FactSet Research Systems Inc.

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 withdraw your question, 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, Allie Van Ness, SVP IR. Please go ahead.

Thank you, and good morning, everyone. Welcome to FactSet's first fiscal quarter 2024 earnings call. Before we begin, the slides we referenced during this presentation can be found through the webcast on the investor relations section of our website at factset.com and are currently available on our website. 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. The 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 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 those forward-looking statements. Our slide presentation and discussions on this call will include certain non-GAAP financial measures. For such measures, reconciliations 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. We will also be joined by Helen Shan, Chief Revenue Officer, and Kristi Karnofsky, Chief Product Officer, for the Q&A portion of today's call. I will now turn the discussion over to Phil Snow.

Thank you, Ali, and good morning, everyone. Thanks for joining us today. In the first quarter, we grew organic ASV plus professional services by 7.1% year-over-year, delivering adjusted diluted EPS of $4.12 and an adjusted operating margin of 37.6%. This quarter, we closed two marquee deals that serve as proof points for our long-term strategy, even as macro conditions remain challenging. The first was a large wealth win at a major U.S. firm where we displaced a competitor. As a result of this deal, our user count increased by more than 17,000 seats. The second was a significant trading win at one of the largest U.S. asset managers, highlighting the strength of our open platform and portfolio lifecycle solutions. We ended this quarter with almost 8,000 clients and 24 net new logos. ASV retention remained greater than 95%, and client retention was 90%. Nevertheless, since our last earnings call in September, sales cycles have continued to lengthen, challenging our near-term forecast. Client budgets remain restricted due to lower deal-making volume layoffs and geopolitical uncertainty. So while the recent Federal Reserve commentary may be positive for the macro environments, we are revising our fiscal 2024 top-line guidance to reflect ASV growth of $110 to $150 million or 6% growth at the midpoint. We will also be implementing a cost reduction program in the second quarter of FY24. This program will support our investments in multi-year initiatives such as deep sector and real-time and allow us to accelerate our AI strategic investments. We expect to review variable costs and personnel-related costs with the goal of delivering adjusted operating margin within our original guidance range of 36.3% to 36.7%. Linda will say more about this later in the call. Turning now to our performance by region, growth this quarter was driven mainly by the large wealth win in the Americas, as well as solid demand for data solutions, offsetting weaker results in other parts of the business. America's ASV growth accelerated 88 basis points over the prior quarter to 7.9%, where outside of wealth, lower net hiring in banking and asset managers led to softer demand for workstations compared with a year ago. In EMEA, organic ASV growth decelerated to 5.4%, mainly due to a slowdown in our core buy-side markets in the UK and France. Our clients are experiencing reduced revenues and margin pressures, which led to delays in planned projects and slower sales cycles. Higher demand for data solutions partially offset these headwinds. In Asia-Pac, we delivered organic ASV growth of 8%, driven by solid gains with asset owners, partially upset by seasonal banking layoffs. From a firm-type perspective, wealth accelerated the most compared with last quarter due to the marquee deal I mentioned earlier. While pipeline visibility remains limited until the broader market recovers some momentum, ongoing C-suite conversations at several firms point to continued opportunity to displace wealth competitors. For dealmakers, we added new logos in private equity and corporates, but not at the rate we saw last year. Churn and lower seasonal hiring led to erosion in banking. On the institutional buy side, cost-cutting and headcount reductions at institutional asset managers caused a deceleration in workstation sales. For asset owners and hedge funds, elongated sales cycles further dampened results. Finally, new business and sales of data solutions drove growth with partners across regions. Overall, retention was flat in the first quarter with the positive effects of the fiscal 2023 price increase partially offset by higher cancels and erosion. Over FactSet's 45-year history, new product releases have driven our strong market position. These included Universal Screening in 1986, Portfolio Analytics in 1995, and FactSet Fundamentals in 2008. Last week, we added to this list with the beta release of FactSet Mercury, our new conversational AI interface. FactSet Mercury is a large language model-based knowledge agent. It uses natural language to request company information, provide supporting context, and also suggest next steps. Users can also ask for any chart using natural language, which is then prepared and delivered into Microsoft Office. FactSet Mercury is part of FactSet Explorer, a product preview program. We are working on Explorer with our leading banking clients and will soon offer it to institutional buy-side and wealth clients. Also, last quarter, we released AI-enhanced transcript highlights and news summaries, which received positive reviews from our users. These are just the first of many workflows that will use generative AI to improve our clients' efficiency. And along with these AI initiatives, work continues on deep sector and real-time, the wealth workstation, and the portfolio lifecycle. Each of these multi-year investments is driving growth, including last quarter's big wins in banking and asset management. Finally, the private credit market is growing fast and is almost the size of the leveraged loan market. It is well served by both our data solutions and our middle office analytics. For example, Cobalt can be used for private credit fund portfolio monitoring. We can also extend our fixed income capabilities to private credit risk assessment, benchmarking, and performance monitoring. In summary, I remain confident in our strategy and the health of our business, and I am optimistic about the opportunity ahead of us. Demand for our high-value products remains strong, demonstrated by our marquee wins this quarter, and increased interest from global firms consolidating to FactSet's open platform. I'll now turn it over to Linda to discuss our first quarter performance in more detail.