What the company does 🌐
FactSet Research Systems is a global financial data, analytics, and workflow company used by investment professionals. It delivers an integrated platform that combines datasets, analytics tools, and research/workflow features into one subscription service.
- Who uses it: asset managers, hedge funds, investment banks, and wealth managers.
- How it makes money: mostly through recurring subscriptions (clients pay ongoing fees, not one-time purchases).
- Why it can be “sticky”: the platform is embedded in daily workflows, and switching can be disruptive.
Financial Highlights 📊
FactSet reported steady growth from FY2023 to FY2025 across revenue, operating income, net income, and EPS. Profitability also improved, with operating and net margins trending higher over time.
- Revenue: increased each year through FY2025.
- Operating income: rose alongside revenue, reflecting continued profitability from core operations.
- Net income and EPS: increased year over year through FY2025.
- Cash generation: operating cash flow grew over time, supporting reinvestment and shareholder returns.
Key Risks ⚠️
Management emphasizes company- and industry-specific risks that could affect results and client relationships:
- Cybersecurity and data security: a security incident could disrupt service or damage trust (trust is critical in financial data and workflows).
- Third-party content dependence: FactSet relies on external data providers; contract changes or higher costs could pressure the business.
- Technology and cloud concentration: service reliability depends on large-scale systems, and heavy reliance on a major cloud provider can add operational and cost risk.
- Competition: the industry includes large, well-funded competitors, which can pressure pricing and require ongoing innovation.
- Global operations complexity: operating across regions adds compliance and operational challenges (including privacy/data rules).
MD&A Highlights 🧭
In management’s discussion, the company points to a recurring subscription model as a key driver of stability. Management also highlights continued investment in people and technology infrastructure to support product development, service delivery, and competitiveness.
- Growth focus: organic growth (growth from existing products and clients, excluding acquisitions) and continued client demand.
- Cost drivers: personnel and technology spending, including scalable infrastructure needs.
- Capital allocation: reinvestment in the business, plus shareholder returns through dividends and share repurchases.
Takeaway ✅
FactSet’s FY2025 results reflect a business built around recurring subscriptions, consistent profitability, and strong operating cash generation. For beginners, the key idea is simple: FactSet sells essential tools and data to professional investors, and its performance depends heavily on client retention, reliable service delivery, and continued product investment.
Income Statement Summary
| (Unit: $m, EPS in $) | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Revenue | 2,085.5 | 2,203.1 | 2,321.7 |
| Cost of Goods Sold | 973.2 | 1,011.9 | 1,097.8 |
| Gross Profit | 1,112.3 | 1,191.1 | 1,224.0 |
| SG&A | 483.1 | 489.8 | 475.7 |
| Operating Income | 629.2 | 701.3 | 748.3 |
| Non-Operating Income/Expense | (45.3) | (49.8) | (27.3) |
| Interest Income/Expense | (53.5) | (51.3) | (49.8) |
| Income Before Tax | 584.0 | 651.5 | 721.0 |
| Income Tax | 115.8 | 114.4 | 123.9 |
| Net Income | 468.2 | 537.1 | 597.0 |
| EPS | 12.0 | 13.9 | 15.6 |
Plain English: FactSet grew revenue steadily from FY2023 to FY2025, and operating income rose as well. Net income and EPS increased each year, helped by the company’s recurring subscription-style revenue model. Non-operating items were a drag overall (mainly interest expense), but the drag eased in FY2025.
Key Financial Ratios
| Ratio | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| ROE (%) | 31.7 | 30.4 | 29.1 |
| ROA (%) | 11.7 | 13.4 | 14.3 |
| ROTC (%) | 19.5 | 21.4 | 21.1 |
| ROIC (%) | 18.0 | 20.2 | 19.3 |
| Gross Margin (%) | 53.3 | 54.1 | 52.7 |
| Operating Margin (%) | 30.2 | 31.8 | 32.2 |
| Pretax Margin (%) | 28.0 | 29.6 | 31.1 |
| Net Margin (%) | 22.4 | 24.4 | 25.7 |
| Debt-to-Equity Ratio (D/E) (%) | 144.6 | 112.0 | 96.9 |
| Net Debt / EBITDA (x) | 1.6 | 1.1 | 1.1 |
| Interest Coverage Ratio (x) | 9.5 | 10.7 | 13.3 |
| Current Ratio (%) | 1.6 | 1.3 | 1.4 |
| Quick Ratio (%) | 1.4 | 1.1 | 1.2 |
| Fixed Asset to Long-term Capital Ratio (%) | 2.7 | 2.6 | 2.4 |
Plain English: Profitability improved over time: operating and net margins moved higher, and returns on capital (ROTC and ROIC) stayed strong. Leverage metrics also improved, with Debt-to-Equity declining and interest coverage rising in FY2025. Net Debt / EBITDA around 1.1x in FY2024–FY2025 suggests the debt load looked manageable relative to earnings power.
📝 Disclaimer
This article is intended for educational purposes only. It does not constitute financial, investment, or legal advice. All investment decisions involve risks, and readers should conduct their own research or consult with a licensed financial advisor.
👉 FactSet Research Systems (FDS) FY 2025 10-K Analysis (Filed 2025) | Explained for Beginners