FactSet Research Systems Inc. (NYSE:FDS) Q3 2018 Earnings Conference Call - Final Transcript

Jun 26, 2018 • 11:00 am ET


FactSet Research Systems Inc. (NYSE:FDS) Q3 2018 Earnings Conference Call - Final Transcript


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Good morning. My name is Stephanie, and I will be your conference operator today. At this time, I would like to welcome everyone to the FactSet Third Quarter Earnings Conference Call. All lines have been placed on mute to avoid any background noise. After the speaker's remarks, there will be a question-and-answer session. (Operator Instructions)

Rima Hyder, Vice President of Investor Relations, you may begin your conference.

Rima Hyder

Thank you, Stephanie and good morning, everyone. Welcome to FactSet's third quarter 2018 earnings conference call. Before we begin, I would like to point out that the slides we will reference during the course of this presentation can be accessed via the webcast on the Investor Relations section of our website at factset.com. The slides will be posted on our website at the conclusion of this call. A replay of today's call will be available via phone, and on our website. This conference call is being transcribed in real time by FactSet's CallStreet service, and is being broadcast live on factset.com.

After our prepared remarks, we will open the call to questions to investors. (Operator Instructions)

(Forward-Looking Cautionary Statements).

Our slide presentation and discussions on this call will include certain non-GAAP financial measures. For such measures, reconciliation to the most directly comparable GAAP measures are in the appendix of the presentation, and in our earnings release issued this morning.

Joining me today are Phil Snow, Chief Executive Officer; and Maurizio Nicolelli, Chief Financial Officer. And now I'd like to turn the discussion over to Phil Snow.

Philip Snow

Thanks, Rima. Good morning to everyone, and thank you for joining us on the call today. As we near the close of our fiscal year, we are pleased with our achievements, and remain committed to executing on our growth strategy and returning value to shareholders. In September, we'll celebrate 40 years as a company. And while a lot has changed, the one thing that has remained constant is the strong collaboration with our clients. We have developed some of the best-in-class solutions in our industry, and become an integral part of our clients daily investment process. This quarter, we saw strong revenue and EPS growth. And although we saw a dip in our organic ASV growth rate, we believe we have a solid Q4 pipeline that will allow us to close off fiscal 2018, within our guidance range.

Turning to third quarter results. We grew organic revenue at 6%, and ASV at over 5%. Adjusted diluted EPS increased 18% to $2.18, boosted by the US tax reform, and our share repurchase program. Adjusted operating margin for the quarter was 31%, a slight decrease from last year and last quarter. However, we are very focused on achieving our medium-term goals of increasing operating margin by 100 basis points per year over the next two years. This quarter, we took actions to streamline parts of our organization, and to optimize costs. And we believe these actions, in combination with our continuing efforts to integrate our acquisitions, pave the path forward