FactSet 2026 Q1 Earnings Revenue Grows 6.9% as Net Income Rises 1.7%

FactSet (FDS) delivered Q1 2026 results that exceeded expectations, with revenue growth outpacing analyst forecasts and guidance reaffirmed in line with prior expectations. The stock’s post-earnings decline, however, highlighted investor concerns over margin pressures and AI-driven market shifts.

Revenue

FactSet’s total revenue rose 6.9% year-over-year to $607.62 million, driven by strong demand in institutional and buy-side client segments. Organic revenue, excluding acquisition/disposition and FX impacts, grew 6.0% to $600.0 million. Regional performance was broad-based, with the Americas contributing $396.2 million (up 6.0%), EMEA adding $149.5 million (5.3% growth), and Asia Pacific surging 8.0% to $61.9 million.

Earnings/Net Income

Adjusted diluted EPS climbed 3.3% to $4.08, while net income reached $152.58 million, a 1.7% increase from the prior year. Despite the EPS growth, GAAP operating margins contracted 137 bps to 31.6%, reflecting higher technology and content investments. The EPS performance remains positive, though margin compression signals near-term challenges in sustaining profitability amid strategic spending.

Post-Earnings Price Action Review

The strategy of buying FDS when revenues miss and holding for 30 days underperformed significantly, returning -11.97% versus a benchmark gain of 85.83%. The -97.80% excess return and -2.54% CAGR underscore the strategy’s failure to capitalize on the stock’s volatility. A maximum drawdown of 0.00% further indicates liquidation risks during the period.

CEO Commentary

CEO Sanoke Viswanathan emphasized 5.9% ASV growth to $2.4 billion and 36.2% adjusted operating margins. Strategic priorities include AI-driven tools, client retention, and productivity gains. The $1 billion share repurchase authorization and $1.10 quarterly dividend underscore confidence in long-term resilience.

Guidance

FactSet reaffirmed FY2026 guidance, targeting $2.423B–$2.448B in GAAP revenue and $16.90–$17.60 in adjusted EPS. While management highlighted disciplined execution, Q2 margin pressures from AI investments remain a near-term headwind.

Additional News

FactSet expanded its share repurchase authorization to $1 billion, signaling robust capital return intentions. The company also announced AI integration advancements, including a Model Context Protocol (MCP) server for AI model interoperability. Additionally, the board approved a $1.10 quarterly dividend, reflecting its commitment to shareholder value.

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