FactSet Research Systems Inc. (NYSE: FDS) projected fiscal 2027 revenue of $2.60 billion to $2.625 billion after closing fiscal 2026 with 7.0% organic annual subscription value growth and higher fourth-quarter adjusted earnings, even as GAAP profit declined.

For fiscal 2027, the financial-data provider expects organic ASV growth of 5.0% to 6.5%, a GAAP operating margin of 31.0% to 32.0% and an adjusted operating margin of 34.75% to 35.25%. FactSet forecast diluted earnings per share of $17.00 to $17.50 and adjusted diluted EPS of $19.25 to $19.65.

Fourth-quarter revenue rises as GAAP profit falls

Revenue for the fiscal fourth quarter ended August 31 increased 6.3% year over year to $634.7 million. Organic revenue rose 7.1% to $635.5 million, while organic ASV reached $2.568 billion, representing 7.0% growth.

Adjusted diluted EPS increased 11.6% to $4.52 from $4.05. Adjusted net income rose 4.1% to $160.9 million, and the weighted average diluted share count declined to 35.6 million from 38.2 million.

On a GAAP basis, operating income fell 11.7% to $156.6 million, reducing the operating margin by 500 basis points to 24.7%. Net income declined 21.1% to $121.1 million, and diluted EPS decreased 15.4% to $3.41.

FactSet’s non-GAAP reconciliation included $26.9 million of fourth-quarter restructuring and severance costs, $18.9 million of intangible-asset amortization and $4.6 million of CEO onboarding costs. The prior-year quarter also included a gain on a business divestiture in the net-income comparison.

Adjusted operating income increased 3.8% to $209.4 million, although the adjusted operating margin narrowed by 80 basis points to 33.0%. Fourth-quarter free cash flow was nearly unchanged at $177.3 million, compared with $178.1 million a year earlier.

Asia-Pacific and client workflows support ASV growth

Asia-Pacific recorded the strongest regional organic ASV growth at 11%, reaching $266 million. Organic ASV increased 7% in the Americas to $1.678 billion and 5% in Europe, the Middle East and Africa to $624 million.

By client category, Dealmakers and Wealth each grew organic ASV by 9%, to $493 million and $407 million, respectively. Market Infrastructure increased 8% to $433 million, while Institutional Buy-Side, FactSet’s largest client group, rose 5% to $1.235 billion.

FactSet said it expanded strategic relationships with J.P. Morgan and Barclays during the year and now serves all five of Canada’s largest banks in wealth management. It also broadened its private-markets offering through AI-powered document ingestion with Cobalt and valuation workflows developed through its Valutico partnership.

AI products accounted for more than 10% of fourth-quarter ASV growth. The company said clients using one or more AI products had twice the ASV growth rate of other clients in the quarter. More than 650 clients were actively consuming data through FactSet’s Model Context Protocol server, including paid users and trials, while API call volume increased sevenfold from the preceding quarter.

During fiscal 2026, FactSet also announced an AI partnership with Google Cloud, introduced FactSet AI for Banking with Finster AI and expanded wealth-management capabilities through TIFIN.AI.

Fiscal 2026 results exceed key guidance ranges

Full-year revenue increased 6.7% to $2.476 billion, slightly above FactSet’s guidance range of $2.450 billion to $2.470 billion. Organic revenue also rose 6.7%, reaching $2.465 billion.

Adjusted diluted EPS increased 6.1% to $18.01, above the company’s $17.25-to-$17.75 outlook. The adjusted operating margin was 34.5%, within the guided range of 34.0% to 35.5%. Organic ASV added during the year totaled $168 million, compared with guidance of $130 million to $160 million.

GAAP operating income declined 6.5% to $700.0 million, while adjusted operating income rose 1.4% to $855.3 million. Full-year GAAP net income decreased 10.6% to $533.5 million, and adjusted net income increased 1.2% to $659.5 million. Free cash flow grew 14.6% to $707.5 million as operating cash flow rose 13.2% to $822.2 million.

FactSet returned $808 million to shareholders during fiscal 2026, including $644 million through share repurchases and $164 million in dividends. The company reported $1.375 billion of outstanding debt and gross leverage of 1.5 times EBITDA as of August 31. Its next disclosed maturity is $500 million of 2.9% senior notes due in March 2027.

Management identified commercial execution, productivity improvements and development of its long-term strategy as its main priorities for fiscal 2027. The company cautioned that its outlook depends on current assumptions and is subject to business and operational risks that could cause actual results to differ materially from its expectations.

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