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FactSet (FDS) is posting solid gains despite reporting 3Q25 EPS of $4.27, missing consensus estimates. The market’s enthusiasm is driven by robust organic Annual Subscription Value (ASV) growth of $22.6 mln, with CFO Helen Shan noting in the earnings press release that “third quarter organic ASV growth is accelerating as we meet client demands and execute diligently.” Additionally, the company reaffirmed its FY25 guidance, signaling confidence in sustained demand. These positives, coupled with 166 net new client additions, are overshadowing the EPS miss, as investors focus on FDS’s recurring revenue strength and client expansion.

• Organic ASV, which increased from $19.6 mln in Q2, is a critical metric for FDS, as it reflects the annualized value of recurring subscription revenues, excluding one-time or project-based services. This 4.5% yr/yr growth to $2.297 bln underscores FDS’s successful pivot toward managed services and enterprise solutions, which offer higher predictability and stability compared to volatile project-based revenues.
• As financial institutions increasingly demand integrated data and analytics platforms, FDS’s focus on recurring revenue streams -- driven by its workstation solutions, portfolio analytics, and AI-enhanced tools -- positions it to capture long-term client commitments. The acceleration in ASV growth, particularly in wealth management and corporate segments, reflects FDS’s ability to deepen client relationships and expand its footprint in high-margin, subscription-based offerings.
• FDS’s client count grew by 166 net new clients in Q3, reaching 8,811 as of May 31, 2025, with user count surpassing 220,000, driven by strong demand from wealth managers and corporates. Key drivers include the integration of clients from the Irwin acquisition, which bolstered FDS’s corporate client base, and growing adoption of its wealth management solutions, such as portfolio analytics and ESG reporting tools. This client growth fueled organic revenue growth of 4.4% yr/yr to $577.2 mln, as new clients contributed to higher subscription volumes and cross-selling opportunities.
• Despite the positive topline metrics, FDS’s Q3 adjusted EPS of $4.27 declined 2.3% yr/yr, missing estimates, while the adjusted operating margin contracted by 270 bps to 36.8%, reflecting higher investments in technology and personnel costs. Incoming CEO Sanoke Viswanathan, announced on June 3. faces the challenge of reversing this margin pressure to drive profitability. Potential avenues include optimizing operating expenses through automation, particularly in data processing and client support, and leveraging economies of scale from the growing client base to improve margins.

FDS’s reaffirmed FY25 guidance and accelerating organic ASV growth signal a robust outlook, overshadowing the Q3 EPS miss and driving investor confidence. The company’s client expansion and focus on recurring revenue position it well to capitalize on demand for data and analytics, with incoming CEO Viswanathan poised to enhance profitability.