FactSet Research Systems Inc.

Ladies and gentlemen, thank you for standing by and welcome to FACTS at Q2 2020 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded, and if you require any further assistance, please press star 0. I would now like to hand the conference over to Rima Haider, Vice President, Investor Relations. Thank you. Please go ahead.

Thank you, Chris. Good morning, everyone. Welcome to FACTSET's second quarter 2020 earnings call. Like many of you, we're also in various remote locations today. We may have some audio quality issues, and we really appreciate your patience in the event we have an audio interruption. Before we begin, I would like to point out that the slides we will reference during the course of this presentation can be accessed via the website on the investor relations section of our website at factset.com. The slides will be posted on our website at the conclusion of this call. A replay of today's call will be available via phone and on our website. After our prepared remarks, we will open the call to questions from investors. To be fair to everyone, please limit yourself to one question plus one follow-up. Before we begin, before we discuss our results, I encourage all listeners to review the notice on slide two, which explains the risks of forward-looking statements and the use of non-GAAP financial measures. Additionally, please refer to our forms 10-K and 10-Q for a discussion of risk factors that could cause actual results to differ materially from these forward-looking statements. Our slide presentation and discussions on this call will include certain non-GAAP financial measures, For such measures, reconciliation of the most directly comparable gap measures are in the appendix to the presentation and in our earnings release issued earlier today. Joining me today are Phil Snow, FactSet's Chief Executive Officer, and Helen Chan, FactSet's Chief Financial Officer. I'd now like to turn the discussion over to Phil Snow.

Thanks, Rima, and good morning to everyone wherever you are today. I'd like to take a moment just to address the unprecedented times we're experiencing. And as ever, our foremost priority remains the health and safety of our employees, their families, and our clients. We're doing everything we can to support our stakeholders around the world, and our thoughts are with each of you during this extremely challenging period. FactSet has implemented its business continuity plans, and our incident management team is in place to ensure we respond to changes in our environment quickly and effectively. We're also working closely with clients to support them as they implement their own contingency plans, helping them access FACTA remotely. On the service side, we've bulked up our support desk resources to manage increased volumes and have extended additional web IDs to clients in need of immediate remote access to financial data. Our open, flexible platform is well-suited for this environment, and the investments we've made to date in technology allow us to serve our clients better. Additionally, part of our three-year plan is accelerating this digital transformation, and the efficiencies and values that digital transformation bring are even more amplified in a world where both we and our clients are working remotely. To that end, in the context of immense change in our industry and the markets at large, we're pleased to deliver a good second quarter and fiscal half-year with promising growth across our businesses. Let's now talk about ASV and our geographic breakdown. Organic ASV plus professional services grew at 4.3%, an increase in our growth rate compared to the first quarter, resulting from a stronger second quarter year over year. The Americas region performed well, with a particularly strong quarter from our analytics business. The Americas also benefited from the impact of our annual price increase, as well as continued improvement in our client retention and new business initiatives. This performance was offset by softer results in the APAC region, due to slower expansion and higher cancellation rates, which we can partly attribute to delays in expected decision-making amidst the Hong Kong protests and the onset of the coronavirus pandemic. As conditions improve, we see many opportunities to execute, particularly in the areas of analytics and CTS, and expect to see this region return to higher growth. Our sales in Europe improved year over year due to a lower cancellation rate compared to the second quarter of fiscal 19. Additionally, analytics and research both performed well in the Europe region. And we continue to capitalize on opportunities with wealth and institutional asset managers. Of course, we're being cautious amid greater uncertainty in all our regions as a result of the evolving impact of the coronavirus pandemic. Quick overview of our second quarter results. Q2 growth was driven by an especially strong performance from analytics. This strength was reflected across multiple aspects of the business, including performance and reporting, trading solutions, and risk management, where we continue to see demand for our multi-asset class offering. The analytics pipeline looks healthy with strong demand and performance reporting and fixed income. Wealth also performed well across all regions. I'm proud of our team for expanding the wealth opportunities we have, especially compared to prior years. We're growing both our product offering and client base, laying the groundwork for a healthy pipeline. Research had a solid quarter relative to the first quarter, driven by stronger client retention and cross-selling to existing clients. Our enhanced deep sector data strategy is helping to pave the way for additional corporate clients. Research also benefited from our annual price increase. Within contents and technology solutions, we've got a solid pipeline as we head into the second half of the year, driven by strength in our core and premium data feeds offering. We're also excited about clients consuming data through APIs and continuing to make our proprietary data sets available on the cloud. An example is our partnership with the cloud data platform Snowflake, who helps users centralize, integrate, and analyze facts and content alongside other hosted data feeds in an open and interoperable way. As we've said before, we're investing from a position of strength to meet universal client demand for increased efficiency and cost savings, particularly through our efforts in content and technology. This investment is more important today than ever, with clients stressing the need for flexible access to critical data in the current environment. Our continued spend on technology, transition to the cloud, and increased pace of API launches have proven vital these last few weeks, and we believe they will make us ever more resilient in the long term. Our content strategy is also progressing well and is proving equally important to clients. Detailed industry-specific data, what we refer to as our deep sector strategy, is sorely needed, and we're seeing strong demand for the sectors we've launched as well as those we plan to launch in the coming months. We believe this demand will increase our appeal to a wider client base, especially when combined with our growing private markets and street account offerings. I'm very pleased at FACTS' overall expansion of coverage is receiving such a positive response from clients, helping us address their needs for comprehensive content solutions. Now, before I turn the call over to Helen, I want to highlight that our pipeline at the end of this quarter appeared to be the healthiest in years. As we noted previously, we've been projecting a stronger second half for our fiscal 2020. And as we talk to you today, it's difficult to measure the potential impact of the coronavirus pandemic on our clients, employees, industry, and broader markets. And Helen's going to walk you through the details of how this may impact our business in a few moments. But first, I want to stress that our robust subscription-based business model and our strategy together with our best-in-class products, many of which are critical to clients, position us well to manage through this period. Moreover, we've continued to diversify our product and client base over the years. Our plans to invest in content and technology are more important in today's environment than ever, and I want to reiterate our commitment to our three-year investment plan. We've proven resilient in times of volatility with a strong balance sheet and have gone on to deliver consistent long-term growth and value to our shareholders, which we expect we will continue in the future. While we believe we have good momentum going into the second half, We fully recognize the scale of the challenge that the entire industry faces. Through it all, our job is to do what we do best, help our clients weather such unprecedented change. Let me now turn the call over to Helen, who will discuss the specifics of our second quarter performance and the second half outlook.