FactSet Research Systems Inc.

Good day, and thank you for standing by. Welcome to the Fact Set first quarter earnings call. At this time, all participants are in 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 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, Kevin Toomey, head of investor relations. Please go ahead.

Thank you and good morning, everyone. Welcome to FactSet's first quarter fiscal 2026 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. A replay of today's call will be available on our website. After our prepared remarks, we will open the call to questions. The call is scheduled to last for one hour. To be fair to everyone, please limit yourself to one question. You may re-enter 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. Discussions on this call may contain forward-looking statements. Such statements are subject to risks and uncertainties that may cause actual results to differ materially from results anticipated in these forward-looking statements. Additional information concerning these risks and uncertainties can be found in our forms 10-K and 10-Q. 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, both of which can be found on our website at investor.factset.com. During this call, unless otherwise noted, relative performance metrics reflect changes as compared to the respective fiscal 2025 period. Joining me today are Sanok Vishwanathan, Chief Executive Officer, Helen Shan, Chief Financial Officer, and Goran Skoko, Chief Revenue Officer. I will now turn the discussion over to Sanok.

Thank you, Kevin, and good morning, everyone. I'm very pleased with how we've started our fiscal year. We are reporting strong ASP growth, and healthy operating margins coming from broad adoption of our solutions and some key customer wins. ASV grew 5.9% to $2.4 billion. Adjusted operating margin was 36.2% and adjusted diluted EPS is at $4.51, up 3% year on year. Thank you to all our fact setters for your focus and commitment to delivering for our clients. We're not just growing, We are winning in the places that matter. Across firm types and in the areas that we've prioritized, clients are choosing FactSet over alternatives because of the strength of our platform. I will share just three examples. We secured a significant mandate with one of the largest warehouse breakaway teams who made FactSet a requirement in their transition to an RIA consolidator. This matters because these breakaways preserve enterprise revenue at the originating firm while adding ASP at the consolidator. At a global top 10 bank, we displaced an incumbent for pricing and reference data feeds, supporting the global reference data hub and multiple use cases in Asia Pacific. We secured a major win with one of the world's largest investment managers who chose FactSet Vault as their analytics book of record and our managed services for performance to unify holdings across all their subsidiaries into a single database. and deliver flexible reporting across their institutional and retail businesses. These wins illustrate the resilience and scalability of our client franchise, driving ASV growth and expanding our reach into adjacent markets, opening new sources of growth. I'm pleased to announce that we are increasing our share repurchase authorization from $400 million to $1 billion. This decision reflects our conviction in the strength of our balance sheet and in the intrinsic value of our shares. delivering shareholder returns while maintaining the flexibility to invest for long term growth. Over the past three months, I've focused on the fundamentals of our business, including our people, clients and products, assessing what we do, where we lead and where we need to improve. I've spent time with employees in all our major global offices, reviewing our operations, product development and execution, and met with over 80 institutional clients across North America, Europe and Asia. I've engaged with technology and content partners on ways to develop new solutions for our clients. And I've spoken with shareholders about their priorities and how we can better articulate our strategy and milestones. What I've heard from everyone reaffirms the core strengths that set FactSet apart and why we believe we will continue to be indispensable to clients. First, our connected data. Clients rely on FactSet for high quality trusted content curated over decades and enriched by deep domain expertise. Just as important, our ability to standardize and reconcile third party sources with speed and precision is market leading, thanks to advanced integration, concordance, and entity resolution capabilities. And clients access our data where and how they need, through APIs, secure low latency feeds, cloud connectors, and MCP servers, without sacrificing performance, security, or reliability. Second, embedded workflows. Faxit isn't a portal. We are built into the data pipes and decision engines that run global finance. Every day, clients on average make 8.4 billion Faxit query language requests for spreadsheet use, evidence of deep reliance on our platform for valuation, screening, and other decision making. Our portfolio analytics power mission-critical workflows, performance, attribution, risk, and reporting, where accuracy, explainability, and governance matter most. We are interested to view the activity, exposure, and risk across client books and deliver analytics that inform decisions throughout the investment lifecycle. Third, best-in-class client service. We combine technology with human expertise. Our consultants are trained on the workflows of asset managers, banks, and wealth advisors. They operate as partners to our clients, designing implementations, guiding transitions, and enabling user adoption and personalization. In a recent meeting I had with the head of wealth management at a top 10 global bank, the first thing he said to me was how much he appreciated his Faxit consultant and mentioned her by first name and said she had just been in his office before I showed up. Fourth, broad and deep distribution. We have reach across the industry. 100,000 wealth advisors, roughly three quarters of the top global investment banks, and 95 of the top 100 global asset managers rely on FactSet. The average age of our client relationships is more than 16 years. So it is clear that this trust runs deep. These strengths reinforce each other in a flywheel to make FactSet essential today. and increasingly so as AI and agentic capabilities become more prevalent in daily work. Success in enterprise AI comes from trusted high-quality data, secure integration with models and workflows, and detailed knowledge of how financial institutions operate. This is where FactSet stands out. Over 90% of our ASV is composed of proprietary client-facing solutions and proprietary data and tools enriched by subject matter experts. Examples include Portfolio Analytics, FactSet Performance Solutions, QSIP, Revere, and FactSet Fundamentals. We are one of the few companies trusted to integrate external and private data at scale without compromising safety, supported by strict data ownership entitlements and security compliance. While other providers offer conversational interfaces or point solutions, they lack the governed data foundations and enterprise integration that regulated financial workflows require. And because Faxset is so deeply integrated across buy-side, wealth, and banking clients, we are uniquely positioned to navigate their technology architecture, consolidate fragmented data environments, and tailor AI and agentic solutions to their needs. As the flywheel compounds, it directly translates into faster product innovation, deeper user personalization, and measurably better client outcomes. Let me give you a sense of the volume running through this flywheel today. Just in the past 30 days, our clients have actively used a million custom models and screens to run data queries, pulling hundreds of billions of data points. We believe AI will accelerate this flywheel. We are still in the early stages of enterprise AI adoption, but to give you an example across the AI products we launched earlier this year, we've seen broad-based user adoption with sequential growth of more than 45%. Put simply, AI doesn't replace what makes Faxit essential, it amplifies it. While I'm pleased with our first quarter results and the positive feedback from our clients, there's much work to be done to unlock the tremendous value within our business. This starts with decisive action to accelerate growth and operating leverage. I have three priorities, driving commercial excellence, delivering productivity improvements across the business, and solidifying our long-term strategy to ensure facts at disposition for sustainable growth. First, commercial excellence. With our strong products and trusted client relationships, we are sharpening sales execution to reinvigorate top-line growth. We are driving new business development, using analytics to prioritize new prospects, scaling marketing to increase awareness and recall of flagship solutions, putting AI tools to work for personalized outreach and follow-up, and managing the pipeline with rigor. We are simplifying packaging and pricing, organizing clients by persona and usage, refreshing bundles with data-driven insight, fully integrating recent acquisitions, pricing to value, and tightening controls to reduce leakage. We are focusing on improving retention and expansion within our clients, aligning customer success metrics and incentives to drive adoption and upsell, using analytics to flag and reduce churn, and elevating our strategic dialogue at top clients. And we're modernizing sales operations, raising performance expectations, applying best practices to sales incentives, reducing friction with advanced forecasting and analytical tools, and instituting robust productivity tracking. We are executing with urgency while laying the groundwork for world-class commercial performance. For example, we've changed sales incentives to better align them with the outcomes we want. new business, cross-selling, and upselling. This has already led to faster sales motions and a richer pipeline. My second priority is driving productivity gains. I've initiated a disciplined review of our technology processes and client service model to identify and act on opportunities to reduce complexity, apply modern tools, and streamline operations. We've initiated a program of transforming and consolidating our legacy technology applications onto a centrally managed modern platform. This is expected to significantly reduce complexity for our developers and deliver efficiencies. One tool having immediate impact is our new text-to-formula agent, which reduces routine support traffic, resolving requests in an average of six seconds versus minutes for a human interaction. On average, approximately 35% of formula support questions daily are now handled by this agent. By offloading these repetitive requests, our service teams are able to focus on higher impact client work. Each interaction also adds to a reinforcement learning loop that continuously improves product performance. Leveraging new data modeling, visualization, and programming approaches, our data operations team is now able to ingest third-party data at 10 times the speed, vastly expanding our content coverage without adding headcount. These examples illustrate the scope of opportunity there is to drive productivity and efficiency across the organization. My third priority is solidifying our long-term strategy to ensure FactSet is positioned for sustainable growth. I'm engaged closely with the board and my management team to shape FactSet's future, and we are holding ourselves accountable to make hard decisions around allocating resources and capital. I know you're all eager to hear my thoughts about medium-term guidance, It's too early for me to comment on that, but I want you to know that I'm working actively on new growth initiatives, anchored on content and technology innovation that drive real competitive differentiation and deliver durable ASP growth and operating leverage. As I reflect on my first few months, I have greater conviction in FactSet's position today because the structural advantages are real, the client reliance is deep, and the opportunities to expand our impact are tangible. We have three clear priorities that we are acting on with urgency to drive a culture of excellence across the company. Over the coming quarters, we'll continue to provide more details as we execute against these priorities. Now, I will hand over to Helen to discuss our Q1 performance in more detail.