FactSet Research Systems Inc. (FDS) on Tuesday projected higher earnings for its third quarter, above Wall Street estimates, after reporting a slight increase in second-quarter profit. The Financial data provider said a double-digit growth in both U.S. and international revenues were partly offset by a 61 percent increase in taxes. For the quarter, both earnings and top line beat Street projections.
Commenting on the results, Chairman and CEO Philip Hadley, said, "We're pleased with our second quarter results as today we announced robust top and bottom-line growth. FactSet added 53 net new clients in the quarter, our highest number since 2006 and sequentially we added 400 net new users during the quarter."
For its second quarter, FactSet's net income increased 3.3 percent to $46.75 million from $45.25 million last year. Earnings per share grew 7.4 percent to $1.02 from $0.95 a year ago. The results for both periods were hurt by one-time items, even as prior year's results included tax benefits of $0.10 per share from the reenactment of the U.S. Federal R&D credit.
Adjusted net income, which excluded items, advanced 12.3 percent to $52.18 million and earnings per share increased 16.3 percent to $1.14 from $0.98 last year. On average, nine analysts polled by Thomson Reuters estimated earnings of $1 per share for the quarter. Analysts' estimates usually exclude special items.
Revenues for the period grew 12.2 percent to $199.37 million from prior year's $177.64 million, beating Wall Street analysts' consensus of $198.16 million. Both US and non-US revenues increased 12.2 percent each in the second quarter.
Annual Subscription Value or ASV grew 11 percent to $803 million. According to the company, 81 percent of the total ASV was derived from buy-side clients and the remainder is from the sell-side firms who perform M&A advisory work and equity research .
As of February 29, FactSet's client count was 2,324
Further, the company said it would pay a regular quarterly dividend of $12.1 million or $0.27 per share on March 20 to common stockholders of record as of February 29.
Looking ahead, FactSet expects third-quarter earnings in the range of $1.03 to $1.05 per share. Adjusted earnings would be between $1.14 and $1.16 per share, representing year-over-year growth of 12 percent and 14 percent. Both these estimates reflect a tax credit expiration, the company noted.
Further, it guided revenues in the vicinity of $200 million and $204 million which represents a growth of 9 percent and 11 percent from last year. Operating margin is expected to range between 33.5 percent and 34 percent.
Analysts currently projects third-quarter earnings of $1.02 per share on revenues of $202.59 million.
FDS shares are currently trading at $90 in pre-market activity, down $0.81 or 0.89 percent.
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