FactSet Reports Q3 Fiscal 2026 Revenue Growth to $622.9 Million, Net Income Declines

FactSet Research Systems Inc. reported its financial results for the third quarter of fiscal 2026, revealing a revenue of $622.9 million, a 6.4% increase from $585.5 million in the same period last year. The growth was primarily driven by a 7.0% rise in organic revenues, although it was partially offset by a 0.6% decline due to the disposition of a business at the end of the previous fiscal year. For the nine months ending May 31, 2026, total revenues reached $1.84 billion, up 6.8% from $1.72 billion in the prior year. However, net income for the quarter fell to $126.7 million, a decrease of 14.7% compared to $148.5 million in the prior year, while diluted earnings per share (EPS) dropped to $3.50 from $3.87.

Operating expenses increased significantly, totaling $456.6 million for the quarter, up 16.7% from $391.4 million a year earlier. This rise was attributed to higher employee compensation costs, including one-time restructuring charges and increased CEO compensation. The operating income for the quarter was $166.3 million, down 14.3% from $194.2 million in the same quarter last year, resulting in an operating margin of 26.7%, compared to 33.2% in the prior year. The company also reported a total annual subscription value (ASV) of $2.49 billion, reflecting a 7.1% increase year-over-year.

FactSet's client base grew to 9,130, an increase of 3.6% from the previous year, with user count rising to 247,766, a 12.4% increase. The company’s employee headcount also saw a slight increase of 0.9%, totaling 12,694 as of May 31, 2026. The growth in clients and users was primarily driven by corporate clients and wealth management users. The company reported an annual ASV retention rate exceeding 95%, indicating strong client loyalty.

In terms of strategic developments, FactSet completed two significant acquisitions: LiquidityBook for $243.2 million and Irwin for $120.2 million. These acquisitions are expected to enhance FactSet's capabilities in providing integrated solutions for investment workflows. The company also returned $243.4 million to shareholders through share repurchases and dividends during the quarter, reflecting its commitment to returning value to stockholders.

Looking ahead, FactSet anticipates continued growth driven by its focus on expanding data offerings, embedding deeper into client workflows, and innovating with artificial intelligence. However, the company also acknowledged challenges, including higher operating expenses and the need to address a material weakness in internal controls over financial reporting. The management remains optimistic about leveraging its strategic initiatives to drive future performance.