FactSet Research Systems Inc. (FDS) posted first-quarter results that should quiet any doubts about the financial data provider's staying power in an AI-dominated landscape. The company reported sales of $607.6 million, sailing past analyst expectations of $600.5 million and marking a solid 6.9% year-over-year gain.
Adjusted earnings per share came in at $4.51, comfortably ahead of the $4.37 consensus estimate. Not bad for a business some might worry could get disrupted by chatbots and machine learning algorithms.
The Numbers Behind the Beat
Organic revenue growth clocked in at 6.0% year-over-year, reaching $600.0 million for the quarter. The company's client roster expanded to 9,003 as of November 30, 2025, adding 7 net new clients over the past three months. Corporate and wealth management clients led the growth.
Annual Subscription Value, the metric that matters most for understanding FactSet's recurring revenue base, stood at $2.41 billion at quarter-end compared to $2.266 billion a year earlier. Organic ASV increased by $6.6 million over the trailing three months, signaling steady momentum in the business.
Operating margins did compress slightly to 36.2% from 37.6% in the prior-year period, driven by higher technology spending and third-party content costs. That's the price of staying competitive in a data-hungry market.
Capital Allocation on Display
FactSet paid out a quarterly dividend of $41.0 million, or $1.10 per share, on December 18 to shareholders of record as of November 28. The company also bought back 478,100 shares for $139.9 million during the quarter under its existing repurchase program.
Here's where things get interesting: as of November 30, FactSet had $260.1 million remaining under its buyback authorization. But on December 16, the board approved an additional $600 million to $1 billion in repurchase authority, effective immediately. That's a serious vote of confidence in the stock.
The balance sheet shows $275.5 million in cash and equivalents against $1.37 billion in long-term debt as of November 30.
The AI Question Everyone's Asking
CEO Sanoke Viswanathan addressed what's probably the most important strategic question facing the company right now: what does AI mean for FactSet's future? His take was refreshingly straightforward.
"FactSet's strong start to the year underscores the quality of our data and products and the strategic role our platform and analytical services play across the financial ecosystem," Viswanathan said.
During the earnings call, he went further, making it clear that AI enhances rather than threatens FactSet's core business. "AI doesn't replace what makes FactSet essential. It amplifies it," he explained, pointing to broad-based positive sentiment across markets.
Importantly, Viswanathan said the company doesn't expect AI to drive significant headcount reductions. Instead, FactSet plans to continue investing in content and AI capabilities to support long-term growth. It's a bet that AI tools will make the company's offerings more valuable, not redundant.
Looking Ahead
FactSet reaffirmed its fiscal 2026 guidance, projecting adjusted EPS between $16.90 and $17.60, compared to the $17.38 analyst consensus. Revenue is expected to land between $2.423 billion and $2.448 billion, versus the $2.442 billion consensus estimate.
The company anticipates organic ASV growth of $100 million to $150 million for the full year, with adjusted operating margins in the 34.0% to 35.5% range.
FactSet shares fell 7.71% to $273.29 following the results, according to market data. Sometimes even a solid beat isn't enough when investors were hoping for more.