NYSE:FDS
FACTSET RESEARCH SYSTEMS INC
A leading provider of institutional financial data and analytics platforms empowering asset managers with actionable insights.
Key Metrics
Investment Thesis
Bull Case
FDS benefits from a widening moat as institutional investors demand more sophisticated AI tools for alpha generation. The company's consistent profitability, with net income rising to $597M in 2025, and robust free cash flow conversion suggest pricing power that allows for continued shareholder returns despite industry headwinds.
Bear Case
The stock faces valuation pressure as traditional data licensing models erode against cheaper cloud alternatives. Significant debt levels with $1.37B in long-term obligations combined with a retained earnings deficit of $2.32B create balance sheet fragility that could amplify interest rate sensitivity during economic stress.
About FACTSET RESEARCH SYSTEMS INC
FACTSET RESEARCH SYSTEMS INC (FDS) provides data analytics solutions to global investment management firms, hedge funds, and professional advisors. The company leverages high-performance computing and advanced AI to deliver real-time market data, portfolio analysis, and risk management tools across North America, Europe, and Asia.
Analysis
Management Discussion
Revenue grew to $2.32B in 2025, reflecting successful adoption of cloud-based solutions and expansion into emerging markets. Operating profit reached $748.3M with strong cash flow from operations of $726.3M, though share repurchases of $300.5M and dividends of $160M reduced net cash by $71.3M.
Industry Overview
The financial data analytics sector is transitioning from legacy on-premise software to cloud-native platforms, creating both disruption opportunities and consolidation risks. Market leaders compete on data breadth and computational speed while newer entrants focus on cost efficiency and specialized AI applications.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $2.09B | $2.20B | $2.32B |
| Cost of Revenue | $973.2M | $1.01B | $1.10B |
| Gross Profit | $1.11B | $1.19B | $1.22B |
| Operating Expenses | $483.1M | $489.8M | $475.7M |
| Operating Income | $629.2M | $701.3M | $748.3M |
| R&D | $267.4M | $265.2M | $300.7M |
| G&A | $457.1M | $485.1M | $475.7M |
| Stock-Based Comp | $62.0M | $63.5M | $61.2M |
| D&A | $105.4M | $125.2M | $157.7M |
| Depreciation | $18.1M | $20.2M | $24.1M |
| Amortization | $87.3M | $105.0M | $133.6M |
| Other OpEx | $-241.5M | $-260.5M | $-300.7M |
| Non-Operating Income | $-45.3M | $-49.8M | $-27.3M |
| Interest Income | $12.8M | $14.4M | $6.5M |
| Pre-Tax Income | $584.0M | $651.5M | $721.0M |
| Income Tax | $115.8M | $114.4M | $123.9M |
| Continuing Ops | $468.2M | $537.1M | $597.0M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $468.2M | $537.1M | $597.0M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $468.2M | $537.1M | $597.0M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $770.1M | $835.8M | $729.8M |
| Cash & Equivalents | $425.4M | $423.0M | $337.7M |
| Marketable Securities | $32.2M | $69.6M | $17.4M |
| Accounts Receivable | $237.7M | $228.1M | $270.7M |
| Prepaid Expenses | $50.6M | $60.1M | $70.4M |
| Other Current Assets | $24.2M | $55.1M | $33.6M |
| Long-Term Assets | $3.19B | $3.22B | $3.57B |
| PP&E (Net) | $86.1M | $82.5M | $85.2M |
| Intangibles | $1.86B | $1.84B | $1.92B |
| Goodwill | $1.00B | $1.01B | $1.28B |
| Operating Leases | $141.8M | $130.5M | $121.8M |
| Other LT Assets | $100.9M | $150.9M | $166.7M |
| Total Assets | $3.96B | $4.06B | $4.30B |
| Current Liabilities | $484.3M | $667.1M | $521.3M |
| Current Debt | — | $124.8M | $0 |
| Current Leases | $28.8M | $31.1M | $33.1M |
| Deferred Revenue | $152.4M | $159.8M | $167.9M |
| Other Current Liab | $265.7M | $311.9M | $278.9M |
| Long-Term Liabilities | $1.86B | $1.48B | $1.60B |
| Long-Term Debt | $1.61B | $1.24B | $1.37B |
| LT Operating Leases | $198.4M | $177.5M | $157.1M |
| Other LT Liab | $13.6M | $15.1M | $25.5M |
| Total Liabilities | $2.34B | $2.14B | $2.12B |
| Shareholders' Equity | $1.62B | $1.91B | $2.19B |
| Paid-In Capital | $1.32B | $1.48B | $1.62B |
| Retained Earnings | $1.51B | $1.89B | $2.32B |
| AOCI | $-87.1M | $-79.6M | $-63.7M |
| Total L&E | $3.96B | $4.06B | $4.30B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $468.2M | $537.1M | $597.0M |
| Non-Cash Adjustments | $153.7M | $156.1M | $150.0M |
| Working Capital Changes | $23.7M | $7.2M | $-20.8M |
| Cash from Operations | $645.6M | $700.3M | $726.3M |
| Capital Expenditures | $60.8M | — | — |
| Cash from Investing | $-95.4M | $-144.3M | $-392.8M |
| Debt Issuances | $0 | $0 | $803.4M |
| Debt Repayments | $375.0M | $250.0M | $805.0M |
| Share Buybacks | $176.7M | $235.2M | $300.5M |
| Dividends Paid | $138.6M | $150.7M | $160.0M |
| Cash from Financing | $-632.0M | $-560.9M | $-407.8M |
| FX Effect | $4.0M | $2.4M | $3.0M |
| Net Change in Cash | $-77.8M | $-2.5M | $-71.3M |
| Beginning Cash | $503.3M | $425.4M | $423.0M |
| Ending Cash | $425.4M | $423.0M | $351.7M |
Frequently Asked Questions
How does FACTSET RESEARCH SYSTEMS INC make money?
1) Data & Analytics Platform serving buy-side and sell-side clients requiring deep market coverage; 2) Risk Management Solutions offering portfolio optimization and compliance tools; 3) Cloud Infrastructure Services providing scalable computing power for complex modeling tasks; 4) Professional Services including implementation, training, and customized reporting.
What are the main risks for FDS?
1) Intense competition from cloud-native entrants like Snowflake and Bloomberg offering lower-cost alternatives; 2) Client concentration risk where top customers represent a significant portion of revenue; 3) Economic downturns reducing discretionary spending on premium analytics tools; 4) Rapid technological obsolescence requiring constant heavy R&D investment.
What is FDS's competitive advantage?
1) Unmatched proprietary dataset depth spanning decades of global financial history; 2) High switching costs due to deep integration into client workflow systems; 3) Continuous investment in AI-driven analytics that differentiate their platform from generic data vendors.
Related Companies
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.