Revenue and earnings top forecasts
FactSet Research Systems Inc. (NYSE:FDS) reported better-than-expected third-quarter fiscal 2026 results on Wednesday, but the company’s full-year earnings outlook failed to impress investors, sending the stock lower in pre-market trading.
Shares fell nearly 3% after the financial data and AI solutions provider reaffirmed guidance that came in below Wall Street expectations.
Adjusted earnings per share reached $4.53, exceeding analysts’ consensus estimate of $4.45 by $0.08.
Revenue increased 6.4% year over year to $622.9 million, ahead of market expectations of $617.3 million and up from $585.5 million in the same quarter last year.
Full-year guidance remains unchanged
Despite the stronger quarterly performance, FactSet left its fiscal 2026 outlook unchanged.
The company continues to expect adjusted earnings per share of between $17.25 and $17.75. The midpoint of $17.50 sits below the analyst consensus forecast of $17.71.
FactSet also reaffirmed its revenue guidance of $2.45 billion to $2.47 billion for the year, with the midpoint broadly matching market expectations.
“FactSet’s strong third quarter results reflect solid execution against our strategic priorities and continued demand for our differentiated content, analytics, and workflow solutions,” said CEO Sanoke Viswanathan.
AI adoption continues to accelerate
Organic Annual Subscription Value (ASV) climbed 7.1% year over year to $2.49 billion as of May 31, 2026.
FactSet also reported growing customer adoption of its artificial intelligence offerings, with more than 90% of its 50 largest clients now using four or more AI products.
Annual ASV retention remained above 95%, highlighting the company’s strong customer retention rates.
Margins narrow as costs increase
Adjusted operating margin declined to 34.0% from 36.8% a year earlier, primarily reflecting higher compensation expenses and increased technology investment.
On a GAAP basis, operating margin fell to 26.7%, compared with 33.2% in the prior-year period, largely due to one-off charges and CEO-related compensation costs.
Shareholder returns remain a priority
During the quarter, FactSet returned $243.4 million to shareholders through dividends and share repurchases.
The latest dividend increase also marked the company’s twenty-seventh consecutive year of annual dividend growth.