FactSet completed two significant acquisitions: LiquidityBook ($243.8 million) on February 7, 2025, adding cloud-native trading solutions, and Irwin ($120.2 million) on November 5, 2024, enhancing its investor relations platform. These acquisitions are expected to deepen client workflow integration and expand market offerings.

Organic Annual Subscription Value (ASV) totaled $2,276.2 million as of February 28, 2025, an increase of 4.1% over the prior year. This growth was primarily driven by higher sales to existing clients, price increases, and sales to new clients, indicating robust recurring revenue generation.

Total client count increased by 7.8% (625 clients) to 8,645, and user count grew by 6.1% (12,663 users) to 219,141 in the last 12 months. This expansion was mainly driven by an increase in corporate and wealth management clients, partially aided by the Irwin acquisition.

Americas operating income decreased 10.5% to $73.1 million for the three months ended February 28, 2025, primarily due to higher professional fees (acquisition-related costs), computer-related expenses (cloud-based hosting), and increased amortization of intangible assets, reflecting strategic investments.

EMEA operating income increased 12.3% to $70.6 million and Asia Pacific operating income increased 11.8% to $41.8 million for the three months ended February 28, 2025. This growth was primarily driven by strong revenue increases in these regions and, for EMEA, lower employee compensation costs.

Net employee headcount increased by 2.6% to 12,598, driven by the Irwin and LiquidityBook acquisitions and continued investment in centers of excellence (COEs) in India. This growth aligns with the strategy to expand data offerings and deepen client workflow integration.

Management identified certain control deficiencies related to the design and operation of IT general controls supporting revenues, accounts receivable, and deferred revenues processes, which aggregate to a material weakness. This indicates a risk to the accuracy and timeliness of financial reporting, though remediation efforts are underway.

A sensitivity analysis indicated that a hypothetical 10% devaluation of the U.S. dollar could decrease operating income by an estimated $22 million for the six months ended February 28, 2025. While hedging strategies are in place, significant currency fluctuations remain a risk to financial performance.

FactSet has $480.0 million in outstanding floating rate debt under its 2022 Revolving Facility. A hypothetical 25 basis point change in the one-month SOFR would result in an approximate $1 million change to annual interest expense, indicating exposure to interest rate fluctuations despite hedging efforts.

FactSet's client count increased by 7.8% and user count by 6.1% year-over-year, indicating successful market penetration and client acquisition. This growth, particularly in wealth management and corporate clients (including from acquisitions), strengthens its competitive standing.

The acquisitions of LiquidityBook and Irwin expand FactSet's offerings in cloud-native trading solutions, order management, and investor relations platforms. These additions enhance FactSet's ability to serve integrated workflow needs across the investment lifecycle, differentiating it from competitors.

FactSet is actively pursuing an AI roadmap, launching new AI-powered solutions for portfolio performance commentary, earnings call transcript analysis, and natural language queries. This pragmatic and flexible approach to AI is highlighted as a key strategy to differentiate FactSet and drive growth.

The operating margin decreased to 32.5% for the three months ended February 28, 2025, from 33.3% in the prior year. This was primarily driven by higher professional fees (up 140 basis points as a percentage of revenues) and computer-related expenses (up 120 basis points).

Cost of services increased 5.7% to $269.6 million for the three months ended February 28, 2025. This was mainly due to higher computer-related expenses (cloud-based hosting, licensed software) and increased amortization of intangible assets (internal-use software development), partially offset by lower employee compensation costs.

Bad debt expense decreased by 50 basis points as a percentage of revenues, primarily due to improved client collections. This positive operational aspect partially mitigated the overall increase in SG&A expenses, which rose 6.2% due to higher professional fees.

FactSet is actively implementing its 'FactSet AI Blueprint' and has launched new AI-powered solutions for generating portfolio performance commentary, analyzing earnings call transcripts, and enabling natural language queries. This demonstrates a strong commitment to leveraging AI for client workflow enhancement.

The acquisition of LiquidityBook brings cloud-native trading solutions and a proprietary FIX network, enabling streamlined connectivity to over 200 brokers and 1,600 destinations. This significantly enhances FactSet's technological infrastructure and market reach.

Capital expenditures increased by 29.2% to $49.6 million for the six months ended February 28, 2025, primarily due to higher capitalized costs related to the development of internal-use software. This indicates ongoing investment in proprietary technology development.

FactSet repurchased 136,714 shares for $64.4 million during the three months ended February 28, 2025, and $113.1 million for the six months. The Board authorized up to $300 million for fiscal 2025, with $186.9 million remaining, signaling ongoing commitment to returning value to shareholders.

The company paid dividends of $39.5 million in the second quarter and $78.8 million for the six months ended February 28, 2025. The quarterly dividend per share increased to $1.04 from $0.98, demonstrating management's confidence in future earnings and cash flow generation.

FactSet fully repaid the 2022 Term Facility ($125.0 million) and borrowed a net of $230.0 million under the 2022 Revolving Facility, with outstanding borrowings of $480.0 million. Total debt increased to $1,472.162 million from $1,365.973 million (August 31, 2024), indicating active management of its capital structure.

FactSet is monitoring the SEC's final rule on climate-related disclosures (adopted March 2024), which is currently stayed pending judicial review. The company is assessing the potential impact of this rule on its disclosures, indicating an awareness of evolving environmental reporting standards.

FactSet determined there was no material impact to its provision for income taxes for the six months ended February 28, 2025, from the OECD's Base Erosion and Profit Shifting Pillar Two rules, which introduce a global minimum corporate tax of 15%. This suggests minimal immediate financial impact from this governance-related tax initiative.

Beyond the discussion of the SEC's climate-related disclosure rule and the Pillar Two tax rules, the provided 10-Q filing does not contain specific details on new or escalating environmental commitments, social responsibility initiatives, or governance practices beyond standard financial reporting compliance.

FactSet's revenue growth across all geographic segments (Americas, EMEA, Asia Pacific) and its continued expansion of client and user counts suggest resilience in the global financial services market. The company serves a broad range of professionals, from institutional asset managers to wealth managers and private equity firms.

FactSet is actively monitoring the SEC's climate-related disclosure rule and the FASB's Pillar Two tax rules, both of which could impact the regulatory landscape. While no material financial impact from Pillar Two was noted, the ongoing assessment reflects adaptation to a dynamic regulatory environment.

As a global company, FactSet is exposed to foreign currency exchange rate risk, which can impact financial condition and results of operations. While hedging strategies are in place, a hypothetical 10% devaluation of the U.S. dollar could still decrease operating income by an estimated $22 million, highlighting ongoing market volatility.