FactSet Research Systems Inc. (NYSE:FDS) Q4 2020 Earnings Conference Call - Final Transcript

Sep 24, 2020 • 11:00 am ET


FactSet Research Systems Inc. (NYSE:FDS) Q4 2020 Earnings Conference Call - Final Transcript


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Helen Shan

our dividend for the 15th consecutive year. We remain committed to returning long-term value to our shareholders.

Turning now to our outlook for fiscal year 2021, we operate in an environment that is in need of greater digital capabilities and differentiating solutions, which presents numerous opportunities for FactSet. For that reason and given the solid progress we have already made, we remain confident in our strategy of investing in content and technology and in our ability to drive growth with our clients and to operate efficiently. The current environment also gives us less visibility due to pandemic, economic and political factors that may well have an impact on our clients' budgets for next year. Therefore, we remain cautious as we start our new fiscal year. As Phil mentioned and as you can see in our press release from this morning, we expect ASV plus professional services for the year to increase between $55 million and $85 million over fiscal 2020. The remaining metrics listed on this slide all stem from our ASV ranges and reflect our planned investments. We will continue to execute at the same pace in content and technology as outlined last September.

We believe momentum in our businesses from fiscal 2020 will carry us into fiscal 2021 with a number of tailwinds, including the strength in our analytics business, as clients add our front office solutions, performance and risk and APIs to their workflows, as well as continuing demand for our core data feeds and wealth tools. Additionally, we expect high client retention to continue and will serve as a solid base for research, buoyed by the continued demand for expanded content coverage in deep sector and private markets.

As highlighted earlier in the year, I want to give you some details of the external factors we think may impact our top line growth for 2021. First, delays in decision making could cause longer sales cycle. While we built a strong pipeline and converted it with solid execution in 2020, we did experience situations in which larger and more complex deals required additional reviews, lengthening the time to close, especially in this virtual environment. We expect this may continue in 2021. Second, client budget may tighten. The majority of our clients will finalize their 2021 budgets toward the end of this calendar year. Depending on the speed of a vaccine and economic recovery, clients may be cautious in their outlook and reduce or delay their spend. And third, a prolonged pandemic and virtual environment may slow new business growth. The strength of our sales force and our value proposition converted into key wins this year, proving that we can sell virtually. However, as pandemic-related uncertainty blunts decision making, we acknowledge that clients may take longer to switch providers and it may take more time to build new relationships virtually.

These same factors impact our visibility when we consider the 2022 targets laid out last September as part of a multi-year investment plan. While we maintain strong conviction