FactSet Research Systems (FDS) 21 Mar 242024 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to FactSet's Second Fiscal Quarter 2024 Earnings Call. [Operator Instructions] Please be advised today's conference being recorded. I would now like to hand the conference over to your speaker today, Ali Van Nes. Please go ahead.

morning, good and you, everyone. Thank Second Welcome XXXX Call. Quarter to FactSet's Earnings Fiscal

website we begin, this webcast the of we the reference through on our section Relations Before slides Investor the found during at factset.com. be presentation can

replay scheduled X, our After on X to open call last our be investors. from will website. to we for today's questions will remarks, The A measures. of results, the available our call prepared legal Instructions] Before encourage call explains listeners hour. is to of discuss the statements of Slide [Operator review the notice on forward-looking all I which risks the use we and non-GAAP financial

Additionally, please statements. could a that cause for refer actual results XX-Q materially to forward-looking Forms and to of these factors XX-K discussion risk differ our from

this and include slide will measures. discussions certain financial Our on call non-GAAP presentation

directly today. reconciliations such in release appendix to measures, For our presentation the issued the to earnings GAAP are in and the earlier measures comparable most

Chief me Huber, Snow, Joining and Officer. are Financial Linda Chief today Phil Executive Officer;

We Helen of will Shan, the today's call. also portion for Officer, be Q&A Chief Revenue joined by

I the over Snow. discussion to turn will Phil now

good diluted Ali, and adjusted joining professional we operating by Thank of plus us delivering organic and the $X.XX second you, Thanks quarter, everyone. today. grew year-over-year, X.X% XX.X%. services EPS ASV morning, of adjusted In for margin an

Given market and quarter uncertainty, continued challenging factors were industry our results mixed. this

softer growth our from the line we top may anticipated that You recall December call.

clients, new UBS' adding this following mostly XXX net Credit to And quarter X,XXX ended user more of XXX,XXX, XX due than acquisition count down the We Suisse. in quarter with our logos. was consolidation

Suisse second is ASV the that our impact not results. in reflected note Credit of quarter please addition, In reduction

conservative full reduction discussions, ongoing about quarter. assume continues details indicated Credit Suisse as share cannot the of to business year last our view guidance we we While a

XX%, retention than client XX%. Overall, and greater was remained ASV retention

saw efficiency market client on continued as We increased further seek In to gains. delay decisions. terms of they caution pressure headcount purchasing conditions, client

quarter. higher erosion result, saw we this a As a

large our slower deals fewer of a impact saw from to had a rate. in growth lower both increase, contributed We price and QX which

However, to recovery. appears be industry and stabilizing, of pockets are starting cost to cutting we see

call, reductions As top quarter. cost headcount the drove anticipation of we necessary our our cuts, in difficult own growth during including but signaled line December softer

careful range allow margins investment the finish year along drive in us will the expense our to Continued EPS expect of future at management X%. to growth maintain products Currently, and of X% to growth lower new guidance we with ASV end performance. to fiscal

from X.X% move performance wealth erosion following Turning cancellation well region. wealth Americas points its a in mainly growth solution prior quarter a client a now The nonstandard strategy. basis to custom decision ASV to our to a due by realization. lower price to workflow change as the by business from large and in-house, banking XXX decelerated resulted as cancellation

decelerated basis decelerated institutional management mainly growth business ASV partially offset growth X% basis renewals, X.X%. headwinds ASV XX acceleration. points to asset new Asia EMEA, Pacific, due to In to In from points XXX lighter by

offset manager coupled owners. with asset larger expansion, banking Softer asset loss, with institutional wins

by greater offset in expansion. accelerated While reductions was new retention across modestly business both it regions, and

across side, the headwinds reduction. headcount we buy institutional all continued due On and types cost-cutting saw to firm

total funds in management. in passive For active assets funds under XXXX, example, surpassed

needs, expanded continued our front increased To this our management including As have a are the clients institutional result, offset to office. pressure, in capabilities seeing asset we help fee users' pressure. address

our office is of FactSet. growing more business asset owners. their some workflows as helped outsource drive services clients gains with to managed This Our middle

clients' of our to in platform ownership or reduce invested We total have TCO. cost

despite our reliance to are fee Given do their help more us ability clients increasing less, they with on pressure.

given this our in are we area. result, managed a investing services, in growth As

middle office solutions. are the power further to We in office leveraging strength front our

this did in incumbent we And both we quarter, client's workflow, OMS a and entire front office capabilities. the This EMS displaced management by asset connecting Asia. including in

that the on of We also open platform. strength our business won

and managers gen portfolio in to enhanced erosion and we significantly saw banking are developing equity insight. AI we will private tools their and In copilots a venture which fundamental Simultaneously, dealmakers, reduce higher time for capital. we lower in research believe retention and analysts,

corporates users. see good starting momentum However, are with to Relations Investor

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that initiatives While momentum. commercial time trend we will foresee this future growth, drive gain these to need

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in have analysis interface. is Assistant, with ask a their accelerates Clients to gen own freedom FactSet-provided from questions Transcript Transcript earnings the Finally, release our transcripts week. of AI-powered prompt. custom or a as full Assistant last call choose interactive conversational chatbox, announced

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no Turning Activity to cancellation quarter, given large was wealth. this deals. subdued more and large one

and connections senior of level increasing stronger creating executive are development turn, business engagement. client partnerships with in workflows, portfolio wealth However,

major organization type growth, our future focus in moving driven reducing the ourselves have including for to to firm changes recently position We costs. and

risen challenging process change, short proud how the been positioned Given for this have pace occasion. well This a market upturn. but has has the of rapid change to I extremely of the may in company run am us

together industry expert makers client highlight Miami decision of This key FOCUS to our top want event end leaders, event the from tech the at Finally, sectors. thought in and finance and I brings April.

of Our Attendees speakers, of meaningful the for curated opportunities sessions intelligence is the machine Registration at theme can educational and inspiring discussing artificial thoughtfully and potential information expect ecosystem, with agenda connections. a found can focus.factset.com. for learning. XXXX revolution be an

to over turn discuss second performance quarter it now to detail. I'll Linda our in more

Thanks, Phil, and hello to everyone.

As you've slower from this ASV release morning, EPS we and press margins despite seen quarter. our in second improved the growth,

XX.X% X.X%, diluted while operating organic improved adjusted XXX points and Second rose adjusted basis XX% EPS to to quarter $X.XX. ASV grew margin

on share now details our I'll fiscal additional quarter some performance. second

our our GAAP comparable adjusted As to Ali is the press included of release. a figures at metrics noted, end reconciliation of

X% $XXX million sales private and to increased and clients. revenue GAAP corporates, hedge asset on equity owners, quarter, to the For capital funds venture

and grew geographic organic X.X% our Americas, For revenues in segment, X.X% Asia X.X% Pacific. in in EMEA the by

Turning operating basis, restructuring margin basis an GAAP year-over-year accrual of GAAP our decrease partially asset This a $X X% personnel charge. nearly increased operating XX%. as grew year, to net by $XX to an to revenues, was expenses. XX million increased million. expenses now $XXX This was adjusted On bonus points as to X%. expense, operating to offset approximately expenses million employee driven due to increased higher previous intangible the higher by increased well Compared by amortization. expenses, including by

cost X buckets each turn. of at in our Looking major

frequently expense discussed, be continues our As we main to technology area growth. of

with costs represent medium-term our Technology year-over-year. about XX% consistent increased of revenue, costs now X.X% outlook. technology Specifically,

compensation the by second year-over-year lower grew In accrual. increase contrast, of took reflects offset by employee X% expenses partially the driven only efforts reduction increased This quarter. bonus we the small expenses, some cost during

took fee higher content And Next, expense as variable we X% expenses. increased costs to X% to bucket. estate real steps our due third-party reduce and an early significant expenses saw decrease year-over-year this finally,

we have footprint. believe now estate real We rightsized our

positioning mentioned have technology for continue growth us and to invest we initiatives. expense the future allowing to management while As before, strategic company thoughtful is in

personnel This Turning now basis partially to Adjusted expense. technology debt and margin. lower higher expenses, expenses points by due accruals benefit, XX.X%. bonus to by higher improved given and capitalization operating the XXX offset higher bad was to lower margin

an appendix today's income find from revenue in presentation. expense operating you'll adjusted block always, to the of earnings As

The on of points GAAP year-over-year revenue, services and adjusted And was As a XX a basis of flat revenue an decrease compensation lower costs, in debt basis offset increase basis lower points expenses about partially lower points year-over-year basis. by a on as in an lower SG&A about cost an increase outpacing of on the and to bad basis. basis. SG&A percentage on adjusted due XX percentage GAAP was our a revenues XX expense. was SG&A was

tax. now Turning to

This quarter Our higher to tax increase was last rate rate XX.X% stock which by income, higher rate. exercises and XX.X%. higher of to offset tax due the reduced foreign taxable the for credits, option year's was compared

margin and growth prior tax an expansion, revenue EPS. to and increased by expansion, higher $X.XX This a EPS EPS tax to by to driven was versus offset Turning also basis, the $X.XX higher quarter GAAP offset rate. $X.XX increased by by revenues a partially driven now this rate. year period. XX.X% partly On adjusted margin higher in X%

the year-over-year the excluding depreciation higher $XXX impact by amortization EBITDA of up increased Adjusted income, nonrecurring to net of increase income expenses. operating driven an due noncash impact in million, primarily and X.X% and

are higher quarter. payable, of for we which remitted quarter, flow, decrease operations due stock taxes the This seasonally year. XX% from of a payroll less over in income same second capital higher cash to was $XXX spending, related was and the the Free last as period to employee the million compensation define taxes which cash timing generated

Turning repurchases. share to

quarter, we XXX,XXX at repurchased an of share average the $XXX.XX. For million $XX.X for shares price

plan repurchases. Our million of targets share fiscal XXXX $XXX repurchase

second for We million have repurchases remaining $XXX XXXX. of fiscal in half the

in dividends long-term repurchases, months. $XXX.X share disciplined shareholders over our committed and shareholders. we million remain and to our XX returning last to the We our our to buyback Combining program value returned

our second of consistent our down the This loan, second XXXX. outstanding in And that our of regarding during plan gross full with to term X.Xx. million paid by leverage quarter the we repay is which down $XX.X quarter, term brings leverage loan fiscal to

while to gen up. markets Finally, managed We initiatives. as our in carefully invest the that for well positioned mentioned, strategic AI are we've as other we growth believe cost pick base and continuing Phil

for Operator? We are your now questions. ready

Deutsche from first [Operator question Instructions] Our comes Bank. Alwy Faiza with

Yes.

and talk recovery. about Phil, pipeline the So from think appears cost I a I be wanted to and cutting said seeing pockets to seeing you bit here. some industry you're of you're what that stabilizing, little

maybe of and sense you're us a just clients. from start give your there what So hearing

in constructive feels more my conversations it X the Well, Yes. did the than -- last yes, months year. from towards it last months X of clients, with way last from

talking salespeople, activity it So the up. out is picking like definitely just with feels being to there clients

increased particular. would solutions off-platform is think, enterprise solutions in I on showing there. seeing, clients, more are headcount strength say We some good our and at pressure But I

to half, optimistic that cautiously into I'm be Helen QX, year. cautiously now here we'll I'm detail. than but probably have that bit we over I'm a QX optimistic turn So last move more for the as going a to will it weaker second stronger

your the volume. seeing we Thanks would seeing Yes, of healthier Sure. we're health sort higher pipeline in a HX pipeline I HX. say for that deal the question. -- dealmakers XX% a in seeing are half side, lines more is is wealth stronger. if along We're bit The the of year, a not little banking, in coming of partnerships. makeup it rest is buy about from and last the or versus XX%

many year, decisions as seeing of And but calendar the the middle of is Phil our and saying, funnel, more the would just the into we're are of Quants accelerate are solutions. pipeline in little fourth gauge. So which office timing really the solutions, say, in the on But I to in in strength quarter. since data bit more beginning stages them of a gives the really was more us later difficult confidence, the pipeline,

[Operator with Instructions] from question Patnaik comes Our Manav Barclays. next

think. touch just managed on to So made, wanted I services comments the I you

help that's business? your lower-margin is were managed you could in just to you Just was you assume percentage fair what revenues referring investing today managed in What it services? hoping more I exactly If of could more elaborate is elaborate that. the to services. on And a

for Thanks Manav. the question. Sure,

of much subscription smaller It You're we're our part of of right. piece FactSet. really is the sort a business, stressing and

as a are and continue. how we we who that's think company I

clients. solution delivering analytics enterprise and clients, more you what for particularly another we've with there need observed more off-platform of sort mission-critical as is the services to level them, But and become an that we sort for of help have we're of

So do we us up good a for we to do to it best. outsource that FactSet to leave opportunity clients think and what to there's do solutions

interest deal really build was -- we a end last clients, I had good that outsourced invested last in example performance to And of very think of we and of at heavily And our that year, seeing that momentum out. in this. one the we're this large with continued group where

we think that piece our necessary. So of is it's a business

You're right, with it is for the of a which business. the we're part lower-margin including the that is sale, is we But it, solutions combined think, a typically, main I that opportunity overall, think us. good with

from Kelsey with Instructions] [Operator question Our Autonomous. Zhu comes next

if wondering you little pricing, growth expect drove on was bit much do for ASP I QX a cross-selling you and much full how new color them the how can growth, year? drive to more logo share and

It's Helen. for that question. Thanks

was Americas, and is continues line provide So 'XX, price CPI than this year's the of price which But some in the increase advantage $XX lower to growth situation. it quarter, this last year's with were able we on take inflation the on increase as in to although year that last the million FY of overall uplift.

points. firm percentage types, rate is our or about would last the It a across does year. minus to flat realization I few vary plus price card say against

new than before, year, I price reflecting that in competitive lower last is think, noted environment. more realization As business

But total ASP increase. we've new business seen actually

So price. on although average we've smaller the -- bit logos, higher a new had average

it's So same that provide sort think growth the past. we've in do I rate that that to continuing seen of

[Operator Instructions] of Our Balsky America. Bank with question Heather comes from next

I rest the the you of for was could expense cadence about your hoping talk year.

strong had this really margins You quarter.

expectations and half, for your the there any was back around into the curious, XQ timing shift just So OpEx back from half?

Heather. We It's how up talked year. move as you, the ramp we expenses our had tend Thank about to through calendar Linda.

through enough we've will So QX the I we of fair think in say it's put the been QX back year. a that up bit to as margins half fortunate move decrease and to

margin operating and QX adjusted in in So XX.X XX.X we of QX. did

despite So top XX.X. that it adjusted softer year is I to of of hit of XX closer for the fair slightly on intention the would to something the back And guidance us to our it margin be arithmetically the midpoint line. think get half midpoint our expect operating to to again, guidance a of

course, continue for bit our actions the little that some And technology we So the ensure appropriate to you a and cost we've should through location move year. headcount of as of going expect go up to appropriate to employees we the forward. have taken

So a that place, the prepared the we of lower we're range. cost works with and to in base for it we think the deal good end so have revenue

mix So we've little got and year. back the all the lower so of a half that in the bit in

[Operator with Instructions] Our question next comes Kramm from Alex UBS.

to for fourth some quarter, to back the It of you fairly the and relative sounds third outlook. said last come to quarter love commentary third made you year. would Phil, quarter like soft

So or flush pricing maybe you that's, can if sales. out just lower again, expectations just lower net

then quarter, optimistic. the you fourth And pretty on sound

just I back quarter fourth soft So up still and a that's see, can you can that is bit from made what maybe I little hiring was on area actually an you hiring. you that think very because comment pretty the think dependent a

a flushes out, XQ maybe you great just it nonhiring-related pipeline have So expectations. maybe of

would So a little color more bit be great.

us smaller X-figure have probably Sure. this some Alex. Helen number quarter is had I'll a will point the a pipeline sure QX deals for can typically sort of have we I'm higher and to large additional that mean, What I than last anyway. time of is in and we year. a Yes, Thanks, number Yes, start, comments. I

So there's appetite with types. large for types certainly there enterprise different of all out an solutions firm

areas. So buy to it's both certainly and in the I of the sell mean, side the point come reports, down your hiring you in side, and sort on

than a saw I'm it's was if that feel that cut that. frankly, more than rates weak from not we any last side anything sure get banks sell year. this The and tailwind could we're do not headwind, we last But a the I'm of sure see expecting QX. But optimistic, different year.

on to all see generative But increased enterprise forward, our pressure with we're the side, doing think AI. our move thesis going On as terms into what solutions we and particularly that's to baked continue I headcount to buy in product. of we're

despite seats And There or XXX,XXX we've XXx many the there approximately be that out industry. got in X seats that, might today.

on a to seats office office feel front or X number buy And there's pressure doubled office. the to us still middle for we've we're good increased the -- opportunity we on even the with back in the to So the last of so. FactSet years headcount,

the And That's clients. the we that into are I buy the And have particularly the to conversation, continue differentiators. can help firms in we a of with our past. way win are the holdings very firms key have Helen? portfolio think, the leaning that which we're TCO on to side, large ones, of than our going more one consolidate good

question, your Thanks that's exactly right. Yes. No, for Alex.

mentioned, X-figure healthy and focus I do X-figure we have As HX the focused I X- Phil deals. a pipeline. on deals. on

total X% that's numbers. I'd of in of almost So sort terms year-over-year, up say,

greater I some think visibility us So that and confidence. gives

because is been displacements, which TCO conversations, a focused these -- for has on strong us. pipeline of total the these lot And of competitive

of So the markets, as to as and deals, will to ability those both capital wealth. The it relates for strength markets especially important flow convert be important. us and the banking know, are you

For we're all -- right in flat as although that sudden QX know, and more, is year, with sort pop of up going just not banking a assuming the know we're of QX. to last to you we'll now,

Instructions] from [Operator next William Our Nicholas Blair. question comes Andrew of

product-type line and like I from cyclical ask some stabilization. budgets about There's wanted maybe maybe a like seen pockets recovery. It you've of to business some perspective. or even sounds sensitivity

or just a side? I'm office the difference level that are perspective. more at or or are workstation way than people curious, side purchases there's from maybe But spend the their that the data in apt are their curious prioritizing middle clients budgets on they or push Just that platform decisions to off if and on

I'll question. great that. a That's take Yes,

not maybe necessarily let look to I but that. even firm try maybe me on size. it So touch type, would at on

accounts, for then really of the flat is -- they premier our up make have our in ability most they're about which book, looking XX% to key large So our budgets. total,

they're themselves. the looking so make some ability And AI to room gen in really to for invest

tougher. becomes And think that's large a bit decisions so I little where making

of demand. reflects in We're of growth the of would is lot data seeing the the expect solutions you what think on Part market. a some that our side, and HX I in

seeing what is we're related think yes, I So deals larger the are to platform.

good have be point be but comfortable feel continues drive need think will of half. strong on pipeline to we And able it. to act them. We data and to We a to -- enough clients second our a

Stanley. Kaplan [Operator comes Instructions] from next Morgan question Our with Toni

ago been maybe Is just has environment any you Helen, questions strong. directionally, the when how And the stronger has up couple displacements mentioned very guess, the it that the been I than in you're sort that's of more just and against bit a competitive changes competitive has in on because of pipeline the been? focusing market other players. of competitive challenges a it -- little

Yes. you, Toni. No, thank

which yes, a I The to would ownership would on the past. the in alternatives of had lot top cost total new find, And a conversations say of say, we've is more than had I'll type probably clients' is So couple C-suite I higher. minds. say things. conversations, definitely of of We've of need is

to say I'd So that. yes

mentioned As as new the pricing, there. type pressure we're Is deals. would depends coming on say it large firm greater seeing on down? the it business, of relates to I overall pricing

been year. leverage realization far, more But I think our through. last you're of has seeing so coming that flat to price

savings with we've and portfolios Toni, I very a to with in of in our us had I that for system the the work to a giving much in of top-down giving think, choice competitively. past, and for good time users push the they more Add in it's I on and us, less is some really cost things favor. think which clients the buy strong TCO the many seeing, side we're got that about tipping cases, position think my a I'm little this, first And fact these more opportunity in career, conversations. a When want the than

advantage also are we're to seeing becoming of less of. our that able which -- We're and platforms some scale, competitors' flexible taking are less

the on side. buy that's So

us, for there. be wealth. We wouldn't of wealth, of we're lot of which prospecting longer-term expand a doing workflows ones well the in still we're you're about the proposal generation. trends including And pipeline. I had beginning and we're opportunities some this large about the thing good the thinking in front We for things On if that incredibly to have addressing wealth, that like concerned one-off quarter, sort

opportunity of wealth lot a on see I So the side.

and in I there's then around with smaller across investment think corporates banking, may some we're but equity, our of a the just and And continued technology firm us sector, opportunity generative much we hedge the not even deal with now across investment for we content around markets massive deep past. making private AI, like have in the as private played types where funds that not

the we're And So this. think be market here. think I I nicely I to think we'll capitalize turns, really when set very up able on

Lau Instructions] [Operator with comes Our Oppenheimer. question next Owen from

GAAP here. I'm So about some land guidance? talk of anticipating end the reconcile organic ASV growth lower at to trying to the of -- lower ASV the you reason revenue of Could please and commentaries the

the And constructive, the lower I UBS-Credit event drives you lead that of quarter. pipeline comments specific your it that there about deal was I the is expectation? your your to any Or because quite Suisse mean decision? especially is mean for fourth

now? the you your your then right about more, into about it's markets you guidance updated expectation one outlook, incorporate capital talk please And that Could how recovery. your about

touch I'll a Owen, bit that. on Sure.

of pipeline, mentioned. very Yes, do we there's think that strong things couple I into a So have we've account. taken as a

of said, being last is merger. we that, bit also talked we control Timing a have -- not the of in the course, little call. CS-UBS our of on We our impact That that. that don't about

reflected that's the in guidance. being end of So our lower

conservative more build We how Linda try a capital back piece, large let don't is numbers. our I'll there. that the but view about talk that the environment. are looking also bounce mentioned in And Phil our we the well. That into at but one-off, a in had we a wealth as also to plays into we're just cancel markets little

Yes.

situation. Credit continuing year's on Owen, included for what and We cannot there that discussions. So quarter to occur, business just we planning the are be going Suisse revenue ongoing have in this will with what tell outlook, is absolutely clear,

it we that out, guidance. how stay tuned. see included We'll So our but we've been conservative, have in plays and

dovish capital regarding Powell yesterday. in now Chairman comments. quite his So markets, was things again changed

As the June. rate north points XX% for cut cutting probability today, basis in of of of June is XX

looking cuts percentage up the June over from went of of we XX X year. Tuesday. is Fed course at rate cut The points remaining probability the where the calendar were The

So yet you asking, cuts? is And the it, Chairman about yet, metaphorically if there think for driving station there family of And yet. we keep not I rate think are quite wagon. we we are Powell there he says, we're

So we're waiting.

The is its trends are rates Astera of The way Bank National held $XX $XX XX bps of very saw cut at yesterday, good at Reddit constant. interest Swiss yesterday, some range, end IPO England which priced $XX. we this was up the priced And morning. Bank positive. which to The sign. by traded a high IPOs And the

with IPOs business. of really a our cuts. seeing information on to now bit good a we as impacts So lag is when timing sign, wait of We a rate are the and that seeing better

is of a So a again, lag. there bit

So quarter that's why starting quarter, look Phil optimistic that, the fourth hugely not we're had to talked the is third certainly much but better. about about

that's we cuts, rate wait. but there And going hope yet you. to to keep are question, to So the on same the we we're have asking helpful

comes Markets. [Operator Instructions] Silber BMO Our Capital with next from question Jeff

on going any be count would we're client seeing count there? just your great. comps? strong, Or User focus growth Or Wanted but is really color it client to anything on tough count specifically slowing. Is was growth there growth.

Helen. is This Sure.

business. of client lot by count think So a is our yes, I new growth driven

So that bit we're seeing I that take anything come I in particular you're now place think that a looking as of don't down. at. you're seeing right think But there's

wealth. and driven by Typically, that's corporates

partners, little This actually more on saw fintech quarter, side. good in bit we a the is growth some which

So count I that client -- focused at to looking the on necessarily. not -- don't be we're as something

Instructions] with next Our Huber comes Research question Huber from Craig [Operator Partners.

to half cost here, want question of back seems your year your half if looking I the guidance X revenue profit significantly first could the guidance the by stuff. It to ramp the year at me $XX it's just the that [indiscernible] to on cost we over versus and your go your year Linda, half up operating for back the the back months in million for the in roughly year. guidance, the the quite of of

right, up And why in that? to that that years, fourth your was not if But the the prior I second in math years, reported got the you quarter. recent cost last the is quarter versus mean ticked case. I X obviously, necessarily has what

So I just want more please. little to on hear that, bit color a

more if I are right, you to have first in could versus second me. little significantly a the Do that seem strange does half, half cost up the which expecting One thing I cost add because in larger you the anything, the should large obviously. ones of That second of have in had years. a one the quarter, help pretty restructuring had charge you've recent

So any thoughts, I'd appreciate.

right. you're Craig,

and will driven we cost. technology year. is Total the by second the million, will those that ramp. do mostly quarter, We see of expect expenses a ramp in half $XXX the for back the This

on and we're we cloud build AI what takes is in demand more get Craig, to seeing costs as as that And gen off front. we have increased

this technology So most from budget. comes of the

remain Personnel quite costs will flat.

and reduced our we by said, accrual those, rightsized $X about million. we we As have bonus had

the second it So going with adjustment million on, went bonus quarter, some for quarter. the million first accruals $XX in $XX was the

You should growth And and paid and are keep seeing XXs probably sort the line top half our pencil fourth in employees margin. what that mind we're the low half of in for given on on quarter, third now.

So piece about it. the want we where is margin

bit a of top little anticipating line piece, The slowness. we're

calculation. the that adjusted we've for bonus down So

well, data down. done estate, about those flat. quite real On costs bringing costs And are third-party we've

efforts and that So cloud mostly it and to is AI about increases in the tech our the fuel the expense gen also moves as budget amortization the as company we through driven by increased clients. look of

helps Craig. there, you So hope that

Our Instructions] Quelch with comes from question [Operator Atlantic. Russell Redburn next

talk I from majority internal AI. we smaller, a that management big could employees you centers. sector of that FactSet to starting have the wondering size opportunity or similar opportunity efficiency the to an to low-cost in We're in see generative how wondering the if P&L. hear to be the might expect little given peers teams I'm was might opportunities from some in maybe when around for in if already is you and

and additional Phil, it's Russell, I'll has sure some I'm start comments. Linda and

been about So yes, there we've where we've X focused. areas been talking

So imagine, there's can as you a at of lot FactSet. developers

So in they efficiency very able to being terms look that of producing are tools code. armed of being currently with the increase good

The do and I be handle we apply question tech we're ways? those could other we Do more it apply it to think how which makes them. is a product sense like stack apply apply So Or our to efficiency getting in what that? product? of good gains on it do parts we and

also content of number quite you we in our at locations. low-cost a large as We're mentioned, employees looking But collection. have

done workflows the to that for juice over even. we've collection more some adds, to lot I a So content automate think, This years.

good there's So some there. opportunity

Although costs efficiency may lower, engineering, as so gains the high are much not as be they are there with for people example.

for terms And opportunity just then clients. supporting in us big of there's a

is FactSet very So a tool. good

people Some different it ways. use in

it a programmatic use people way. in Some

So there's involved a if workflow. want lot of customize coding to that's your really you

internally. it support those both and So clients that can I people help really think clients

our rolling we bigger So we're those do in the at We X looking plans. And hard are be X-year apply to going can buckets. of opportunity. that how see very

that and about year next of our the there and will part So we're budget a just certainly years, think be beginning to this following efforts for equation.

Yes. Linda. Russell, it's

They're should to put things, for relatively little FY a but gains new look tools it. recently. to in early our You given number these guidance. a our good only on it's engineers We've reporting those efficiency 'XX

engineers think our the will cost more avoidance be And perhaps sort We get down from we hiring. of curve. efficient, cost as of advantage ramp some this can bend we biggest as the the

efforts a of those our that that's make spot, So ASV first and but more generate gen able you'll outwardly see that, look to to that AI to we direct conference. sure we're efforts, going we're to think FOCUS bright at with

then able And to turn do we darn of we're ensure 'XX, to of cost the FY focus only to to is in that. looking will say, the but that, are portion I We've more AI a managing the savings. cost been and pretty company constructively would that internal gen effectively, continue

for thanks So the question.

Research. question Our Instructions] Housum Keith [Operator Northcoast next from comes with

the in a like are capitalized about year-over-year you you the you then you going cost amortizing as amortization it well. how for? this cost capitalized bit costs is to long a us can Linda, on up seems expect I color be 'XX? have for going been give versus guess XXXX of little It what question up, And costs.

question. great Yes,

us We better at between some accurate. million to has time added year. I are $XX did helped which right looking I is don't has -- it we're automation that last which $XX than million, somewhere we grown. have And tracking, number our we've think for year, but be the hand, and more

coming more some everyone that It see feel to out But doing in terms going yet. that there. to and what would we through has helpful not years there X over very capitalization. we generally you're of good that peaked normal the involved spread it's costs probably be quite we're So about these pretty situation

pretty middle So you the how right think we of costs. time those over much would the the about terms down spread of period which in road

bit. should you a that think help So little I

at of look moving revenues. to probably to we'll kind forward, of up move that X% we revenues capitalization X% percent As of

automated we manner. I a better of of building and job have are think that through previously doing of to with we moving software But a tracking the tools, X.X in X. capitalized again, then sort cost said

next from Sachs. Our question Instructions] [Operator George of Goldman Tong comes

from? mentioned you against come bit a earlier your lower, last new rate the And most card talk among trends in and a about would environment. is you reflecting more business is flat where your price that realization competitive little year, describe bit realization about Can seeing a competition pricing how you're versus competitors? You price that

to Yes, Helen. let me get it's that. George,

So it little be it about cases, in PVC talking when bit might think more the some in deals, maybe in banking, and I you're I some smaller depends, competitive. of a right? would So say

competitors think on do I enterprise sometimes like of stronger to leverage able so. some the some deals they're if we do their of

I think like from asset benefit a value where places are in packages actually owners perspective resonating. in we're seeing our really

just for fighting do We're differences that get hard trying to as think depends. So I any much everyone it is huge seeing logo. new not as again

Our question comes Instructions] from [Operator with Shlomo next Stifel. Rosenbaum

little control. the a expense want bit I to just more Linda, focus on

ahead You've of nicely gotten things.

though estate. are than high that. this and continues So bonus saying, on and going longer if there we was coming range the for let's squeeze I we're environment quarters in revenues pool. of at expected real down you hit just to softer, end likely done the even you've the wondering sitting in still few There's this still you're say of yet, here lot a EPS

drive development the operationally, on need generative invest the Like and and frankly, after -- you're next up are of the kind continue what to AI what top to going what But the steps line? to you that that you focus do take move product margin to in this? the

Board great with a earlier Directors one it's of Shlomo, our week. question we this that Yes. and discussed

we've a the buckets. on pretty all cost job done think I good

You're right, plan charges to these take we wanted at to midyear.

some of go year. So down adjust rest through we rate areas our in the expense as we the

few past years, personnel to X the and of want unfortunately, very we've those sort different rounds over to of be we done. had take for much So actions,

possible huge those of exception we with event geopolitical planned. We consider that be done to a the haven't

the think So cost that we we cuts have to hand. want well in

FY what think into to we we growth. as personnel look is to have at I looking we're flat 'XX And for closer move

going try that to got right. we're we've So model that ensure to

in got we've get right keeping of about the did on rest so to which line the think want range is comes year top right well. the XX% correct, lower out our for But now. end I with the expenses offshore we everything about the of the balance

place. From here, I think pretty we're in a good

we've well. can yet pretty we But top we're I we that to the there we thought enough in And see got that executed hand, help soon and hoping and it through I need think that think well are line. some what get costs from we've we done do there we've the do.

So for thank Shlomo. you great. that, That's

to I'd further Phil showing for remarks. back not I'm this like And at over time. any turn call to any the Snow closing questions

Thanks, operator.

results while this taken market quarter mixed, closing, well actions in this capitalize on were to So quarter us shifts. position

on in for opportunities anchor on talked the for to we execute for ends our half. that's them. our long-term we efficiency, about confident call. I'm really today's the the And Operator, partner focus that clients' is Our an reason ability remain and pipeline second FactSet innovating at in the

does conclude and you. gentlemen, Thank presentation. today's Ladies this

You disconnect, day. a wonderful have may now and