Factset FY 3Q13 Earnings Call Notes

posted in: Notes | 0

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

$FDS Earnings Call Notes

“We added 4 net new clients, reaching a total of 2,440 clients. At FactSet, we do not count every single company that uses our service as a client. Companies on trial are not included, nor our clients that pay less than $24,000 a year.”

“Our annual client retention this year was greater than 95% of ASV, and our retention rate in terms of number of actual clients was 92%.”

“Our user count increased this quarter by 61 users, to reach a total of 49,500 at quarter end. Buy-side clients added users, while some sell-side clients continued to reduce theirs.”

“We continue to make gains on the buy-side, which accounts for 83% of our total revenues. The sell-side, particularly equity research, has been under significant pressure for some time.”

“Our clients continue to be cautious in a market that is still far from settled. On the sell-side, which constitutes about 70 — 17% of our business, they continue to contract, both in terms of headcount and purchasing, to focus significantly on cost savings. On the buy-side, they’re still hesitant to make large purchases because given market volatility, they cannot be certain where they’ll wind up for this year in terms of performance.”

“I think we’re definitely seeing tiny signs of hiring, but it’s not one of those things where it feels like a market of several years ago.”

“We haven’t seen the significant amount of Eikon in the marketplace. The indications are that most of the rollouts are happening in segments of the market where FactSet doesn’t have a strong presence, including the trading and execution space. We do know that firms are being contacted and there is an initiative across all the Thomson platforms to transition them away from their legacy platform to the new icon platform. And the fact that it’s out there, reminding clients that if clients are in a transition period, we can offer them a seamless transition and offer them a very attractive alternative.”

“I think we certainly have ETF creators as clients, and also the ETF in the same category as passives. Passives have been around for a long time and there are many players in the space that are — and several huge players in the space. And the shift and mix over time into passives has been a long-term trend. I would say certainly, a negative to the active, as an asset class, but I always question where the assets are actually coming from and what do these plays mean.”