FactSet stock falls over 3% on disappointing guidance

Investing.com -- On Wednesday, FactSet Research Systems Inc. (NYSE: FDS) (NASDAQ: FDS) reported fourth quarter adjusted earnings per share of $4.52, beating the analyst estimate of $4.35, while revenue of $635.5 million exceeded the consensus estimate of $629.74 million.

However, shares of the company fell 3.45% in pre-market trading following the release as fiscal 2027 guidance came in below Wall Street expectations.

For fiscal 2027, FactSet expects adjusted EPS of $19.25 to $19.65, with a midpoint of $19.45 that falls short of the analyst consensus of $19.72. The company projected revenue of $2.6 billion to $2.63 billion, with the midpoint of $2.615 billion slightly below the consensus estimate of $2.62 billion.

Fourth quarter revenue increased 7.1% YoY from $593.5 million in the prior year period.

The financial data and analytics provider reported organic Annual Subscription Value (ASV) of $2,568.2 million at August 31, 2026, representing growth of 7.0% YoY. The company said AI solutions ASV added in fiscal 2026 more than doubled YoY, while annual ASV retention remained above 95%.

"FactSet delivered strong results, highlighted by a record increase in organic ASV for both the fourth quarter and fiscal year with continued momentum across our AI and data solutions," said CEO Sanoke Viswanathan.

Adjusted operating margin for the fourth quarter was 33.0%, compared with 33.8% in the prior year period, primarily due to higher compensation expense from ASV-linked incentive plans and technology-related expenses. For fiscal 2027, the company expects adjusted operating margin of 34.75% to 35.25%.

FactSet returned $179 million to shareholders in the fourth quarter, including $138 million in share repurchases and $41 million in dividends, marking the company’s 27th consecutive year of dividend increases.

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