Organic annual subscription value grew 7.0% to $2.57 billion. The fiscal 2027 outlook calls for 5.0% to 6.5% growth and adjusted earnings of $19.25 to $19.65 a share.
FactSet Research Systems ended its fiscal year with its biggest subscription gains on record, then told investors to expect slower growth.
The financial data provider said organic annual subscription value, the recurring revenue it has under contract, rose 7.0%, or $168.2 million, to $2.57 billion in the fiscal fourth quarter ended Aug. 31. Chief Executive Sanoke Viswanathan pointed to "a record increase in organic ASV for both the fourth quarter and fiscal year."
Fourth-quarter GAAP revenue rose 6.3% to $634.7 million. Organic revenue rose 7.1%.
For fiscal 2027, FactSet guided to organic ASV growth of 5.0% to 6.5%, below the 7.0% it just posted. It expects revenue of $2.600 billion to $2.625 billion, adjusted operating margins of 34.75% to 35.25% and GAAP margins of 31.0% to 32.0%. Adjusted earnings are forecast at $19.25 to $19.65 a share, and GAAP earnings at $17.00 to $17.50.
The shares rose about 2.8% to near $267.
The buyback
FactSet repurchased 552,064 shares for $138.0 million in the fourth quarter, an average of $249.90 each, and returned $808 million to shareholders over the fiscal year. Wednesday's price is about 7% above that average.
At $267, the stock trades at about 13.7 times the midpoint of the company's adjusted earnings forecast.
Two readings
One reading is that FactSet has set a bar it can clear. The fourth quarter showed subscription growth at a record, and a range that starts below that pace leaves room to raise it during the year. The market's positive response is consistent with investors seeing the outlook as conservative.
The other reading is that the guide concedes a slowdown. Even the top of the 5.0% to 6.5% range is half a point below the exit rate, and the bottom would mean growth falling by 2 percentage points in a year.
What to watch
The first-quarter report will show where ASV growth lands inside the new range. Margins against the 34.75% to 35.25% adjusted target will show whether FactSet can hold profitability if growth slows.