FactSet AI Sales More Than Double, Propelling 7% ASV Growth as Stock Gains 3%

FactSet Reports Strong Q4 Performance Driven by AI Momentum

FactSet Research Systems delivered better-than-expected fiscal 2026 fourth-quarter results, with revenue climbing 6.3% year-over-year to $634.7 million, surpassing the $629.8 million consensus estimate1

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. Adjusted earnings reached $4.52 per share, beating the $4.33 estimate2

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. The financial data provider ended the year with organic annual subscription value of approximately $2.56 billion, up 7% and above the high end of its guidance1

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. FactSet stock gained nearly 3% Wednesday, reversing early losses as investors weighed the strong quarterly performance against softer fiscal 2027 guidance2

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AI as a Growth Driver Accelerates Client Adoption

AI-related products emerged as a significant growth catalyst for FactSet, with AI solutions ASV more than doubling from a year earlier1

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. AI-powered solutions accounted for more than 10% of new ASV added during the fourth quarter, demonstrating accelerating adoption across the client base1

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. The company launched its MCP server and FactSet AI for Banking, while announcing a strategic partnership with Google Cloud to support AI innovation and agentic workflows1

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. More than 650 clients were using contracts or trials to access FactSet data through the Model Context Protocol at fiscal year-end1

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. API call volume increased seven-fold quarter over quarter, while clients with AI products demonstrated ASV growth rates twice as fast as those without3

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Enterprise Contracts and Client Retention Strengthen Foundation

FactSet reported ASV growth across institutional buy-side, dealmakers, wealth and market infrastructure clients, with annual ASV retention remaining above 95%1

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. Most renewed ASV in the fourth quarter came through enterprise agreements or contracts lasting at least three years1

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. The average renewal contract length increased nearly 30%, while pricing remained broadly intact1

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. FactSet secured competitive wins across banking, asset management, quantitative investing and wealth management, with expanded strategic partnerships with J.P. Morgan and Barclays1

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. The company serves all five of Canada's largest banks in wealth management and maintains relationships with 95 of the top 100 global asset managers and 45 of the top 50 global investment banks3

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Margin Expansion and Productivity Initiatives Target Profitability

FactSet financial performance showed adjusted operating margin compression to 33% from 33.8%, attributed mainly to higher compensation tied to annual subscription value incentive plans and increased technology expenses2

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. Management positioned fiscal 2026 operating margins as a "floor" and expects profitability to improve in fiscal 2027, with adjusted operating margin expansion of 25 to 75 basis points1

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. The company made workforce reductions in September and is redirecting savings toward product development and growth initiatives1

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. AI-enabled projects across FactSet's product and engineering teams increased about 40% during the fourth quarter, while AI-assisted processes reduced processing times for private-markets data by more than 75%1

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. CEO Sanoke Viswanathan noted that frontier AI lab marketplaces could become a powerful marketing channel for FactSet data, providing access to users beyond traditional workstations and data feeds1

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Fiscal 2027 Outlook Signals Measured Growth Expectations

For fiscal 2027, FactSet expects revenue of $2.60 billion to $2.625 billion, representing growth of approximately 5% to 6%, with the midpoint below the $2.616 billion analyst estimate1

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. Organic ASV growth is forecast at 5% to 6.5%1

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. Adjusted earnings are projected at $19.25 to $19.65 per share, compared with the $19.68 consensus estimate2

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. The company expects high-single-digit earnings-per-share growth despite an estimated 2% headwind from higher taxes and incremental interest expense1

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. FactSet returned nearly $808 million to shareholders during fiscal 2026, including $644 million through share repurchases and $164 million in dividends, while free cash flow rose 14.6% year-over-year to $707.5 million1

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. The company achieved 47 consecutive years of revenue growth and 30 years of consecutive adjusted diluted EPS growth3

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