Financials and guidance: Organic ASV rose 6.7% to $2.45B, revenue was $611M (+7.1%) and adjusted EPS was $4.46 (+4%); FactSet raised fiscal‑2026 ASV, revenue and EPS guidance while maintaining its operating margin range.

AI drives product traction and productivity: Management said AI is both a demand driver and efficiency lever—MCP has 120+ clients with rapidly rising API volumes, AI coding assistants account for nearly 20% of successful code commits, and the company has already captured over half of its targeted 100 bps productivity gain.

Commercial momentum and buybacks: FactSet added 98 net new clients (9,101 total), users exceeded 241,000 with 91% client retention and ASV retention >95%, cross‑sell improved among top clients, and buybacks accelerated (~652k shares for $163M in Q2; >$300M YTD with ~ $700M remaining authorization).

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FactSet Research Systems (NYSE:FDS) reported second-quarter fiscal 2026 results that management said reflected accelerating growth across geographies and client types, alongside ongoing investment in technology and productivity initiatives tied to artificial intelligence.

On the company’s earnings call, CEO Sanoke Viswanathan said annual subscription value (ASV) growth accelerated for the fourth consecutive quarter. Organic ASV increased 6.7% to $2.45 billion, while adjusted operating margin was 35% and adjusted diluted EPS rose 4% year over year to $4.46. CFO Helen Shan reported revenue of $611 million, up 7.1% year over year (6.8% organic, excluding foreign exchange and M&A impacts).

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Shan said organic ASV growth was “balanced across all regions” and driven by client expansion, new business wins, and higher pricing capture from FactSet’s annual price increase in the Americas.

Americas: Organic ASV grew 7%, up from 6% in the prior quarter, with strength in asset management driven by trading and middle-office solutions. Dealmakers benefited from competitive displacements in banking and uplift from sell-side research renewals, while new logos were “powered by hedge funds and corporates,” according to Shan.

EMEA: Organic ASV grew 4%, matching Q1. Shan cited a competitive managed services win, higher demand for data solutions in wealth, and a large banking renewal that included Pitch Creator and the company’s new MCP solution. She noted softness with asset owners, “partly due to pension reform in the Netherlands.”

Asia-Pacific: Organic ASV accelerated to 10% from 8% last quarter, driven by improved demand from asset managers and hedge funds for middle-office and trading solutions, plus stronger banking retention.

By firm type, Shan said institutional buy-side organic ASV grew 5% (up from 4% in Q1), citing higher trading volumes supported by additional Portware installations, increased data demand among hedge funds, and managed services tied to performance solutions. Wealth posted 10% organic ASV growth despite what she described as a challenging comparison tied to a “landmark UBS win a year ago.” Dealmakers grew 8% (up from 6% in Q1), while corporates and private capital “accelerated to double-digit growth” driven by demand for FactSet data. Market Infrastructure growth accelerated to 8%, supported by real-time data and retention, and Shan added that “strong issuance activity supported the positive results for CUSIP.”

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FactSet said it added 98 net new clients in the quarter, bringing the total to 9,101, and increased its user base to more than 241,000—additions that Shan said were largely in wealth and dealmakers and equated to a 10% annual growth rate. Retention remained “solid,” with 91% client retention and ASV retention above 95%, she said.

Viswanathan highlighted shifts in the company’s commercial approach, including pricing and packaging changes and a greater focus on enterprise agreements. He said direct seat-based exposure now represents less than 20% of ASV due to “appropriate minimums and bundling into enterprise agreements.” In Q2, he said the majority of renewed ASV came through enterprise agreements or contracts longer than three years, and that renewals “extended in length by more than 30%” on average.

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Viswanathan also pointed to cross-sell metrics, saying 86% of the top 200 clients use five or more FactSet solutions, up from 78% three years ago. He added that data solutions grew by double digits across all firm types in Q2 and that 48 of FactSet’s top 50 clients were using at least three of its AI solutions, with others in trials.

Management repeatedly framed AI as both a demand driver and an internal efficiency lever. Viswanathan said FactSet’s “foundational strengths” are becoming more valuable in an AI-intensive environment, citing connected data, embedded workflows, service, and distribution. He said that as clients move AI into production, “they are pulling FactSet deeper into their operations, not replacing us.”

Among product and partnership updates, Viswanathan said FactSet’s MCP server—built on its content API ecosystem—launched in December and already had “over 120 clients actively engaged.” He said API call volume was rising, with March volumes at three times February levels. He also cited partnerships with Snowflake and Databricks for cloud-based workflows, and said the company is partnering with Anthropic, OpenAI, and other “frontier labs” to make FactSet datasets available in marketplaces. Viswanathan noted a newly announced partnership with Finster aimed at accelerating an “agentic platform for banking.”

Internally, Viswanathan said FactSet had already captured more than half of the 100 basis points of productivity improvement targeted for the year, with efforts focused on technology, data operations, and client support. He said AI coding assistants now author “nearly one-fifth” of successful code commits and free up about a quarter of engineering capacity in those teams, with “over 90% reduction” in effort spent on routine upgrades and patching. In data operations, he said FactSet deployed four AI tools that produced “25%+ reduction in manual curation on average,” and highlighted a private company classification effort that quadrupled classification capacity year over year while keeping costs flat.

Shan said AI was “playing a dual role” by enhancing client value while driving productivity gains, and described the company’s investment mix as roughly two-thirds toward growth initiatives and one-third toward internal infrastructure. She also said FactSet reduced the cost of vectorizing client data by 80% while delivering “faster and more accurate results.”

Based on first-half performance, FactSet raised its fiscal 2026 outlook for ASV, revenue, and EPS while maintaining its operating margin guidance range. Shan said ASV growth is now expected to be $130 million to $160 million (about 5.4% to 6.7%), an increase of $20 million at the midpoint. The company raised its GAAP revenue outlook to $2.45 billion to $2.47 billion, up $25 million at the midpoint.

The company maintained its GAAP and adjusted operating margin guidance ranges, with Shan noting the framework accounts for potentially higher performance-based compensation given the commercial outlook. She said the effective tax rate guidance was unchanged. FactSet raised its GAAP EPS guidance to $14.85 to $15.35 and its adjusted EPS guidance to $17.25 to $17.75.

Shan also detailed capital allocation, noting gross debt leverage of 1.4 times and an accelerated pace of repurchases. FactSet bought back about 652,000 shares for $163 million in Q2 and deployed more than $300 million year to date. She said the pace of buybacks over the past two quarters reduced total shares outstanding by 3%, and that roughly $700 million remained under the company’s upsized $1 billion authorization.

In closing remarks, Viswanathan said accelerating ASV growth, improved commercial execution, and productivity gains “position us well for the second half of fiscal 2026 and beyond,” adding that the company plans to host clients at FactSet FOCUS in May to showcase product innovation.

FactSet Research Systems Inc operates as a global provider of integrated financial data and analytics to the investment community. Founded in 1978 and headquartered in Norwalk, Connecticut, the company offers a unified platform that aggregates content from thousands of sources, delivering real-time and historical market data, company fundamentals, estimates, fixed-income information and proprietary analytics to portfolio managers, research analysts, investment bankers and risk officers.

The company's core products include the FactSet Workstation, an application offering customizable screening, charting, portfolio analysis and news; APIs and data feeds for seamless integration into proprietary systems; and cloud-based solutions for thematic research and quantitative strategies.

The article "FactSet Research Systems Q2 Earnings Call Highlights" was originally published by MarketBeat.