FactSet (FDS) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 revenue grew 4.9% to $568.7 million, with organic ASV up 4.5% to $2,258.8 million, and adjusted diluted EPS rising 6.1% to $4.37, despite macro uncertainty and client cost pressures.

• Client base expanded to 8,249, with user count surpassing 218,000, driven by Wealth segment growth and strong retention rates above 95%.

• Operating margin declined to 33.6% due to higher amortization and professional fees, while adjusted operating margin remained flat at 37.6%.

• Free cash flow dropped 56.4% to $60.5 million, impacted by higher capex and sales tax dispute resolution.

• Strategic focus on AI and technology innovation, including the launch of the Intelligent Platform, GenAI-powered products, and new partnerships.

Financial highlights

• Net income increased 1.0% to $150.0 million; adjusted net income up 5.7% to $168.1 million.

• EBITDA rose 5.0% to $229.9 million; operating income up 1.2% to $191.3 million; adjusted operating income up 4.8% to $213.8 million.

• GAAP diluted EPS increased 1.3% to $3.89; adjusted diluted EPS up 6.1% to $4.37.

• Free cash flow was $60.5 million, down from $138.7 million year over year, due to higher working capital and capex.

• Capital expenditures increased 57.1% to $25.9 million, mainly for internal-use software.

Outlook and guidance

• Fiscal 2025 guidance reaffirmed: organic ASV growth of 4%-6%, adjusted operating margin of 36%-37%, and adjusted diluted EPS of $16.80–$17.40.

• Revenue expected between $2,285 million and $2,305 million; GAAP operating margin projected at 32.5%-33.5%.

• Margins expected to compress in H2 due to higher people and technology costs; H1 margin to be near midpoint of guidance.

• Sales pipeline is healthy, with promising demand for GenAI products and enterprise solutions.

• Annual effective tax rate expected between 17% and 18%.