FactSet Reports 5.9% Revenue Growth in Q3 Fiscal 2025, Net Income Declines

FactSet Research Systems Inc. reported its financial results for the third quarter of fiscal 2025, revealing a revenue increase of 5.9% to $585.5 million compared to $552.7 million in the same period last year. For the nine months ended May 31, 2025, total revenues reached $1.72 billion, up 5.1% from $1.64 billion in the prior year. The growth was primarily driven by a 4.4% increase in organic revenues, with contributions from acquisitions and favorable foreign currency exchange rates also playing a role. However, net income for the quarter decreased by 6.1% to $148.5 million, resulting in diluted earnings per share of $3.87, down from $4.09 a year earlier.

Operating expenses rose significantly, with costs of services increasing by 13.7% to $280.7 million, largely due to higher employee compensation and amortization of intangible assets. Selling, general, and administrative expenses also grew by 7.1% to $110.6 million. Consequently, operating income fell by 4.1% to $194.2 million, leading to a decrease in operating margin from 36.6% to 33.2%. The company attributed the decline in profitability to rising costs, particularly in employee compensation, which was influenced by a net headcount increase of 2.6% to 12,579 employees.

FactSet's strategic developments included the acquisition of LiquidityBook for $243.2 million in February 2025, enhancing its capabilities in cloud-native trading solutions. Additionally, the company completed the acquisition of Irwin for $120.2 million in November 2024, further expanding its offerings in investor relations and capital markets. As of May 31, 2025, FactSet served over 8,800 clients, comprising more than 220,000 investment professionals, reflecting a net increase of 9.7% in client count year-over-year.

The company reported a total annual subscription value (ASV) of $2.3 billion, with organic ASV increasing by 4.5% compared to the previous year. The Americas segment accounted for 65% of total ASV, driven by strong demand for workstations and data solutions. FactSet's geographic expansion continues, with revenue growth across all segments, particularly in the Americas, which saw a 6.7% increase in revenues.

Looking ahead, FactSet remains focused on enhancing its data offerings and integrating artificial intelligence into its services. The company anticipates continued growth in organic revenues and ASV, supported by its strategic acquisitions and investments in technology. However, it also acknowledges potential challenges related to rising operational costs and market conditions.