A month has gone by since the last earnings report for FactSet Research (FDS). Shares have added about 5.2% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is FactSet due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for FactSet Research Systems Inc. before we dive into how investors and analysts have reacted as of late.
FactSet’s Q3 Earnings Beat Estimates
FactSet Research Systems Inc. has reported third-quarter fiscal 2026 adjusted earnings of $4.53 per share, beating the Zacks Consensus Estimate of $4.44 by 2%. The figure increased 6.1% from the year-ago quarter.
Revenues of $622.9 million surpassed the consensus mark of $617.2 million by 0.9% and rose 6.4% year over year. Organic revenues grew 7%, while organic ASV rallied 7.1% to $2.49 billion.
FDS’s Revenue Growth Gains Traction
FactSet’s top line benefited from continued demand across institutional buy-side and wealth management clients. Organic revenues were $622.9 million, up from $582.2 million in the prior-year period.
The company’s revenue growth reflected stronger client engagement and expanding enterprise relationships. Management noted that clients continued to choose FactSet for differentiated content, analytics and workflow solutions.
FactSet’s ASV Momentum Remains Healthy
Annual Subscription Value, or ASV, was $2.48 billion as of May 31, 2026, compared with $2.34 billion a year ago. Organic ASV came in at $2.49 billion, increasing $165 million year over year.
Organic ASV increased $35.4 million over the past three months. FactSet’s annual ASV retention remained above 95%, while enterprise renewals in the quarter extended 30% in length on average.
FDS’ Regional Revenues Show Broad Growth
Revenues from the Americas were $407.2 million in the third quarter of fiscal 2026, up 7% on an organic basis from the year-ago quarter. The region remained FactSet’s largest revenue contributor, supported by an ASV base of $1.62 billion.
EMEA revenues were $152 million, with organic revenue growth of 5.3%. The Asia Pacific revenues rose 10.5% organically to $63.7 million, whereas organic ASV growth in the region was 10%, the strongest among FactSet’s reported regions.
FactSet’s Margins Reflect Cost Pressure
Adjusted operating income was $211.8 million, down 1.7% from the prior-year quarter. The adjusted operating margin contracted to 34% from 36.8% a year earlier.
The margin decline reflected higher compensation and technology-related expenses. The GAAP operating margin was 26.7%, down from 33.2% due to higher employee compensation costs, including one-time charges and CEO compensation costs.
FDS’ Cash Flow & Capital Returns Improve
FactSet generated $284.5 million in net cash from operating activities during the quarter, up 12.1% year over year. The free cash flow increased 11.1% to $254 million.
The company returned $243.4 million to shareholders in the quarter. This included $203.1 million in share repurchases and $40.3 million in dividends. FactSet also raised its quarterly dividend by 6 cents to $1.16 per share, marking its 27th consecutive year of dividend increases.
FactSet Reaffirms FY26 Outlook
FDS has reaffirmed its fiscal 2026 guidance. The company continues to expect organic ASV growth of $130-$160 million and GAAP revenues of $2.45-$2.47 billion.
The adjusted operating margin is expected to be 34-35.5%. Adjusted diluted earnings are projected between $17.25 and $17.75 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, FactSet has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, FactSet has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
