Good day, and thank you for standing by. Welcome to the FactSet Second Quarter 2025 Earnings Conference Call. — Operator Instructions — Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Yet He, with Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Welcome to FactSet’s Second Fiscal Quarter 2025 Earnings Call. Before we begin, the slides we reference during this presentation can be found through the webcast on the Investor Relations section of our website at factset.com. A replay of today’s call will be available on our website. After our prepared remarks, we will open the call to questions from investors. The call is scheduled to last for 1 hour. — Operator Instructions — Before we discuss our results, I encourage all listeners to review the legal notice on Slide 2, which explains the risks of forward-looking statements and the use of non-GAAP financial measures. Additionally, please refer to our Forms 10-K and 10-Q for a discussion of risk factors that could cause actual results to differ materially from these forward-looking statements. Our slide presentation and discussions on this call will include certain non-GAAP financial measures. For such measures, reconciliation to the most direct comparable GAAP 1 measures are in the appendix to the presentation in our earnings release issued earlier today. During this call, unless otherwise noted, relative performance metrics reflect changes as compared to the respective fiscal 2024 period. Also consistent with the last quarter, please note that starting fiscal 2025, FactSet is reporting organic ASV rather than organic ASV plus professional services to focus on the recurring nature of our revenues. Joining me today are Phil Snow, Chief Executive Officer; Helen Shan, Chief Financial Officer; and Goran Skoko, Chief Revenue Officer. I will now turn the discussion over to Phil Snow.

Thank you, Yet, and good morning, everyone. Thanks for joining us today. Before I begin, let me start by welcoming Kevin Toomey as our new Head of Investor Relations, and thanking Yet for serving in the role on an interim basis, maintaining strong investor engagement during the past 6 months, in addition to his role as Head of Corporate Development. Kevin brings to FactSet over 2 decades of experience in investor relations, equity research and financial markets, and I look forward to working with him to continue growing our Investor Relations program. Now on to the results. In the second quarter, we grew organic ASV 4.1% year-over-year, delivering adjusted operating margin of 37.3% and adjusted diluted EPS of $4.28. We are encouraged by the positive momentum of deals progressing through the sales cycle this past quarter and have confidence that we are reaching an inflection point in ASV growth heading into the back half of the year. We anticipated a slow start to fiscal 2025 and continue to operate in a challenging market 2 environment. Lower CPI has resulted in a lower year-over-year annual price increase and softer results in asset management and banking masked the significant progress we made developing and executing against our pipeline during the quarter. While acknowledging there remains market uncertainty, I’m pleased with the strength of our pipeline and the product-led innovation FactSet is bringing to the market. Our dialogue with clients continues to be constructive, positioning our business positively for the growth acceleration we anticipate in the second half of the year. With increased visibility into the remainder of the fiscal year, we are reaffirming the 5% midpoint of our organic ASV growth guidance and narrowing the range of anticipated top line outcomes. Helen will cover the rest of our revised guidance in more detail later in her remarks. Turning back to the second quarter. ASV retention remained greater than 95%, and client retention was 91%. We grew our client base to over 8,600 led by an increase in corporates, wealth and partners, and our user count increased to over 219,000, driven by our continued success in wealth. Starting with our performance by region. In the Americas, we grew organic ASV by 4%. Strength in wealth and hedge funds was offset by mixed results for asset managers, asset owners and partners, where a few large losses masked the benefit of strategic 7-figure wins. In EMEA, organic ASV growth was 3%. We’re continuing to see momentum with hedge funds and PE/VC firms in the region, but these gains were offset by erosion headwinds faced in the quarter. This trend was most notable in asset management and banking. In Asia Pacific, we maintained 7% organic ASV growth, driven by continued strong sales of data solutions, particularly among wealth, corporates, hedge funds and PE/VC firms. 3 Now turning to our results from a firm-type perspective. Wealth reaccelerated to doubledigit growth in the quarter, lapping last year’s large cancellation. We continue to gain market share with leading clients in wealth evidenced by UBS selecting FactSet to power their adviser desktops and client-facing portal in the Americas. This is another example of an enterprise deal where our digital and technology capabilities are winning in the market. Our differentiating wealth adviser solution and industry-leading client service were key to this success. Implementation and rollout are expected to occur throughout the remainder of the year. With this latest win, FactSet is now the primary market data partner to half of the world’s top 20 wealth management firms, including 3 of the 4 U.S. wirehouses and 3 of the top 5 Canadian wealth managers. The opportunity for our wealth business is global, and we are seeing traction with clients outside North America. As we execute against our sales pipeline, I’m confident there is continued runway to extend our success, both geographically and beyond the adviser desktop into the wealth home office and adjacent workflows. Within dealmakers, while banking was a drag to growth, we still saw renewal activity increased notably in the quarter. We signed more than a dozen large banking renewals, securing multiyear contracts on many of them to reinforce FactSet as a trusted partner and opening the opportunity for future upsells. We are confident FactSet’s focus on workflow efficiency and total cost of ownership is top of mind for many of our banking clients. We launched Pitch Creator midway through the quarter and already have a robust pipeline with more than 50 opportunities, almost 2 dozen of our largest banking clients actively trialing our products and several of our clients in the latest stages of commercial negotiation. 4 Pitch Creator and our recently acquired LogoIntern solution are extending FactSet’s lead in powering junior bankers by streamlining their daily workload. Clients are telling us they welcome the practical workhorse approach FactSet is taking to boost the productivity of their junior employees who are increasingly asked to do more in the current environment. We expect acceleration of our banking business in the second half of the year, notwithstanding the more cautious sentiment and macro uncertainty of recent weeks. Outside of banking, PE/VC remains a bright spot with accelerated double-digit growth in the second quarter. Corporates also added to growth fueled by the momentum from our Irwin acquisition in the first quarter. Within the institutional buy side, headwinds from cost rationalization and budget tightening persisted among our asset manager and asset owner clients. While retention pressure growth, particularly among active asset managers facing AUM outflows, the impact in the second quarter included a 7-figure cancel due to our proactive retirements of a legacy and bespoke solution that we are no longer supporting. As clients continue to cut costs and optimize headcount, our managed services offering is providing a natural hedge and an additional growth channel. We gained further momentum with a large 7-figure win, displacing the legacy performance system with attached managed services to support the operational workflows of a leading asset management client. Hedge funds were also a bright spot in the second quarter as we capitalized on fund launches, higher workstation retention and strong data solution sales. During the second quarter, we announced the acquisition of LiquidityBook to enhance FactSet’s ability to serve the integrated workflow needs of our clients across the entire portfolio life cycle. Adding LiquidityBook’s technology forward OMS, free trade compliance and eyeball capa5 bilities to our workstation enables us to more seamlessly link adjacent steps in the front office trade workflow. We are excited about the bidirectional cross-sell opportunities that we are already executing on and expect this acquisition to be immediately accretive to FactSet’s growth. Our partnerships in CGS growth in the second quarter remained solid. We are seeing robust new business and expansion activity across multiple partner segments, particularly amongst index providers, exchanges and AI-focused fintechs. Similar to last quarter, CGS benefited from the continued strong new issuance market across several asset classes. In summary, I want to reiterate that our #1 priority is to drive top line growth. As we head into the second half of the fiscal year, we have increasing visibility into a robust sales pipeline and positive underlying momentum. Wealth will continue to be a growth engine. Not only are we gaining market share and extending our track record of success displacing the incumbent in this market, but we are also widening the aperture on the breadth of workflows our solution is going to address. Leading clients are choosing FactSet to be their enterprise partner, and we continue to receive validating feedback that our products and service levels are positive differentiators versus the competition. There is ample runway for accretive growth across our smaller firm types. The acquisitions of Irwin and LiquidityBook in recent months are already driving cross-selling op- portunities and pulling FactSet into higher volume, shorter sales cycle opportunities with corporates and hedge funds where client purchase decisions are more rapid. Additionally, Cobalt, which we acquired a few years ago, continues to open doors and position us to cross-sell PE/VC clients seeking enterprise solutions. Our banking products remain best-in-class, strengthened by content investments across 6 private markets, deep sector and fundamental data. Our clients consistently provide positive feedback on the breadth and quality of our data that we feel is a competitive advan- tage. We believe FactSet has the best banking product in the market, and we continue to extend this lead with our focus on workflow productivity. In the past 18 months, we renewed more than 1/3 of our banking ASV, representing over 40% of banking users, including more than half of our top 25 investment banking clients to multiyear contracts, limiting downside risk in the second half of the year and positioning FactSet to grow wallet share with our expanded enterprise data and workflow productivity solutions. For the institutional buy side, we are making steady progress driving client engagement at the enterprise level with a focus on improving their total cost of ownership. Managed services and our expanded data solutions offering are contributing to a healthy second half pipeline and lowering the risk of large client cancellations. Our teams are intensely focused on capitalizing on FactSet’s early mover status on GenAI products, executing our go-to-market strategies across our new and differentiated solutions and mitigating the headwinds that pressured retention in the first half. We are well positioned to deliver on our mission to supercharge financial intelligence, and I am confident in our path forward. I’ll now turn it over to Helen to take you through our second quarter and first half 2025 performance in more detail.

Thank you, Phil, and hello to everyone on the call. Over the first 2 quarters of the fiscal year, we delivered solid financial and operating performance that sets us up for a strong second half, as we previously guided. We utilized our balance sheet to acquire central 7 capabilities for our buy-side, corporate and banking workflows, while continuing to return capital to our shareholders. As Phil mentioned, we have a promising pipeline across all firm types, which should boost ASV in the remainder of the fiscal year. As a result, we have updated our fiscal 2025 guidance by narrowing our organic ASV growth range to reflect our confidence in achieving the 5% midpoint. We are also reaffirming the ranges for adjusted operating margin and adjusted diluted EPS, with our productivity and expense management efforts expected to absorb the dilution from recent acquisitions. More detailed information to follow, but first, I will review our quarterly results. Organic ASV grew by $19.6 million in the quarter and 4.1% year-over-year. It is important to remember that our annual price increase partly depends on CPI, which has declined compared to last year, thus impacting the price increase for this fiscal year. We captured over $18 million in price increases, primarily in the Americas versus $25 million in the prior year, resulting in a nearly $7 million headwind to ASV growth this quarter. GAAP revenues increased 4.5% year-over-year to $571 million, while organic revenues, which exclude foreign exchange movements and impact from acquisitions or dispositions over the past 12 months, increased 4% to $568 million. For our geographic segments, organic revenues grew by 4% in the Americas, 3% in EMEA and 7% in Asia Pacific. GAAP operating expenses, which include onetime nonrecurring items, rose 5.8% yearover-year to $385 million. This increase resulted from higher acquisition-related profes- 8 sional fees and technology expenses, partly offset by lapping a onetime restructuring charge in the prior year. Due to these factors, GAAP operating margin decreased by approximately 80 basis points to 32.5% compared to last year’s second quarter. On an adjusted basis, operating expenses grew 6.3%, and operating margin decreased 100 basis points year-over-year to 37.3%. This was primarily driven by a 31% increase in technology related spend due to higher cloud and software expenses and greater amortization of internal use software, reflecting our ongoing investment in generative AI. Tech- nology costs accounted for over 10% of revenue in the quarter, up from 8% in the prior year. Employee expenses increased 3% year-over-year, primarily due to last year’s lower bonus accrual. Excluding this factor, our employee expenses would have been flat to down yearover-year. People expenses are our largest cost category, constituting 40% of revenue, which is down nearly 60 basis points versus the prior year. By streamlining processes and utilizing automation, we continuously find ways to enhance workforce efficiency and maintain cost discipline, while investing in strategic priorities. Third-party content costs rose 7% year-over-year, but remain less than 5% of revenues, similar to the prior year’s quarter. With increased data demand, we have actively managed this growth. For example, in the second quarter, we replaced several providers with our own self-collected data. We not only reduced licensing fees we pay third parties, but also now offer superior content with full redistribution rights that align seamlessly with FactSet’s proprietary identifiers. Real estate and related facilities expense decreased 6% year-over-year, staying under 3% of revenues, about 30 basis points lower than the prior year. Please refer to the appendix for today’s earnings presentation for a more detailed expense 9 walk from revenue to adjusted operating income. During the quarter, our cost of services as a percentage of revenue was higher year-overyear by approximately 50 basis points on a GAAP basis and more than 180 basis points on an adjusted basis, primarily due to higher technology expenses, partially offset by lower compensation expense. SG&A as a percentage of revenue was approximately 30 basis points higher year-overyear on a GAAP basis, primarily due to increased professional fees linked to acquisitions, offset by reduced bad debt expense. On an adjusted basis, SG&A was about 75 basis points lower after excluding onetime nonrecurring items. Our GAAP effective tax rate in the second quarter was 15.9%, a decrease when compared to the 16.4% tax rate in the second quarter of last year. This change was mainly due to lower U.S. tax on foreign earnings, partially offset by discrete items like reduced tax benefits from stock-based compensation. Our GAAP diluted EPS increased $0.11 or 3% to $3.76 this quarter versus $3.65 in the same period last year, primarily due to higher revenue, partially offset by an increase in acquisition-related professional fees and technology related expenses. Adjusted EPS increased by $0.06 or 1.4% to $4.28. EBITDA for the quarter grew 3.6% compared to the prior year period to $225 million, driven by higher net income. Free cash flow, which we define as cash generated from operations minus capital spending, was $150 million in the second quarter, up 23% over the same period last year. This result was driven by positive working capital shifts due to decreased income tax payables and improved accounts receivable collections. Turning to return of capital to shareholders. In the quarter, we repurchased nearly 137,000 shares for approximately $64 million at an average share price of $470.70. At fiscal quarter 10 end, we had a capacity of $187 million remaining under the $300 million share repurchase authorization approved by our Board of Directors last September. Today, we paid a quarterly dividend of $1.04 per share to holders of record as of February 28, 2025. We remain diligent with our buyback program and are committed to delivering long-term value to our shareholders. Combining dividends and share repurchases, we returned $392 million to our shareholders over the last 12 months. At the end of the second quarter, we paid off the remaining principal of the $1 billion term loan we took out for our CGS acquisition 3 years ago. We funded the recent LiquidityBook acquisition with new borrowings under our revolving credit facility, with $480 million drawn at quarter end. Our gross leverage ratio was 1.7x, consistent with our aim to maintain investment-grade ratings. Finally, we remain confident in our second half top line acceleration and are reaffirming the 5% midpoint of our prior guidance on organic ASV growth. We are also narrowing our ASV growth range by adjusting both the top and bottom ends of the range by $10 million to $100 million to $130 million, reflecting a growth rate range of approximately 4.4% to 5.8%. Our guidance for revenue is now a range of $2.305 billion to $2.325 billion, a $20 million increase from our previous guidance, the change factors in the expected impact for the rest of the year from our recent acquisitions of Irwin in November, LiquidityBook in February and LogoIntern in early March. Based on our solid performance and conscientious cost management in the first half, we are maintaining our guidance range for adjusted operating margin at 36% to 37% and adjusted diluted EPS at $16.80 to $17.40. This decision illustrates our ability to mitigate 11 the modest margin and EPS dilution from the aggregate impact of our recent acquisitions. On a GAAP basis, we expect operating margin in the range of 32% to 33% and EPS to be between $14.80 to $15.40 for the year. This decrease from prior guidance of 50 basis points and $0.30, respectively, reflect onetime nonrecurring expenses incurred in connection with these acquisitions. The guidance range for our effective tax rate remains unchanged between 17% to 18%. As Phil indicated, our teams are well equipped to deliver second half growth. We have clearer visibility into our pipeline strength based on our increased breadth of solutions and growing client interest in our GenAI solutions. We will continue to leverage our expense base and invest smartly, focusing on differentiated products and internal efficiencies. We anticipate higher expenses in the second half for planned GenAI and infrastructure projects alongside go-to-market initiatives to further boost pipeline volume and quality over the next 12 months. In conclusion, we are prioritizing ASV growth, operational focus and strategic capital allocation to enable FactSet to deliver sustainable long-term value for shareholders. And with that, we are now ready for your questions. Operator?

— Operator Instructions — Our first question comes from the line of Kelsey Zhu with Autonomous.

I want to start with the GenAI question. I think in this space, FactSet definitely has a first12 mover advantage. And I was wondering if you can provide more color around the traction you’ve been gaining with clients, especially when it comes to Pitch Creator and some of the other GenAI products that you’ve highlighted before. And how are you thinking about the pricing for these products? And how receptive are clients to add those as an additional service and not as part of the current subscription?

Thanks, Kelsey. It’s Phil. I’ll start, and I think Goran may have some extra words to say here. So yes, we’re pleased with the momentum. We’re well on our way to getting to the 30 to 50 bps that we spoke about in terms of monetizing these assets this year. And we’ve got 6 SKUs now that we’ve sold, and they’re out there and more coming. I would say the one SKU that sort of got the most momentum is Pitch Creator, which I spoke about in my opening comments. So very good reception from the banks. Obviously, sitting on top of the best banking product in the industry already. So this has been very exciting for us. And during the quarter, getting LogoIntern was a nice little add there to kind of to put into the product. So it’s just been released. We had tons of people trialing it, giving us feedback, but I do think we’re now on the cusp of being able to monetize that more seriously as we get into Q3 and Q4. I would say the second SKU that we’ve got the most traction on is the conversational API. So that’s really taking the ability to take what you can do in FactSet to search with AI capabilities and plugging it into your own environment. And we’re seeing receptivity for that across all firm types. So there are many firms, particularly the larger ones, that want to control the research environment and combine the best of something like FactSet with their own data that 13 sometimes they’re reluctant to release out to anyone and maybe some of the sources. So that’s going really well. And then we are beginning to monetize portfolio commentary. That has been a bit slower, although what we’ve done is we’ve packaged that together with a bunch of other things that are a bit more sort of usage based for the buy side. So we think that’s going to be a good approach. People love the product. I think they’re waiting for all the asset classes, in some cases, to be filled out. We’ve done equity risk but we have begun to sell it. So those are the 3 today, and we’re coming out with some other SKUs in Q3 and Q4. But I guess I’ll pause there. Goran, do you want to add?

Yes, just to add a couple of things. One is clients are reacting very well to the pricing structure that we have put in place, certainly are realizing productivity gains from the products that we have launched, in particular, Pitch Creator. We have almost 2,000 active trials and late stages of negotiation with a number of large – of larger clients. We are also helping clients drive their internal initiative via our conversational API as well as vectorized data packages that are ready for clients to implement in their own environment. So all of those solutions are resonating well and as is our pricing structure for those.

Our next question comes from the line of Shlomo Rosenbaum with Stifel.

So it sounds like your tone is definitely getting better as the year goes on. And what I’m 14 trying to understand is if you could parse out, is the environment getting better? Or do you feel like the company is doing better in an environment that’s not really changing that much with all the proactive items that you guys have been doing? So I guess, it sounds like the green shoots have been turning greener and, I guess, looking for the reasons for it, just to understand how you guys are progressing.

Yes, and we’ll tag team now. So I appreciate that you’ve recognized my tone is improving. Thanks, Shlomo. Yes, so I think what we feel really good about is, I think, we’ve derisked all of the big rocks for the year basically. So we now have visibility, and almost all of those and I think a lot of the things that we were battling for in terms of the bigger renewals and so on, I think of – the majority of those have fallen our way. So I think we feel good about sort of where we stand there. And then I think we’re seeing – we’re definitely seeing strength across every market. So I would say the Americas, Europe and Asia all look like they’re going to come in – they’re going to accelerate in the second half if the pipeline proves out. And then we’re seeing really good, I think, resurgence in asset management. So the environment is not getting any easier, that’s for sure. But I do think that we’re really beginning to see some real progress at selling at the enterprise level. On the buy side, I really want to talk to just kind of performance, reporting, the managed services, which I know you’ve asked about, that continues to do well. Our feeds business, which decelerated a bit over the last year or 2, is having a really strong comeback. So it’s not just the real-time and reference data feeds that we’ve released more recently, but our benchmark data feeds are doing really well, and some of our core 15 data is doing well also. And the smaller firm types are doing great, like hedge funds, private equity, corporates and wealth. Obviously, they’re growing at a high clip. And what I want to stress is we’re not relying on banking for the numbers that we talked about today and the narrowing of the range. So banking is tough. I don’t think that the environment is getting any more – there’s no more deals coming to market. I think we saw that in January and February. So we’re not relying on some data from the banking business to hit the numbers that we spoke about today. If that comes through, that will be great. That will be a tailwind for us. Goran, do you want to add anything?

Yes. Just in addition to everything Phil said about the buy side, the improvement, I think, in addition to our traditional strength in the middle office solutions, performance solutions, we’re also seeing improvement. And we’re quite pleased with activity in the MS space with our Portware solution as well as our front office solutions are gaining more and more traction. Lastly, on the buy side, I think the LiquidityBook really helps us complete the PLC life cycle. It makes us the go-to for consolidation for our – for hedge fund and smaller to midsize buy-side clients. So we’re quite excited about that. It creates a cross-sell opportunity for us of FactSet solutions and, as Helen said, by directional cross-sell opportunities. So we’re excited about the second half. So there is a lot in front of us, and we have the tools to do it. 16

Our next question comes from the line of Alex Kramm with UBS.

Just actually to follow up on the last question. Phil, you just mentioned you’re not relying on banking or the sell side. But obviously, there is a range. So maybe you can be a little bit more specific. Does that mean you don’t need banking to pick up to hit the low end? Or are you talking about the midpoint? Because, clearly, post election, there was a lot of enthusiasm of capital markets picking up and then hiring picking up. And clearly, that continues to get pushed out. So it should continue to be a swing factor. So just wanted to figure out where exactly does that swing factor lie in your guidance range.

Yes. So I think we’ve been fairly conservative in sort of what we’ve put in the pipeline in terms of banking hiring, so that’s in our numbers. I think the bright spot is definitely Pitch Creator. So that could actually help there. Goran, what do you want to say here?

So as Phil said, I think what we are baking in for our midpoint in terms of guidance is really slightly lower or even headcount compared to the last year. So there is no upside in those numbers that we are counting on. I think it would be a swing towards far end of the range.

Our next question comes from the line of Faiza Alwy with Deutsche Bank. 17

I had a couple of quick questions about ASV in the quarter. One, just for avoidance of doubt, I want to make sure, is the UBS Vault deal included in the ASV this quarter? And if you could help quantify that, that would be helpful. And then just secondly, you talked about the proactive retirement of a legacy solution. Maybe if you can help quantify that also and if there’s any sort of – are there any more legacy contracts like that or products that are expected to be retired, whether it’s this particular product or something else in the future?

Faiza, it’s Goran. So a couple of things. Absent the lower price increase that we implemented this quarter and a couple of strategic deals that we proactively canceled, we would have actually seen acceleration in the quarter. So there is no further retirement of the products that we are planning on for the rest of the year. So you’ve already seen the impact of that in Q2. Back to your question about the UBS deal. We signed the contract in the quarter. We are thrilled with it. It’s another strategic win for the fastest-growing segment of our portfolio. So we are quite pleased with it. I think it speaks to the strength of the product. We purely want this on a better product suite, really, and it enables us to further expand this relationship as we – as the years progress. Implementation of it will take place throughout the next 5 or 6 months. I think we will be starting that in the quarter 3 – in Q3. It’s a very strategic win for us. We love our position in that space, and it really position us to land and expand, as we expand additional services to all of these clients and the market share we have won over the last few years.

18 So yes, Faiza, just to add on. So yes, it is – it was booked in Q2. The users for UBS won’t come through until the next quarter or 2 as we roll it out. So the ASV that we captured at least in the initial stages at UBS is not part of the second half where we see a really robust pipeline. So that you can model that out.

Our next question comes from the line of Ashish Sabadra with RBC.

Just wanted to clarify the pricing in the quarter. So there was a reference to lower CPI weighing on pricing. I was just wondering if you could provide any color on pricing versus pricing realization for existing deal versus new and renewals. Any color on that front? And then similarly, on international, should we expect similar pressure on the international pricing in the third quarter as well?

Ashish, it’s Helen. I’ll take that one. So thank you for clarifying your thoughts there. Our standard contracts include annual price increases based on the higher of CPI or RPI or 3%. So our guidance range does reflect the lower inflation rate versus last year. So we expect the international price increases to align proportionately to that what we’ve seen in the Americas. We do adjust rate cards throughout the year. So in January, we activated on that. We actually raised global rate cards depending on the package. And we’ve seen higher price realization in certain firm types like corporates and hedge funds, also along with Street account. On new business, we are seeing price realization slightly lower year-over-year, but the volume is up, nearly 25%. So driving our total ASV from new business up nearly 10%. So 19 that reflects our positioning and taking more market share. So we do believe in the sort of land-and-expand type of strategy. So these impacts will come through our renewals and new business. That’s separate from the annual price increase. So the annual price increase is expected to be lower than last year, but we’re capturing additional ASV, either through higher pricing via rate cards or through higher quantity in new business.

Our next question comes from the line of Manav Patnaik with Barclays.

This is Brendan on for Manav. Just want to ask on the margin guide, given – I believe you guys have already talked about tech costs going up quite a bit this year, I think, 25%. And then obviously, the acquisitions coming in, some costs there. It seems like the people cost has to be held down, I guess, net of those acquisitions quite a bit to get to the midpoint. Normally, we kind of see those float up a little bit throughout the year. So I guess, what – you mentioned some efficiency programs, some initiatives. I guess, any color on what you guys are doing and how to kind of bridge to the midpoint?

Sure. I’ll take that one as well. Thanks for the question. So yes, we have seen in this quarter, this half, the way we’ve benefited from lower people costs, despite sort of higher year-on-year comparison because, last year, there was a change in that bonus accrual. Without this, though, the adjusted people expenses would have been lower. So we’re actively managing that. We’ve got mix that continues to float that way. We are managing our content and technology costs as well, including having vendor credits and cancellations of contracts, which I mentioned in my earlier remarks. And we’re also 20 seeing some benefit in the first half on FX, which is also helping us as well. So those are the things that are helping on the first half. We’ll expect to see a ramp-up in expenses in the second half as we prioritize strategic investments. The tech costs, like you said, are going to continue to ramp up in GenAI and the infrastructure. And our go-to-market, we’re actually going to put more money in to really build the pipeline in the next 12 months, and we’re not looking for FX benefit either. So that’s really how we’re coming through. And absolutely, the benefit here is that we’re able to absorb the dilution that comes from the acquisitions, which is about 40 to 50 basis points.

Our next question comes from the line of Owen Lau with Oppenheimer.

So I have a follow-up with the previous question about the data and feeds business and sales. So is it fair to say that the market uncertainty actually helps your data feed business? Because people want more data, people want more kind of information, that’s why that part of the business outperformed compared to your initial expectation. And then the M&A part, it looks like it cooled down a little bit, so that’s why you can still maintain the full year ASV guidance or narrow to – narrow the range.

Yes, maybe I’ll start. So I think FactSet always does very well through all types of cycles. So we’ll manage through whatever market we’re in. I’m not sure that, that’s the main reason for the data feed predicted growth or growth. I think a lot more of it has to do with us becoming increasingly an enterprise partner for our clients. 21 So we’re selling at the top of the house. Very often now, we’re constructing agreements where our clients can really take value from FactSet any way they want, whether it’s through the desktop, analytics and API, GenAI, some other provider. So that all feeds into that. And again, I think the fact that we’ve released some new products here is super exciting. So Goran, I don’t know if you want to talk a little bit more about the feeds, and then we’ll come back to your acquisition question.

Yes. So just to follow up on what Phil said. It is the quality of our content that’s really driving the improvement in our numbers in the data feed business. As well we have put some more sales focus on it, but I think there is a high demand for high-quality data by hedge funds, by other players in – by other players in the industry. But also, as you see all of these new tech start-ups that are really AI focused, I think our best-of-breed data is really the fuel that drives that entire – their entire development and potential growth. So we are focused on developing partnerships that we think will help us in the future. There is higher demand for our data in traditional business as well. With the development of our real-time data feeds, exchange data feeds as well as our security master offering, we are seeing more and more success. We do have a superior delivery and superior technological solutions for our clients that really improve the efficiency of their operation as they switch to our products. That’s evidenced by a number of wins in this quarter. We had about 4 or 5 that were very specific to some of the hardest to deliver exchange data feed sets in particular options. We are quite pleased with that progress, and we believe that the data feed business will 22 be a driver of our success for the rest of the year and going forward.

And maybe I can just add one other piece that we’re beginning to see growth in, which is our data management services piece, which is where we’re helping clients be able to concord not only our data, but also with the client data, and that’s quite difficult. And that is largely done through technology with some people services as well. So that is a very profitable service for us, and we expect to see that continue to grow going forward.

Let me – Owen, you asked about M&A, and I do think that the 2 or 3 things that we’ve done this fiscal year are really going to help. They’re smaller, but there’s so many great synergies and cross-sell opportunities for the team. So the LiquidityBook acquisition, which we just announced, when we acquired it, it was about $22 million of ASV. Irwin previously was about 9. And that LiquidityBook comes with around 170 clients. I would say more than half of those are hedge funds, but there’s also sort of a healthy group of clients. There’s a sell-side offering, and then there’s a great opportunity for us to serve kind of the middle of the bell curve and the buy side for those firms that need the entire portfolio life cycle from FactSet. So this is really the missing piece, and combining the OMS and the IBOR with FactSet EMS and some of our other portfolio managing capabilities really does open up a lot more market for us with a lot of our existing clients. So we couldn’t be more excited. It also comes with a fixed network. I think that was probably in the press release, but there’s some great synergies that we expect to capture 23 from that as well.

Our next question comes from the line of Andrew Nicholas with William Blair.

I wanted to double back to the commentary on wealth, in particular, ASV growth accelerated, some big wins there. And you talked about your strong share within the top 20. Can you help outline maybe what the land-and-expand strategy skews towards on a goforward basis within that market? Is it adding additional services to existing clients? Is it selling additional users within those contracts, new regions? I’m just trying to understand kind of where the growth opportunities are once you have signed up as many flagship clients as you have at this point.

It’s Goran. I will take that. So all of the above. I think we certainly see opportunity for regional expansion. We have done very well in Americas. We have made good progress in Europe, and we are focusing on kind of what we have done in U.S. and Canada, really copying that to what we are doing in Europe. Particularly, we’re focused on Switzerland and U.K. as the growth market for us in the near future, and then further expansion in Asia as well. Asia is growing quite nicely for us, and we see those geographic opportunities are significant. We do see opportunities for more users, especially in the home office and replacing some of the higher-end terminals. So that is another area of focus, and we have been actually quite successful there. But then the real extension of our strategy is layering on additional services to support 24 additional workflows of our clients. For example, we supported their business development with some of our lead generation tools that we have recently launched, and they are resonating quite well in the market. And then all of the other portfolio management workflows that our clients undertake are other areas that we are building for and expanding into. I hope that answers your question.

Our next question comes from the line of Craig Huber with Huber Research Partners, LLC.

We can hear you. I don’t know if that’s on our side or your side.

Can you hear me here?

Yes. We can now, yes, if you can speak up.

Okay. I’m not sure what happened there. Coming into this decade, I recall you guys announced a large 3-year internal investment program with a goal of accelerating your or- ganic revenue growth to the high single digits. And it successfully worked, as you recall. You had high single-digit growth for 2-plus years and stuff. And now, you’re – I think you talked about 31% increase in technology spend. Now are you anticipating a significant ramp-up in your organic revenue growth because of these internal investment spending here as you think out over the next couple of years?

25 Craig, it’s Helen. Let me try to answer that one. So when we talked about this at our Investor Day, as you know, in our 3-year plan, we plan to be in that mid- to high single digits. And our – the investments that we’re making in technology is to help support that. So there’s no specific additional large investment plan that we had done that you rightfully said back in 2019, 2020. This is part of our consistent investment back into the business in technology, in GenAI and funding that through rationalization of costs of our existing expense base.

Our next question comes from the line of George Tong with Goldman Sachs.

In light of the recent market downturn and volatility, can you talk a little bit more about changes you’re seeing with buy-side budgets and broader sales cycles, especially among large asset managers and asset owners?

Sure. George, it’s Phil. So yes, I don’t think we’re really seeing much of a change, at least not yet. So I think we’ve been working through a great period of uncertainty for a number of years. And the pressures that are on the buy side in terms of the shift from active to passive, obviously, are not new. So I just – I think that probably is the forcing function, honestly. So we’re addressing that with the enterprise solutions we have, the generative AI offerings. Yes, it could be choppy. But again, I think we’re very resilient through these markets, and we’ve built a very strong pipeline for the second half. A lot of that is the buy side, and we don’t anticipate that the current market environment could influence that pipeline that strongly. 26

Our next question comes from the line of Toni Kaplan with Morgan Stanley.

I wanted to go back to the price increase. You mentioned the CPI being – the lower CPI being a driver there. And so I guess, when I was doing the calculation, I was getting about 2% price increase versus roughly 3% last year. That obviously does impact the organic ASV growth and puts pressure on that. But you are, it sounds like, aiming for inflection here. And so is it – is your confidence coming from your strong pipeline in deals? It sounds like the international price increase, you’re expecting to be sort of similar to U.S., so that probably doesn’t help that much. So is it the pipeline? Or is there something that is really going to drive this inflection higher in the organic ASV, and maybe a competitive environment might be relevant here as well, if that’s a factor?

Toni, it’s Goran. So there’s a number of factors that I think we can point to is, point in time, our booked ASV is actually quite a bit higher year-over-year and – as compared to 2024 and 2023. So that gives us quite a bit of confidence. The pipeline is better, again, compared to the both years. And in terms of our selling environment, we see it more equivalent to 2023 than 2024. We have better visibility into the downside for us. And as Phil and Helen mentioned, we do not see any large – any material losses in the second half. So the year-over-year retention will improve in the second half, and we have a very solid 27 and diverse pipeline. So what we are quite happy with is that, that pipeline represents large 7-figure deals, but also those midsized deals that are easier to execute on. So all of that gives us confidence that we will – that we are at the inflection point for the organic growth for the rest of the year.

— Operator Instructions — Our next question comes from the line of Jeff Silber with BMO Capital Markets.

This is [ Ryan ] on for Jeff. You talked in the past about selling more into the tech budget. I was just wondering what type of sensitivity that is seen as the macro has unwound a bit compared to what you might see in the financial services and market data budgets? And then just more broadly, how are clients conversations and sales cycles been trending over the last few weeks?

Well, I’ll start. So yes, so I think selling into the tech budget is good. And I think everyone, including ourselves, is investing very heavily in technology as we sort of transition to a new paradigm, I think, in terms of how we’re all going to be working over the next few years. So I think we’ve got good data to support that – some of the deals that were going out there, and selling aren’t always into the market data budget, which is the one that not surprisingly has been under a bunch of pressure. And I’m not sure that we’ve seen much of a change in the last few weeks.

So the question was specific to the sell side, and we’re not seeing much of a change. I 28 think clients do appreciate we have best-of-breed products. And I think some of that – in general, I think a lot of the conversations are about our GenAI tools in that space, and the conversations have been good. I will just add, we are having that level of C-level technical discussions with some of the clients, and some of the larger deals in the second half will come from the technological budget rather than traditional market data. So that’s definitely shifting more and more as clients invest more and more in their GenAI efforts.

Our next question comes from the line of Jason Haas with Wells Fargo.

So there was a nice uptick in the client count growth year-over-year. But then on the flip side, it looks like the amount of users per client declined for the first time in a while. So I wasn’t sure what was causing that dynamic, if it was M&A or something maybe the type of clients that you’re bringing on. So if you could explain that, that would be helpful.

So I’ll take that. So I think we have seen a significant uptick in private equity in terms of the clients we’re bringing on. Those are usually a smaller number of users for us. So I think, both competitively and in terms of our pricing and packaging as well as the improvement in the private markets product, we are seeing more success there. So that is really what is impacting the number of users per client that you’re seeing this quarter.

I think it may also be a function of we put in all of the clients from the Irwin acquisition this quarter, so I think that was a few hundred clients, right? 29

Yes. And there’s a little bit of continued integration, so the users were not included. So that might be driving your number there as well.

Our next question comes from the line of Surinder Thind with Jefferies LLC.

It sounds like the confidence in the second half comes from the fact – or part of it is just not having as much renewal activity. And it sounds like you’ve gone through a really solid period where you’ve seen some really good strength in your renewals. Have you guys been more proactive about trying to get ahead of deals before renewal cycles? Or do we just happen to go through a renewal cycle where maybe there’s just a lot more elevated activity or renewals coming up in the past a little bit? Just trying to understand the forward cadence and how we should think about renewals and risk in the cycle at this point in time and if just clients maybe are trying to take advantage of pricing at this point and so you just – they themselves have been pushing for more renewals.

So I think what you’re seeing in the current cycle is really related to the contract expiration dates. Going forward, I think we’re being a lot more organized around renewals. We are – I think we spoke about this during our Investor Day and are creating – as we have a very large number of clients now, we’re creating playbooks for renewals. We’re being proactive. Wherever we can, we are trying to get ahead of those renewals and renew them prior to the expiration date. So we’re trying to make sure that we have better dispersion of renewals across the entire 30 year rather than them being bunched up. But – so all of that is something that we are paying lots of attention to in terms of our sales operations and how we’re addressing those. Helen?

Yes. And as Goran mentioned, to get to your point on pricing, for example, the dozen large banking renewals that we completed, all of them were either flat or up. And in aggregate, they were up. So it is not a case where we’re sacrificing price in terms of total ASV per contract to be able to renew it. But as Goran talked about at our Investor Day, retention is a huge focus of ours, and I think you’re seeing some of the benefits from that.

I’m not going to be able to stop myself here. So a lot of what we talked about today with these banking renewals, we have an amazing banking product. So we’ve always had the best product in the industry, and we’re leaning into the technology part of this with Pitch Creator. But we’ve also made a massive investment in data over the last 5 years-or-so. So we continue to build out the core FactSet fundamental data and the other data, but our investment in private company data has been significant. We’ve, I think, gone from 3 million or 4 million to almost 9-plus million private companies with much higher quality data. And we’re not relying now on some third-party sources. We’re doing a lot of this ourselves because we can do it better. And then the deep sector initiative that we started in ’19, that’s a long road, but that’s beginning to pay off. 31 So I just want to really stress for our banking clients, the combination of the technology, the integration with office, the GenAI work we’re doing as well as the data, it’s just such a powerful combination and, obviously, has a lot to do with the banks wanting to renew with FactSet. So I think that’s the last question. Thank you for joining us today. In closing, our solid financial performance and disciplined execution against our full year pipeline in the first 2 quarters of this year has positioned us well for the acceleration we anticipate in the second half. Thanks to all the great questions today, and we’ll see you next quarter. Operator, that ends today’s call.

This concludes today’s conference call. Thank you for your participation. You may now disconnect. Copyright © 2025, S&P Global Market Intelligence. All rights reserved 32