FactSet Research (FDS) reported EPS for the quarter of 75 cents, exceeding the Zacks Consensus Estimate of 74 cents.
The company reported revenue for the second quarter of $157.3 million, up 0.5% from $156.5 million reported in the year-ago quarter. The company is witnessing some benefits from investments made during the downturn, as well as the highest quarterly user growth in two years.
Geographically, revenues from the U.S. were $106.8 million, flat compared to the year- ago quarter, while non-U.S. revenues increased 1.3% to $50.5 million.
Annual Subscription Value (ASV) increased $14.0 million sequentially to $635.0 million in the second quarter. Of this, 82.0% of ASV was from buy-side clients and the remainder from sell-side firms performing M&A advisory work and equity research. ASV from FactSet’s U.S. operations was $430.3 million, while international operations supporting ASV amounted to $204.3 million.
The company exited the quarter with 38,800 users, an increase of 1400 users during the quarter. Client count was 2,052 at quarter-end, a net increase of 8 clients. Annual client retention rate was greater than 95.0% of ASV and 88.0% of clients. Portfolio Analytics (PA) 2.0 was deployed by 655 clients and 5,794 users at quarter-end. PA users increased by 124 sequentially during the quarter, while the number of PA clients increased by 8.
Operating margin was 34.6% in the quarter, an increase of 140 basis points year-over-year. This increase in operating margin may be attributed to the decline in operating expense and successful cost savings.
Net income for the quarter came in at $36.1 million, an increase of 4.5% from $34.6 million reported in the year-ago period. The growth in net income for the quarter was partially offset by other income which declined 23.4% year over year to $151,000. On a fully diluted basis, the quarterly EPS of 75 cents marked an increase of 5.6% from 71 cents in the year-ago quarter.
FactSet exited the quarter with $205.0 million in cash and short-term investments, compared to $216.3 million in the previous quarter. The company has no long-term debt. During the quarter, the company repurchased 844,057 shares of common stock for $55.0 million and $95.0 million remains authorized for repurchase. This apart, the company incurred a net capital expenditure of 2.0 million during the quarter.
For the third quarter of fiscal 2010, FactSet expects revenue in the range of $157.0 million to $161.0 million. Diluted EPS for the first quarter is expected to be in the 75 to 77 cents range. For full fiscal year 2010, FactSet expects capital expenditures, net of landlord contributions, to be between $20.0 million to $26.0 million.
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