July 1, 2026

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FactSet Research Systems Inc. (NYSE: FDS) reported fiscal third-quarter 2026 results above expectations, supported by revenue growth, organic ASV gains, stronger adjusted EPS, expanding AI product adoption, and continued shareholder returns.
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FactSet is a financial data and analytics company that provides market data, research tools, portfolio analytics, enterprise data, workflow solutions, and AI-powered financial intelligence for investment professionals, wealth managers, corporations, and financial institutions.
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The company reported adjusted EPS of $4.53, above estimates of $4.44, representing a 2.0% earnings surprise. Revenue came in at $622.92 million, above estimates of $617.19 million, with revenue growth of 6.4%.

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Results Showed Revenue Growth and ASV Momentum

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Revenue increased 6.4% to $622.9 million from $585.5 million in the prior-year quarter.
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Organic revenue increased 7.0%, driven by strength among institutional buy-side and wealth management clients.
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Annual Subscription Value was $2.48 billion at the end of the quarter. Organic ASV increased 7.1% year-over-year to $2.49 billion.
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Adjusted diluted EPS increased 6.1% to $4.53 from $4.27 a year earlier.
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GAAP operating income declined 14.3% to $166.3 million, while adjusted operating income declined 1.7% to $211.8 million.
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GAAP operating margin fell to 26.7% from 33.2%, mainly due to higher employee compensation costs, including one-time charges and CEO compensation costs not incurred in the prior-year period.
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Adjusted operating margin was 34.0%, compared with 36.8% a year earlier, reflecting higher compensation and technology-related expenses.

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AI Adoption and Client Retention

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FactSet said more than 90% of its top 50 clients now use four or more AI products.

The company also highlighted new AI-related partnerships with Google Cloud, Finster AI, and TIFIN.AI, along with its MCP server, as part of its push to expand AI-ready financial workflow tools.
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Enterprise relationships also deepened during the quarter. FactSet said Q3 renewals extended in length by 30% on average, while annual ASV retention remained above 95%.

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Cash Flow, Buybacks, and Guidance

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FactSet generated $284.5 million in operating cash flow during the quarter, up 12.1% from the prior-year period.
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Free cash flow was $254.0 million, up 11.1%.
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The company returned $243.4 million to shareholders in the quarter, including $203.1 million in share repurchases and $40.3 million in dividends.
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FactSet also increased its quarterly dividend by $0.06 to $1.16 per share, marking its 27th consecutive year of dividend increases.
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FactSet reaffirmed its fiscal 2026 outlook, including organic ASV growth of $130 million to $160 million, GAAP revenue of $2.45 billion to $2.47 billion, and GAAP operating margin of 29.5% to 31.0%.

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The Bigger Picture

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FactSet’s quarter showed steady demand for financial data and workflow tools, with AI adoption becoming a larger part of the story.
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Revenue beat expectations, adjusted EPS came in ahead of estimates, organic ASV continued to grow, and client retention remained strong. The main pressure point was margin, as higher compensation and technology-related costs weighed on operating profitability.
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The key question is whether FactSet can keep converting AI adoption and enterprise renewals into stronger ASV growth while managing expense pressure.
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