FactSet Research Systems (NYSE:FDS) reported what management called a “solid start” to fiscal 2026, citing accelerating organic annual subscription value (ASV) growth, healthy operating margins, and continued demand across data, analytics, and workflow solutions. On the company’s first quarter earnings call, executives also emphasized expanding AI-related adoption and announced a major increase to its share repurchase authorization.
Quarterly results and client momentum
Chief Executive Officer Sanoke Viswanathan said FactSet began the year with “strong ASP growth and healthy operating margins” driven by broad solution adoption and key customer wins. The company reported ASV growth of 5.9% to $2.4 billion, an adjusted operating margin of 36.2%, and adjusted diluted EPS of $4.51, up 3% year over year.
Where growth came from: regions and firm types
Shan detailed performance by geography and customer segment, pointing to broad-based demand and faster growth in Asia-Pacific.
- Americas: 6% organic ASV growth, driven by asset managers and wealth. Shan said demand included portfolio lifecycle solutions and “AI-ready data.”
- EMEA: 4% organic ASV growth, with expansion in performance solutions and improved retention offsetting softness among asset owners.
- Asia-Pacific: 8% organic ASV growth, up from 7% last quarter, led by middle office solutions and AI-ready data as firms modernize technology stacks.
By firm type, FactSet reported 4% organic ASV growth in the institutional buy-side, including multiple “seven-figure wins” among asset managers and accelerating demand from hedge funds for data and front-office offerings. Asset owners were described as softer due to lapping a large outsourced CIO win in the prior-year quarter.
Wealth delivered 10% organic ASV growth, which Shan said included displacing incumbents with “six-figure wins” across workstations, pricing, reference data, and analytics. She noted off-platform solutions such as data feeds, APIs, and analytics integrations made up an increasing portion of expansion, consistent with a land-and-expand approach.
Dealmakers posted 6% organic ASV growth, with banking contributing the majority. Shan cited client expansion in data feeds, APIs, and off-platform solutions, along with “higher net seasonal hiring” tied to a strong global M&A market. FactSet also renamed its “partnerships and CGS” category to market infrastructure, which grew 7% organically amid “robust data demand” and strong issuance activity.
Client metrics were also highlighted. Management said client count grew to over 9,000, up 9% year over year, retention was 91% for clients and above 95% for ASV, and the user base approached 240,000, led by wealth and asset manager growth.
Costs, investment priorities, and margin outlook
Revenue grew 6.9% year over year to $608 million, or 6% organically excluding foreign exchange and M&A. Adjusted operating expenses increased 9% year over year, which Shan attributed primarily to people-related costs and technology expense.
People-related expense rose $15 million, or 7%, reflecting annual merit increases and the lapping effect of employees hired or acquired after the year-ago quarter, including through Irwin and LiquidityBook. Technology expense increased $13 million, or 23%, driven by higher amortization of internal-use software and cloud costs. Third-party content costs rose $4 million to support new research workflow datasets, while real estate expense increased $2 million tied to lease renewals and return-to-office expense.
Shan said FactSet’s investment framework remains weighted roughly two-thirds toward growth and one-third toward internal infrastructure. Growth investments include expanding real-time feeds, pricing and reference data, and deep sector content, as well as strengthening workflows such as managed services and modern EMS/OMS solutions. Structural investments include upgraded go-to-market tools, cybersecurity, AI productivity tools, and performance-based incentives.
Asked about the cadence of investment impact, Shan said strategic investments are “back half-weighted” and include incremental headcount, software infrastructure, and professional services that are “more largely one-time in nature.” She also said second quarter operating margins are expected to reflect a step-up in investment as resources are added, while remaining consistent with the full-year margin target.
AI positioning, distribution strategy, and shareholder returns
During Q&A, management repeatedly framed AI as an accelerant rather than a disruptor to FactSet’s business model. Viswanathan said the company is seeing clients, after experimenting with various AI tools, asking FactSet to act as a “consolidator” of solutions, and he referenced multiple five-year and seven-year contract renewals where AI is a key component. He also said the company is not currently seeing headcount reductions at clients tied to AI adoption, including in banking, where he said hiring has increased alongside a recovery in M&A activity.
On AI product impact, management said it no longer breaks AI out as a separate line item because AI is being deployed broadly across products. Viswanathan cited sequential adoption growth of more than 45% across AI products launched earlier in the year, and said FactSet views AI as a “tailwind” for the overall business.
Executives also addressed questions about whether rising demand for “AI-ready data” delivered via APIs and feeds could cannibalize workstation subscriptions. Viswanathan described the workstation as a distribution channel alongside feeds and APIs and said FactSet expects “more of both,” arguing that workstation workflows remain deeply embedded and that multiple consumption channels can complement each other. He added that management sees strong margin opportunity in both workstation and data-feed delivery models.
FactSet also emphasized productivity initiatives, including a Text-to-Formula Agent that management said resolves routine formula support requests in an average of six seconds and now handles about 35% of daily formula support questions. Viswanathan also said data operations teams can ingest third-party data at 10 times the speed using new approaches, expanding coverage without adding headcount.
On capital allocation, the company announced it increased its share repurchase authorization from $400 million to $1 billion. Shan said FactSet purchased approximately 478,000 shares in the quarter, leaving $860 million of remaining capacity. The company also paid a quarterly dividend of $1.10 per share. Over the last 12 months, Shan said FactSet returned $554 million to shareholders through dividends and buybacks.
Finally, management reaffirmed previously issued fiscal 2026 guidance across GAAP and adjusted metrics. Shan said the pipeline remains healthy and that the company is maintaining a “prudent and conservative approach” to guidance given that much of the year is still ahead.
About FactSet Research Systems (NYSE:FDS)
FactSet Research Systems Inc operates as a global provider of integrated financial data and analytics to the investment community. Founded in 1978 and headquartered in Norwalk, Connecticut, the company offers a unified platform that aggregates content from thousands of sources, delivering real-time and historical market data, company fundamentals, estimates, fixed-income information and proprietary analytics to portfolio managers, research analysts, investment bankers and risk officers.
The company’s core products include the FactSet Workstation, an application offering customizable screening, charting, portfolio analysis and news; APIs and data feeds for seamless integration into proprietary systems; and cloud-based solutions for thematic research and quantitative strategies.
