FactSet Research Systems Inc.
) reported fourth quarter 2012 earnings per share (EPS) of $1.11,
ahead of the Zacks Consensus Estimate of $1.07.
FactSet reported total revenue of $207.7 million in the fourth
quarter of 2012, up 8.2% from $191.9 million in the year-ago
quarter. This includes $1.8 million contribution from the
StreetAccount acquisition made in June 2012.
Excluding StreetAccount, FactSet's total user count increased by
1,100 users. At the quarter end, total user account was 49,500,
which is a result of increase in the investment banking client
The company generated U.S. revenues of $141 million, up 7%
compared with the year-ago quarter, whereas the Non-U.S. revenues
increased 10% year on year to $66 million. European and the Asian
revenue for the fourth quarter jumped 9% and 14% year on year to
$51 million and $15 million, respectively.
Annual Subscription Value
The Annual Subscription Value (ASV) for the company improved by
$20.4 million organically, which is inclusive of the StreetAccount
acquisition amount of $11.4 million. Moreover, ASV for the company
increased $31.9 million over the last three months. Total ASV for
the company stood at $843 million as on August 31, 2012, moving up
7% compared with the prior-year period. Buy-side clients
contributed 81% of the total ASV.
FactSet's revenue growth exceeded the growth rate of operating
expenses. This led to a 330 basis points expansion in operating
margin. Operating margin was 34.0% in the quarter versus 30.7% in
the year-ago quarter. Moreover, cost of services as a percentage of
revenues improved by 70 basis points compared with last year. The
increase was attributable to the higher expenses that were incurred
for hiring software engineering and consulting professionals
coupled with the increase in headcount in content operations and
Net income during the quarter came in at $48.5 million, up 18.7%
from $40.88 million in the year-ago period. On a fully-diluted
basis, quarterly EPS was $1.08 versus 88 cents in the year-ago
quarter. Adjusted net income (excluding amortization of intangible
assets from acquisitions, but including stock based compensation)
of $1.11 per share was ahead of the year-ago level of 91 cents per
Balance Sheet, Cash Flow
FactSet exited the quarter with $189.0 million in cash and cash
equivalents, compared with $228.5 million in the previous quarter.
The company has no long-term debt. The company generated free cash
flow from operations of $51 million, down from $64 million in the
same quarter last year.
The company expects first quarter fiscal 2013 revenues to be in
the range of $210 million to $213 million, operating margin is
expected to range between 33.5% and 34.0%. GAAP diluted EPS is
expected between $1.10 and $1.12, which tantamount to a
year-over-year growth rate of 11% and 13%.
For fiscal 2013, the company expects capital expenditures, net
of landlord contributions, to be in the range of $20 million to $28
FactSet reported decent fourth quarter 2012 results by beating
the Zacks Consensus Estimate on bottom line. The company's revenue
growth was supported by an increase in the number of users, which
in turn improved the business volume. The company also witnessed
growth across most of its geographic region.
The company continues to launch new applications and new data in
its system, which includes its own data or something secured from
other sources such as the new bank loan data from Markit, ace
provider of independent loan market data and loan portfolio
management software. This also includes fixed income in the
company's Portfolio Analytics products.
Although new products and services are offered by the company
regularly, but we believe adding new customers is a challenge as
the European weakness has resulted in a slowdown of business
activity in the region. Moreover, FactSet faces stiff competition
), which is also coming up with new solutions to increase its
FactSet carries a Zacks #3 Rank, implying a short-term Hold
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