TLDR
- FDS shares sink 10% despite record EPS and steady revenue growth in FY25
- FactSet’s Q4 EPS jumps 74%, but higher costs weigh on market sentiment
- FactSet sees solid ASV gains, free cash flow, but stock takes a sharp hit
- Revenue climbs 6%, EPS rises, yet FactSet shares tumble on margin worries
- FactSet outlines 2026 growth targets as new CEO takes the helm
FactSet Research Systems Inc. (FDS) shares dropped sharply by 10.36%, falling $34.81 to close at $301.23 on September 18. This significant decline came after the company reported its Q4 and full-year fiscal 2025 earnings. Despite the sell-off, FDS saw a modest after-hours recovery of $0.77, settling at $302.00.
FactSet Research Systems Inc. (FDS)
Earnings Rise as Revenue Growth Remains Consistent
FDS posted Q4 2025 GAAP revenues of $596.9 million, a 6.2% increase over the same quarter last year. Full-year fiscal 2025 GAAP revenues reached $2.32 billion, reflecting a 5.4% annual rise. The company also recorded 4.5% organic revenue growth in Q4, signaling sustained client demand.
Diluted EPS for Q4 surged 73.7% year-over-year to $4.03, while adjusted diluted EPS increased 8.3% to $4.05. For the full fiscal year, GAAP EPS rose 11.8% to $15.55, and adjusted EPS increased 3.2% to $16.98. This marks the 29th straight year FDS has delivered an annual rise in adjusted diluted EPS.
GAAP operating margin improved by 700 basis points in Q4, reaching 29.7%, aided by prior-year tax dispute charges rolling off. The adjusted operating margin fell 200 basis points to 33.8%, which was impacted by higher tech spending and compensation. Full-year GAAP operating margin stood at 32.2%, while adjusted margin ended at 36.3%.
Solid Cash Flow and ASV Expansion Support Growth Strategy
FDS generated $212.1 million in net cash from operations in Q4, up 30% year-over-year. Free cash flow rose to $178.1 million during the quarter, reflecting increased operational efficiency. For the full year, free cash flow reached $617.5 million, up 0.5% from fiscal 2024.
Annual Subscription Value (ASV) reached $2.41 billion as of August 31, 2025, growing 6.7% year-over-year. Organic ASV rose 5.7% to $2.37 billion, with the Americas contributing 6.0% growth. Asia Pacific led regional performance with 7.2% organic ASV growth, while EMEA saw 4.2%.
FDS added 185 new clients and 16,828 users in Q4, with annual retention rates exceeding 95% by value. Buy-side clients accounted for 82% of total organic ASV, emphasizing the firm’s core business strength. Segment performance reflected steady global demand for FactSet’s financial data services.
Outlook for 2026 Stays Positive Amid Leadership Transition
FDS issued fiscal 2026 guidance with projected organic ASV growth of 4% to 6%. Revenue is expected to range from $2.423 billion to $2.448 billion, with margins slightly contracting. Adjusted EPS guidance ranges from $16.80 to $17.40, indicating cautious margin management.
In fiscal 2025, the company returned $460.4 million to shareholders through buybacks and dividends. FDS repurchased $106.6 million worth of shares in Q4 alone, reflecting its continued commitment to shareholder value. A new $400 million buyback authorization remains in place.
Leadership changes took effect on September 8, when Sanoke Viswanathan became CEO and Malcolm Frank was named Board Chair. These appointments signal a new phase of strategic leadership. FDS also exited its RMS Partners business and partnered with BlueMatrix to sharpen its product focus.
FDS continues to invest in technology, including AI-powered data from MarketAxess and partnerships with BondCliQ and research content from J.P. Morgan and Barclays. Despite recent market pressure, FactSet remains well-positioned to capitalize on financial workflow transformation.
