FACTSET RESEARCH SYSTEMS INC (FDS)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the Consolidated Financial Statements and related Notes included in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the fiscal year ended August 31, 2025, our Current Reports on Form 8-K and our other filings with the Securities and Exchange Commission. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause such differences include, but are not limited to, those discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended August 31, 2025.

Our MD&A is designed to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results. Our MD&A is presented in the following sections:

•Executive Overview

•Annual Subscription Value ("ASV")

•Client and User Additions

•Employee Headcount

•Results of Operations

•Non-GAAP Financial Measures

•Liquidity and Capital Resources

•Off-Balance Sheet Arrangements

•Foreign Currency Exposure

•Critical Accounting Estimates

•New Accounting Pronouncements

Executive Overview

FactSet Research Systems Inc. and its wholly-owned subsidiaries ("we," "our," "us," the "Company" or "FactSet") is a global financial digital platform and enterprise solutions provider with open and flexible technologies that deliver financial intelligence to investment professionals worldwide.

Our platform delivers expansive data, sophisticated analytics, and flexible, artificial intelligence ("AI")-powered technologies used by global financial professionals to power their critical investment workflows. As of May 31, 2026, we had more than 9,100 clients comprised of over 247,000 investment professionals, including institutional asset managers, bankers, wealth managers, asset owners, hedge funds, corporate users, and private equity and venture capital professionals. Our revenues are primarily derived from subscriptions to our multi-asset class data and solutions powered by our connected data and technology platform. Our products and services include workstations, portfolio analytics and enterprise data solutions. We also offer managed services that operate as an extension of our clients' internal teams to support data, performance, risk and reporting workflows.

We drive our business based on a detailed understanding of our clients' workflows, which helps us to solve their most complex challenges. We provide financial data and market intelligence on securities, companies, industries and people to enable our clients to research investment ideas and analyze, monitor and manage their portfolios. Our solutions span the investment lifecycle of investment research, portfolio construction and analysis, trade execution, performance measurement, risk management and reporting. We provide open and flexible technology offerings, including a configurable desktop and mobile platform, comprehensive data solutions, cloud-based digital solutions, and application programming interfaces ("APIs"). AI is embedded across these offerings to enhance data discovery, automate routine workflows and improve the speed and accuracy of client insights. The CUSIP Global Services ("CGS") business supports security master files relied on by the investment industry for critical front, middle and back-office functions. All of our platforms and solutions are supported by our client service team.

We operate our business through three reportable segments ("segments"): the Americas, EMEA and Asia Pacific. Refer to Note 15, Segment Information, in the Notes to the Consolidated Financial Statements included in Part I, Item 1. of this Quarterly Report on Form 10-Q for more information on our segments.

Within each segment, we offer data, products and analytical applications by firm type: Institutional Buyside, Dealmakers, Wealth, and Market Infrastructure. In fiscal 2026, we renamed "Partnerships and CGS" to "Market Infrastructure".

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•"Institutional Buyside" focuses on global asset managers, asset owners, and hedge fund professionals,

•"Dealmakers" focuses on investment bankers, sell-side research analysts, corporate users, investor relations officers and private equity and venture capital professionals,

•"Wealth" focuses on wealth management clients, and

•"Market Infrastructure" focuses on partnerships that deliver solutions to firms in the financial services ecosystem including data, analytics and technology platform providers, and includes CGS, the exclusive issuer of Committee on Uniform Security Identification Procedures ("CUSIP") and CUSIP International Number System ("CINS") identifiers globally.

Business Strategy

We strive to be a trusted enterprise partner and service provider to our clients across the financial services spectrum, delivering relevant intelligence, insights and execution solutions tailored to our clients' business models.

We are focused on growing our global business through three strategically aligned geographic segments: the Americas, EMEA and Asia Pacific. This approach allows us to better manage resources, target solutions and interact with clients effectively.

To execute our strategy, we are focused on three core pillars and primary areas of investment:

•Expanding our data offerings and delivery capabilities: We continue to scale up our data ecosystem to provide a comprehensive inventory of industry, proprietary and third-party data. This includes granular data for key industry verticals, real-time market data, fund data and sustainable finance. In addition to using our growing data catalog to drive our AI-powered workstation products, we aim to continue to expand our data delivery capabilities in the cloud and through other methods to advance our position as an enterprise data provider for our clients.

•Embedding deeper in client workflows: Through continued innovation, we aim to deepen our integration into our clients' workflows. We are focused on expanding further into the buy-side front office by leveraging our expertise in portfolio performance, analytics, and risk management. In addition, we are building on our strong presence on advisor desktops by expanding into prospecting and digital reporting workflows. We are also working to introduce next-generation automation in research, financial modeling, and pitch creation.

•Innovating with AI: We believe sustainable success in enterprise AI depends on trusted, high-quality data, secure integration with models and workflows, and deep domain expertise. We continue to advance a pragmatic, open, and flexible strategy for integrating AI and natural language processing into our clients’ workflows, aiming to boost productivity by surfacing actionable insights throughout the portfolio lifecycle and automating routine research and content processing tasks. FactSet is delivering AI embedded workflow solutions for various personas including research analysts, bankers, portfolio managers, wealth advisors and engineering teams across our clients.

Fiscal 2026 Third Quarter in Review

Revenues in the third quarter of fiscal 2026 were $622.9 million, an increase of 6.4% from the comparable prior year period. The growth in revenues was driven by a 7.0% increase in organic revenues, partially offset by a 0.6% decrease in revenues due to the disposition of a business at the end of the prior fiscal year. Revenues increased in all our segments, primarily in the Americas. The increase in revenues was primarily from workstations and data solutions. Refer to Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Non-GAAP Financial Measures, of this Quarterly Report on Form 10-Q for the definition of organic revenues and a reconciliation between revenues and organic revenues.

As of May 31, 2026, organic annual subscription value ("Organic ASV") totaled $2,485.6 million, an increase of 7.1% over the prior year. Organic ASV increased in all our segments, with the majority of the increase in the Americas. The Organic ASV increase was mainly driven by data solutions and workstations. Refer to Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Annual Subscription Value, of this Quarterly Report on Form 10-Q for the definition of Organic ASV.

Operating margin was 26.7% for the third quarter of fiscal 2026, compared to 33.2% in the prior year period. When expenses are expressed as a percentage of revenues, this decrease was primarily driven by higher operating expenses, mainly due to an increase in employee compensation costs, including one-time restructuring charges and Chief Executive Officer ("CEO") compensation costs pursuant to the terms of his employment agreement, partially offset by growth in revenues.

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Net income for the third quarter of fiscal 2026 was $126.7 million, a decrease of 14.7% from the prior year period. Diluted earnings per common share ("Diluted EPS") was $3.50 for the third quarter of fiscal 2026, a decrease of 9.6% compared with the prior year period. These decreases were driven by higher operating expenses, partially offset by growth in revenues. The decrease in Diluted EPS was also partially offset by a reduction in the diluted weighted average common shares outstanding of approximately 2.2 million shares.

We returned $243.4 million to our stockholders in the form of share repurchases and dividends during the three months ended May 31, 2026.

As of May 31, 2026, our client and user count was 9,130 and 247,766, respectively. Our employee headcount was 12,694 as of May 31, 2026, up 0.9% compared to the prior year. This increase was driven by net headcount growth of 1.1% in Asia Pacific, 0.6% in EMEA and 0.4% in the Americas.

Annual Subscription Value ("ASV")

We believe ASV reflects our ability to grow recurring revenues and generate positive cash flows, and thus serves as a key indicator of the successful execution of our business strategy.

–ASV at any point in time represents our forward-looking revenues for the next 12 months from all subscription services currently being supplied to clients.

–Organic ASV at any point in time equals our ASV excluding ASV from acquisitions and the comparable impact of dispositions and discontinued lines of business effected within the last 12 months and the impact of foreign currency movements.

Organic ASV

The following table presents the calculation of Organic ASV as of May 31, 2026. With proper notice provided as contractually required, our clients can add to, delete portions of, or terminate service, subject to certain limitations.

(1)For comparability purposes, in calculating the organic ASV annual growth rate, the prior year excludes ASV from dispositions completed in the last 12 months.

Organic ASV increased in all our segments, with the majority of the increase in the Americas. The increase in Organic ASV was primarily driven by data solutions and workstations. This increase is derived from higher net sales to existing clients and, to a lesser extent, sales to new clients.

Segment ASV

As of May 31, 2026, ASV from the Americas represented 65% of total ASV and was $1,621.0 million, an increase from $1,513.1 million as of May 31, 2025. Americas Organic ASV was $1,621.0 million as of May 31, 2026, a 7.2% increase

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the Consolidated Financial Statements and related Notes included in Part II, Item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, our Current Reports on Form 8-K and our other filings with the Securities and Exchange Commission. For a similar detailed discussion comparing fiscal 2024 and 2023, refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report on Form 10-K for the fiscal year ended August 31, 2024. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause such differences include, but are not limited to, those identified below and those discussed in Part I, Item 1A. Risk Factors of this Annual Report on Form 10-K.

Our MD&A is designed to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results. Our MD&A is presented in the following sections:

•Executive Overview

•Annual Subscription Value ("ASV")

•Client and User Additions

•Employee Headcount

•Results of Operations

•Non-GAAP Financial Measures

•Liquidity and Capital Resources

•Off-Balance Sheet Arrangements

•Foreign Currency Exposure

•Critical Accounting Estimates

•New Accounting Pronouncements

Executive Overview

FactSet is a global financial digital platform and enterprise solutions provider with open and flexible technologies that deliver financial intelligence to investment professionals worldwide.

Our platform delivers expansive data, sophisticated analytics, and flexible, AI-powered technologies used by global financial professionals to power their critical investment workflows. As of August 31, 2025, we had approximately 9,000 clients comprised of over 237,000 investment professionals, including institutional asset managers, bankers, wealth managers, asset owners, partners, hedge funds, corporate users, and private equity and venture capital professionals. Our revenues are primarily derived from subscriptions to our multi-asset class data and solutions powered by our connected data and technology platform. Our products and services include workstations, portfolio analytics and enterprise data solutions. We also offer managed services that operate as an extension of our clients' internal teams to support data, performance, risk and reporting workflows.

We drive our business based on a detailed understanding of our clients’ workflows, which helps us to solve their most complex challenges. We provide financial data and market intelligence on securities, companies, industries and people to enable our clients to research investment ideas and analyze, monitor and manage their portfolios. Our solutions span the investment lifecycle of investment research, portfolio construction and analysis, trade execution, performance measurement, risk management and reporting. We provide open and flexible technology offerings, including a configurable desktop and mobile platform, comprehensive data feeds, cloud-based digital solutions, and APIs. AI is embedded across these offerings to enhance data discovery, automate routine workflows and improve the speed and accuracy of client insights. The CGS business supports security master files relied on by the investment industry for critical front, middle and back-office functions. All of our platforms and solutions are supported by our dedicated client service team.

We operate our business through three segments: the Americas, EMEA and Asia Pacific. Within each segment, we offer data, products and analytical applications by firm type: Institutional Buyside, Dealmakers, Wealth, and Partnerships and CGS.

Refer to Part I, Item 1. Business - Business Overview and Business Strategy and Part II, Item 8. Note 17, Segment Information, in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for more information.

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Fiscal 2025 in Review

Revenues for fiscal 2025 were $2,321.7 million, an increase of 5.4% from the comparable prior year. The growth in revenues was driven by a 4.4% increase in organic revenues, a 0.9% increase from acquisition-related revenues and a net increase of 0.1% from foreign currency exchange rate fluctuations. Revenues increased in all our segments, primarily in the Americas. Revenues increased primarily from workstations and to a lesser extent, CGS and front office solutions. Refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, Non-GAAP Financial Measures, of this Annual Report on Form 10-K for a definition of organic revenues and a reconciliation between revenues and organic revenues.

As of August 31, 2025, organic annual subscription value ("Organic ASV") totaled $2,370.9 million, an increase of 5.7% over the prior year. Organic ASV increased in all our segments, with the majority of the increase in the Americas. Organic ASV growth was mainly driven by workstations, data solutions and, to a lesser extent, CGS. Refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, Annual Subscription Value, of this Annual Report on Form 10-K for the definition of Organic ASV.

Operating margin was 32.2% for fiscal 2025, compared with 31.8% for fiscal 2024. This increase in operating margin was mainly due to growth in revenues and, when expressed as a percentage of revenues, charges related to the Sales Tax Dispute that were recorded in the prior year, partially offset by higher amortization of intangible assets in the current year. Refer to Part II, Item 8. Note 12, Commitments and Contingencies in the Notes to the Consolidated Financial Statements of this Annual Report on Form 10-K for more information on the Sales Tax Dispute.

Net income for fiscal 2025 was $597.0 million, an increase of 11.2% from the prior year. Diluted earnings per common share ("Diluted EPS") for fiscal 2025 was $15.55, an increase of 11.8% compared with the prior year. The increase in Net income and Diluted EPS was primarily driven by higher operating income and a gain from the divestiture of a business.

We returned $460.4 million to our stockholders in the form of share repurchases and dividends during fiscal 2025.

As of August 31, 2025, our client and user counts were 8,996 and 237,324, respectively. Our employee headcount was 12,800 as of August 31, 2025, up 3.2% compared to the prior year. This increase was driven by net headcount growth of 6.0% in the Americas and 2.6% in each of EMEA and Asia Pacific.

Annual Subscription Value ("ASV")

We believe ASV reflects our ability to grow recurring revenues and generate positive cash flows, and thus serves as a key indicator of the successful execution of our business strategy.

–ASV at any point in time represents our forward-looking revenues for the next 12 months from all subscription services currently being supplied to clients.

–Organic ASV at any point in time equals our ASV excluding ASV from acquisitions and dispositions completed within the last 12 months and the effects of foreign currency movements.

Beginning in fiscal 2025, we are reporting Organic ASV, rather than Organic ASV plus professional services, to focus on the recurring nature of our revenues. This underscores the shift of our offerings toward providing more managed services and less project-based services.

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Organic ASV

The following table presents the calculation of Organic ASV as of August 31, 2025. With proper notice provided as contractually required, our clients can add to, delete portions of, or terminate service, subject to certain limitations.

(1) ASV from acquisitions completed within the last 12 months.

(2) For comparability purposes, in calculating the organic ASV annual growth rate, the prior year excludes ASV from dispositions completed in the last 12 months.

As of August 31, 2025, Organic ASV was $2,370.9 million, an increase of 5.7% compared with August 31, 2024. Organic ASV increased in all our segments, with the majority of the increase in the Americas. The increase in Organic ASV was primarily due to higher sales to existing clients and, to a lesser extent, sales to new clients and price increases to existing clients, all primarily attributable to workstations, data solutions and, to a lesser extent, CGS. This increase was partially offset by existing client cancellations.

Segment ASV

As of August 31, 2025, ASV from the Americas represented 65% of total ASV and was $1,570.1 million, an increase from $1,455.4 million as of August 31, 2024. Americas Organic ASV was $1,541.9 million as of August 31, 2025, a 6.0% increase from the prior year. The Organic ASV increase in the Americas was primarily driven by workstations and, to a lesser extent, data solutions.

As of August 31, 2025, ASV from EMEA represented 25% of total ASV and was $591.6 million, an increase from $569.7 million as of August 31, 2024. EMEA Organic ASV was $586.3 million as of August 31, 2025, a 4.2% increase from the prior year. The EMEA Organic ASV increase was mainly from data solutions.

As of August 31, 2025, ASV from Asia Pacific represented 10% of total ASV and was $243.9 million, an increase from $230.3 million as of August 31, 2024. Asia Pacific Organic ASV was $242.7 million as of August 31, 2025, a 7.2% increase from the prior year. The Asia Pacific Organic ASV increase was primarily driven by data solutions and workstations.

Buy-side and Sell-side Organic ASV Growth

The buy-side and sell-side Organic ASV annual growth rates as of August 31, 2025 were 5.5% and 4.3%, respectively. Buy-side clients account for approximately 82% of our Organic ASV, consistent with the prior year, and primarily include institutional asset managers, wealth managers, asset owners, partners, hedge funds and corporate clients. The remaining Organic ASV is derived from sell-side firms and primarily include broker-dealers, banking and advisory firms, and private equity and venture capital firms.

Client and User Additions

The table below presents our total clients and users:

(1)The client count includes clients with ASV of $10,000 and above.

(2)The user count does not reflect users associated with our fiscal 2025 acquisitions.

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Our total client count was 8,996 as of August 31, 2025, a net increase of 9.5% or 779 clients in the last 12 months, mainly due to an increase in corporate clients, primarily driven by clients from the Platform Group Limited ("Irwin") acquisition.

As of August 31, 2025, there were 237,324 professionals using FactSet, representing a net increase of 9.7% or 20,943 users in the last twelve months, primarily driven by an increase in wealth management users. The user count does not reflect our fiscal 2025 acquisitions.

Annual ASV retention was greater than 95% of ASV as of August 31, 2025 and August 31, 2024. When expressed as a percentage of clients, annual retention was 91% as of August 31, 2025, compared with 90% as of August 31, 2024.

Employee Headcoun

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