FactSet Research Systems Inc.

and thank you for standing by. Welcome to the Fact-Fact Fourth Quarter Fiscal 2023 Earnings Call. At this time, all participants are in 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 star 11 on your telephone. You will then hear an automated message advising your hand is raised. To answer all your questions, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kendra Brown, Senior Vice President, Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Welcome to FACSET's fourth fiscal quarter 2023 earnings call. Before we begin, the slides we will reference during this presentation can be accessed via the webcast on the Investor Relations section of our website at FACSET.com and are currently available on our website. A replay of today's call will also be available on our website and via phone. After I prepare a remark, we will open the call to questions from investors. This call is scheduled to last for one hour. To be fair to everyone, please limit yourself to one question. You may reenter the queue for additional follow-up questions, which we will take if time permits. 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 of 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. We will also be joined by Helen Shan, Chief Revenue Officer, for the Q&A portion of today's call. I will now turn the discussion over to Phil Snow.

Thank you, Kendra, and good morning, everyone. Thanks for joining us today. I'm pleased to share our fourth quarter and full year results. We ended fiscal 2023 with organic ASV plus professional services growth of 7%. and we delivered annual revenue of $2.1 billion and adjusted EPS of $14.55. In 2023, we grew our business on the strength of our enterprise offerings that drove large strategic wins across several workflows. We expanded our presence with existing clients while adding new logos and new users both on and off platforms. On the buy side, our industry-leading analytics and middle office solutions drove a significant performance deal, as asset managers and asset owners rely on FactSet to serve more of the portfolio lifecycle. Additionally, a large real-time deployment at an institutional asset manager underscored growing demand for cloud-native market data services. On the sell side, deep sector drove a key banking deal in the fourth quarter and continued to be a deciding factor in renewals, situating us well to increase market share and banking. Our strategy to deliver the leading open content and analytics platform continues to resonate and drive growth. But the pace of change is accelerating. While we have been innovating with machine learning and AI for a long time, the recent advances in generative AI have made it possible for us to step up our development. In the second half of 2023, we began moving significant resources to GenAI in anticipation of directing further investment to this area in fiscal 2024, putting it among our top initiatives. FactSet's content refinery provides us with a real competitive advantage. We have one of the most extensive suites of proprietary and third-party data in the industry, and we continue to invest in new categories of data to further power the workflows of our clients. On top of our content refinery, we are reimagining the FactSet user experience and actively exploring innovative solutions. For example, a conversational user interface that allows bankers to ask questions, discover and source information, and initiate tasks. Generative AI will also help us evolve our productivity suite, further deepening our competitive moat. Second, on the buy side, we are enhancing our portfolio manager bot to answer questions in conversation with asset managers. Thirdly, in the front office, we are harnessing generative AI to create code in FactSet's programmatic environment, reducing the need to know Python. This will make the power of that programmatic environment available to more users. For wealth managers, we are developing solutions to drive the next best action and to create portfolio summaries for proposal generation and client engagement. And we are establishing GenAI ready data bundles, allowing clients to augment their own large language models or LLMs with our connected auditable data. We also see significant opportunity for cost savings as a result of GenAI projects targeting our efficiency. In fiscal 2023, we began to pilot AI coding initiatives to improve the productivity of our technologists. We also started using our agent assist bot to help with client queries, and we are accelerating the collection of unstructured data across our content refinery with our recent acquisition of Audacity, giving us industry-leading expertise. As we enter fiscal 2024, we will build on our strategic investments in content, generative AI, and technology to drive growth and forge deeper client relationships. On the buy side, we intend to use our leading portfolio analytics and middle office solutions to grow our front office market share. We expect our new portfolio manager workstation and open programmatic environment to drive growth. We also see opportunities for FACSA to provide some targeted managed services based on our years of experience. On the sell side, we believe that deep sector and private markets offerings will drive workstation wins across banking, corporate, and private equity and venture capital clients. We see an opportunity to capture additional seats in under-penetrated areas with solutions for senior bankers and investor relations professionals, and we expect increased adoption of Cobalt, an anchor product for private equity and venture capital firms. In wealth, we anticipate capturing more market share as we focus on portfolio management, proposal generation, and intelligent prospecting to expand our addressable market. Our open and flexible platform will power business development and reporting solutions to connect advisors with clients seeking new sources of insight. Finally, we expect the demand for our off-platform solutions to continue to drive growth across phone types. Turning now to our fourth quarter results. Growth was driven by analytics and trading and CTS with improved expansion across most phone types. Asset owners continued to have momentum with new logos, transactional revenue from portware, and data feeds. While macro uncertainty continued to contribute to elongated sales cycles and slower decision-making across all phone types, our sales team successfully executed on several large wins and renewals as we ended the fiscal year. In looking across our regions, organic ASV growth in the Americas was 7%. Performance was driven by asset owners and CTS wins among partners and hedge funds. This was offset by weakness among asset and wealth management clients, where retention remained under pressure and expansion was lower. As expected, we also saw lower seasonal banking hiring, which was a common theme across all regions. In EMEA, our organic ASV growth was close to 8%. We saw growth in asset owners, driven by analytics middle office solutions. Wealth growth was also driven by wealth workstation and advisor dashboard wins. Gains were partially offset by software expansion in banking and asset management. Finally, Asia Pacific delivered organic ASV growth of 8%, driven by strong growth in Japan, where we saw an increase in large deals, analytic wins, and strength in channel partners. However, muted expansion in Australia and India from fewer asset management wins and lower seasonal hiring banking were headwinds to growth. Turning now to our workflow solutions. Analytics and trading organic ASV grew by 9%. Growth among asset owners accelerated the most, driven by middle office solutions, workstations, and feeds. CTS, which is now part of data solutions, grew fastest, with organic ASV growth slightly over 9%. Performance was driven by channel partners and asset management clients, although partially offset by lower professional services and decreased retention in banking. Our data management solutions, company data, and real-time offering were the major contributors to growth. CGS also contributed to performance with healthy expansion and new business. Among asset managers, workstation erosion was offset by analytics and CTS wins coupled with a higher price increase. Research and advisory grew organic ASV by 5%. In banking, workstation and deep sector wins were offset by increased erosion. Private equity and venture capital clients continued their track record of double-digit growth despite market headwinds that offset improved pricing realization. For corporates, reduced client budgets were an obstacle. Looking ahead, we are focused on diversifying our solutions for our corporate clients And finally, in wealth, we saw strong execution on several renewals in the face of client cost-cutting exercises. As discussed last quarter, we have reorganized our business by firm type to better align our operations with those of our clients. As of September 1st, analytics and trading has become our institutional buy-side organization, focusing on asset managers, asset owners, and hedge fund workflows. Also, as of September 1st, Research and advisory has become our deal makers and wealth organization, focusing on banking and sell side research, wealth management, corporate and private equity, and venture capital workflows. And we've combined our content and content and technology solutions groups to create one data solutions organization. Going forward, we will also be aligning our partnerships and QSIP global services organizations for the purposes of discussing ASV. as they are both key parts of our growth strategy. You can find ASV and ASV growth rates from the perspective of our realignments in the appendix of today's presentation. As we look ahead to fiscal 2024, we expect the year will be a tale of two halves. Unlike previous years where clients had higher budgets to spend before the calendar year end, we expect continued caution for the rest of 2023. Starting in the new calendar year, we expect an improved operating environment to drive a strong second half. As such, we are guiding to organic ASV growth of 7% for fiscal 2024. Linda will provide more detail on guidance shortly. Looking forward, we have started seeing green shoots of market recovery, particularly in new business. New logos in the fourth quarter showed an improvement over the reduced deal volume seen earlier in the fiscal year. We expect this trend to continue as the new business pipeline and potential ASV for wealth management, private equity, and venture capital clients and partners are all outpacing the pipeline at the same time last year. As client sentiment improves and markets stabilize, we believe we are in a great position. Our new structure, best-in-class solutions and content sets us apart as the partner of choice for our clients. I'll now turn it over to Linda to take you through the specifics of our fourth quarter and full-year performance.