FactSet 2025 Q3 Earnings Misses Targets as Net Income Declines 6.1%

FactSet (FDS) reported its fiscal 2025 Q3 earnings on Jun 22nd, 2025. FactSet's earnings fell short of expectations, with net income declining 6.1% to $148.54 million compared to $158.13 million in the previous year. The company's diluted EPS also decreased by 5.4% to $3.87, missing analysts' average expectation of $4.30 per share. FactSet reaffirmed its fiscal 2025 guidance, maintaining projections for organic ASV growth and GAAP revenue. Additionally, the company announced a new $400 million share repurchase authorization set to begin in September 2025, which underscores their confidence in long-term growth despite current challenges.

Revenue

FactSet's total revenue rose by 5.9% to $585.52 million in Q3 2025, compared to $552.71 million in Q3 2024. This growth was driven by wealth and institutional buy-side clients, showcasing the effectiveness of the company's strategic focus.

Earnings/Net Income

FactSet's EPS declined by 5.5% to $3.92 in Q3 2025 from $4.15 in Q3 2024, with net income falling 6.1% to $148.54 million. FactSet's profitability metrics indicate challenges, as margins were compressed by higher operating expenses linked to acquisitions.

Post Earnings Price Action Review

Investing in FactSet shares following a revenue increase and holding them for 30 days post-report has historically yielded a 13.45% return, which underperformed the benchmark by 40.77%. The strategy showed a compound annual growth rate (CAGR) of 4.33%, a maximum drawdown of -19.94%, and a Sharpe ratio of 0.19, highlighting significant volatility and moderate returns. Despite the strategy's underperformance relative to the benchmark, FactSet's consistent business model and client loyalty provide a solid foundation for potential future growth. However, investors should remain cautious due to the substantial volatility reflected in the strategy's Sharpe ratio and drawdown figures.

CEO Commentary

"We are pleased with our third quarter performance, which reflects the execution of our enterprise solution strategy," said Phil Snow, CEO of FactSet. He highlighted that growth was driven by wealth and institutional buy-side clients, leading to a 5.9% increase in GAAP revenues. Snow expressed pride in the solid foundation established on innovation and client trust, providing confidence in the company's continued success as it transitions to new leadership.

Guidance

"In the second half of fiscal 2025, we anticipate improved results, with third quarter organic ASV growth accelerating," stated Helen Shan, CFO. She reaffirmed the fiscal 2025 guidance, emphasizing the focus on investing in strategic priorities while achieving full-year targets.

Additional News

FactSet has announced a significant leadership transition, appointing Sanoke Viswanathan as CEO effective September 2025, succeeding Phil Snow. Snow will remain a senior advisor through the end of the calendar year, ensuring a smooth transition. Additionally, the company has bolstered its shareholder returns by approving a new $400 million share repurchase authorization, set to commence in September 2025. FactSet also increased its quarterly dividend by 6% to $1.10 per share, marking the 26th consecutive year of dividend growth. These strategic moves underscore FactSet's confidence in its long-term growth prospects despite the current financial pressures.