FactSet Research Systems Inc.

Good day, ladies and gentlemen. Thank you for standing by, and welcome to FACSET's third fiscal quarter 2022 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press the star, then the one key on your touch-tone telephone. Please be advised that today's conference is being recorded. If you recall operators, since at any time, you may press star, then zero. I would now like to hand the conference over to your speaker host, Kendra Brown, Head of Investor Relations.

Thank you and good morning, everyone. Welcome to FactSet's third fiscal quarter 2022 earnings call. Before we begin, I would like to point out that the slides we will reference during this presentation can be accessed via the webcast 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 discuss our results, I encourage all listeners to review the legal notice on slide two which explains the risk 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 to the most directly comparable GAAP measures are in the appendix to the presentation and in our earnings release issued earlier today. Joining me today are Phil Snow, Chief Executive Officer, and Linda Huber, Chief Financial Officer. I will now turn the discussion over to Phil Snow.

Thank you, Kendra, and hello, everyone. Thanks for joining us today. I'm pleased to share our strong third quarter results as we delivered another exceptional quarter with double-digit ASV growth. As we enter our fiscal fourth quarter of 2022, We are building on our momentum and are well positioned for the year end. Given this outlook, we are guiding to the high end of our previously discussed financial ranges, except for the tax rate, which will be at the low end of the range. Linda will speak more about this in a moment. Our organic ASV plus professional services growth accelerated to 10% in the third quarter, with strength across all workflow solutions and regions. Growth was primarily driven by analytics, with success globally from asset managers and asset owners, as well as large partnership wins and increased demand from wealth management firms. Our sales and client-facing teams continue to outperform, increasing the pace of our top-line progress. We saw acceleration in year-over-year growth from all client types, reflecting our success in building the leading open content and analytics platform. We once again saw the continuation of double-digit growth in banking, wealth, hedge funds, corporate clients, partners, and private equity and venture capital funds. Stronger retention and accelerated expansion drove demand for our content and digital solutions for existing clients, and for new business, growth was driven by our workstation with solid performance in the Americas and EMEA and continued small and medium wins across all regions. Adjusted EPS increased 38% from the prior year period, given our ASV growth and disciplined expense management. Our third quarter adjusted operating margin also expanded 500 basis points year-over-year to 36.6%. About two-thirds of this margin expansion came from the addition of QSIP, Global Services, or CGS, while the remaining one-third came from our core business. Our fourth quarter pipeline continues to look strong, providing a tailwind for the remainder of fiscal 2022. Our third quarter performance is the result of intense focus on the strategic initiatives we showcased at Invest Today, scaling our content refinery, delivering next-generation workflow solutions, and enhancing the client experience with an open platform and hyper-personalization. These key differentiators drive top-line growth and enable us to capture more of the addressable market. FactSet's open platform powers the portfolio lifecycle with market-leading solutions. Our portfolio analytics and trading products for the front and middle office drive broad-based growth on the buy side. Ongoing investment in the front office is paying dividends as the momentum and acceleration of our front office capabilities continues to grow. These multi-asset class portfolio analytics continue to see healthy client demand thanks to our differentiating buy side attribution and risk capabilities. Our content refinery is driving growth in content and technology solutions, or CTS, our off-platform business. As you may recall from Invest Today, this business delivers proprietary and 30-party content to clients in several ways, including data feeds, APIs, or increasingly the cloud. FactSet's suite of off-platform solutions offers our clients the flexibility to decide where and how they will consume their data. And our ability to concord or connect data is a real differentiator. As clients increasingly want to consume data programmatically, we're expanding our robust suite of data management and workflow solutions. Q-SIP Global Services, a CTS business component, is a great example of this expansion. I'm pleased with the performance of the CGS team. Its integration with FactSet has gone very well. Together, our teams are working to expand the business, focusing on private companies, ESG, digital assets, and issuance trends, These opportunities are promising, but several will take time, so it's still early days. Linda will discuss CGS's performance in more detail later in the call. In the current volatile market, our investments in content and workflow solutions put us in a resilient position. Our clients clearly recognize the value of our diverse product portfolio, and we are committed to increasing the pace of these investments for the next few years. We will continue to invest in our content refinery, building on our offerings in ESG, deep sector, real-time, private markets, and wealth. And as we discussed at Invest Today, our investments drive client demand and will be a driver of growth in the years to come. Looking across our regions, we saw broad-based acceleration across all our markets. The Americas continues to be the biggest contributor to growth, with organic ASV growth accelerating to 10.1%. This was driven by research and advisory, with the workstation driving new business, especially among corporates. Expansion was driven largely by wins at wealth clients. In EMEA, ASV growth accelerated to 8.3%. Workstation sales drove growth with asset managers and banks. We saw increased ASV capture in the region due to the international price increase, better price realization, and workstation expansion. New business also contributed to growth driven by increased workstation sales within wealth firms. Asia Pacific's performance remains strong with ASV growth at 14.3%, driven by demand from asset managers and asset owners. We saw higher retention and expansion among existing clients across many countries. Both CTS and analytics contributed to growth with higher expansion with asset owners and asset managers, respectively. In summary, I'm very pleased with our third quarter performance. We continue to invest in our business and platform, which is paying off, giving us good momentum as we head into the fourth quarter. Looking ahead, we are confident in our strategy and ability to navigate volatile markets. We remain committed to the medium-term outlook we shared at Invest Today of 8% to 9% ASV growth, 11% to 13% EPS growth, and 35% to 36% adjusted operating margin. FactSet has a proven history of growth in volatile markets. Our subscription-based model provides stability and fosters client retention. We're prepared for potential downturn scenarios with specific levers to reduce our spending if necessary, even as we continue to invest in our business, which Linda will discuss in more detail. Ultimately, our open platform, content refinery, and personalized workflow solutions will continue to set us apart. Underpinning all our efforts is our incredible team. Our culture is a key differentiator in this competitive environment. and we're committed to attracting, retaining, and developing top talent. Like many of you, our leadership team has increased our in-person interactions. It's been great to meet with clients again, have visitors in our offices, and engage with fact-setters face-to-face. We provide flexibility for our employees with our hybrid work model, which has been very well received, and I'm proud of the work our team does every day to deliver on our goals and constantly improve our products. I will now turn it over to Linda to take you through the specifics of our Q3 performance.