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

Jun 26, 2018 • 11:00 am ET


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


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Philip Snow

to margin expansion.

We increased ASV by $9 million in the last 3 months. The increase was primarily driven by analytics, CTS, wealth, and our annual price increase, to our international clients. Our cross-selling efforts drove many of the wins this quarter. Analytics added more than 50% of the net increase in ASV this quarter. And we highlighted our risk offering at our Investor Day, as a key driver within analytics. This quarter was no different with a number of multi-asset class risk wins.

CTS had another strong quarter, maintaining a high growth trajectory, year-over-year. And we're really excited about the Open:FactSet Marketplace, which launched in April. This new platform offers both core financial, and alternative data sets. Examples are ESG, satellite and sentiment data to address the growing demand for more integrated content, across our client base. And we're seeing particularly strong interest from the quants, within hedge funds as well as traditional asset managers.

Our wealth management business also performed well this quarter, with workstation deployments across top-tier clients, displacing our main competitors. Much of our client count and workstation increase this quarter is coming from the wealth business. We've executed well, against our strategy of broadening our wealth solutions and capturing wins with large clients. We also saw cancellations this quarter, but at a decreased rate compared to the same quarter last year. Most of the cancellations were due to firm closures, and firm consolidations, a recurring theme in the industry. However, this quarter versus last year, we saw a reduction in cancellations from firm consolidations. For the last two quarters, we've seen a reduction in cancellations, but we still believe that the cost pressures in the industry, have not abated. We performed well this quarter with our client retention rate increasing to 90%.

Turning to our geographic breakdown. Our Americas organic ASV growth was 4%, driven by analytics and CTS products, primarily sold to institutional asset managers. Outside of the Americas, ASV grew organically by 7%, with Asia Pac growing over 13%, and Europe growing at 5%. In Asia Pac, we gained new clients, and increased sales to existing clients, particularly in Singapore, and Australia. Analytics, both fixed income and equity products, and CTS were the main contributors. We also opened a new office in Shanghai, which strengthens our position in the growing Chinese market.

EMEA had a stronger Q3, than last year. In addition to the price increase, we had major wins in Europe, with analytics, CTS and an increase in workstation sales. The UK and Nordics regions performed particularly well this quarter. We had a good win in Europe, with an integrated BISAM portfolio analysis solution, a great example of our portfolio life cycle strategy, to cross sell, and up-sell, our broader suite of products.

In conclusion, we believe, we remain on track to achieve our annual and medium-term goals as laid out at Investor Day. We've got good visibility, as we start our final quarter for fiscal 2018 and feel positive about our