Q4 2022 Factset Research Systems Inc Earnings Call

In a listen only mode. After the speaker's presentation, there will be a question and answer session.

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I would now like to hand, the conference over to your speaker for today Ken.

Brown you may begin.

Thank you and good morning, everyone welcome to Factset fourth fiscal quarter 2022 earnings call before we begin I would like to point out that the slides we will reference during this presentation can be accessed via the webcast on the Investor Relations section of our <unk>.

Website at Factset Dot com, the slides as well as a replay of today's call will be posted on our website at the conclusion of this call.

After our prepared remarks, we will open the call to questions from investors to be fair to everyone. Please limit yourself to one question plus one follow up.

Before we discuss our results I encourage all listeners to review the legal notice on slide two which explains the risk of forward looking statements and the use of non-GAAP financial measures. Additionally, please refer to our forms 10-K, and 10-Q for a discussion of risk factors that could cause actual results to differ materially from these forward looking statements.

Our slide presentation and discussions on this call will include certain non-GAAP financial measures for such measures reconciliation to the most directly comparable GAAP measures is in the appendix to the presentation and in our earnings release issued earlier today.

Joining me today are Phil Snow, Chief Executive Officer, and Linda Huber, Chief Financial Officer, I will now turn the discussion over to Phil Snow.

Thank you Kendra and Hello, everyone. Thanks for joining us today I'm pleased to share our strong fourth quarter and full year results. We ended fiscal 2022 with organic ASB plus professional services growth of $158 million accelerating nearly 200 basis points year over year to over 9% topping the high end of our guidance.

We achieved annual revenue of $1 84 billion and adjusted EPS of $13 43 with.

With both metrics also above the high end of our guidance range, our strategy to become the leading open content and analytics platform is resonating with clients and driving a strong performance as we continue to gain market share.

We saw growth across firm types with corporate private equity and venture capital firms wealth managers hedge funds and banking continuing that trend of double digit organic <unk> growth specifically, we saw improved retention with most clients. This year with further growth coming from better price realization our investments in content and technology.

<unk> supported both stronger retention and expansion as well as significant acceleration in new business.

Year over year buy side and sell side growth rates have increased by 200, and 180 basis points, respectively on the buy side. The success of our portfolio of lifecycle products has been key to our expanded footprint with institutional asset managers, we continue to capture more of our addressable market by increasing on connecting our analytics cant.

<unk> and delivery capabilities across the front middle and back office.

Fiscal 2022 was not only a strong financial year for us, but also a milestone year for Factset, we completed the largest acquisition in our history with CUSIP Global services issued or an overall senior notes with investment grade ratings from both Moody's and Fitch joined the S&P 500, and advanced our sustainability efforts with the committee.

<unk> to the science based targets initiative, and the 2040 net zero emissions goal and.

In addition, we continued to expand our content and technology offerings with several key partnerships.

It also marks the combination of our three year investment plan, our foresight to invest in content and technology is paying dividends accelerating topline growth by over 400 basis points. Since 2019. These investments fueled the largest content expansion and Factset history today, we have deep sector coverage for eight sectors.

We are making strides in our private market strategy with private company coverage.

Across our content refinery.

<unk> solutions for private equity and venture capital firms and cohesive connected workstation integration, we expanded our ESG content through the acquisition of true value labs, now partner with more than 45, other ESG providers to aggregate a comprehensive set of data and solutions and in wealth our market leading workstation.

<unk> advisor dashboard and portfolio analytics tools are helping advisers work more efficiently, while driving new business wins for Factset.

We also invested in and accelerated our digital transformation, our digital platform is a competitive differentiator, enabling clients to access our content and analytics via open modern solutions. We are now a preferred partner for our clients on that cloud migration journeys.

Our acquisition of CUSIP Global services aligns very well with our strategy and is a natural extension of our content refinery capabilities. The performance of CGS has exceeded our expectations with the integration progressing well and we see opportunities to expand further by innovating and building new products.

While early on in these efforts we are currently exploring new business opportunities to extend the CUSIP identifiers two additional entities.

We continue to invest in our people, helping us retain the best talent and stabilized retention even in this competitive market. We've embraced a hybrid work model that trust our employees to select the work paradigm that allows them to be the most productive cells. We've invested in technology for home offices to ensure all employees regardless of.

Location have setups that facilitates collaboration and efficiency.

We've instituted global wellness day is to give employees time to reconnect in charge.

And we've also seen an increase in traveling and in person engagement as our leaders encourage employees to meet one another and clients face to face wherever possible.

And we've invested in compensation to combat the effects of inflation, we proactively increased salaries for critical roles and extended participation in our bonus and equity pools.

Head count increased year over year, thanks to our recruiting team, who did an amazing job of backfill and critical open positions and sourcing new talent to support our investments.

We also progressed as a firm with diversity equity and inclusion central to our culture is the commitment to hiring supporting talent from diverse backgrounds and experiences.

With the addition of Cade step as our Chief Technology Officer women now comprise half of our executive leadership team. That's just one example of our success and achievement that makes us proud.

As we enter our next phase of investment our focus remains the same scaling up our content refinery to provide the most comprehensive and connected set of industry proprietary and third party data for the financial market.

Enhancing the client experience by delivering hyper personalized solutions, so clients can discover meaningful insights faster.

And driving next generation workflow specific solutions for asset managers asset owners to sell side wealth management private equity venture capital and corporate clients.

We're committed to investing in our people and our products and have invested about $40 million or about 360 basis points of margin in this effort during fiscal 2022. These.

These investments are split pretty evenly between people and products and we will ensure that the continued healthy growth of Factset revenue.

As we move forward, we will continue to take the same strategic approach to our investments investing at a similar pace for FY 'twenty three while delivering on our commitment to margin expansion. This includes the continued build out of deep sector data.

Real time, ESG private markets and wealth data as core parts of our content strategy. In addition, we will continue to invest in our digital platform and then our people the.

The connected nature of our content and products gives us continued confidence in meeting our medium term outlook of 8% to 9% organic <unk> growth adjusted operating margin of 35% to 36% and adjusted diluted EPS growth of 11% to 13%.

Turning now to our results in the fourth quarter ASC plus professional services grew nine 3% revenue.

Revenue growth in the fourth quarter was 21% driven by both organic revenue and contribution from CGS and adjusted EPS increased almost 9% from the prior year period.

Our fourth quarter adjusted operating margin decelerated slightly year over year to 31, 5%, primarily due to higher personnel expenses and technology costs.

This quarter's strong performance was driven by continued expansion in analytics and trading and research and advisory New business growth also accelerated as we added small and medium wins as well as some notable larger wins, including the expansion of our relationship with Raymond James This win reflects the significant investments we have made.

On the wealth management side.

We are recognized for having market leading products.

Now looking across our regions, we continue to see broad based organic <unk> growth over the last year.

The Americas continued to lead ASP performance contributing more than half of fiscal 2020, twos total ASP growth and surpassing $1 billion in total ASB.

In the Americas, we grew organic <unk> by 9% over the past 12 months research and advisory and analytics and trading performed particularly well this quarter with strength from our banking wealth private equity and venture capital clients and asset managers.

In EMEA, our organic ASP growth accelerated to 8% this quarter with strength across the product portfolio, specifically growth was driven by analytics and trading wins at asset managers combined with capturing research and advisory and Cts opportunities at banks wealth managers and corporate partners.

In Asia Pac, we saw organic 12% ASP growth driven by analytics and trading with particular strength from asset managers and owners.

Growth from wealth managers in the region also accelerated driven by higher retention.

Now turning to our businesses research and advisory was the largest contributor to our organic ASP growth. This year with a growth rate of 9% driven by banking wealth and private equity and venture capital funds, we saw diverse wins from the workstation with new products, such as advisor dashboard and cobalt portfolio monitoring capabilities gaining.

Traction.

We increased research and advisory workstation users by 12% this quarter versus a year ago with growth across both the sell side and buy side clients.

<unk> growth from sell side clients was 13, 8%, reflecting increased price realization.

Strong seasonal hiring and increased wallet share from our solutions and.

Analytics and trading ended the year with an impressive 10% organic <unk> growth rate demonstrating continued momentum in our portfolio lifecycle strategy. This quarter marks sixth consecutive quarters of accelerating LTM ASP growth for analytics, we saw an uptick in larger wins driven by portfolio reporting our performance.

<unk> with gains among asset managers across all regions being led by the Middle office.

Performance and analytics professional services also contributed to this acceleration.

As we look ahead, we believe demand for our market, leading analytics expanding asset class coverage and leading technology on and off platform will continue to drive growth.

Finally, Cts grew organic ASB by 11% with wins across asset managers and partners being key contributors. We saw strength in core company data data management services benchmarks and security data in the fourth quarter. We sold several ESG wins with continued client growth real time also gained traction with our.

Are all cloud solution appealing to clients looking to reduce costs.

In summary, I'm proud of our fourth quarter and full year performance and the results of our three year investment plan. As we look ahead, we remain confident in our strategy and our ability to weather volatile markets. We are entering fiscal 2023, and a position of strength as our clients recognize the value of our solutions.

Our fiscal 2023 guidance reflects our ongoing confidence in the business and Linda will provide more detail shortly.

I want to wrap up by thanking our incredible Factset team, we couldnt have achieved a strong quarter and year that we did without them. We have the best team in the business and remain committed to attracting retaining and developing this top talent I'll now turn it over to Linda to discuss our fourth quarter and full year performance in more detail and take you through our fiscal 2023.

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Thank you, Phil and Hello, everyone I joined sell in Congratulating fact centers for an outstanding fiscal 2022 as I.

My one year anniversary as CFO I'm excited by everything we've been able to accomplish together, our 9% organic ASD growth adjusted operating margin expansion and 20% adjusted diluted EPS growth not to mention our largest acquisition investment grade ratings and successful financing are testament to the hard work.

With our talented teams.

I look forward to continuing to work across the organization in fiscal 'twenty three to build on Factset history of strong performance and returning value to shareholders.

Our growth rate for organic ASP, plus professional services beat the high end of our guidance range due to our investment in product and excellent execution by our sales team.

Tension move the needle here with higher price increases across a larger base of clients reduced erosion as demand for our products increased across client types and successful cross selling opportunities.

Full year revenue also exceeded the high end of our range with help from CUSIP Global services.

Adjusted operating margin was in line with the higher end of our range. Our margin increase was driven by effective expense control in the core business as well as the addition of the CGS business, resulting in 500 basis points of margin expansion.

Session was to reinvest about 360 basis points of this margin growth back in our people and products, while allowing the margin for shareholders to rise about 140 basis points as Phil stated, we are committed to balancing investment at a similar pace for the next few years, while delivering our commitment to margin expansion.

Finally, we generated solid earnings exceeding the top end of our guidance range through strong revenue growth disciplined expense management and operating leverage let me now walk you through the specifics of our fourth quarter performance as you've seen from our press release. This morning, we're pleased to report the acceleration of organic ASD plus professional services and revenue.

Before we begin I'd like to remind everyone that consistent with our definition of organic revenues in ASD, we will exclude any revenue NASD associated with CGS when reporting organic related metrics for the 12 months. Following the acquisition date. However, we will provide some specifics on CGM you can continue to <unk>.

Track its performance as.

As Ken noted a reconciliation of our adjusted metrics to comparable GAAP figures is included at the end of our press release.

We grew fourth quarter organic <unk> plus professional services by 9%. This increase reflects momentum across our product portfolio with current levels of market volatility, we see higher demand for our products as clients focus on driving alpha as well as finding efficiencies.

Fourth quarter GAAP revenue increased by 21% from the prior year period to $499 million.

This was driven by a research and advisory and analytics and trading solutions and Ccs.

Organic revenue, which excludes any impact from foreign exchange acquisitions. During the last 12 months and deferred revenue amortization increased 10% to $453 million over the prior year period.

We saw organic ASD acceleration across all workflow solutions in each of our regions for our geographic segments organic revenue growth over the prior year period for the Americas was 9% EMEA was 8% and Asia Pacific at 18%.

Turning now to expenses GAAP operating expenses grew 25% year over year to $367 million impacted by several charges incurred during the period.

This includes the recognition of $13 million and intangible asset amortization related to Cts in the fourth quarter as we spoke about last quarter. This intangible asset amortization will be a recurring charge.

Also we saw a higher bonus pool in line with stronger than anticipated ASP performance in the fourth quarter, our bonus accrual was $37 million, bringing.

Bringing the total bonus pool to $111 million for the fiscal year.

As previously stated we invested $40 million in people and product this year.

This is also consistent with commitments, we made at Investor day to continue to grow these buckets to sustained growth looking ahead to fiscal 2023, we expect a similar level of investment.

Given these expenses our GAAP operating margin decreased by 240 basis points to 26, 5% compared to the prior year period.

Adjusted operating margin saw a slight decrease of 10 basis points year over year to 31, 5% driven by higher personnel expenses increased technology expenses and transactional foreign currency impact.

As a percentage of revenue our cost of services was 50 basis points higher than last year on a GAAP basis, and 130 basis points lower on an adjusted basis primary drivers include higher technology and content related expenses, including expenses related to our shift to the public cloud as well as amortization of intangible assets.

<unk> and other costs associated with CGS.

When expressed as a percentage of revenue SG&A was 169 basis points higher year over year on a GAAP basis.

And 142 basis points higher on an adjusted basis. The increase was primarily driven by growth in compensation comprised of higher salary expenses for existing employees higher bonus accrual in line with stronger ASP performance and higher stock based compensation expense as we distributed equity more broadly throughout the organization.

Moving on to tax our tax rate for the quarter was 10, 3% compared to last year's 14, 7%.

This was primarily due to lower pretax income and a tax benefit related to finalizing the prior year's tax returns.

GAAP EPS increased two 3% to $2 69, this quarter versus $2 63 in the prior year, primarily due to higher revenue and lower taxes, partially offset by higher interest expense and margin compression.

Adjusted diluted EPS grew eight 7% from the prior year to $3 13.

Largely driven by higher revenue offset by the impact of higher interest expense from tax that's investment grade senior notes and outstanding term loan adjust.

Adjusted EBITDA in the fourth quarter increased to $158 5 million up 16% year over year, and finally free cash flow, which we define as cash generated from operations less capital spending was $136 million for the quarter a decrease of 20% over the same period last year driven by higher working.

Capital, which includes the timing of estimated tax payments and deferred revenue movements related to Cts.

CUSIP global services exceeded expectations, adding $6 million in incremental ASD since the close of the acquisition on March one 2022 in Q4, CUSIP diverse asset class coverage, partially offset a weaker issuance markets with significant year over year gains in time deposits Cds and private place.

<unk>.

In the fourth quarter, our ASP retention remained above 95% and our client retention improved to 92% highlighting the continued stable demand for our solutions.

<unk> the prior year, we grew our total number of clients by 17% to more than 7500 clients largely due to the addition of more wealth and corporate clients. Our user count grew 12% year over year growing to almost 180000, primarily driven by sales in our research and advisory solutions, particularly.

Amongst wealth management users.

And turning now to our balance sheet, we continue to progress on the prepayment of the term loan related to the acquisition of Cts.

Fourth quarter, we made a planned prepayment of $125 million, bringing our gross leverage ratio down to three one times from the initial three nine times level. When we financed the CGS acquisition, we expect to make two more payments of $125 million in each of the next two quarters, enabling us to reach our gross leverage target of <unk>.

Two times to two five times in the second half of fiscal 2023.

As a reminder, while we may continue minor share repurchases to offset the dilutive impact of stock option grants. During this time, we do not intend to resume our share repurchase program until at least mid 2023 lastly.

Lastly, we would like to remind investors that we increased our regular quarterly cash dividend in the third quarter for the 20 <unk> consecutive year. The increase was eight 5% for our per share dividend of <unk> 89.

Turning now to our outlook for fiscal year 2023.

We are guiding to incremental growth of $150 million to $180 million for organic ASD plus professional services. The midpoint of this range represents a 9% increase.

<unk> continued momentum in our business and our commitment to our medium term outlook. Please note that CGS is not included in our organic ASD guidance at this time given that it will not impact organic AFC until the last two quarters of 2023 fiscal year.

We expect adjusted operating margin of 34% to 35% with the midpoint, providing 60 basis points of margin expansion, which aligns with our medium term outlook of 50 to 75 basis points of margin expansion each year.

Finally, we expect adjusted EPS of $14 50 to $14 90.

Representing almost 10% growth at the midpoint given our outperformance in fiscal 2022, we're still on track to deliver 11% to 13% EPS growth over the medium term.

We are confident of our ability to continue to grow in the face of market uncertainty our subscription model diverse product portfolio and enterprise solutions make us a stable long term investment.

Going ahead to fiscal 2023 growth will be driven by improved retention. We expect two thirds of our topline acceleration to come from existing clients with low double digit expansion offset by normal erosion plus increases in price realization in the past the majority of our growth came from cross selling however, given the incremental <unk>.

<unk> and pricing this year, we anticipate the split will be more even between the two we expect the balance of growth will come from new business with continued growth in wealth private equity and venture capital firms as well as corporates are continued.

Our investment in technology and content should drive growth in new markets and cross selling opportunities for existing clients drivers include continued commitment to the digitization of our platform.

<unk> step our new CTO is taking a fresh look at our digital strategy example areas of focus include scaling the use of cognitive technologies, expanding our API program and driving improved capabilities and productivity and our use of the public cloud.

Next continued evolution in our content refinery as discussed previously we plan to make a direct investments towards deep sector real time private markets and ESG development of these content sets are intended to drive retention and expansion across firm types and finally workflow solutions for the front office.

Wealth manager and private equity and venture capital firms will be key.

In closing we are pleased with our performance in fiscal 2022, as we spoke about during Investor day, we are seeing the benefit of our strategic investments and we feel we have a long runway ahead of US. We believe we are strategically placed to deliver on our targets for fiscal 2023 as well as our medium term outlook, while we acknowledge the uncertainty in the macro environment.

We believe that our focus in investing in our people content and technology will continue to drive growth over the longer term.

And with that we're now ready for questions operator.

Thank you.

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Our first question comes from the line of Ashish <unk> with RBC capital markets. Your line is open.

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Ashish are you there your line is open.

Hi can you hear me okay. Thanks, Thanks for taking my question.

So we saw some pretty strong momentum across all three workflow solutions and thanks for giving some clarity around the growth drivers going forward in terms of pricing cross sell and new wins.

But the question.

That we get from.

That we're getting is.

Is around that $150 million to $180 million of ESP growth outlook.

In the light of the market volatility and concerns about potentially off on investment banking and pull back on spend by asset managers. So I was wondering if you could just provide some more color on the confidence around the ESP growth for 'twenty three.

Sure Hey, Ashish, it's Phil Thanks for the question.

So similar to what we.

We saw in 2022.

We believe that our growth will be broad based again in 'twenty three so those pretty even distribution of goals between the different.

Business lines as.

As well as the different regions.

And I think that's really good news, we've got a great portfolio here everything's firing on all cylinders.

When we look out at the first half.

And which we typically have good visibility on we see a very good pipeline versus last year. So it's a very high quality pipeline.

So in terms of what we can see in front of us.

We feel good we don't want to be naive, we understand that our clients, obviously are going to be facing some pressure here on the budget side, but that plays into our strengths and we have a great.

Sales team. They are fully equipped to go out and really kind of communicate the value of factset proposition value proposition.

We saw in 2022. you know, we believe that our growth will be broad based again in 23, So there's pretty even distribution of goals between the different business lines as well as the different regions, and I think that's really good news. We've got a great portfolio here. You know, everything's firing and all cylinders. When we look out at the first half, and which we typically have good visibility on, we see a very good pipeline versus last year. So it's a very high quality pipeline. So in terms of what we can see in front of us.

And there's a lot we can do to help clients on the efficiency side as well as all obviously alpha generation by one.

One piece of our business, what I really want to call out. This year is the analytics business. So if you go back to 2021, you can see that business was growing at 6% and it reached double digits. This year. So that's 400 basis points of acceleration in analytics and that is not workstation based growth primarily so we're having huge.

Wins across the portfolio of lifecycle and the Middle office, we talked a little bit about that in the script, but we're very encouraged by the conversations we're having within institutional asset managers to help them think about how they manage data.

We feel good we don't want to be naive we understand that our clients obviously are going to be facing some pressure here on the budget side but that plays into our strengths and we have a great sales team that fully equipped to go out and really kind of communicate the value of factsets proposition valy proposition and there's a lot. We can do to help clients on the efficiency side as well as obviously alpha generation one piece of our business that I really want to call out this year as the analytics business. So if you go back.

And their workflows. So thats just one thing that gives us more confidence going into next year.

That's very helpful color really appreciate that and maybe on my follow up just on the margin front, particularly.

Particularly as we look at <unk> versus the <unk> margins again, Linda you provided some really good color around reinvestment, but I was just wondering as we think about how much of it was maybe higher compensation versus more hiring we obviously saw a big step up in hiring in the fourth quarter, how should we think about for going into 2020.

To 2021. you can see that business is growing at six percentand it reached double digits this year. So that's 400 basis points of acceleration and analytics, and that is not workstation based growth, primarily. So we're having huge wins across the portfolio life cycle in the middle office. We talked a little bit about that in the script, but we're very encouraged by the conversations we're having within institutional asset manages to help them think about how they manage data.

And in this particular inflationary environment, how do we think about salaries and compensation going forward. Thanks.

Sure. Thanks Ashish.

As we had said on the third quarter earnings call. If we did well in the fourth quarter. We did flag that we were going to put up a higher bonus accrual for the fourth quarter, So I'm somewhat surprised.

And their workflows. So that's just one thing that gives us more confidence going into next year.

That's a very helpful because I LT really appreciate that and maybe on my follow up, just on the margins front, particularly as we look at three Q versis, the four Q margins. Again Linda, you provided some really good color around reinvestment, but I was just wondering as we think about how much of it was maybe higher compensation versus more hiring. We obviously saw a big step up in hiring in the fourth quarter. How should we think about for going into 2020? three and in this particular, inflationary reenvironment, how do we think about?

Prized frankly that people were surprised by the level of what we did in the fourth quarter in terms of the bonus.

The bonus accrual for the fourth quarter was $37 million.

And in the third quarter was $31 million, our total bonus pool, as we said with $111 million.

Which was up considerably over last year. We also increased stock based compensation and that's important we're pushing equity to more people in the corporation.

Both broader and deeper so that's an important change as well as we try to get our compensation balanced properly.

Technology expenses were also up and we had talked about this also in Investor day that as we move to the cloud, we're seeing higher utilization of the cloud so that cost a little bit more as well.

So most of this was around the increase in the like for like compensation Ashish.

We did hire some more people same balance of 65% in.

The bonus accrual for the fourth quarter was $37 million and in the third quarter was $31 million. Our total bonus pools, we said, was $111 million, which was up considerably over last year. We also increased stock-based compensation and that's important. We're pushing equity to more people in the corporation, both broader and deeper, So that's an important change as well, as we try to get our compensation balance properly.

Centers of excellence and 35%.

That are not in the centers of excellence, so nothing too dramatic there most of that goes to content collection as we are looking to invest in deep sector as Phil said.

But really nothing particularly exceptional other than that we had a really strong year and a strong fourth quarter and we had a bonus catch up as I had said we were going to do on.

On the third quarter call. So I hope that helps you.

Technology expenses. We also up- and we had talked about this- also an investor day- that as we move to the cloud we're seeing higher utilization of the cloud, So that costs a little bit more as wellso most of this was around the increase in the like for like compensation. We did hire some more people- same balance of 65% in centers of excellence and 35% that are not in the centers of excellence.

That's very helpful color. Thanks again.

Sure. Thank you please standby for our next question.

Our next question comes from the line of Phase of OE with Deutsche Bank. Your line is open.

Yes, hi, good morning, Thank you.

So I just wanted to talk a little bit more around margin Linda.

So nothing too dramatic there. Most of that goes to content collection as we are looking to invest in deep sector, as Phil said, but really nothing particularly exceptional other than that we had a really strong year and a strong fourth quarter and we had a bonus catch-up as I had said we were going to do on the third quarter call. So hope that helps you.

I'm curious how much C. D S contributor to margins. This quarter I know you had mentioned last quarter that it was it contributed about two thirds of the of the expansion plan.

So I'm curious what the contribution was this quarter and maybe if you can tell us how.

How much you expected to contribute to earnings in 2023.

That's very helpful color. Thanks again.

Sure. So over the course of the year and I'm not going to go into fourth quarter.

Sure Thank you. Please stand by for our next question.

Cts gives us about 500 additional basis points of margin and as we said in the script, we reinvested 360 basis points of that margin and we increased our margin over the course of the year by 140 basis points, which we think is a pretty significant amount and far in excess of the 50 to 75.

Our next question comes from the line of phasa: how we would dtyoubite. Your line is open.

Yes Hi, good morning, Thank you. So I just wanted to talk a little bit more around margins. Linda, I'm curious how much cgs contributed to margins this quarter. I know you'd mentioned last quarter that it was. It contributed about two thirds of the expansion, So I'm curious what the contribution was this quarter and maybe if you can tell us how much you expected to contribute to in 2020 -three.

Five basis points that we had guided toward.

So as we roll forward, we have increased margin that comes from CUSIP.

Can it be thoughtful about how we deal with that margin and again, we would see that we'll reinvest about two thirds and probably about a third will dropdown to the bottom line.

So we would expect that that will continue at sort of the same pace next year.

Sure So over the course of the year- and I'm not going to go into two fourth quarter- cgs gives us about 500 additional basis points of margin and, as we said in the script, we reinvested 360 basis points of that margin and we increased our margin over the course of the year by 140 basis points, which we think is pretty significant amount, and foreign exits of the 50 to 75 basis points that we had guided to.

Okay understood and then just on you mentioned pricing.

I'm curious how much incremental.

Pricing, you're embedding for fiscal 'twenty three versus what we saw in 'twenty two.

It doesn't sound like Theyre getting any pushback on that pricing, but just just wanted to ask sort of how.

The receptivity to that incremental pricing.

Hi, Faisal its Phil.

In 2022, we went out with a 4% price increase.

We anticipate we'll we'll be asking for a little bit more than that going into 'twenty, three which is completely appropriate given the level of investment we've made in the product and obviously our costs, we don't expect to be market, leading and hub price increase right. We want to be conservative here and make sure that we're thinking about our long term relationships with our club.

You mentioned pricing. I'm curious how much incremental pricing you're embedding for fiscal 23 versus what we saw in 22, and it doesn't sound like you're getting in pushback on that pricing. But just just wanted to ask sort of how you know what's the receptivity to that incremental pricing.

But based on what we were able to do in terms of getting.

Realisation from 4% this year, we feel pretty confident that we can get.

Bit of an uplift going into 'twenty three with price.

And.

Please note that Bill has said before.

None of that made its way to his desk in the past year. So we think that price increase went pretty well.

I por fill. So Yeah, in 2022 we went out with a oppercent price increase and you know we anticipate we'll be asking for a little bit more than that, going into 23, which is completely appropriate given the level of investment we've made in the product and obviously, costs. We don't expect to be market leading and help price increase. Right, we want to be conservative here and make sure that we're thinking about a long-term relationships with our clients.

It's been reported in the media that some of those in the competitor space may be pricing.

Considerably higher we don't intend to go up way up to that but we do expect that we can do a good bit better than we have been able to do in 'twenty two because we do have market leading products. So we're quite optimistic about that for FY 'twenty three.

But based on what we were able to do in terms of getting realization from 4% this year, we feel pretty confident that we can get a bit of an upli giling into 23 with price.

I would also add on that in terms of price realization we've been.

Well too.

Well, it really simplify our rate card and go to market and I think capture.

Price for our new sales are much more.

And please note that Bill has said before: none of that made its way to his desk in the past year, So we think that price increase went pretty well. It's been reported in the media of that some of those in the competitor space may be pricing considerably higher. We don't intend to go off the way up to that, but we do expect that we can do a good bit better than we've been able to do in twenty two.

Much more than we had in the past so that's really helped us in terms of how we execute.

On the sales force has done a tremendous job in taking.

A much more simplified set of packages to market and it's made the clients' lives easier. It's made our lives easier. It's really helped all around so that's part of what we think about when we think about price as well.

Great. Thank you so much.

Yes.

Thank you.

Because we do have market-leading products. So we're quite optimistic about that for FY' twenty-three.

Please standby for our next question.

Our next question comes from the line of Colin Law with Oppenheimer. Your line is open.

I'd also add on that, terms of price realization, we've been able to- I really simplify our rate card and go to market and, I think, capture price for new sales much more, much more than we had in the past. So that's really helped us in terms of how we execute and the sales force. It's done a tremendous job in taking a much more simplified set of packages to market.

Good morning, and thank you for taking my question.

As Ireland.

Hey.

On the stock based comp I think three months ago, we were still talking about the downturn.

Bulk and I think factset can adjust to calm accrual which control the expanse.

And it's made the clients lives ves easierit's made a ves easier. It's really helped all around. So that's part of what we think about when we think about price as well.

I'm just wondering given the current market conditions.

Wondering if that time turn playbook anymore.

Great Thank you so much.

Have you changed any of your view in terms of <unk>.

Hi.

Thank you, Please stand and by for our next question.

You think stock based comp going forward any more color would be very helpful. Thanks.

Sure Owen we are prepared for the downturn playbook, if we need to bring that into action.

Question comes from the line of when law with poppenheim, ER julan- is open.

Right now we don't see any need to do that things are holding up very well sales are very strong and as Phil said. This is a high recurring revenue business. So we have pretty good idea of what our revenue will look like for the first half of next year, because we've already got the ASD in house. So that's really really good.

morningand Thank you for asking my question.

Ion.

Y So on the stock based cal, I think three months ago we were still talking about the downturn playbook and I think facts I can adjust a comma crew to control the expense. I'm just wondering, given the current market conditions, are you not wondering at that downturn playbook anymore? Have you changed any of your view in terms of giving stock based cal going forward? Any more color would be very helpful.

So the numbers are for the course of the year last year.

We found that.

We did $89 million in bonus and this year was more like 111 112, so that was a pretty pretty high change given the performance of the company and that's all formulaic. So as we go back into FY.

Sure Owen, we are prepared for the downturn playbook if we need to bring that into action, for right now we don't see any need to do that. Things are holding up very well. Sales are very strong and, as still said, this is a high recurring revenue business, So we have a pretty good idea of what revenue will look like for the first half of next year, because we've already got the ASV in-house, So that's really really good.

FY 'twenty three that bonus pool will reset to roughly $90 million. So that's the first step and then if for some reason we underperform.

Our bonus pool will adjust as well and we will go back down but this was a very strong year.

Similarly last year, we paid out $45 million in stock based compensation. This year, we paid out $56 million in stock based compensation.

So the reset on that will be we'll be closer to the $56 million number.

So the numbers are for the course of the year. Last year we found that we did $89 million in bonus and this year was more like 111- 112. So that was a pretty, pretty high change given the performance of the company and that's all formulaic. So as we go back into F? Y 23, that bonus pool will reset to roughly $9 million.

But again the bonus pool can flex and adjust our salary line in fact, because we had slower hiring than we expected was not up very much. So it's important that investors understand most of this comes from the flexible nature of the bonus pool, increasing so in fact in FY 'twenty one the salary line was 496.

And in 'twenty two it was 507, that's only a 2% increase so we're keeping a very good handle on the salary line.

So that's the first step and then, if for some reason we underperform, that bonus pool, will adjust as well and will go back down. But this was a very strong year. Similarly, last year we paid out $45 million in stock based compensation. This year we paid out $56 million in stock based compensation. So the reset on that will be will be closer to the $56 million number, but again the bonus pool canlex and adjust.

Most of this flex has been in the bonus line.

Because we had a very strong year as we talked about in the third quarter.

In fact, we're pretty surprised.

With the reaction because we had signaled that this would be coming so hope that's helpful to you and hope that answers your question.

Just.

Right.

Something I've said in my opening remarks, which is the.

Our salary line in fact, because we had slower hiring than we expected was not up very much. So it's important that investors understand most of this comes from the flexible nature of the bonus pool increasing. So, in fact, in FY 21 the salary line was four and 96 and in 22 it was 5- seven that's only a 2% increase, So we're keeping a very good handle on the salary line. Most of this flex has been in the bonus line.

The numbers that Linda just mentioned.

Allowed us to go broader and deeper in the organization in terms of the number of employees.

There are participating in the bonus and equity pools, which is really great that we're able to do that.

Obviously it has very good.

Very good consequences for us in terms of talent retention moving forward.

Got it that's super helpful. And then something related to that line, which is the adjusted EPS growth expectation for 2028.

Because we had a very strong year, as we talked about, in the third quarter. In fact, we're pretty surprised with the reaction because we had signaled that this would be coming. So hope that's helpful to you and hope that answers your question.

11%, which is.

Slightly lower annual medium term target of 11% to 13% I know last year was strong, but given the market conditions.

Just iterate something I said in my opening remarks, which is you. The numbers that Linda just mentioned have allowed us to go broader and deeper in the organization in terms of the number of employees there are participating in in the bonus and equity pools, which is really great that we're able to do that and obviously it has very good.

Do you expect you can still meet your medium term guidance over the next two to three years or do you expect your EPS growth will run below that for <unk>.

Near term thank you.

Owen It's Linda I do think we're going to be able to meet that EPS growth expansion.

Very good consequences for us in terms of talent retention, moving forward.

And.

One of the things to consider here with actually two things to consider one is the tax rate. So we're going to.

That that's super helpful. And then something related to that line, which is the adjust E PS's growth expectation for 2023. it's eight to 11%, which is slightly lower than your medium term target of 11 to 13%. I know last year was strong, but given the market conditions, do you expect you can still meet your medium term?

Guiding to 12, 5% to 13 and a half next year. Our history has been that we have had.

One off items that had been flattering.

<unk>, our <unk> our tax rate.

Though we may find ourselves in that situation again, secondly, we can't predict what option exercise will be which is beneficial to our tax rate as well and brings it down. So that one is hard to predict also so the tax rate might be something that could be helpful to EPS.

Guidance over the next two to three years, or do you expect your EPS growth will run below that in the near term? Thank you.

Thirdly, we have not modeled in any share repurchase for 2023, we thought that was the conservative thing to do.

Oh and it's Linda, I do think we're going to be able to meet that EPS growth expansion and one of the things to consider here was actually two things to consider. one is the tax rate. So we're guiding to Twelve point a to 13 a half next year. Our history has been that we have had one-off items that have been flattering to our tax rate.

We are hoping to be able to go back into the share repurchase market. Once we bring our leverage down to where we need it to be which is two to two five times.

Gross leverage for the company and we're pretty close to that already we've gone from three 9% to three 5% to three one.

At the end of our fourth quarter so.

If that happens share repurchase will be pushed more towards the back half of the year and it won't help us that much but it would be some wind at our backs. So those are some of the various factors and of course, if we do better on the margin mine.

So we may find ourselves in that situation again. Secondly, we CAn't predict what option exercise will be which is beneficial to our tax rate as well and brings it down so that one 'is hard to predict also, So the tax rate might be something that could be helpful to EPS.

That will come down into EPS as well so just some things to consider as puts and takes on the EPS outlook.

Thirdly, we've not modeled in any share repurchase for 2023. we thought that was the conservative thing to do. We are hoping to be able to go back into the share repurchase market once we bring our leverage down to where we need it to be, which is two to two and a half times gross leverage for the company, and we're pretty close to that already. We've gone from three point nine to three point five to three point one at the end of our fourth quarter.

Thank you for the explanation thanks Linda.

Sure.

Thank you.

Standby for our next question.

Our next question comes from the line of <unk> Patnaik with Barclays. Your line is open.

Thank you.

And then maybe just to ask another way you know the 9% growth organic growth that you're talking about for the year is that much different if you look at either the sell side buy side ESP.

So if that happens, share repurchase will be pushed more towards the back half of the year and it won't help us that much, but it would be some wind at our backs. So those are some of the various factors and of course, if we do better on the margin line, that will come down into EPS as well. So just some things to to consider as puts and takes on the EPS outlook.

Just trying to put it in context. It sounds like you guys don't see any need to go to the downturn playbook countries deal with the market is telling us.

Hey, Manav, it's Phil.

So we see strength in both the pipeline for the buy side on the sell side. So based on what we can see today.

Thank you for the explanation. Thanks, Linda.

churp.

Thank you. Please stand by for our next question.

I think on 9% buildup is a very healthy.

Combination of different firm types.

Our next question comes from the line of maneve patnick with berclleay's El line is open.

Beyond those.

Beyond the larger asset managers and banks, we obviously have some other firm types now that are smaller in terms of our base, but are growing much more quickly.

Thank you in that. Maybe just to ask in other way you, the 9% growth, organic growth that you're talking about for the year, is that much different if you look at either the sell side or buyside, ASV? You know, just just trying to put it in context- it sounds that you guys don't see any need to go to the downturn playbook, contrary to what the market is telling us.

Okay, and then the comments around not including CUSIP and organic growth I just wanted to clarify that so in the second half of the year I guess of your fiscal year. It will be part of organic and so does that then if it's growing mid to high single digits does that then dragged down that number ultimately.

Pay minovits fil yes. So you know we see strength in both the pipeline for the buyside and the cell side. So you based on what we can see today you know I think on 9% build. Up is a very healthy combination of know different firm types and you beyond those beyond. The larger asset manages and banks. We obviously have some other firm types now that are.

For the year.

Manav that's correct. So we're looking at about 9%.

Growth for next year, and Youre correct that <unk> does average down that growth.

A little bit we factored that in for the full course of the year.

We will be bringing CUSIP online a year. After it has closed and so it will be talking more about that as we get there.

Smaller in terms of our base but are growing much more quickly. Okay, and then the comments around not including Q second, organic growth. I's going to clarify that. So in the second half of the year, I guess ok, fiscal year- it will be part of organic, and so does that. Then, if it's going mid to high single digit, that then crack down that number ultimately for the year.

But the 9% number looks pretty good CUSIP may bring it down a couple of basis points, but.

We're only going to be including that in the back half of the year as you noted.

Okay. Thank you.

Mhm.

Thank you.

Please standby for our next question.

Of that's correct So we're looking about 9% growth for next year and you're correct that QIP does average down that growth a little bit we factored that in for the full course of the year we will be bring QIP online a year after it has closed and so we'll be talking more about that as we get there but the 9% number looks pretty. Good QIP may bring it down a couple of basis points but.

Our next question comes from the line of Alex Kramm with UBS. Your line is open.

Yes, Hey, Hello, everyone.

Starting with a couple of questions on margins I think they're related but.

Obviously, when when people saw the margin in the third quarter.

Some folks got ahead of themselves.

Messaging or not from your end, but should the message really be if we look over the next few years that amount.

If you commit to 50 to 75 basis points.

Expansion per year, Thats, what youre going to be delivering because obviously you can do it this year or next year.

And if there is any upsides.

Youll youll spend in a way for growth I guess the question is on the asset right and then two is it also on the downside Youll you would still commit to that 50 to 75.

Over the course of the next few years. So so really that's that's how we should read it in and then secondarily can you just make a quick comment on seasonality and margin for for 2023, obviously theres been a lot of movement in 2022. So just people don't get ahead of themselves.

Hello everyone starting with a couple of.

Questions on margins. I think they're related but obviously when, when people saw the margin in the third quarter, some folks got ahead of themselves messaging or not from your end. But should the message really be, if we look over the next few years, that if you commit to 50 to 75 basis points?

Yes. Thank you very much Alex I think you expressed it really very well if we're guiding to 50 to 75 basis points of margin expansion on average over the next couple of years to exit.

Margin expansion per year. That's what you're going to be delivering, because obviously this year, next year and if there's any upside, you'll spend it away for growth. I guess the question is on the A- is that right? And 2, is it also on the downside? You would still commit to the 50 to 75 over the course of the next few years. So really, that's that's how we should read it then secondarily, can you just make a quick comment on seasonality?

At 35% or so adjusted operating margin in 2025.

That's what we're going to do.

This growth in the top line doesn't come for free we've invested to be able to make sure that we keep that top line growing despite the market conditions and we feel we over delivered in 2022, we had said 50 to 75 basis points, we put up 140, our midpoint in the guidance for next year is 60 basis points.

In margin for for 2023. obviously there's been a lot of movement in 2022- 2, So just people don't get ahead of themselves.

We may have that wrong, we may get 110.

It's very hard to tell there are a lot of things moving around right now currency.

Yes Thank you very much, Alex. I think you expressed it really very well. If we're guiding to 50 cent to 75 basis points of margin expansion on average over the next couple of years, to exit at 35% or so adjusted operating margin in 2025, that's what we're going to do. This growth in the top line doesn't come for free. We've invested to be able to make sure that we keep that top line growing.

Movements are the most dramatic and volatile they've been in 40 years.

That action yesterday was not really expected that it would be that dramatic in terms of the the tone. So we want to be a little bit cautious as we think about the margin going forward, but yes, we will protected on the downside through the downturn playbook, we'll make that adjustment.

And on the upside which is what we experienced in 'twenty two.

Despite the market conditions and we feel we over delivered. In 2022 we had said 50 to 75 basis points. We put up 140. our midpoint in the guidance for next year is 60 basis points. we- we may have that wrong. We may, you know, get 100 and ten's. It's very hard to tell. There are a lot of things moving around right now. Currency movements are the most dramatic involved will they've been in 40 years.

If we do better our contract with our employees.

Would be that we pay them higher bonuses, because they performed and that will adjust the bonus line again, we'll adjust back down to about $90 million as we go into 2023. So there is there seems to be a lot more dramatic response here than than we had anticipated, but I'll turn it over to Phil and <unk>.

Let him talk a little bit more about the margin commitment.

Yes, I think thats right, Linda and just to kind of re stress.

The Fed action yesterday was not really expected that it would be that dramatic in terms of the tone. So we want to be a little bit cautious as we think about the margin going forward. But yes, we will protect it on the downside, through the downturn playbook, we'll make that adjustment and on the upside, which is what we experienced in 22, if we do better, our contract with our employees would be that we pay them higher bonuses because they performed.

You said at the beginning there.

We're really focused on sustainable top line growth there.

I think we can control our costs where needed.

But our primary objective as we stated back in 19 is to get the top line back up to much higher number and we've done that we want to keep it there and.

And we've got a long list of great ideas to invest in as well as some existing programs that continue to need feeding as.

And that will adjust the bonus line again. We'll adjust back down to about $9 million as we go into 2023. So there seems to be a lot more dramatic response here than we had anticipated. But I'll turn it over to Phil and let him talk a little bit more about the margin commitment.

As well as all of our great.

So that's the balance at Factset.

A consistent performer.

Feel really good about where we are right now probably the best we felt in a long time in terms of our business model and our momentum.

Feel like we're in a really good position to make the decisions that we've made and we feel these are the best decisions for the long term for our clients investors and employees.

Yes I think that's right lind, and just to kind of restress what you said at the beginning: there, you know we're really focused on sustainable top line growth there. You know, I think we can control our costs when needed, but our primary objective, as we stated back in' 19, is to get the top line back up to much higher number. We've done that, we want to keep it, and we've got a long list of great ideas to invest in, as well as some existing programs that can.

Great and sorry on the seasonality for 2023 on margin.

Did you want to address that as well and I do have a follow up sure Directionally, Alex you should probably expect.

All of this hinges on our pacing of hiring.

All things being equal the first quarter, it's a little hard to get all the hiring done exactly pro rata over the four quarters.

So the margin might be a bit higher in the first quarter.

And perhaps the second quarter and then in the back half that hiring pace picks up and if we have any catch ups again on bonus next year in the fourth quarter, because we've done well you would see the same sort of pattern occur. So again, probably the margin trend would be a little higher earlier in the year.

Investors and employees.

Great and sorry on the seasonality for 2023. on margin.

And perhaps a little.

More muted later in the year, but it could lay out differently if.

That you want to address it as well, and I do have follow-up.

The macro conditions are a little bit different as we as we move through the year.

Directionally. Alex, you should probably expect.

Okay. Great then I'll ask my real second question, Dan. Thank you for the clarification.

All of this hinges on our pacing of hiring. So, all things being equal, the first quarter. It's a little hard to get all the hiring done exactly pro rata over the four quarters, So the margin might be a bit higher in the first quarter and perhaps the second quarter, and then in the back half that hiring pace picks up and if we have any catch ups again on bonus next year in the fourth quarter because we've done well.

Just a quick one.

When I look at your revenue growth targets and your <unk> growth targets I'm, a little bit surprised that just.

If I look at historical seasonality on how easily phases in the revenue target seems a little bit elevated I guess, what I'm trying to say is given that usually you get a lot of the ASP in the second half of the year I'm surprised how are how much along with revenues coming through already for fiscal year 'twenty. Three so is there something different in seasonality would you.

You would see the same sort of pattern occur. So again, probably the margin trend would be a little higher earlier in the year and perhaps a little more muted later in the year. But it could lay out differently if the macro conditions are a little bit different as we as we move through the year.

<unk> is that that confidence over about the pipeline here in the first half that you're actually seeing revenue starts off much stronger than it otherwise would.

Just maybe a little bit of help on seasonality on revenues because it seems a lot higher than historically speaking given the <unk> guidance. Thanks.

Okay great and I'll ask my real second question then thank you for the clarification. This is a quick one when I look at your revenue growth targets and your ASV growth targets. I'm a little bit surprised just if I look at historical seasonality on how ASV phases and the revenue target seems a little bit elevated. I guess what I'm trying to say is given that usually you get a lot of the ASV. In the second half of the year. I'm surprised how how much more much revenuees coming through already for fiscal at 23 So.

I'll start and Linda please add ons. So yeah, we're not expecting anything dramatically different Alex in terms of the seasonality. We did do a really great job last year of pulling more into Q1 with some sales incentives we have a similar.

Program set up for this year.

But I think we anticipate as usual you would capture more than half of our <unk> in the second half I don't know Linda if there's anything you can do to kind of help answer those sure.

Is there something different in seasonality? You're expecting? Is that that's confidence over about the pipeline here and the first half that you actually think revenue starts off much stronger than it otherwise woulds. So just just maybe a little bit of held on seasonality on revenues, because it seems a lot higher than historically speaking, given the ASV guidance.

We work hand in hand, Alex with Helen Shan, Our Chief revenue Officer, who has done an amazing job and first quarter Kickers are very helpful to getting the ASB and sooner and then we have the weight of that ASE over the course of the year, which is very very helpful. Also we've had very strong ASD in the back half of 'twenty two.

Iul start and Linda Please, that on. So yes, we're not expecting anything dramatically different Alex, in terms of the seasonality, we did do a really great job, but last year, pulling more into Q1 with some sales and sensves. We have a similar program set up for this year, but I think we anticipate, as usual, that we would capture more than half of our ASV in the second half. I don't know linder, if there's anything you can do to.

Which converts to revenue that we can already see in the front half of 'twenty three so we feel pretty good about about what we're seeing and we actually think that these market conditions will allow us to sit down and talk with a lot more clients about what they can do in terms of cost efficiencies and that's where we feel that we really shine.

So we're doing incredibly well with head to head competition.

In terms of request for proposals, we're doing very well and the investment in the product just paying off with a lot of wins.

Kind of help answer this. Sure, we work hand and hand Alex, with the helllen Chan, our Chief revenue Officer, who has done an amazing job, and first quarter kickers are very helpful to getting the ASB and sooner, and then we have the weight of that AF B over the course of the year, which is very, very helpful. Also, we've had very strong as B in the back half of 22 which converts to revenue that we can already see in the front half of twenty three.

So looking at next year.

It's it's hard to find what one shouldn't like about this guidance guidance for next year, 9% top line margin expansion and EPS.

EPS growth around 10%, we think that's pretty healthy so.

Tax rate breaks a little bit our way, we get back to bet more share repurchases.

So we feel pretty good about what we're seeing and we actually think that these market conditions will allow us to sit down and talk with a lot more clients what they can do in terms of cost efficiencies, and that's where we feel that we really shine. Also, we're doing incredibly well with head-to-head competition. In terms of requests for proposals. We're doing very well and the investment in the product just paying off with a lot of wins.

We feel pretty good about this guidance so we.

We hope that helps.

I appreciate the color thanks, guys.

Sure.

Thank you.

Please standby for our next question.

Our next question comes from the line of Toni Kaplan with Morgan Stanley . Your line is open.

Hey, Good morning. This is Greg Harrison on for Tony Thanks for taking our question.

So looking at next year, it's hard to find what one shouldn't like about this guidance for guidance for next year: 9% top line margin expansion and EPS growth around 10%. We think that's pretty healthy. So tax rate breaks a little bit our way. We get back to more share repurchases. We feel pretty good about this guidance So we hope that helps.

Wanted to ask about the recent wells when I don't know if you could size that at all for us.

When should we expect that to be added to ASB and then the second part of it if you could talk about the main differentiators that led to the win versus competitors that would be helpful.

Hey, Greg Yeah, I think I know the one you're referring to so I believe that closed in August so the impact of revenues going to be pretty low for 'twenty. Two obviously, we'll capture all of that in 'twenty three it.

Appreciate the color. Thanks guys, sure you.

It was a decent size win but I would not say it.

Thank you. Please stand by for our next question.

Was a win that made the quarter.

But it was a good multi seven figure win.

And a lot of.

Wealth advisor desktops.

Next question comes from the line of Tony Kaplan with Morgan Stanley . Your line is open.

So what's driving all of these wealth wins really has a lot to do with the core product itself.

Hey morning is Greg parish on ferattony. Thanks for taking our question. Why don't ask about the recent wealth when I don't know if? If you could size that at all for us, when should we expect that to be added to a as V and then the second, second sort of part of it. If could talk about the main differentiators that led to the win versus competitors, that be helpful.

But also we've released something called advisor dashboard, which had an exceptionally strong Q4. So we had three key advisor dashboard wins in Q4. So this advisor dashboard as an add on to kind of all of the advisers that have the the regular factset product for wealth, but just gives a lot more.

Hey Greg. Yeah, I think I know the one you're referring to. So I believe that closed in August , So the impact of revenue is going to be pretty low for 22. obviously, little capture. All of that in 23. it was a decent size win But I would not say it. You know it was a winind that made the quarter, but it was a good. You know. Multi 7, a figure win and the lot thousands of wealth advised desktops. So you know what's driving all of these wealth wins really has a lot to do with the core product itself.

Since to the adviser in terms of how they might want to organize their actions for the day. So this is a great market for us well the winds at our back we are growing at a double digit so it's becoming a meaningful part of access revenue.

And it's one that we're going to continue to invest in so Linda mentioned the Rfps, we get a lot of these these are large decisions.

Decisions for these big oil companies. So I continue I would expect to see a continued steady diet of these larger wins that we can execute on its hard to get more than a handful every year, but below that we're doing a lot to close tons of family offices, we are beginning to close more.

But also, you know, we've released something called advisor dashboard, which had an exceptionally strong Q4. So we had three key advised dashboard wins in Q4. So this adviser dashboard is- and add on to kind of all of the advisers that havethe the regular facts at product for well, but just gives a lot more intelligence to the advis in terms of you know how they might want to organize their actions for the day. So this is a great market for as well. The winss it up back. We're growing it in double digits.

Is this just a lot of great momentum in this space and that's a lot of what's driving our.

Our user count as well.

Okay, great. Thanks, that's very helpful and then.

Hey, I just wanted to kind of ask about the broad market environment and maybe if you could like mark to market client appetite here, especially given the macro brought backdrop I know youre expecting strength and it sounds like youre, not really seeing any pressure yet, but obviously, there's a lot of uncertainty out there. So our final conversations going are you expecting potentially maybe some deals get pushed out or not the case. If you can kind of just.

The mark to market there. Thanks.

Yes, we are seeing a little bit of.

I think extension and how long it takes to close a deal we saw some of that in hedge funds, but honestly a lot of our clients are going through the journey that we've been going through which is digital transformation. These efforts are not stopping for our clients. You can stop you have to keep investing I think to transform your business in this market and we have.

Tons of family offices. We're beginning to close more RIAs. There's just a lot of great momentum in the space. That's a lot of what's driving are our useer account as well.

Okay great, think that's very helpful. And then may just sort of to kind of asked about the broad market environment. Maybe, if you're like mark-to-market client appetite here, especially given the macroor broought backdrop, I know you're expecting strength and it sounds like you're not really seeing any pressure yet, but obviously there's a lot of uncertainty out there. So how client conversations going? Are you expecting potentially maybe some deals get pushed out or not, the case being kind of just a mark to market there?

So many picks and shovels now to help the clients in terms of being more efficient.

We feel it's not a difficult thing to sit down with the C level at our clients the heads of technology and really educate them about all the great stuff.

That can do I'm Super excited for 'twenty, three I think there's a.

There is a premium opportunity here for Factset to tell our story.

EBIT and even newer and more exciting way for our clients in terms of the capabilities. We have we really believe that what we've done here to transform our business is market, leading the opening of the platform.

Yeah we're seeing you know a little bit of, I think, extension and and how long it takes to close a deal. We saw some of that in hedge funds. But honestly, you know a lot of our clients and going through the journey that we've been going through, which is digital transformation. These efforts are not stopping for our clients. You CAn't stop. You have to keep investing, I think, to transform your business in this market and we have so many picks and shovels now to help the clients- terms of being more efficient.

The API is that we offer our clients know that Lincoln with their own tech stacks. All the work that we're doing with partners like asset services, that's really helping us.

We have a new quant research environment, where clients can come in and programmatically access factset. So.

That we feel it's not a difficult thing to sit down with the sea level at our clients, the heads of technology, and really educate them about all the great stuff, the facts that can do. I'm super excited to 23. I think there's the there's a premium opportunity here for facts that to tell our story in an even newer and more exciting way for our clients in terms of the capabilities we have. We really believe that what we've done here to transform our business is market leading, the opening of the platform.

We've been telling this story for years now we're not just a workstation business, but all of these elements in these different ways that you can utilize our data and analytics.

Give us a ton of confidence there.

Even if it's a tough environment for clients and their budgets are constrained we're going to be at the top of the list in terms of partners they want to work with.

Greg another another point to note until can speak more about this.

And a short hand old school idea is very much based on seat count and even if seat count is somewhat reduced at some of the banks, we don't price most of what we're doing by seat count anymore. So that's kind of an old school idea and we just want to make sure that that everyone everyone.

The APIs that we offer our clients now that Lincoln you know with their own tech stacks all the work that we're doing with partners like asset services that's really helping us. We have a new qu research environment where claims can come in and programmatically access factaccess. So we've been telling this story for years. Now we're not just a workstation business but all of these elements in these different ways that you can utilize our data and analytics just give us a ton of confidence that.

Dance that.

We see these headlines that theres going to be some thoughtfulness regarding.

Banking and so on but the class sizes that we've seen so far havent moved very much at all I think what we see here is a delay in the capital markets pipeline and that will come back at some point, but the M&A deal market as asset prices are returning back to Earth.

You know, even if it's a tough environment for clients and that budgets are constrained, you we're going to be at the top of that. Less in MS of upon. They want to work with Greg another. Another point to knowte until you can speak more about this, the kind of shorthand old school idea is very much based on seat count and even if seat count is somewhat reduced at some of the banks, we don't price most of what we're doing by seat count anymore, So that's kind of an old school idea.

Could be very much a bright spot. So this happens every 10 years or so.

And we.

We don't think that the result for us is going to be particularly that dramatic but maybe so it might have some more to say about that yes, I mean, just to build on what Linda said here I mean in banking, we did more we closed more ASB in banking in Q4. This year than we did last year, which might surprise some of you and more for the whole year, so you've seen the growth.

And we just want to make sure that that everyone, everyone understands that you. We see these headlines that there's going to be some thoughtfulness regarding investment banking and so on, but the class sizes that we've seen so far haven't moved very much at all. I think what we see here is a delay in the capital markets pipeline- and that will come back at some point- but the MA deal market, as asset prices are returning back to earth.

Right. So that's held up really well and within banking, where I think a lot of the concern comes from from a seat count standpoint, we've really diversified what we sell to the banks now. So we have parts of Factset that can get integrated into the CRM workflow, we're doing more on the feed side. So we're not just a one.

<unk> Pony anymore on the sell side Theres a lot.

Could be very much a bright spot. So this happens every 10 years or so and you know we we don't think that the result for us is going to be particularly that dramatic, but maybe Phil might have some more to say about that. Yeah, I mean just to build on what Linda said here. I mean, in banking we did more, we closeed more ASV in banking in Q4 this year than we did last year- which might surprise some of you- and more for the whole year. So we've you've seen the growth rates. That's. That's holdld up really well.

A lot of other stuff, we can sell to the banks that isn't related to just workstations.

And probably lastly, as bankers might.

It might move away from the Bulge bracket firms generally they go to other places they go to corporate there.

Go to PVC, they got hedge funds or they go more to the boutique firms. We have made really good strides with the boutique firms this year because as those bulge bracket bankers might move on in their careers and moved to other firms they take factset with them they take their preference for factset with them and that's a very.

And within banking, where I think a lot of the concern comes from. From a seat count standpoint we've really diversified what we sell to the banks now. So you know we have parts of fact said that can get integrated into their CRM workflow. We're doing more on the feed side So we're not just a one trick pony anymore. On the cell side there's a lot, lot of other stuff we can sell to the banks that isn't related to just workstation.

Important selling tool for us so we've seen this happening naturally it it's a real wind at our backs.

So even if bankers move around.

That's not an unhappy story for us it just.

Kind of spreads the gospel that Factset has the best products to more firms. So that's a space we're watching but it's.

And probably lastly, as bankers might move away from the bulge bracket firms generally, they go to other places. They go to corporatesthey go to peev C, they go to hedge funds or they go more to the boutique firms. We have made really good strides with the boutique firms this year because, as those bulge bracket bankers might move on in their careers and move to other firms, they take fact set with them, they take their preference for fact set with them.

It's probably a little overemphasized from what we're seeing.

Extremely helpful. Thank you.

Thank you.

Please standby for our next question.

Our next question comes from the line of George Tong with Goldman Sachs. Your line is open.

And that's a very important selling tool for us. So we've seen this happening. Naturally it's it's a real wind at our backs. So even if bankers move around, that's not an unhappy story for us. It just kind of spreads the gospel- that factx that has the best products to more firms. So that's a space B watching but it's probably a little overvemphasized from what we're seeing.

Hi, Thanks, good morning.

I wanted to go back to the margin topic you mentioned.

Personnel expenses increased technology expenses contributed to the fourth quarter margin contraction.

It was helpful to hear the bonus pool reset numbers going from $110 million approximately this year. The 90 million next year, so that I think helps frame that part.

How do you expect growth in investments and technology and content to evolve next year from current levels.

Ensure me help. Thank you.

ple Thank youthank you.

Please stand by for our next question.

Hey, George its Phil.

Miller programs as we both highlighted in our opening remarks, I think I would expect again, a pretty even split between products and people.

Continuing to feed deep sector private markets wealth ESG, we have a couple of really cool ideas in terms of where we can invest with CUSIP global services in partnership with EMEA, So that's off and running.

Next question comes from a line of George tongue with Goldman Sachs. Your line is open.

High thanks, good morning. I want to go back to the margin topic. You mentioned personnel expenses. Increased technology expenses contributed to the fourth quarter margin contraction and it was helpful to hear that the bonus pool reset numbers going from 11 million approximately this year than nine million next year, So that, I think, helps frame that part. How do you expect growth in investments into technology and content to evolve next year from current year levels?

And we also have our upturn playbooks at Rosebel as hubs households, playbook. So.

Things end up.

Going better than we think we have other investment ideas around different asset classes and workflows that were that we could fund as well.

Okay got it.

Maybe turning to ASC trends youre guiding to organic <unk>, plus professional services growth to decelerate to about 8%.

Page georgees feil, So similar programs- is we both highlighted in our opening remarks. You know, I think I'd expect again a pretty even split between products and people and continuing to feed deep stack to private markets. Well, the's G. we have a couple of really cool ideas in terms of where we can invest with acic global services in partonnership of the abba. So that's often running. And then we also have our up ton playbooks as well as such house SP playbooks. So you know if things end up.

Next year, a CUSIP as you mentioned is slower growth so as that becomes organic it's going to weigh on the growth. What other factors may be contributing to <unk> growth deceleration next year compared to this year.

Let me just I'll clarify some things so I think if you look at the midpoint of our guidance, which was $165 million and you divide that into the $1 eight 4 billion that we ended the year at <unk>.

That gets you closer to 9% so the midpoint of our guidance is around nine alright. Thank if you then factor in CUSIP coming in like in the second half of the year I think that's when we consider it to be organic so.

Going better than we think. We have other investment ideas around, different asset classes and workflows that were that we could fund as well.

Okay got it.

May be. Turning to ASV transit. You're guiding to organic ASV plus professional services growth to decelerate to about 8% next year. acq siip, as you mentioned, is slower growth So as that becomes organic it's going to weigh on the the the growth. What other factors may be contributing to ASV growth deceleration next year compared to this year?

I would I would think of it that way George So we don't really think of ourselves as decelerating that much right. I think we ended the year at nine three or nine four in the mid points around 899%.

So that's that's how the math works on that.

Okay got it thank you.

Thank you.

Maybe just I'll clarify something. So I think if you look at the midpoint of our guidance, which is 165 million, and you divide that into the one point eight three nine nine nine nine nine nine nine nine nine nine nine nine nine nine billion that we ended the year out, that gets you closer to 9%. So the midpoint of our guidance is around 9, I think. If you then factor in Q SI coming in like in the second half of the year, I think that that that's when we consider it to be organic. So I would. I would think of it that way George, So we don't really.

Please standby for our next question.

Our next question comes from the line of Craig Huber with Huber Research. Your line is open.

Okay, great. Thank you Lindsay I'd like to go back to the cost question again here.

The way I look at these numbers it looks to me like in the fourth quarter, you had $360 million of costs. If you take out the onetime items.

Think of ourselves as decelerating that much. Right, I think we ended the year at nine point three or 0.4, in the mid points around eight point nine cent to 9%. So's, that's how the math works. On that.

Up about $32 million sequentially or quarter over quarter of about 9% to 10% I know you said that incentive comp was up about 6 million sequentially and stuff can you just break down or give me to help me out here, what's the other $26 million increase in costs in the August quarter versus the May quarter, Obviously CUSIP was in both quarters fully.

ok Thank you.

Thank you.

First question please.

Please stand by for our next question.

Yes sure. It most of it was technology expense and a couple of points there.

We've had higher utilization of our cloud our amortization, because we're building our own software and more of it.

Expression comes from the line of Craig hoober with who research? Your line is open.

Great Thank you, Linda. D like to go back to the cost question again here. The way I look at these numbers, it looks to me like in the fourth quarter at 36 million of cost if we take up the onetime items.

<unk> has come through so fourth quarter technology expenses last year.

Just for hardware and software. This is in all of it but just hardware and software with $21 million and this year. It was 35. So that gives you. Some idea that's a $14 million increase Craig of what's going on there. So as we talked about this is pretty much all about what we did with the employees because of the bonus accrual.

Up about 32 million sequentially or quarter over quarter up about 9- 10%. I know you said that instecentive comp was up about six million sequentially in stuff. Can just break down. Give me help me out here. What's the other twenty $6 million increase in costs in August quarter versus the may quarter? Obviously accuse it was in both quarters fully. That's my first question, Please.

Some more stock payments, but that's a lot less important and the technology expense as we are building more of our own software now that suffer amortization.

Yes sure, most of it was technology expense and a couple of points there. We've had higher utilization of our cloud, our amortization because we're building our own software, and more of it has come through. So fourth quarter technology expenses last year just for hardware and software- this isn't all of it, but just hardware and software- was $21 million and this year it was 35, So that gives you some idea. That's a 14 million doars increase. Craig of what's going.

Has kind of built from 10 million to $20 million and leave and go to something more like $30 million just for software amortization next year. So that's something that everybody should factor in and as we said in the script. We're taking another hard look at what we're doing with our cloud transformation.

We may have a.

Look again at some of the things that we do on the cloud that may be able to remain on Prem. So we're thinking about that Kate step, our new CTO and I are looking very carefully at that so we want to make sure that we pay solid base accordingly, but it's that's that's the main stuff, it's a compensation and technology spend.

A little bit of <unk>, because we were able to come out of.

The last year is still in pandemic last year at this time <unk> for the third for the fourth quarter was $3 million.

And for the year, it's $9 million. So we would see that more as a normalized run rate going forward.

So that's something that everybody should factor in and, as we said in the script, we're taking another hard look at what we're doing with our cloud transformation and we we may look again at some of the things that we do on the cloud that may be able to remain on Prem. So we're thinking about that. Kate step, our new CTO, and I are looking very carefully at that, So we want to make sure that we pay all of this accordingly.

So we think that thats, probably most of it and just.

Not really so much Craig that's going to make a huge difference here.

As we think about housekeeping for next year, Craig since I've got you on the phone and I know that you like this.

We should think about interest expense next year as about $60 million, but as we pay down that is going to be front end loaded so everybody should model interest expense.

But it's that. That's the main stuff. It's compensation and technology spend a little bit of tna because we were able to come out of the last year's still in pandemic. Last year at this time TE for the third, for the fourth quarter was $3 million and for the year it's $9 million. So we would see that more as a normalized run rate going forward. So we think that that's probably most of it and just.

A little bit higher and we do have hedged 75% of our transaction exposure that has helped us a lot this year, but we cannot hedge according to GAAP translation exposure. So for example, when you put up your bonus pool.

In the centre of excellence kinds of currencies that we have to pay the dollar's been moving around so much in strengthening so dramatically during the course of August .

You know, not really so much, Craig. That's going to make a huge difference here as we think about housekeeping for next year. Craig, since I've got you on the phone and I know that you like thiswe should think about interest expense next year as about $6 million, But as we pay down, that is going to be front end loaded it, So everybody should model interest expensethis a little bit higher. And we do have hedged 75% of our transaction exposure. That has helped us a lot this year.

We found that that exposure hit us by a couple of million dollars. So that's something we can do absolutely nothing about because you cant hedge translation exposure. The rest of our hedges are working really really well so that would be another thing that added to costs in the fourth quarter and I think that's how we're going to say about that for Capex for next year.

Again going back to 'twenty three.

Our midpoint numbers, probably around $68 million, we are looking to consolidate.

A couple of offices.

In Europe , where we have multiple offices from acquisitions in one country. So that's going to cost us some money.

And I think the Capex number is higher because of this amortization view it that I already spoke about so that should give you pretty good guidance for all your modeling for next year Craig.

Anything else, we can do for you.

Yes, just wanted to ask I mean, obviously, you sound very optimistic, especially Canada this tough environment.

Pipeline here, where are some of the weaknesses in your pipeline. If you could just talk on that end of the spectrum. If you would please.

Can't hedge translation exposure. The rest of our hedges are working really, really well, So that would be another thing that added to costs in the fourth quarter and I think that's all we're going to say about that. For CapEx, for next year, again going back to 23, our midpoint numbers probably around $68 million. We are looking to consolidate a couple of offices in Europe where we have multiple offices from acquisitions in one country.

Hi, Craig it's Phil Yeah, So we don't get into that much detail on the pipeline, but as I mentioned earlier, we've got a very broad base plan here to grow both our businesses and our geographies. So.

You can see that in this year's results in the range of growth rates from research and advisory through the Cts was 8% to 11%.

So that's going to cost us some money and I think the CapEx number is higher because this amortization view that I already spoke aboutso that should give you pretty good guidance for all your modeling for next year, Craig.

In the regions for about 8% to 12% So we don't anticipate.

<unk>.

<unk> much different than that.

Anything else we can do for you.

So I think just stay tuned.

Yes I do want to ask. I mean obviously sound very optimistic, especially Canada's tough environment with your pipeline here.

Great. Thank you.

Okay. Thank you.

Thanks.

Please standby for our next question.

Where are some of the weaknesses in your pipeline if you just talk about that end of the spectrum? If you would please?

Our next question comes from the line of Russell Quelch with Redburn. Your line is open.

Hi gregsvilm. Yes, So we don't get into that much detail in the pipeline but, as I mentioned earlier, we've got a very broad-based plan here to grow bothwith our businesses and our geographies. So' you can see that in this year's results and that the range of growth rates from research and advisory through the cttss was eight per to eleve percent and the regions for about 8% to 12%. So we don't anticipate anything much different than that.

Yes.

I just wanted to go back to CUSIP quickly and ask.

Seeing the retention rates.

Is it in the business.

Additionally, today's the pricing power higher lower or the same as the rest of the factset.

<unk> spoke about the investments being made in product enhancements in this business I was just wondering what is the time to market and.

Will these whales in CGS margins potentially in 'twenty three.

So I think, just stay tuned.

So I think, just stay tuned great, Thank you.

Maybe I'll speak to the investments first and then I think Linda will have something to say on price. So.

Stay tuned. Great, Thank you come. Thank you.

Thank Please stand by for our next question.

Hey, Russell So these <unk> these are new investments.

And we're just beginning to get these going so they're not going to weigh heavily on margin by any means and I would not anticipate that we'd be getting much of a revenue impact from them. This year.

An next question comes from the line of Russell quoch with redid burn. The line is open.

Yes Don' time me on the call I just wanted to go back to qive quicklyand. I sume the retention rates are very residve for this otherub business. But I just wanted to those the pricing cower higher lower or the same as the rest of facts that.

Yeah great.

Great questions that you have there Russell.

We would expect that CUSIP.

We can think about pricing again, we don't totally control the business.

We're in a transaction transition services agreement.

And I heard Phil spoke about the investments being made in product enhancements in this business.

That can last for up to a year that's up to March 1st we hope to get off that sooner and there are a number of things that we need to do with CUSIP.

I'm just wondering what is the time to market for thosead enhancements and will these way on cgs margins, potentially in twenty-three?

One of those would be to look at its accounts receivable and one of the analysts.

Maybe i'all speak to the investments for us and then I think whendow, we'll have something to say price. So Hey Russell, So these are new investments and you, we're just beginning to get these goings, So they're not going to weigh heavily on margin by any means and I would not anticipate that we'd be getting much of a revenue impact from them this year.

Very correct in the third quarter that our days sales had gone up largely as a result of the accounts receivable from CUSIP.

I'm very very pleased to note that we have reversed that trend and in fact, our days sales outstanding from the third quarter to the fourth quarter have gone from 42 days down to 37 days, we think that once we get the business completely in house, we're going to be able to do more with that and then we will think about pricing, but again we run.

Yes great questions that you have, their Russell. We would expect that qsip- we can think about pricing again. We don't totally control the business- were in a transaction transition services agreement that can last for up to a year, that's up to March first. We hope to get off that sooner and there are a number of things that we need to do with Q SIP. one of those would be to look at its accounts receivable and one of the analysts.

<unk> business with the American Bankers Association, and we have to be very thoughtful.

And we have to think about what we're doing so.

We don't see any margin implications at all but we could do a better job of collecting.

Our accounts receivable with the CUSIP business. So we'll be looking at that we have a plan ready to go once that comes in house.

Okay perfect. Thank you.

And then just one clarification as well.

The new 2023 margin guidance does that exclude both the possible implementation of the 24 to 36 million in the cost saves as Phil mentioned on the Q3 call.

As well as the potential for higher prices that you spoke to earlier in 2023.

It does include higher prices for 2023, which is why we have confidence on the revenue line.

Pricing. But again, we run this business with the American bankers association and we have to be very thoughtful and we have to think about what we're doing. So we don't see any margin implications at all. But we could do a better job of collecting our accounts receivable with accusic business. So we'll be looking at that and we have a plan ready to go once that comes in house.

And.

We do have while we talked about on the third quarter call is we do have the potential for the downturn playbook as things get more difficult again to reiterate that.

Bonuses come back down from sort of the 111 113 range back into the 90 days and then if we don't perform they can drop even below that.

Good perfect, Thank you. And then just one clarification as well.

And the new 2023 margin guidance. Does that exclude both the possible implementation of the 2004 to 36 million of cost? Saves that pH mentioned on the Q3 call.

We have other things that are scaled to incentive payments are scaled to how well we do and we do think that that would provide the first cushion the second we'd probably be travel and entertainment. If we do need to look at tightening things thirdly, we'd probably be a discretionary projects spend particularly in the technology.

As well as the potential for higher prices that you spoke to earlier in 2020. -three.

It does include higher prices for 2023, which is why we have confidence on the revenue line and we do have what we talked about on the third quarter call is we do have the potential for the downturn playbook if things get more difficult. Again to reiterate that bonuses come back down from sort of the one 11, one and 13 range back into the 90 S.

Allergy area, and we would look at that as well, so we see 2% to 3% flexibility on pricing if we need it but this is a growth business and we're pretty excited with how things are going and the market share we've been able to take the fact that we've invested has allowed us to build cutting edge products that are winning in the.

A marketplace and that's really an important thing and we intend to keep that going also our employees are doing great things and our sales team performed.

And then if we don't perform, they can drop even below that. We have other things that are scaled to. Incentive payments are scaled to how well we do and we, you know, we do think that that would provide the first cushion. The second would probably be travel and entertainment, if we do need to look at tightening things. Thirdly would probably be a discretionary project spend, particularly in the technology area, and we would look at that as well.

Just out of the park in FY 'twenty, two so those sales payments or had been a little bit higher we'll see what happens with those in 'twenty three we're rooting for the sales team to have another good year.

Hope that helps.

Yes, thanks very much.

Thank you.

Please standby for our next question.

So we see 2% to 3% flexibility on pricing if we need it. But this is a growth business and we're pretty excited with how things are going and the market share we've been able to take. The fact that we've invested has allowed us to build cutting edge products that are winning in the marketplace, and that's really an important thing, and we intend to keep that going. Also our employees are doing great things and our sales team performed.

Our next question comes from the line that Shlomo Rosenbaum with Stifel. Your line is open.

Hi, This is Adam parrington for Shlomo.

I think Linda preemptively answered the question already on that you said they are so thank you for that last one would be on the.

Given the strength of the U S. Dollar why it was FX and the benefit of the Companys revenue if I'm looking at the revenue Rec tables taken from the port revenue to organic.

Just out of the Park in FY' 22 So those sales payments are had been a little bit higher. We'll see what happens with those in' 23. we're rooting for the sales team to have another good year. Hope that helps.

Yeah.

Adam I'm, sorry, I answered the question that Shlomo correctly pointed out on <unk> sales in the wrong place. That's my fault and again, we get full credit for noting that and <unk>.

Gift good stuff. Thanks very much.

Thank you.

Thank you. Please stand by for our next question.

<unk> maintains its third quarter goldstar for having noticed that.

The issue there is.

[laughter] the issue is.

Next question comes from the line OM O Rosen bomb with steeel an is openlton Hi? Is that'm parenage on for ilmo say? Think glinda preempively answered the question already on that. She said they are, So thank you for that. Last one would be on the. Given the strength of the? U's dollar, why was FX? And that benefited the company's revenue. Ifi'm looking at the revenue rect tab taken from report revenue to organic.

Is this translation exposure as we put up.

The reserves for our bonuses, we have a lot of employees in emerging markets and then as the dollar strengthened.

That situation was one that we couldn't hedge so that basically.

What's going on there.

One thing I forgot to say also regarding the bonus payments, which might have not been evident to everyone. We had some bonus payments that we owed as a result of some of the acquisitions that we've done that have performed pretty well.

Yeah Adam, I'm sorry. I answered the question that schlummo correctly pointed out on Dave sales in the wrong place. That's my fault and again we give them full credit for noting that and he maintains his third quarter gold star for having noticed that issue there is.

So that was another couple of million dollars on the bonus line for some of those acquisitions, where we had agreements.

Agreements with some of the principles of those businesses. So.

With all of that we hope that that explains things pretty well and.

You know as we said we are.

The issue is: is this translation exposure? As we put up the reserves for our bonuses, we have a lot of employees in erging markets and then, you know, as the dollar strengthened, that situation was one that we couldn't hedge. So that's basically what's going on there. one thing I forgot to say also regarding the bonus paymentsts, which might am not been evident to everyone: we had some bonus payments that we OW as a result of some of the acquisitions that we've done, that have performed pretty well.

I'm pleased with our guidance for next year, 9% at the midpoint on the topline.

That does conclude pricing power, which is very helpful to us margin expansion of about on average median 60 basis points, if things break our way.

That might be better, but as everyone has noted.

We are conservative and we'll probably stay that way tax.

Tax rate of 12, 5% to 13 and a half we may find ourselves with some one offs that are helpful to us there and we'll see what happens with EPS. If we are able to resume our share repurchases, though those will have a marginal impact because they will be back end loaded.

So that was another couple of million dollars on the bonus line for some of those acquisitions where we had agreements with some of the principles of those businesses. So with all of that, we hope that that explains things pretty well and, as we said, we are pretty pleased with our guidance for next year. 9% is the midpoint on the top line. That does include pricing power, which is very helpful to us.

So I think that's about it I think we've covered all of our housekeeping items and with that I think I'll turn it back over to Phil.

Great. Thanks, Linda.

Thank you all for all the great questions today, I am very proud of all we've accomplished this year and we're not done yet we have great momentum heading into 2023 as we remain focused on executing on our strategy and creating long term value for all our stakeholders.

Margin expansion of about, on average, median 60 basis points. If things break our way, that might be better but, as everyone is noted, we we are conservative and will probably stay that way. Tax rate of 12 and a half to 13 and a half: we may find ourselves with someone offs that are helpful to us there, and we'll see what happens with E PS's. If we are able to resume our share repurchases though, those will have a marginal impact because they will be back end loaded.

While we recognize the uncertainty in the market. The Factset has a proven 40 plus year history 40, plus year history of successfully navigating volatility.

So our business model innovative product mix in the central role, we play for our clients.

Regardless of the macro environment I am confident in our ability to drive sustainable growth given the investments we have made in our businesses and.

So I think that's about it. I think we've covered all of our housekeeping items, and with that I think I'll turn it back over to Phil.

And we look forward to speaking with you again next quarter in the meantime, please call Ken for Brown with additional questions. Operator. This ends today's call.

Ladies and gentlemen. This concludes today's conference call. You may now disconnect everyone have a wonderful day.

Great thanks Linda, and thank you all for the great questions today. I'm very proud of all we've accomplished this year and we're not done yet. We have great momentum heading into 2023, as we remain focused on executing on our strategy and creating long-term value for all our stakeholders.

While we recognize the uncertainty in the market, the facts. That has a proven 40 -plus year history. The 40 -plus year history of successfully navigating volatility thanks to our business model, innovative product mix and the Central role we play for our clients.

Regardless of the macro environment. I'm confident in our ability to drive sustainable growth, given the investments we have made in our businesses.

We look forward to speaking with you again next quarter. In the meantime, please call kender Brown with additional questions. Operator descends today's call.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect everyone. Have a wonderful day.

The conference will begin shortly. To raise your hand during QA, you can dial Star 1- one