FactSet’s fourth quarter drew a negative market reaction despite the company beating Wall Street’s revenue and non-GAAP profit expectations. Management highlighted that revenue gains were driven by strong adoption of AI-enabled products, expansion with key institutional clients, and traction in wealth management and banking segments. CEO Sanoke Viswanathan pointed to several large client wins, such as a mandate with a major investment manager for FactSet Vault and increased usage of AI-powered analytics, as evidence of the firm’s ability to gain share across core markets. However, operating margins declined compared to last year, a result management attributed to higher personnel and technology expenses as the company invests in product development and sales infrastructure.
Is now the time to buy FDS? Find out in our full research report (it’s free for active Edge members).
FactSet (FDS) Q4 CY2025 Highlights:
- Revenue: $607.6 million vs analyst estimates of $600 million (6.9% year-on-year growth, 1.3% beat)
- Adjusted EPS: $4.51 vs analyst estimates of $4.36 (3.5% beat)
- Adjusted EBITDA: $248.8 million vs analyst estimates of $234.3 million (41% margin, 6.2% beat)
- The company reconfirmed its revenue guidance for the full year of $2.44 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $17.25 at the midpoint
- Operating Margin: 31.6%, down from 33.6% in the same quarter last year
- Market Capitalization: $10.86 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From FactSet’s Q4 Earnings Call
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Kelsey Xu (Autonomous Research) pressed CEO Sanoke Viswanathan on FactSet’s ability to compete with larger data incumbents investing in AI; Viswanathan emphasized proprietary data and workflow integration as key differentiators.
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Faiza Alwy (Deutsche Bank) asked about the impact of commercial excellence initiatives; Viswanathan detailed new sales incentives leading to faster sales cycles and improved pipeline quality.
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Alex Kramm (UBS) inquired about potential client headcount reductions due to AI adoption; Viswanathan responded that FactSet is not seeing reductions, and banking segment headcount is actually increasing amid M&A activity.
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Manav Patnaik (Barclays Capital) questioned the cadence and nature of investments impacting margins; Viswanathan and CFO Helen Shan outlined investment pacing, with back-half weighting and a mix of recurring and one-time expenses.
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Andrew Nicholas (William Blair) sought clarity on AI’s contribution to ASV growth; Viswanathan explained AI is now embedded across products, driving adoption and acting as a tailwind for growth.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will monitor (1) the pace of adoption for FactSet’s AI-enabled analytics and workflow solutions, (2) progress in sales productivity and client expansion initiatives, and (3) the effects of technology and infrastructure investments on operating margins. Execution against these priorities, along with expansion of proprietary data offerings, will be key indicators of future performance.
FactSet currently trades at $289.83, down from $296.13 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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