FactSet Earned $2.20 per Share

FactSet‘s (FDS) earnings are out, and the company earned $2.20 per share for their fiscal fourth quarter. That was one penny below expectations.

Let’s dig into the numbers a little bit because they’re not so bad. For the quarter, organic revenue rose 5.3% to $347.1 million. Annual Subscription Value (ASV), which is a key stat for FDS, increased to $1.39 billion. Organic ASV was up 5.7%. FDS noted that the increase for Q4 was $38.6 million, which is the highest in the company’s history. Adjusted operating margin, another key stat, inched up to 31.3% compared with 31.2% last year.

“We are proud to have reached many milestones in fiscal 2018. We celebrated 40 years as a company with 38 years of consecutive revenue growth and 22 years of consecutive adjusted EPS growth. This quarter we had the highest reported quarterly ASV in our history. We enter fiscal 2019 with strong momentum and an expanding suite of innovative workflow solutions to drive our growth plans,” said Phil Snow, FactSet CEO.

For Q4, FactSet’s effective tax rate was 18.0% compared with 25.3% a year ago. That’s largely due to the tax cuts. Their client count now stands at 5,142. That’s an increase of 167 in the past three months. User count increased by 2,391 to 91,897. Annual client retention is greater than 95% of ASV. As a percentage of clients, annual retention is 91%. Net cash provided by operating activities was $106.3 million compared with $100.2 million a year ago. Quarterly free cash flow rose 2.1% to $91.2 million.

For the entire year, FactSet’s organic revenues rose 5.6% to $1.35 billion while ASV rose 5.7% to $1.39 billion. Earnings increased 16.7% to $8.53 per share. Previously, the company said their earnings range was $8.37 to $8.62 per share, so things seem to be working out according to plan.

Annual client count increased by 8.4% or 398 during the year, while users grew by 3.4% or 3,051 from the prior year. Free cash flow increased 24.1% to $352.1 million.

Now let’s look at some estimates for fiscal 2019 (ending next August). The company expects earnings to range between $9.45 and $9.65 per share. That’s not a bad increase over this year. Wall Street had been expecting $9.61 per share.

FactSet sees organic ASV rising by $75 million to $90 million in 2019, and they see operating margins between 31.5% and 32.5%.

Update: FDS dropped sharply today. At one point, it was down 6.2% on the day. The shares recovered some and closed down 1.90%.

Posted by on September 25th, 2018 at 8:10 am


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