypical given FactSet's usually sticky offering. What is happening in the asset management environment?

The large cancellation was due to a firm consolidating operations under cost pressure. Management provided detailed win/loss analysis showing 9 of top-10 deals were against competitors (7 against major competitors), with 4 deals adding 700+ seats each. On the buy side, management noted anecdotally improving sentiment among C-suite regarding transformation initiatives despite cost pressures. Continued strength in managed services.

Top 10 ASV wins: 9 were against competitors, 7 against top-4 competitorsFour of top-10 deals added 700+ seats of FactSet solutionsBottom 10 deals: 6 lost to competitors, 4 from M&A/firm closuresBuy-side sentiment becoming more constructive on transformation despite cost pressures

Kelsey Zhu · Autonomous

GenAI was expected to deliver incremental ASV in FY2025. Has this been sized? What is the impact on both ASV and expense outlook for coming years?

GenAI impact is embedded in FY2025 guidance. Expected to contribute 30-50 basis points to ASV growth, concentrated in second half after product releases. GenAI investments comprise approximately 50+ basis points of total expense guidance, split between workflow development and consumption billing infrastructure.

GenAI expected ASV contribution: 30-50 basis pointsGenAI expected expense impact: 50+ basis pointsNew GenAI products launching first half for second-half realizationSpecific GenAI products: Portfolio Commentary, Transcript Assistant, Conversational API

Shlomo Rosenbaum · Stifel

Has FactSet philosophically shifted to prioritize margin expansion over growth, given recent guidance? Also, what specifically gives management more confidence in second-half FY2025 improvement versus last year's similar guidance that disappointed?

Management denied philosophical shift, reiterating long-term focus on balanced growth and cash flow generation. Acknowledged last year's optimism about headwind dissipation proved premature. Increased confidence this year stems from actual product innovation delivered, new GenAI solutions, and improved client positioning to drive enterprise deals, rather than macro assumptions.

No philosophical change in growth versus margin balanceLast year's margin focus was response to market pressure, not strategy shiftCompany aspires to return to high single-digit growth ratesThis year's confidence based on delivered product innovation, not macro assumptions

Answers to last quarter's watch list

Organic ASV growth holding ≥4.5% in Q4 — Yes, and meaningfully better: organic ASV growth printed 5.7% vs 4.5% at end of Q3, indicating Q4 accelerated further.

Resolved positively

FY2025 close vs the $100–130M ASV growth band — Organic ASV grew $127.3M in FY2025, landing in the upper half of the $100–130M guided range, with the FY2026 forward band widened at the top end to $100–150M.

Resolved positively

Asset-owner softness — Q3 outlier or persistent? — Buy-side ASV growth accelerated to 5.5% in Q4 from 4.0% in Q3, outpacing sell-side, suggesting the buy-side weakness was largely transient.

Resolved positively

Pitch Creator pipeline conversion — Not directly disclosed in the press release. Client count grew 185 sequentially and users grew nearly 17K, but the Pitch Creator-specific contribution wasn't broken out.

Continue monitoring

Adjusted operating margin landing within FY 36.0–37.0% — Met. FY adjusted operating margin of 36.3% landed within the 36.0–37.0% guided band, despite Q4 standalone compression to 33.8%.

Resolved positively

Gen AI efficiency translating into quantified opex tailwind — The FY2026 guide explicitly steps margins down vs FY2025 actuals (adjusted op margin -80 to -230bps) to fund AI investment, with management framing this as a "strategic inflection point" rather than a self-funded efficiency story.

Resolved negatively

What to watch into next quarter

Whether Q1 FY2026 adjusted operating margin tracks toward the new 34.0–35.5% FY band or shows further compression — early Q1 below 34% would signal the investment ramp is front-loaded and the new range may itself be at risk

Organic ASV growth holding at or above 5.7% in Q1; sustained acceleration would validate the top-end raise to $150M, while a deceleration would make the margin sacrifice harder to defend

Specific quantification of Gen AI revenue contribution — prior commentary sized it at 30–50bps of ASV growth; whether management raises that range in early FY2026 will indicate whether the margin investment is producing returns

EMEA growth — Q4 EMEA organic ASV growth of 4.2% and revenue growth of 3.0% remain the structural laggard; another step-up would confirm asset-owner pressure has cleared

Headcount and opex trajectory — FY2025 headcount grew 3.2% (12,800 at year-end); whether FY2026 sees a step-up in deliberate hiring will indicate whether the margin reset is a one-time investment year or a structural reset

Any FY2026 guide raise within the first two quarters — if margins stabilize earlier than expected, an in-year raise to the top end of the adjusted margin band (35.5%) would partially reverse the negative read on this print

Sources

FactSet Q4 FY2025 earnings press release (SEC filing): https://www.sec.gov/Archives/edgar/data/1013237/000101323725000084/fdsq42025earningsrelease.htm
FactSet Q3 FY2025 Tapebrief (prior quarter reference for trend context)
No current-quarter (Q4 FY2025) earnings call transcript was available at the time of writing; management tone analysis is therefore omitted from this brief and relies solely on press release commentary where cited.

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